Coherus BioSciences, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Q2 2022 Coherence Bioscience, Inc. earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, simply press star 1 again. I would now like to turn the call over to Marek. Please go ahead.

Thank you, Mandeep. Good afternoon, everyone, and thank you for joining us. We issued a press release earlier announcing our financial results for the second quarter of 2022. This release can be found on the Coherence Biosciences website and is also attached to our form 8K. Today's call includes forward-looking statements regarding Coherence's current expectations about future events. These statements include, but are not limited to, our ability to launch multiple new products, our ability to generate sufficient sales to achieve revenue growth and profitability, our SG&A and R&D expense guidance, our projected market share, our 2026 top line projections, our projections about market opportunities, and our ability to advance our product candidates and successfully launch our products according to our projected timeline. All these forward-looking statements involve substantial risks and uncertainties that are beyond our control and could cause actual results, performance, or achievements to differ from results, performance, or achievements implied by the forward-looking statements. These statements are not guarantees of future performance and are subject to substantial risks and uncertainties that are discussed in our press release that we issued today, as well as the documents that we filed with the SEC, including those in our quarterly report on Form 10Q for the second quarter that we filed today. Overlooking statements provided on the call today are made as of this date, and we undertake no duty to update or revise any forward-looking statements. With me on today's call are Denny Lanphier, CEO of Claharis, Paul Reeder, Chief Commercial Officer, Dr. Raj Daya, Chief Medical Officer, and McDavid Silwell, Chief Financial Officer. Our Chief Development Officer, Dr. Teresa Lavella, is traveling on vacation and is unable to join us. I will now turn the call over to Danny.

Thank you, Merak, and good afternoon, everyone. Thank you for joining our conference call to review recent business highlights and financial results for Q2 2022. First, let me make a few remarks about progress on our strategy. I'm pleased to report today continued strong execution to transform Coheris into an innovative immunology company driven by revenues from a diversified portfolio of approved products. We've entered into an exciting 12-month period where we expect to launch multiple products, resulting in growing revenues, which will ultimately lead back to profitability. The Coheris team has executed particularly well with respect to Simerly, which is now our third approved product. As you know, earlier this week, The FDA approved our Lucentis biosimilar with the interchangeability designation and interchangeability exclusivity for 12 months. The approval also included both Lucentis dosage strengths and the full Lucentis label. This is important because it means that when we launch later this year, we will do so at the formation of Lucentis biosimilar market with a significantly differentiated biosimilar label relative to other competitors. The one other approved biosimilar has only one approved dosage strength, an incomplete and limited label, and does not have interchangeability designation. Furthermore, two of the potential competitors recently announced regulatory delays and are not expected to launch for a year or more. As Paul Reeder, our Chief Commercial Officer, will elaborate for you in just a moment, the similarly commercial opportunity will leverage our demonstrated strength as seen with Eugenica in buy-and-build markets. For all these reasons, we believe we will do very well with Summerlee, and that our confidence is justified. Our fourth product candidate for our CalMEM, our P1 inhibitor, is back on track due to stellar execution by our regulatory affairs, quality, and manufacturing teams, working alongside our partner, Junshi Bioscience. Together, we rapidly responded to the issues identified in the FDA's April 29th complete response letter, which we characterized at the time as straightforward and readily addressable. Having resubmitted the BLA in less than two months' time indicates both that this was a fair characterization and that our team is highly focused on strong execution across the board. The FDA has assigned a new PDUFA date of December 23, 2022. and we expect to launch Toropalimab very early in 2023 into nasal pharyngeal carcinoma if approved. Our immuno-oncology strategy in the U.S. includes evaluating Toropalimab's ability to deliver substantial clinical benefits and significant indications in combination with other cancer drugs and immunotherapy through co-development agreements or other arrangements designed to drive utilization. Our objective is to establish coherence as a partner of choice for companies seeking PD-1 combinations for their immuno-oncology programs. In a moment, Dr. Raj Dias, our Chief Medical Officer, will detail multiple internal toropalimab combination programs we're advancing in clinical and preclinical development. While we have entered a period of product portfolio growth and top-line revenue inflection, we remain tightly focused on our expense structure and are reducing costs whenever possible. Our Chief Financial Officer, Mr. McDavid-Stilwell, will provide you some additional color in our financial results in just a moment. With an efficient operational structure in place, $275 million in cash at quarter end, and access to an additional $100 million in non-dilutive capital post-approval similarly into our PALMAP, the company is in a strong financial position going forward into the launches. Those launches and continued strong execution across the company support our 2026 top line projections of $1.2 billion to $2.2 billion provided at our Analyst Day event earlier this year. We reiterate this guidance now. We are well on our way to the product portfolio and revenue diversification past Udenica as we have long planned. well-capitalized and was certainly in our direction, we are confident that the multiple anticipated new product launches over the next 12 months will deliver growth consistent with our plans and, as I mentioned earlier, ultimately drive us back to profitability. I'll now turn the call over to Dr. Diaz who will provide you an update on the Toro Palamab BLA review and our other development programs. Rush?

