Q3 2025 Coherus Oncology Earnings Call
Speaker #1: Good day and thank . You for standing by . Welcome to the Coherus Oncology Q3 2020 Earnings Conference Call . At this time , all participants are in a listen only mode .
Speaker #1: After the speakers presentation , there will be a question and answer session . To ask a question during the session , you will need to press star one one on your telephone .
Speaker #1: You will then hear an automated message advising your hand is raised . To withdraw your question , please press star one . One again , please be advised that today's conference is being recorded .
Speaker #1: I would now like to hand the conference over to our speaker today, Carrie Graham. Please go ahead.
Speaker #2: Thank you . Heidi . Good afternoon , and welcome to Coherus Oncology's Third quarter 2020 Earnings Conference Call . Joining me today to discuss our results are Dennis Lanfear Chief Executive Officer of Coherus .
Speaker #2: Bryan McMichael chief Financial Officer , doctor Rosh Dias chief Medical officer , Doctor Theresa Lavallee . Chief Scientific and Development officer . And Sameer Goregaoker chief Commercial officer .
Speaker #2: Before we get started , I would like to remind you that today's call includes forward looking statements regarding Coherus current expectations about future events .
Speaker #2: Actual results may vary significantly , and we undertake no duty to update or revise any forward looking statements . Please see the press release that we issued today and our quarterly Report on Form 10-q .
Speaker #2: For more information on risks and uncertainties . And now I'd like to turn the call over to Denny .
Speaker #3: Thank you , Carrie , and good afternoon , everyone , and welcome to our Q3 2025 earnings call . As we get started , let me first welcome , Arvin Hsu to Cohere Oncology .
Speaker #3: Our newly appointed chief strategy and corporate affairs officer . Arvin , responsible for investor relations , corporate development and government affairs . Welcome , Arvin .
Speaker #3: Thank you . Things are going very well . And today , I'm very excited to tell you about the progress we have made on our strategic plan in the last quarter .
Speaker #3: As well as generally recap our progress for you over the past year . As we approach the end of 2025 . As you know , we take great pride in our ability to execute and execution has been strong across the board .
Speaker #3: For example , you may recall last year , me telling you that our objectives included driving the top line , reducing expenses , and strengthening the balance sheet .
Speaker #3: I'm happy to report that we've made great progress across all three . We are particularly pleased with the progress on the balance sheet and expenses , which shows a substantial improvement over the past year .
Speaker #3: My Chief Financial Officer , Bryan McMichael , will discuss these results with you directly . Now , the oncology value proposition for investors is all about our drugs .
Speaker #3: Our evolving data , and the opportunity for deals . We have set ourselves up for success with a sound strategy and have gained significant momentum and hit our stride regarding our drugs .
Speaker #3: Loqtorzi is a next generation PD one active in low Pd-l1 cancers and approved in nasal , pharyngeal cancer , where it is a revenue generator for us , providing growing sales and margin contribution .
Speaker #3: Our chief Commercial Officer , Sameer Goregaoker , will give you the color and detail on that shortly , and reiterate our confidence that we will achieve our revenue targets .
Speaker #3: Our focus as a cancer company is achieving a step change in patient survival . That is our goal . We believe that future of extending patient survival lies in combinations , and we are combining with both our own proprietary pipeline assets across indications .
Speaker #3: Loqtorzi is also being used in combination with other companies therapeutic assets and upon approval of any of these drugs , will be a revenue multiplier .
Speaker #3: Its second key role in our strategy . We are currently pursuing liver and lung cancer with cars . Okita and with chess one one for our Treg Depleter .
Speaker #3: We are pursuing head and neck cancer , gastric cancer , esophageal and colorectal cancer , an area of expanded focus for us all in combination with Loqtorzi .
Speaker #3: Which brings me to the second thing for investors to keep in mind , our data in just a moment , doctor Rosh Dias , our chief Medical officer , will update you on our enrollment in clinical trial progress in more detail , but I will note here that enrollment across all of the initiated studies is in full swing .
Speaker #3: And on a global basis , with a vast majority of our sites open as we drive to deliver data for you next year .
Speaker #3: In these promising indications , with clinical development , we have hit our stride and with highly engaged clinical investigators enthusiastic about these highly promising mechanisms of action , enrolling their patients suffering from their unmet need .
Speaker #3: Stop their cancers . Doctor Theresa Lavallee , our chief Scientific and Development officer , will spend a few minutes with you today discussing the mechanism of action of our drugs with particular focus on the therapeutic promise of t regulatory cells as a target .
Speaker #3: As you know , this field was the subject of a recent Nobel Prize in Physiology or Medicine . Thrusting it to the fore and underscoring its therapeutic potential as a leader in this rapidly advancing field .
Speaker #3: Coherus oncology is proud to be the first company to demonstrate Treg depletion and subsequent CD8 positive T cell infiltration in a patient . The organizers of the 2025 Sitc meeting invited us to present our data at a webinar recently , which was the highest attended of the year .
Speaker #3: Chse 114 . Our highly selective Treg Depleter is potentially best in class , and given the broad distribution and role of Tregs in the body , selectivity takes out a dominant role with our broad yet focused clinical program .
