Q2 2022 Coherus BioSciences Inc Earnings Call

Okay.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Q2 2022 Coherus BioSciences Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Q2 'twenty two 2022 cohorts Bioscience, Inc earnings Conference call.

Operator: Earnings Conference Call.

Operator: All lines are being placed on mute to prevent any background noise.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad to withdraw your question simply press Star one again.

Operator: After the speaker's remarks, there will be a question and answer session.

Operator: If you would like, to ask a question during this time, simply press star, then the number one on your telephone keypad.

Operator: To withdraw your question, simply press star one again.

I would now like to turn the call over to Marek. Please go ahead.

Operator: I would now like to turn the call over to

Thank you Wendy.

Good afternoon, everyone and thank you for joining us we.

We issued a press release earlier announcing our financial results for the second quarter of 2022.

This release can be found on our careers Biosciences website, and it's also our cash to our form 8-K.

Today's call includes forward looking statements regarding <unk> current expectations about future events.

These statements include but are not limited to our ability to launch multiple new products, our ability to generate sufficient sales to achieve revenue broken profitability.

Our SG&A and R&D expense guidance.

Our projected market share our 2026 top line projections our.

Our projections about the market opportunity.

And our ability to advance our product candidates and successfully launch our products. According to our projected timeline.

All of these forward looking statements involve substantial risks and uncertainties that are beyond our control and could cause actual results performance or achievements to differ from our results performance or achievements implied by the forward looking statements.

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 issued today as well as the documents that we file with the SEC, including those in our quarterly report on Form 10-Q for the second quarter that we filed today.

Forward looking statements provided on the call today are made as of this date and.

And we undertake no duty to update or revise any forward looking statement.

With me on today's call are there any lanphear.

New York or Harriss.

All reader.

<unk> commercial officer Dr Raj.

Chief Medical Officer, and Mcdavid Stilwell, Chief Financial Officer, Our Chief Development Officer, Dr. Theresa Lasalle is traveling on vacation and is unable to join us.

Operator: Marek.

I will now turn the call over to Danny.

Thank you Mirek.

Hey, good afternoon, everyone.

Marek: Please go ahead.

Thank you for joining our conference call to review recent business highlights and financial results for Q2 2022.

Mandeep: Thank you, Mandeep.

First let me make a few remarks about progress on our strategy.

Marek: Good afternoon, everyone, and thank you for joining us.

Pleased to report today continued strong execution.

Four years into an innovative immuno oncology company driven by revenues from a diversified portfolio of products.

Marek: We issued a press release earlier announcing our financial results for the second quarter of 2022. This release can be found on the Coherus BioSciences website and is also attached to our, form 8K.

Marek: Today's call includes forward-looking statements regarding Coherus's current expectations about future events. These statements include, but are not limited to, our ability to launch multiple new products, our ability to generate sufficient sales to achieve revenue growth and profitability, our SG&A and R&D expense guidance, our projected market share, our 2026 top-line projections, our projections about market opportunities, and our ability to advance our product candidates and successfully launch our products according to our projected timeline.

We've entered into an exciting 12 months period, where we expect to launch multiple products, resulting in growing revenues, which will ultimately do get back to profitability.

Marek: All these forward-looking statements involve substantial risks and uncertainties that are, beyond our control and could cause actual results, performance, or achievements to differ from results, performance, or achievements implied by the forward-looking statements.

Marek: 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 issued today, as well as the documents that we filed with the SEC, including those in our quarterly report on Form 10-Q for the second quarter that we filed today.

Marek: 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.

<unk> team has executed, particularly well with respect to certainly.

Which is now our third.

Yeah.

As you know earlier this week the FDA approved our Lucentis biosimilar with the interchangeability designation and interchange ability exclusivity 12 months.

The approval also include both Lucentis dosage strengths.

And the whole central slip.

This is important because it means that when we launch later this year, we'll do so at the formation of Lucentis Biosimilar market.

Significantly differentiated label.

Weibo relative to other competitors.

One other a true biosimilar has only one dosage strength and.

And then complete and limited label and does not have interchangeability designation.

Furthermore, she wasn't potential competitors recently announced regulatory delays are not expected to launch for a year or more.

Marek: With me on today's call are Danny Lanphier, CEO of Coherus, Paul Reeder, Chief Commercial Officer, Dr. Raj Dyas, Chief Medical Officer, and McDavid Silwell, Chief Financial Officer.

Marek: Our Chief, Development Officer, Dr. Teresa LaValle, is traveling on vacation and is unable to join us.

It's Paul reader, our Chief commercial officer will elaborate for you to just a moment.

Similarly, commercial opportunity will leverage our demonstrated strengths as seamless Seneca and buy and build markets.

For all these reasons, we believe we will do very well.

And then our confidence is justified.

Our fourth product candidate for Palomar.

<unk> back on track due to the stellar execution by our regulatory affairs quality and manufacturing teams working alongside our partner <unk> Biosciences.

Together, we rapidly responded to the issues identified in the Fda's April 29, complete response letter, which we characterized at the time is straightforward and readily addressable.

Have been resubmitted, the BLA less than two months time indicate.

This was a fair characterization and that our team is highly focused on strong execution across the board.

The FDA has assigned a <unk> date of December 23rd 2022.

And we expect to launch Tory Palomas very early 2023, inter nasal pharyngeal carcinoma if approved.

Our immuno oncology strategy in the U S includes evaluating towards <unk> ability to deliver substantial clinical benefits and significant indications in combination with other cancer drugs and immunotherapy.

Co development agreements or other arrangements designed to drive utilization.

Our objective is to establish <unk> Harris.

Partner of choice for companies seeking PD, one combinations for their immuno oncology programs.

In a moment Dr.

Dr Raj.

Medical officer, well detailed multiple internal tour palomas combination programs are advancing.

And preclinical development.

Well, we have entered a I believe you had been a period of product.

Portfolio growth and top line revenue inflection.

We remain tightly focused on our expense structure and are reducing costs wherever possible.

Our Chief Financial Officer, Mr. Mcdavid Stilwell will provide you some additional color.

Just a moment.

And efficient operational structure in place $275 million in cash at quarter end.

Access to an additional $100 million in non dilutive capital post approval similarly to our Palomar.

The company is in a strong financial position going forward into logics.

Those launches and continued strong execution across the company support our 2026 top line projections of $1 2 billion to $2 2 billion provided at our analyst day earlier this year.

We reiterate this guidance now.

We are well underway to the product portfolio and revenue diversification astrazeneca as we have one plant.

Well capitalized and with certainty in our direction, we are confident that the multiple anticipated new product launches over the next 12 months will deliver growth consistent with our plan and as I mentioned earlier ultimately drive us back to profitability.

Marek: I will now turn the call over to Danny.

I'll now turn the call over to Dr. <unk>, who will provide you an update on the <unk> BLA review and our other development programs brush.

Danny Lanphier: Thank you, Merak, and good afternoon, everyone.

Thanks, very much Jenny and good afternoon, everyone.

Danny Lanphier: Thank you for joining our conference call to review recent business highlights and financial, results for Q2 2022.

Danny Lanphier: First, let me make a few remarks about progress on our strategy. I'm pleased to report today continued strong execution to transform Coherus into an innovative, immuno-oncology company driven by revenues from a diversified portfolio of products. We've entered into an exciting 12-month period where we expect to launch multiple products, resulting in growing revenues, which will ultimately lead back to profitability. Coherus team has executed particularly well with respect to Simrleaf, which is now our third approved product. As you know, earlier this week, the FDA approved our new census file similar with the interchangeability designation and interchangeability exclusivity for 12 months.

So as Denny referenced the FDA accepted our resubmitted the BLA Tory pattern at all.

<unk> carcinoma and assigned a new target action date of December 20.

If you recall the CRM. We've received late April request the quality process change that we characterized at the time of straightforward and readily addressable and we are quickly met with the FDA to ensure understanding their needs and completed the re submission in late June .

Yeah, just you have communicated with you timelines for the BLA submission will be six months as of course, the required onsite inspections have been ended by travel restrictions related to the COVID-19 pandemic in China.

I have conversations with the FDA that repeatedly indicated that the existing Tory piling up clinical data are supportive of the BLA resubmission given of course that Tory piling that would address a critical unmet medical need for patients with nasopharyngeal carcinoma, which as you know is an aggressive cancer for which there are currently no FDA.

Immunotherapy treatments.

So over the next several months, we and GNC Bioscience will work closely with the FDA to facilitate the review of this novel agent.

