CHRS - Earnings call transcript Q1 2019 | Coherus BioSciences, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Coherus BioSciences 2019 First Quarter Earnings Conference Call. My name is Dimitris, and I will be your conference operator for the call today. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded. to of call Affairs. Investor like Arrington, to now President Vice Relations would turn over the David I and Corporate go ahead. Please

David Arrington

market site. This release Thank After be found first good and Coherus can financial today, BioSciences the of Web quarter release. you, our we press afternoon, results on issued Dimitris, close everyone.

and Officer, Denny Financial Officer, Marketing Jean Joining me will Access, call President Chief the Market and be Coherus Vice Chief Lanfear; Legal Thomas Hassard. today's for President Fitzpatrick Senior and CEO, Jim Viret; of

these Before on description our be this you uncertainties product and beyond risks involve begin can most with making formal we which statements. our afternoon like these our which and differ A remarks, risks to after to that cause control forward-looking of we found that could I are remind development Form respect actual recent be of assumptions, would XX-K, results plans, close. all we filed will certain market from statements to

In does not I obligation made the forward-looking any addition, Coherus any call during call. turn now will BioSciences to to statements Denny. this update over undertake

Denny Lanfear

Today you, main plan thank David. for call. all us to on Thank Coherus' earnings XXXX cover you today three you. topics QX, with joining And we

performance will review behind the QX First, drivers we some UDENYCA in into share the launch insights and those results.

[Technical on of So be provide and color you quantitative have additional Difficulty] in subject this and Jim how just a qualitative understanding a to some a both happy moment.

total field team our from company. the and some integrated and growth R&D we'll in a With equivalents commercial development full-time company. an to equivalent full-time plus discuss pure in XXX Secondly, our platform in transition company XX C members

our term. our to top-line a the commercialized is to growth products long demonstrated ambition the products in results opportunity other with Accordingly, and to to medium to us oncology Our long a achieve in increase market term. medium provides progressive success leverage in the corresponding commercialize capability and

how commercial breakeven. future financing review and to our will our performance our needs, Lastly, we achieve plans impacts

were UDENYCA Now let provide performance me so make doing and a what as to we understanding results that revenues to as were well achieve aligned as well you strong few so with points means performance able here million, qualitatively, our color to two like this UDENYCA we which in possible, $XX.X much to these key QX how sales respect as with QX expectations. have a you. I'd for quantitatively, of make comments try is

within to abnormal was at stocking was inventory preservation with stocking well range. long-term First, value discounts With respect pricing were or to say artificial there a bill our That consistent strategy. wholesalers levels. or contracting, normal is no customer and

is our will This As Prior and biosimilars to moment. this, biosimilar to companies drive with mixed further drug or the We approach market adoption. generic Mr. time to has results a a pure-play value these first unique either discuss results. biosimilar company companies biosimilars just launching launching believe conversely market biopharma Hassard innovator a in the validate launched deliver the witnessed biosimilar.

our shared as biosimilars both includes have approach, unique Biosimilars street type to launch. strong commercial commercialization with prior We wraparound novel, innovator and provided a products services patient our confident complete capabilities. which we complex and biosimilar branded been a the require always approach contracting and such holistic opportunity the our Coherus

to keys Jim. on over hand more little color a the proposition things our me success, for to let value Now and the

Jim Hassard

you, Thank Denny.

forward as our we that for are look new approach quarter pleased to gives covenants very of validating the are We XXXX. our rest the which market, results to us one

have and and proposition UDENYCA. our to judicious remains the preserving non we revenue There value been long-term our XXXB has approach. XXXB Now getting for proposition. abundance hospitals. find that value and market, been With allowing hospitals to the approach pricing and high let through four we and that across deliver to walk Consistent market to clinics, while an segments. all value date. me that we of respect you customers contracting broad disciplined potential our elements of three to with are the good to plan the support are supply, the respect oncology conservative, enter three to of our contracting, core with traction We market segments, With across us compelling community all believe launch

any continues confidence value that to provided Our patients. our levels high piece strategy far hundreds services. service to provided The of Coherus is the focus offering our supply complete so be meet time. of and the over demand we with have of support customers could proposition last branded we cancer

me hand Denny. to things let back Now

Denny Lanfear

Jim. Thanks

discuss to with R&D transitioning is commercial like an company R&D Company. from Coherus C an I'd successfully being Next integrated. how C and UDENYCA, fully to

