On November 6, 2024 Coherus BioSciences, Inc. (Coherus or the Company, Nasdaq: CHRS), reported financial results for the quarter ended September 30, 2024 and recent business highlights (Press release, Coherus Biosciences, NOV 6, 2024, View Source [SID1234647808]):
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"Revenue growth was strong in the third quarter, with the UDENYCA franchise increasing 30% compared to the second quarter, and 100% over Q3 2023. LOQTORZI sales grew more than 50% compared to the second quarter of 2024," said Denny Lanfear, Coherus Chairman and Chief Executive Officer. "Our sharpened focus on oncology is delivering results. Third quarter 2024 revenues are now comparable to Q3 2023, despite our divestitures, with higher gross profit, lower operating expenses and lower interest expense."
"We continue to make progress towards our long-term vision of bringing innovative, next-generation therapies to extend cancer patient survival. Our competitively positioned pipeline, in combination with LOQTORZI, is advancing to plan in tumor types with high unmet medical need and with robust supportive biology," continued Mr. Lanfear.
RECENT BUSINESS HIGHLIGHTS
UDENYCA RESULTS
● UDENYCA net product sales were $66.1 million in Q3 2024, an increase of 30% compared to $50.9 million in Q2 2024 and a 100% increase compared to $33.0 million in Q3 2023.
● Q3 revenue was driven by a 54% increase in demand for ONBODY and a higher overall net selling price.
● In Q3, UDENYCA maintained its #2 position in the pegfilgrastim class with 28% market share.
UDENYCA SUPPLY UPDATE
● Coherus’ third-party labeling and packaging contract manufacturing organization (CMO) for UDENYCA has informed the Company that production will resume this week, a few weeks later than previously targeted and disclosed. Based on the production schedule, the backlog of UDENYCA lots of approximately 120,000 units will be completed without further interruption or delay by the end of the year.
● The Company has also made significant progress in its previously announced efforts to diversify its labeling and packaging resources. An additional final packaging and labeling CMO has already started production testing and is expected to start manufacturing saleable product by the end of 2024. Commercial supply from that CMO is expected to commence in the first quarter of 2025, subject to U.S. Food and Drug Administration (FDA) authorization. Once the second facility is commercially operational, the Company projects that its labeling and packaging capacity will have doubled to over one million UDENYCA units annually, consistent with the rest of its supply chain.
LOQTORZI LAUNCH UPDATE
● LOQTORZI, the first and only FDA-approved treatment for recurrent, locally advanced or metastatic nasopharyngeal carcinoma (NPC), commercially launched across all lines of therapy on January 2, 2024.
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● LOQTORZI net product sales were $5.8 million in Q3 2024, an increase of 54% compared to $3.8 million in Q2 2024.
● The number of LOQTORZI treated patients grew by more than 60% in Q3, with new patient uptake primarily in relapsed locally advanced and 1L metastatic disease, the key driver of long-term revenue growth.
● Since launch, nearly 80% of all National Comprehensive Cancer Network (NCCN) institutions have written prescriptions for at least one new patient.
ADVANCEMENT OF PROMISING IMMUNO-ONCOLOGY PIPELINE
● This quarter, the Company expects to open a Phase 2 randomized study evaluating casdozokitug, an immune regulatory IL-27 antagonist in combination with toripalimab and bevacizumab for the treatment of unresectable locally advanced or metastatic hepatocellular carcinoma (HCC) in treatment-naive patients.
● The Company also anticipates final data from its Phase 2 trial of casdozokitug combined with atezolizumab and bevacizumab in first-line HCC in the first quarter of 2025. Coherus has received FDA orphan drug status and fast track designation for casdozokitug in HCC.
● A Phase 1 study evaluating CHS-114, a highly selective cytolytic anti-CCR8 antibody, is ongoing. In the first half of 2025, Coherus expects to report Phase 1 data from expansion cohorts evaluating CHS-114 as monotherapy and in combination with toripalimab in patients with advanced/metastatic head and neck squamous cell carcinoma (HNSCC).
