Coherus BioSciences, Inc.

Q1 2023 Earnings Conference Call

5/8/2023

spk11: 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.
spk16: 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.
spk19: 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.
spk10: Thank you, Paul, and good afternoon, everyone. Let me begin with an update on our Torapalamab inspections and projected approval. As you know, due to COVID travel restrictions in China, The PDUFA date was missed for Toropalamab MPC application in December 2022. In January, the travel restrictions related to the COVID-19 pandemic were eliminated, and the inspection is now scheduled for the second half of this month, May. We wish to thank our partner, Junshi Biosciences, for their thorough and diligent preparation efforts to make the inspection a success. With respect to the sufficiency of the clinical data to support the MPC BLA, we note again that the FDA granted toropalimab breakthrough therapy designation as there are no approved treatments for MPC. The agency has consistently recognized this unmet need and stated MPC warrants regulatory flexibility. The review of the BLA is now substantially complete. The FDA conducted an extensive remote regulatory clinical assessment and did not identify any deficiencies. We continue to work with FDA to complete the clinical site inspection. Boropalimab is a next-generation PD-1 with a differentiated mechanism of action and has demonstrated an impressive survival benefit in multiple tumor types in combination with chemotherapy, irrespective of PD-L1 status. Based on these observations, we conducted mechanistic studies to better understand the basis of this differentiation. We have just completed preclinical studies for journal submissions demonstrating that toropalimab has higher potency on T cell activation compared to PEMBRO-LizMAP. These data further support the evolving understanding and the appeal that PD-1 antibodies are not all the same or necessarily equivalent. And we plan to present our findings at a scientific meeting later this year. We believe that this makes toropalimab an ideal foundation for our IO pipeline. as well as a combination agent for non-coherence novel compounds. Thus, we are actively seeking additional development opportunities to expand Torapalimab use beyond MPC with combinations, as Dr. Diaz will describe. I'm also pleased to report that Coherence's regulatory and manufacturing teams continue to execute at a very high level. In the first quarter, we gained approval for the USMRI auto-injector, as well as the facility change for large-scale manufacturing. Additional approvals included the UDENICA auto-injector presentation, the fourth approval of the quarter. UDENICA's BLA supplement for the on-body injector presentation is progressing well, and we look forward to approval this year. Lastly, regarding tech transfer of the Tora Palamap manufacturing to the United States, I can report that we recently successfully completed a large-scale engineering run needed to onshore manufacturing supply. We plan to execute the process qualification lots this fall and have prioritized these efforts. I'll now turn it over to Dr. Rosh Dias, our Chief Medical Officer, for a clinical update on the Coherence IO pipeline. Rosh?
spk02: Thanks very much, Teresa, and good afternoon, everyone. Borupalamab continues to form the backbone of our communal oncology franchise. We believe that the publication of pivotal data across nasopharyngeal carcinoma, non-small cell lung cancer, and esophageal squamous cell carcinoma in top-tier journals Continuing positive datasets being released across multiple tumor types, together with its differentiated mechanism of action, will position toripalamab effectively as a partner of choice for combinations. Several toripalamab datasets across multiple tumor types and tumor settings have been accepted for presentation at the upcoming ASCO 2023 Annual Meeting. These include data in non-small cell lung cancer, final overall survival and biomarker analyses of choice 01, first-line non-small cell study, as well as event-free survival data from NeoTorch in the perioperative treatment of stage 2-3 non-small cell lung cancer being presented. In metastatic or recurrent triple negative breast cancer, TFS data will be presented from the Torchlight study. We will also be presenting the final overall survival analysis of Jupiter 02, registration of our BLA submission in NPC. With respect to our internal pipeline, we remain excited about our Phase 1-2A Torre Palomar Digit Study, which is currently active in the U.S. with anticipated results next year. In addition, our ILT4 asset remains on track as we proceed towards IND submission towards the end of this year. I'll now turn it over to Dr. David Stilwell, our Chief Financial Officer.
