Full Press Release Details
Coherus BioSciences Reports First Quarter 2024 Financial Results and Provides Business Update
- Net revenue of $77.1 million in Q1 2024 -
- CRI and ENB Therapeutics development partnership for toripalimab in ovarian cancer -
- New debt and royalty financing replaces $75 million term loan, with debt maturity of May 2029 -
- Conference call today at 5:00 p.m. Eastern Time -
REDWOOD CITY, Calif., May 9, 2024 -- Coherus BioSciences, Inc. (Coherus, Nasdaq: CHRS), today reported financial results for the quarter ended March 31, 2024 and recent business highlights:
RECENT BUSINESS HIGHLIGHTS
UDENYCA RESULTS and ONBODY LAUNCH UPDATE
LOQTORZI LAUNCH UPDATE
NOVEL IMMUNO-ONCOLOGY PIPELINE ADVANCES
"The strength of our company's first-quarter performance reflects our ongoing commitment to driving top-line revenues, controlling operating expenses, advancing our pipeline, and improving our capital structure," said Denny Lanfear, Coherus' Chairman and Chief Executive Officer. "The progress we reported today aligns with these objectives, consistent with our overarching mission to become a sustainable and growing oncology company improving outcomes for cancer patients."
FIRST QUARTER 2024 FINANCIAL RESULTS
Net revenue was $77.1 million during the three months ended March 31, 2024, and included $42.7 million of net sales of UDENYCA, $2.0 million of net sales of LOQTORZI, which was launched on January 2, 2024, $3.9 million of net sales of YUSIMRY , and $28.2 million of net sales of CIMERLI , which was divested to Sandoz on March 1, 2024. Net revenue was $32.4 million during the three months ended March 31, 2023.
Cost of goods sold (COGS) was $34.6 million and $16.9 million during the three months ended March 31, 2024 and 2023, respectively. CIMERLI COGS included a low to mid 50% royalty on gross profits and UDENYCA COGS includes a mid-single digit royalty on net sales payable through the first half of 2024. The increase in COGS was primarily driven by higher royalty costs and an increase in product costs from the mix of products sold and the launch of new products.
Research and development (R&D) expense was $28.5 million and $34.2 million during the three months ended March 31, 2024 and 2023, respectively. The decrease was primarily due to savings from reduced headcount and lower costs related to biosimilar products, partially offset by increased costs related to moving LOQTORZI production from China to the United States.
Selling, general and administrative (SG&A) expense for the three months ended March 31, 2024 was $56.5 million compared to $49.2 million for the same period in 2023. The increase was primarily due to the net $6.8 million charge in Q1 2024 associated with the full write-off of the outlicense intangible asset and associated release of the CVR liability related to NZV930, obtained in the Surface Oncology acquisition, and higher third-party processing fees from multiple products being commercialized, partially offset by savings from reduced headcount.
Gain on Sale, net for the divestiture of the ophthalmology franchise, which closed during the three months ended March 31, 2024, was $153.6 million, and reflects total cash proceeds of $187.8 million, net of assets transferred to Sandoz, assets derecognized, transactions costs of $7.2 million and other employee transition related expenses.
Net income for the first quarter of 2024 was $102.9 million, or $0.83 per share on a diluted basis, compared to a net loss of $75.7 million, or $(0.96) per share on a diluted basis for the same period in 2023.
Non-GAAP net loss for the first quarter of 2024 was $35.8 million, or $(0.32) per share on a diluted basis, compared to non-GAAP net loss of $59.5 million, or $(0.75) per share on a diluted basis for the same period in 2023. See "Non-GAAP Financial Measures" below for a discussion on how Coherus calculates non-GAAP net loss and a reconciliation to the most directly comparable GAAP measures.
Cash, cash equivalents and investments in marketable securities were $259.8 million as of March 31, 2024, compared to $117.7 million as of December 31, 2023. Proceeds from the divestiture of our ophthalmology franchise received in March 2024 were used to pay down $175.0 million of the total $250.0 in principal on Coherus' 2027 Term Loans in April 2024.
2024 R&D and SG&A Expense Guidance
Coherus projects combined R&D and SG&A expenses for 2024 to be in the range of $250 to $265 million. This guidance includes approximately $40 million of stock-based compensation expense and excludes the effects of acquisitions, collaborations, investments, divestitures including expenses incurred on behalf of and reimbursed by Sandoz to satisfy Coherus' obligations under the Transition Services Agreement (TSA), restructuring, the exercise of rights or options related to collaboration programs, and any other transactions or circumstances not yet identified or quantified. This guidance is subject to a number of risks and uncertainties. See Forward-Looking Statements described in the section below.
Conference Call Information
When: Thursday, May 9, 2024, starting at 5:00 p.m. Eastern Daylight Time
To access the conference call:
Dial: (800) 715-9871 (toll-free USA and Canada); (646) 307-1963 (international)
Conference ID: 4442005
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 is expected to 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 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 a response from the FDA on our IND filing expected in the second quarter 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 an FDA response to its IND for CHS-1000; Coherus' future projections for R&D expense and SG&A expense; and Coherus' expectations about revenues and long term growth.
