CHRS - Earnings call transcript Q4 2019 | Coherus BioSciences, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Coherus BioSciences 2019 Fourth Quarter Earnings Conference Call. My name is May 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.

I would now like to turn the call over to David Arrington, Vice President of Investor Relations and Corporate Affairs. ahead. go Please

David Arrington

found and today, May, fourth everyone. close can After and BioSciences Thank issued good a market be release This we financial our the press of Coherus year-end website. you, results. afternoon on release quarter on

for Tom be Denny today's Officer. Fitzpatrick, Jean Chief CEO; Lanfear, Chief Anicett, will Officer; Financial Legal Chief Vince call Operating me Coherus' Dr. Joining Viret, Officer; and

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

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

Denny. I over call to will turn now the

Dennis Lanfear

welcome will earnings Thank QX you, our broad and you. four everyone for cover David, to we Today, call. areas

of we QX entire of XXXX which of year with I'll and course, UDENYCA, both review First very the pleased. the are performance all,

as we'll will in-license on progress review pipeline, well our both products wholly-owned small molecule. to CHS-XXX Secondly, our internally update as assets, and on our we with an provide developed thinking you including respect the our our

will handing Following year. financial that, our the before Chief transaction to off I’ll quarter Viret, review XXXX make the a for our who few Officer, remarks further about the performance efforts company's and Financial for Jean

or were as These call our share the all prefilled year. performance against non-XXXB earnings market First, achieving met on-body hospitals we XXXB hospitals, goal are across market with UDENYCA, and last share both very by of XX% we commercial XXXX our QX guided segments. gains respect of and syringe formats. the pleased achieved injector of end in company's to more

progress achieving for patients. payers, made over with national our we UDENYCA XXXX, XX% access substantial During both and regional

patient strategy commercial conversion, COMPLETE, launch well the validates on context as in to our ASP discipline positioning, our We focus biologic this value. as services biosimilar overarching branded as to with comprehensive to long-term Coherus conceived believe preserve pricing support all performance support supply, such prior contracting guaranteed individualized of as robust

the During you continue manner and efforts see pursue will share highly company's additional in commercial XXXX, effective a market to gains. integrated

year I a of Now has with make biosimilar will the remarks our to after success One pipeline. respect our validated launch, model. few business UDENYCA

is patients the strengths also therapeutic now As and our a and leveraging to commercial best selected focused our return strategy healthcare greatest in value system the result, shareholders. provide for can that our R&D the while pipeline on areas generating

requested first expect as ophthalmology these respect efforts me and discuss FDA the data biosimilar we generate to in-licensed currently the focused application to regulatory completion to our additional certain from With manufacturing on franchise. the resubmit supporting Let Bioeq, partner our interactions. company's Lucentis and upon are by of

trials progress manufacturing CHS-XXXX to respect in With support scale, of XXXX. clinical XXXX Phase expected efforts biosimilar, our to our the position in commercial launch are initiate very in are with and now pleased GMP III with projected we in Eylea

delivering proficiency these a dynamics. competitive buy-and-bill greater system As $X Ophthalmology the market healthcare which and in demonstrated is savings. of under products we access biosimilar have discussed, with and entry dynamic market favorable previously patient anti-VEGF will model, order and billion have we in reimbursed U.S. compete reimbursement conversion,

in FDA the Type-X filing support BLA our meetings our a franchise, with series the over Now clinical and and have of with gained of half HUMIRA past immunology analytical to concurrence with biosimilar, and of now on in have we year-and-a-quarter, FDA second respect the the held CHS-XXXX, strategy XXXX.

