CHRS - Earnings call transcript Q2 2019 | Coherus BioSciences, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Coherus BioSciences 2019 Second Quarter Earnings Conference Call. My name is Liddie 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 BioSciences financial results. Thank After release can press good and on This on today, the found of Coherus release quarter you, a we second afternoon, our be issued website. Liddie, close everyone.

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

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

Coherus made obligation In addition, undertake any this during forward-looking any update to call. BioSciences does not statements

will over the Denny. call to turn I now

Denny Lanfear

you, to you today. thank us joining all Good David. for morning of Thank and

As pleased uptake strong. that report first in performance you remains launch to quarter the through second today and we UDENYCA know, very experienced quarter, strong are the

result Our is customer execution segments quarter now strategy. of and a is second the across performance direct what strong our all key well-validated biosimilar-specific

second the growth the Access, help performance, few drivers conversion the first the a of with of provide context year, and of Senior for you potential and you our through of providing sustainability beyond. to half Market are foundation President market will this Hassard sales of the significant efforts. solid for with Marketing our Vice UDENYCA better continued understand momentum Jim growing XXXX behind additional moments, a In half and

Company for current products believe providers in our UDENYCA, to for that we portfolio to is First true medium anti-TNF and creating commercialize is half on payers, term. promise as long-sought biosimilars the well and this also for may shareholders. additional that deliver We any long patients, of ophthalmology biosimilars, the well-positioned while the demonstrate results value the of as

Officer, and as following will financial sales sales. respect proportions, remarks, Jean Dr. as net gross results, for Chief secondary Now, some the proxy sales details to product including our brief comments on net data well Jim's as review the making using sources with a Financial Viret

Lastly, feel we expected of share and points Jean guidance is with achievement significant XXXX key for go market on Company, Q&A. and today's will rest what remarks, provide before for a Jean's unit the that on to is After milestone the a of the I'll you the comment profitability. we summary beyond, of

being establishing quarters for been think constitutes biosimilars. for the last a launch key have the as be commercialization biosimilar biosimilar business benchmark biosimilar in UDENYCA Now, is to defining successful We two what exceptional, future and a the successful company.

think executed that coincidence the don't to-date successful the company opportunity. the most we it's So, on focused by launch a biosimilar solely biosimilar was

at the million, unit by XX% of share UDENYCA XXXX end net the first approximately of sales supported of half strong were June. exit market $XXX about in

market has launch deep and broad pre-filled both realized this all Now, in strategy. and against of our and market, share been Onpro again validating the syringe segments formats,

our we share successful launch results project The increases confidence the strong preparation these market of XXXX. of investments is through to to continued calls, significant the XXXX no outlined Further, us unit in we of for the years see set launch, the the success investments give made what and have previous and we today. for the remainder stage and result On substantial execution. prior

by investments. greater Jim? the detail enabled these in Now, I'll let Jim review execution

Jim Hassard

Denny. you, Thank

performance to color additional into provide to perspective. happy put I'm our

critical Our three success upon factors. has been built

tailored basis. proposition market by customer-centric our drivers deep segment the segment which the a to a of organizational launch on value a and barriers, to value stakeholder; led and segment market each understanding strategy; to delivering execution, and third, market First, second,

value As the marketplace. and share in our from resonated syringe erosion future of benefits rational And noted biosimilar to focused with on by services, segment-specific for superior Market and Denny, formats. from branded contracting pegfilgrastims gains Neulasta we value expect proposition the with came Onpro growth both, quality both. prefilled supply share biosimilar our come

in grow all quarter, in XXXB UDENYCA oncology And market past This non-XXXB share we segments continued expect forward. and hospitals. going clinics, segments, gains share market all significant these we to

the Second pass-through proposition strong reliable reference now access segment Neulasta. reimbursement, value quarter line the UDENYCA reimbursement. in particularly distribution, a price, to advantage The the for XXXB on to first full hospitals represented product is and compared supply, XXXB competitive opportunity for based

extends a pass-through April for or of a reminder, XXXX. total until months XX status As

price reflecting sales $X,XXX, on Services the cost that of Center contracting acquisition for approach was the Based strong effective or an date. quarter, to selling in July for first of or XXXX. average our Medicare wholesaler list UDENYCA established ASP $X,XXX of ASP XX% This represents the disciplined price X,

