Coherus BioSciences, Inc. (“Coherus” or the “Company”, Nasdaq:
CHRS), today reviewed corporate events and reported financial
results for the third quarter and nine months ended September 30,
2020.
“In September, Coherus celebrated its ten year anniversary, and
I am thrilled by what we have accomplished at this milestone,” said
Denny Lanfear, Coherus President and CEO. “Coherus is fully
integrated with competencies in research, development, and
commercialization, and we are successfully fulfilling our mission
to deliver value to patients by providing them access to cost
effective drugs that can have a major impact on their lives.
Moreover, our Udenyca business is generating significant cash flow,
enabling investments in our pipeline of product candidates which,
if approved, would expand our addressable market opportunity from
$4 billion to $30 billion.”
Third Quarter 2020 and Recent Corporate
Highlights
- Net product revenue for the third
quarter of 2020 was $113.6 million, and net income was $27.9
million, or $0.33 per share on a diluted basis.
- Non-GAAP income during the third
quarter of 2020 was $39.7 million, or $0.47 per share on a diluted
basis.
- Cash flow from operating activities
was $47.4 million for the third quarter of 2020.
Third Quarter 2020 Financial Results
Net product revenue for the third quarter of
2020 was $113.6 million. Cost of goods sold for the third quarter
of 2020 was $9.0 million, resulting in a gross profit margin of
92%.
Research and development (R&D) expense for
the third quarter of 2020 was $38.9 million, as compared to $21.6
million for the same period in 2019. R&D expense for the nine
months ended September 30, 2020 was $98.1 million, as compared to
$59.2 million for the same period in 2019. The increase in
R&D expense in both periods was primarily due to preparations
for the biologics license application (BLA) filing of CHS-1420,
Coherus’ biosimilar to Humira® (adalimumab), as well as other
pipeline activities.
Selling, general and administrative (SG&A)
expense for the third quarter of 2020 was $32.0 million, as
compared to $31.8 million for the same period in 2019. SG&A
expense for the nine months ended September 30, 2020 was $101.4
million, as compared to $101.0 million for the same period in
2019.
Cash, cash equivalents and investments in marketable
securities for the third quarter increased to $503.4 as of
September 30, 2020, as compared to $456.5 million as of June 30,
2020 and $177.7 million as of December 31, 2019. The increase in
the third quarter of 2020 is primarily due to generating $47.4
million in net cash from operating activities.
Net income for the third quarter of 2020 was a
$27.9 million, or $0.33 per share on a diluted basis, compared to
$47.0 million, or $0.63 per share on a diluted basis for the same
period in 2019.
Non-GAAP net income for the third quarter of
2020 was $39.7 million, or $0.47 per share on a diluted basis,
compared to non-GAAP income of $55.7 million, or $0.74 per share on
a diluted basis for the same period in 2019. See “Non-GAAP
Financial Measures” below for a discussion on how the Company
calculates non-GAAP net income and a reconciliation to the most
directly comparable GAAP measures.
Guidance for the Next Twelve Months from September 30,
2020
Coherus will continue to lay the foundation for long-term growth
across its three therapeutic areas:
Oncology
- Deliver continued unit share growth
with UDENYCA® against all Neulasta® dosage forms, while maintaining
average selling price (“ASP”) discipline, leveraging the validated
branded-biosimilar strategy of offering a robust value proposition
across all key customer segments.
- Advance the Company’s biosimilar
candidate to Avastin® (bevacizumab) in-licensed from Innovent
toward an expected 351(k) BLA submission with the U.S. FDA in 2021,
depending on the outcome of the three-way pharmacokinetic (“PK”)
study, the timing of required interactions with the FDA, as well as
completion of analytical similarity exercises.
Ophthalmology
- Facilitate Bioeq’s resubmission of a
351(k) BLA with the FDA for the biosimilar candidate to Lucentis®
(ranibizumab) in 2021.
- Advance the Company’s internally
developed CHS-2020 biosimilar candidate to Eylea® (aflibercept) to
a projected Phase 3 clinical trial initiation in 2021, with launch
projected in 2025, if approved.