XXXX This the pipeline. the we First ophthalmology pre to our With on date. alignment development the also CHS-XXXX. in Humira biosimilar includes to side, pipeline, includes our for advance our continue launch this with exercises respect CHS-XXXX filing

Our I your manufacturing plans Eylea happy various with and to during the questions and Q&A. our biosimilar Lucentis And through report advancing stages. both preclinical that biosimilar. consistent our take are CHS-XXXX be can We'll

with treatment Now price and mind is new technology in paradigms. and important the the in to entering commercial changing it's that and oncology side, a ecosystem, therapeutic is significant rapidly keep sensitivities

commercial be plans capabilities buy in other oncology dimensions to to team and of stakeholders. or have have the either validates that needs. claim cash we of want potential And required key long-term Accordingly, the products, applied specifically you what understanding commercialization financial and developed medium as point the key of ontology today ability it a our GAAP respect to cracked we infrastructure and While, is like various the feel to priority to that a implication which discuss deeper breakeven underway we in-license all UDENYCA. basis. we we'd performance high the demonstrates do our effectively the financing actually in to bill a with deliver lever code date performance, ecosystem can to do launch our the value to we biosimilars, We commercial achieve not topic believe last the efforts the companies would assets. financial of how And at impacts for to long-term time on with

recall the goal that beginning January. the the may $XX stated to breakeven which since have aspirational in the leveraging HCR reach secured early You we of year financing, was million

not for product the the where to achieve Further, will continue the continue sales also And, XXXX Mr. development see ambition preserve of consistent pipeline to essential company's Our investments we Hassard's we squeeze we a is course, support say key to UDENYCA and are driven trajectory expense by success. to line organically. we to on throughout will with product financial profitability be goal, whatever That value. remarks top growth commercial term long- future achieve going to this in line. to we investments infrastructure. Rather expect

we sales we to stated results that for While month-to-month today, on you can not plans the consistent say QX provide and basis financial a is advancing growth aspirations. going are with our

I'm hand Officer, Jean company's to that Chief Viret, the to with JV? over Dr. Financial things Now going

Jean Viret

the to XXXX manufacturing for quarter equivalents the XXXX that X for cost yearend the for in $XX.X UDENYCA XXXX, in Research million gross cash $X.XX Thank the collect of the team XXXX investments of in first you. revenue in the March compared the quarter to as $X.X for of XX, Denny. With of a share to loss Net for through of $XX.X due quarter-- call most this as $XX.X earlier. turning mainly as primarily of period decreased this compared marketable million pre-approval back that million, first a $XX.X million million was result $XX.X Cost $X.XX quarter $XX.X and million goods of for balance expenses were and in sold to during mainly $XX.X I general associated Net totaled of the XXXX first attributable by operating for SG&A activities. Selling, support of XXXX from million or decreased Coherus by loss XXXX will that, net profit the increase XX, to in same million and this of Cash was $XX.X XX, We of commercialization R&D million of the decreases over the with XXXX. for total attributable XX% this million service in indicated now in UDENYCA walk the XXXX quarter. March of XXXX Overall of the to is capitalization year. XXXX. the UDENYCA as share, administrative a to to net $X.X the down million quarter. quarter a sales first The Denny receivables million of first second in was results XXXX resulting by quarter main million we'll a $XX quarter to and margin full as XXXX. quarter you as anticipate manufacturing the as March expenses in increased to December or the for million product $XX. of was million, million quarter $XX.X XXXX. of to development XX, per compared were quarter XXXX. XXXX. quarter we for to marketing for I'm the and securities and reduction as $X.X $XX.X The UDENYCA. of compared David. expenses commercializing of expenses same fourth same of in $XX.X for the financial Trade to as period per first million added US first in as period $XX.X cost expenses

