Coherus BioSciences Reports Fourth Quarter, Full Year 2023 Financial Results and Provides Current Business Update
- Strong net revenue of $91.5 million in Q4 2023 and $257.2 million in FY 2023.
- UDENYCA® net sales reached $36.2 million in Q4, with CIMERLI® net sales at $52.4 million.
- Successful launch of LOQTORZI™ and UDENYCA ONBODY™ in Q1 2024.
- Corporate restructuring with the divestiture of the ophthalmology franchise to Sandoz for $170 million.
- Initiation of a 30% workforce reduction for 2024 on March 7, 2024.
- Plan to prepay $175 million of the $250 million term loan balance with Pharmakon Advisors LP by April 1, 2024.
- Workforce reduction may impact company morale and productivity.
- Partial prepayment of term loan may lead to increased financial pressure in the future.
Insights
The reported net revenue of $91.5 million for the fourth quarter and $257.2 million for the full fiscal year indicates a stable financial performance by Coherus BioSciences. The breakdown into specific product sales such as UDENYCA® and CIMERLI® provides a clear picture of the company's revenue streams. The successful launch of LOQTORZI™ and UDENYCA ONBODY™ could signify the company's potential for growth and diversification in its product portfolio. However, it's crucial to understand how these new products will affect future revenue projections and the competitive landscape.
The divestiture of the ophthalmology franchise and the subsequent debt prepayment plan showcase a strategic shift towards strengthening the company's focus on oncology, which may resonate well with investors focusing on specialized biotech firms. The reduction in the workforce by 30% is a significant cost-cutting measure that could improve operational efficiency but may also raise concerns about the company's ability to sustain growth and innovation. The impact of these changes on Coherus's stock will depend on the market's perception of the company's long-term strategy and its execution.
The divestiture of the ophthalmology franchise to Sandoz for a notable $170 million upfront plus additional considerations suggests a strategic pivot for Coherus BioSciences. This move could be perceived positively by the market as it allows the company to streamline its focus on oncology, a sector with high growth potential. The prepayment of the substantial portion of debt to Pharmakon Advisors LP indicates fiscal prudence and may lead to reduced interest expenses, improving the company's net income in the long run. This financial maneuvering reflects a proactive approach to balance sheet management that is often well-regarded by investors.
However, the impact of the workforce reduction on the company's morale and productivity cannot be ignored. While the immediate financial benefits are clear, the long-term effects on innovation and company culture are less certain. Investors will likely monitor how these changes influence the company's ability to maintain a competitive edge in the biopharmaceutical industry.
Coherus BioSciences' focus on the oncology sector following the divestiture of their ophthalmology franchise is a strategic decision that capitalizes on the growing demand for cancer treatments. The oncology market is known for its high barriers to entry due to the complexity of drug development and regulatory approvals, but it also offers substantial rewards for successful entrants. The successful launches of LOQTORZI™ and UDENYCA ONBODY™ could potentially enhance Coherus's market positioning within this lucrative sector.
The financial results reflect a company in transition, with significant changes in its operational structure. The reduction in workforce, while a difficult decision, may be necessary for the company to align its resources with its strategic focus and to remain competitive in the high-stakes oncology market. Stakeholders should monitor how these changes affect the company's research and development pipeline and its ability to bring new, innovative treatments to market.
– Net revenue of
– UDENYCA® net sales of
– CIMERLI® net sales of
– LOQTORZI™ and UDENYCA ONBODY™ successfully launched in Q1 2024 –
– Reduction of work force of
– Conference call today at 5:00 p.m. Eastern Time –
REDWOOD CITY, Calif., March 13, 2024 (GLOBE NEWSWIRE) -- Coherus BioSciences, Inc. (Coherus, Nasdaq: CHRS), today reported financial results for its fiscal fourth quarter and full year ended December 31, 2023 and recent business highlights:
RECENT BUSINESS HIGHLIGHTS
CORPORATE RESTRUCTURING SOLIDIFIES FOCUS ON ONCOLOGY
- On March 1, 2024, Coherus closed the divestiture of the ophthalmology franchise to Sandoz for upfront, all-cash consideration of
$170 million plus an additional$17.8 million for CIMERLI product inventory and prepaid manufacturing assets. - On or before April 1, 2024, Coherus plans to prepay
$175 million of the$250 million principal balance of its term loan with Pharmakon Advisors LP (“Pharmakon”), leaving a residual balance of$75 million and reducing projected annualized Pharmakon related interest payments by about70% . - The sharpened focus in oncology and a subsequent restructuring is expected to result in a reduction in workforce of
30% by the end of 2024, including 35 employees associated with the ophthalmology divestiture, for an estimated annualized cost savings of more than$25 million . - Expected SG&A and R&D expenses for 2024 reduced from
$301.5 million in 2023 to$250 -265 million representing at least a12% decrease year over year. - The
$25 million toripalimab NPC approval milestone due to be paid to Junshi Biosciences in Q1 2024 has been restructured such that$12.5 million will be paid in Q2 2024 and the remainder in Q1 2025, potentially adjusted downward for proceeds from Canadian rights.