Speaker #3: Reading out over 2026 , we are well positioned to continue the scientific leadership that we demonstrated in 2025 . We have global rights to 114 , as well as Castonzo .
Speaker #3: So let me make a few comments about potential deals . The third part of our value proposition investors should keep in mind Treg depletion is potentially complementary mechanistically , with a wide variety of existing therapeutics where the proportion and density of T regulatory cells is correlated to poor outcomes .
Speaker #3: Recall my earlier comments about combinations. This means that adding something like 114 to ADCs, whether through radiation treatment or other therapeutic approaches, may improve outcomes and extend survival.
Speaker #3: We are pursuing such partnering opportunities both in the US , where we are commercially focused , but also globally ex-US , where we are not focused yet have full rights .
Speaker #3: Such arrangements will provide us with income from upfronts to offset ongoing clinical development costs . But more importantly , cost contribution to pivotal or registrational trials , which need to be conducted globally over the next six , 12 and 18 months .
Speaker #3: We can expect our emerging clinical data to drive such deals and will keep you updated on our calls . And with that , let me hand it over to Teresa .
Speaker #3: Doctor Lavalle ,
Speaker #4: Thank you . Denny , and good afternoon . I'm excited to update you on Coherus Oncology's innovative pipeline scheme to advance cancer treatments .
Speaker #4: Let me start with this year's Nobel Prize for Physiology or Medicine, recognizing the importance of T regulatory cells in immune homeostasis. If Tregs are defective or missing, this results in severe autoimmune disease, providing strong evidence for the critical role these cells play in peripheral immune tolerance.
Speaker #4: Tumors exploit these cells as a key mechanism to evade the immune system . This is a problem because it results in cancer growth and progression .
Speaker #4: The presence of tregs in tumors is known to be associated with poor outcomes . To any cancer therapy , including chemotherapy , radiation , and of course , PD one inhibitors .
Speaker #4: While this is well known , what has been a problem in the field is a way to selectively target tregs in the tumor and not in peripheral tissue .
Speaker #4: Crate is a protein preferentially expressed on tumor resident tregs , enabling a targeted therapy approach to selectively remove these immune suppressive in the tumor .
Speaker #4: We have been focused on CCR eight as a drug target for several years , and believe our program is set apart from the field .
Speaker #4: 114 is a cytolytic antibody with Adcc enhancement designed to bind and kill CCR positive Tregs . This mechanism is akin to an ADC molecule , and in this case , the payload is enhanced effector function , leading to Treg killing .
Speaker #4: Our preclinical and clinical data have shown differentiation , potency and tumor response . VHS 114 was evaluated for binding to over 5000 human proteins .
Speaker #4: The entire proteome available on the outside of the cell . Importantly , VHS 114 only binds to one protein . Its target , CCR eight , eliminating off target binding , has the potential to have a differentiated safety profile .
Speaker #4: CAS 114 is the only known selective antibody . Additionally , it has shown an acceptable safety profile , selective CCR , Treg depletion , in tumors , and also a remarkable ability to lead to the increase of CD8 T cells in tumors .
Speaker #4: Thus characterizing the tumors as hot or immunologically responsive . In the initial safety cohort of seven US patients evaluating 114 with Toripalimab response was observed in a fourth line head and neck cancer patient .
Speaker #4: All of these data not only show the idea works , targeting CRE will mainly remove tumor tregs , but also show CAS 114 treatment remodels .
Speaker #4: The tumor to be more immune active this weekend at the annual conference , we will present additional biomarker data showing significantly enhanced immune activation and head and neck cancer patients following VHS 114 treatment with Toripalimab .
Speaker #4: This is important as we are testing whether the combinations of 114 with Toripalimab can overcome PD one resistance and refractory patients . VHS 114 pharmacological and clinical attributes establish it as having good drug like properties , and this , coupled with our programs focused on generating data to address two areas of increased scrutiny by the US , FDA first , data in a Western population and second , dose optimization establish our scientific leadership in the space .
Speaker #4: The last point I want to make on CAS 114 is that it is a targeted therapy . So we know who to treat essentially tumors with a high prevalence of CCR .
Speaker #4: Its target tumor types that have a high degree of CCR eight include lung , colon , head and neck , and gastric , to name a few .
Speaker #4: Coherence oncology is prioritizing some of these tumor types and is now enrolling in a new cohort evaluating one , one four and toripalimab in a patient population without any approved immunotherapy .
Speaker #4: Yet microsatellite stable colorectal cancer . The the clinical program is designed to generate data on a variety of solid tumors and further inform where VHS one , one four and Toripalimab treatment results in meaningful clinical benefit alone or in combination with chemotherapy .
Speaker #4: Now , switching gears to discuss our other promising clinical program , cascos , a tug . Another approach to overcoming immune evasion is activating NK cells .
Speaker #4: T cells and NK cells are the body's immune killer cells . Tesco's , A ketone coherus oncology's first in class IL 27 antagonist , results in immune activation of both T and NK cells at this week's International cytokine and interferon Society meeting , we presented preclinical and clinical biomarker data showing an important role for NK cell activation and has dosage , efficacy , particularly in first line HCC , a tumor type rich with NK cells .