spk19: Dr. David. Thank you, Raj. Today, we reiterate our prior financial guidance for 2023. We project revenue growth from accelerating similarly sales and with the launches this year of Toro Palo Alto, Yosemite, and the Eugenica Auto Ejector and On-Body Ejector. For the full year, we expect to book at least $275 million in net sales with at least $100 million of similarly net product revenue. In the first quarter, we took measures to reduce operating expenses. with a reduction in force and the re-scoping of the Toro Palmbab Joint Development Plan. Along with other measures we implemented last year, we have significantly reduced expected 2023 R&D and SG&A expenses to a range of $315 to $335 million. This range excludes non-recurring milestones and upfront payments, and it includes approximately $50 million in non-cash stock compensation expense. Near the start of the year, we requested and obtained a waiver for the revenue covenant of our term loan through the first two quarters of 2023, recognizing that the Simmerly Q code would not be available until April 1st, and that the Udenica auto injector would not launch until May. For my review today of first quarter financial results, I'll touch on just a few highlights, as the details are in the press release 8K and 10Q we filed this afternoon. Net loss for the first quarter of 2023 was $75.7 million, or $0.96 per share, on a diluted basis, compared to a net loss of $96.1 million, or $1.24 per share, on a diluted basis for the same period in 2022. We incurred approximately $4.9 million to non-recurring charges in connection with restructuring in March 2023. Net revenue for the first quarter of 2023 was $32.4 million and included $26.2 million of net sales of Eugenica and $6.2 million of net sales of Simerly. Net sales of Eugenica were reduced by a $1.7 million charge for a contingent liability related to resolving a dispute. Net revenue declined compared to the same quarter one year ago, primarily due to a decrease in the number of units of Eugenica sold, as well as a lower net realized price. Cost of goods sold was $16.9 million during the first quarter of 2023. Recall that Udenica COGS includes a mid-single-digit royalty on net sales payable through the first half of 2024. And similarly, COGS includes a low to mid-50% royalty on gross profits. COGS in the first quarter of 2023 included two non-recurring items, a $3 million contract modification fee with one of our manufacturers, and a $2.7 million write-off of inventory that was damaged during processing at one of our manufacturers. Research and development expense for the first quarter of 2023 was $34.2 million, significantly lower than the year-ago quarter when we reported $47.9 million in R&D expenses after excluding a $35 million license fee paid to Junshi Biosciences for the TIDGET antibody, VHS006. R&D expense for the first quarter of 2023 included $3.6 million in costs associated with the recent reduction to force. Selling, general, and administrative expense for the first quarter of 2023 was $49.2 million, roughly equivalent to the $48.8 million in SG&A expenses for the same period in 2022. SG&A expenses are primarily driven by commercialization activities to support current UDINACA and similarly sales and costs incurred. preparation for multiple anticipated new product launches in 2023. scna expense for the first quarter 2023 included 1.3 million dollars in costs associated with the recent production reports cash cash equivalents and investments in marketable securities were 128.1 million dollars as of march 31 2023 compared to 191.7 million at year end cash burn was elevated was further impacted by introductory payment terms for the similarly launch which delays cash receipts for product sales we expect the timing of cash receipts to normalize in the second half of the year in 2023 we are focused on ensuring the success of our new product launches and generation of the anticipated revenue growth we will continue to maintain tight control over our operating expenses as we aim toward a potential return to profitability in 2024 And I'll turn the call back to Denny. Thank you, McDavid. And thank you all for joining us on our Q1 2023 earnings call. Now that the similarly Q code is active and we're beginning to see the impact of the second quarter, we look forward to accelerating similarly sales throughout the year. On the Udenica front, a launch later this month of a new innovative product presentation, Udenica Auto Injector, will provide patients and physicians with a unique option. driving share gains. Development of our immuno-oncology franchise is progressing well. Thor Palmet, our foundational asset and anchor, continues in study after study to demonstrate strong efficacy and safety across multiple tumor types. As the next generation of PD-1, physicians cohere as ideally as the partner of choice for those developing combination treatments with their own proprietary agents and number of cancers. the first indication of nasopharyngeal cancer will occur in Q3. Lastly, through thoughtful and disciplined cost and expense control, we've significantly reduced our 2023 expenses by about $100 million to about $325 million, and we'll continue to look for more efficiencies and savings as we progress our efforts to drive revenue increases while controlling expenditures to achieve profitability in 2024. Operator, we are ready for the questions.
spk11: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Robin Karnowskis of Truist Security. Your line is now open.
