On February 24, 2021 Coherus BioSciences, Inc. ("Coherus" or the "Company", Nasdaq: CHRS), reviewed recent corporate events and reported financial results for the quarter and full year ended December 31, 2020 (Press release, Coherus Biosciences, FEB 24, 2021, View Source [SID1234575536]).

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UDENYCA (pegfilgrastim-cbqv) delivered strong results in 2020:

$476 million in net sales for the full year; $110 million for the fourth quarter.
With excellent commercial execution in the face of COVID-19 headwinds, maintained position as leading pegfilgrastim biosimilar in the United States with 21% share of the overall pegfilgrastim market and nearly 50% share of the pre-filled syringe segment.
Financial strength to execute on our immuno-oncology and biosimilar pipeline and commercial plans:

Cash flow from operating activities was $154 million for 2020 and $33 million for the fourth quarter of 2020.
Coherus had cash and cash equivalents of $541 million at December 31, 2020.
Net income was $132 million for 2020, or $1.62 per share on a diluted basis, and for the fourth quarter of 2020 was $10 million, or $0.12 per share on a diluted basis.
"We are very pleased with the strong performance of UDENYCA in the face of challenging COVID-19 conditions in 2020 and with the recent progress of our biosimilar pipeline candidates," said Denny Lanfear, Chief Executive Officer of Coherus. "With our recently announced collaboration with Junshi Biosciences, we are building a focused immuno-oncology franchise atop the strong foundation of UDENYCA and our late-stage Lucentis, Avastin and Humira biosimilar candidates. As our commercial biosimilar portfolio expands, we expect to generate strong cash flows to leverage into commercialization of toripalimab, if approved, as well as development of PD-1 combination therapies to drive longer-term growth."

Pipeline Progress and Recent Corporate Highlights

Immuno-oncology collaboration with Junshi Biosciences: In February, Coherus announced a collaboration with Junshi Biosciences for the development and commercialization of Junshi Biosciences’ anti-PD-1 antibody, toripalimab, in the United States and Canada. Upon satisfaction of closing conditions, which is expected to occur in the first quarter 2021, Coherus and Junshi Biosciences will co-develop toripalimab, and Coherus will be responsible for all commercial activities in the United States and Canada.
The U.S. Food and Drug Administration ("FDA") has granted breakthrough therapy designation to toripalimab for third-line nasopharyngeal carcinoma ("NPC"), and Coherus expects the first toripalimab biologics license application ("BLA") to be filed with the FDA for this indication in 2021. On February 20, 2021, Junshi Biosciences announced the approval in China of toripalimab for the treatment of patients with recurrent or metastatic NPC after failure of at least two lines of prior systemic therapy.
Coherus and Junshi Biosciences plan to file additional toripalimab BLA supplements with the FDA over the next three years for multiple rare and highly prevalent tumor types, including non-small cell lung cancer ("NSCLC").

FYB201, a biosimilar Lucentis (ranibizumab) product candidate in collaboration with Bioeq AG: Bioeq expects to file the FYB201 BLA mid-year 2021 following a supportive pre-BLA meeting with the FDA earlier in the first quarter of 2021. Bioeq reviewed new manufacturing data with the FDA which the agency requested last year, as well as other elements of the BLA filing.

CHS-1420, a wholly owned biosimilar Humira (adalimumab) product candidate: The FDA accepted for review the BLA for CHS-1420 and assigned a target action date in December 2021. Coherus plans to launch CHS-1420 on or after July 1, 2023, if approved.

IBI-305, a biosimilar Avastin (bevacizumab) product candidate in collaboration with Innovent Biologics (Suzhou) Co. Ltd: Earlier in the first quarter of 2021, Coherus initiated the three-way pharmacokinetic study required prior to potential BLA submission later this year.
Fourth Quarter and Full Year 2020 Financial Results

Net product revenue, consisting of net sales of UDENYCA, was $110.4 million for the fourth quarter of 2020 compared to $123.9 million for the same period in 2019. The decline was primarily due to an increase in discounts and allowances incurred, which was partially offset by an increase in the number of units of UDENYCA sold. Net product revenue for 2020 was $475.8 million compared to $356.1 million for 2019, an increase of $119.7 million. The increase was primarily due to an increase in the number of units of UDENYCA sold, which was partially offset by an increase in discounts and allowances incurred during the year ended December 31, 2020.

Research and development (R&D) expenses for the fourth quarter of 2020 were $44.6 million, compared to $34.9 million for the same period in 2019. The increase was mainly due to increased clinical development activities as well as payments for certain negotiation rights for pipeline development. R&D expense for 2020 was $142.8 million compared to $94.2 million for 2019, an increase of $48.6 million. The increase was primarily due to costs incurred in support of the BLA submission for CHS-1420 and for development activities related to other biosimilar product candidates.

Selling, general and administrative (SG&A) expenses were relatively unchanged quarter-over-quarter and year-over-year. SG&A expenses for the fourth quarter of 2020 were $37.7 million, compared to $36.1 million for the same period in 2019. SG&A expenses for 2020 were $139.1 million, compared to $137.0 million for 2019.

Cash and cash equivalents were $541.2 million as of December 31, 2020, compared to $177.7 million as of December 31, 2019. During 2020, Coherus generated $154.1 million in operating cash flow, used $14.4 million in investing activities, including $7.5 million in upfront and milestone payments to collaborators, and received net cash proceeds of $223.9 million from financing activities related to the issuance of convertible notes due in 2026, less issuance costs and the purchase of related capped call options, as well as proceeds from the exercise of stock options and from purchases under the stock purchase plan.

Net income for the fourth quarter of 2020 was $9.7 million, or $0.12 per share on a diluted basis, compared to a net income of $39.2 million, or $0.53 per share on a diluted basis for the same period in 2019. Net income for 2020 was $132.2 million, or $1.62 per share on a diluted basis, compared to a net income of $89.8 million, or $1.23 per share on a diluted basis for 2019.

Non-GAAP net income for the fourth quarter of 2020 was $18.6 million, or $0.23 per share on a diluted basis, compared to non-GAAP income of $56.7 million, or $0.75 per share on a diluted basis for the same period in 2019. Non-GAAP net income for 2020 was $176.7 million, or $2.16 per share on a diluted basis, compared to non-GAAP income of $133.1 million, or $1.82 per share on a diluted basis for 2019. See "Non-GAAP Financial Measures" below for a discussion on how Coherus calculates non-GAAP net income and a reconciliation to the most directly comparable GAAP measures.

2021 Guidance

Coherus projects lower UDENYCA net sales revenue in 2021 compared to 2020. Starting from a seasonally low first quarter impacted by customer buying patterns and COVID-19, Coherus expects UDENYCA revenue and market share to rise over the remainder of the year, assuming treatment patterns normalize as the general population is vaccinated against COVID-19.

Excluding upfront, milestone and development expenses related to the recently announced collaboration with Junshi Biosciences, which is expected to close in the first quarter of 2021, Coherus projects R&D and SG&A expenses combined will increase in 2021 to a range of $310 million to $350 million, with external R&D spending focused on manufacturing-related activities in preparation for the potential launch of CHS-1420, if approved, and development activities for IBI-305 and for additional presentations of UDENYCA.

This financial guidance 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 items 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.