On March 6, 2023 Coherus BioSciences, Inc. ("Coherus" or the "Company", Nasdaq: CHRS), reported financial results for its fiscal fourth quarter and full year ended December 31, 2022 and recent business highlights (Press release, Coherus Biosciences, MAR 6, 2023, View Sourcenews-releases/news-release-details/coherus-biosciences-reports-fourth-quarter-and-full-year-2022#:~:text=Net%20revenue%20was%20%2445.4%20million" target="_blank" title="View Sourcenews-releases/news-release-details/coherus-biosciences-reports-fourth-quarter-and-full-year-2022#:~:text=Net%20revenue%20was%20%2445.4%20million" rel="nofollow">View Source,was%20launched%20in%20October%202022%20. [SID1234628184])

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

RECENT BUSINESS HIGHLIGHTS

The U.S. Food and Drug Administration (FDA) has notified the Company of the planned dates in the second quarter of 2023 for its required inspection of the toripalimab manufacturing facility in China. The inspection, previously hindered by COVID-related travel restrictions, is part of the FDA’s review of the biologics license application (BLA) for toripalimab, a PD-1 inhibitor for the treatment of nasopharyngeal carcinoma (NPC). Coherus plans to launch toripalimab in the U.S. directly upon potential approval by the FDA.
The FDA on March 3, 2023 approved a single-dose, prefilled autoinjector presentation of UDENYCA (pegfilgrastim-cbqv), which represents the first presentation innovation in the pegfilgrastim space in eight years and highlights Coherus’ commitment to developing innovative treatments that expand access and address the needs of patients undergoing cancer treatment. Coherus plans to launch UDENYCA AI in the second quarter.
The FDA review of the prior approval supplement for Coherus’ third pegfilgrastim presentation, the UDENYCA on-body injector (OBI), is ongoing, and Coherus plans to launch UDENYCA OBI directly upon potential approval later this year.
In February, the U.S. Centers for Medicare & Medicaid Services (CMS) assigned to CIMERLI (ranibizumab-eqrn) a permanent, product-specific Q-code, which will become active on April 1, 2023. The Q-code is expected to enable more efficient billing processes and speed time to reimbursement for providers.
On March 3, 2023, Coherus implemented a reduction in force impacting approximately 60 full-time and part-time employees in order to focus resources on strategic priorities including the commercialization of its diversified product portfolio and development of innovative immuno-oncology product candidates.
Coherus is introducing a guidance range of combined R&D and SG&A expenses for 2023 of $315 to $335 million. This guidance reflects nearly $100 million in expense reductions compared to prior 2023 guidance provided in April 2022.
"2023 will be a year of continued transformation for Coherus with significant value drivers including four anticipated product launches and multiple upcoming clinical catalysts," said Denny Lanfear, Coherus’ Chairman and Chief Executive Officer. "We are strengthening the UDENYCA franchise by offering unprecedented choice for patients and physicians with a prefilled syringe, autoinjector, and an on-body injector presentation of pegfilgrastim expected later this year. With onsite manufacturing inspections now being scheduled for toripalimab, we look forward to the approval and launch of toripalimab in NPC. We remain sharply focused on commercial execution as we accelerate near-term revenue growth with CIMERLI, our Lucentis biosimilar, further penetrate the pegfilgrastim market with new presentations for UDENYCA, prepare for the launch of our Humira biosimilar, YUSIMRY, and gain approval for and launch toripalimab in NPC."

Mr. Lanfear continued: "We expect significant topline revenue growth in 2023 and beyond as we execute commercially on our new product launches. We are also tightly focused on expense management throughout the Company and in coordination with our development and manufacturing partners, and the 2023 operating expense guidance we are providing today is nearly $100 million lower than we projected in April 2022. We expect revenue growth and expense control to enable a return to profitability in 2024."

