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01/11 03:39
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several challenges: regulatory uncertainties, supply chain issues, and intense market competition, particularly with PD-1 inhibitors. Despite strategic initiatives and cost reductions, revenue stagnation and a net loss from discontinued operations are concerning. The Q&A section highlights management's vague responses on key issues, amplifying uncertainty. The refusal to provide 2025 guidance and the competitive landscape further dampen sentiment. While divestitures provide cash inflow, the overall outlook remains negative, reflecting potential short-term stock price decline.
Revenue $7,300,000, flat year-over-year; driven by a seasonal inventory drawdown despite strong demand growth of 15%.
COGS $2,700,000, an increase from $1,400,000 year-over-year; due to increased Lactorsi sales.
R&D Expense $24,400,000, a decrease of $4,000,000 or 14% year-over-year; reflecting savings from reduced co-development with Junshi, partially offset by increased investments in internal programs.
SG&A Expense $26,000,000, a decrease of $14,200,000 or 35% year-over-year; primarily due to non-recurring charges from last year and savings from lower headcount.
Net Loss from Discontinued Operations $9,200,000, compared to net income of $170,900,000 in Q1 last year; primarily driven by a $153,600,000 gain on sale of the Similee ophthalmology franchise in March 2024.
Net Revenues from Discontinued Operations $32,100,000 in Q1 2025, down from $74,800,000 in Q1 2024; driven by divestitures in 2024 and wholesaler allocations following supply interruptions.
Annualized Savings from Headcount Reductions Approximately $25,000,000 expected; more than half already realized due to the transfer of approximately 40 employees.
Cash Position $82,000,000 on the balance sheet as of 03/31/2025; net cash from divestiture transactions is almost $200,000,000 after deducting transaction fees and taxes.
Lactorsi Revenue Projection: Projected to grow to about $150,000,000 to $200,000,000 annually over the next three years.
Torapalumab Indication Expansion: Focus on expanding indications for Lactorsi in combination with other agents, including proprietary pipeline candidates.
CHS-114 Development: CHS-114 is a selective CCR8 cytolytic antibody with promising clinical data and potential for broad applicability across solid tumors.
Casidosoketogue Development: First in class anti IL-27 antibody showing promising data in first line liver cancer.
Market Positioning of Lactorsi: Lactorsi is positioned as the only FDA approved treatment for metastatic recurrent locally advanced nasopharyngeal carcinoma.
NCCN Guidelines: Lactorsi is now a preferred treatment in NCCN guidelines for recurrent and metastatic patients.
Sales Force Restructure: Sales force restructure completed to focus on driving growth for Lactorsi.
Cost Savings from Divestiture: Expected annualized savings of approximately $25,000,000 from lower headcount post UDENYCA divestiture.
Focus on Innovative Oncology: Shifted focus to innovative oncology following biosimilar divestitures.
Partnership Strategy: Developing partnerships for drug supply to fund clinical trials for indication expansion.
Forward Looking Statements: The company acknowledges that forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ from expectations.
Regulatory Changes: Concerns were raised regarding changes at the FDA, particularly with staff turnover leading to potential challenges in navigating regulatory processes.
Supply Chain Challenges: The company experienced supply interruptions that impacted sales momentum and required a restructuring of the sales force.
Market Competition: The competitive landscape for PD-1 inhibitors remains challenging, with established products like Keytruda and Opdivo still being used off-label, which may hinder the adoption of Lactorsi.
Sales Force Restructuring: The restructuring of the sales force is seen as a short-term headwind, potentially impacting sales growth in the immediate future.
Economic Factors: The company is navigating a transitional quarter amidst significant corporate transformation, which may affect financial performance.
Clinical Trial Risks: There are inherent risks associated with clinical trials, including the potential for unfavorable data readouts that could impact product development and market acceptance.
Core Pillars of Strategy: Coherus is focused on three core pillars: 1) Torapalumab (Lactorsi) as a next-generation PD-1 inhibitor, 2) CHS-114 (CCR8 cytolytic antibody) for Treg depletion, and 3) Casdosahedrug (anti IL-27) for hepatocellular carcinoma.
Revenue Projections: Lactorsi is projected to grow to approximately $150 million to $200 million annually over the next three years.
Indication Expansion Strategy: Coherus aims to expand Lactorsi's indications through partnerships, allowing partners to fund clinical trials while Coherus supplies the drug.
Clinical Trial Focus: Coherus is conducting trials for CHS-114 in head and neck and gastric cancers, and for Casdosahedrug in combination with Lactorsi.
Cost Savings: Expected annualized savings of approximately $25 million from lower headcount post-UDENYCA divestiture.
SG&A Guidance: Projected SG&A expenses for full year 2025 are between $90 million and $100 million.
R&D Expense Guidance: R&D expenses will depend on data readouts and portfolio prioritization, with more details to be provided later in the year.
Future Data Readouts: Key clinical data readouts for pipeline candidates are expected in the first half of 2026.
Commercial Growth Expectations: Expectations for continued growth in Lactorsi demand and market share in NPC, with a focus on increasing physician education.
Convertible Notes Repurchase: In April, Coherus repurchased $170,000,000 principal amount of its convertible notes in privately negotiated transactions. They expect to purchase the remaining $60,000,000 of convertible notes by mid-May, provided that they are tendered by the holders of those notes.
UDENYCA Divestiture Proceeds: Coherus received $483,000,000 of upfront cash in April from the divestiture of UDENYCA.
Annualized Savings from Headcount Reductions: Following the divestiture, Coherus expects to achieve approximately $25,000,000 in annualized savings from lower headcount, with more than half already being realized.
Royalty Payment: Coherus paid $48,000,000 to buy the remaining royalty on UDENYCA in conjunction with the close of the divestiture.
The earnings call reveals strong financial performance with 92% YoY revenue growth and improved balance sheet. The company is optimistic about LOQTORZI's sales trajectory and has strategic plans for pipeline products. While there are risks in clinical trials and competitive pressures, management's focus on partnerships and operational cost management is promising. Despite some uncertainties in Q&A responses, the overall sentiment is positive, supported by the potential for significant market opportunities and strategic initiatives.
The earnings call presents a mixed outlook. While there are positive elements such as confidence in LOQTORZI's revenue growth and first-in-class positioning for the anti-IL-27 program, there are also concerns. These include declining cash reserves, vague timelines for partnerships, and unclear responses on key data readouts. The Q&A reveals management's confidence but also highlights uncertainties in partnerships and data maturity. Without a clear market cap, the stock reaction is uncertain, leading to a neutral sentiment.
Despite some positive developments like a 15% growth in patient demand for LOQTORZI and significant cash influx from divestitures, the earnings miss, supply chain issues, competitive pressures, and lack of 2025 guidance weigh negatively. The Q&A highlighted operational challenges and management's unclear responses on key issues. These mixed signals suggest a neutral impact on the stock price, with potential upside from future growth projections balanced by current uncertainties and financial risks.
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