Immunology
- Submit the 351(k) BLA for the
Company’s internally developed Humira® (adalimumab) biosimilar,
CHS-1420, by year end 2020, consistent with prior guidance, and
continue other activities to advance toward a projected market
entry in the United States on or after July 1, 2023, if
approved.
Financial Guidance
- R&D and SG&A expenses
combined for the full fiscal year 2020 are expected to come in at
the low end of the previously stated range of $285 million to $310
million, excluding upfront or milestone payments from any potential
new collaborations.
Conference Call Information
When: Thursday, November 5, 2020 starting at
4:30 p.m. ET
Webcast: at https://investors.coherus.com.
The conference call will be broadcast live in listen-only mode
on the Company’s investor relations website at
https://investors.coherus.com/. If you would like to ask a
question, the dial in number for the conference call is
844-452-6826 (Toll-Free U.S. and Canada) or 765-507-2587
(International).
Conference ID: 7079429
Please dial-in 15 minutes early to ensure a timely connection to
the call.
Third quarter 2020 financial results are posted on the Coherus
website at https://investors.coherus.com/. The webcast will be
archived on the Coherus website.
About Coherus BioSciences, Inc.
Coherus is a leading biosimilar company that develops and
commercializes its own high-quality therapeutics as well as those
of others seeking capable access to the United States market.
Biosimilars are intended for use in place of existing, branded
biologics to treat a range of chronic and often life-threatening
diseases, with the potential to reduce costs and expand patient
access. Composed of a team of proven industry veterans with
world-class expertise in process science, analytical
characterization, protein production, sales and marketing,
clinical-regulatory development and commercialization. Coherus is
positioned as a leader in the global biosimilar marketplace.
Coherus commercializes UDENYCA® (pegfilgrastim-cbqv) in the United
States and is advancing additional product candidates including
CHS-1420, a Humira® (adalimumab) biosimilar, Bioeq’s Lucentis®
(ranibizumab) biosimilar, Innovent’s Avastin® (bevacizumab)
biosimilar towards commercialization, as well as CHS-2020, an
Eylea® (aflibercept) biosimilar. For additional information, please
visit www.coherus.com.
Forward-Looking Statements
Except for the historical information contained herein, the
matters set forth in this press release are forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995, including,
but not limited to, Coherus’ ability to generate cash flow from its
UDENYCA® business, Coherus’ ability to expand its addressable
market opportunity and to lay the foundation for long-term growth
across its three therapeutic areas; Coherus’ ability to deliver
continued unit share growth with UDENYCA® against all Neulasta®
dosage forms, Coherus’ ability to maintain ASP discipline,
leveraging the validated branded-biosimilar strategy of offering a
robust value proposition across all key customer segments; Coherus’
ability to advance the Company’s oncology biosimilar candidate to
Avastin® (bevacizumab) in-licensed from Innovent toward an expected
351(k) BLA submission with the U.S. FDA in 2021, depending on the
outcome of the three-way PK study, the timing of required
interactions with the FDA, as well as completing analytical
similarity exercises; Coherus’ ability to submit a 351(k) BLA with
the FDA in 2021 for the Innovent biosimilar candidate to Avastin®;
Coherus’ ability to launch Innovent’s biosimilar candidate to
Avastin® in the United States; Coherus’ ability to facilitate
Bioeq’s resubmission of a 351(k) BLA with the FDA for the