Speaker #4: The updated biomarker data continue to support that Akita treatment leads to inhibition of IL-27 signaling and enhanced cytolytic immune activity by NK and T cells.
Speaker #4: Why is this important ? Two reasons one cats dose Akita treatment results in strong NK cell activation may give a mechanistic explanation for why the results showed a more than doubling of the complete response rate , activating both NK and T cells could optimize tumor cell killing and lead to its disappearance .
Speaker #4: The second reason I highlight this is that when a new drug is added to standard of care , we need to show the contribution of components or said plainly , is cats dosage kita adding anything to standard of care .
Speaker #4: These data give further confidence . The deepening of response is associated with cat dose cats dose Akita treatment . Since patients who respond show IL 27 inhibition and significant NK cell activation .
Speaker #4: Also , I want to reiterate Denny's comments that identifying partnerships that accelerate the development of the pipeline is a priority . We own global rights for both cats , Akita and 114 , and these compelling clinical data across the two pipeline assets are supporting discussions with potential partners .
Speaker #4: Before I turn it over to Raj , let me just summarize why we are excited about recent developments with our key pipeline molecules .
Speaker #4: We were thrilled the Nobel Prize for Physiology or Medicine recognizes the importance of t regulatory cells in immune homeostasis . We will present biomarker data at CDC meeting this week showing enhanced immune activation in head and neck cancer patients following treatment with one one four in combination with Toripalimab .
Speaker #4: Also , our presentation of biomarker data earlier this week at the International Cytokine Meeting provides further support . Of the contribution on top of standard of care in liver cancer patients .
Speaker #4: With that , I'll turn it over to Doctor Deyev , who will further describe the clinical development .
Speaker #5: Thank you , Teresa , and good afternoon , everyone . Given the clear unmet medical need and the potential for improvement over available therapies , we are aggressively advancing our programs for both Quito and Chess .
Speaker #5: 114 in our focused indications for both molecules , investigators globally maintain strong engagement and enthusiasm for our programs with very active participation in our trials , starting first with Cardoso in first line hepatocellular carcinoma , our ongoing study is a three arm multinational study randomizing patients to two doses .
Speaker #5: Of Cardoso in combination with Toripalimab and bevacizumab versus Tory Bev alone , and is designed to achieve three objectives . Firstly , efficacy and safety data .
Speaker #5: Secondly , address the FDA's project Optimus . And thirdly , address contribution of components as we move through the development pathway . As a reminder , this trial builds upon the very encouraging data we presented at Asco GI in January of this year .
Speaker #5: In study 201, we showed that Cardoso, in combination with a teaser and Bev, achieved an overall response rate of 38%. Importantly, the complete response rate was 17%, which represented both an improvement in the response rate as well as a deepening of the responses compared with the initial data from this same trial. This compares favorably to historical benchmarks with Atezo and Bev alone, which recorded a response rate of 30% and a complete response rate of 8%, respectively.
Speaker #5: For Orr and CR, with these exciting results in hand, global investigator sentiment has been very enthusiastic about the potential of the Castonzo Tory Bev combination.
Speaker #5: This trial is recruited to plan , and will on track to deliver early efficacy and safety data in the first half of 2026 .
Speaker #5: Let's move now to one one for our ccr8 targeting Cytolytic antibody . Given the biology of Ccr8 114 has potential utility across a multitude of tumor types , and we have a very targeted approach in four specific tumors where there's strong biological and clinical rationale for evaluation .
Speaker #5: First , in second line head and neck squamous cell carcinoma . Earlier this year , at aAcr , we reported a partial response with significant tumor shrinkage in a fourth line patient .
Speaker #5: Importantly , this patient was refractory to multiple prior therapies , including a PD one . A TKI , and a Taxane . We were invited to highlight this data again during a seminar a couple of weeks ago , which has Jenny mentioned was the most highly attended of the CTC webinar series .
Speaker #5: We are recruiting to plan in our ongoing study investigating two doses of 114 in combination with Tory . In the second line , head and neck squamous cell population refractory to prior PD one therapy and are on track to report efficacy and safety data in the first half of 26 .
Speaker #5: This data will inform us of the importance of ccr8 as a resistance mechanism in second line head and neck squamous cells , specifically second in second line upper GI adenocarcinoma , including a population of second line gastric gej and esophageal adenocarcinoma refractory to one prior line of therapy .
Speaker #5: We are also exploring two doses of 114 in combination with Tory . As a reminder , second line gastric cancer is an indication where proof of mechanism has already been established , with the CCR eight class in combination with Tory , we're recruiting to plan and are on track to report efficacy data in the second half of 26 .
Speaker #5: Third , we're pursuing esophageal squamous cell carcinoma . This takes advantage of the activity of Tory , irrespective of Pd-l1 levels . And we're looking at both first line and second line , where the medical need remains strong .
Speaker #5: In the second line , population . We're looking at limited dose expansion of chess 114 in combination with Tory and our first line cohort is a safety cohort aiming to gather data for 114 in combination with Tory and standard chemotherapy .