mid-XXXX. preparing the good with for this manufacturing and strategy product of made our for launch further development also progress a in We’ve large-scale

believe market we an we we fair in previously, $XX of expect discussed take U.S. leverage billion that and to this our have the share our as to commercial we market will launch our prior be As and infrastructures. biosimilar

we inflammation. as and oncology, are focused ophthalmology on Now, mentioned, now

that with have currently alternatives in highly and valuable, determined program to NASH, CHS-XXX, pursue we strategic small with our company's does not the development asset. while plan thus, molecule We this for priorities, strategic align

transactions We the therapeutic generating leverage of with to biosimilar in company capabilities. commercial infrastructure business and our oncology-focused focusing believe R&D key Consistent is that best is on pursuing these our this, value. interest in core shareholder areas additional the licensing further

arise. course We matters of you over providing be updates additional XXXX as will on these

full Jean Officer, Viret, Now Dr. and the Jean? Chief let quarter review financials. the company's year I'll Financial

Jean Viret

Denny. financial main Thank full quarter for our and the you, I XXXX. will results now year fourth review

top let the me remained XXXX. in review and January financial for became positive cash our quarter the two of level second We subsequent very X, XXXX have the cash positive since at progress First, flow quarters. we flow

million for that and the anticipate operating We cash the during flow of million quarter basis. $XX.X both operations Our annual was flow remain our an from fourth $XX.X on entire for quarterly from activities and will XXXX. positive year cash XXXX,

result sale increased to launch through healthcare UDENYCA $XX.X across borrowing generating and in than equivalents and million $XX cash million, provider started ended Second, $XXX.X cash of January of commercially position We in all cash the and $XXX from XXXX. steadily year segments. UDENYCA more the XXXX million our with million increase as cash the with year a

than the million by Third, year. beginning capital the XXXX, considerably. is in over to the was $XX.X million our ended at that our shy assets, year of quadrupled balance balance slightly of the XXXX since million. end of $XXX from of $XXX We four-fold total strengthened the sheet which $XXX up beginning has million working with more the Similarly,

was income year Net $XXX.X full gross for XX%. $X.X million, review a profit the main quarter now resulting the revenue quarter for sold XXXX aspects XX%. in our gross million Net was of for fourth million statement. me same cost Let product margin $XXX.X revenue a of in resulting of goods was product margin this of

quarter, were of to the $XX.X for to $XX.X mainly development XXXX Bioeq for payments R&D year-over-year was for expenses fourth expensing in quarter of in biosimilar million $XX.X of Bioeq's development Lucentis to the XXXX. quarter and in of compared the as increase for million, upfront milestone due and the the The million in same period XXXX. the expenses fourth Research

R&D expenses the same fiscal million, for the million year $XX.X compared to XXXX $XXX.X were in for XXXX. as period

impact UDENYCA R&D UDENYCA approval costs capitalization Here, expenses in the in the $XX.X manufacturing of decrease November since the XXXX. year-over-year primarily had to due full was that million a of

product increase upfront and other Bioeq This decrease the million of was $XX.X milestone offset the candidates. payments primarily and to of to our biosimilar $XX.X by related million development

fourth were and the were $XX.X million the expenses million, $XX.X same million administrative compared quarter to million of same XXXX. in year for XXXX the $XX.X in XXXX compared over as the full as $XXX for general period XXXX. SG&A to Selling, for period

year-over-year an increases for UDENYCA. commercialization year-over-year attributable and The force full in the were SG&A with to commercial mainly quarter the the personnel, connection sales and related increase of expenses in functions in

to period million fully on fourth Net a $X.XX diluted fully quarter XXXX million the basis for $XX.X income same in a per of a compared loss $X.XX or $XX.X was per of diluted basic share to net or the and attributable Coherus basis XXXX. for share on

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

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

Dennis Lanfear

Thanks, JV.