The and also execution. on sales direct teams educating and reimbursement. biosimilars the the effective and excellence field, In UDENYCA of have organizational a and market Coherus share been are result in promoting

efforts educational approval also successful. has support the navigation been Our in to P&T rapid process of hospitals

and requests continues we've coverage Coherus UDENYCA utilization Choice and the increase lock services, provider COMPLETE. COMPLETE more Our calls customer Compromise. our over with to wins through team had and And Coherus support and than of insurers X,XXX payer payers. continues patient Without as branded to XXX Year-to-date,

distributor coordination with availability. ensure our to We've had great product partners

barriers. surprises have in very communicated sufficient or in more to demand July, unexpected we we've encountered As early had Overall, anticipated satisfy than we supply few future.

momentum We've great a entered July. XXXX of with strong the month half and second of

strong that of rest performance and first confident through our XXXX the will beyond. are half continue We

Denny Lanfear

course, we’ll happy the market be session. on Q&A Jim. any take and And the you, of questions during segments Thank further to the execution

to to Viret on in I'd Jean review Company's financial to performance JV? Now, the like CFO, the pass it quarter.

Dr. Jean Viret

Denny. you, Thank

the the for year. million the product the quarter first XXXX second compared as will first I Net revenue quarter. $XX.X was for revenue for financial of now in product of XXXX quarter $XXX.X results the quarter. for half million to Net XXX% the revenue review second main of increased this and

sources and that of discounts sales to sales publicly track Gross GAAP be net quarter, in used data to percentage the may to XX% in sources approximately the a the was purpose caution performance, sales of absolute gross sales simply the to XXXX. approximately be data XX% Company's directional these quarter for a first defining as With and as respect that compared second available on net of basis. would considered we primarily not allowances

for margin XXXX XXXX. XX% second gross of sold quarter, Cost the was a of resulting to million, of a the the compared for XX% of quarter for in margin $X.X gross a goods in first profit quarter product going We royalty as of range, will on margins pay forward anticipate beginning revenue will July XX% net XXXX. on we mid-single-digit X, that be gross the

second stable compared expense at as $XX.X quarter for development $XX.X the XXXX. of million and of for XXXX the million to quarter second remained Research

expenses to quarter Selling, for support were of million general and Overall, increased XXXX. million will mainly to we from they administrative outstanding quarter the the million ongoing remainder based expense year. sales UDENYCA. $XX range compensation, for to team functions commercialization the the was $X.X our of million, anticipate And on The related and increase XXXX increased second the compared per operating quarter. for the as due $XX.X $XX.X that of second to by $XX.X first commercial million performance to the million for of quarter $XX of

million the The equivalents to at $XX.X $XX.X to of and March in positive during increased second June cash XXXX. million at million investments securities $XX.X XXXX XX, Cash, from marketable operating the quarter cash increase flow. primarily XX, million cash $XXX.X as came compared in

of income diluted income basis, loss share of was $XX.X of compared attributable a million, $X.XX XXXX. for first fully the per for second the Net XXXX basic to Coherus a to or on $XX or million, $X.XX share loss per quarter net quarter

profitable, importantly, share income year-to-date as we are a the first diluted XXXX on fully a of Denny net $X.XX of More or million Coherus for per with six to $X.X months basis. attributable mentioned,

for remarks. like the back would I Denny turn Now, to concluding to his call

Denny Lanfear

Thank you, Jean.

now additional few guidance provide closing pegfilgrastim in with biosimilars. in future. some remarks for are and the into formation Two make me we you well Let quarters the launch, a in market

hospitals, better of a has As we understanding timelines result, a step. which limiting the rate in committee P&T have

to understand present now overall to also from our how share market all proposition capture value We formats. dose originated

multifunctional, across regions. Our team working all a as well-integrated commercial organization is

