Q1 2022 Coherus BioSciences Inc Earnings Call
Operator: There will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone.
The answer session to ask a question during the session you will need to press star one on your telephone if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Mcdavid Stilwell Chief Financial Officer. Please go ahead.
Operator: If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, McDavid Stilwell, Chief Financial Officer. Please go ahead.
McDavid Stilwell: Thank you, Operator. Good afternoon, everyone. And thank you for joining us. We issued a press release earlier announcing our financial results for the first quarter of 2022. And the results can be found in the release can be found on the Coherus BioSciences website. Today's call includes forward-looking statements regarding Coherus' current expectations about future events. These statements include, but are not limited to, our ability to advance our product candidates through development and registration, the status of our product candidate clinical profile, our timing and ability to commercialize our products and product candidates in the future, our R&D and SG&A expense guidance for 2022, our revenue targets for 2026 and our ability to meet the same, our projections about margin as well as our ability to draw down amounts under our receipt credit, and the timing of the All these future events involve substantial risks and uncertainties that are beyond our control and could cause actual results, performance, or achievements to differ from the results, performance, or achievements implied by the forward-looking statements.
Thank you operator, good afternoon, everyone and thank you for joining US we issued a press release earlier announcing our financial results for the first quarter of 2022.
<unk> can be found on the release can be found on the comparative biosciences website.
Today's call includes forward looking statements regarding coherent as current expectations about future events. These statements include but are not limited to our ability to advance our product candidates through development and registration the status of our product candidates clinical profile, our timing and ability to commercialize our products and product candidates in the future.
R&D and SG&A expense guidance for 2022.
Our revenue targets for 2026, and our ability to meet the same our projections about margin as well as our ability to draw down.
Credit facility and the.
Timing of the Resubmission and review.
We're talking about.
All of these future events involve substantial risks and uncertainties that are beyond our control and could cause actual results performance or achievements to differ from the results performance or achievements implied by.
The forward looking statements.
McDavid Stilwell: These statements are not guarantees of future performance and are subject to substantial risks and uncertainties that are discussed in our press release that we issue today as well as in the documents that will be filed with the Securities and Exchange Commission, including those in our quarterly report on Form 10-Q for the period ending today. The forward-looking statements provided on the call today are made as of this date, and we undertake no duty to update or revise any forward-looking statements.
These statements are not guarantees of future performance and are subject to substantial risks and uncertainties.
<unk> in our press release that we issued today as well as the documents will be filed with the Securities and Exchange Commission, including.
As noted in our quarterly report on Form 10-Q with today's date.
The forward looking statements provided on the call today are made as of this date and we undertake no duty to update or revise any forward looking statements.
McDavid Stilwell: With me on today's call are Denny Lanfear, CEO of Coherus, Paul Reider, Chief Commercial Officer, Theresa Lavallee, Chief Development Officer, and Dr. Rosh Dias, Chief Medical Officer. And I'll now turn the call over to Denny. Thank you, McDavid. Good afternoon, everyone.
With me on today's call are getting unfair CEO of Coke Harris poll Reeder, Chief Commercial Officer, Teresa Law Valley, Chief Development Officer.
Dr. Ross <unk>, Chief Medical Officer, and now I'll turn the call to Danny.
Dennis Lanfear: And thank you for joining us today on our conference call to review recent business highlights and financial results for the first quarter of 2022. Today, we will provide updates on our current business as well as our progress transforming Coherus into an innovative immuno-oncology company supported by revenues from a diversified portfolio of FDA-approved products. Now, first, with respect to the complete response letter we received from the FDA pursuant to the 12-valve malleolus A for advanced nasopharyngeal cancer, we are currently assembling the FDA meeting package, which will support agency interaction, to occur prior to the BLA submission. We expect a mid-summer filing in the next six months per due timeline.
Thank you David and good afternoon, everyone and thank you for joining US today in our conference call to review recent business highlights and financial results for the first quarter 2022.
Today, we will provide updates on our current businesses bought their progress transforming <unk> into an innovative immuno oncology company.
Part of our revenues from a diversified portfolio of products.
So first with respect to the complete response letter we received from the FDA pursuant to the tour.
Hey.
Our advanced nasal pharyngeal cancer.
We're currently assembling the FDA meeting package, which will support an agency interaction.
Prior to the BLA submission.
We expect mid summer finally, the six month review timeline.
Dennis Lanfear: As we previously communicated, we believe the requested quality process change. Administrative Foreword, and Runley Address. Further to the development side of the business, Dr. Theresa Lavallee, our Chief Development Officer, will provide additional detail regarding Toropalva and VLA, as well as our work with our partner, Junichi Biosciences, on the development of TorPALMAP for other indications, and in combination with CHS-006, targeted antibodies. On the commercial side of the business, Paul Reider, our Chief Commercial Officer, will review recent Udenica performance Similarly, our Lucentis biosimilar candidate, where the review of the BLA is proceeding well and progressing towards an August 2, 2022 action plan. Summary.
As we previously communicated we believe the requested all the process change the straightforward and readily addressable.
Yeah.
The development side of the business Dr. Theresa Lavalle, our Chief Development Officer, who will provide additional detail regarding our BLA as well as our work with our partner <unk> Biosciences on the development of <unk> for other indications and in combination with CHS 006.
Our targeted antibody.
On the commercial side of the business Paul reader.
Our chief commercial officer.
We will review recent.
Performance in our preparation.
It is near term commercial launches of <unk>.
First toward Palomar, which we plan to launch for MPC once approved.
Similarly.
Census, Biosimilar Kennedy.
The BLA is proceeding well and progressing towards August 2nd 2022 action date.
Dennis Lanfear: Argue My Repulse, where we are investing heavily in inventory built as robust supply availability is a key part of our market strategy, as well as the Udenica OnBody Injector presentation, a significant market share growth opportunity for our Uganda franchise. Today, we're also announcing the termination of our license relationship with Inovant for the development of the biosimilar acid candidate, IPI 305. COVID commenced shortly after execution of this agreement and has caused significant delays to the development time.
You said marine our Humira biosimilar.