ophthalmology biosimilar candidate to Lucentis® (ranibizumab) in
2021 and Coherus’ ability to launch the product, if approved;
Coherus’ ability to advance CHS-2020 an Eylea® (aflibercept)
ophthalmology biosimilar currently in preclinical development by
initiating an projected Phase 3 clinical trial in 2021, with launch
projected in 2025, if approved; Coherus’ ability to submit the
351(k) BLA for CHS-1420, a Humira® (adalimumab) biosimilar by year
end 2020, and continue other activities to advance toward a
projected market entry in the United States on or after July 1,
2023; and Coherus’ ability to meet its R&D and SG&A
expenses guidance for the full fiscal year 2020. Such
forward-looking statements involve substantial risks and
uncertainties that could cause Coherus’ actual results, performance
or achievements to differ significantly from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Such risks and uncertainties include,
among others, the risks and uncertainties inherent in the clinical
drug development process; the risks and uncertainties of the
regulatory approval process, including the timing of Coherus’
regulatory filings; the risk that Coherus is unable to complete
commercial transactions and other matters that could affect the
availability or commercial potential of Coherus’ biosimilar drug
candidates; and the risks and uncertainties of possible patent
litigation. All forward-looking statements contained in this press
release speak only as of the date on which they were made. Coherus
undertakes no obligation to update or revise any forward-looking
statements. For a further description of the risks and
uncertainties that could cause actual results to differ from those
expressed in these forward-looking statements, as well as risks
relating to Coherus’ business in general, see Coherus’ Annual
Report on Form 10-K for the year ended December 31, 2019, filed
with the Securities and Exchange Commission on February 27, 2020,
its Quarterly Report on Form 10-Q for the three and nine months
ended September 30, 2020, filed with the Securities and Exchange
Commission on November 5, 2020 and its future periodic reports to
be filed with the Securities and Exchange Commission. Our results
for the quarter ended September 30, 2020 are not necessarily
indicative of our operating results for any future periods.
UDENYCA® is a trademark of Coherus BioSciences, Inc.
Neulasta® and Onpro® are registered trademarks of Amgen
Inc.Avastin® and Lucentis® are registered trademarks of Genentech,
Inc.Humira® is a registered trademark of AbbVie Inc.Eylea® is a
registered trademark of Regeneron Pharmaceuticals, Inc.
Coherus
BioSciences, Inc. |
Condensed
Consolidated Statements of Operations |
(in thousands,
except share and per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September
30, |
|
September
30, |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Net product revenue |
$ |
113,551 |
|
|
$ |
111,684 |
|
|
$ |
365,405 |
|
|
$ |
232,215 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
9,000 |
|
|
|
6,447 |
|
|
|
25,994 |
|
|
|
9,273 |
|
Research and development |
|
38,851 |
|
|
|
21,568 |
|
|
|
98,131 |
|
|
|
59,240 |
|
Selling, general and administrative |
|
31,984 |
|
|
|
31,828 |
|
|
|
101,386 |
|
|
|
100,967 |
|
Total operating expenses |
|
79,835 |
|
|
|
59,843 |
|
|
|
225,511 |
|
|
|
169,480 |
|
Income from
operations |
|
33,716 |
|
|
|
51,841 |
|
|
|
139,894 |
|
|
|
62,735 |
|
Interest
expense |
|
(5,656 |
) |
|
|
(4,469 |
) |
|
|
(15,495 |
) |
|
|
(13,118 |
) |
Other
income, net |
|
56 |
|
|
|
518 |
|
|
|
548 |
|
|
|
1,887 |
|
Net income
before income taxes |
|
28,116 |
|
|
|
47,890 |
|
|
|
124,947 |
|
|
|
51,504 |
|
Income tax
provision |