UDENYCA® RESULTS and ONBODY LAUNCH UPDATE
- UDENYCA net product sales increased
10% in the fourth quarter 2023 to$36.2 million compared to$33.0 million in the third quarter. Total unit demand grew7% quarter over quarter. UDENYCA Autoinjector presentation unit demand grew129% quarter over quarter. Since commercial launch in May 2023, more than 727 accounts have ordered the Autoinjector presentation. - UDENYCA ONBODY, a novel and proprietary state-of-the-art delivery system for pegfilgrastim-cbqv, was launched in February 2024. High customer demand coupled with confirmed payer coverage, drove robust uptake with 138 accounts ordering ONBODY within the first four weeks of launch.
- Based on data from IQVIA, rolling 4-week UDENYCA market share as of March 1 was
26% .
LOQTORZI™ LAUNCH UPDATE
- LOQTORZI is the first and only FDA-approved treatment for recurrent or metastatic NPC in all lines of therapy with commercial launch commencing on January 2, 2024.
- NCCN Guidelines recommend LOQTORZI as the only immunotherapeutic agent with Preferred Category 1 status in first-line treatment for adults with metastatic or recurrent locally advanced NPC in combination with chemotherapy; LOQTORZI monotherapy is also recommended in NCCN guidelines as the only preferred regimen in subsequent lines of therapy.
- Category 1 represents the highest level of evidence and uniformity among panel members in terms of agreement that translates into ease of reimbursement and the ability to establish a new standard of care for these patients.
- Payer coverage for LOQTORZI has been confirmed across Medicare Fee for Service, as well as national and regional commercial health plans.
- Early demand uptake tracking to expectations, with over 59 NPC targeted accounts ordering the product since launch.
NOVEL IMMUNO-ONCOLOGY PIPELINE ADVANCES
- In January 2024, Coherus entered into a clinical collaboration with INOVIO to evaluate LOQTORZI (toripalimab-tpzi) in combination with INO-3112 in a Phase 3 clinical trial as a potential treatment for patients with locoregionally advanced, high-risk, HPV16/18 positive oropharyngeal squamous cell carcinoma (OPSCC), a type of head and neck cancer commonly known as throat cancer.
- Coherus presented new Phase 1b/2 clinical data for casdozokitug, a first-in-class IL-27 antagonist at the 2023 ESMO IO Congress in December and 2024 ASCO Gastrointestinal Cancers Symposium in January. Results show encouraging signs of antitumor activity and an acceptable safety profile for casdozokitug alone and in combination with PD-(L)1 inhibitors with or without bevacizumab in HCC and NSCLC respectively. Importantly, responses were associated with IL-27 related biomarkers and data support planned clinical trials with casdozokitug/ toripalimab-tpzi in NSCLC and HCC.
- New preclinical data for CHS-1000 has been selected for a poster presentation at the upcoming 2024 AACR Annual Meeting being held April 5-10, 2024, in San Diego.
- Coherus plans to file an Investigational New Drug (IND) application in second quarter of 2024 for CHS-1000, a novel ILT4-targeted antibody.
“Throughout 2023, Coherus demonstrated significant progress in transforming the Company’s business model and product portfolio for long-term sustainable growth,” said Denny Lanfear, Coherus’ Chairman and Chief Executive Officer. “We are clearly focused on driving our revenues, reducing our costs, and advancing our pipeline, with constant attention to long-term shareholder value. The divestiture of CIMERLI and debt paydown improves our capital structure and sharpens our focus on oncology. With a robust portfolio of FDA-approved products and a promising immuno-oncology pipeline, we are now better positioned than ever to execute on our mission of extending the lives of cancer patients.”