We're investing heavily in inventory build as robust supply availability is a key part of our market strategy.
As well as your deneke on body injector presentation.
Significant market share growth opportunity for our <unk> franchise.
Today, we're also announcing the termination of our license relationship with element for the development of a biosimilar candidate Ipi at 305.
Covid commenced shortly after execution of this agreement and has caused significant delays to the development timeline.
Dennis Lanfear: We have recently assessed the market dynamics, and given ongoing and projected COVID-related delays, we determined that this program no longer warrants our continued investment. Lastly, McDavid Stilwell, the company's Chief Financial Officer, will review our first quarter financial results and provide an update on our operating expense guidance for the remainder of 2022. We'll then, of course, be happy to take your questions.
We have recently assessed.
The market dynamics, and given ongoing and projected COVID-19 related delays, we determined that this program no longer warrants for continued investment.
Lastly.
Mcdavid Stilwell company's Chief Financial Officer.
I'll review, our first quarter financial results provide an update on our operating expense guidance for the remainder of 2022.
Well that will of course be happy to take your questions.
Dennis Lanfear: And today I want to introduce you to our new chief medical officer, Dr. Rosh Dias, who is with us and will be happy to take your questions during the Q&A. Rosh has over 18 years of experience in oncology, medical affairs, development, and commercialization. We welcome Rosh to our team.
Today I want to introduce you to our new Chief Medical Officer.
Dr. Raj <unk>, who is with us and we'll be happy to take your questions during the Q&A.
Russia has over 18 years experience in oncology Medical affairs development and commercialization.
We welcome Raj to our team.
Dennis Lanfear: Now, at our analyst day event on March 29th, we introduced 2026 revenue guidance targets of $1.2 to $2.2 billion and further described how we will leverage our existing operational infrastructure to achieve our commercial and development objectives, with continued strong execution of regulatory approvals and commercial launches and the advancement of our novel immuno-oncology pipeline. We expect to transform Coherus into a rapidly growing, profitable, and innovative company. Now, I'll turn the call over to Dr. Lavallee for an update on the TORI BLA Review and our other development programs. Therese. Thank you, Denny.
At our analyst day event March 29, we introduced 2026 revenue guidance targets.
One point to $2 2 billion.
And further describe how we will leverage our existing operational infrastructure to achieve our commercial development objectives.
With continued strong execution on the regulatory approvals and commercial launches in the advancement of our novel immuno oncology pipeline, we expect to transform <unk> into a rapidly growing profitable and innovative oncology.
Now I'll turn the call over to Dr. <unk> for an update on the Torrey BLA review and our other development programs.
Theresa Lavallee: As Denny referenced, the FDA issued a complete response letter for the Biologics License Application for Toropalamab for NTC. The CRL requests a quality process change that we believe is straightforward and readily addressable. We plan to meet with the FDA to ensure our resubmission is complete and will submit the meeting request package in the next few days. We plan to resubmit the BLA by mid-summer 2022. The agency also communicated in the CRL that the review timeline for the BLA resubmission would be six months. However, as required, on-site inspections have been hindered by travel restrictions related to the COVID-19 pandemic in China.
Thank you Jenny.
Any reference the FTE.
Later at the Biologics license application for Tomorrow.
Alright.
And BRL request, our quality process change that we believe is straightforward.
We plan to meet with the FDA to ensure our Resubmission is.
And we'll submit the meeting package for the next few days.
And plan to resubmit the BLA.
Hi.
In 2022.
AEP ingenuity.
And the review timeline for the BLA Resubmission would be fixed.
As required.
Thank you.
By travel restrictions related to Covid.
Theresa Lavallee: The FDA has indicated that the existing TORRA-PALOMAV clinical data are supportive of the BLAs mission. Laura Palinav has demonstrated clinical efficacy in multiple tumor types, including in tumors with low PD-L1 expression. This differentiated clinical activity may result from toropalumab's high binding affinity to a unique epitope that potentiates PD-1 internalization.
The FDA.
Got it.
<unk> clinical data.
Importantly, the BLA.
Yeah.
<unk> has demonstrated clinical efficacy in multiple tumor types.
<unk> in tumors with low PDL one expression.
This differentiation.
He may result.
Hi.
So unique.
<unk>.
<unk>.
Theresa Lavallee: The next clinical milestone for toropalumab could be the readout of the PF, PFS, and OS co-primary endpoints from the small cell lung cancer study Jupiter-8, which is expected this year. We recently obtained orphan drug designation for this indication in the United States. JUPITER-8 is a randomized, double-blind, placebo-controlled, multi-center phase 3 clinical trial evaluating platinum chemotherapy plus etoposide alone or in combination with torepalumab as the first-line treatment for extensive stage small cell lung cancer. This is an aggressive tumor characterized by rapid disease progression, low expression of PD-L1, and low levels of tumor-infiltrating immune cells, as well as a high degree of immunosuppression.
Our next clinical milestone for Allomap.
Yeah, Yeah yeah.
So primary endpoint.
<unk> cell lung cancer study <unk>.
Which is expected this year.
We recently obtained orphan drug designation.
Thank you.
Do you think there is a randomized double blind placebo controlled multicenter phase III clinical trial.
Platinum chemotherapy alone.
Alone or in combination with Allomap.
The first line treatment.
Small cell lung cancer.
This is an aggressive tumor characterized by rapid disease progression.
Especially in of PDL, one and low levels of tumor infiltrating immune cells as well as the high degree of immune suppression.
Theresa Lavallee: Efficacy of cancer immunotherapy has been limited in small-cell lung cancer, and no PD-1 inhibitors are currently approved in the United States for this indication. Regarding additional potential indications in the United States, we announced at a recent Analyst Day event that we are working with QMC to review possibilities to amend protocols of several studies to enroll patients in the United States to satisfy the FDA's needs for multi-regional clinical trials. We look forward to providing additional information on this topic in the future. However, at this time, we are not planning additional studies for toropalumab in combination with chemotherapy for first-line non-smallpellas.
It could be in cancer immunotherapy has been limited in small cell lung cancer and no PD. One inhibitors are currently approved in the United States.
Yeah.