David Arrington

you. Thank Yes.

to questions. So, take ready operator we're now

Operator

comes Company. [Operator Cowen Cacciatore question Instructions] with And our first Ken and from

may proceed. You

KenCacciatore

launch. the to Hey, team and Denny. you the on Congratulations

of profitability. Just you an elegant had the path describe to to trying way

confirm the It saying growth a to of wanted balance through year. like things. Just you're the sequential of to just try couple sounds

said sounds is no you launch the well. So stocking, going like

here question, you're a what launch make sure terms is that to that's penetrate. lot one way the know anything little in does doing modeling make the market. Just surprising bit to should lastly, in want see responding different. as that you. learning that anything we you the reaction you that a that you. I focus any just of disciplined, steady about geographies it a purposes or the a higher surprising maybe then maybe a Thank an that's for continue to want or -- brand just segment's they're And and that was in being broader you focus; of grind then Again in you sense just to of so And Mylan area is on in

DennyLanfear

for your questions. thank things And A few Ken. Thanks you there.

linear let and just month quarter, I on. to in be month it's with I of pre couple the -say few go of progressivity I'm and so So one up forward. a have we sales think here tee of me to Jim exactly But so going course to to that answer respect answers step, specifically or to going Hassard, as not the month let to market questions with Jim? on. quarter respect Jim see we a quarter your the what to

JimHassard

Thanks Denny.

thought surprise had you adoption we had longer and Ken something to about. asked what So in we to In that hospitals be general, it's place. than has a biggest process come anticipated

of pleased We that moved the have value through have UDENYCA and rapidly are UDENYCA segments very hospital PNT process. recognized the the

a think of we have that discipline in lot. I nature, terms the mentioned

as the was One now disciplined. of be marketplace it's And market, three seeing the with again disciplined we market we're also the this anticipate into to but in first, be very perhaps that us being requiring players well. things coming

DennyLanfear

give with earlier better number respect publishing because questions things That guidance of going. understand get in was we with as know, how you we simply sales were we $XX did to quarters. sales And the sort numbers so of to Ken, the some in pre that why respect there's and ongoing on. to the million. to And various street wanted announced numbers

symmetric have we So sought any information. not to

and --is forth other is was much somehow which usual. to notion organic the business wanted thing in was disabuse channel we because loading Does of sort that it's questions? The very and your of not out-of-the-ordinary this cover as early that so launch, the

Operator

with Schott Chris from comes JPMorgan. question next Our

You may proceed.

ChrisSchott

and can the see couple translate the I first will here. was secure as kind the to share feel of over do Or advantage over about ones market. congrats of of mover as that kind was just going the that's we going That Dan we you of into sticky? market landscape you question. opt-in a as about this you some first evolving Do Thanks think I had these and incremental to competitions? think are think competition sustained had or second you time, of that very am of first coming think that again the Great. incremental Neulasta kind see of share out different time be that to once about much kind launch. trying much on fairly all how Yes, we competitive players products? of I

gross proxy product to XX% the gross out to on net level like at for profits? think in XX% where to but a it very is any UDENYCA? for it's first think I decent decent in price that was was the royalty royalty a Looks that if for plus finally quarter. Second margins. of other color shaking that is much. forward? And the to point this going Thanks about terms then about Is take the Amgen know just be we about going