FOURTH QUARTER and FULL YEAR 2023 FINANCIAL RESULTS
Net revenue was
Cost of goods sold (COGS) was
Research and development (R&D) expense for the three months ended December 31, 2023 and 2022 was
Selling, general and administrative (SG&A) expense was
Net loss for the fourth quarter of 2023 was
Non-GAAP net loss for the fourth quarter of 2023 was
Cash, cash equivalents and investments in marketable securities were
2024 R&D and SG&A Expense Guidance
Coherus is introducing a guidance range of combined 2024 R&D and SG&A expenses from
Conference Call Information
When: Wednesday, March 13, 2024, starting at 5:00 p.m. Eastern Time
To access the conference call, please register through the following link to receive dial-in information and a personal PIN to access the live call: https://register.vevent.com/register/BI41e6b8f8ab024eefafe43493f6fd0cdf
Please dial-in 15 minutes early to ensure a timely connection to the call.
Webcast: https://edge.media-server.com/mmc/p/7c7bss7i
An archived webcast will be available on the “Investors” section of the Coherus website at https://investors.coherus.com/events-presentations.
About Coherus BioSciences
Coherus is a commercial-stage biopharmaceutical company focused on the research, development and commercialization of innovative immunotherapies to treat cancer. Coherus is developing an innovative immuno-oncology pipeline that will be synergistic with its proven commercial capabilities in oncology.
Coherus’ immuno-oncology pipeline includes multiple antibody immunotherapy candidates focused on enhancing the innate and adaptive immune responses to enable a robust immunologic response and enhance outcomes for patients with cancer. Casdozokitug is a novel anti-IL-27 antibody currently being evaluated in two ongoing clinical studies: a Phase 1/2 study in advanced solid tumors and a Phase 2 study in hepatocellular carcinoma. CHS-114 is a highly selective, competitively positioned, ADCC-enhanced anti-CCR8 antibody currently in a Phase 1/2 study as a monotherapy in patients with advanced solid tumors. CHS-1000 is a preclinical candidate targeting immune-suppressive mechanisms via the novel pathway ILT4 with an IND filing planned in the first half of 2024.
Coherus markets LOQTORZI™ (toripalimab-tpzi), a novel next generation PD-1 inhibitor, UDENYCA® (pegfilgrastim-cbqv), a biosimilar of Neulasta®, and YUSIMRY™ (adalimumab-aqvh), a biosimilar of Humira®.
Neulasta® is a registered trademark of Amgen, Inc.
Humira® is a registered trademark of AbbVie Inc.
Forward-Looking Statements
Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding Coherus’ ability to identify synergies between its I-O pipeline and its commercial operations; Coherus’ expected timing for filing an IND for CHS-1000; Coherus’ future projections for R&D expense and SG&A expense; Coherus’ expectations for timing, principal paid and interest payment reductions for its term loan with Pharmakon Advisors, LP; the size of the reduction of workforce in 2024; and Coherus’ expectations that it will be able to realize value in the future from its pipeline.
Such forward-looking statements involve substantial risks and uncertainties that could cause Coherus’ actual results, performance or achievements to differ significantly from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the risks and uncertainties inherent in the clinical drug development process; risks related to Coherus’ existing and potential collaboration partners; risks of Coherus’ competitive position; the risks and uncertainties of the regulatory approval process, including the speed of regulatory review and the timing of Coherus’ regulatory filings; the risk of FDA review issues; the risks of competition; the risk that Coherus is unable to complete commercial transactions and other matters that could affect the availability or commercial potential of Coherus’ products and product candidates; and the risks and uncertainties of possible litigation. All forward-looking statements contained in this press release speak only as of the date of this press release. Coherus undertakes no obligation to update or revise any forward-looking statements. For a further description of the significant risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Coherus’ business in general, see Coherus’ Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on or about the date of this press release, including the section therein captioned “Risk Factors” and in other documents Coherus files with the Securities and Exchange Commission. Coherus’ results for the fiscal year ended December 31, 2023 are not necessarily indicative of its operating results for any future periods.
UDENYCA®, UDENYCA® ONBODY™, YUSIMRY™ and LOQTORZI™, whether or not appearing in large print or with the trademark symbol, are trademarks of Coherus, its affiliates, related companies or its licensors or joint venture partners unless otherwise noted. Trademarks and trade names of other companies appearing in this press release are, to the knowledge of Coherus, the property of their respective owners.