Okay, sorry, additional potential indications in the United States, We announced at our recent analyst day event and.
We are working with GMC to review possibility for men protocols.
That is to enroll patients in the United States to satisfy the fda's need for multi regional clinical trials.
We look forward to providing additional information on this topic in the future.
At this time, we are not planning additional studies of <unk> in combination with chemotherapy.
Okay.
Theresa Lavallee: However, we are planning to develop the dual I-O treatment of toropalumab in combination with our TIGID, CHF006, for non-small cell lung cancer, leveraging the robust efficacy results reported in the CHOICE-1 study. An ongoing phase one clinical trial evaluating CHF006 and toropalumab is being conducted in China and is expected to read out next year, and an IND is open in the U.S., and we expect to begin enrolling cohorts of U.S. patients later this year or early next year. The blockage of the TTIP pathway may be a crucial underlying mechanism for overcoming PD-1 resistance.
However, we are planning to develop tools.
Cool I O treatment for Palatin.
In Asia with our T J CHS Apple effects for non small cell lung cancer, leveraging the robust efficacy results reported and then choice.
Any.
And Orange County, eight clinical trial evaluating CHS blessing.
Telenet is being conducted in China is expected to read out next year.
Indy and open in the U S.
We expect to begin enrolling cohort of U S. Patients later this year or early next year.
Blockage entertainment pathway, it may be a crucial and youre a mechanism.
Overcoming PD one great distance, we believe a dual immunotherapy approach.
Theresa Lavallee: We believe the dual immunotherapy approach of TTIP with PD-1 could enhance PD-1 efficacy and create a new standard of care for multiple tumor types. We expect to see important clinical data from several competing TGIP programs in the coming months, and these data may inform the future direction of our CHS006 development program. At our recent Analyst Day, we introduced several fully owned programs targeting ILT4 and CCRA that are being developed by Coherus scientists at our research center in Camarillo.
PD, one could enhance PD one efficacy.
And survival.
Create a new standard of care for multiple tumor types.
We expect to see important clinical data.
Competing ticket program maintenance.
And these data may inform the future direction of ours, each at epilepsy development program.
At our recent analyst day, we energies central wholly owned programs targeting IL people are <unk> that are being developed.
And our research center in camera payout.
Theresa Lavallee: We expect to submit an IND for our first of these, CHS1000, targeting ILT4, next year and to file at least one new IND per year going forward. On the biosimilar development and regulatory front, we recently held a late-cycle review meeting with the FDA for the Simmerly BLA, and that review is advancing towards the August action date. In June, results of the PK-PD study evaluating our Eugenica on-body injector device will be published in connection with the ASCO annual meeting.
We expect to submit an I N E R.
CHS 1000 targeting Iot for next year, and just finally at least one new R&D per year going forward.
And the Biosimilar development regulatory front.
Recently held the late cycle review meeting with the FDA for the <unk> BLA and that review is advancing towards August .
Yeah.
I mean in June results at the PK PD study evaluating <unk> guernica on body injector debate will be published in connection with the App.
Yeah.
Theresa Lavallee: Recall that we previously announced that the study met all PK bioequivalence primary endpoints, as well as the key secondary pharmacodynamic endpoints of A and C. I'll now turn the call to Paul Reider. Thank you, Theresa. Edenica net sales were $60 million in the first quarter, a decline from $73.4 million in the prior quarter. This was driven by a 12% decline in demand units.
Recall that we previously announced a steady net all PK bioequivalence primary endpoint as well as the key secondary Pharmacodynamic endpoint F N b.
I'll now turn the call to Paul reader.
Paul Reider: As well as continued price erosion due to intense competitive pressures in the Peckfield-Grastham pre-filled syringe market. On a units basis, the overall PECFIL-GRASDA market increased 1% in the first quarter, and we expect low single-digit market growth in the remainder of 2022, consistent with historical trends. New LASTA retains 59% total market share within the cloud, with OnPro holding 47% market share, based on an entrenched preference by customers reinforced by the COVID pandemic.
Thank you Theresa.
<unk> net sales were $60 million.
First quarter declined 73 4 million the prior quarter.
Was driven by a 12% decline in demand units as well as continued price erosion due to intense competitive pressures the pegfilgrastim pre filled syringe market.
On a unit basis, the overall pegfilgrastim market increased 1% in the first quarter and we expect low single digit market growth.
Remainder of 2022, consistent with historical trends.
<unk> retains 59% total market share within the class with Olin pro holding 47% market share based on an entrenched preference by customers reinforced by the Covid pandemic.
Paul Reider: Eudenica market share erosion from 17.5% to 16% in the first quarter occurred largely in the hospital segment, where competitive biosimilars have resorted to a strategy of offering irreversible significant price reductions in order to capture short-term market share. This is reflected in the quarterly ASP declines by these competitive products, with our on-body device in the pipeline. Our strategy is to maintain a disciplined approach to managing price with the PFS format in 2022.
<unk> market share erosion from 17, 5%, 16% in the first quarter occurred largely in the hospital segment, where competitive biosimilars have resorted to a strategy of offering irreversible significant price reductions in order to capture short term mark.
Sure.
This is reflected in the quarterly ASP declines by these competitive products.
With our on body device in the pipe for our.
Our strategy is to maintain a disciplined approach in managing price with the PFS format in 2022.
Paul Reider: This will enable us to maximize long-term revenues for the Eudenica Cree Institute through significant share gains that we expect in 2023 and beyond within the on-body segment, which currently represents approximately $1 billion in untapped opportunity. We expect Udenica market share to grow next year once we introduce our Udenica on-body injector, if approved. Now I'd like to talk about commercializing our plant. We're preparing for the launch of three new brands in the next 15 months. Torpalumab, or PD-1 inhibitor, for nasal pharyngeal carcinoma
This will enable us to maximize long term revenues for the identical franchise three significant share gains that we expect in 2023 and beyond within the on body segment, which currently represents approximately $1 billion an untapped opportunity.
We expect Datacom market share to grow next year once we introduce our you detica on body injector if approved.
Now I'd like to talk about commercializing <unk>.