<unk> continued to demonstrate robust clinical data in a variety of immunologic responses.

<unk> monotherapy and also in combination with chemotherapy and we're continuing to work with GNC to prioritize clinical trials program for multi regional clinical studies.

At the same time also looking at partnership opportunities to advance novel immunotherapy combinations.

As we detailed at our analyst day event in March the planning to develop the dual I O treatment of Toric pilot novel combination without T J.

CHF <unk> non.

Non small cell lung cancer, leveraging the robust efficacy results reported in Detroit 301 study.

Okay to the ticket, partly maybe a crucial underlying mechanism.

One resistance and we believe that the juul immunotherapy approach of tissue with PD one could enhance.

PD one as you can see with the potential to extend survival and create a new standard of cash for multiple tumor types.

With that in mind and ongoing phase one clinical trial evaluating CHF <unk> six and Tory pattern that is currently being conducted in China and is expected to readout next year and also in R&D is currently open in the U S and we expect to begin enrolling cohort of U S patients either late this year or very early next year.

In addition, we do expect to see important clinical data of course, several other competing ticket programs.

Over the coming months and these data may inform the future direction of our C. H.

As it relates to development program.

Well most of the CHD several fully owned programs targeting Iot.

Alright that are being developed by cohere of scientists at our research center in Cameroon in Southern California, and we expect to submit an IND for the first of these CHF 1070.

Iot for next year and to file at least one new R&D going forward.

I'll now turn over the call to our Chief commercial Officer <unk> <unk>.

Thank you Raj and good afternoon, everyone.

Ill review the highlights of our Oreo please.

Pleased to announce that carrot costs joint co Harris as our new executive Vice President of sales and strategic accounts.

Following the retirement of Chris Thompson earlier this year.

Erinn most worst most recently worked at Pfizer oncology.

As a decade. She has served as a key sales executive.

Member of the North America leadership.

He was responsible for launching over a dozen new oncology therapies and growing the business from under $1 billion to over $6 billion.

And revenue.

Aaron This is an experienced sales executive with a proven track record of success in both oncology, Brandon and Biosimilar product launches.

She is an inductee of pfizer's exclusive prestigious hall of Fame.

We are thrilled to have her as our new head of sales and leading the multiple product launches planned over the next year.

So let me start with your desktop.

And a good performance in the second quarter reflects positive execution of our overall strategy.

Maximizing the long term revenues of <unk> by balancing price share trade offs this competitive market.

Net sales were $60 million in the second quarter similar to the prior quarter.

Market share was 15% a 1% decline over the prior quarter with share losses occurring in the low margin 340 <unk> segment.

Overall demand units in the second quarter were stabilized and equivalent to Q1 with growth in the clinic segment offsetting declines in the 340 <unk> hospitals.

Net selling price declined 3%.

Selecting continued price erosion due to intense competitive pressures pre filled syringe market.

On a unit basis.

Overall, pegfilgrastim market increased 5% over Q1.

And we expect low single digit market growth for the remainder of 2022, which is consistent with historical trends.

The Alaska remains and retains 58% total market share.

Within the entire class of <unk> pro device, holding 46% market share.

Just on an entrenched preference by customers, which has been reinforced by the Covid pandemic.

And continued price discounting by the originators.

Our on body injector and the pipeline our strategy is to maintain a disciplined approach to managing price with the Prefilled syringe format in 2022.

This will enable us to maximize longer term revenues for these deneke franchise through significant share gains that we expect in 2023 and beyond.

<unk> body segment, which currently represents approximately $1 billion.

An untapped opportunity.

We expect Datacom market share to grow next year once we introduce our datacom on body injector different groups.

Now I'd like to talk about commercializing very exciting pipeline.

We are preparing for the launch of three new brands. The next 11 months.

Danny Lanphier: The approval also included both Lucentis dosage strengths and the full Lucentis label.

Early our lucentis biosimilar towards <unk> or PD, one inhibitor for MPC and <unk>, our Humira biosimilar.

Danny Lanphier: This is important because it means that when we launch later this year, we will do so at the formation of the Lucentis biosimilar market, with a significantly differentiated biosimilar label relative to other competitors. The one other approved biosimilar has only one approved dosage strength, an incomplete and limited label, and does not have interchangeability designation. Furthermore, two of the potential competitors recently announced regulatory delays, and are not expected to launch for a year or more.

With respect to similarly.

FDA approval was granted on August 2nd.

Enabling commercial launch early Biosimilar market formation.

Of the $7 billion.

Anti VEGF market.

Commercial launch planning is proceeding on track and we plan to have first sale to occur in early October .

We remain highly confident in executing a successful launch of similarly based on a number of factors first our commercial capabilities.

Danny Lanphier: As Paul Reider, our Chief Commercial Officer, will elaborate for you in just a moment, the similarly commercial opportunity will leverage our demonstrated strengths as seen with Eugenica in buy and build markets.

Since our last call we've hired a dedicated rep sales all of whom have years of experience selling to retinal specialists.

Our existing key account payer and field reimbursement teams will support the launch enabling synergies and cost efficiencies.

Our launch will be backed by a full service comprehensive patient support program built to meet the needs for both providers and patients.

Danny Lanphier: For all these reasons, we believe we will do very well with Simmerly, and that our confidence is justified.

Danny Lanphier: Our fourth product candidate for our Palomam, our P1 inhibitor, is back on track, due to stellar execution by our regulatory affairs, quality, and manufacturing teams, working alongside our partner, Jun-Chi Bioscience. Together, we rapidly responded to the issues identified in the FDA's April 29th complete response letter, which we characterized at the time as straightforward and readily addressable.

The second factor is similarly clinical profile differentiated label compared to the other recently launched Lucentis Biosimilar.

Danny Lanphier: Having resubmitted the BLA in less than two months' time indicates both that this was a fair characterization, and that our team is highly focused on strong execution across the board.

Similarly is the first and only biosimilar designated by FDA as fully interchangeable with Lucentis.

Five FDA approved indications.

We also received 12 months of interchange ability exclusivity.

The head to head Columbus, AMD trial was published last year in the peer reviewed journal ophthalmology and demonstrated the clinical equivalence similarly to centers with a comparable safety and Immunogenicity profile.

These combined will give retinal specialists a high degree of confidence to prescribe similarly.

For patients currently receiving lucentis as well as for any newly diagnosed new patients within indication.

And our market research confirms that depending upon access practice economics opportunity exists to expand similarly use into avastin and eylea.

The third factor is our deep understanding of the rest of the market and our track record of commercial success.

This is in clinic base volume built bottle, which is very similar to oncology and a core competency of ours and backed by our track record of success with your Deneke, which has delivered one 3 billion of net sales since its commercial launch in 2019.

Good day <unk>, the only company competing in the retina biosimilar market with U S Biosimilar large experience.

In short retinal specialist opinion leaders expressed positive receptivity to <unk> entering this market at.

And our track record of success in oncology gives them confidence that coheres understands the dynamics of a buy and bill market and that we will deliver a safe and effective alternative to lucentis with a compelling value proposition.

Danny Lanphier: The FDA has assigned a new PDUFA date of December 23rd, 2022, and we expect to launch Toropalomab very early in 2023 if the nasal pharyngeal carcinoma is approved.

Regarding toward Palomar.

Commercial launch plans are now focused towards the FDA action date of December 23, and we are excited about the potential bring to oncologists and patients.

Danny Lanphier: Our immuno-oncology strategy in the U.S. includes evaluating Toropalomab's ability, to deliver substantial clinical benefits and significant indications in combination with other cancer drugs and immunotherapy through co-development agreements or other arrangements designed to drive utilization.

Danny Lanphier: Our objective is to establish Coherus as a partner of choice for companies seeking PD-1 combinations, for their immuno-oncology programs.

Danny Lanphier: In a moment, Dr. Raj Dias, our chief medical officer, will detail multiple internal Toropalomab combination programs we're advancing in clinical and preclinical development.

Danny Lanphier: While we have entered a period of product portfolio growth and top-line revenue inflection, we remain tightly focused on our expense structure and are reducing costs whenever possible.

Would it be if approved the first and only PD one inhibitor indicated for nasal pharyngeal carcinoma.

Establish a new standard of care in all lines of therapy, including first line.

NPC is a rare cancer in which high unmet need exists, but there are currently no FDA approved therapies, including checkpoint inhibitors.

Our oncology commercial capabilities built to scale and there is significant overlap between our current <unk> customers and toured Palo map targeted prescribers.

