On August 8, 2024 Coherus BioSciences, Inc. (Coherus, Nasdaq: CHRS), reported financial results for the quarter ended June 30, 2024 and recent business highlights (Press release, Coherus Biosciences, AUG 8, 2024, View Source [SID1234645591]):

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RECENT BUSINESS HIGHLIGHTS

UDENYCA RESULTS
UDENYCA net product sales were $50.9 million in Q2 2024, an increase of 19% compared to $42.7 million in Q1 2024 and a 60% increase compared to $31.7 million in Q2 2023.

Total unit demand increased 25% in Q2 2024 compared to Q1 2024, and 138% compared to Q2 2023.
Based on data from IQVIA, UDENYCA franchise market share for Q2 2024 was 29.0%, an increase of 4 market share points from Q1 2024.
LOQTORZI LAUNCH UPDATE

LOQTORZI, the first and only FDA-approved treatment for recurrent, locally advanced or metastatic nasopharyngeal carcinoma (NPC), commercially launched on January 2, 2024.
LOQTORZI net sales in Q2 2024 of $3.8 million, with new patient uptake primarily in relapsed locally advanced and 1L metastatic disease, a potential driver of long-term revenue growth.
LOQTORZI can now be ordered in all 33 National Comprehensive Cancer Network (NCCN) institutions.
The Centers for Medicare and Medicaid Services granted LOQTORZI a product-specific, permanent J Code, which was implemented on July 1, 2024.
ADVANCEMENT OF PROMISING IMMUNO-ONCOLOGY PIPELINE

Clinical data from the dose escalation stage of the Phase 1 study of CHS-114, a highly selective cytolytic anti-CCR8 antibody, was presented at the 2024 ASCO (Free ASCO Whitepaper) Annual Meeting in June. These data showed selective depletion of peripheral CCR8+ regulatory T cells, establishing proof of mechanism for CHS-114, and an acceptable safety profile with no dose-limiting toxicities, and a disease control rate of 47% in heavily pretreated patients with solid tumors. Expansion cohorts evaluating CHS-114 as monotherapy and in combination with toripalimab are currently enrolling patients with advanced/metastatic head and neck squamous cell carcinoma (HNSCC).
A Phase 2 study evaluating casdozokitug, an immune regulatory IL-27 antagonizing antibody, in combination with toripalimab and bevacizumab in treatment naïve patients with unresectable locally advanced or metastatic hepatocellular carcinoma is expected to begin enrolling patients in Q4 2024.
An Investigational New Drug (IND) application for CHS-1000, a novel humanized Fc-modified IgG1 monoclonal antibody specifically targeting ILT4 (LILRB2), was filed with the U.S. Food and Drug Administration (FDA) in Q2 2024 and received clearance. Coherus plans to initiate a Phase 1 study in the coming months.
"The first half of 2024 has been a period of disciplined execution of our strategy, which included improving our capital structure, advancing our innovative oncology pipeline and driving increasing sales of our commercial portfolio. We continue to streamline our operations, solidifying our focus on our oncology business," said Denny Lanfear, Coherus’ Chairman and Chief Executive Officer. "Bryan McMichael, our newly appointed Chief Financial Officer, will play a key role on our management team as we further translate this oncology focus into shareholder value."

"I am honored to carry forward my work at Coherus in the role of Chief Financial Officer. The strength of the team, commercial portfolio, and pipeline gives me great confidence in the Company’s future," said Bryan McMichael, Coherus’ Chief Financial Officer. "I look forward to continuing in my partnership with Denny, the Board, and other members of management to execute our strategy and bring value to shareholders."

SECOND QUARTER 2024 FINANCIAL RESULTS

Net revenue was $65.0 million during the three months ended June 30, 2024, and included $50.9 million of net sales of UDENYCA, $3.8 million of net sales of LOQTORZI, which was launched on January 2, 2024, $3.8 million of net sales of YUSIMRY, which was divested to Hong Kong King-Friend Industrial Company Ltd. ("HKF") on June 26, 2024, and other revenue of $6.5 million which included the $6.3 million up-front cash payment received for the outlicense to Apotex, Inc. of the Canadian rights to LOQTORZI on June 27, 2024. Net revenue was $58.7 million during the three months ended June 30, 2023 and included $26.7 million in revenues for CIMERLI, which was divested on March 1, 2024. Net revenue was $142.0 million and $91.2 million for the six months ended June 30, 2024 and 2023, respectively. Total net revenues attributable to the Company’s divested products, CIMERLI and YUSIMRY, during the first half of 2024 and 2023 were $35.9 million and $32.9 million, respectively.