Thanks very much, Denny, and good afternoon, everyone. So, as Denny referenced, the FDA accepted our resubmitted DLA for toripalamab for nasopharyngeal carcinoma and assigned a new target action date of December the 23rd. If you recall, the CRL we received in late April requested a quality process change that we characterized at the time as straightforward and readily addressable, and we quickly met with the FDA to ensure our understanding of their needs and completed the resubmission in late June. The agency has communicated that the review timeline for the BLA resubmission would be six months, as, of course, the required onsite inspections have been hindered by travel restrictions related to the COVID-19 pandemic in China. In our conversations with the FDA, they have repeatedly indicated that the existing toripalamab clinical data are supportive of the BLA resubmission, given, of course, that toripalamab would address a critical unmet medical need for patients with nasopharyngeal carcinoma which, as you know, is an aggressive cancer for which there are currently no FDA-approved immunotherapy treatments. So over the next several months, we and Junshi Biopharm will work closely with the FDA to facilitate the review of this novel agent. Oripalimab continues to demonstrate robust clinical data in a variety of immunologically responsive treatments. program for multi-regional clinical studies, while at the same time also looking at partnership opportunities to advance novel immunotherapy combinations. As we detailed at our Analyst Day event in March, we're planning to develop the dual biotreatment of toripalamab in combination with our TIGIT CHS006 for non-small cell lung cancer, leveraging the robust efficacy results reported in the CHOIC-01 study. Blockade of the TIGIT pathway may be a crucial underlying mechanism for overcoming PD-1 resistance, and we believe that the dual immunotherapy approach of TIGIT with PD-1 could enhance PD-1 efficacy with the potential to extend survival and create a new standard of care for multiple tumor types. With that in mind, an ongoing phase one clinical trial evaluating CHS-006 and toripalimab is currently being conducted in China and is expected to read out next year. And also, an IND is currently open in the U.S., and we expect to begin enrolling cohorts of U.S. patients either later this year or very early next year. In addition, we do expect to see important clinical data, of course, of several other competing TIGIT programs over the coming months, and these data may inform the future direction of our CHS006 development program. We've also this year introduced several wholly-owned programs targeting ILT4 and CCR8 that are being developed by Cohera scientists at our research center in Camarillo in Southern California. And we expect to submit an IND for the first of these, CHS1000, targeting ILT4 next year and to file at least one new IND per year going forward. With that, I'll now turn over the call to our Chief Commercial Officer, Paul Reeder. Paul? Thank you, Roshan. Good afternoon, everyone.