Therefore, the launch of <unk> will be efficiently integrated into our existing oncology commercial infrastructure.

In addition, the NCC guidelines committee for MPC is added as a reference to the guidelines. The citation for the Jupiter two trial, which was published in nature Medicine last year.

Further validating the importance and quality toward palmette clinical data.

Commercial launch preparations remain on track and the field facing teams have been fully trained.

We will be ready to launch toward panel members grew by us.

Now regarding your summary, our Humira biosimilar.

If you recall in December it was approved by FDA last December and we were preparing for launch in July 2023.

<unk> U S. Net sales were $17 billion in 2021, and we look forward to competing in this large market.

We believe payers and Pbms will drive Biosimilar adalimumab adoption and have completed extensive market research with national and regional payers as well as Pbms.

The insights gleaned from this market research confirms that coheres can deliver on the attributes most important to payers, which include a highly competitive price.

Robust and reliable supply and.

On an auto injector presentation. It has a non stinging citrate free formulation.

<unk> will have both the pre filled syringe and an auto injector presentation at launch with our proprietary knowledge sticking citrate free formulation delivered by a 29 gauge needle comparable to the originators.

We also plan to introduce a high concentration presentation post launch.

To meet our expectations to achieve at least 10% unit market share.

<unk> has invested more than $45 million as large scale manufacturing.

It expects to be a high volume low cost manufacturing well positioned to compete on supply guarantees and price.

First year manufacturing capacity exceeds 1 million units or about 10% of the overall market and we have the potential to triple that capacity and the current facility.

Now unlike some other market participants we have build portfolio of branded alternatives to humira that we need to protect from paddling about cannibalization.

Similar strategy is well aligned to that of the product selection decision makers show the payers and Pbms.

We both seek to make the <unk> biosimilar market as large as possible as quickly as possible.

And we see this alignment is a source of competitive advantage.

Short, we are confident we will deliver a compelling value proposition.

We can achieve our objective to win at least 10% unit market share.

Danny Lanphier: Our chief financial officer, Mr. McDavid Stilwell,

I'll now turn the call to make David will review of the quarter's financial results.

Danny Lanphier: will provide you some additional color on our financial results in just a moment. With an efficient operational structure in place, $275 million in cash at quarter end, and access to an additional $100 million in non-dilutive capital post-approval of Simmerly and Toropalomab, the company is in a strong financial position going forward into the launches.

Thank you Paul.

The details of our financial results are in the press release 8-K, and the 10-Q that we filed this afternoon. So I'll focus today on just a few highlights.

Danny Lanphier: Those launches and continued strong execution across the company, support our 2026 top-line projections.

Danny Lanphier: We are well on our way to the Product Portfolio and Revenue Diversification path to DENECA, as we have long planned.

For the second quarter of 2022, we reported $58 2 billion net loss on a GAAP basis were <unk> 65 per share compared to a net loss of $29 $9 million 40 per share in the second quarter of 2021.

On a non-GAAP basis, we reported a net loss of $36 3 million or <unk> 47 per share.

The reconciliation from GAAP to non-GAAP in the recent quarter included $13 9 million.

Noncash stock based compensation expense and is contained in our press release.

Cash used in operating activities was $50 million for the second quarter.

Yes.

As Paul detailed earlier in the call.

<unk> net revenues were $16 1 million on par with the prior quarter.

An increase in demand units sold in the clinic segment was partially offset by a lower net realized price the.

The decline in revenue compared to the $87 6 million, we reported in the second quarter of 2021 is due to lower demand as well as lower net realized price.

Research and development expense for the three months ended June 32022.

$41 6 million as compared to $54 8 million in the same period in 2021.

The decrease was driven by lower development costs as several clinical studies were completed in 2021, partially offset by higher compensation expense.

Selling general and administrative expense for the three months ended June 32022 was $51 3 million compared to $40 3 million for the same period in 2021.

The increase was primarily driven by higher commercialization expenses to support current unica sales and to prepare for multiple anticipated new product launches in 2022, and 2023, including separately Tory Pam about the assembly and the on body injector presentation extended.

We ended the quarter with cash cash equivalents and investments and marketable securities of $275 5 billion.

Compared to a balance of $417 2 million at year end 2021.

With the approval of similarly, and subject to certain conditions. We can now request, an additional $50 million under our credit facility with Pharmacon advisors, another $50 million tranche will become available upon the approval of Tory Panamax.

And today, we are reducing our guidance for 2022, combined SG&A and R&D expenses from a range of $395 million to $430 million previously to a range of 375 million to $395 million today.

The revised guidance range reflects the reduction in R&D expenses associated with <unk> manufacturing scale up and auto injector production, which will now instead be capitalized into inventory in accordance with relevant accounting rules.

Our R&D and SG&A expense guidance excludes the $35 million upfront <unk> Biosciences, we pay for Reits to CHS, <unk> and the $25 million milestone payment that will become due upon the approval of Tora App for MPC.

This range also includes approximately $55 million to $60 million and noncash stock based compensation expense.

We've always run <unk> focus on operating efficiency and we are continuously reviewing processes program vendors and head count for additional opportunities to reduce costs.

Danny Lanphier: Well capitalized and with certainty in our direction, we are confident that the multiple, anticipated new product launches over the next 12 months will deliver growth consistent with our plans, and as I mentioned earlier, ultimately drive us back to profitability.

As we prepare to launch multiple new products over the next 12 months, we projected inflection in revenues, while our operating expenses are expected to rise only modestly in 2023 and 2024.

With current cash on hand, additional liquidity that we will request through our credit facility and.

And increasing product revenues, we believe we have the financial strength to execute our new product launches and continue our R&D investments despite turbulent biotech equity markets.

I'll now turn the call back for any closing remarks.

Danny Lanphier: I'll now turn the call over to Dr. Dias, who will provide you an update on the Toropalumab

Thank you David.

Danny Lanphier: BLA review and our other development programs.

<unk> is entering a period of rapid product portfolio expansion as well as revenue growth and diversification.

Rosh Dias: Rosh?

The outstanding execution by our team on plans that we initiated back in 2019.

Rosh Dias: Thanks very much, Denny, and good afternoon, everyone.

Rosh Dias: So as Denny referenced, the FDA accepted our resubmitted BLA for Toropalumab for nasopharyngeal, carcinoma and assigned a new target action date of December the 23rd. If you recall, the CRL we received in late April requested a quality process change that, we characterized at the time as straightforward and readily addressable, and we quickly met with the FDA to ensure our understanding of their needs and completed the resubmission in late June.

Rosh Dias: The agency has communicated that the review timeline for the BLA resubmission would be, six months, as of course the required onsite inspections have been hindered by travel restrictions related to the COVID-19 pandemic in China. In our conversations with the FDA, they have repeatedly indicated that the existing Toropalumab, clinical data are supportive of the BLA resubmission, given of course that Toropalumab would address a critical unmet medical need to patients with nasopharyngeal carcinoma, which as you know is an aggressive cancer for which there are currently no FDA-approved immunotherapy treatments.

With the approval of <unk>, we now have three FDA approved products for the fourth product candidate in the final stages of FDA review.

Rosh Dias: So over the next several months, we and Junshi Bioscience will work closely with the FDA, to facilitate the review of this novel agent.

Rosh Dias: Toropalumab continues to demonstrate robust clinical data in a variety of immunologically, responsive tumors of both monotherapy and also in combination with chemotherapy, and we're continuing to work with Junshi to prioritize the clinical trials program for multi-regional clinical studies, while at the same time also looking at partnership opportunities to advance novel immunotherapy combinations.

Rosh Dias: As we detailed at our Analyst Date event in March, we're planning to develop the dual, IO treatment of Toropalumab in combination with our TGIT, CHF006, for non-small cell lung cancer, leveraging the robust efficacy results reported in the CHOICE-01 study.

Rosh Dias: Blockade of the TGIT pathway may be a crucial underlying mechanism for overcoming PD-1 resistance, and we believe that the dual immunotherapy approach of TGIT with PD-1 could enhance PD-1 efficacy with the potential to extend survival and create a new stance of care for multiple tumor types. With that in mind, an ongoing Phase 1 clinical trial evaluating CHF006 and Toropalumab is, currently being conducted in China and is expected to read out next year, and also an, IND is currently open in the U.S., and we expect to begin enrolling cohorts of U.S, patients either later this year or very early next year.

Rosh Dias: In addition, we do expect to see important clinical data, of course, of several other, competing TGIT programs over the coming months, and these data may inform the future direction of our CHF006 development program.