We have biosimilars and of made payers, consistent both provided when proposition. regionally nationally with value very them progress and supportive appropriate the found

to in you all of quarters we with three these it than faster to four current understanding. level able the now Having anticipated dimensions, in-depth we would achieve progressed we or first Now, are our provide guidance. when launched, estimated following take market

basis. units’ XX% of at or XXXX share, share terms on of market in a the greater expect First, end exit we

we be growth through Secondly, XXXX. expect to this there beyond continued XX%

from in million quarter. $XX expect million to range we XXXX Lastly, expenses operating $XX per to

first we will months We believe that continue progress. updating to the success we've in the six look and on you our forward achieved

We’re all open happy up questions. for to

Operator

Mohit first from [Operator Instructions] question Our Bansal of Citigroup. comes

Your line is now open.

Mohit Bansal

well, Couple as for XX-Q color we on my Thanks side. the some do right Great. questions congrats progress. please as my stand of on the net you quarter and give where to taking from Can in first question, you gross now? provided

Denny Lanfear

Thanks in Yes. comment you that QX? Jean QX question. the net I'll let for gross versus one, your Mohit. to Viret handle can on JV,

Dr. Jean Viret

well It lot, at such varies the of flat, you slightly factors, versus quarter, varying Essentially as it's be mix But, to Yes. end inventory that is. market as actually don't going think what given the the QX being QX. we the it better customers of have. in on as multiple a

this here. I XX give play tell there a you So, that color can I you point, a at is of role don't have factors except lot about that that to

Denny Lanfear

relatively the year, across relatively the throughout quarters, two But Mohit. flat flat

Mohit Bansal

XXXB, these the doing the for shaking other are do the where And of do how back hospitals around you do part see you dynamic? Thank as year, there is plus contracting terms out? this to hospitals think the for grant thinking think a this in been you. thinking, you litigations then, ASP around next are going X% And of have you're well. on lot Where

Denny Lanfear

that you I'll take let Jim do to it? one? take Jim, want

Jim Hassard

Yes.

Mohit They market foreseeable put into for appealed. the will out some that formulas guidance have methodologies and remain the actually the that suggests future. CMS current the hospitals actually So, to just reimbursement

Operator

comes next of Schott And from Chris your Morgan. JP question

is line Your open. now

Chris Schott

share erosion ramp there. Should my kind of so few you of net from gross of targeting by just follow-ups price to price first I least occurs we exit share, QX should at per be XX% to of guess, question, a XX% similar maybe year-end. next kind couple I about XX% existing thinking unit some that scale we a as over got the think an mentioned XX% or about of kind as at or you And similar volumes? quarters,

Denny Lanfear

Okay.

two those two. of exit So, first of about June share, versus end months terms for talking ending those in we're Decemberish

that's So, we gross I somewhere ended guiding think December. of June to we just net, XX% With as the that the end going looking follow-on a mentioned quarters. the XX, better to around be behind at we're for Did indicated, feel remainder or next the we're one, in we fairly for to have we respect to the of XXXX that range Chris? the flat you two XXish in

Chris Schott

And have help then, just coming, we are to was second impact as about competitive what launch thinking about so just one or what landscape? that yes, think the dynamics third could market you us player follow-up, and entering how the that Sandoz competitive

Denny Lanfear

Jim do this point? have any let take I'll Yes. share at thoughts Jim, to we one. that

Jim Hassard

been we're we their their when FDA So, they've of cetera. always expected looking accepted in I marketplace. What file, third at in announcing Sandoz, -- think competitor this the et public a terms

So, they next get until likely to pass-through to year. coding, have won’t cetera. And we status that they've know got et

takes of guidance the provided all obviously that account. into So, this we've that year for

Denny Lanfear

Yes.

we’ll a think pass-through I with that have lead year XXXB one about status.