Before I review the highlights of our product portfolio, I'm pleased to announce that Karen Kotz has joined Coherus as our new Executive Vice President of Sales and Strategic Accounts, following the retirement of Chris Thompson earlier this year. Karen most recently worked in Pfizer oncology, where for the last decade she has served as a key sales executive and a member of the North America leadership. She was responsible for launching over a dozen new oncology therapies and growing the business from under a billion dollars to over $6 billion in revenue. Karen is an experienced sales executive with a proven track record of success in both oncology branded and biosimilar product launches. She is an inductee of Pfizer's exclusive and prestigious Hall of Fame. We are thrilled to have her as our new head of sales and leading the multiple product launches planned over the next year. Now let me start with Udenica. Udenica performance in the second quarter reflects positive execution of our overall strategy of maximizing the long-term revenues of Udenica by balancing price share trade-offs in this competitive market. Net sales were $60 million in the second quarter, similar to the prior quarter. Market share was 15%, a 1% decline over the prior quarter, with share losses occurring in the low-margin 340B hospital segment. Overall demand units in the second quarter were stabilized and equivalent to Q1, with growth in the clinic segment offsetting declines in the 340B hospital segment. Net selling price declined 3%, reflecting continued price erosion due to intense competitive pressures in the pre-filled surrender market. On a units basis, the overall PEG Fulgrasta market increased 5% over Q1, and we expect low single-digit market growth for the remainder of 2022, which is consistent with historical trends. Elasta remains and retains 58% total market share. Within the entire class, Neon Pro device holding 46% market share, based on an entrenched preference by customers, which has been reinforced by the COVID pandemic, and continued price discounting by the originator. Our on-body injector in the pipeline, our strategy is to maintain a disciplined approach to managing price with the pre-fold syringe format in 2022. This will enable us to maximize longer-term revenues for the Udenica franchise through significant share gains that we expect in 2023 and beyond within the on-body segment, which currently represents approximately $1 billion an untapped opportunity. We expect Udenica market share to grow next year once we introduce our Udenica on-body injector, if approved. Now I'd like to talk about commercializing our very exciting pipeline. We are preparing for the launch of three new brands in the next 11 months. Similarly, our Lucentis biosimilar, Torpalimab, our PD-1 inhibitor for NPC, and Usimri, our Humira biosimilar. With respect to Simerly, FDA approval was granted on August 2, enabling commercial launch in the early biosimilar market formation periods of the $7 billion anti-VEGF market. Commercial launch planning is proceeding on track, and we plan to have first sale to occur in early October. We remain highly confident in executing a successful launch of Simerly based on a number of factors. our commercial capabilities. Since our last call, we've hired a dedicated retina sales team, all of whom have years of experience selling to retinal specialists. Our existing key account, payer, and field reimbursement teams will support the launch, enabling synergies and cost efficiencies. And our launch will be backed by a full-service, comprehensive patient support program built to meet the needs of both providers and patients. The second factor is Simerly's clinical profile and differentiated label compared to the other recently launched Lucentis Biosimilar. Simerly is the first and only biosimilar designated by FDA as fully interchangeable with Lucentis for all five FDA approved indications. We also received 12 months of interchangeability exclusivity. The head-to-head Columbus AMD trial was published last year in the peer-reviewed journal Ophthalmology and demonstrated the clinical equivalence of Simerle to Lucentis with a comparable safety and immunogenicity profile. These combined will give retinal specialists a high degree of confidence to prescribe Simerle for patients currently receiving Lucentis as well as for any newly diagnosed new patients with an indication. And our market research confirms that depending upon access and practice economics, opportunity exists to expand similarly use into Avastin and ILEA. The third factor is our deep understanding of the retina market and our track record of commercial success. This is a clinic-based buy and build model, which is very similar to oncology and a core competency of ours. and backed by our track record of success with Udenica, which has delivered 1.3 billion in net sales since its commercial launch in 2019. Today, Coheris is the only company competing in the retina biosimilar market with U.S. biosimilar launch experience. In short, retinal specialist opinion leaders express positive receptivity to Coheris entering this market, and our track record of success in oncology gives them confidence that Coheris understands the dynamics of a buy-and-build market and that we will deliver a safe and effective alternative to Lucentis with a compelling value proposition. Now, regarding TOR Palamap, commercial launch plans are now focused toward the FDA action date of December 23rd, and we are excited about the potential to bring to oncologists and patients what would be, if approved, the first and only PD-1 inhibitor indicated for nasopharyngeal carcinoma, and to establish a new standard of care in all lines of therapy, including first line. NPC is a rare cancer in which high unmet need exists, but there are currently no FDA-approved therapies, including checkpoint inhibitors. Our oncology commercial capabilities have been built to scale, and there is significant overlap between our current Udenica customers and Toropalamab-targeted prescribers. Therefore, the launch of Toropalamab will be efficiently integrated into our existing oncology commercial infrastructure. In addition, the NCCN Guidelines Committee for NPC has added as a reference to the guidelines the citation for the Jupiter O2 trial, which was published in Nature Medicine last year, further validating the importance and quality of the toropalimab clinical data. Commercial launch preparations remain on track, and the field-facing teams have been fully trained. We will be ready to launch toropalimab approved by FDA.

