On November 6, 2023 Coherus BioSciences, Inc. (Coherus, Nasdaq: CHRS), reported financial results for the quarter ended September 30, 2023, and recent business highlights (Press release, Coherus Biosciences, NOV 6, 2023, View Source [SID1234637016]):

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RECENT BUSINESS HIGHLIGHTS

CIMERLI

CIMERLI (ranibizumab-eqrn) net product sales increased in the third quarter 2023 to $40.0 million compared to $26.7 million in the second quarter. CIMERLI sales have exceeded 100,000 doses since commercial launch on October 3, 2022, and CIMERLI held a 29% share of the overall ranibizumab market in the third quarter 2023.
UDENYCA

UDENYCA (pegfilgrastim-cbqv) net product sales increased in the third quarter 2023 to $33.0 million compared to $31.7 million in the second quarter. Market share grew to 16.5% in the third quarter 2023, an increase of 4.3 market share percentage points compared to the prior quarter.
As of late September, more than 250 accounts had ordered the autoinjector (AI) presentation of UDENYCA, which was launched commercially on May 22, 2023. Coherus anticipates demand will continue to rise with significantly improved commercial and Medicare Advantage formulary coverage in the fourth quarter of 2023 and in 2024.
Coherus resubmitted the Biologics License Application (BLA) Supplement for UDENYCA ONBODY, the company’s on-body injector presentation of UDENYCA (pegfilgrastim-cbqv), to the U.S. Food and Drug Administration (FDA) for review on October 4, 2023. This followed the completion and satisfactory resolution of the FDA’s review of inspection findings at a third-party filler, which was the only issue identified in the FDA’s September 21, 2023 Complete Response Letter (CRL). Coherus anticipates potential approval for the UDENYCA ONBODY in late 2023 or by early 2024.
LOQTORZI (toripalimab-tpzi)

On October 27, 2023, the FDA approved LOQTORZI (toripalimab-tpzi) in combination with cisplatin and gemcitabine for the first-line treatment of adults with metastatic or recurrent locally advanced nasopharygeal carcinoma (NPC), and as monotherapy for the treatment of adults with recurrent unresectable or metastatic NPC with disease progression on or after platinum-containing chemotherapy. Commercial launch is expected in the first quarter of 2024.
Coherus presented new mechanism of action data for LOQTORZI at the 2023 AACR (Free AACR Whitepaper)-NCI-EORTC AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper) and at the 38th Annual Meeting of Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper).
YUSIMRY

Coherus launched YUSIMRY, a Humira biosimilar, with a citrate-free and sting-free formulation delivered via a state-of-the-art autoinjector July 3, 2023. YUSIMRY is now available for sale nationwide through retail, mail order and specialty pharmacy channels.
Surface Oncology Acquisition and Novel Immuno-oncology Pipeline

On September 8, 2023, Coherus announced the closing of its acquisition of Surface Oncology, Inc. The acquisition significantly advanced Coherus’ next-generation immuno-oncology pipeline focused on the tumor micro-environment with clinical stage anti-IL-27 and anti-CCR8 monoclonal antibody development programs.
Coherus presented new preclinical data for casdozokitug, a first-in-class IL-27 antibody and CHS-114, a highly selective cytolytic CCR8 antibody at the 38th Annual SITC (Free SITC Whitepaper) meeting.
Coherus plans to file an Investigational New Drug (IND) application in first quarter of 2024 for CHS-1000, a novel ILT4-targeted antibody.
"With the approval of LOQTORZI and the closing of the Surface Oncology acquisition, Coherus has all the elements in place to realize its vision of building an innovative immuno-oncology company with a commercial-stage PD-1 inhibitor and a highly competitive, next-generation clinical I-O pipeline focused on the tumor microenvironment," said Denny Lanfear, Coherus’ Chairman and Chief Executive Officer. "Our net revenues of $74.6 million in the third quarter represent an increase of 27% compared to Q2, and our SG&A plus R&D costs year to date have declined 28% compared to the same period last year. Looking forward, we expect further revenue growth driven by CIMERLI, the UDENYCA franchise, YUSIMRY, and LOQTORZI, while holding the line on expenses and focusing on returning to profitability."

THIRD QUARTER 2023 FINANCIAL RESULTS

Net revenue was $74.6 million during the three months ended September 30, 2023 and included $33.0 million of net sales of UDENYCA, $40.0 million of net sales of CIMERLI, and $1.4 million of net sales of YUSIMRY, which was launched July 3, 2023. Net revenue for the three months ended September 30, 2022, consisting primarily of UDENYCA net sales, was $45.4 million. Net revenue was $165.7 million and $165.7 million for the nine months ended September 30, 2023 and 2022, respectively. Year to date revenues remained flat compared to the prior period primarily due to a reduction in the number of units of UDENYCA sold as well as a lower net realized price due to increased competition offset by increasing revenue from CIMERLI and YUSIMRY sales during the nine months ended September 30, 2023.