FOURTH QUARTER and FULL YEAR 2022 FINANCIAL RESULTS

Net revenue was $45.4 million during the three months ended December 31, 2022 and included $38.3 million of net sales of UDENYCA and $6.9 million of net sales of CIMERLI, which was launched in October 2022. Net sales of UDENYCA for the fourth quarter of 2022 were reduced by a $4.7 million charge for a contingent liability related to resolving a dispute regarding certain sales from October 2020 through December 2021. Net revenue was $73.4 million during the three months ended December 31, 2021. For the twelve months ended December 31, 2022 and 2021, net revenue was $211.0 million and $326.6 million, respectively, and consisted primarily of net sales of UDENYCA. The decline for both the fourth quarter and the full year 2022 was primarily due to a decrease in the number of units of UDENYCA sold as well as a lower net realized price due to increased competition.

Cost of goods sold (COGS) was $14.2 million and $12.1 million during the three months ended December 31, 2022 and 2021, respectively, and $70.1 million and $57.6 million during the full year ended December 31, 2022 and 2021, respectively. COGS for the full year of 2022 included a $26.0 million write-down taken in the third quarter 2022 for inventory at risk of expiration, and 2021 included the write-down of $5.1 million of inventory that did not meet Coherus’ acceptance criteria. UDENYCA COGS also includes a mid-single digit royalty on net sales payable through the first half of 2024, and CIMERLI COGS includes a low to mid 50% royalty on gross profits.

Research and development (R&D) expense for the three months ended December 31, 2022 and 2021 was $29.0 million and $50.8 million, respectively, driven by lower development costs. For the full year ended December 31, 2022 and 2021, R&D expense was $199.4 million and $363.1 million, respectively. The decrease was primarily due to the $136.0 million upfront license fee paid to Junshi Biosciences in 2021, less spending in 2022 related to additional presentations of UDENYCA, and higher YUSIMRY development costs in 2021 for pre-approval inspections, all partially offset by the $35.0 million option exercise fee for CHS-006 in the first quarter of 2022.

Selling, general and administrative (SG&A) expense was $53.6 million and $50.1 million during the three months ended December 31, 2022 and 2021, respectively, and $198.5 million and $169.7 million during the full year ended December 31, 2022 and 2021, respectively. The increases were primarily driven by higher commercialization expenses in preparation for the commercial launch of CIMERLI in 2022 and for multiple new product launches anticipated in 2023, including, of toripalimab, YUSIMRY, the autoinjector and the on-body injector presentations of UDENYCA.

Net loss for the fourth quarter of 2022 was $58.9 million, or $(0.76) per share on a basic and diluted basis, compared to a net loss of $45.7 million, or $(0.60) per share on a basic and diluted basis for the same period in 2021. Net loss for the full year of 2022 was $291.8 million, or $(3.76) per share on a basic and diluted basis, compared to a net loss of $287.1 million, or $(3.81) per share on a basic and diluted basis for the full year of 2021.

Non-GAAP net loss for the fourth quarter of 2022 was $47.1 million, or $(0.60) per share on a basic and diluted basis, compared to non-GAAP net loss of $35.1 million, or $(0.46) per share on a basic and diluted basis for the same period in 2021. Non-GAAP net loss for the full year of 2022 was $234.8 million, or $(3.02) per share on a basic and diluted basis, compared to non-GAAP net loss of $224.5 million, or $(2.98) per share on a basic and diluted basis for the full year of 2021. Beginning in the first quarter of 2022, the Company no longer regularly excludes upfront and milestone-based license fee payments from its non-GAAP financial information. To conform to this change, the prior period non-GAAP financial information has been recast to include upfront and milestone-based license fee payments. 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 $191.7 million as of December 31, 2022, compared to $417.2 million at December 31, 2021.

2023 R&D and SG&A Expense Guidance

Coherus is introducing a guidance range of combined 2023 R&D and SG&A expenses from $315 to $335 million. This guidance includes approximately $50 million of stock-based compensation expense and excludes any collaboration upfront payments to Klinge Pharma for the in-license of their Eylea biosimilar program or milestones payments to Junshi Biosciences due upon U.S. approval of toripalimab. 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, March 6th, 2023, starting at 5 p.m. ET

Please register through the following link for dial-in information and personal PIN:
View Source

Please register 15 minutes early to ensure a timely connection to the call.

A replay of the webcast will be archived at View Source