We are preparing for the launch of three new brands in the next 15 months towards Palomar, our PD, one inhibitor nasal pharyngeal carcinoma.
Paul Reider: Similarly, our Lucentis biosimilar and Eucimry, our Humira biosimilar. Nasal pharyngeal carcinoma, or NPC, is a rare cancer where there are currently no PD-1 inhibitors approved for use by the FDA. Fort Palomar not only has the potential to be the first and only PD-1 inhibitor indicated for this tumor, but also to establish a new first-line standard of care. Our oncology commercial capabilities have been built to scale, and there is significant overlap between our current Udenica customers and TORP Halimap targeted prescribers.
Similarly, our Lucentis Biosimilar and <unk>, our Humira biosimilar.
Please refer jewel carcinoma, NPC is a rare cancer, where there are currently no PD one inhibitors approved for use by the FDA.
<unk> has the potential to be the first and only PD one inhibitor indicated for this tumor type.
But also to establish a new first line standard of care.
Our oncology commercial capabilities have been built to scale and there is significant overlap between our current <unk> customers and toward pellet map targeted prescribers.
Paul Reider: Therefore, the launch of TOR-PALIMAP will be efficiently integrated into our existing oncology commercial. In addition, the NCCN Guidelines Committee for NPC has added as a reference to the guidelines the citation for the Jupiter 02 trial, which was published in Nature Medicine last year, further validating the importance and quality of the clinical trial.
Therefore, with the launch of towards Alabama will be efficiently integrated into our existing oncology commercial infrastructure.
In addition, the NCC guidelines committee for MPC has added as a reference to the guidelines. The citation for the Jupiter Zero two trial, which was published in nature Medicine last.
Further validating the importance and quality of the clinical trial.
Paul Reider: Commercial launch preparations are on track, and the field-facing teams have been fully trained. We will be ready to launch ToroPALMAP once approved by FDA. With respect to Simmerly, our FDA action date is August 2, 2022, which, if approved, will allow us to launch in the early biosimilar market formation period of the $7 billion anti-VEGF. This is a clinic-based buy-and-build model, which is very similar to oncology and the core competency, and we look forward to competing in this large, attractive market.
Commercial launch preparations are on track and the field facing teams have been fully trained we will be ready to launch towards pedal map.
<unk> by FDA.
With respect to similarly, our FDA action date is August 2022, which if approved will allow us to launch the early biosimilar market formation periods of the $7 billion.
Hi, Jeff.
This is a clinic based buy and Bill model, which was very similar to oncology and a core competency of ours and we look forward to competing in this large and attractive market.
Paul Reider: Recently conducted market research confirms the opportunity exists to penetrate the entire budget. Since our last call, we've continued to engage with retina thought leaders, built out additional marketing expertise, and hired the head of our ophthalmology sales, an experienced sales executive with over 15 years building and leading sales teams in the ophthalmology therapeutic area. Retinal specialist opinion leaders expressed positive receptivity to Coherus entering this market.
Recently conducted market research confirms the opportunity exists to penetrate the entire market.
Since our last call. We've continued to engage with the thought leaders built out additional marketing expertise and hired the head of our ophthalmology sales team an experienced sales executive with over 15 years building and leading sales teams in the ophthalmology therapeutic areas.
Retinal specialist opinion leaders expressed positive receptivity.
<unk> entering this market and our track record of success in oncology gives them confidence to understand the dynamics.
Paul Reider: And our track record of success in oncology gives them confidence that Coherus understands the dynamics of a buy and build market and that we will deliver a safe and effective alternative to ascendance with a compelling value proposition. Now regarding Yosemite, or Humbera Biosciences. Summary was approved by FDA last December, and we are preparing for a launch in July 2023. Yamira's US net sales were $17 billion in
Bill market and that we will deliver a safe and effective alternative to centers with a compelling value proposition.
Now regarding your similarly, our Humira biosimilar.
<unk> was approved by FDA last December .
We're preparing for a launch in July 2023.
Paul Reider: And we look forward to competing in this large market. We believe payers and pharmacy benefit managers will drive biosimilar adalumumab adoption and have completed extensive market research with national and regional payers, as well as pharmacy benefit managers. The insights gleaned from this market research confirm that Coherus can deliver on the attributes most important to payers, which include a highly competitive price, robust and reliable supply, and an auto-injector presentation that has a non-stinging, citrate-free formulation. Yosemite will have both a prefilled syringe and an auto injector presentation, and the USIMRI device will include our proprietary non-stinging citrate-free formulation and a 29-gauge needle, all comparable to the original.
<unk> U S. Net sales were $17 billion in 2021.
We look forward to competing in this large market.
We believe payers and Pbms will dry bulk and aluminum abduction and have completed extensive market research with national and regional payers as well as the Pbms.
Insights gleaned from this market research confirmed that <unk> can deliver on the attributes most important to payers, which include a highly competitive price.
Robust and reliable supply.
And in auto injector presentation. It has not stinging citrate free formulation.
You Sebree will have both a pre filled syringe and an auto injector presentation.
Similarly, <unk> device will include our proprietary no interesting ctrip free formulation and to 29 gauge needle all comparable to the originators.
Paul Reider: We also plan to introduce a high-concentration presentation post-launch to meet our expectations to win at least 10% of the unit market share. We have invested more than $45 million in large-scale manufacturing and expect to be a high-volume, low-cost manufacturer, well positioned to compete on supply guarantees and price. Our first year manufacturing capacity exceeds 1 million units for about 10% of the overall aluminum market, and we have the potential to triple that capacity in the current facility.
We also plan to introduce a high concentration presentation post launch.
To meet our expectations to win at least 10% unit market share.
Invested more than $45 billion large scale manufacturing and expect to be a high volume low cost manufacturer.
Well positioned to compete on supply guarantees and price.
First your manufacturing capacity, six 1 million units or about 10% overall add aluminum that market.
You have the potential to triple that capacity and the current facility.
Paul Reider: Unlike other players in the adalumumab market, we have no portfolio of branded alternatives to Humira that we need to protect from adalumumab cannibalization. Our positioning for Yosemite is perfectly aligned with that of the payers and PBMs. We want to make the Adelman Met market as large as possible, as quickly as possible.