Speaker #5: Here , too , we're tracking we're on track to report efficacy data in the second half of 26 . Fourth , as Denny alluded to earlier , we have expanded the chess 114 program to include a colorectal carcinoma arm in addition to a large unmet medical need .
Speaker #5: This tumor type also has strong supportive biological rationale , given the elevated prevalence and density of ccr8 positive tregs in CRC . Our approach in CRC aims to explore the combination of Chess 114 and Tory .
Speaker #5: Initially in a fourth line plus MSS population where the current standard of care in late line provides a mid-single digit IRR and patients are in real need of additional therapeutic options .
Speaker #5: Our trial looks first at the combination in the non liver Mets population and will move quickly into the liver . Mets population , which which historically has been more resistant to existing therapies .
Speaker #5: We're excited about the progress we're making with our clinical programs as we work towards getting superior alternatives to market for cancer patients in need , and look forward to turning over multiple data cards in 2026 .
Speaker #5: With that , I'll hand it over to Samir . Samir .
Speaker #6: Thank you . Rosh . Today I will focus my discussion on three areas . First , I'll cover Q3 business performance . I will then discuss the evolving market dynamics , specifically in the community versus the academic setting .
Speaker #6: And third , I'll outline our plans for driving continued growth in the coming quarter . Q3 net revenue grew to $11.2 million , a 12% increase quarter over quarter , and 92% increase year over year .
Speaker #6: However , this is down from the 35% growth that we saw in Q2 for . I'll offer some perspective and context growth in Q2 included inventory accumulation as a result of previously depleted inventory levels for demand growth was actually about 20% in that quarter .
Speaker #6: In contrast , inventory levels remained flat in Q3 , so almost all of our growth came from end customer demand . I'll point out that our sales team has four regions across the country for this quarter .
Speaker #6: The average growth for three out of the four regions was 21% , close to the Q2 results . However , demand in the fourth region was flat , driven by post restructure vacancies , which resulted in a lower share of voice impacting the overall national average .
Speaker #6: This issue has now been addressed , and I'll explain in a moment why consistent method reinforcement is critical across our customer base and how we're addressing it .
Speaker #6: Growth this quarter was driven by new patient starts in both new and existing accounts, and increasing duration of treatment. The total number of accounts purchasing Loqtorzi grew over 15%, indicating increasing breadth of use.
Speaker #6: Additionally , 30% of existing accounts are now using Loqtorzi in a subsequent patient , indicating strong physician satisfaction . Longer term , we expect to achieve a dominant share in the NPC market , which is estimated to be in the range of 150 to $200 million .
Speaker #6: This translates into an expected average 10 to 15% demand growth over the next three years , which puts us on track to achieving our long term goals .
Speaker #6: Transitioning now to market dynamics . As you know , there are approximately 2000 Loqtorzi eligible patients each year . These patients are seen by both hospital based head and neck specialists , as well as community physicians .
Speaker #6: However , there are key differences in these two segments that we have to keep in mind to achieve a dominant share in both first , hospital based head and neck specialists sees several NPC patients each year , and a well-informed on the NCCN guidelines and our clinical data in this setting , we are seeing strong growth both in NCC and institutions and other large hospital systems .
Speaker #6: Accordingly , we are now shifting our focus from brand awareness to new patient identification and generating advocacy from academic kols . However , in our second segment , the community , the dynamics are very different .
Speaker #6: This is primarily because community physicians manage multiple tumor types constantly , and NPC being rare is not always top of mind . The addressable opportunity in the community is very widely spread and physicians typically only see 1 to 2 new NPC patients each year .
Speaker #6: As a result , awareness of our preferred position in the NCCN guidelines and a clinical superiority data is relatively low . So chemo alone or off label IO continue to persist .
Speaker #6: So the task in front of us is very clear . We have to consistently reinforce our clinical story in the community . But with the smaller sales force post divestiture , our reach and share of voice has been limited , particularly as we saw in this quarter's lagging region .
Speaker #6: With that background , let me now describe to you our three point plan to drive growth in the community . First , we're expanding our sales force by approximately 15% to increase our reach in select geographies .
Speaker #6: This is a very targeted expansion that we believe is financially responsible and will drive a positive ROI . Second , we're onboarding a remote sales team to drive engagement with oncologists that are not being reached by a sales representatives covering these physicians in a cost effective manner will expand our reach deeper into the community .
Speaker #6: And thirdly , we're significantly expanding our multichannel capabilities to educate community physicians . Specifically , we're developing a campaign of highly engaging , Kol driven digital programs .
Speaker #6: These will be distributed by our field team , our website , and third party distributors . In summary , we see significant growth opportunities for lock in the coming quarters and recently conducted promotional effectiveness research .
Speaker #6: Physicians stated strong resonance with our overall survival messaging and the NCCN guidelines . We remain confident that our focus execution will drive strong demand growth , and we are on track to achieving our long term commercial objectives .
Speaker #6: With that , I'll now pass the call to Bryan McMichael , our chief Financial Officer .
Speaker #7: Thank you . Sameer , and good afternoon , everyone . After more of a more than a year of deal activity , Q3 2025 was the first full quarter following our exit from the biosimilar business .