Coherus Contact Information:
For Investors:
Jami Taylor
Head of Investor Relations
IR@coherus.com
For Media:
Jodi Sievers
VP, Corporate Communications
media@coherus.com
| Coherus BioSciences, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenue | $ | 91,524 | $ | 45,352 | $ | 257,244 | $ | 211,042 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 84,567 | 14,202 | 158,992 | 70,083 | ||||||||||||
| Research and development | 26,368 | 29,022 | 109,436 | 199,358 | ||||||||||||
| Selling, general and administrative | 49,494 | 53,621 | 192,015 | 198,481 | ||||||||||||
| Total costs and expenses | 160,429 | 96,845 | 460,443 | 467,922 | ||||||||||||
| Loss from operations | (68,905 | ) | (51,493 | ) | (203,199 | ) | (256,880 | ) | ||||||||
| Interest expense | (10,619 | ) | (9,385 | ) | (40,542 | ) | (32,474 | ) | ||||||||
| Loss on debt extinguishment | — | — | — | (6,222 | ) | |||||||||||
| Other income (expense), net | (129 | ) | 2,008 | 5,469 | 3,822 | |||||||||||
| Loss before income taxes | (79,653 | ) | (58,870 | ) | (238,272 | ) | (291,754 | ) | ||||||||
| Income tax provision (benefit) | — | — | (380 | ) | — | |||||||||||
| Net loss | $ | (79,653 | ) | $ | (58,870 | ) | $ | (237,892 | ) | $ | (291,754 | ) | ||||
| Basic and diluted net loss per share | $ | (0.71 | ) | $ | (0.76 | ) | $ | (2.53 | ) | $ | (3.76 | ) | ||||
| Weighted-average number of shares used in computing basic and diluted net loss per share | 111,492,596 | 77,955,769 | 94,162,637 | 77,630,020 | ||||||||||||
| Coherus BioSciences, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 102,891 | $ | 63,547 | ||||
| Investments in marketable securities | 14,857 | 128,134 | ||||||
| Trade receivables, net | 260,522 | 109,964 | ||||||
| Inventory | 130,100 | 115,051 | ||||||
| Intangible assets, net | 71,673 | 5,931 | ||||||
| Other assets | 49,561 | 58,220 | ||||||
| Total assets | $ | 629,604 | $ | 480,847 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Accrued rebates, fees and reserve | $ | 169,645 | $ | 54,461 | ||||
| Term loans | 246,481 | 245,483 | ||||||
| Convertible notes | 226,888 | 225,575 | ||||||
| Other liabilities | 180,015 | 92,746 | ||||||
| Total stockholders' deficit | (193,425 | ) | (137,418 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 629, 604 | $ | 480,847 | ||||
| Coherus BioSciences, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cash, cash equivalents and restricted cash at beginning of the period | $ | 80,711 | $ | 287,245 | $ | 63,987 | $ | 417,635 | ||||||||
| Net cash used in operating activities | (12,937 | ) | (99,953 | ) | (174,884 | ) | (241,124 | ) | ||||||||
| Purchases of investments in marketable securities | — | (127,382 | ) | (19,507 | ) | (127,382 | ) | |||||||||
| Proceeds from maturities of investments in marketable securities | 36,212 | — | 144,360 | — | ||||||||||||
| Proceeds from sale of investments in marketable securities | — | — | 13,282 | — | ||||||||||||
| Cash and cash equivalents acquired from Surface Acquisition | — | — | 6,997 | — | ||||||||||||
| Option payment to Junshi Biosciences | — | — | — | (35,000 | ) | |||||||||||
| Milestone based license fee payments | (1,051 | ) | (2,429 | ) | (1,051 | ) | (2,429 | ) | ||||||||
| Other investing activities, net | 42 | (87 | ) | 559 | (2,039 | ) | ||||||||||
| Net cash provided by (used in) investing activities | 35,203 | (129,898 | ) | 144,640 | (166,850 | ) | ||||||||||
| Proceeds from 2027 Term Loans, net of debt discount & issuance costs | — | — | — | 240,679 | ||||||||||||
| Proceeds from issuance of common stock under ATM Offering, net of issuance costs | (105 | ) | 6,358 | 18,093 | 6,358 | |||||||||||
| Proceeds from issuance of common stock under Public Offering, net of issuance costs | — | — | 53,625 | — | ||||||||||||
| Proceeds from issuance of common stock upon exercise of stock options | 524 | 60 | 694 | 691 | ||||||||||||
| Proceeds from purchase under the employee stock purchase plan | 472 | 665 | 1,809 | 2,320 | ||||||||||||