XX% both We share. to we mission as system. our our the Further seen, and of XXXX year performance you’ve financial patients healthcare in of XXXX company's market with access are and and over achieved increase pleased course commercial are in the with we to pleased and savings increase QX the overall, advancement

highly oncology, characteristics and one between leverage We providing those ophthalmology footprint. two opportunity have our the current in-licensed products, in synergistic recognizing two biosimilar further one commercial to and in markets

place commercial making we believe aligned in good and company's company's capabilities year by to we Lastly, approved We and to-date the R&D or plan XXXX. market in six opportunity our growth areas in we portfolio our a success more is on are where by patient project believe successfully and the have have needs. driven five the with progress focus very products putting

to the take to am any you questions go have we now as I operator. happy may

David Arrington

Denny. to line. to questions the operator very the from Thank much, take over you this hand I’ll

Operator

Bansal. first from Your line is Instructions] the question Mohit of [Operator

Your Mohit now Bansal, Mr. open. open. line Your is line is now

Mohit Bansal

I on mute. Sorry, I think was

and have player Mylan been seen been my for question XXXX. the and taking touch launch on of can market since and talking that in UDENYCA has congrats the – in about months it Maybe So, supply. more forward, going new upon thanks you a couple a progress other if you the now has

beyond, Or try point? how to you Can maintain seeing are in sort it you marketplace you when about XXXX we could think from what and try competition here? about at And think or think to here? grow project we UDENYCA? So, of should this the share the

Dennis Lanfear

Mohit. Thanks,

UDENYCA right last And enough have were see As are we And able once data be for to throughout we year, to that, year and you year. at at the further committed point was forecast of points a year, that. time at our we we that recall, similar that growth the reply entire we'll do asked for that. launch, last to XXXX,

number. performance are biosimilar are point this However, that, at to And to UDENYCA converted. which users the plus players provide the potential not point the is we though and uncertainties already three make and would with the able in actual in the the absolute time those an Sandoz’s respect have entrants market, there particular future I originator you

existing to more a And the to the in -- priced which Neulasta biosimilar. users therefore, high there is the conversion is be option had value of Neulasta

share say from So, to from benefits which additional Neulasta’s converting that additional as and you know. on primarily expect Neulasta pressure market put is in biosimilar market the to is entrants still we the patients derived that substantial is quite the

in respect I movement would of of that. with Sandoz, a market haven’t thus Lastly, with say, terms far lot to seen we share

Mohit Bansal

study just one And if I start the biosimilar And the it. study, here? can FDA regarding to there, what versus could to input would designing perform, so that’s ask FDA before am may you talking getting in you that be study the to your have would FDA after candidate, Avastin help strategy three-way talking So FDA? input your more, understand us much or necessary the to. the timelines change you how I Got

Dennis Lanfear

to asset course, FDA consistent change review Well, with entire were diligence agreement. even the even We, of that of and they prudent assets, that in initiating program it’s believe Rituxan asset, the strategy. on if at course, our the those Avastin cost. before these risk FDA’s were both our if could they input with modest continuing studies and the We one both

you, update respect for But next We those more to monthly been happy about it’s time, don’t to probably current a only we’ll we that. the advancing further the did on updates have will say have little you be at any to that. a we with programs about since call,

Mohit Bansal

And at anything of of any in if because go deal about quarter this this which we R&D in least should spend, and terms year? in think lumpiness spend the could up this

Jean Viret

R&D molecule which expect to to we expenses are only is we CHS-XXXX somewhat be in-house Yes, modestly, going on R&D. increase focused because for

are We filing CHS-XXXX.

maybe needs done. some be there to that manufacturing So run

increase So it will but modestly.

Mohit Bansal

Got helpful. you. it. Very Thank

Dennis Lanfear

Thank Mohit. you,

Operator

line is next the Douglas from Your Tsao. of question

line Your is now open.

Douglas Tsao

the position for device? Denny, Hi, be release to in ready to of delivery of a might launch taking in extended are sort questions. own good your terms you an Onpro give or when afternoon. you just Thanks

Dennis Lanfear

question, the Thanks much. for Doug, very

position we would are very the for and example, no it and we that device. progress are we pleased project, not on so our Onpro say to a making I we that, with are on. are when ready launch in would update market But, the where So,

product that not about that say primarily development at We stage is much window forward, reasons. disclosed what competitive won’t the too until currently and of closer have probably to launch much we we for in are just