Cost of goods sold (COGS) for the three months ended September 30, 2023 and 2022 was $32.7 million and $35.2 million, respectively, and $74.4 million and $55.9 million during the nine months ended September 30, 2023 and 2022, respectively. COGS includes a mid-single digit royalty payable on net sales of UDENYCA through the first half of 2024, and 2023 COGS also includes a low to mid 50% royalty payable on gross profits of CIMERLI.

The decrease in COGS for the three months ended September 30, 2023 compared to the same period in the prior year was primarily due to the $26.0 million write-down in the third quarter 2022 of inventory at risk of expiration and due to the sale in the third quarter 2023 of certain of those UDENYCA units having a total original cost of $2.4 million but no carrying value following the write-off, partially offset by a $17.0 million increase in royalty costs and $8.4 million increase in product costs primarily driven by CIMERLI sales and the mix of products sold.

The increase in COGS for the nine months ended September 30, 2023 compared to the same period in the prior year was due to a $28.1 million increase in royalty costs primarily driven by CIMERLI sales, $3.0 million in contract modification fees with one of our manufacturers for reducing the number of UDENYCA batches to be produced, and $2.3 million in write-offs, net of recoveries for inventory that was damaged during processing. These unfavorable factors were partially offset by the factors associated with the write-down in the third quarter of 2022 noted above.

Research and development (R&D) expense for the three months ended September 30, 2023 and 2022 was $25.6 million and $45.8 million, respectively. For the nine months ended September 30, 2023 and 2022, R&D expense was $83.1 million and $170.3 million, respectively. The decline in R&D expense compared to the prior year periods primarily resulted from the reduction in scope of the toripalimab collaboration and from the recognition in the first quarter of 2022 of the $35.0 million option exercise fee paid to Junshi Biosciences to license CHS-006. R&D expense for the first nine months of 2022 also included development costs for additional presentations of UDENYCA and certain manufacturing expenses for YUSIMRY which began to be capitalized in mid 2022.

Selling, general and administrative (SG&A) expense was $48.2 million and $44.8 million during the three months ended September 30, 2023 and 2022, respectively, and $142.5 million and $144.9 million during the nine months ended September 30, 2023 and 2022, respectively. The increase in SG&A expense in the three months ended September 30, 2023 was primarily due to an increase in professional services fees associated with the acquisition of Surface Oncology that was completed in September 2023. The decline in SG&A expense in the nine months ended September 30, 2023 compared to the prior year period primarily reflects lower headcount.

Net loss for the third quarter of 2023 was $39.6 million, or $(0.41) per share on a diluted basis, compared to a net loss of $86.7 million, or $(1.11) per share on a diluted basis for the same period in 2022. Net loss for the nine months ended September 30, 2023 was $158.2 million, or $(1.79) per share on a diluted basis, compared to a net loss of $232.9 million, or $(3.00) per share on a diluted basis for the same period in 2022.

Non-GAAP net loss for the third quarter of 2023 was $26.9 million, or $(0.27) per share on a diluted basis, compared to non-GAAP net loss of $74.4 million, or $(0.96) per share on a diluted basis for the same period in 2022. Non-GAAP net loss for the nine months ended September 30, 2023 was $117.3 million, or $(1.33) per share on a diluted basis, compared to non-GAAP net loss of $187.7 million, or $(2.42) per share on a diluted basis for the same period in 2022. See "Non-GAAP Financial Measures" below for a discussion on how Coherus calculates non-GAAP net loss and a reconciliation to the most directly comparable GAAP measures.

Cash, cash equivalents and investments in marketable securities were $131.1 million as of September 30, 2023, compared to $191.7 million at December 31, 2022.

2023 Revenue and R&D and SG&A Expense Guidance

Primarily due to the delay in the timing of the planned commercial launches of the UDENYCA On-body Injector and of LOQTORZI, Coherus is lowering its guidance for 2023 net product revenue to a range of $250 to $260 million.

Coherus is lowering its guidance range for combined R&D and SG&A expenses for 2023 from $315 to $335 million to a range of $300 to $310 million. This guidance range includes $40 to $45 million of stock-based compensation expense and excludes the Surface Oncology acquisition cost as well as any potential collaboration upfront or milestone payments.

This financial guidance also excludes the effects of any potential future strategic acquisitions, collaborations or investments, the exercise of rights or options related to collaboration programs, and any other transactions or circumstances not yet identified or quantified. This guidance is subject to a number of risks and uncertainties. See Forward-Looking Statements described in the section below.

Conference Call Information
When: Monday, November 6, 2023, starting at 5:00 p.m. Eastern Time

To access the conference call, please pre-register through the following link to receive dial-in information and a personal PIN to access the live call: https://register.vevent.com/register/BI0eececfba52f4f83a7438c9f002fabc4

Please dial-in 15 minutes early to ensure a timely connection to the call.

Webcast Link: View Source

A replay of the webcast will be archived on the "Investors" section of the Coherus website at View Source