Rosh Dias: We've also this year introduced several wholly-owned programs targeting ILT4 and PCR8 that are, being developed by Coherus scientists at our research center in Camarillo in Southern California.

Caring for launch of four new products in 2022, and 2023 to generate sales, which were turned the company to revenue growth and profitability.

Rosh Dias: And we expect to submit an IND for the first of these, CHS1000, targeting ILT4 next year, and to file at least one new IND per year going forward.

With $275 million in cash and cash equivalents access to additional capital through existing agreements and significant projected revenue growth. We believe we have the financial resources to launch these new products.

It's just continuing to invest.

<unk> pipeline and opportunities.

Rosh Dias: With that, I'll now turn over the call to our Chief Commercial Officer, Paul Reider.

Operator, we're ready to take questions.

Paul Reider: Thank you, Rosh.

The floor is now open for your questions to ask a question at this time. Please press star one on your telephone keypad, if any point you would like to withdraw from the queue. Please press star one again.

Paul Reider: Good afternoon, everyone.

Paul Reider: Before I review the highlights of our product portfolio, I'm pleased to announce that Karen, Kotz has joined Coherus as our new Executive Vice President of Sales and Strategic Accounts following the retirement of Chris Thompson earlier this year. Karen most recently worked at Pfizer Oncology, where for the last decade she has served as, a key sales executive and a member of the North America leadership. She was responsible for launching over a dozen new oncology therapies and growing the business, from under $1 billion to over $6 billion in revenue.

Paul Reider: Karen is an experienced sales executive with a proven track record of success in both oncology, branded and biosimilar product launches. She is an inductee of Pfizer's exclusive and prestigious Hall of Fame. We are thrilled to have her as our new head of sales and leading the multiple product, launches planned over the next year.

Paul Reider: Now, let me start with Udenica.

It will be provided the opportunity to ask one question and one further follow up questions. If you have any further questions you may raise your hand, and he will get.

We will take a moment, while we render our roster.

Paul Reider: Udenica performance in the second quarter reflects positive execution of our overall, strategy of maximizing the long-term revenues of Udenica by balancing price-share trade-offs in this competitive market. Net sales were $60 million in the second quarter, similar to the prior quarter. Market share was 15%, a 1% decline over the prior quarter, with share losses occurring, in the low-margin 340B hospital segment. Overall demand units in the second quarter were stabilized and equivalent to Q1, with, growth in the clinic segment offsetting declines in the 340B hospital segment.

Paul Reider: Net selling price declined 3%, reflecting continued price erosion due to intense competitive pressures, in the pre-filled syringe market.

Paul Reider: On a units basis, the overall PEGFO Grasda market increased 5% over Q1, and we expect, low single-digit market growth for the remainder of 2022, which is consistent with historical trends. Elasta remains and retains 58% total market share.

Paul Reider: Within the entire class, the on-pro device, holding 46% market share, based on an entrenched, preference by customers, which has been reinforced by the COVID pandemic, and continued price discounting by the originator.

Paul Reider: Our on-body injector in the pipeline, our strategy is to maintain a disciplined approach, to managing price with the pre-filled syringe format in 2022.

Paul Reider: These will enable us to maximize longer-term revenues for the Edenica franchise 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.

Okay.

Yeah.

Our first question comes from the line of Ken Cacciatore from Cowen <unk> Company.

Please go ahead.

Thanks, so much Denny with the approval of similarly, it really feels like there's been a big kind of momentum changed at least to meet those shares didn't react but.

You now have what could be a major product in your hand, too when we talk to retinal specialists.

They talk about this being a heavily payer driven market and I'm, not saying anything as easy in life I know all launches are difficult, but it just strikes us as this should be a little bit even more straightforward than the deneke complexities that you nicely navigated so maybe a little bit more detail on your ability to win here maybe discussion around.

Pricing to win.

And then also just secondly on Humira you have the approval early I can't think of any reason why kind of the negotiations can't begin now with it then.

Here's and others wanting to see all the products that are available, but can you just talk about kind of the early insight youll get into the Humira opportunity baby well ahead of the actual launch thanks, so much.

Sure well thank you Ken.

And thank you very much which I think your observations are right on.

This is a road that we've been down before.

Did very well on this as we will now be the second time.

Ill, let Paul.

<unk> achieved commercial officer makes some industrial remarks.

But we consider and train a lucentis heart other bad Jeff market very much ideal.

Hello on the market you have of course, the advanced and the reformulation products above AG of Eylea in other products and we think entering that.

The center part of the market and expanding in both directions is really.

Ideal strategy.

I'm thrilled actually though to get the interchange ability at 70, but the interchange ability and to further to be the one proven biosimilar team out there.

At market formation with a very very strong product and I would just add that <unk>, probably got interchange ability with clinical data and the analytical data and having the various doses and a very complete package was compelling to the FDA to provide us with that.

I'll, let Paul makes additional margin certainly with respect to your summary of the Humira Biosimilar.

And the interactions with the payers and so on I think that it was very clear to us early on.

Two years ago, what would be important to these payers and that has high capacity. So we invested $45 million in the big steel tanks.

Paul Reider: We expect Udenica market share to grow next year once we introduce our Udenica on-body injector, if approved.

Grade three formulation.

It wouldn't stay a small needle.

Being there at market formation with a significant amount of inventory, we knew what would be important to them and we went ahead and made those investments.

Paul Reider: Now I'd like to talk about commercializing part of a very exciting pipeline.

So we think we're going to do quite well what the gun goes off next July .

Paul Reider: We are preparing for the launch of three new brands in the next 11 months.

Paul Reider: Similarly, are Lucentis Biosimilar, Toropalumab, our PD-1 inhibitor for NPC, and UCIMRI, our Humira Biosimilar.

With that I'll, let Paul just make a few remarks about similar some insight into that market.

We've put in the ground and so on and what we expect Paul can you give that.

Can you give Ken a little more color yeah sure Hi, Ken Thanks for your question.

Paul Reider: With respect to Simerly, FDA approval was granted on August 2nd, enabling commercial launch in the early biosimilar market formation period of the $7 billion anti-VEGF market.

Your question was sort of focused around the payer segment and <unk>.

Look we are battle tested with the payers, we've got a dedicated payer team that's got relationships with all the national.

Regional plans as well as the Pbms.

With the approval now.

Financial engagement conversations.

Occurring now with them and I think what rich retinal specialist want is they want it.

Freedom to be able to make the best clinical choice for their patients and so.

It's really going to be how we're going to align our overall strategy steady mentioned, we've got a differentiated product that's going to be very compelling and we're going to deliver right.

A very compelling value proposition to all stakeholders. So.

We're excited to come in here and we think the interchange ability designation, an exclusivity will provide yet another differentiating component as we are talking with payers because quite frankly.

We'll stop specialist didn't want to stock multiple biosimilar products and when it comes to the <unk> zoom about biosimilar product, they're going to want to use the one that's got the full label all the dosage strengths and interchangeability designation and Thats, where similarly is going to be so we're really excited about coming into this.

Now regarding price.

We're going to be we're going to be talking more about price as we get a little bit closer to commercial launch in the coming weeks, so stay tuned on that.

Paul Reider: Commercial launch planning is proceeding on track, and we plan to have first sale to occur in early October.

Paul Reider: We remain highly confident in executing a successful launch of Simerly based on a number of factors.

Paul Reider: First, our commercial capabilities.

Ken I would just offer that two follow ons.

Two.

Paul's remarks.

First.

With respect to price and this sort of buy and bill and ASP driven environment I think our experience with <unk> Deneke has left us in a fully informed now to manage price and this sort of environment or the long term and thats, what we intend to do one more point about interchange ability.

Paul Reider: Since our last call, we've hired a dedicated retina sales team, all of whom have years of experience selling to retinal specialists. Our existing key account, care, and field reimbursement teams will support the launch, enabling synergies and cost efficiencies.

Paul Reider: Our launch will be backed by a full service, comprehensive patient support program built to meet the needs of both providers and patients.

Paul Reider: The second factor is Simerly's clinical profile and differentiated label compared to the other recently launched Lucentis Biosimilar. Simerly is the first and only biosimilar designated by FDA as fully interchangeable with Lucentis for all five FDA-approved indications.

Interchange ability to us means that a physician can be comfortable transitioning of converting to stable patient to a biosimilar and that's a message that we are going to deliver you don't have to wait start. This product has been deemed interchangeable by FDA factor you can feel comfortable converting.