Speaker #7: We used divestiture proceeds to pay off all near-term maturity debts and are now transitioned into an innovative company solely focused on novel oncology .
Speaker #7: Today , I will share key observations about the company's position at the end of Q3 as we head into year end and next year's data readouts .
Speaker #7: First , we have significantly improved our balance sheet compared to the end of last year . The total of cash and investments at the end of Q3 was $192 million .
Speaker #7: Of the $429 million in total liabilities on the balance sheet at the end of the quarter , more than half , or $254 million related to transition service agreements .
Speaker #7: These liabilities will be settled using reimbursements from buyers in the divestitures or cash collected directly from their customers . The remaining non TSA portion of liabilities decreased 69% since the end of last year .
Speaker #7: By the end of Q3 , we had successfully transferred or wound down a majority of the Udenyca related operations , freeing up Coherus to focus more on the priorities outlined by Denny , namely growing loqtorzi sales and developing our pipeline .
Speaker #7: We are tracking towards a headcount of less than 140 PhDs by the around year end . That's an update from the target of 150 ease , 150 PhDs communicated previously .
Speaker #7: Today , I will limit my discussion of the results to key updates . You can find detailed quarterly results and figures in our earnings press release .
Speaker #7: As Sameer covered in detail . Growth in volumes drove increases in net revenues from continuing operations in both the quarterly and year to date periods .
Speaker #7: Our continuing operations demonstrate strong execution on our strategy , starting with OpEx , R&D expenses were $27.3 million for the quarter , up 24% from Q3 last year .
Speaker #7: The increase was due to investments in our pipeline and were partially offset by savings from programs we deprioritized last year as G&A expenses were $24.9 million for the quarter , which is down 11% compared to last year , primarily due to decreased headcount .
Speaker #7: As a reminder , these figures are for continuing operations . Total opex related to discontinued operations , which captures the biosimilar business dwindled to less than $1 million in Q3 2025 .
Speaker #7: To put the savings from divestitures into context , opex for discontinued operations for FY 2024 totaled more than $40 million for the full year 2025 , we are reiterating our projection that SG&A expense from continuing operations will be between 90 and $100 million .
Speaker #7: This range reflects costs incurred solely for Coherus programs and excludes Non-reimbursed TSA costs and asset impairment charges . Before I hand the call back over to Denny , let me recap the progress we've made since transforming Coherus into the innovative oncology company it is today .
Speaker #7: There are three things to remember . First , we bolstered our balance sheet by significantly decreasing our liabilities while retaining sufficient cash . Cash , which we expect will be will fund operations through 2026 .
Speaker #7: Beyond key data readouts next year . Second , we are driving towards sales by marketing , by making targeted investments in the commercial infrastructure to enable growth in the coming quarters and years .
Speaker #7: Third , we've demonstrated spending discipline , streamlining our operations , including lower expenses and focused investments in R&D that target our pipeline molecules 114 and Cass .
Speaker #7: With that , I'll hand the call back over to Denny .
Speaker #3: Thank you . Brian . So let me summarize our progress this quarter for you . In the momentum we are carrying into Q4 and why we're so excited .
Speaker #3: First , strong execution across the board in all critical dimensions of the business . And disciplines . On the financial front , we drove the top line with higher sales of Loqtorzi while reducing the overall expenses and strengthening the balance sheet .
Speaker #3: As Brian just talked about , we advance the pipeline as Roche talked about , as clinical trials combine Loqtorzi with our own proprietary assets continue to progress , we prepared turnover , key data cards next year and more than a half dozen studies .
Speaker #3: Importantly , having full global rights to our pipeline products at this point in the company's evolution enables partnering opportunities outside the US , which will serve as currency to offset ongoing clinical development costs all the way through approval .
Speaker #3: Lastly , let me just take a moment to thank all of our dedicated team members here at Coherus Oncology for their extraordinary commitment to the company and their high performance as we work to create value for patients and for shareholders .
Speaker #3: We're ready for the questions .
Speaker #1: Thank you . As a reminder , to ask a question , you will need to press star one one on your telephone and wait for your name to be announced .
Speaker #1: To withdraw your question , please press star one . One again . We will take our first question . The first question comes from the line of Mike Nedeljkovic from TD Cohen .
Speaker #1: Please go ahead . is open .
Speaker #8: Hi . Thank you for the question . I have one and it's more of an R&D type question . It seems like the crate mechanism would be up complimented not just by anti-PD-1 , but potentially both targets on the same molecule in a bispecific format .
Speaker #8: I'm curious if that makes biologic sense and if so , if you've explored that option at all . Thank you .
Speaker #3: Mike , thanks for the question , doctor Lavalle will be happy to give you a little further insight on that . Theresa .
Speaker #4: Hi , Mike . Thanks . Just to clarify , do you mean to
Speaker #4: molecule that targets great , plus Your line something else ?
Speaker #8: That's right . Yeah . And potentially anti-PD-1 or Pd-l1 .
Speaker #4: Yeah . I said that the challenge with that I mean , people are looking at Bispecifics , but I think that given the mechanism is a bind and kill mechanism to try to kill the Treg cell and then inhibit PD one on a cytotoxic T cell would be challenging .