Chris Schott

this think And how Neulasta? some point? thinking United final to the that And or we kind reacts of of dynamics, you seeing a contracting how of for we the guess, about erosion see innovator are they're as innovator just see is, kind me situation of could that's about further do a share you broader one-off I of at kind then, on trend

Jim Hassard

the decision that We obviously disappointed were UnitedHealthcare. Yes. with

We with continue in them. to be discussion

of applied early, July thus number the does to of policy it what apply plans. it as And Fortunately, limited far, to appears us it's is still Xst. a

also this other have to seen date not point. this payers with We at

off. So, be one a united seems to

Operator

is your Thank Ken Cacciatore you Cowen so question And and next much. Company. of from

now is open. line Your

Ken Cacciatore

situation and anything ask us any they're mention the to congratulations how their about anything, you supplying to a And seamless I you know, anything such Also, color, team much. about did your seeing competitive competitor, pipeline congrats programs. hearing from a if there's your could so then, for I release also in or wondering, just of Thanks your work, marketplace, give feeling thoughts any just launch. it's that. on the Mylan, on lot if wanted

here So, maybe the discussion. more into a And you on timing? little in also color Enbrel put bit

an maybe this the competitor’s So quickly way, your just behind of opportunity wondering to you a -- if you around turn you it, could update BLA give as if kind you. us maybe thoughts lawsuit have put on which Thank a maybe your in went well. how position

Denny Lanfear

market, All to Good from let Well, first biosimilar With right. hear Ken. you. me take respect there's ourselves pegfilgrastims let to first. the obviously, Thanks, one on the Mylan, me two

Mylan. the syringes, believe announced quarter we to launched course, that XXX,XXX of is our commitment a XXX,XXX we very very, We during supply strong up and to with We that syringes. went differentiator.

our at XXs have not Camarillo had the just at facility, have with only And also earlier in the which record and We facility both we through occasions. been XXs. here took a our think inspection multiple there but stellar inspections have our we that FDA at really headquarters inspection zero very in calls, EMA took very, analytical regulators record, KDI the strong reviewed our I zero at

Our zero took analytical lab that immunogenicity XX. our

a the emphasis and on been couple we look paid high quality that differentiator commitment have strong and that think we has that us, have I backed that investment off internally. commitment has And with for over a a well quality organization very supply, very And very that way market. in up is has quality the to very the past at Coherus So, significant years.

to pipeline, the just and let through respect start the ophthalmology. anti-TNFs then with me on With

earlier the Humira the same drivers, that as in I ophthalmology further on. But you'll we same excellent announced. And we but about franchise think our franchise. segue call buy-and-bill, so that. is ophthalmology, A XXXX an number have Medicare make hear of if launch to terms in and the said would We're that after on so, we November months, very the too probably of expect as Part lot over things six currently biosimilar We reiterated call, about mid-XXXX, previously ophthalmology ophthalmology the the a of more with oncology. progress from haven't that, say very B, not we dynamics, next much

timelines. look Now, Sandoz question, respect taking of course, own our with case we're your the We're at to watching a Amgen internal Enbrel closely.

take it turn We one launch currently long on provided terms any Enbrel. guidance product which together. BLA to have year in Humira not, about biosimilar. of how is certain course, a to of would window, we're typically a mid-XXXX, put a BLAs take the the And focused which has on

Now, if how able and gears we're as but provide take any now at we right not Enbrel, we'll quickly to on look a something guidance change could focus close Enbrel. happens, to

Operator

you. Thank

of Tsao next Your Wainwright. comes question Douglas from H.C.

open. Your now is line

Douglas Tsao

then cost with standpoint. again, loyalty Jean, to But, some a moving Amgen understand from kick we and there a or I maybe, sort Obviously, in you have we'll gross on of the bit was first Just of saw profit cost if strong you know goods in. of that could help quarter incredibly inventory the worked off little that quarter. goods, your the

you XX% that? guys so is be to in really baseline know on your make this, how UDENYCA, terms You of about ability we the produce thinking should can