Unlike other players in the AD aluminum at market, we have no portfolio of brands and alternatives to Humira. The we need to protect from added lumen that cannibalization.
Our positioning for your summary is perfectly aligned with that of the Payors and Pbms, we want to make the aluminum that market as large as possible as quickly as possible.
McDavid Stilwell: We see this as a source of competitive advantage. In short, we are confident that we will deliver a compelling value proposition and that we can achieve our objective to win at least 10 percent of the unit market share at. I'll now turn the call to McDavid for a review of the quarter's financial results. Thanks, Paul.
We see this as a source of competitive as competitive advantage.
In short we are confident that we will deliver a compelling value proposition that we can achieve our objective to win at least 10% market share.
Although I will turn the call to David.
For a review of the quarter's financials.
Thanks, Paul.
McDavid Stilwell: I'll focus on just a few financial highlights since the details are in the press release and in the 10-Q that we followed earlier this afternoon. For the first quarter of 2022, we reported a $96.1 million net loss on a gap basis. On a non-gap basis, we reported a net loss of $77 million. Gap to non-gap reconciliation included two items, $12.9 million in non-cash stock-based compensation expense and a $6.2 million loss on the extinguishment of debt.
I'll focus on just a few financial highlights since the details are in the press release and in the 10-Q that we followed earlier this afternoon.
For the first quarter of 2022, we reported a $96 $1 billion in net loss on a GAAP basis.
The non-GAAP basis, we reported a net loss of $77 million.
GAAP to non-GAAP reconciliation included two items $12 9 million in noncash stock based compensation expense and a $6 $2 million loss on the extinguishment of debt.
McDavid Stilwell: Cash used in operating activities was $54 million for the first quarter of 2022. As detailed earlier in the call, net product revenues were $60.1 million, a decline from the prior quarter and the year-ago quarter. The decline was primarily attributable to a decline in demand units, as well as a lower net realized price.
Cash used in operating activities was 54 million for the first quarter of 2022.
As detailed earlier in the call net product revenues were $16 1 billion a decline from the prior quarter and the year ago quarter.
Mine was primarily attributable to a decline in demand units as well as lower net realized price.
McDavid Stilwell: Research and development expenses for the first quarter of 2022 were $82.9 million, compared to $203.5 million for the same period in 2021. This year's first quarter included a $35 million payment to Jun-Chi Biosciences for the license of VHS-006, our TIGIT-targeted antibody. Last year's first quarter R&D expense included the $145 million upfront payment to Jun-Chi for the Torop Alamap collaboration. Dining, general, and administrative expenses were $48.8 million in the first quarter of 2022, as compared to $39.4 million in the year-ago quarter.
Research and development expenses for the first quarter of 2022 were $82 9 million compared to $203 5 million for the same period in 2021.
This year's first quarter included a $35 million payment to June she biosciences licensed with CHS.
Our tissue targeted antibody.
Last year's first quarter R&D expense included the $145 million upfront payment did you achieve for the tour.
Operations.
Selling general and administrative expenses were $48 8 million in the first quarter of 2022 as compared to $39 4 million in the year ago quarter.
McDavid Stilwell: The increase was primarily driven by activities in preparation for the launches of multiple new commercial products anticipated in 2022 and 2023. We ended the quarter with cash and cash equivalents of $326 million, compared to a balance of $417 million at year-end 2021. Recall that in January, we entered into a credit facility agreement with Pharmacon Advisors for a $300 million term loan payable across four tranches. We drew the first $100 million tranche at closing and simultaneously paid off a $75 million term loan.
The increase was primarily driven by activities in preparation for the launches of multiple new commercial products anticipated in 2022 and 2023.
We ended the quarter with cash and cash equivalents of $326 million compared to a balance of $417 million at year end 2021.
Recall that in January we entered into a credit facility agreement with Pharmacon advisors for a $300 billion term loan payable across board tranches.
During the first $100 million tranche at closing and simultaneously paid off a $75 million term loan.
McDavid Stilwell: At the end of March, we drew a second $100 million tranche and simultaneously paid off the 2022 convertible notes. Two additional tranches of $50 million each will become available to us upon the approval by the FDA of Torp-LMF and of Simrales. And for our expectations for full-year operating, With the discontinuation of the CHS305 Avastin Biosimilar program and the delay in the Toropanelmat launch, we are lowering our projected range for full-year R&D and SG&A expenses by $20 million to $395 million to $430 million.
At the end of March we drew our second $100 million tranche and simultaneously paid off the 2022 convertible notes.
Two additional tranches of $50 million, each will become available to us upon the approval by the FDA.
And similarly.
As for our expectations for full year operating expenses with the discontinuation of the CHF three zero.
And Biosimilar program and the delay in the tour patent about March.
Lowering our projected range for full year, R&D and SG&A expenses by $20 billion.
To 395 million to $430 million.
McDavid Stilwell: This guidance excludes both the $35 million upfront fee to Junchi Biosciences that we paid for rights to CHS006 and the $25 million milestone payment that will become due on approval of Toropalambap for nasopharyngeal carcinoma. This range also includes approximately $55 million to $60 million in non-cash stock-based compensation expenses.
This guidance excludes both the $35 million upfront fee to <unk> biosciences that we pay for Reits to CHS, <unk>, six and the $25 million milestone payment.
Come to an approval for.
<unk> appeared NGL carcinoma.
This range also includes approximately 55 million to $60 million and noncash stock based compensation expense.
McDavid Stilwell: Let me provide some additional color on these anticipated operating expenses, a significant portion of which is investment that will convert back to cash quickly with a high IRR. This year, we will spend approximately $50 million on manufacturing inventory for new product models. Recall that one lesson from our Utenica launch is that going to market with ample supply is a critical success factor. Also, recall that low-cost inventory manufactured and expensed prior to approval is subsequently expected to deliver a P&L benefit in the form of lower cost of goods sold.
Let me provide some additional color on these anticipated operating expenses a significant portion of which is investment that will convert back to cash quickly with a high IRR. This.