Now, regarding Yosemite or Humira biosimilar.

If you recall, Yosemite was approved by FDA last December, and we were preparing for launch in July 2023. NUMERA's U.S. net sales were $17 billion in 2021, and we look forward to competing in this large market. We believe PEARS and PBMs will drive biosimilar adaluminab adoption and have completed extensive market research with national and regional PEARS as well as PBMs. The insights gleaned from this market research confirmed that coherence can deliver on the attributes most important to PEARS, which include a highly competitive price, robust and reliable supply, and an auto-injector presentation that has a non-stinging citrate-free formulation. Yosemite will have both a pre-filled syringe and an auto-injector presentation at launch with our proprietary non-stinging citrate-free formulation delivered by a 29-gauge needle comparable to the Originate. We also plan to introduce a high-concentration presentation post-launch. To meet our expectations to achieve at least 10% unit market share at peak, Coheris has invested more than $45 million in large-scale manufacturing and expects to be a high-volume, low-cost manufacturer well-positioned to compete on supply guarantees and price. Our first-year manufacturing capacity exceeds 1 million units, or about 10% of the overall market. We have the potential to triple that capacity in the current facility. Now, unlike some other market participants, we have no portfolio of branded alternatives to Humira that we need to protect from adalumab cannibalization. Our USIMRI strategy is thus well aligned to that of the product selection decision makers, which are the payers and PBNs. We both seek to make the adalumin map biosimilar market as large as possible, as quickly as possible. And we see this alignment as a source of competitive advantage. In short, we are confident that we will deliver a compelling value proposition and that we can achieve our objective to win at least 10% unit market share at peak. I'll now turn the call to McDavid for a review of the quarter's financial results. Thank you, Paul.

The details of our financial results are in the press release, the 8K and the 10Q that we filed this afternoon, so I'll focus today on just a few highlights. For the second quarter of 2022, we reported a $15.2 million net loss on a GAAP basis for 65 cents per share, compared to a net loss of $29.9 million, or 40 cents per share, in the second quarter of 2021. On a non-GAAP basis, we reported a net loss of $36.3 million, or 47 cents per share. The reconciliation from GAAP to non-GAAP in the recent quarter included $13.9 million in non-cash stock-based compensation expense and is contained in our press release. Cash used in operating activities was $50 million for the second quarter of 2022. As Paul detailed earlier in the call, Udenica net revenues were $60.1 million on par with the prior quarter. An increase in demand units sold in the clinic segment was partially offset by a lower net realized price. The decline in revenue compared to the $87.6 million we reported in the second quarter of 2021 is due to lower demand units as well as lower net realized price. Research and development expense for the three months ended June 30th, 2022. with $41.6 million as compared to 54.8 million in the same period in 2021. The decrease was driven by lower development costs as several clinical studies were completed in 2021, partially offset by higher compensation expense. General and administrative expense for the three months into June 30, 2022 was $51.3 million. compared to $40.3 million for the same period in 2021. The increase was primarily driven by higher commercialization expenses to support current Udenica sales and to prepare for multiple anticipated new product launches in 2022 and 2023, including, similarly, Toripalamab, Usimri, and the on-body injector presentation of Udenica. We ended the quarter with cash, cash equivalents and investments in marketable securities of $275.5 million, compared to a balance of $417.2 million at year-end 2021. With the approval of Simerly and subject to certain conditions, we can now request an additional $50 million under our credit facility with Pharmacon Advisors. Another $50 million tranche will become available upon the approval of Torapalimab. And today, we are reducing our guidance for 2022 combined SG&A and R&D expenses from a range of $395 to $430 million previously to a range of $375 million to $395 million today. The revised guidance range reflects a reduction in R&D expenses associated with Yosemite manufacturing scale-up and auto-injector production, which will now instead be capitalized into inventory in accordance with relevant accounting rules. Our R&D and SG&A expense guidance excludes both the $35 million upfront fee to Junshi Biosciences we paid for rights to CHS-006 and the $25 million milestone payment that will become due upon the approval of Tora Poundmap for NPC. This range also includes approximately $55 million to $60 million in non-cash stock-based compensation expense. We have always run Coheris to focus on operating efficiency, and we are continuously reviewing processes, programs, vendors, and headcount for additional opportunities to reduce costs. As we prepare to launch multiple new products over the next 12 months, we project an inflection in revenues while our operating expenses are expected to rise only modestly in 2023 and 2024. With current cash on hand, additional liquidity that we will request through our credit facility and increasing product revenues. We believe we have the financial strength to execute our new product launches and continue our R&D investments despite turbulent biotech equity markets. I'll now turn the call back to Kenny for closing remarks. Thank you, McDavid. Hoyer's is entering a period of rapid product portfolio expansion as well as revenue growth and diversification. Due to the outstanding execution by our team on plans that we initiated back in 2019. With the approval of Similarly, we now have three FTA-approved products with a fourth product candidate in the final stages of FTA review. Preparing for launch of four new products in 2022 and 2023 to generate sales which will return the company to revenue growth and profitability. With $275 million in cash and cash equivalents, access to additional capital through existing agreements, and significant projected revenue growth, we believe we have the financial resources to launch and support these new products while judiciously continuing to assess the oncology pipeline opportunities.