DennyLanfear

Hi, for congratulations Chris. and Thanks question. for your your thanks

the competition questions. in there let with about to gross talk the lot work respect about an to Jean the realize I all awful of it. color first as forward to adopt on the talk a market, when Hassard required of part will go Mr. this of providers have the that issue Viret handle me you let you requested. think was I'll biosimilar With profit competition then So Dr. the

hospital hospital normal XXXB particularly The non segments. the Now and the XXXB. segments in at

we sticky committees of You of a a do decide very through how data overall once to Hospital them the amount are it's go is for have view have PNT lot out process. able because think respect With lot probably of there probably terms --for there I a course is would amount believe product various that a there. because products sure and not larger to work, I fair the another to think much They're work of in fair switching stickiness laborious I so but don't I the there's through move as And things. a stickiness than hospital very to of biosimilar, all of it's they and a on in a segment. We're clinics clinics, get to less biosimilar. think to I quicker

is gross stickier with on the like two-thirds Jean comment market respect you than would Chris's profit? perhaps a of remaining question So little third. the to to

JeanViret

had impacted unusual that's XX-Q. we a a So that was gross quarter this We of somewhat of cost lots profit indicated and cancelled few because write-down our a sales. our prepayment on

will above be that go to the now not margin do of in our up be by proximity that, single --XX%. be margin you if XX% have and owed not hovering So will digit Amgen mid gross gross if around the will With XX-ish well we royalty so XX%, this that percentage expect should will percent.

DennyLanfear

Is your answered question? it

ChrisSchott

margin Very Yes. impressive there.

DennyLanfear

just question or here. remarks pricing -- and that. we out in about say a I'll Hassard can Jim last early? anything your Like like a shaking your color little any that's Mr. was is bit Great. about last on how

JimHassard

early. bit It's Yes.

strategy involves think I I'll pricing to and go our contracting three back Chris, principles.

payers. First, providers and our is customers. our savings cost to patients' mission The provide corporate to obviously

establish not to price. entails we've achieve product, share we the value just to service customers price the as then disciplined that market and seek in a way that a aim our seen. lastly, the we Second And objectives our proposition for

X% quarters course about to And And I announced market, quarter think terms on you from price. declined releasing can about overall December were of the that the available to first ASP. in what's reported Neulasta biosimilar Mylan that our look list the ASP we XX% at their for the see at after can this Mylan the was for three publicly. for of impact time, of And but ASP example, March. be market to we the not

is disciplined within see So marketplace. the a reaction what we fairly

Operator

comes Mohit question with Bansal Citigroup. from next Our

proceed. may You

MohitBansal

be and next that the would been encore here you your dynamics, question in more on a thing? are if comments segment -- is quick you How is watch seeing any get do think are so wait Jim, you Onpro you of characterize or --if that? that can if have it a of far and approach market make could to the if dent market could you Denny and you taking of year trying able you more

DennyLanfear

I'll very but entire are Jim will handle say, that market, question, the just and Thanks Onpro business business let broadly. for Mohit, we the that pursuing very, firstly syringe your the I

And add conversion. and be the for that to is the like we market with approached some Onpro. has additional so to feel to respect Jim you entire potential the would color on question Mohit's

JimHassard

Mohit, Absolutely. from you hear good to today.

represents UDENYCA As say value proposition. a Onpro share March, there we've share from a higher and XX% earlier, mentioned the through market that belief pro. biosimilar of management priced Early data, recognize and premium payers option Amgen Neulasta look convenience roughly is on- the at and it's strategy when a at providers lifecycle to April coming There's are we data cost. gain the

the to So it as We're for we're and leave Denny making keep we'll competing progress share in actively the Onpro said, others market. to score.