Paul Reider: We also received 12 months of interchangeability exclusivity.

Paul Reider: The head-to-head Columbus AMD trial was published last year in the peer-reviewed journal Ophthalmology, and demonstrated the clinical equivalence of Simerly to Lucentis with a comparable safety and immunogenicity profile. These combined will give retinal specialists a high degree of confidence to prescribe Simerly for patients currently receiving Lucentis, as well as for any newly diagnosed new patients with an indication.

Paul Reider: And our market research confirms that depending upon access and practice economics, opportunity exists to expand Simerly use into Avastin and ILEA.

Paul Reider: The third factor is our deep understanding of the retina market and our track record of commercial success.

Yeah.

Great. Thanks, so much.

Okay.

Our next question comes from Salim Sayed from Mizuho.

Please go ahead.

Hi, This is managed for Salim thanks for taking our question.

If you could please provide some color on them expected timing for getting similarly, Brazil hearings presentation.

Or do you think that having this presentation, but the key to capture significant share given that most of the percentage for example today in this format.

Really quick one if you could please remind us.

Then it goes on monthly injector application has been submitted or not okay.

Alright, let me take the last question first consistent with our prior remarks, we do.

Do not intend to disclose.

<unk>.

The filing of the on body injector for you Danica.

We have remained silent on that for a variety of strategic reasons and you will probably hear about that upon approval.

<unk> on launch.

With respect to the alternative dosage forms.

<unk> Similarly, I'll, let Paul.

And as to whether that comprises any barrier to entry in the shorter term, but again, we for competitive reasons, we have not disclosed.

The PFS.

And the market, but I think pulp pretty bullish and his ability to proceed regardless Paul.

Yes. Thanks for your question so.

If you look at you guys you got to remember that before all these presentations were launched.

<unk> that the doctors were using so.

This is a very common and standard way that they can deliver these medications.

So.

We don't we don't see it as is.

A major impediment.

Two similarly adoption and I think you can only point to most recent example of roche's launch of these MAU, which isn't a vial presentation and.

You can see.

The uptake for that is.

<unk> been quite steady so I think that shows that when doctors want to use a product.

They.

We'll use user whether it's a buy order PFS.

Alright, Thank you Ed.

Our next question comes from the line of Douglas <unk> from HC Wainwright and company.

Please go ahead.

Okay.

Hi, good afternoon, thanks for taking the question.

Just going back to that point on.

The pre filled syringe and assembly market.

<unk>.

Do you expect there to be sort of at some value offset that you need to make or do you think that that will already be in Comcast and the value proposition that you're offering as a product and that.

You won't need to offer a sort of an additional incentive for physicians and you have a sense of how much additional sort of work that puts into in terms of going from a pre filled syringe versus putting it into a vial.

We're taking it from a violent but again that's surrounded himself.

Sure.

Yes, Thanks for your question Doug.

Paul Reider: This is a clinic-based buy-and-build model, which is very similar to oncology and a core competency of ours, and backed by our track record of success with Udenica, which has delivered $1.3 billion in net sales since its commercial launch in 2019.

Sure.

One of the core competencies that we have coherence and it's been demonstrated with Heath deneke as early or understanding the the whole dynamics.

Dynamics for the buy and Bill market, we see.

From every perspective and know the complete value proposition.

The product profile.

<unk>.

The characteristics of the brand patient services as well as the contract all come into place.

Paul Reider: Today, Coherus is the only company competing in the retina biosimilar market with U.S. biosimilar launch experience. In short, retinal specialist opinion leaders express positive receptivity to Coherus entering this market, 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 Lucentis with a compelling value proposition.

Paul Reider: Now, regarding TOR-PALIMAT, commercial launch plans are now focused toward the FDA action, date of December 23rd, and we are excited about the potential to bring to oncologists and patients what would be, if approved, the first and only PD-1 inhibitor indicated for nasal pharyngeal carcinoma, and to establish a new standard of care in all lines of therapy, including first-line.

We know what we need to do with the retinal specialist.

Paul Reider: NPC is a rare cancer in which high unmet need exists, but there are currently no FDA-approved, therapies, including checkpoint inhibitors.

We're going to deliver that irrespective of the <unk> the PFS in terms of the.

The timing of whether or not or how much more time it takes place.

Their the biologics the PFS, obviously, it take submitted but post rental specialists told us.

<unk> had their staff draw those up at a drive towards daylight the do it for me.

In the room.

Thanks.

A few seconds.

To pull it out.

The volume so again I don't think its a big deal.

Evidenced by the <unk> Mo.

George.

Yes.

Great. That's helpful and then just.

Just as a follow up.

Hello.

Yeah.

Paul in terms of given now that you have the Paducah date at the end of the year can you just provide an update where you are in terms of the build out the commercial organization for tour pallet Matt.

Yes.

It's built out.

Paul Reider: Our oncology commercial capabilities have been built to scale, and there is significant, overlap between our current Udenica customers and TOR-PALIMAT-targeted prescribers. Therefore, the launch of TOR-PALIMAT will be efficiently integrated into our existing, oncology commercial infrastructure.

Paul Reider: 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 TOR-PALIMAT clinical data.

We are leveraging our current oncology field facing teams.

From our field sales representatives, where payer teams our key account teams field reimbursement.

Raj, It's Scott oncology Msl's into field, so everythings built for it.

Paul Reider: Clinical launch preparations remain on track, and the field-facing teams have been fully, trained. We will be ready to launch TOR-PALIMAT if approved by FDA.

With the launch expected earlier this year patient services has already been built out so we're ready to just flip the switch.

Paul Reider: Now regarding USIMRI or Humira biosignals.

Soon as we get approval so.

It's we're ready to go.

And should we expect that that's the launch that happens right upon approval.

Paul Reider: If you recall, USIMRI was approved by FDA last December, and we were preparing for launch, in July 2023.

The <unk>.

Paul Reider: Humira's US net sales were $17 billion in 2021, and we look forward to competing in, this large market.

<unk> date is December 23rd fact, so I don't think well understood.

Paul Reider: We believe payers and PBMs will drive biosimilar adalumumab adoption and have completed extensive, market research with national and regional payers as well as PBMs. The insights gleaned from this market research confirmed that coherence 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. USIMRI will have both a pre-filled syringe and an auto-injector presentation at launch, with our proprietary non-stinging citrate-free formulation delivered by a 29-gauge needle comparable to the originators.

Okay.

But I think we will get it early I think your question is will we get an early 2023, yes, you may note in our remarks, we'd characterize it as very early in 2023, so that's different than.

At the end of the quarter so.

Thank you okay perfect. Thank you so much and congrats on the progress thanks, Doug.

Paul Reider: We also plan to introduce a high-concentration presentation post-launch.

King.

Paul Reider: To meet our expectations to achieve at least 10% unit market share peak, Coherus has invested, more than $45 million in large-scale manufacturing and expects 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, or about 10% of the overall, market, and we have the potential to triple that capacity in the current facility.

Our next question comes from Kirsten Burgundy from the Bank of America. Please go ahead.

Paul Reider: Now, unlike some other market participants, we have no portfolio of branded alternatives, to Humira that we need to protect from Adalumumab cannibalization.

Paul Reider: Our eucimery strategy is thus well aligned to that of the product selection decision, makers, which are the payers and PVMs. We both seek to make the Adalumumab biosimilar market as large as possible, as quickly as, possible. We see this alignment as a source of competitive advantage.

Okay.

I think.

The question was for me, maybe Jason Gregory.

Yeah.

Can you guys hear me.

Yes, Hi, Jay.

Paul Reider: 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% unit market share at peak.

I was a little ground by introduction there.

Maybe can you talk about with the Biosimilar Lucentis launch how long do you compete with.

For the broader VEGF category, and specifically products like ours is that something that you can compete.

Grab share from a product like that early on and then I guess the differentiation versus the other biosimilars, but as we think about the differentiation versus the brand Africa.

Harper conducting very economic core players, forcing the decision on <unk>.

Weighing the decision to use a biosimilar. So can you help frame the economic tradeoffs, but would expect health care providers are faced with a biosimilar versus a brand in this new new we're all going into the second half are there other specific segments of the market that you think you have a better chance of winning maybe yes.

Lower volume practices that didn't get as good of discounts from say the innovators just curious.

Where do you think you're best positioned to win.

Thanks for the question I'll, let I'll, let Paul I'll take the first shot at that one but what are you I guess first issue is what do you think about.

How do we think about going after the various segments. The avastin reformulated shares incentive shares and the <unk> portion of the market with <unk>, how do we sort of think about that.