● Coherus plans to initiate Phase 1b dose optimization studies of CHS-114 in combination with toripalimab in patients with HNSCC and gastric cancer in the first quarter of 2025, with initial data for both studies expected in the first half of 2026.
THIRD QUARTER 2024 FINANCIAL RESULTS
Net revenue was $70.8 million during the three months ended September 30, 2024, and included $66.1 million of net sales of UDENYCA and $5.8 million of net sales of LOQTORZI. Net revenue was $74.6 million during the three months ended September 30, 2023 and included $33.0 million in net sales of UDENYCA and $41.4 million attributable to the Company’s divested products, CIMERLI and YUSIMRY.
Net revenue was $212.8 million and $165.7 million for the nine months ended September 30, 2024 and 2023, respectively. Total net revenue attributable to the Company’s divested products, CIMERLI and YUSIMRY, during the first nine months of 2024 and 2023 was $34.5 million and $74.3 million, respectively. In addition, the first nine months of 2024 included other revenue of $7.0 million mainly comprising 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.
Cost of goods sold (COGS) was $20.7 million and $32.7 million during the three months ended September 30, 2024 and 2023, respectively, and $83.7 million and $74.4 million during the nine months ended September 30, 2024 and 2023, respectively. The decrease in COGS for the third quarter of 2024 compared to the same period in the prior year was primarily due to $24.1 million of COGS in the third quarter of 2023 related to CIMERLI and YUSIMRY, which were divested during the first half of 2024, partially offset by a $9.7 million increase in product costs driven by increased UDENYCA volume.
The increase in COGS for the nine months ended September 30, 2024 compared to the same period in the prior year was primarily due to a $27.8 million increase related to volumes driven by UDENYCA and LOQTORZI, $4.5 million in connection with a CMO contract change, and $2.5 million in LOQTORZI royalties. These increases were partially offset by non-recurring COGS related to products divested during the first half of 2024 mentioned above.
Research and development (R&D) expenses were $21.7 million and $25.6 million for the three months ended September 30, 2024 and 2023, respectively, and $72.1 million and $83.1 million for the nine months ended September 30, 2024 and 2023, respectively. The decreases were primarily due to savings from reduced headcount and lower costs related to biosimilar product divestitures, partially offset by costs for development of casdozokitug and CHS-114.
Selling, general and administrative (SG&A) expenses were $34.7 million and $48.2 million during the three months ended September 30, 2024 and 2023, respectively, and $126.4 million and $142.5 million during the nine months ended September 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 nine-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.
Interest expense was $5.4 million and $10.3 million during the three months ended September 30, 2024 and 2023, respectively, and $21.8 million and $29.9 million during the nine months ended September 30, 2024 and 2023, respectively. The declines in both periods were primarily due to prepaying $175.0 million of the principal amount due under the 2027 Term Loans on April 1, 2024 and the remaining $75.0 million principal amount on May 8, 2024, partially offset by interest on the senior secured term loan facility of up to $38.7 million and the revenue participation right purchase and sale agreement, both commencing May 8, 2024.
Gain on sale transactions, net was $176.6 million for the nine months ended September 30, 2024 and included a $153.8 million gain on the divestiture of our CIMERLI ophthalmology franchise, which closed during the first quarter of 2024, and a $22.9 million gain on the divestiture of our YUSIMRY immunology franchise, which closed during the second quarter of 2024. There was no gain on sale transactions in the nine months ended September 30, 2023.
Net loss for the third quarter of 2024 was $10.8 million, or $(0.09) per share on a diluted basis, compared to a net loss of $39.6 million, or $(0.41) per share on a diluted basis for the same period in 2023. Net income for the nine months ended September 30, 2024 was $79.2 million, or $0.65 per share on a diluted basis, compared to a net loss of $158.2 million, or $(1.79) per share on a diluted basis for nine months ended September 30, 2023.