MichaelBlum

plans Can close helpful, you. Got also very you to thank at able point? on it, comment for this own on-body Anything you are device? your any

DennyLanfear

announced the course, Mohit, to of pursuing of we the market we previously, have are Well, that device. development

provided get We and would the appreciate be won't and certainly a interest closer little for program. understand in until not we market. probably we the we why have to we of and it the question timing development But further such

Operator

Tsao question H.C. Douglas Wainwright. comes next with from Our

may proceed. You

DouglasTsao

taking for Thanks the afternoon. Hi, questions.

is like affected of baseline? the new expect set previously? was of curious versus it customer might that there in about there sort And of the Just or Is UDENYCA question prefilled Jim that spend a sort a the in quarter. was XX% that sort then bit expense, of different it are any that R&D back across channel to from hospitals to for indicated of particular of more? the or segments Onpro, the following to be terms to issue Meaning levels should go you a the sort to you R&D biosimilars volume. switching or Did back XXXB. evenly of little syringe just related a clinics Onpro just sort Or coming Jean, sounds capitalization up, we share the that on like

DennyLanfear

your Doug. question, Thanks Okay. for

give you a little the can JV levels on. on So R&D comment so and

JeanViret

Yes. Good you, Doug. have to

is becomes so in So was to approval What to production capitalization. down me expense really started all some prior therefore R&D a all we came clarify, to an to cost. it fact matter approval, there related the and not expenses post production UDENYCA because to happened quarter-over-quarter inventory now issue was let capitalize product as capitalized production fact, it of that of

not at of QX didn't matter we more we had So least had production. expense a fact, I as related when to we UDENYCA would say Further activities QX. in UDENYCA in

as Son going pipeline. year. line stay we forward our so certain this anticipate QX R&D towards to from we clinical and indicated slightly net expense R&D is -net, end because the the Further to of year down on will start will trial will increase of related that came we flat relatively QX what our

DennyLanfear

note the of period initiating Doug, in get before this question, threes of Important we're but XXXX previously as part not will that time, to particular expensive phase XXXX. any sometime probably materialize second stated, we in the those

by handle respect penetration with that Onpro one. can segment, to the Now Jim maybe

JimHassard

at level. we've the Doug, just at Denny. Thanks Sure. market it looked

biosimilar to gain at try detail. looked too early We've from we of at As said, XX% at the that at to this level segment of look is It's level Onpro. way time. not the it roughly coming

DouglasTsao

their the large sort mean Onpro. And you you just terms maybe go just made because stick or getting to I in of and been entire are to to consistent I as qualitatively the to you're the Denny, market. customers point going you've Jim that willingness follow after you Denny Okay. either wanted with talk know, feedback with of this then up

DennyLanfear

of that paradigm that Onpro. place End very recognize with treatment it profile are There's is an think Jim for Hassard I discuss pointed is find price we helped/ Q&A open Well, them. in there appropriate a when product we patient that premium Hope to as And folks there. out. talk It customers about the a

Operator

over And Denny the closing that to today's I portion call any back concludes to now conference. for turn of our like Q&A comment. wouldn't

Denny Lanfear

you Thank takeaways like Thank you mention QX, our all call. very for joining us today I'd at In XXXX closing, for key you. three to much.

of First, of I the my that investors helping like enabled And to execution very this would launch for for which our and strong success. a infrastructure course, with we're us teammates outstanding build performance fund required very their and UDENYCA. pleased infrastructure thank

to Coherus are finally, by performance continue transformation company will a of financial consistent infrastructure we the into and leveraging then effective our with plans aspirations. commercial Secondly, product and growth future guidance our our against And proceeding support highly opportunities. our

We all We in investor the week will for Vegas few you presenting continue including be Thank meeting various look New at next our discussions. over you RBC weeks, be to there in conferences a Las York. forward next will supporting and Coherus. demo and to of

Operator

you. concludes day. of A you our available be and coherus.com. will replay Thank Thank great on This webcast have the call. a

David Arrington	VP, IR and Corporate Affairs
Denny Lanfear	President, Chief Executive Officer and Chairman
Jean Viret	Chief Financial Officer
Jim Hassard	SVP, Marketing and Market Access
Ken Cacciatore	Cowen and Company
Chris Schott	JPMorgan
Mohit Bansal	Citi
Douglas Tsao	H.C. Wainwright

Coherus BioSciences (CHRS) 9 May 192019 Q1 Earnings call transcript