Speaker #4: There are people making bispecifics for CRE , but what I think looks really promising from treating with chse 104 is not only this marked depletion of the tregs , the immunosuppressive tregs in the tumor , but bringing the CD8 in .
Speaker #4: So I think a more traditional combination therapy approach to look at other ways of immune activating would probably give . I mean , based on scientific hypothesis , would give us stronger clinical response .
Speaker #4: But there are folks looking at CRA by . So to watch those data emerge .
Speaker #4: But there are folks looking at CRA by . So we'll have
Speaker #3: Thank you . Mike .
Speaker #9: Okay . Thank you .
Speaker #1: Thank you . We will take our next question . And the question comes from the line of Brian Cheng from JP Morgan . Please go ahead .
Speaker #1: Your line is open .
Speaker #10: from today to I think you had a sales goal of 150 to 200 million peak sales by mid 2028 . How do you think that trajectory was going to look like ?
Speaker #10: Where do you see the biggest gating factors today and have a quick follow up . Thank you .
Speaker #3: Yeah , thanks for the question , Brian . Let me let me handle that one first and then we'll go to the follow up .
Speaker #3: I'll see if I if I can get this right I'll hand it over to Sameer . So first of all , Sameer outlined , if we just take where we are today and you straight line 10 to 15% per quarter , you know you land in the target region of 150 to 200 out in mid 2028 ish .
Speaker #3: So that's sort of the benchmark . Although I would point out two key things that were part of Samia's recitation . First of all , we we did an actual demand growth in Q2 of around 20% .
Speaker #3: Even though the Q1 to Q2 growth was something like 36% . The rest of that was inventory in Q3 over Q2 , three out of four regions grew an average of 21% .
Speaker #3: So that's pretty good . That's two quarters in a row clipping along at 20% . Now there is one region that lagged because of some staffing issues and turnover issues that happened in Q3 .
Speaker #3: But as Sameer recited , we think we've got a pretty good handle on that . If we are clearly if we were to proceed at 20% per quarter at this rate , we would reach the target range 150 to 200 .
Speaker #3: Much earlier than mid 2028 . So I think we're actually overachieving right now . But just where that sort of curve kicks in is difficult to say .
Speaker #3: I would also add , though , that Sameer gave us some very clear guidance on his plans to get us there and why the conversion of the community is dependent upon the education of the community .
Speaker #3: And this is really where we're focused . We have found that once these physicians are exposed to the clinical that they see , the significant benefit of Loqtorzi in terms of survival for these patients , they're easily converted .
Speaker #3: data
Speaker #3: So really , it's just a matter of reach . And the converts and again , this is why we see that once these physicians use loqtorzi , they use it again in the follow up patient .
Speaker #3: They're happy to take your follow up question .
Speaker #10: Yeah . And then just on the colorectal front , just curious how you think about the benchmark . You know , as we think about the data
Speaker #10: later next year , you know , in the fourth line setting is , you fairly late line . How should we think about the benchmark for when there .
Speaker #10: And then I think just kind of stepping back as you think about , you know , 114 as a as a holistically , there are multiple data reads coming across a number of indications .
Speaker #10: Do you have a sense of how you would ultimately prioritize indications , since you do have a number of multiple , the number of data readouts coming up ?
Speaker #10: Thank you . .
Speaker #3: All right . So let me let me take the first one first here and hand that off to Doctor Dias . So first of all , we think that the as we said in our prepared remarks , we think that the Nobel Prize for physiology and Medicine , recognizing the importance of t-regulatory cells , is really , really something to note .
Speaker #3: We intend to show scientific leadership and be at the forefront of this , and we've done that . I'll just remind you of our remarks compared to , you know , relative to the webinar and so on , that doctor Dyess was on .
Speaker #3: And , you know , we felt compelled to move into colorectal , where first line colorectal is chemotherapy . Same treatment for 20 years .
Speaker #3: So this is a this is a disease that is striking ever younger patients and is really really critical . So we're I think that we believe it's it's really worthy of thorough investigation .
Speaker #3: Regarding your specific questions colorectal rush , do you want to make some observations ?
Speaker #5: Yeah , sure . Thanks , Brian , for the question . So on your first question on how should we think about the benchmark for colorectal , I'll make a few points .
Speaker #5: First of all , colorectal , as Denny mentioned , it's a large indication and it's growing , particularly in the younger population . And currently it is an area where there are , you know , there's real room for improvement for patients in terms of potential improvements in the standard of care .
Speaker #5: The fourth line , plus population has an overall response rate currently in the mid-single digits . The typical standard of care is chemotherapy .
Speaker #5: And again , it's around five 6% in terms of the overall response rate . We tend to look at , you know , the totality of evidence .
Speaker #5: So we would want to beat that in terms of overall response rate . Of course . But also durability is important . You know , disease stability is important .
Speaker #5: There are multiple different factors that are important. As you look at the whole totality of evidence, I am really excited about the potential for the Tory CRA combination in late line.
Speaker #5: And obviously, the plan is to move into earlier lines subsequent to that.
Speaker #3: And Brian , let me take your question with respect to how we would prioritize these indications , and I'll let my team members chime in .
