On November 8, 2021 Coherus BioSciences, Inc. ("Coherus" or the "Company", Nasdaq: CHRS), reported financial results for the quarter ended September 30, 2021 and highlighted recent achievement of key milestones toward potential near-term expansion of the commercial product portfolio (Press release, Coherus Biosciences, NOV 8, 2021, View Source [SID1234594715]):
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ACHIEVEMENT OF KEY MILESTONES DRIVING NEAR-TERM COMMERCIAL PRODUCT PORTFOLIO EXPANSION
Successful UDENCYA on-body injector clinical trial is expected to enable 2022 submission of a prior approval supplement to the UDENYCA BLA.
FDA accepted the BLA for CHS-201, a biosimilar Lucentis (ranibizumab), and assigned a target action date of August 2022.
FDA review of the BLA for CHS-1420, a biosimilar Humira (adalimumab), is advancing toward the target action date in December 2021.
FDA accepted the toripalimab BLA for advanced nasopharyngeal carcinoma and granted priority review with a target action date of April 2022.
Positive esophageal squamous cell carcinoma Phase 3 clinical data is expected to enable submission of a toripalimab BLA supplement in 2022.
Positive progression free survival data (PFS) from the CHOICE-01 Phase 3 clinical trial evaluating toripalimab in non-small cell lung cancer were presented in September. A final analysis of PFS and an additional interim overall survival analysis are expected by early first quarter 2022, after which Coherus and partner Junshi Biosciences plan to discuss a potential submission of a BLA supplement with FDA.
THIRD QUARTER 2021 FINANCIAL HIGHLIGHTS
Net product revenue, consisting of net sales of UDENYCA (pegfilgrastim-cbqv), was $82.5 million.
GAAP net loss of $38.5 million was driven by lower net product revenue and increased R&D and regulatory expenses to support the development and regulatory submissions of toripalimab and biosimilar pipeline product candidates.
Non-GAAP net loss was $26.6 million, adjusting for $11.9 million in stock-based compensation expense.
At September 30, 2021, cash, cash equivalents and marketable securities were $468.7 million.
"With three BLAs currently under FDA review, and positive clinical data expected to enable submission of multiple additional applications for marketing authorization in 2022, we are making rapid progress toward our goals to diversify and grow our commercial product portfolio," said Denny Lanfear, Coherus CEO. "UDENYCA continues to provide strong funding for Coherus as we invest in our pipeline and prepare for a succession of anticipated new product launches in 2022 and 2023."
THIRD QUARTER 2021 FINANCIAL RESULTS
Net product revenue, consisting of net sales of UDENYCA, was $82.5 million and $113.6 million during the three months ended September 30, 2021 and 2020, respectively, and $253.2 million and $365.4 million during the nine months ended September 30, 2021 and 2020, respectively. The decreases were primarily due to a decrease in the number of units of UDENYCA sold during the three and nine months ended September 30, 2021, as well as an increase in discounts and allowances during the nine months ended September 30, 2021.
Cost of goods sold (COGS) was $21.3 million and $9.0 million during the three months ended September 30, 2021 and 2020, respectively, and $45.5 million and $26.0 million during the nine months ended September 30, 2021 and 2020, respectively. Until the first quarter of 2021, Coherus sold inventory that was manufactured and expensed prior to the approval of UDENYCA in late 2018. This inventory was depleted in the first quarter of 2021, and COGS now fully reflects per unit acquisition cost. Additionally, COGS for the third quarter of 2021 included a $5.2 million write-off 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.
Research and development (R&D) expense for the three months ended September 30, 2021 was $54.1 million compared to $38.9 million for the same period in 2020, an increase of $15.2 million which was mainly the result of higher development and regulatory costs in support of the advancement of pipeline product candidates. For the nine months ended September 30, 2021, R&D expense was $312.3 million compared to $98.1 million for the same period in 2020, an increase of $214.2 million which included the $136.0 million upfront license fee paid to Junshi Biosciences in 2021.
Selling, general and administrative (SG&A) expense for the three months ended September 30, 2021 was $39.9 million compared to $32.0 million for the three months ended September 30, 2020, an increase of $7.9 million which was primarily driven by increased commercialization expenses to support UDENYCA sales. For the nine months ended September 30, 2021, SG&A expense was $119.7 million compared to $101.4 million for the same period in 2020, an increase of $18.3 million, which was primarily due to an increase of $10.7 million in stock-based and other compensation expense and an increase in UDENYCA commercialization expenses.
Net loss for the third quarter of 2021 was $38.5 million, or $(0.49) per share on a diluted basis, compared to a net income of $27.9 million, or $0.33 per share on a diluted basis for the same period in 2020.
Non-GAAP net loss for the third quarter of 2021 was $26.6 million, or $(0.34) per share on a diluted basis, compared to non-GAAP net income of $39.7 million, or $0.47 per share on a diluted basis for the same period in 2020. See "Non-GAAP Financial Measures" below for a discussion on how Coherus calculates non-GAAP net (loss) income and a reconciliation to the most directly comparable GAAP measures.
Cash, cash equivalents and investments in marketable securities were $468.7 million as of September 30, 2021, compared to $454.4 million at June 30, 2021.
2021 FINANCIAL OUTLOOK
Excluding the upfront payment made to Junshi Biosciences in the first quarter, Coherus projects full year 2021 R&D and SG&A expenses in a range of $370 million to $400 million. R&D spending is focused on development, regulatory and other activities in preparation for the potential launch of toripalimab, as well as manufacturing-related and regulatory activities for CHS-1420 (Humira biosimilar), development activities for CHS-305 (Avastin biosimilar), and additional presentations of UDENYCA. Increases in SG&A spending in 2021 are primarily driven by marketing activities and headcount to support UDENYCA and the potential launches in 2022 of toripalimab and CHS-201 (Lucentis biosimilar).
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 and the section titled "Risk Factors" in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 to be filed with the Securities & Exchange Commission on November 8, 2021.
Coherus is planning to host an analyst day event in January 2022.
Conference Call Information
When: Monday, November 8, 2021 starting at 5:00 p.m. ET
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