| Taxes paid related to net share settlement | (326 | ) | (123 | ) | (3,587 | ) | (3,744 | ) | ||||||||
| Repayment of 2022 Convertible Notes and premiums | — | — | — | (109,000 | ) | |||||||||||
| Repayment of 2025 Term Loan, premiums and exit fees | — | — | — | (81,750 | ) | |||||||||||
| Other financing activities | (199 | ) | (367 | ) | (1,034 | ) | (1,228 | ) | ||||||||
| Net cash provided by financing activities | 366 | 6,593 | 69,600 | 54,326 | ||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 22,632 | (223,258 | ) | 39,356 | (353,648 | ) | ||||||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | 103,343 | $ | 63,987 | $ | 103,343 | $ | 63,987 | ||||||||
| Reconciliation of cash, cash equivalents, and restricted cash | ||||||||||||||||
| Cash and cash equivalents | $ | 102,891 | $ | 63,547 | $ | 102,891 | $ | 63,547 | ||||||||
| Restricted cash balance | 452 | 440 | 452 | 440 | ||||||||||||
| Cash, cash equivalents and restricted cash | $ | 103,343 | $ | 63,987 | $ | 103,343 | $ | 63,987 | ||||||||
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with GAAP, Coherus has also included in this press release non-GAAP net loss, and the related per share measures, which exclude from net loss, and the related per share measures, stock-based compensation expense, certain acquisition-related expenses, amortization of intangible assets, contingent consideration, loss on debt extinguishment and restructuring charges related to our reduction in workforce. These non-GAAP financial measures are not prepared in accordance with GAAP, do not serve as an alternative to GAAP and may be calculated differently than similar non-GAAP financial information disclosed by other companies. Coherus encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations set forth below, to more fully understand Coherus’ business.
Coherus believes that the presentation of these non-GAAP financial measures provides useful supplemental information to, and facilitates additional analysis by, investors. In particular, Coherus believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors’ and analysts’ ability to meaningfully compare Coherus’ results from period to period, and to identify operating trends in Coherus’ business. Coherus also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions.
Coherus BioSciences, Inc.
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
(in thousands, except share and per share data)
(unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| GAAP net loss | $ | (79,653 | ) | $ | (58,870 | ) | $ | (237,892 | ) | $ | (291,754 | ) | ||||
| Adjustments: | ||||||||||||||||
| Stock-based compensation expense(1) | 10,797 | 11,726 | 42,161 | 50,737 | ||||||||||||
| Loss on debt extinguishment | — | — | — | 6,222 | ||||||||||||
| Restructuring charges related to reduction in workforce(1) | — | — | 4,876 | — | ||||||||||||
| Acquisition-related costs(2) | 545 | — | 5,093 | — | ||||||||||||
| Contingent consideration | (920 | ) | — | (920 | ) | — | ||||||||||
| Amortization of intangible assets | 313 | — | 456 | — | ||||||||||||
| Non-GAAP net loss | $ | (68,918 | ) | $ | (47,144 | ) | $ | (186,226 | ) | $ | (234,795 | ) | ||||
| GAAP net loss per share, basic and diluted | $ | (0.71 | ) | $ | (0.76 | ) | $ | (2.53 | ) | $ | (3.76 | ) | ||||
| Non-GAAP net loss per share, basic and diluted | $ | (0.62 | ) | $ | (0.60 | ) | $ | (1.98 | ) | $ | (3.02 | ) | ||||
| Shares used in computing basic and diluted net loss per share | 111,492,596 | 77,955,769 | 94,162,637 | 77,630,020 | ||||||||||||
| (1) | In the year ended December 31, 2023, stock-based compensation of | |
| (2) | Beginning in the third quarter of 2023, the Company began excluding acquisition-related costs in its non-GAAP financial information. To conform to this change, |
FAQ
What was Coherus BioSciences' net revenue in Q4 2023?
How much were UDENYCA® net sales in Q4?
What corporate restructuring did Coherus undertake recently?
When did Coherus initiate a workforce reduction for 2024?
What is Coherus' plan regarding its term loan with Pharmakon Advisors LP?