Speaker #3: You know , first of all , we think there's strong clinical justification and mechanism of action justification for all of these . You can identify where tregs are an issue , and those are the cancers we're going after .
Speaker #3: Regarding gastric cancer, there's always been strong efficacy shown. I will remind you on a background of Toripalimab and others' hands. So we think that it has a very strong probability of success.
Speaker #3: And that's a very substantial indication with esophageal cancer . That's an area where Toripalimab has actually shown efficacy in low Pd-l1 states , where it's approved in Europe , for example .
Speaker #3: So that's someplace where it's not a huge indication . It's someplace where we are very interested in investigating further regarding head and neck cancer .
Speaker #3: I think you're already familiar with the that we've shown . The partial response , you know , and so on . And so we think there's strong they're frankly , you know , we would probably investigate further indications with the with our 114 but we think we have these very promising ones now .
Speaker #3: And I would just wonder if Theresa, any further comment on indication selection or the sort of things we would go after next.
Speaker #4: Yeah, I mean, I think that we've characterized a large number of solid tumors that have a high density and prevalence of CRE-positive Tregs.
Speaker #4: I mean, there are tumor types that we're currently not studying, but that would be of interest. And there have been some hints of efficacy in competitor programs for lung cancer and breast cancer.
Speaker #4: And we saw data at Asco this year in pancreatic cancer . Our program is
Speaker #4: inform us of the best data setting where we see the largest effect . So is it the density of CRE positive tregs . Is it the percent of CRE positive tregs or is it a ratio with the T cells ?
Speaker #4: So our program is really designed next year to read out some important information on how best to look at ways to do quick development and then development to get in combination with other agents to get broader efficacy across multiple tumor types .
Speaker #3: I would just add that our program , we believe , is both broad , sufficiently across many of these indications , but also highly targeted .
Speaker #3: Right . And so I think that's really in the end , going to be very beneficial for us . Thank you Brian .
Speaker #10: Thank you so much . Yeah . Thanks , Danny . And the team . And looking forward to the data next year . Thank you .
Speaker #3: Okay .
Speaker #1: Thank you . Your next question comes from the line of Jason McCarthy from Maxim Group . Please go ahead . Your line is open .
Speaker #1: Jason McCarthy , your line is open . Please ask your question .
Speaker #11: Hi . Yeah . So for CAS Dozo , what would you need to see from the phase two to justify moving straight into a pivotal study ?
Speaker #3: Thanks for the question , Jason . Doctor Dias , would you like to talk about that ?
Speaker #5: Yeah , absolutely . Thanks , Jason , for the question . So , you know , one thing that's really important to to realize , and I referenced this earlier , is that we really look at the totality of evidence , not any one single measure .
Speaker #5: We are hugely encouraged by the Atezo . Bev Cardoso data that we presented earlier this year . I'll remind you again that what we saw was initial results .
Speaker #5: And then an increase in response rate . And and a deepening of the response over time . So what we would like to see next year when we report our data in the first half of the year , in initial data , at least , is we'd like to see a very solid overall response rate .
Speaker #5: We'd like to see some durability there . We'd like to see some , you know , really nice durability in terms of how long some of those last .
Speaker #5: And then an increase over time in in response rate itself . And then also a complete , you know , deepening of the responses as well .
Speaker #5: So I think those are some of the key measures . But really I would like to , you know , really emphasize that it's really totality of evidence rather than a single measure or two .
Speaker #3: Thank you Jason .
Speaker #11: Great . Thanks .
Speaker #1: Thank you . We will take our next question . Your next question comes from the line of Nick caterpillar from Baird . Please go ahead .
Speaker #1: Your line is open .
Speaker #12: Hey , this is Nick on for Colin . Thanks for taking our question . Can you help quantify the increase in duration on that ?
Speaker #12: You're seeing and can you speak of to what you think might be driving that increase in whether you think there's room for that to grow further ?
Speaker #12: And then I have a follow up question after that . Thank you .
Speaker #3: I'm sorry . Nick , what particular indication did you have in mind ?
Speaker #12: Oh, sorry. This is on commercial for MPC.
Speaker #3: Oh . Oh , great . You want to talk about that ? Samir ?
Speaker #6: Yeah , sure . Thank you so much for your question , Nick . So duration of therapy is continues to increase . So every quarter we're seeing an increase in the duration of therapy .
Speaker #6: We're still not having approached the average duration of therapy that we saw in the clinical trials. But that's simply because we haven't had enough time on the market to achieve that average duration of therapy.
Speaker #6: So we're a little too early in the launch to give you an exact number on the duration of therapy . But both in a monotherapy indication as well as in a combination therapy indication .
Speaker #6: Each quarter , we're seeing an encouraging increase in the average duration . And when we have numbers where we can confidently say what the average on market duration is , will communicate that on a future call .
Speaker #3: Did you have a follow up , Nick ?
Speaker #12: I did , yes . Thanks . And then for the one one for Tory study in second line , head and neck . Can you speak to some of the expectations around the dose optimization data coming first half of 26 , what you're hoping to show and then what would be the next steps , what the next steps for that program would look like ?