Dr. Jean Viret

for yes. Well, now,

XXX,XXX as And substance about, that As and XXX,XXX you of to our it expense was a when in know, available. we quite produced to we had we R&D. prior approval bit syringes indicated, launched,

sold. new been through that and have is we being produced go that has So, before material to all actually the utilized substance

and, in of to substance we'll XX%ish produced may mostly would then per yes, And change. the use little decrease year syringe margin start the that I may price and come because a that The was second, out. we'll So, to course, to denominator after are, around bit, say, foreseeable years the two start approval future be these will down. Right? a

Denny Lanfear

Yes.

think, good a I question. it's

syringes, through which XX% $X high, third margins course, the billion annual Of a JV But the market. XXX,XXX as to very work have we are indicated, is of about Doug.

So, quite a bit. that's

it that be how work just seen. years remains takes us So, many through to to

this syringe though, in material dating point that the one-year bulk. the in second has three-year I'd make, is that dating and The

in durability carry us got So, terms nice the to that window we've pretty inventory, of forward. of a also,

Douglas Tsao

a maybe or just question you, then And for Denny Jim.

taking gains simply Are you? going make, be product in share that forward to expect individual share you terms success. already be certainly mostly the lot from you who that more accounts is expecting to of to picking that see looking Just buying to that or within it more is -- accounts new you're a are to up you're you're going

Denny Lanfear

That's to that thank Doug, unable granularity really level we're the you comment on. of Yes. for question. a further

confidence on we going have that to three was additional this and additional it forward the to end quarters year four take think indicated at be currently in at understanding we of project confidence of have level would that market with the the where did to to remarks, As we or here come our we'd the we gains. prepared us XXXX to go to have

what or mix Just or to breaks and terms how is of what that little just model. of difficult down accounts, additional is forth, a accounts and so mix converting new is the the in accounts

front couldn't to six And I data otherwise behind get when information have four gets do to you a or that. little provide stand support. to want very So, of that wouldn't strong difficult we things, quarters didn't you out it in or

Douglas Tsao

just then Okay. final And one one.

achieved up the do really expect in you've you to portfolio? ramp that ophthalmology profitability, investments Now sort the of

Denny Lanfear

two would make that. I comments about Well,

cash million remaining per about quarter the to here $XX guiding we're for Firstly, XXXX. $XX to of used million in

The we sorry. -- have point I'm that second

Dr. Jean Viret

expense. Operating

Denny Lanfear

expense. you, JV. Thank Operating

any Those So, start you that X Phase both to we're XXXX made and expense market costs the in, expect point period XXXX. time respect of second XXXX, have filing incur will can ‘XX. pushed into Phase XXXX, in going right? we are ‘XX, late The that costs we beyond, to earlyish a is not get XXXX, with consistent that and various say, programs and over ophthalmology to of manufacturing would with the us time some Xs

in in see future. we're the little talk the But to granular you that more about very a So, we detail with it. happy that's much way

wouldn't So, we're it profitable. I ramping now as up characterize really that

think the in believe, good But of a Xs keeping going XXXX, of job in check. in, things think do the Phase I XXXX-XXXX. I kick remainder to pretty I will for we're that sometime

Operator

Baird. comes question of next your And you. from Mike Wolff Thank

may You now your ask question.

Mike Wolff

Great. the here. on launch congratulations and Hey, strong question Thanks guys. as well the taking for

just question launch on just what can the you a can you the seeing continued had of particular, then, I And UDENYCA So, dynamics the in maybe share key levers that on segment? to of just in are Onpro comment that you're use and, the if across some some segment. Thanks. specifically, drive

Denny Lanfear

Maybe for that I'll one Hassard. Mr. up tee Jim?

