Coherus Oncology, Inc.

Good day, and thank you for standing by. Welcome to the Coherence Biosciences Q1 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Marek Szczeski of Investor Relations for Coherence Biosciences. Please go ahead.

Thank you, Crystal, and good afternoon, everyone, and thank you for joining us. We issued a press release earlier today announcing our financial results for the first quarter of 2023. This release can be found on the Coherence Biosciences website and is also attached to our Form 8-K. 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 gain approval from multiple new products and launch them, the ability of the FDA to complete all required inspections in China for our BLA for toripalamab, necessary for approval, expectations about demand, timing of our ability to gain market share for any of our approved products, expectations about future revenues and expenses, and the timing of any return to profitability. All these forward-looking statements involve central risks and uncertainties that are beyond our control and could cause actual results, performance, or achievements to differ from those implied by 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. Forward-looking 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. First quarter 2023 results are not necessarily indicative of results for future periods. With me on today's call are Danny Lanthier, our CEO, Dr. Teresa Lavalle, Chief Development Officer, Dr. Raj Dias, Chief Medical Officer, Paul Reeder, Chief Commercial Officer, and McDavid Stilwell, Chief Financial Officer. And I will now turn the call over to Danny. Thank you, Merrick, and thank you all for joining us on our Q1 2023 call. In Q1, we set the stage for revenue growth over the rest of the year as we plan for and execute multiple product launches across our diversified pipelines.