Operator, we're ready to take questions.

The floor is now open for your questions. To ask a question at this time, Please press star 1 on your telephone keypad. If at any point you would like to withdraw from the queue, please press star 1 again. You will be provided the opportunity to ask one question and one further follow-up question. If you have any further questions, you may raise your hand and queue again.

We'll take a moment while we render our roster.

Our first question comes from the line of Ken Cacciatore from Cohen & Company. Please go ahead.

Thanks so much, Denny. With the approval of Simerly, it really feels like there's been a big kind of momentum change. At least it did to me. The shares didn't react, but you now have what could be a major product in your hand. When we talk to retinol specialists, they talk about this being a heavily payer-driven market. and I'm not saying anything is easy in life. I know all launches are difficult, but it just strikes us as this should be a little bit even more straightforward than the Udenica complexities that you nicely navigated. So maybe a little bit more detail on your ability to win here, maybe discussion around pricing to win. And then also just secondly on Humira, you have the approval early. I can't think of any reason why kind of the negotiations can't begin now other than payers and others wanting to see all the products that are available. But can you just talk about kind of the early insight you'll get into the Humira opportunity, maybe well ahead of the actual launch? Thanks so much.

Sure. Well, thank you, Ken. And thank you very much, which I think your observations are right on. This is a road that we've been down before and we did very well on. This will now be the second time. I'll let Paul read our My chief commercial officer makes some adaptional remarks. But we consider entering the Lucentis part of the VEGF market very much ideal. Below in the market, you have, of course, the Avastin reformulation products. Above it, you have ILEA and other products. And we think entering that big center part of the market and expanding in both directions is really a sort of ideal strategy. We're thrilled, actually, though, to get the interchangeability and the X70 with the interchangeability, and to further to be the one proven biosimilar team out there at market formation with a very, very strong product. And I'll just add that the reason this product got interchangeability was because clinical data and the analytical data and having the various doses in a very complete package was compelling to the FDA to provide us with that. But I'll let Paul make some additional remarks on similarly. With respect to Yosemite, the Humira Biosimilar, and the interactions with the payers and so on, I think that it was very clear to us early on, as late as two years ago, what would be important to these payers. And that is high capacity, so we invested $45 million in the big steel tank. Citrate feed formulation, so it wouldn't stink. A small needle. Being there at market formation, with a significant amount of inventory. We knew what would be important to them, and we went ahead and made those investments through that. So we think we're going to do quite well when the gun goes off next July. But with that, I'll let Paul just make a few remarks about some of the insights into that market team, who we put on the ground, and so on, and what we expect. Paul, can you give Ken a little more color?

