On August 6, 2020 Coherus BioSciences, Inc. ("Coherus" or the "Company", Nasdaq: CHRS), reported financial results for the quarter ended June 30, 2020 (Press release, Coherus Biosciences, AUG 6, 2020, View Source [SID1234563040]).

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Second Quarter 2020 and Recent Corporate Highlights

Net product revenue for the second quarter of 2020 was $135.7 million, and net income was $59.0 million, or $0.70 per share on a diluted basis.

Non-GAAP income during the second quarter of 2020 was $68.3 million, or $0.81 per share on a diluted basis.

Cash flow from operating activities was $60.2 million for the second quarter of 2020.

The Healthcare Distribution Alliance recognized Coherus’ successful launch of UDENYCA (pegfilgrastim-cbqv) by awarding the 2019 Diana Award in the category for Best New Product Introductions in the Biotechnology Pharmaceutical Product sector.

The Company appointed veteran healthcare leader, Kimberly Tzoumakas, J.D. to its Board of Directors.
Second Quarter 2020 Financial Results

Net product revenue for the second quarter of 2020 was $135.7 million. Net product revenue included a favorable revision of the Company’s prior period payer rebate estimate of $13.3 million recorded in the second quarter of 2020. Cost of goods sold for the second quarter of 2020 was $10.1 million, resulting in a gross profit margin of 93%.

Research and development (R&D) expense for the second quarter of 2020 was $26.2 million, as compared to $18.9 million for the same period in 2019. R&D expense for the six months ended June 30, 2020 was $59.3 million, as compared to $37.7 million for the same period in 2019. The increase in R&D expense in both periods was primarily due to preparations for the biologics license application (BLA) filing of CHS-1420, Coherus’ biosimilar to Humira (adalimumab), and to the manufacturing scale-up to initiate planned clinical trials in 2021 for CHS-2020, Coherus’ biosimilar to Eylea (aflibercept).

Selling, general and administrative (SG&A) expense for the second quarter of 2020 was $34.1 million, as compared to $36.5 million for the same period in 2019. SG&A expense for the six months ended June 30, 2020 was $69.4 million, as compared to $69.1 million for the same period in 2019.

Cash, cash equivalents and investments in marketable securities for the second quarter increased to $456.5 million as of June 30, 2020, as compared to $193.3 million as of March 31, 2020 and $177.7 million as of December 31, 2019. The increase in the second quarter of 2020 is primarily due to generating $60.2 million in net cash from operating activities and receiving $222.8 million in net proceeds from issuing convertible debt notes due 2026 in April 2020, which was offset by purchasing $18.2 million in capped call options related to the convertible notes.

Net income for the second quarter of 2020 was a $59.0 million, or $0.70 per share on a diluted basis, compared to $23.6 million, or $0.32 per share on a diluted basis for the same period in 2019.

Non-GAAP net income for the second quarter of 2020 was $68.3 million, or $0.81 per share on a diluted basis, compared to non-GAAP income of $31.5 million, or $0.43 per share on a diluted basis for the same period in 2019. See "Non-GAAP Financial Measures" below for a discussion on how the Company calculates non-GAAP net income and a reconciliation to the most directly comparable GAAP measure.

Guidance for the Remainder of 2020

Coherus will continue to lay the foundation for long-term growth across its three therapeutic areas:

Oncology

Deliver continued market success with UDENYCA (pegfilgrastim-cbqv) against all Neulasta dosage forms, while maintaining average selling price ("ASP") discipline, leveraging the validated branded-biosimilar strategy of offering a robust value proposition across all key customer segments.

Advance the Company’s biosimilar candidate to Avastin (bevacizumab) in-licensed from Innovent toward an expected 351(k) BLA submission with the U.S. FDA in 2021, depending on the outcome and the timing of required interactions with the FDA in completing a three-way pharmacokinetic ("PK") study, as well as completing additional analytical similarity exercises.
Ophthalmology

Facilitate Bioeq’s resubmission of a 351(k) BLA with the FDA for the biosimilar candidate to Lucentis (ranibizumab) in the second half of 2020.

Advance the Company’s internally developed CHS-2020 biosimilar candidate to Eylea (aflibercept) to an expected Phase 3 clinical trial initiation in 2021, with launch projected in 2025, if approved.
Immunology

Complete certain manufacturing, regulatory and development activities for the Company’s internally developed Humira (adalimumab) biosimilar, CHS-1420, and file the 351(k) BLA in the fourth quarter of 2020. The Company expects this timing will enable a projected market entry in the United States on or after July 1, 2023, if approved.
Financial Guidance

R&D and SG&A expenses combined together are expected to range between $285 million and $310 million for the full fiscal year 2020, excluding upfront or milestone payments from any potential new collaborations, consistent with prior quarter guidance.
Conference Call Information

When: Thursday, August 6, 2020 starting at 4:30 p.m. ET

Webcast: at View Source

The conference call will be broadcast live in listen-only mode on the Company’s investor relations website at View Source If you would like to ask a question, the dial in number for the conference call is 844-452-6826 (Toll-Free U.S. and Canada) or 765-507-2587 (International).

Conference ID: 4956327

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

Second quarter 2020 financial results are posted on the Coherus website at View Source The webcast will be archived on the Coherus website.