Douglas Tsao

forward, And a sort about internally. just had lot products developing of going Okay. your thinking success sort Denny, and pipeline you of of obviously,

You a business more from recently become standpoint. aggressive developments

forward, that you Just works? to the about you that can biosimilars what’s ones curious have, how in-license derisked extent when that developed others’ been balance project versus think company by some internally between

Dennis Lanfear

a question, great That’s Doug.

synergy to tandem in internally products say currently fair having that in-licensed like it’s that I pursing with we think products. that we the are developed with

timing. of I with launch think the biosimilar a Lucentis It that prime Eylea is example hand-in-hand biosimilar. balances

for margins are we that comfortable and oncology licensing balances economic same the on. products Similarly, issues oncology so have the to additional with alignment products, may not wholly-owned fees. all that in It so and of strong feel sorts the in-licensed space example, adding UDENYCA, due

wise, of We for as strategy is high. we externally on oncology think footprint – for also internally that ophthalmology, the very that and is leveraging the in to investment terms the in And brought both overall return very said the we commercial feel company. of products further

at balance. sort it and much look of very that we So,

Biosimilars are to develop. the per product $XXX perhaps million

all probably every with want to don’t take you single So, risk that product.

if internally. certainly in therapeutic helpful? products at you’ll not However Is you areas, these product that that one have least develop yourself

Douglas Tsao

so, Yes, you you I might is. it selective more suggest developed bit an that the I no, no, guess, it little in mean, will opportunities with a pursue does internally that be biosimilar?

Dennis Lanfear

believe that HUMIRA XXXX we launch and the all, the have UDENYCA biosimilar of first XXXX I then of the and the Well, have Eylea. then XXXX of launch we – launch of

So, and overall is that’s projecting products. what three products we are six

in top on products that. So, three of additional licensed

therapeutic of of that areas think selected being an bringing an less I it’s find and products in them. think is as the internally R&D of these in, So it these I each synergy issue issue as we of maximizing commercial

Douglas Tsao

much. so That’s Thank you Okay, helpful. great.

Operator

Wolff. question is the next Mike of Your line from

line open. now Your is

Mike Wolff

Thanks of on biosimilar. that with just on talk opt-in another and can to guess, or Maybe taking you in an determining guys. the on you you Maybe Hey questions. I some whether have sort decide Thanks. the of pass? follow-up to considerations the ultimately just BD specifically for just option Rituxan about

Dennis Lanfear

for That’s Thanks a Mike. good question. one. Hi, the

terms the were to the that treatment you another all disease that The the externally, any view that particular stage the used, of that thing protocol do is was that. the in the trials patient these clinical population, products So, patients, period, the of first the from FDA you performed very how right. to in margins, understand I is of of think going have bring country,

you are the the the Chinese second to of external Chinese the what you FDA. you types and and to that just what to of product, do to or bridge going and and going looks clinically from and innovator like, bioanalytically have Rituximab product U.S. are Avastin The consider do Avastin how in the to how you satisfy going analytically, U.S. is, innovator the of thing the Rituximab bridge external are that products, studies the case to

forward of task is the on ourselves in both the that So, that time. set current at have we those products terms

question of updates on sort you so, things and as from of additional take progress And have to gist are we things that’s the get in But another on bringing one We’d happy next to the in sort we that. be on don’t that else. somewhere consider have the that, of of middle the these call. matter our the when of

Mike Wolff

it. Got

Dennis Lanfear

you? for helpful that’s It

Mike Wolff

Yes. Thanks.

Operator

question is Chris next of from the Schott. Your line

Your now line is open.