Yeah, sure. Hi, Ken. Thanks for your question. You know, your question was sort of focused around the payer segment. look, we're battle-tested with the payers. We've got a dedicated payer team that's got relationships with all the national, regional plans, as well as the PBMs. With the approval now, substantial engagement, conversations occurring now with them. And I think what retinal specialists want is they want freedom to be able to make the best clinical choice for the patients. And so You know, that's really going to be how we're going to align our overall strategy. As Denny mentioned, you know, we've got a differentiated product that's going to be very compelling, and we're going to deliver a, you know, very compelling value proposition to all stakeholders. So, you know, we're excited to come in here, and we think the interchangeability designation and exclusivity will provide yet another differentiating component as we're talking with payers, because quite frankly, retinal specialists, they want to stock multiple biosimilar products. And when it comes to the ranazumabab biosimilar product, they're going to want to use the one that's got the full label, all the dosage strengths, and the interchangeability designation. And that's where similarly is going to be. So, you know, we're really excited about coming into this market. Now, regarding price, we're going to be talking more about price as we get a little bit closer to commercial launch. in the coming weeks, so stay tuned on that.

Ken, I would just offer two follow-ons to Paul's remarks. The first is with respect to price in this sort of buy and build and ASP-driven environment, I think our experience with Udenica has left us fully informed on how to manage price in this sort of environment for the long term, and that's what we intend to do. One more point about interchangeability. Interchangeability to us means that a physician can be comfortable transitioning and converting a stable patient to a biosimilar, and that's a message that we are going to deliver. You don't have to wait for a fresh start. This product has been deemed interchangeable by FDA.

Doctor, you can feel comfortable converting your patient. Great. Thanks so much.

Our next question comes from Salim Syed from Mizzou. Please go ahead.

Hi. This is Bennett for Salim. Thanks for taking our question. If you could please provide some color on the expected timing for getting a similarly pre-filled syringe presentation. Do you think that having this presentation would be key to capture significant share, given that most of Lucentis, for example, is sold today in this format? And a really quick one, if you could please remind us if Denica's on-ball injector application has been submitted or not. Thanks.

Hi. Let me take the last question first. Consistent with our prior remarks, we do not intend to disclose the filing of the on-body injector for Eudenica. We have remained silent on that for a variety of strategic reasons. And you will probably hear about that upon approval and or on launch. With respect to the alternative dosage forms for similarly, I'll let Paul comment as to whether that comprises any barrier to entry in the shorter term. But again, we, for competitive reasons, we have not disclosed the PFS timing in the market. But I think Paul's pretty bullish on his ability to proceed regardless. Paul?

Yeah, thanks for your question. So, you look at, you got, You've got to remember that before all these presentations were launched, it's the vials that the doctors were using. This is a very common and standard way that they can deliver these medications. We don't see it as a major impediment to similarly adoption. I think you can only point to the most recent example of Roche's launch of Abismo, which is a vial presentation and And, you know, you can see, you know, that uptake for that has, you know, been quite steady. So I think that shows that when doctors want to use a product, you know, they will use it, whether it's a vial or a PFS.

All right. Thank you, Mike.

Our next question comes from the line of Douglas Tiseo from HC Wainwright and Company. Please go ahead.

Hi. Good afternoon. Thanks for taking the question. So, just, Paul, going back to that point on the pre-filled syringe and the similarly market, you know, do you expect there to be sort of some value offset that you need to make? do you think that that will already be encompassed in sort of the value proposition that you're offering as a product and that you won't need to offer sort of an additional incentive for additions? Do you have a sense of how much additional sort of work that puts into in terms of, you know, going from a prefilled syringe versus putting it into a vial or taking it from a vial and putting it into a syringe themselves?