Cost of goods sold (COGS) was $28.4 million and $24.8 million during the three months ended June 30, 2024 and 2023, respectively, and $63.0 million and $41.7 million during the six months ended June 30, 2024 and 2023, respectively. UDENYCA COGS included a mid-single digit royalty on net sales which expired on July 1, 2024. The increases in COGS in both 2024 periods were primarily driven by increased unit volumes, and in the second quarter of 2024, a $4.5 million fee for a contract change with a CMO, partially offset by a $9.7 million decrease in royalty costs in the second quarter of 2024, due to the CIMERLI divestiture on March 1, 2024.

Research and development (R&D) expenses were $22.0 million and $23.3 million for the three months ended June 30, 2024 and 2023, respectively, and $50.4 million and $57.4 million for the six months ended June 30, 2024 and 2023, respectively. The decreases were primarily due to savings from reduced headcount and lower costs related to biosimilar products, partially offset by increased costs for development of casdozokitug and CHS-114.

Selling, general and administrative (SG&A) expenses were $35.2 million and $45.1 million during the three months ended June 30, 2024 and 2023, respectively, and $91.7 million and $94.3 million during the six months ended June 30, 2024 and 2023, respectively. The declines in SG&A compared to the prior year periods were driven primarily by lower headcount. The decrease for the six-month period was partially offset by the net $6.8 million charge in the first quarter of 2024 associated with the full write-off of the outlicense intangible asset and associated release of the CVR liability related to NZV930, obtained in the Surface Oncology, Inc. acquisition.

Gain on Sale Transactions, Net which included the divestiture of the YUSIMRY franchise, which closed during the three months ended June 30, 2024, was $22.9 million, and reflects total cash proceeds of $40.0 million, net of assets transferred to HKF, liabilities derecognized, and transactions costs of $0.9 million. Gain on Sale Transactions, net for the first half of 2024 was $177.7 million and included a $154.8 million gain on the divestiture of the CIMERLI franchise, which closed during the three months ended March 31, 2024. There was no gain on Sale Transactions in the first half of 2023.

Interest expense was $5.3 million and $9.9 million during the three months ended June 30, 2024 and 2023, respectively, and $16.5 million and $19.7 million during the six months ended June 30, 2024 and 2023, respectively. The declines in both periods were primarily due to prepaying $175.0 million of the principal amount of the senior secured term loan facility that was entered into on January 5, 2022 on April 1, 2024 and prepaying the remaining $75.0 million principal amount on May 8, 2024. This was offset by interest on the $38.7 million principal amount of the new term loan facility and the revenue participation right purchase and sale agreement, both commencing May 8, 2024, as well as an average higher variable rate in the first half of 2024 compared to the first half of 2023.

Net loss for the second quarter of 2024 was $12.9 million, or $(0.11) per share on a diluted basis, compared to a net loss of $42.9 million, or $(0.49) per share on a diluted basis for the same period in 2023. Net income for the first half of 2024 was $90.0 million, or $0.73 per share on a diluted basis, compared to a net loss of $118.6 million, or $(1.42) per share on a diluted basis for the first half of 2023.

Non-GAAP net loss for the second quarter of 2024 was $16.4 million, or $(0.14) per share on a diluted basis, compared to $32.8 million, or $(0.38) per share for the same period in 2023. Non-GAAP net loss for the first half of 2024 was $52.2 million, or $(0.46) per share on a diluted basis, compared to $92.3 million, or $(1.11) per share for the first half of 2023. 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 $159.2 million as of June 30, 2024, compared to $117.7 million as of December 31, 2023.

2024 R&D and SG&A Expense Guidance
Coherus projects combined R&D and SG&A expenses for 2024 to be in the range of $250 to $265 million. This guidance includes approximately $40 million of stock-based compensation expense and excludes the effects of acquisitions, collaborations, investments, divestitures including expenses incurred on behalf of and reimbursed by Sandoz and HKF to satisfy Coherus’ obligations under the transition services agreements with those entities, restructuring, 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: Thursday, August 8, 2024, starting at 5:00 p.m. Eastern Daylight 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/BI9dd3f986eeb7428485a66ce1fb34999f
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Webcast: View Source

An archived webcast will be available on the "Investors" section of the Coherus website at View Source