This year, we will spend approximately $50 million manufacturing inventory for new product launches recall that one lesson from our Utica launch is it going to market with ample supply is a critical success factor.
Also recall that low cost inventory manufactured in expense prior to approval subsequently is expected to deliver P&L benefit in the form of lower cost of goods sold.
McDavid Stilwell: Another $40 to $50 million of operating expenses this year will fund completion of the development of additional presentations of products we expect to introduce over the next two years, as well as manufacturing scale-up projects that will deliver ongoing benefits in the form of significantly lower costs. I'll close by saying that on the investor relations front, we'll be participating in the Bank of America Health Care Conference in Las Vegas next week on May 12th, and at the UBS Conference in New York on May 24th, and at the HCW Conference in Miami on May 25th. And I'll now turn the call over to Penny for her closing remarks. Thank you, McDavid.
Another $40 million to $50 million of operating expense. This year will fund completion of development of additional presentations of products, we expect to introduce over the next two years as well as manufacturing scale up projects that will deliver ongoing benefits in the form of significantly lower costs.
I'll close by saying that on the Investor Relations, who will be participating in the bank of America Healthcare conference in Las Vegas next week on May 12.
And the UBS Conference in New York on May 24th and the Acw Conference in Miami on May 25.
And I'll now turn the call to Kenny for closing remarks.
Dennis Lanfear: And thank you all once again for joining us today. This is an exciting time in our company as we prepare for as many as four product launches in 2022 and 2023 and continue to make strong progress transforming Coherus into an innovative new oncology. Supported by our diversified commercial portfolio revenue, and with our sharp focus on execution of this strategic transformation, the leveraging of our commercial capabilities with new products, and the advancement of our novel immunology pipeline, while keeping a critical eye on our cost, I believe we are in an excellent position to create significant shareholder value in the coming years.
Thank you David and thank you all once again for joining us today.
It is an exciting time in our company is to prepare for as many as four product launches in 2022 and 2023.
You need to make strong progress transforming <unk> into an innovative new oncology company supported by our diversified commercial portfolio revenues.
With our sharp focus on execution of the strategic transformation, the leveraging of our commercial capabilities with new products and the advancement of our novel immuno oncology pipeline, while keeping a critical eye on our cost structure.
I believe we are in excellent position to create significant shareholder value in the coming years.
Operator: Operator, we're ready to take any questions. Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw the question, press the pound key.
Operator, we are ready to take any questions. Thank you.
As a reminder to ask a question you will need to press star one on your telephone to withdraw the question press the pound Keith Please standby, while we compile the Q&A roster.
Operator: Please stand by while we compile the candidate roster. Your first question will come from the line for Salim Sayyaf with Mizuho. Please proceed with your question. Hi. Hi, guys. This is Benetton for Salim.
Your first question will come from the line of <unk> with Mizuho. Please proceed with your question.
Unknown Speaker: Thanks for taking our questions. Regarding the submission beyond an MPC, are you still planning to submit for an MPC and non-small cell lung cancer this year, or should we expect this to happen after potential first approval in nasopharyngeal? And also, if you could provide a little bit more information on the people behind you. I'm sorry. I'm sorry.
Hi, Hey, guys. This is Ben it unfulfilling, thanks for taking our questions.
Unknown Speaker: Let's just do one question at a time. Sure. And then we'll provide you with the opportunity for a follow-on question. So I'll let Dr. Theresa Lavallee address the question about the submissions. Did you hear the question clearly? And Colleen, hi.
I think it's pretty fundamental submission beyond MCC.
Are you still planning to submit for FCC in non small cell lung cancer. This year or should we expect this to happen.
Potential promoting green zone.
So if you could provide.
Sorry, sorry.
I'm, sorry, I'm, sorry, let's just do one question.
Sure and then we will provide you with the opportunity for a follow on question. So I'll, let Dr. <unk> addressed the question about the <unk>.
The submissions that you hear the question clearly.
Theresa Lavallee: Thanks for the question. Just to make sure I understood you were asking about submission for non-small cell lung cancer. I'm for ESCC as well, if you're planning to do it this year as well, or are you going to expect it to get approved first in NPC? So, as mentioned during the discussion, we don't anticipate following up with TOR-PALIMAB in non-small cell lung cancer for a filing based on the CHOICE-1 data.
Hi, Thanks for the question just to make sure I heard you were asking about submission for non small cell lung cancer.
Is that correct yes.
Yes for SPP as well.
We're planning to do it this year as well or are you wanted to say first to get approval in mtc.
Okay.
As mentioned Teri.
But the discussion and we don't anticipate Halloween FY foreign Palo Mab.
Ill, let cancer as far a filing based on the <unk> data will leverage that data.
Theresa Lavallee: We'll leverage that data to look at dual immunotherapy combinations with an R-tigit molecule, CHS-006. In terms of other filings, I think at this time we're as focused as engaging with the FDA on MPC, and we'll continue to have discussions about where else the clinical data really warrant regulatory flexibility. We'll be happy to provide you with the opportunity for a follow-on question then. Did you have a second one?
If you look at you will I mean, our therapy.
And our ticket.
Hello. Thanks.
In terms of either finally, I think at this time, where it's focused and engaging with the FDA.
And we will continue to have discussions about where else that clinical data really great lakes pipeline.
Yes.
Happy to provide you with the opportunity for a follow on question is did you have a second one.
Unknown Speaker: Yeah, thank you. Well, if you could provide a little bit more color on the reasons behind today's discontinuation of CHS305, Inc. Christopher Schott, Yigal Nochomovitz, Could you provide more color on the discontinuation of CHS 305? Yes, we're happy to, of course. First of all, let me say that we have a very positive relationship with InnoVent. I have a very good relationship with their InnoVent CEO Michael Yu. We signed this agreement, and directly thereafter, right after Chinese New Year, as you can recall, COVID struck, and COVID basically impaired the progress of this product development, I think significantly. It was very difficult, and it was actually impossible for us to travel to China.
Yes. Thank you.
Well, if you could provide a little bit better color on the reasons behind that.
And discontinuation of CHS.
Thanks.
Could you provide more color on the discontinuation of <unk>.
Yes, we're happy to of course.