Yeah, thanks for your question, Doug. You know, One of the core competencies, you know, that we have coherence and it's been demonstrated with Udenica is really our understanding the whole dynamics of the buy and build market. We see, you know, from every perspective and know the complete value proposition, you know, that includes the product, you know, portfolio, the characteristics of the brand, patient services, as well as the, you know, the contract all come into place. So, you know, we know what we need to do. with the retinal specialists and we're going to deliver that to them irrespective of the vial or the PFS. In terms of the timing of whether or not or how much more time it takes to prepare the vial versus the PFS, obviously it takes a minute, but most retinal specialists have told us they either have their staff draw those up ahead of time or if they like to do it, they can do it in the room and it only takes them a few seconds if you know, to pull it out of the vial. So, again, I don't think it's a big deal as evidenced by the Vavismo, you know, launch.

Okay, great. That's helpful. And then just as a follow-up. Hello? Sure.

Yeah, I was just going to ask, Paul, in terms of given now that you have a VEDUFA date at the end of the year, can you just provide an update where you are in terms of the build-out for the commercial organization for Tor Palamab?

Yeah, I mean, it's built out, Doug. I mean, we are leveraging our current oncology, you know, field-facing teams, you know, from our field sales representatives, our payer teams, our key account teams, field reimbursement. Rosh has got oncology MSLs, you know, in the field. So everything's built for it. And with the launch expected earlier this year, patient services have already been built out. So We're ready to just flip the switch as soon as we get approval. So we're ready to go.

And should we expect that that's the launch that happens right upon approval?

The due date is December 23rd, Doug, so I don't think we'll launch it Christmas Eve. But I think we'll get an early, I think your question is will we get an early 2023? Yeah. Yeah. You may note in our remarks, we characterized it as very early in 2023. So that's different than the other quarter. So thank you for your question.

Perfect. Thank you so much. And congrats on the progress.

Thank you.

Our next question comes from Kirsten Bruggeny from the Bank of America. Please go ahead.

Hey, I think...

The question was for me, maybe. Jason Gerber, can you guys hear me? Yes. Hi, Jason. Okay, great. I was a little thrown by the introduction there. Can you talk about with the biosimilar Lucentis launch, how long do you think it will take to eat into the broader VegF category and specifically products like ILEA? Is that something that you feel like you can compete and grab share from a product like that early on? And then I get the differentiation versus the other biosimilars, but as we think about the differentiation versus the brand, I have to think it's either economic or payers forcing the decision or at least swaying the decision to use a biosimilar. So can you help frame the economic tradeoffs that you'd expect healthcare providers to face with a biosimilar versus a brand in this new world going into the second half? Are there other specific segments of the market that you think you have a better chance of winning? Maybe the lower volume practices that didn't get as good at discounts from, say, the innovators. Just curious where you think you're best positioned to win.

Thanks for the question. I'll let Paul take the first shot at that one. Paul, I guess the first issue is what do you think – how do we think about going after the various segments, the Avastin reformulated shares, incentive shares? and the ILEA portion of the market with Vangia. How do we sort of think about that?

Yeah. Hi, Jason. Thanks for your question. Yeah, so, you know, I want to reiterate sort of what our primary strategy is, and that's to convert, you know, as much of the Lucentis business today. That's the core opportunity that's right in front of us in our, you know, our label, as you see with the interchangeability designation. you know, will really give physicians a very high degree of confidence that the safety and efficacy of Simerly will provide them the same outcomes consistent with historical Lucentis experience. So we believe that that's going to help drive conversions. That's number one. But what we also know is that, you know, physicians, you know, choose VEGF products for a lot of different reasons. And, you know, on the commercial side of the business, you know, where a payer might require them to step through Avastin, you know, they're very adept at transitioning patients off of that to another VEGF product. And we want to be, you know, well-positioned to be that next brand. So, you know, our market research tells us that based on access, based on the practice economics, we have the ability to not only penetrate high degree of Lucentis, but also those edges of Aston and ILEA. So that's going to be our strategy. And we're not going to Pick small versus big. There's opportunity across the entire marketplace.

Yeah, I think it's a fair question, Jay. The other thing that I would point out, though, is that these practices use, in a lot of cases, all three flavors of these products. And to a significant degree, the Avastin reformulation product versus Lucendis versus ILEA are significantly therapeutically, clinically, I would say, interchangeable. So, to the degree that we get into the consensus market, establish a footprint in our credibility with the interchangeability designation, which we think is really important, and then take significant portions of that market, we're able to talk to those very same doctors who have Sebastian patients or ILEA patients and inform them about similarly and the value proposition and so on. As we said before, we think this is an ideal place to enter the overarching VEGF market. Just how fast and how deep things go, we'll probably be in a better place to talk about that after maybe Q1 of next year when we see how things are rolling out. But it's a fair question.