|
183 |
|
|
|
847 |
|
|
|
2,411 |
|
|
|
898 |
|
Net
income |
$ |
27,933 |
|
|
$ |
47,043 |
|
|
$ |
122,536 |
|
|
$ |
50,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.39 |
|
|
$ |
0.67 |
|
|
$ |
1.72 |
|
|
$ |
0.73 |
|
Diluted |
$ |
0.33 |
|
|
$ |
0.63 |
|
|
$ |
1.52 |
|
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares used in computing net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
71,649,350 |
|
|
|
69,877,693 |
|
|
|
71,138,973 |
|
|
|
69,501,835 |
|
Diluted |
|
87,470,337 |
|
|
|
78,530,227 |
|
|
|
82,043,469 |
|
|
|
72,872,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Coherus
BioSciences, Inc. |
|
Condensed
Consolidated Balance Sheets |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
|
2020 |
|
2019 |
|
Assets |
|
|
|
|
Cash and cash equivalents |
$ |
292,465 |
|
$ |
177,668 |
|
Investments
in marketable securities |
|
210,966 |
|
|
— |
|
Trade
receivables, net |
|
160,707 |
|
|
141,992 |
|
Inventory |
|
85,964 |
|
|
55,071 |
|
Other
assets |
|
53,631 |
|
|
34,196 |
|
Total
assets |
$ |
803,733 |
|
$ |
408,927 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Accrued
rebates, fees and reserve |
$ |
75,961 |
|
$ |
51,120 |
|
Convertible
notes due 2022 |
|
79,537 |
|
|
78,542 |
|
Convertible
notes due 2022 - related parties |
|
26,512 |
|
|
26,181 |
|
Convertible
notes due 2026 |
|
222,718 |
|
|
— |
|
Term
loan |
|
74,267 |
|
|
73,663 |
|
Other
liabilities |
|
69,007 |
|
|
74,207 |
|
Total
stockholders' equity |
|
255,731 |
|
|
105,214 |
|
Total
liabilities and stockholders’ equity |
$ |
803,733 |
|
$ |
408,927 |
|
|
|
|
|
|
Coherus
BioSciences, Inc. |
Condensed
Consolidated Cash Flow |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30, |
|
September 30, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Cash, cash equivalents and restricted cash at beginning of
the period |
$ |
225,057 |
|
|
$ |
106,762 |
|
|
$ |
177,908 |
|
|
$ |
73,191 |
|
|
|
|
|
|
|
|
|
Net
cash provided by operating activities |
$ |
47,353 |
|
|
$ |
54,951 |
|
|
$ |
121,021 |
|
|
$ |
10,645 |
|
|
|
|
|
|
|
|
|
Purchases of investments in marketable
securities |
|
(41,981 |
) |
|
|
(5,371 |
) |
|
|
(273,845 |
) |
|
|
(20,235 |
) |
Proceeds from maturities of investments in
marketable securities |
|
63,000 |
|
|
|
6,000 |
|
|
|
63,000 |
|
|
|
15,000 |
|
Upfront and milestone based license fee payments
to Innovent |
|
(2,500 |
) |
|
|
- |
|
|
|
(7,500 |
) |
|
|
— |
|
Purchases of property and equipment and other
investing activities |
|
(2,112 |
) |
|
|
(918 |
) |
|
|
(6,112 |
) |
|
|
(1,435 |
) |
Net
cash provided by (used in) investing activities |
$ |
16,407 |
|
|
$ |
(289 |
) |
|
$ |
(224,457 |
) |
|
$ |
(6,670 |
) |
|
|
|
|
|
|
|
|
Proceeds (payments) related to issuance of
Convertible Notes due 2026, net of issuance costs |
|
(674 |
) |
|
|
— |
|
|
|
222,156 |
|
|
|
— |
|
Purchase of capped call options related to
convertible notes due 2026 |
|
— |
|
|
|
— |
|
|
|
(18,170 |
) |
|
|
— |
|
Proceeds (payments) related to the term loan, net
of issuance costs |
|
— |
|
|
|
(106 |
) |
|
|
— |
|
|
|
72,955 |
|
Proceeds from common stock offering, net of
underwriters discounts, commissions and offering costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,153 |
|
Proceeds from issuance of common stock upon
exercise of stock options |
|
4,909 |
|
|
|
3,789 |
|
|
|
13,014 |
|
|
|
5,184 |
|
Proceeds from purchase under the employee stock
purchase plan |
|
— |
|
|
|
— |
|
|
|
2,557 |
|
|
|
1,878 |
|
Cash used in other financing activities |
|
(147 |
) |
|
|
— |
|
|
|
(1,124 |
) |
|
|
— |
|
Net
cash provided by financing activities |
$ |
4,088 |
|
|
$ |
3,683 |
|
|
$ |
218,433 |
|
|
$ |
88,170 |
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash |
|
— |
|
|
|
59 |
|
|
|
— |
|
|
|
(170 |
) |
|
|
|
|
|
|
|
|
Net
increase in cash, cash equivalents and restricted
cash |
$ |
67,848 |
|
|
$ |
58,404 |
|
|
$ |
114,997 |
|
|
$ |
91,975 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash at end of the
period |
$ |
292,905 |
|
|
$ |
165,166 |
|
|
$ |
292,905 |
|
|
$ |
165,166 |
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted
cash |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
292,465 |
|
|
$ |
165,116 |
|
|
$ |
292,465 |
|
|
$ |
165,116 |
|
Restricted cash – current |
|
— |
|
|
|
50 |
|
|
|
— |
|
|
|
50 |
|
Restricted cash – non-current |
|
440 |
|
|
|
|
|
440 |
|
|
|
Cash, cash
equivalents and restricted cash |
$ |
292,905 |
|
|
$ |
165,166 |
|
|
$ |
292,905 |
|
|
$ |
165,166 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
GAAP, Coherus has also included in this press release non-GAAP net
income, and the related per share measures, which exclude from net
income, and the related per share measures, stock-based
compensation expense, upfront and milestone payments under the
license agreements and the related income tax effect of those
non-GAAP adjustments. These non-GAAP financial measures are not
prepared in accordance with GAAP, do not serve as an alternative to
GAAP and may be calculated differently than similar non-GAAP
financial information disclosed by other companies. Coherus
encourages investors to carefully consider its results under GAAP,
as well as its supplemental non-GAAP financial information and the
reconciliation between these presentations set forth below, to more
fully understand Coherus’ business.
Coherus believes that the presentation of these non-GAAP
financial measures provides useful supplementary information to,
and facilitates additional analysis by, investors. In particular,
Coherus believes that these non-GAAP financial measures, when
considered together with its financial information prepared in
accordance with GAAP, can enhance investors’ and analysts’ ability
to meaningfully compare Coherus’ results from period to period, and
to identify operating trends in Coherus’ business. Coherus also
regularly uses these non-GAAP financial measures internally to
understand, manage and evaluate its business and to make operating
decisions.
Coherus
BioSciences, Inc. |
Reconciliation of GAAP Net Income to Non-GAAP Net
Income |
(in thousands,
except share and per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30, |
|
September 30, |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
GAAP net
income |
$ |
27,933 |
|
|
$ |
47,043 |
|
|
$ |
122,536 |
|
|
$ |
50,606 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expense |
|
9,308 |
|
|
|
8,790 |
|
|
|
28,287 |
|
|
|
26,319 |
|
Upfront and milestone based license fee
payments to Innovent |
|
2,500 |
|
|
|
— |
|
|
|
7,500 |
|
|
|
— |
|
Income tax effect of the above
adjustments |
|
(77 |
) |
|
|
(155 |
) |
|
|
(691 |
) |
|
|
(459 |
) |
Non-GAAP net
income |
$ |
39,664 |
|
|
$ |
55,678 |
|
|
$ |
157,632 |
|
|
$ |
76,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income per share, basic |
$ |
0.39 |
|
|
$ |
0.67 |
|
|
$ |
1.72 |
|
|
$ |
0.73 |
|
GAAP net
income per share, diluted |
$ |
0.33 |
|
|
$ |
0.63 |
|
|
$ |
1.52 |
|
|
$ |
0.69 |
|
Non-GAAP net
income per share, basic |
$ |
0.55 |
|
|
$ |
0.80 |
|
|
$ |
2.22 |
|
|
$ |
1.10 |
|
Non-GAAP net
income per share, diluted |
$ |
0.47 |
|
|
$ |
0.74 |
|
|
$ |
1.93 |
|
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact
David S. ArringtonInvestor Relations & Corporate
AffairsCoherus BioSciences, Inc.darrington@coherus.com+1 (650)
395-0196
Coherus BioSciences (NASDAQ:CHRS)
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