First of all let me say that we have a very positive relationship with an event I have a very good relationship with their event CEO . Michael you We signed this agreement.
Directly thereafter ramp to Chinese new year as you can recall.
Covid struck.
And Covid basically impaired the progress of the <unk>.
This product development I think significantly it was very difficult and it wasn't possible actually for us to travel to China clinical trials were difficult a number of things so.
We lost a substantial amount of time with the product really is a function of that and.
And when we took a look during a product review period currently.
It was simply a matter that the commercial case for the product and the market has moved on from our prior assumptions and given the costs that we're hand in front of us and we felt that it was the best interest of strategically for us discontinuing and Theres really nothing more else do it again, we haven't.
Dennis Lanfear: The clinical trials were difficult and a number of things so we lost a substantial amount of time with the product really as a function of that. And when we took a look during a product review period currently, it was simply a matter that the commercial case for the product and the market had moved on from our prior assumptions and given the costs that were at hand in front of us, we felt that it was in the best interest of Unknown Executive, Ashwani Verma, McDavid Stilwell, Paul Reider, Rosh Dias, Billal Jahangiri, Bryan McMichael, Coherus BioSciences Inc, Thank you very much.
But good things to say about our friends at <unk> and.
Unfortunately that this particular product to that moving forward, but.
It was simply a business decision.
Understood. Thank you very much.
Okay.
Dennis Lanfear: Your next question will come from the line of Balaji Prasad with Barclays. Please proceed with your question. Hi, good evening, and just a couple of questions from my side. Firstly, on FDA inspections, are there any pending for either similarly or resumed? I'll stick to one.
Your next question will come from the line up our lives <unk> Prasad with Barclays. Please proceed with your question.
Hi.
Good evening and just take.
Couple of questions from my side Firstly on.
FDA inspections are there any pending for a similarly already assume ray.
I'll stick to one question. Thanks.
Theresa Lavallee: Yeah, Theresa, do you want to answer that one with respect to assembly inspections? Yeah, we feel that we're complete with that. I'm sorry, complaint for volume. Similarly, inspections have been completed, and there's no issues with comparing the approvals, and Yosemite's already approved. Of course, my bad.
Yes, Tristan do you want to answer that one then with respect similarly inspections.
Yeah, we feel quite good.
At this time.
I'm sorry.
Yes.
Yes.
Really inspections have been completed.
Issues of comparing the approval.
I'm sorry.
The submarine that somebody is already approved.
Yes. Thanks.
Unknown Speaker: Thanks. Your next question will come from the line of Jason Gerberi with Bank of America. Please proceed with their questions. Hey guys, thanks for taking my questions. I guess my first step would just be looking at the run rate that you have for Odenka right now, one, two. Do you see any reason why that would get better for the remainder of the year before you have the OBI launch, which will be a 2023 event?
Your next question will come from the line of Jason <unk> with Bank of America. Please proceed with your question.
Hey, guys. Thanks for taking my questions.
I guess my first so to speak just looking at the run rate that you have for Atlantica right now one Q <unk> senior reason why that would get better.
For the remainder of the year before you have the <unk>, which would be a 2023 event. So just curious do you see that run rate improving I know there was some commentary about I think sort of market unit volume trends and growing but I'm just curious specifically your own run rate how that pans out through the rest of the year.
Unknown Speaker: I'm just curious, do you see that run rate improving? I know there was some commentary about, I think, sort of market unit volume trends growing, but I'm just curious specifically about your own run rate, how that pans out through the rest of the year. Well, I thank you, Jason, for that. Paul, do you want to take that one?
Well thanks.
Paul do you want to take that one.
Paul Reider: Sure, thanks for your question, Jason. As we indicated during our Q4 call, you know, where we stated that our eugenics sales of 2022 will be less than the sales of 2021. We're not offering any updates to that guidance at this time. You know, the market grew 1%, remaining relatively stable. So we're expecting that to pick up. But that's where we're at right now.
Sure. Thanks for your question, Jason So, yes, as we indicated during our Q4 call, where we stated that our <unk> sales in 2022 will be.
Yes.
The sales in 2021.
Not offering any updates to that guidance at this time.
The market grew 1% remaining relatively stable.
So we're expecting that to pick up but.
Unknown Speaker: No further updates on, Okay. And then I guess if I can get a follow-up question, just based on the commentary about sort of the maybe irrational competitor pricing behaviors in the, Do you see this as a profitable market beyond 2024? Like, I think most people could probably say 2023 and 2024 could be interesting, but there's sort of an expectation amongst investors that perhaps pricing could get so compressed in that category that it might not be particularly profitable beyond 2024.
But that's where we're at right now no no further updates on guidance.
Okay, and then I guess, if I can get a follow up question.
Just based on the commentary about sort of maybe irrational competitor pricing behavior in the identical market thinking ahead tissue mirror, just given the sheer volume of players.
Do you see this as a profitable market beyond 2020 for like I think most people could probably say 2023, and 2024 could be interesting, but but theres sort of an expectation amongst investors that perhaps pricing tickets so compressed.
That category that it might be.
Not particularly profitable beyond 2024. So curious if you guys have a view there based on your learnings from the identical.
Dennis Lanfear: I am curious if you guys have a view there based on your learnings from the Identica, I guess, market launch. I would let Paul add some additional remarks, but I would point to two things. First of all, we've already made previous investments that we outlined in order to be the high volume, low cost producer. We've made significant progress in driving the cost down to a fully loaded and released auto injector, which I think the price will be significantly higher than.
Market.
Launch.
I will let Paul add some additional remarks, but I would I would point to two things first of all.
<unk> already made previous investments that we outlined in order to be the high volume low cost producer we have made significant.
Progress in driving the cost down, but fully loaded and released auto injector.
Which I think the price well.
That'd be significantly larger than.
Dennis Lanfear: The second issue, though, I think is, you know, Paul, Mike, why don't you go ahead and interrupt? Yeah, no, I think Denny Denny articulated very well, Jason, there's a two-pronged approach to success.
The second issue, though I think.
Paul Mike Why don't you go ahead et cetera.
Yes.
