Coherus Oncology, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• The company has made progress on its four-part strategy, including driving top-line revenues, controlling expenses, advancing the pipeline, and addressing debt. The divestiture of the UDENYCA franchise is near completion, with SEC, Hart-Scott-Rodino, and CFIUS reviews completed. The shareholder vote and special meeting were upcoming. Post-transaction, the company will have $250 million in cash on the balance sheet.
• On the commercial side, UDENYCA's team navigated supply interruption and had strong Q4 numbers. LOQTORZI's team is focused on maximizing the product's potential, with NCCN guidelines placing LOQTORZI in a preferred position for metastatic and locally recurrent MPC patients.
• In development, toripalimab's pharmacology differentiates it, and clinical trials for casdozokitug and CHS-114 in combination with toripalimab are ongoing, with data expected in 2025 and 2026.

Segment Performance

• UDENYCA: Q4 2024 net product sales were $46.3 million, an increase of 28% compared to $36.2 million in Q4 2023. For fiscal year 2024, UDENYCA net sales were $206 million, a 62% increase compared to $127.1 million in fiscal year 2023. UDENYCA's supply resumed in November 2024, and market share in Q4 was 15% with an exit share of 22%.
• LOQTORZI: Q4 2024 net revenue was $7.5 million, a 29% quarter-over-quarter increase. Net revenue for fiscal year 2024 was $19.1 million. Nearly 80% of all NCCN institutions have used LOQTORZI for at least one patient. In Q4, the number of new accounts purchasing LOQTORZI grew by 37%, and new patient starts continued to grow with uptake in the relapsed, locally advanced, and first line metastatic setting.

Guidance

• The UDENYCA divestiture is expected to close in late Q1 or early Q2 2025. Post-transaction, the company will have $250 million in cash on the balance sheet. 2025 will focus on enhancing investors’ appreciation and understanding of Coherus’ value proposition. The company will continue development efforts through key data milestone readouts in 2025 and 2026.

Risks

• Risks associated with the UDENYCA divestiture, including the remaining closing condition of FDA authorization to sell final packaged product from the additional contract manufacturing organization. Also, macro-level risks related to the company's stock price.

Question and Answer

• Q: With the shareholders voting tomorrow, just wanted to check if there are any hurdles at all that we can expect, like, make sure there are no surprises with respect to the UDENYCA divestiture. Also, you noted you expect to have $250 million in cash exceeding two years. Does that include the cost savings from the headcount reduction by 30% and that 30% coming from those associated with UDENYCA or is there any other optimization in terms of expenses?
• A: Denny Lanfear said they see no obstacles in the way of concluding the UDENYCA divestiture. Bryan McMichael explained the $250 million cash figure is net of upfront consideration, note payoff, and royalty obligations. Regarding headcount reduction, they expect to reduce from ~225 employees to 155, with 50 transferring to the buyer.
• Q: I was just wondering about LOQTORZI. I think you have the modified NCCN guidelines. You have preferred positions for LOQTORZI. Congratulations on that. I was just wondering if you have a sense of where the drug is being used now, now that you have both front line and second line in guidelines?
• A: Sameer Goregaoker said the guidelines recommend chemo plus LOQTORZI as the preferred treatment for first line metastatic and recurrent patients. LOQTORZI is used in a mix of recurrent locally advanced patients, metastatic first-line patients, and some second-line metastatic patients, with physicians expecting to increase its use due to the guidelines.