Hi, Jason Thanks for your question, yes. So.

Reiterate it was sort of what our primary strategy is and Thats announced to convert.

As much of the Lucentis.

Business today, that's the that's the core opportunity that's right in front of us that are.

Our label as you see with the interchangeability designation.

We're really give physicians a very high degree of confidence that the safety and efficacy of similarly will provide them. The same outcomes consistent with historical Lucentis experience. So we believe that that's going to help drive conversion.

It's number one.

But we also know is that physicians choose that Jeff products for different reasons and on the commercial.

Side of the business.

Our payer might require them to step through avastin.

They're very they're very adept at transitioning patients off of that to another manager product and we want to be.

Well positioned to be that next brand so that.

Our market research tells us that based on access to restarting the practice economics, we have the ability to not only penetrate high degree of Lucentis, but also those edges of avastin and eylea. So that's going to be our strategy and we're not going to.

Small versus big Theres opportunity across the entire marketplace.

Yes.

It's a fair question Jay the other thing that I would point out though is that these practices use.

And a lot of cases, all three flavors of these products and to a significant degree.

They've asked and re formulation product versus Lucentis, eylea or significantly therapeutically clinically I would say interchangeable so to the degree that we get into the Lucentis market.

Establish a footprint beachhead and our credibility with the interchange ability designation, which we think is really important and then take significant portions of that market, we're able to talk to those very same doctors.

The vast in basins earlier patients.

And inform them about separately.

And the value proposition and so on so as we said before we think this is an ideal place to enter the overarching VEGF market.

Just how fast now deep things go well.

We will probably be in a better place to talk about that after maybe Q1 of next year. When we see how things are rolling out.

McDavid Stilwell: I'll now turn the call to McDavid for review of the quarter's financial results.

It's a fair question.

Alright, thanks, guys.

Thank you.

Our next question comes from US Vermont from UBS. Please go ahead.

McDavid Stilwell: Thank you, Paul.

McDavid Stilwell: The details of our financial results are in the press release, the 8K, and the 10Q that, we filed this afternoon.

Okay.

Thanks for taking my question. So I had two so one was just.

How are you thinking about the <unk>.

Do you like the new coming in mid 2020, do you think the contracting discussion.

Will it be to either the day meaningfully for 2024 or 2020 demand.

Court. So that's question number one the second one can you just trying to understand the mechanics of this entity and the ability for similar lethal when a physician right. That's correct I mean is it by a while our PFS in other words can you product be interchangeable no matter, what the script is or could it only be replaced followed by implementation script.

McDavid Stilwell: So I'll focus today on just a few highlights.

Thanks.

McDavid Stilwell: For the second quarter of 2022, we reported a $15.2 million net loss on a GAAP basis for, $0.65 per share, compared to a net loss of $29.9 million, or $0.40 per share, in the second quarter of 2021. On a non-GAAP basis, we reported a net loss of $36.3 million, or $0.47 per share. The reconciliation from GAAP to non-GAAP in the recent quarter included $13.9 million, in non-cash stock-based compensation expense and is contained in our press release.

McDavid Stilwell: Cash used in operating activities was $50 million for the second quarter of 2022.

Thanks for your questions. Let me take the first one first with respect to summary.

I think that there will be of course, several market participants entering around that same point.

July in 2023.

Time, we will be there that we think yes, there will be significant sales in 'twenty, three and significant contracting in 'twenty three certainly it will accelerate in the second year of 2024, but I would not say that.

2023 revenues or market penetration would be insignificant I think all of our licensees are pretty much in the same boat.

McDavid Stilwell: As Paul detailed earlier in the call, Udineka net revenues were $60.1 million, on par with, the prior quarter. An increase in demand units sold in the clinic segment was partially offset by a lower net, realized price.

Hitting that market at the same time, but we feel that we particularly have significant advantages with respect to our insights on the market and our ability to produce our cost structure and our volume structure and so on.

McDavid Stilwell: The decline in revenue compared to the $87.6 million we reported in the second quarter, of 2021 is due to lower demand units, as well as lower net realized price.

McDavid Stilwell: Research and development expense for the three months ended June 30, 2022, was $41.6 million, as compared to $54.8 million in the same period in 2021. The decrease was driven by lower development costs, as several clinical studies were completed, in 2021, partially offset by higher compensation expense.

With respect to your second question I'll.

McDavid Stilwell: Time, general, and administrative expense for the three months ended June 30, 2022, was $51.3 million, compared to $40.3 million for the same period in 2021. The increase was primarily driven by higher commercialization expenses to support current, Udineka sales, and to prepare for multiple anticipated new product launches in 2022 and, 2023, including Cimerly, Toripamameth, Ucimri, and the on-body injector presentation at Udineka.

McDavid Stilwell: We ended the quarter with cash, cash equivalents, and investments in marketable securities of, $275.5 million, compared to a balance of $417.2 million at year-end 2021. With the approval of CIMRLE and subject to certain conditions, we can now request an, additional $50 million under our credit facility with Pharmacon Advisors. Another $50 million tranche will become available upon the approval of Toropanomav.

Pass that one over to Bob Yes things are so.

McDavid Stilwell: And today we are reducing our guidance for 2022 combined SG&A and R&D expenses from a, range of $395 to $430 million previously to a range of $375 million to $395 million today. The revised guidance range reflects a reduction in R&D expenses associated with Yosemite Manufacturing's, scale-up and auto-injector production, which will now instead be capitalized into inventory in accordance with relevant accounting rules.

Interchange ability typically for products that are dispensed through the pharmacy allow pharmacists to do the conversion rates along as they have the interchangeable designation. This is a little bit.

<unk> new launch because it's it's a buy and bill market and the physicians are making.

Making the product decision buying the drug administering it billing for it so in this case.

Our changeability designation is really going to be.

Enabling.

Our ability to give confidence to the to the.

Retinal specialists that they can safely.

Convert patients already on Lucentis and that's the that's the key point.

It will give them outcomes consistent with their.

Historical Lucentis experience so that's the nuance.

Got it thanks.

And that of course will allow you to drive biosimilar conversion in the market.

That's why we're that's why we're so thrilled to get that.

McDavid Stilwell: Our R&D and SG&A expense guidance excludes both the $35 million upfront fee to Junichi, BioSciences we paid for rights to CHS006 and the $25 million milestone payment that will become due upon the approval of Toropanomav for NPC.

McDavid Stilwell: This range also includes approximately $55 million to $60 million in non-cash, stock-based compensation expense.

McDavid Stilwell: We have always run CoHERIS with a focus on operating efficiency, and we are continuously, reviewing processes, programs, vendors, and headcount for additional opportunities to reduce costs. As we prepare to launch multiple new products over the next 12 months, we project an inflection, in revenues while our operating expenses are expected to rise only modestly in 2023 and, 2024. With current cash on hand, additional liquidity that we will request through our credit facility, and increasing product revenues, we believe we have the financial strength to execute our new product launches and continue our R&D investments despite turbulent biotech equity markets.

Our next question comes from the line of Douglas Tsao from H C. Wainwright <unk> co. Please go ahead.

Danny Lanphier: I'll now turn the call back to Kenny for closing remarks.

Hi, Thanks for taking the follow up questions just as a quick one sticking to the subject of inter Changeability, just Danny or Paul just curious do you think this designation is more important for a buy and bill market like the anti VEGF retina space than it is for something.

Danny Lanphier: Thank you, McDavid.

Danny Lanphier: CoHERIS is entering a period of rapid product portfolio expansion as well as revenue growth, and diversification due to the outstanding execution by our team on plans that we initiated back in 2019. With the approval of Simmerly, we now have three FDA-approved products with a fourth, product candidate in the final stages of FDA review. Preparing for launch of four new products in 2022 and 2023 to generate sales which will, return the company to revenue growth and profitability.

Danny Lanphier: With $275 million in cash and cash equivalents, access to additional capital through existing, agreements, and significant projected revenue growth, we believe we have the financial resources to launch and support these new products while judiciously continuing to invest in the oncology pipeline and opportunities.

<unk> like with what Youll face lips, Humira and you send money. Thank you.

Operator: Operator, we're ready to take questions.

Sure Fair question, Doug, Yes, Paul do you want to take a shot to preserve sure. So certainly in February .

So that is a.

A pharmacy benefit product.

And dispensed by specialty pharmacies, and because of the high cost nature of that.

Payers and Pbms were instituted.

Restricted formularies, so they will be dictating.