Danny.
Denny articulated very well Jason.
There is a two pronged approach to success.
Dennis Lanfear: You know, with the Adalumumab biosimilar entry, its price, and its supply. And so, you know, we're going to be coming to market, offering supply guarantees, and we'll react to whatever price is going to be in the market at that particular time. And we're very prepared to compete on that price to gain rapid, you know, rapid adoption in the formularies, you know, in the second half of 2023, with real acceleration occurring in 2024 and beyond.
With our aluminum that Biosimilar entry.
And its supply and so.
We're going to be coming to market.
Offering supply guarantees.
And we'll react to whatever price is going to be in the market at that particular time.
We're very prepared to compete on that price to gain rapid.
We're up at adoption on the formularies.
Second half of 2023 with real acceleration occurring in 2024 and beyond so we see we see the opportunity for significant revenue growth in this number but we would expect.
Paul Reider: So we see the opportunity for significant revenue growth in this market, but we expect that, with our cost structure, to remain profitable for a number of years on this product, given our high volume and low cost capabilities and the fact that we don't expect that, but we also don't expect to fill the bill. Yeah. Okay, guys. Thanks.
We expect with our cost structure to remain profitable for a number of years on this product.
Our high volume and low cost capabilities.
And the fact that we don't expect you guys, but we also don't expect to build the sales force.
Yes, okay guys. Thanks.
Okay.
Unknown Speaker: Your next question will come from the line of Georgi Yordanov with Cowan & Company. Please proceed with your question. Hey guys, thank you so much for taking our questions. So I guess for the first one, regarding the review process for Biosimilar Los Santos, are there any additional updates or color you could provide around interactions with the agency? And specifically, have you been part of these discussions?
Your next question will come from the line of Georgia, Giordano with Cowen and company. Please proceed with your question.
Unknown Speaker: And has your partner received clearance around the manufacturing issue that was identified in the previous TRL? And then, if I could have a follow-up. To be clear, and I'll let Dr. Lavallee address this in more detail, to be clear, yes, we are confident that the previous issues with respect to the manufacturing CRL have been fully addressed. There has been an inspection.
Hey, guys. Thank you so much for taking our questions.
The first one.
Regarding the review process for Biosimilar Lucentis are there any additional updates or color you could provide around interactions with the agency and specifically have you been part of these discussions and has your partner receives clearance around the manufacturing issue that was identified in the previous TRL and then if I could have a follow up.
Yes to.
To be clear.
I'll, let Dr. <unk>, barley and addresses a more detailed to to be clear, yes, we are confident that the previous issues with respect to manufacturing zero.
Ben.
Fully addressed there hasn't been an inspection.
Dennis Lanfear: The facility and the manufacturing inspection do not believe are any impediment to approval whatsoever. Theresa, do you have any additional comment with respect to the similar approval? Yeah, we just completed the late cycle meeting, and I am optimistic about continuing engagement with the FDA through the review process for the August ZUFA date. And then, just around the opportunity for biosimilar incentives, do you know if there are any other competitors apart from Biogen and Samsung that might be launching in the near term? And given that limited competition, could you potentially see a similar ramp-up as we saw with Udenico over the next two to three years?
The facility and the manufacturing inspection, we do not believe are any element.
Two approval whatsoever.
Any additional comment with respect to some labor pool.
Yes.
Italy.
<unk>.
Hey, Timna.
Tim is continuing.
Continuing engagement with the FDA pre the review process for the August date.
Great and then just around the opportunity for Biosimilars centers.
Are there any other competitor is biogen Samsung that might be launching in the near term and given that limited competition could you potentially see a similar ramp up as we saw identical over the next two years.
Dennis Lanfear: Well, I would say that our understanding is Biogen will probably be in a position of coming to market before us, just how much we're uncertain, but perhaps a bit. But, as you point out, we were second to market with Eugenica, did very, very well with that launch and that product, and dominated that biosimilar market, you know, up until this point. So I think that we're fairly optimistic about how well Paul and his team will perform with the Simuli launch, based on our demonstrated expertise. Paul, any additional points you want to make about the Simuli launch? I don't think so, Dennis.
Well I would say that.
Our understanding is.
Biogen will probably be in a position to coming to market before us.
How much were uncertain, but perhaps a bit.
But as you pointed out we were second to market with your deneke did very very well with that launch with that product and dominated that debt.
Of our market.
Up until this point, so I think that we're fairly optimistic about our well Paul and his team will perform similarly launch based on our demonstrated expertise for any additional or a bunch of them.
Similarly on the lunch I don't think so I think.
Paul Reider: I think, I mean, we're in the market formation period, and that's key for, you know, short and long-term success with biosimilars. So we're going to be prepared to come in, get to that market formation period with our track record of our expertise and, you know, clinic-based buy and build markets with our expertise in, you know, contracting, with discipline there, as well as ASP management and delivering a retinal specialist, a very compelling value proposition. Just one note; the first Simuli filing did not receive a complete response letter. There was additional manufacturing data requested by the agency. That data was subsequently developed in conjunction with the agency they were conferred with.
We are in the market formation period, that's key for.
Short and long term success with Biosimilar so.
So we're going to be prepared to come in and get that work and probation period.
With our track record of our expertise in.
Clinic based volume below markets.
Our expertise.
With contracting.
With discipline, there as well as ASP management, and delivering a retinal specialists say very compelling value proposition. So yeah.
Just one note.
The first similarly filing did not receive a complete response letter there was additional manufacturing data requested by the agency that data was subsequently developed in conjunction with the agency. They were conferred with there was submitted it was accepted.
Unknown Speaker: It was submitted, it was accepted, and we look forward to approval. Thank you so much. And at this time, there are no further questions in queue. I would now like to turn it back over to the panel for closing remarks. Thank you, operator, and thank you, everybody, for joining us today. This concludes today's conference call. Thank you for participating. You may now disconnect.
We look forward to approval.
Thank you so much.
And at this time there are no further questions in queue I would now like to turn it back over to the panel for closing remarks.
Thank you operator, and thank you everybody for joining us today.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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Okay.
Thank you.
Awesome.
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Okay.
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