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' quarterly filing on Form 10-Q for the fiscal quarter ended March 31, 2024 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 quarter ended March 31, 2024 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:
Head of Investor Relations
VP, Corporate Communications
Coherus BioSciences, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
| Three Months Ended | ||||||
| March 31, | ||||||
| 2024 | 2023 | |||||
| Net revenue | $ | 77,063 | $ | 32,436 | ||
| Costs and expenses: | ||||||
| Cost of goods sold | 34,586 | 16,874 | ||||
| Research and development | 28,470 | 34,154 | ||||
| Selling, general and administrative | 56,532 | 49,153 | ||||
| Total costs and expenses | 119,588 | 100,181 | ||||
| Loss from operations | (42,525) | (67,745) | ||||
| Interest expense | (11,116) | (9,712) | ||||
| Gain on Sale Transaction, net | 153,647 | - | ||||
| Other income (expense), net | 2,869 | 1,728 | ||||
| Income (loss) before income taxes | 102,875 | (75,729) | ||||
| Income tax provision | - | - | ||||
| Net income (loss) | $ | 102,875 | $ | (75,729) | ||
| Net income (loss) per share: | ||||||
| Basic | $ | 0.91 | $ | (0.96) | ||
| Diluted | $ | 0.83 | $ | (0.96) | ||
| Weighted-average number of shares used in computing net income (loss) per share: | ||||||
| Basic | 112,749,306 | 79,268,853 | ||||
| Diluted | 125,529,971 | 79,268,853 |
Coherus BioSciences, Inc.
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||
| 2024 | 2023 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 259,775 | $ | 102,891 | ||
| Investments in marketable securities | - | 14,857 | ||||
| Trade receivables, net | 251,951 | 260,522 | ||||
| TSA receivables, net | 32,194 | - | ||||
| Inventory | 127,623 | 130,100 | ||||
| Intangible assets, net | 57,104 | 71,673 | ||||
| Other assets | 34,898 | 49,561 | ||||
| Total assets | $ | 763,545 | $ | 629,604 | ||
| Liabilities and Stockholders' Deficit | ||||||
| Accrued rebates, fees and reserve | $ | 155,775 | $ | 169,645 | ||
| TSA payables and other accrued liabilities | 30,770 | - | ||||
| Term loans | 247,452 | 246,481 | ||||
| Convertible notes | 227,220 | 226,888 | ||||
| Other liabilities | 184,172 | 180,015 | ||||
| Total stockholders' deficit | (81,844) | (193,425) | ||||
| Total liabilities and stockholders' deficit | $ | 763,545 | $ | 629,604 |
Coherus BioSciences, Inc.
Condensed Consolidated Statements of Cash Flows
| Three Months Ended | ||||||
| March 31, | ||||||
| 2024 | 2023 | |||||
| Cash, cash equivalents and restricted cash at beginning of the period | $ | 103,343 | $ | 63,987 | ||
| Net cash used in operating activities | (46,766) | (68,732) | ||||
| Proceeds from maturities of investments in marketable securities | 6,200 | 17,500 | ||||
| Proceeds from sale of investments in marketable securities | 8,688 | - | ||||
| Cash received from Sale Transaction | 187,823 | - | ||||
| Other investing activities, net | 52 | 26 | ||||
| Net cash provided by investing activities | 202,763 | 17,526 | ||||
| Proceeds from issuance of common stock under ATM Offering, net of issuance costs | 1,507 | 6,835 | ||||
| Proceeds from issuance of common stock upon exercise of stock options | 291 | 103 | ||||
| Taxes paid related to net share settlement | (745) | (2,781) | ||||
| Other financing activities | (166) | (353) | ||||
| Net cash provided by financing activities | 887 | 3,804 | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 156,884 | (47,402) | ||||
| Cash, cash equivalents and restricted cash at end of the period | $ | 260,227 | $ | 16,585 | ||
| Reconciliation of cash, cash equivalents, and restricted cash | ||||||
| Cash and cash equivalents | $ | 259,775 | $ | 16,145 | ||
| Restricted cash balance | 452 | 440 | ||||
| Cash, cash equivalents and restricted cash | $ | 260,227 | $ | 16,585 |
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 income (loss), and the related per share measures, stock-based compensation expense, certain acquisition-related expenses, amortization of intangible assets, gain on divestiture, impairments 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 Income (Loss) to Non-GAAP Net Loss
(in thousands, except share and per share data)
| Three Months Ended | ||||||
| March 31, | ||||||
| 2024 | 2023 | |||||
| GAAP net income (loss) | $ | 102,875 | $ | (75,729) | ||
| Adjustments: | ||||||
| Stock-based compensation expense (1) | 7,319 | 11,333 | ||||
| Gain on Sale Transaction, net | (153,647) | - | ||||
| Impairment of out-license asset and remeasurement of CVR liability, net | 6,772 | - | ||||
| Restructuring charges related to reduction in workforce (1) | - | 4,876 | ||||
| Amortization of intangible assets | 930 | - | ||||
| Non-GAAP net loss | $ | (35,751) | $ | (59,520) | ||
| GAAP | ||||||
| Net income (loss) per share, basic | $ | 0.91 | $ | (0.96) | ||
| Net income (loss) per share, diluted | $ | 0.83 | $ | (0.96) | ||
| Shares used in computing basic net income (loss) per share | 112,749,306 | 79,268,853 | ||||
| Shares used in computing diluted net income (loss) per share | 125,529,971 | 79,268,853 | ||||
| Non-GAAP | ||||||
| Net loss per share, basic and diluted | $ | (0.32) | $ | (0.75) | ||
| Shares used in computing basic and diluted net loss per share | 112,749,306 | 79,268,853 |