throughout 2023, transitioning from a single product company to one with six products or presentations, including our first immuno-oncology agent to our PALMAP. This quarter, we executed strongly on the launches and growth catalysts in support of the emerging pipeline. This progress includes, first, the Q-code for Simulink, which was implemented at the beginning of April. Demand is now increasing as expected. Eugenica Autoinjector is now ready for launch later this month. key driver for market share increase this year. They're ready to launch Yosemite, or you might about similar, in July, having gained all the requisite approvals in built inventory. Manufacturing facility inspection to support Tor Palbo approval is now scheduled for later this month. We expect the approval and launch of the Udenica on-body injector later in 2023, strengthening the franchise positioning and driving additional share gains. Following my opening remarks, Paul Reeder, our Chief Commercial Officer, will update you on the impact of the CMS-assigned Q code on summer leave sales at the start of the second quarter, which we expect to drive sales starting in Q2 and accelerate revenue growth throughout 2023. Paul will then further update you on the Q1 2023 Udenica sales and our launch plans for our newly approved Udenica auto injector. Dr. Teresa LaValle, our Chief Development Officer, We'll update you on the status of the Torpalimab inspections, the BLA review, and our progress on bringing Tori manufacturing to the U.S., along with other pipeline developments. Chief Medical Officer, Dr. Raj Dias, will then update on the new Torpalimab clinical data being presented at ASCO, as well as progress on our TIGIT-Torpalimab combination studies and our IoT4 program. As you know, we've been very tightly focused on actively managing expenses without jeopardizing our product sales potential. David Stilwell, our Chief Financial Officer, will provide you some additional detail on measures taken during Q1 to reduce operating expenses, sharpen our focus on ensuring the success of our product launches, key revenue drivers that we anticipate will return the company to profitability in 2024. And with that, I'll turn the call over to Paul Reeder, our Chief Commercial Officer. Thank you, Denny, and good afternoon. I'll provide you with an update this afternoon on the expansion of our commercial product portfolio. The potential launches of four products in 2023 we expect will drop top-line revenue growth this year and going forward. I'll start with Simerly, a fully interchangeable Lucentis biosimilar launched in the fourth quarter last year. Our strategic approach to the market is to first maximize the conversion of existing Lucentis currently represents 1 million units annually, and second, grow share through new patient starts or conversion from other anti-VEGF products. While the complete label with interchangeability has been well received by retinal specialists, giving them the confidence that they can safely transition currently treated Lucentis patients similarly, expect the same clinical outcomes. Use of the miscellaneous J-code has hindered adoption and conversion, Billing under a miscellaneous code is prone to errors, interrupting payment flows, and even if executed correctly, can result in payment delays of two months or more, which disrupts practice cash flows. We expect that a slower start similarly fails until the activation by CMS of our permanent product-specific Q code, which enables electronic automated billing, thus providing faster payments with much higher certainty. Accordingly, we focused our efforts in Q1 on obtaining the permanent Q code from CMS and getting it deployed across ophthalmology practices and payers. Those efforts are bearing fruit. The payer front, as of April 30th, over 90% of target payers have confirmed loaning the Q code. With respect to billing and reimbursement using the Q code, numerous providers have reported receiving full reimbursement within 14 days of electronic billing. We are now seeing the expected increase in demand. Through the month of April, we've shipped over 7,200 demand units, which represents about 72% of the entire Q1 2023 unit sales. Also during Q1, we doubled the number of accounts that have ordered similarly to 185, and of those, 54% have reordered. Among these ordering accounts, similarly market share was 20%, reinforces the potential of Simerly once accounts begin adopting. As momentum built in Q1 prior to deploying the Q code, doctors are reporting that they are seeing the same clinical outcomes with Simerly that they would expect to see with Lucentis. So Simerly is successfully establishing an excellent safety and efficacy track record with rental specialists. This helped fuel the doubling of demand in Q1, resulting in an average rent-a-vis-mat market share for the quarter of 4.1%, compared to 2.4% in the prior quarter. At the same time, inventory levels on hand were higher at year end, given Q4 was the launch quarter. It had begun to normalize, and for the first quarter, sales have similarly reached 6.2 million, compared to 6.95 million for Q4. Reordering reflects new patient starts and conversion from other products. With the chronic nature of the disease and frequency of injections, this results in a compounding growth trajectory. Therefore, we continue to expect that in 2023, similarly, revenues will exceed $100 million. I'll now turn to our oncology franchise, starting with Udenica and the launch plans for the two new presentations this year. As you know, the Pegfograstum pre-filled syringe segment is increasingly competitive. as reflected by continued price erosion. Accordingly, our strategy is not to compete solely on price, but to launch additional presentations that provide a differentiated value proposition to patients and providers, filling unmet needs in the market with the objective to regain share. The past year, we told you that we would sacrifice share to preserve pricing power for these future presentation launches. as all product presentations are linked to the same average selling price. And we maintain a strong ASP on which to launch our two new innovative presentations this year. We plan to launch Denica Auto Injector later this month. This presentation represents the first innovation in the PEG for Graston class in eight years. Customer receptivity has been overwhelmingly positive. This confirms that there is a large market segment unserved by new last on pro the on body device which still retains 43 of the market eugenica auto injector provides convenience administration flexibility independence and certain delivery in under 10 seconds auto injector thus provides providers and patients a highly desired alternative to on pro and has the potential to drive market share increase over the coming quarter Q1 2023 was our last quarter competing with one undifferentiated presentation, and Udenica net sales were $26 billion, a decline from the prior quarter resulting from four key factors. First, a market share decline of 1% from the prior quarter to 11.5%, a 9% decline in net selling price required to maintain a competitive position in the pre-filtered segment, higher wholesale inventory levels at the end of Q4, which has now normalized. And finally, a non-recurring $1.7 million charge, resulting from a contingent liability arising from a dispute. Going forward, we believe the Udenica franchise is well-positioned to regain market share beginning the second half of 2023. Udenica is now the only Pegfield Graston brand with both pre-filled syringe and auto-eject Later this year, if the on-body injector is approved, we will be the only PEG for Graston brand with all three product presentations. This will provide a path for maximum market penetration and market share growth this year in Milan. We expect our next oncology launch to be Torre Palomat, if approved. Let me cover some of our launch plans next. Launching the company's first immuno-oncology product is a critical step forward in the advancement of our biofranchise. Our mission is to extend cancer patient survival and to offer new hope to patients, and nasopharyngeal carcinoma is an excellent example. Today, NPC patients have no FDA-approved treatments, including biotherapies, and therefore constitutes a high-end venue. Torapalamab is a next-generation P1 inhibitor. A different proof will be the first and only PD-1 inhibitor in the U.S. indicated for relapsed metastatic nasopharyngeal carcinoma, establishing a new standard of care in all lines of therapy, including first line. As such, we feel confident that Torpalamab plus chemo will gain a dominant market share and estimate the NPC market opportunity could reach $200 million in In preparation for Tor Palomab's commercial launch, we are executing on a number of pre-launch activities. We created and launched NPCFacts.com, which is designed to be a primary source of disease state information for patients and their caregivers to learn about NPCFacts. The sister site for healthcare professionals was also launched. NPCFacts.com allows patients and their caregivers to join our community enabling us to share disease state education that is tailored to each patient at each stage of MPC disease progression. Our aspiration is to identify and appropriately engage with all MPC patients in the U.S. by the end of the year. We continue to train our oncology sales force so they will be ready at launch to educate doctors on torpillomab's differentiated mechanism of action and the impressive patient survival benefits demonstrated at NPC irrespective of PD-L1 expression status. Finally, we will launch a peer-to-peer educational program featuring the nation's leading opinion leaders in the field of head and neck cancers and NPC, and we look forward to engaging with these KOLs at the upcoming ASCO. While some modest marketing investment will be required to identify patients and educate physicians and providers on the benefits of Torapelomat, Our oncology commercial capabilities were built to scale with significant overlap between Udenica customers and Torapalimab targeted prescribers. Therefore, the launch of Torapalimab is being efficiently integrated into our existing oncology commercial infrastructure. We are ready to launch Torapalimab with proud approval and expect to successfully address the entire NPC patient population across all lines of therapy and irrespective of expression status. I'll end with UCMRI, or Humira Balsamler, which is on track to launch in July. Market feedback confirms that price, robust supply, and product presentation are the key criteria used in making formulary decisions, and UCMRI is well positioned to compete on each of these criteria. UCMRI will have a state-of-the-art auto-injector presentation It includes our proprietary non-stinging citrate-free formulation and a 29-gauge needle for maximum patient comfort. We will have substantial supply volumes at launch, with hundreds of thousands of December units ready for distribution in July. We are confident in our ability and our commercial approach, and we look forward to updating you in more detail on our strategy on our August call after we launch. In summary, we are now at the inflection point of our growth story, five ongoing and new product launches will drive top line revenue for the next three years. I'll now turn the call over to Theresa LaValle. Theresa.