Product selection that's why.

Our our expectation to deliver the players with some remarks.

<unk>, a very competitive place.

Gary Please.

Yes.

At a product presentation similar to the originator is really important.

That's going to be key and that's why we didn't pursue the interchange ability because at the end of the day payers are going to make the decision now.

Now for four and similarly, as we mentioned, we know that retinal specialists routinely switching patients from one therapy to another but we also know that.

They are really sensitive to inflammation in the eye. So this designation.

We'll give them again greater confidence.

They can expect the same safety and efficacy, which separately as they would.

With <unk>, and therefore will help us drive conversions of the currently set this patient population as well as new patient starts, but hopefully that answers your question with the distinction there.

Yes.

Helpful.

Okay.

Thanks, Doug.

Yes.

Operator: The floor is now open for your questions.

That concludes.

Operator: To ask a question at this time, please press star 1 on your telephone keypad. If at any point you would like to withdraw from the queue, please press star 1 again.

Today's questions.

I would now like to turn the call over to Denny Lanphier CEO for closing remarks.

Operator: You will be provided the opportunity to ask one question and one further follow-up question.

Thank you very much and thank you all for joining us on our call today I would just like to point out that we will be participating in the Citi and Wells Fargo conferences in Boston The week of September 4th and the HC Wainwright conferences in New York Li of September 11th.

Operator: If you have any further questions, you may raise your hand and queue again.

Operator: We'll take a moment while we render our raw screen.

Operator: Our first question comes from the line of Ken Cacciatore from Cohen & Company.

Bennett: And really quick one, if you could please remind us if Eudenica's on-board injector application has been submitted or not.

Ken Cacciatore: Please go ahead.

Bennett: Thanks.

Unknown Executive: And that is high capacity.

Unknown Executive: Hi, let me take the last question first.

Unknown Executive: So we invested $45 million in the big steel tank.

Unknown Executive: Consistent with our prior remarks, we do not intend to disclose the filing of the on-body injector for Eudenica.

Unknown Executive: Citrate feed formulation, you know, so it wouldn't stink.

Unknown Executive: We have remained silent on that for a variety of strategic reasons.

Unknown Executive: A small needle.

Kirsten Burgany: Please go ahead.

Unknown Executive: And you will probably hear about that upon approval and or on launch.

Unknown Executive: Being there at market formation with a significant amount of inventory, we knew what would be important to them, and we went ahead and made those investments to do that.

Jason Gerber: Hey, I think the question was for me, maybe.

Unknown Executive: With respect to the alternative dosage forms for similarly, I'll let Paul comment as to whether that comprises any barrier to entry in the shorter term.

Unknown Executive: So we think we're going to do quite well when the gun goes off next July.

Jason Gerber: Jason Gerber, can you guys hear me?

Unknown Executive: But again, for competitive reasons, we have not disclosed the PFS timing in the market.

Unknown Executive: But with that, I'll let Paul just make a few remarks about simile, some of the insights into that market team, who we put on the ground, and so on, and what we expect.

Jason Gerber: Yeah.

Unknown Executive: But I think Paul's pretty bullish on his ability to proceed regardless.

Unknown Executive: Paul, can you give Ken a little more color?

Jason Gerber: Okay, great.

Paul Reider: Paul?

Paul Reider: Sure.

Ash Verma: So that's question number one.

Jason Gerber: I was a little thrown by the introduction there.

Paul Reider: Yeah, thanks for your question.

Paul Reider: Hi, Ken.

Ash Verma: The second one, I'm just trying to understand the mechanics of this interchangeability for similarly.

Jason Gerber: Maybe can you talk about with the Biosimilar Lucentis launch, how long do you think it will take to eat into the broader VEGF category and specifically products like ILEA?

Paul Reider: So you look at, you got to remember that, you know, before all these presentations were launched, you know, it's the vials that the doctors were using.

Paul Reider: Thanks for your question.

Ash Verma: So when a physician writes a script, I mean, is it by a while or PFS?

Jason Gerber: So can you help frame the economic tradeoffs that you'd expect healthcare providers to face with a Biosimilar versus a brand in this new world going into the second half?

Paul Reider: So, you know, this is a very common and standard way that they can deliver these medications.

Paul Reider: You know, your question was sort of focused around the payer segment.

Ash Verma: Like in other words, can your product be interchangeable no matter what the script is or could it only be replaced for a while formulation script?

Jason Gerber: Are there other specific segments of the market that you think you have a better chance of winning?

During September we're also going to have a number of non deal roadshows and throughout the fall, but we look forward to seeing all of you.

Paul Reider: And so we don't see it as a major impediment to similarly adoption.

Paul Reider: And look, we're battle tested with the payers.

Ash Verma: Thanks.

Jason Gerber: Maybe the lower volume practices that didn't get as good of discounts from, say, the innovators?

Paul Reider: I think you can only point to the most recent example of Roche's launch of Abismo, which is a vial presentation.

Paul Reider: We've got a dedicated payer team, you know, that's got relationships with all the national, regional plans, as well as the PBMs.

Ash Verma: Thanks for your questions, Ash.

Jason Gerber: Just curious where you think you're best positioned to win.

Paul Reider: And, you know, you can see, you know, that uptake for that has, you know, been quite steady.

Paul Reider: With the approval now, you know, substantial engagement, you know, conversations occurring now with them.

Unknown Executive: Let me take the first one first with respect to Yosemite.

Jason Gerber: Thanks for the question.

Danny Lanphier: Thank you very much, and thank you all for joining us on our call today.

Paul Reider: So I think that shows that when doctors want to use a product, you know, they will use it, whether it's a vial or a PFS.

Paul Reider: And I think what retinal specialists want is they want, you know, they want freedom to be able to make the best clinical choice for the patients.

Unknown Executive: We think that there will be, of course, several market participants entering around that same point in July 2023.

Paul Reider: I'll let Paul take the first shot at that one.

Danny Lanphier: I would just, like to point out that we will be participating in the City and Wells Fargo Conferences in Boston the week of September 4th, and the H.C. Wainwright Conferences in New York the, week of September 11th.

Operator: Our next question comes from the line of Douglas Tsao from H.C. Wainwright & Company.

Paul Reider: And so, you know, that's really going to be how we're going to align our, you know, our overall strategy.

Unknown Executive: I think all of the licensees are pretty much in the same boat hitting that market at the same time. But we feel that we particularly have significant advantages with respect to our insights on the market, our ability to produce, our cost structure and our volume structure and so on.

Paul Reider: Paul, I guess the first issue is, how do we think about going after the various segments, the Avastin reformulated shares, Lucentis shares, and the ILEA portion of the market with VEGF?

Danny Lanphier: During September, we're also going to have a number of non-deal roadshows and throughout the fall, so we look forward to seeing all of you.

Douglas Tsao: Please go ahead.

Paul Reider: As Benny mentioned, you know, we've got a differentiated product that's going to be very compelling, and we're going to deliver a, you know, a very compelling value proposition to all stakeholders.

Unknown Executive: With respect to your second question, I'll pass that one over to Paul.

Paul Reider: How do we sort of think about that?

Danny Lanphier: Thanks very much.

Douglas Tsao: Hi, good afternoon.

Paul Reider: So, you know, we're excited to come in here, and we think the interchangeability, designation, and exclusivity will provide yet another differentiating component as we're talking with payers, because quite frankly, Retinal Specialists.

Paul Reider: Yeah, thanks, Ash.

Paul Reider: And our label, as you see with the interchangeability designation, will really give physicians a very high degree of confidence that the safety and efficacy of Simmerly will provide them the same outcomes consistent with historical Lucentis experience.

Danny Lanphier: Have a great day.

Douglas Tsao: Thanks for taking the question.

Paul Reider: They want to stock multiple biosimilar products.

Paul Reider: So interchangeability is typically for products that are dispensed through the pharmacy, allow pharmacists to do the conversion, right, so long as they have the interchangeable designation.

Paul Reider: Yeah, I think it's a fair question.

Danny Lanphier: Bye-bye.

Douglas Tsao: So just, Paul, going back to that point on the prefilled syringe and the similarly market, you know, do you expect there to be sort of some value offset that you need to make, or do you think that that will already be encompassed in sort of the value proposition that you're offering as a product and that you won't need to offer sort of an additional incentive for physicians?

Thank you very much have a great day bye bye.

Paul Reider: And when it comes to the Ranazumabap biosimilar product, they're going to want to use the one that's got the full label, all the dosage strengths, and the interchangeability designation.