All right. Thanks, guys. Thank you. Our next question comes from Ash Verma from UBS.

Please go ahead.

Hey, guys. Thanks for taking my question. So I have two. So one was just how are you thinking about the ramp for your summary? Obviously, like with you coming in mid-2023, do you think the contracting discussion will be revisited meaningfully for 2024 or later? the 2023 agreements are going to hold. So that's question number one. The second one, I'm just trying to understand the mechanics of this interchangeability for similarly. So when a physician writes a script, I mean, is it by a while or PFS? Like in other words, can your product be interchangeable no matter what the script is, or could it only be replaced for a while formulation script?

Thanks. Thanks for your questions. Let me take the first one for us with respect to summary. We think that there will be, of course, several market participants entering around that same point in July 2023 at the same time. We will be there for that. We think, yes, there will be significant sales in 2023 and significant contracting in 2023. Certainly, it will accelerate in the second year of 2024, but I would not say that the 2023 revenues or market penetration would be insignificant. I think all of the licensees are pretty much in the same boat, hitting that market at the same time. But we feel that we particularly have significant advantages with respect to our insights on the market and our ability to produce our cost structure and our volume structure and so on. With respect to your second question, I'll pass that one over to Paul.

Yeah, thanks, Ash. So interchangeability typically for products that are dispensed through the pharmacy is you know, allow pharmacists to do the conversion, right, so long as they have the interchangeable designation. This is a little bit, you know, nuanced because it's a buy and bill market and the physicians are, you know, making the product decision, buying the drug, administering it, billing for it. So in this case, you know, interchangeability designation is really going to be, you know, enabling our ability to give confidence to the to the retinal specialist that they can safely convert patients already on Lucentis. And that's the key point, you know, that it will give them outcomes consistent with their historical Lucentis experience. So that's the nuance.

Got it. Thanks. And that, of course, will allow you to drive some more conversion in the market. That's why we are so thrilled to get that.

Our next question comes from the line of Douglas Tisseo from H.C. Wainwright & Co. Please go ahead.

Hi. Thanks for taking the follow-up questions. Just as a quick one, sticking to the subject of interchangeability, just Danny or Paul, just curious, do you think this designation is more important for a buying bill market like the anti-VEGF, you know, retina space, than it is for something like what you'll face with Humira and Yosemite. Thank you.

Fair question, Doug. Yeah.

Paul, do you want to take a shot at that for that? Sure. So, you know, currently, Yosemite, you know, that is a pharmacy benefit product and dispensed by specialty pharmacies. And because of the high cost nature of that, you know, payers and CDMs will institute, you know, restricted formularies. So they will be dictating, you know, product selection. That's why, you know, our expectation to deliver to payers with December, you know, a very competitive price, high guarantees, you know, and a product presentation similar to the originator is really important. That's going to be key, and that's why we didn't pursue the interchangeability, because at the end of the day, payers are going to make the decision. Now, similarly, as we mentioned, we know that retinal specialists are routinely switching patients from one therapy to another, but we also know that they're really sensitive to inflammation in the eyes, so this designation will give them, again, greater confidence you know, that they can expect the same safety and efficacy, which similarly as we would, you know, with Lucentis, and therefore, you know, will help us drive conversions of the current Lucentis patient population, as well as new patient starts. But hopefully that answers your question with the distinction there.

Yeah, no, that's helpful. That concludes today's questions.

I would now like to turn the call over to Denny Lanphier, CEO, for closing remarks.

Thank you very much. And thank you all for joining us on our call today. I would just like to point out that we will be participating in the City and Wells Fargo conferences in Boston the week of September 4th and the HC Wainwright conferences in New York the week of September 11th. During September, we're also going to have a number of non-deal roadshows and throughout the fall. So we look forward to seeing all of you. Thanks very much. Have a great day. Bye-bye.

Goodbye.

Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.