Coherus Oncology, Inc. Q1 FY2025 earnings call

• Core pillars include LOQTORZI (next-gen PD-1 inhibitor), CHS-114 (CCR8 cytolytic antibody), and casdozokitug (anti-IL-27 antibody).
• LOQTORZI is FDA-approved for metastatic recurrent locally-advanced nasopharyngeal carcinoma, with market penetration focus. Demand grew 15% in Q1 2025 despite revenue being flat due to seasonal inventory drawdown.
• CHS-114 had first US clinical data at AACR showing T-reg depletion and tumor shrinkage in a patient, with ongoing trials in head and neck and gastric cancer.
• Casdozokitug has a Phase 2 trial with LOQTORZI and pembrolizumab, and a Phase 3 pivotal study with LOQTORZI and Lenvatinib in liver cancer.
• UDENYCA divestiture completed, with $483M upfront cash received, and headcount savings expected.

The main product segment is LOQTORZI. Revenue from continuing operations was $7.3 million in Q1 2025, flat due to a seasonal inventory drawdown despite 15% demand growth. COGS from continuing operations was $2.7 million, increasing from Q1 2024 due to higher LOQTORZI sales. R&D from continuing operations was $24.4 million, a decrease of over $4 million from Q1 2024. SG&A from continuing operations was $26 million, a decrease of $14.2 million from Q1 2024. The net loss from discontinued operations for the quarter was $9.2 million.

• LOQTORZI is projected to grow to $150 million to $200 million annually over the next three years in the NPC indication.
• SG&A for full year 2025 is projected between $90 million and $100 million.
• Expect Q2 and Q3 to see growth in LOQTORZI sales as the sales force restructure impact is felt in Q1.

• Uncertainties in forward-looking statements such as repurchasing convertible notes, cost savings from headcount reductions, clinical trial data releases, and future expenses.
• Challenges in FDA interactions and adapting to regulatory changes.
• Dependence on successful clinical trial outcomes and market adoption of LOQTORZI.

Q: Hey guys, thanks for taking my question, and congratulations on all the progress, especially with CHS-114 presentation at AACR. I have a question on LOQTORZI...

A: Thank you, Kripa. Let me start with the last point first. I want Theresa [ph] LaValle address the issue of the FDA changes treatment.

Q: Can you clarify what you meant by patient demand LOQTORZI? I just want to confirm if that 15% that you quoted is referring to the number of patients that are on commercial supply.

A: Yes. So we look at revenue and demand in two different things, right? So wholesalers purchasing our products have that going into inventory. And then the end users, which is the actual clinics buying the product from the wholesaler that's the demand. And the demand is usually a direct indicator of actual patient growth because in this release date, physicians are not stocking inventory on their shelves.

Q: Hi. Thank you for the questions. I have two. One is a follow-up on LOQTORZI. You noted that it could take some time to take share in MPC in part because LOQTORZI is not stocked at all institutions. Should we take that to mean that PD-1s like KEYTRUDA and OPDIVO are still being used off label to a high degree in MPC?

A: So again, the Keytruda and chemo only use is real. It's real, especially in the community setting, less for the academic setting. And this is despite the NCCN guidelines recommending a chemo combination, including LOQTORZI as the preferred regimen. And the reason this happens is frankly, it's a matter of habit, right? That's the reason that's happening. But when we talk to physicians, it's a very clear story. The story is simply, we are the only brand, only IO with an OS survival benefit that we demonstrated in a Phase 3 trial, and we're the only NCCN approved preferred regimen for these patients.

Q: Great. Good afternoon. Thanks for taking our questions and congrats on the progress. Can you talk a little more about the Type D meeting you had with the FDA for CHS-114? It sounds like you aligned on project optimists, but any other interesting feedback coming out of that meeting?

A: Yes. I mean the focus of that, I mean -- so our approach is to collaborate with the FDA and not just show up with data but really have a conversation about our approaches and how we do things. So the Type D meetings in particular, are very focused on single topics and that was -- I mean, project optimist is something a lot of people have struggled with. And so really walking them through the data we have and the data we plan to bring to them early next year and ensuring that this would meet what they're looking for was important and I think very exciting that they found it acceptable.

Q: Good afternoon. Thanks for taking the questions. Just one as a follow-up in terms of educating physicians, I'm just curious, is it the -- sort of -- does it take convincing a physician in terms of the value of a PD-1? Or is it sort of demonstrating the value of LOQTORZI, meaning do they have some skepticism because of other PD-1s not demonstrating efficacy and so you need to convince them there and the differentiation of the asset?

A: Yeah. Thanks for the question, Doug. So a couple of points I'll make. So first of all, up until now, you know there's been no approved therapies and no data actually in this tumor type. So this is a real area of unmet medical need. So we've come along with the first real data, the first positive data. And as you know, what LOQTORZI has shown is over chemotherapy alone. We have shown a really profound survival benefit. That is the gold standard, right? So whenever a doctor hears this data, they're very impressed to date. It is impressive data. And again, it's a 37% risk reduction. Now that's now accompanied by premier listing on the NCCN. So there are no real objections to the data whatsoever.