Ekaterina Knyazkova

you Hi. My for This kind too is you to Thank given Ekaterina limited is on question they've behaviors Chris. UDENYCA. or changes first hospitals' gains that for questions. Are in taking Sandoz it share tell coming or early in made? is on notable with the clinics' simply any noticing Amgen's of our or

kind you and given change of you second one landscape my many on talk Thank strategy how Avastin. And then, about competitive about commercial Can to market kind players you. the And for disadvantage? product is the time of expect your that expectations your does there? the

Dennis Lanfear

respect we a think I strategy, Ekaterina, fair – think Amgen all, first a that the Thanks It’s defensive defensive and lot a which it’s seen in very with we with is you others, forward know. of and as put haven’t much the strategies incongruent – to Onpro-focused Amgen it’s so lot. of that say forth to Yes. XXXX. that activity I

I don’t reimbursement about. had Sandoz, or don’t for believe they as through such the competitors additional believe quarter mid-year to that yet so code another until pass and respect have and I With believe have they they’ll

data develops us sort and the up have substantial will has nothing of see any far. so of Sandoz, seen haven’t popped and t to we in thus with inroads that So far we the respect course how

did a how base we’ve With customer shown and there that going in and base market terms and going it in to understand are market. from with like of with that true a of we is up have be to believe launch. proposition, customer share very the really strategies UDENYCA, successful. strong forward various that’s others respect go we show Avastin, to and I have can the think out ahead But our value I fair getting understand that don’t there the us deter

discussing currently customers, their things the competitive did before needs, are of the agreement that with One along we mAb of much doing, understanding is the we we the done we’ve dynamic what onco UDENYCA. launched the since very lines

we As you We recall, to did over talked X,XXX a the interviews. payers.

went various on. so to We healthcare congresses and

over be out markets. these for I show We share onco But flexing are will mAbs of XXXX. process currently will we our you we now strategy in once those and get that fair our

Ekaterina Knyazkova

you. Thank

Operator

of question next Syed. the is Your from line Salim

open. is now Your line

Salim Syed

guys so and team. much the questions, on Denny progress, thanks for and congrats the Hey, all

So, UDENYCA. then and the accounting on on me just one second for one

just JV, sales like end of receivables. the question side that’s one a little So, seems more on the a versus companies for It a and the I year, million looks I had looked which that like have other is high trade $XXX the was than on at. of it’s it quarter

comment you just just receivables And Could my of how I’ll questions thinking the with then terms follow-up the you UDENYCA after. Thanks. that? on and maybe trade about are

Jean Viret

Yes, right. charged receivables receivables, the Actually, from wholesalers, should a trade because the at but it’s at good only the question. and rebates look trade and solely accruals, you also

liability and have from rebates a under to we – account. disburse However,

coming between a on So at you XX regular days, so combined. are now them have to look basis. and Receivables are they coming XX

million $XXX by after. So tomorrow expect the be the of end collected will or day

Salim Syed

in or? the lumpiness little timing a just there Is

Jean Viret

No.

Salim Syed

Okay.

Jean Viret

the then the just and rebates. – you clinics that and just use wholesaler put payers you to if have you It’s side have the pay – you is then the pay will from have the on proceeds - performed to this to and hospitals have

Salim Syed

or terms speaking, XX days? there is generally the XX days But Okay.

Jean Viret

days. XX some days, There are XX at is some at are

Salim Syed

longer nothing But than XX? Okay.

Jean Viret

very current. it’s then and No,

Salim Syed

UDENYCA, over XXXX. when over if to may, And on a and something of like Denny, at on QX you modeling for at sort the like consensus and consensus, end quarter then, Got so got QX, just of on I I Okay. QX XXX the it. a to look seems year, QX UDENYCA, a sales flattish be

release press imply penetration the should plan it mentions In price that increase which you quarter-over-quarter growth. to maintain and

you what consensus guidance under say your is qualitative willing are modeling to So, suggests? that,

Dennis Lanfear

particular no, appreciate overall mind make willing point asking. I Salim, respect to But in am to with at time. further not question, you the don’t and the Well, this I I comments consensus

confident are throughout we that on. think and as share I will lumpy go forward so things quarter-to-quarter, penetration probably additional XXXX, we have

But, pricing exactly with various uncertain of Sandoz going up show we competitors are to how is the evolve on. so the will and respect forth. to so and