Speaker #12: Thanks .
Speaker #3: Great head and neck rash.
Speaker #5: Yeah , absolutely . So the study that we're doing is in second line head and neck . We're looking at 40 subjects a couple of biologically active doses of Cardoso in combination with Toripalimab .
Speaker #5: I'll say again , the trials are the trial is recruiting . Well . And to plan . And we anticipate efficacy and safety data in the first half of the year .
Speaker #5: So again , the totality of evidence is important . The currently , at least in terms of the current standard of care in second line up with cetuximab , you're seeing roughly around 13% in terms of overall response rate , which is again the current standard of care .
Speaker #5: So we'd like to substantially beat that . But again , we also want to see durability , right . We want to see durability disease stability etc.
Speaker #5: . And and I think , you know , seeing some of the results we communicated at aAcr really kind of encourages us as we look at what we , you know , as we move forward in this , in this ongoing trial .
Speaker #4: , an important output of that study to as the biopsy data as well as the dose to to get to a recommended phase two dose .
Speaker #4: And we did have a very productive type meeting with FDA getting alignment on the data package will bring to them next year to declare a recommended phase two dose , which will enable us to move more nimbly , to have a single dose , to look at in multiple indications .
Speaker #3: Thank you . Theresa . Thanks , Nick .
Speaker #1: Thanks so much . Once again , if you wish to ask a question , please press star one one on your telephone . We will take our next question .
Speaker #1: Your next question comes from the line of Douglas from H.C. Wainwright . Please go ahead . Your line is open .
Speaker #10: Hi .
Speaker #5: Good evening .
Speaker #13: Thanks for taking my questions . I guess sort of sticking to the colorectal study , I guess , you know , just trying to sort of understand sort of the rationale .
Speaker #13: I mean , I think , Roz , you mentioned that that , you know , you're looking in the fourth line , setting it sort of single digit survival levels .
Speaker #13: And so just , you know , from your perspective , you know , the , the , your expectation in terms of finding a really compelling signal in , in a population that is , you know , already quite sick .
Speaker #3: Thanks for your question , Doug . So let me let me make this remark for you . First of all , going into the fourth line setting as part of an overall development plan that moves us much farther up the treatment paradigm over time .
Speaker #3: And I think that we have a very efficient and well conceived strategy that we can talk about it at a future time to do that .
Speaker #3: With regard to your question in particular , I'll let Doctor LaValley talk about two things . First of all , the mechanism of action and the rationale , particularly for CRC , for one , one for or Treg Depleters .
Speaker #3: And then secondarily , how results positive results from that study will set us up for future studies . Teresa .
Speaker #4: Yes . So the importance of the clinical program with 114 , it goes to what I started with that it's really designed to inform us .
Speaker #4: So the colorectal is an important tumor type for several reasons that it has a good density and prevalence of Kras positive tregs Alexander Radinsky , one of the real pioneers in t-regs and Kras biology , has published several papers on the diversity and differentiation of tregs , particularly in the colon , showing that the CRA positive t-regs are really the pathogenic ones , so it gives it a stronger sense in that tissue that that tumor should be particularly sensitive .
Speaker #4: Colorectal has not mis colorectal . So we know from the microsatellite instable population that a PD one inhibitor can work in the disease in the right context .
Speaker #4: But 85% to 90% of colon cancers miss microsatellite stable CRC, which PD-1 inhibitors have failed, and a large component of that is the high density and prevalence of Tregs.
Speaker #4: So colorectal is particularly exciting given the biology shionogi was . A hand showed a complete response and partial response with single agent treatment at Asco .
Speaker #4: This year . We've seen some long term stable disease in our early clinical program so that signed together with Toripalimab really sets up an exciting opportunity to bring immunotherapy to a tumor type that hasn't had any .
Speaker #4: So the totality of data , the preclinical , the clinical and the biology of the target give it a very important attribute . As Denny said , the other things were testing are the highest density of CRA positive and gastric cancer .
Speaker #4: And head and neck cancer . And then esophageal , which is a little different in that Toripalimab has differentiated activity and an approval Europe .
Speaker #4: So I think the strategically , the whole program gives us a lot of levers to look at how we can do the fastest development with the highest impact to advance the program .
Speaker #3: Thank you . Teresa . Doug , I would just anecdotally add that we are we're very honored to have Doctor Alexander Radinsky as a key member of our scientific advisory board , because he is really one of the seminal leaders in this entire field , which is now come to the fore .
Speaker #3: And I think he's responsible , really , for a large part of our scientific leadership in this
Speaker #3: field , which , as I said in my in prepared remarks , we look forward to continuing , you know , into 2026 .
Speaker #13: Okay , great . Thank you so much .
Speaker #3: Thank you , Doug . .
Speaker #1: This concludes today's question and answer session . I'll now hand the call back to Dennis Lanfear for closing remarks .
Speaker #3: Thank you , Heidi , and thank you all for joining us on the call . Us Oncology Q3 . Call this afternoon . I would just add that we will be at the UBS conference in sunny West Palm Beach , Florida , and we will also be attending Jefferies in London .
Speaker #3: And we hope to see you there . Thank you . Bye bye .