Jim Hassard

Yes.

two of we're seeing No. accounts what experience in is UDENYCA. our converting Mike, field favor we Onpro UDENYCA switching seeing things. So, and adopt X, or in to Onpro or are the

seeing we thing in The data second is are the well. that as

look we basis and both market units data decline at a IMS the a in basis share IMS and is as So, on well. in what seeing data we're a

Denny Lanfear

I'd make points more two Yes. Mike, here.

little First believe segment, then, is we of us continue for all, we the for excellent share. term. XX% demand Maybe of to that believe secondarily, the actual And time more. the the a Onpro medium that erosion the growth over of probably a is business source really Onpro sort of an in

segment opportunity. growth growth into consider in that future. us the So, there's real for that's that a substantial think possible we We

Operator

much. our last comes so Prada of Balaji Thank And from Barclays. question you

Your now is line open.

Balaji Prada

couple cash for on And questions. had positive. I turning of a Hi. taking flow and results the questions. my congratulations on Thanks

would policy Denny, in on question XXXX on your I Firstly, market your proposed in can on on entry? mentioned factor mean changes, see Does Denny, for this your us this you what second The the have XXXX. share. was I have you closing provide could in and this overall? latest strategy updates remarks, Sandoz meaningful recent this growth guidance And that appreciate your that exit

Denny Lanfear

guidance. first, me reiterate our let So,

characterized greater, share XX% further we indicated that, quarters XX% haven't to that four exit or in have We said -- are beyond difficult, growth quarters or I the we six out XXXX. make are as and an ago, in minute quantified XXXX or and guiding guiding that December see end simply of a we at further to of It's we look predictions.

course, are of all February include that to coming to public Sandoz made, and based in models, However, upon our statements respect filing. market with I the of they've the believe,

actually this status XXXX launch end in they or of April factor whether the year XXXX. remains pass-through seen. of Also So, achieving early their to in XXXB at be of in

that changes of respect answer you'd the policy any yeah, like part policy changes, With the comment parcel to that specific us on? to to and our is So, modeling. is

Balaji Prada

proposed This mean to a one with X% stage X% this of from being reimbursement rates what could and change you. first the and it for

Denny Lanfear

Yes. Look, that let I'll crack a Jim? take Jim Hassard at one.

Jim Hassard

biosimilars for the offer to any provision. continue can't Capitol is up evolving to they any realize the the legislation don't we'll don't physician is significant There with to for comment legislation But savings biosimilars, both a want moving consistently or want I this for encountered comment Hill questions closely. track competitive advocate continue broad can't so we're In we and and strong follow on time patients the forward. patient specific on at administration, to our we've we happy vibrant, and on So, government. The patients access biosimilars choice. a understanding and discussion that if market support to

Denny Lanfear

number of we we've and, sides I rare will thing But the find trips of act, way months. one agree price thing. provide how the the competition of as as predict people aisle, biosimilars all not had would very very past couple can find exactly, to to We pro-biosimilars. folks, see to both per the We manifest to exactly sides It's all D.C. actually, of the in that can terms PCIA. that don't a itself we say administration on a six in pro-biosimilars of both a be legislation. aisle the a original when know be

Balaji Prada

have we just question Jim, you, one Since Jim. to Understood.

the kind you up any of couple the are in have there setup of you same sales imitation set guys the In kind seeing last seeing So, potentially over is Sandoz that replicating that your of of strategy of the years? you're terms competition, market?

Jim Hassard

force that has bag. their So, in first, and they'll our expectation And add is sales Zarxio. to place Sandoz there their out they're that understand pegfilgrastim selling already

to of not do. terms may comment in terms they we of strategy, In or don't what want may

Denny Lanfear

can't. are I had well markets market. say we doing have would a these us. We there. to really and competition. ahead we second I market months launched into Yes, think Mylan where went of We're were six

we'll I competitors, have fine, do respect sharp. it think But very as high Sandoz. we is. that for But, those tough folks. They're is market the

Operator

replay Thank so This be a great so you A the on concludes And day, much. will call. have Thank available everyone. our of coherus.com. . webcast much you

Denny Lanfear

you. Thank

Jim Hassard

Thank you.

Dr. Jean Viret

Thank Liddie. you,

Coherus BioSciences (CHRS) 1 Aug 192019 Q2 Earnings call transcript