So, are going it maintaining as we nail point in particular time. far you as but down well growth. the overall, I than share I do at trajectory that on for But to really this think quite can’t further

Salim Syed

one me Last in Okay. and again. then for queue hop I’ll the

a on or peak Some UDENYCA people being bimodal when trajectory it's single the comment assumes does the peak sales? or is Coherus long-term peak

internally, general guys you Is about being two are there that? generally you or how point peak there be thinking years thinking some a about pricing here is perhaps mean, that into at right? framework sales three years pressure Like people be going should think to I because about launch. into launch guys

Dennis Lanfear

a any would interest of market is is of bit prices of would Part diminish that that incentives Well, D prematurely overall to things their in participant B And space. the the is Medicare that for one in not I I ASP. Par different aggressively example quite and and the than financial it emphasize terms structure cut observe market buy-and-bill space

not have the to they looked when this folks power if So, the that sufficiently wish the participants some in have staying fact have I market, focused market think may on at they context we'll of to steadiness market, the conservative have trying right. a some decreases trajectory with wish share, in be in terms price that all and multiyear gain of market to in

XXXX probably closer year while trajectory. peak evolves sometime roll-off that we to we say see gentle down two guided think have that would through for timeframe, nail think to thereafter. I the as a to a we’ll street see would we I and sales But how then things see the in you. not little So, three the how a I

the where cost a because cut will But maintain that, make I point pricing there would Part is how a to is to the B though certainly go simply again to in a product Medicare their and market. long that incentives not pricing as last your space in and

Salim Syed

much Thanks helpful. Super Okay. guys. so

Jean Viret

Thank you, Salim.

Operator

of question McCarthy. next the line Jason form Your is

Your open. line is now

Michael Okunewitch

Michael Thanks taking guys. question. for the on is Okunewitch This for Hey Jason.

Dennis Lanfear

Hey, Michael.

Jean Viret

Michael. Hi,

Michael Okunewitch

that I'd get key like it Lucentis the the on advantages the biosimilar up that that know basically of your to one front moves to idea launch, guys of you was I position. in-license because

see market? delay? the first Are to like what’s you're biosimilar that you the I’d to still So, going be on projecting the

Dennis Lanfear

wanted of The movement months the as we is additional file that go this equipment that’s soon four work. very that the of to as as FDA that work manufacturing wrap question. the far worth resubmitted. Yes, as required, like a fair see and And can and we indicated piece earlier as schedule ahead get of we up,

guidance can have how you the don’t get fast as exactly We schedule. for now, to right that

as of sort that scheduling are we speak. We

And when question so, we terms to address it’s of in think. difficult do your

say But this would any actual you that it in tell fortunately I will that within file further we in so at you. I resubmitted of for would time terms have that, I which granularity should certainly we don’t XXXX, timing, get XXXX. get approved believe

Michael Okunewitch

All right. very Thank you much.

Dennis Lanfear

helpful? that Is

Michael Okunewitch

me that’s helpful. all I no, though. from appreciate That’s really Yes, it.

Dennis Lanfear

good. All right. Very

Operator

Ladies gentlemen, you have you. your Thank participation this concludes conference call. and Thank day. for today’s and wonderful a

disconnect. You may all

Dennis Lanfear

you. Thank

Jean Viret

you. Thank

Dennis Lanfear

See the call. next you Bye-bye. on

David Arrington	Vice President of Investor Relations & Corporate Affairs
Dennis Lanfear	Chief Executive Officer
Jean Viret	Chief Financial Officer
Vince Anicett	Chief Operating Officer
Thomas Fitzpatrick	Chief Legal Officer
Mohit Bansal	Citigroup
Douglas Tsao	H.C. Wainwright
Mike Wolff	Baird
Ekaterina Knyazkova	JP Morgan Chase & Co
Salim Syed	Mizuho Securities
Michael Okunewitch	Maxim Group

Coherus BioSciences (CHRS) 27 Feb 202019 Q4 Earnings call transcript