Paul Reider: This is a little bit nuanced because it's a buy and bill market and the physicians are making the product decision, buying the drug, administering it and billing for it.

Paul Reider: The other thing that I would point out, though, is that these practices use, in a lot of cases, all three flavors of these products.

Douglas Tsao: Do you have a sense of how much additional sort of work that puts into in terms of, you know, going from a prefilled syringe versus putting it into a vial?

Paul Reider: And that's where Simraly is going to be.

Paul Reider: So in this case, interchangeability designation is really going to be enabling our ability to give confidence to the retinal specialist that they can safely convert patients already on Lucentis.

Paul Reider: And to a significant degree, the Avastin reformulation product versus Lucentis versus ILEA are significantly therapeutically, clinically, I would say, interchangeable.

Douglas Tsao: Or taking it from a vial and putting it into a syringe themselves?

Paul Reider: So, you know, we're really excited about coming into this market.

Paul Reider: So that's the key point, you know, that it will give them outcomes consistent with their historical Lucentis experience.

Paul Reider: So to the degree that we get into the Lucentis market, establish a footprint, a beachhead in our credibility with the interchangeability designation, which we think is really important, and then take significant portions of that market, we're able to talk to those very same doctors who have Avastin patients or ILEA patients and inform them about similarly and the value proposition and so on.

Douglas Tsao: Yeah, thanks for your question, Doug.

Paul Reider: Now, regarding price, we're going to be talking more about price as we get a little bit closer to commercial launch in the coming weeks.

Paul Reider: So that's the nuance.

Paul Reider: So as we said before, we think this is an ideal place to enter the overarching VEGF market.

Paul Reider: You know, one of the core competencies, you know, that we have at Coherus, and it's been demonstrated with Udenica is really our understanding the whole dynamics of the buy and build market.

Paul Reider: So stay tuned on that.

Operator: Goodbye.

Paul Reider: Got it.

Paul Reider: Just how fast and how deep things go, we'll probably be in a better place to talk about that after maybe Q1 of next year when we see how things are rolling out.

Goodbye.

Paul Reider: We see, you know, from every perspective and know the complete value proposition, you know, that includes the product, you know, portfolio, the characteristics of the brand, patient services, as well as the, you know, the contract all come into place.

Unknown Executive: Can I would just offer two follow-ons to Paul's remarks. The first is with respect to price, in this sort of buy and bill and ASP-driven environment, I think our experience with Eudenica has left us, you know, fully informed on how to manage price in this sort of environment for the long term.

Paul Reider: Thanks.

Paul Reider: But it's a fair question.

Paul Reider: So, you know, we know what we need to do with the retinal specialists, and we're going to deliver that irrespective of the vial or the PFS.

Unknown Executive: And that's what we intend to do.

Paul Reider: And that, of course, will allow you to drive biosimilar conversion in the market.

Operator: Our next question comes from Ash Verma from UBS.

Operator: Thank you, ladies and gentlemen.

Paul Reider: In terms of the, you know, the timing of whether or not, you know, or how much more time it takes to, you know, prepare the vial versus the PFS, obviously it takes a minute, but most retinal specialists have told us, you know, to either have their staff draw those up ahead of time, or if they like to do it, you know, they can do it in the room and it only takes them a few seconds, you know, to pull it out of the vial.

Unknown Executive: One more point about interchangeability. Interchangeability to us means that a physician can be comfortable transitioning and converting, a stable patient to a biosimilar.

Thank you ladies and gentlemen, this does conclude today's call. Thank you for your participation you may now disconnect.

Paul Reider: That's why we were so thrilled to get that.

Ash Verma: Please go ahead.

Operator: This does conclude today's call.

Paul Reider: So, again, I don't think it's a big deal as evidenced by the Vabismo, you know, launch.

Unknown Executive: And that's a message that we are going to deliver.

Paul Reider: Our next question comes from the line of Douglas Tiseo from H.C. Wainwright & Co.

Ash Verma: Hey guys, thanks for taking my question.

Operator: Thank you for your, participation.

Paul Reider: Okay, great.

Unknown Executive: You don't have to wait for a fresh start.

Operator: Please go ahead.

Ash Verma: So I have two.

Paul Reider: That's helpful.

Unknown Executive: This product has been deemed interchangeable by FDA.

Douglas Tiseo: Hi, thanks for taking the follow-up questions.

Ash Verma: So one was just how are you thinking about the ramp for Yosemite?

Paul Reider: And then just as a follow-up.

Unknown Executive: Doctor, you can feel comfortable converting your patient.

Douglas Tiseo: Just as a quick one, sticking to the subject of interchangeability, just Danny or Paul, I'm just curious, do you think this designation is more important for a buy and bill market like the anti-VEGF retina space?

Ash Verma: Obviously, like with you coming in like 2023, do you think the contracting discussion will be revisited meaningfully for 2024 or the 2023 agreements are going to hold?

Paul Reider: Hello?

Unknown Executive: Great.

Operator: You may now disconnect.

Douglas Tiseo: And it is for something like with what you'll face with Humira and Usemri?

Paul Reider: Sure.

Unknown Executive: Thanks so much.

Douglas Tiseo: Thank you.

Paul Reider: Yeah, I was just going to ask, Paul, in terms of given now that you have a BDUFA date at the end of the year, can you just provide an update where you are in terms of the build-out of the commercial organization for Tor Palomar?

Operator: Our next question comes from Salim Syed from Mizzou.

Douglas Tiseo: Fair question, Doug, yeah.

Paul Reider: Yeah, I mean, it's built out, Doug.

Salim Syed: Please go ahead.

Paul Reider: Paul, do you want to take a shot at that for a second?

Paul Reider: I mean, we are leveraging our current oncology, you know, field-facing teams, you know, from our field sales representatives, our payer teams, our key account teams, field reimbursement.

Bennett: Hi, this is Bennett for Salim.

Paul Reider: Sure, sure.

Paul Reider: Roche has got oncology, MSLs, you know, in the field.

Bennett: Thanks for taking our question.

Paul Reider: So, you know, certainly, you know, that is a pharmacy benefit product and dispensed, by specialty pharmacies.

Paul Reider: So everything's built for it.

Bennett: If you could please provide some color on the expected timing for getting a similarly, pre-filled syringe presentation.

Paul Reider: And because of the high-cost nature of that, you know, payers and CDFs will institute, you know, restricted formularies.

Paul Reider: And with the launch expected earlier this year, patient services groups have already been built out.

Bennett: Do you think that having this presentation would be key to capture significant share, given that most of the incentives, for example, sold today in this format?

Paul Reider: So, they will be dictating, you know, product selection.

Okay.

Paul Reider: So we're ready to just flip the switch as soon as we get approval. So we're ready to go.

Paul Reider: That's why, you know, our expectation to deliver to payers, you know, a very competitive price, high guarantees, you know, and a product presentation similar to the originator is really important.

Paul Reider: And should we expect that that's the launch that happens right upon approval?

Paul Reider: That's going to be key, and that's why we didn't pursue the interchangeability, because at the end of the day, payers are going to make the decision.

[music].

Paul Reider: The BDUFA date is December 23rd, Doug.

Paul Reider: Now, for, you know, for the similarly, you know, as we mentioned, we know that retinal specialists, you know, routinely switching patients from one therapy to another, but we also know that, you know, they're really sensitive to, you know, inflammation in the eye.

Paul Reider: So I don't think we'll launch it.

Paul Reider: So, this designation will give them, again, greater confidence, you know, that they can expect the same safety and efficacy, which similarly as we would, you know, with Lucentis, and therefore, you know, will help us drive conversions of the current Lucentis, patient population, as well as new patient starts.

Paul Reider: I think we'll get an early, I think your question is will we get an early 2023.

Paul Reider: But hopefully, that answers your question with the distinction there.

Paul Reider: Yeah, you may note in our remarks, we characterized it as very early in 2023.

Paul Reider: Yeah, no, that's helpful.

Paul Reider: So that's different than at the end of the quarter.

Operator: That concludes today's questions.

Paul Reider: So thank you for your question.

Operator: I would now like to turn the call over to Denny Lanphier,

Paul Reider: Perfect.

Danny Lanphier: CEO, for closing remarks.

Paul Reider: Thank you so much.

Paul Reider: And congrats on the progress.

Paul Reider: Thank you so much.

Paul Reider: Thank you.

Okay.

Operator: Our next question comes from Kirsten Burgany from the Bank of America.

Sure.

[music].

Yes.

Sure.