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01/11 03:36
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Reported EPS $-0.35 EPS, expectations were $-0.31, indicating a miss on earnings expectations.
Revenue $7.3 million, flat year-over-year, with a 15% increase in patient demand but impacted by a seasonal inventory drawdown.
COGS $2.7 million, an increase from $1.4 million in Q1 last year due to increased LOQTORZI sales.
R&D Expense $24.4 million, a decrease of just over $4 million or 14% from Q1 last year, reflecting savings from reduced co-development with Junshi.
SG&A Expense $26 million, a decrease of $14.2 million or 35% from Q1 last year, primarily due to savings from lower headcount and nonrecurring charges from the previous year.
Net Loss from Discontinued Operations $9.2 million, compared to net income of $170.9 million in Q1 last year, primarily due to a $153.6 million gain on sale of the CIMERLI franchise in March 2024.
Net Revenues from Discontinued Operations $32.1 million in Q1 2025, compared to $24.8 million in Q1 2024, driven by divestitures in 2024 and wholesaler allocations.
Annualized Savings from Headcount Reductions Approximately $25 million, with more than half already realized due to the transfer of approximately 40 employees.
LOQTORZI: FDA-approved next-generation PD-1 inhibitor, projected to grow to $150 million to $200 million annually over the next three years.
CHS-114: Highly selective CCR8 cytolytic antibody, showing promising clinical data for solid tumors.
Casdozokitug: First-in-class anti-IL-27 antibody, showing potential in first-line hepatocellular carcinoma.
Market Penetration: LOQTORZI's growth focused on increasing market penetration, supported by NCCN guidelines.
New Patient Starts: 15% growth in patient demand, with over 400 accounts now using LOQTORZI.
Cost Savings: Projected $25 million in annualized savings from lower headcount post-UDENYCA divestiture.
Sales Force Restructure: Completed sales force restructure to focus on LOQTORZI, enhancing commercial efficiency.
Divestiture: Successful divestiture of UDENYCA, allowing focus on innovative oncology.
Partnerships: Agreements in place for indication expansion of LOQTORZI with various partners.
Earnings Expectations: Coherus BioSciences missed earnings expectations with a reported EPS of $-0.35, compared to expectations of $-0.31.
Regulatory Risks: The company faces substantial risks and uncertainties related to forward-looking statements, including projections of cost savings, clinical trial data releases, and future expenses.
Supply Chain Challenges: The company experienced supply interruption issues in the previous quarters, which have impacted their operations.
Market Competition: Coherus is navigating a competitive landscape in oncology, particularly with their PD-1 inhibitor, LOQTORZI, which must establish itself against existing treatments.
Financial Risks: The divestiture of the UDENYCA business presents financial risks, including the management of cash flow and the impact of lower revenues from discontinued operations.
Operational Risks: The restructuring of the sales force and remapping of territories post-divestiture may pose short-term operational challenges.
Clinical Development Risks: The success of ongoing clinical trials for pipeline products like CHS-114 and casdozokitug is uncertain and dependent on regulatory approvals and market acceptance.
Economic Factors: The overall economic environment may impact funding and investment in R&D, affecting the company's growth and innovation strategies.
Core Pillars of Strategy: Coherus is focused on three core pillars: 1) LOQTORZI (toripalimab) as a next-generation PD-1 inhibitor, 2) CHS-114 (CCR8 cytolytic antibody), and 3) Casdozokitug (anti-IL-27) for innovative oncology.
Revenue Projections for LOQTORZI: Projected revenue for LOQTORZI in the NPC indication alone is expected to grow to approximately $150 million to $200 million annually over the next three years.
Cost Savings from Headcount Reductions: Expected annualized savings of approximately $25 million from lower headcount due to the divestiture, with more than half already realized.
R&D Expense Projections: R&D expenses for 2025 are projected to be influenced by data readouts and portfolio prioritization, with more details to be provided later in the year.
SG&A Expense Projections: SG&A expenses for 2025 are projected to be between $90 million and $100 million.
Future Revenue Expectations: Coherus expects LOQTORZI to achieve a dominant share in the NPC market valued at $150 million to $200 million.
Clinical Data Readouts: Key clinical data readouts for pipeline candidates are projected in the first half of 2026.
Financial Outlook: Coherus anticipates achieving full annualized savings from headcount reductions by year-end 2025.
Convertible Notes Repurchase: In April, Coherus repurchased $170 million principal amount of its convertible notes and expects to purchase the remaining $60 million by mid-May.
UDENYCA Divestiture Proceeds: Coherus received $483 million of upfront cash from the UDENYCA divestiture.
Annualized Savings from Headcount Reductions: Following the divestiture, Coherus expects to achieve approximately $25 million in annualized savings from lower headcount.
Net Cash from Transactions: The net cash from the divestiture and related transactions is almost $200 million after deducting transaction fees and taxes.
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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