spk20: Hi, thanks for the question, and congrats on getting the manufacturing inspection. That's great news. So I have two sets of questions. I'll be really brief. So on Tori, it seems like there was a press release by your partner, Junshi, around small cell lung cancer, which has typically been very difficult to treat with sequin inhibitors, given it's a cold tumor. So I had a few questions on that. What are your thoughts on, like, why Tori worked, you know, given the differentiated epitope and MOA? Do you think it's driving the response? And then how does this change your overall strategy with Tori? You talked about partnering going forward. It seems like this would be a pretty big deal if it works in SDLC. So talk a little bit about how much collaboration interest there is and how aware people are of this new data set. And then I have one on identica.
spk19: Thank you, Robin, for that question. Yeah, we were very pleased to see the small cell data announcement this morning. I'll let Dr. LaValley address the issues of mechanism of action to our panel map. I'll subsequently have Dr. Dias address your secondary question, which is of the potential combinations and these other indications, including small cell with other agents. Teresa?
spk10: Yeah, thanks, Robin. We are excited to see yet another positive phase three clinical study with toropalimab, and particularly in a difficult tumor that has not shown benefit with some other PD-1 antibodies. This positive survival results are consistent with our preclinical studies, showing that toropalimab has more potent activation of T cells compared to pembrolizumab. And I think that really sets it up well to really think about combinations I'll let Raj expand further.
spk02: Yes, thanks, Teresa, and thanks, Robin, for the question. So I think you're quite right. First of all, looking at small cell lung cancer, I think there's a real unmet need here. You know, it represents about 15% to 20% of all lung cancers, extensive stage, continues to have a poor prognosis, and the current therapies that are out there continue to have marginal benefits. So with that in mind, I think we are very excited about the benefits co-primary endpoints. And I think if we look at the overall space, you know, I think this data set continues to add to the breadth of the data available across multiple different tumor types. As we mentioned, for lung alone, we have CHOICE-01 now in non-small cell lung cancer. We have Neotorch in PERI operative analysis. across small cells, but also other forms of lung cancer, and then also additional genotypes with our additional data sets.
spk19: Robin, just an additional remark with respect to this. When we selected torpalimab from a broad array of available PD-1 agents some three years ago, we consistently saw it outperforming other agents, such as PEMBRO and various in vitro and cell-based studies, although we didn't quite understand all the implications of it now. I think it's very rewarding, first of all, to see the mechanism of action story read out, as Dr. Lavallee indicated, but it's also now very rewarding to see this read out in several cancers where toropalumab continues, as we said, to demonstrate a really very potent track record here as far as With that, I think you had a follow-up question on Udenica, perhaps, you said?
spk20: Yeah, and one small one. I mean, given that it's an Asian-based study, I mean, I'm sure that doctors will be super excited to see the detailed data. Do you have any sense of whether it be in a publication or presentation on that? And the Udenica question is really about the autoinjector and the fact that you're going to have the autoinjector, the on-body device, and the pre-filled syringe. I'm just trying to get a better sense of, you know, how do payers use the autoinjector What are you getting as an early read on the interest for this auto injector and that's being differentiated now? And then, you know, it's really giving you a three. I mean, just help us tease out, like, how do we think about these three products taking share in different markets? Thanks.
spk19: Thanks. That's a great question. So I'll let Paul frame that out for you. First of all, what the differentiated value proposition is for the auto injector. compared to the various dosage forms which are on the market today. And then secondarily, some of the progress that we're making with the payers on that front. Paul? Hey, Robin. Thanks for your question. Yeah, we're excited to launch the auto-injector later this month, and we expect it will cause some market share stabilization this quarter and then really increase growth in the second half of the year. I think with the auto-injector, enables us to do in the market is to now compete in both the in-clinic segment against the competitive pre-filled syringe competitors. But it also enables us to now compete more effectively in the at-home segment, where OnPro still has 43% share. It'll do that because of the patient benefits. There's really three important ones. First is the auto-injector will give patients more independence over their injection experience. So Essentially, they'll be able to inject when and where they desire. The second is ease of use. So this can be delivered in less than 10 seconds, as opposed to wearing the body for an entire day and navigating through a 45-minute injection time. And then the third is flexibility. So the patients who live far away or can't come back to the office can simply do this at home. So we believe it's going to be able to penetrate all segments of the market. And our payer coverage is actually coming online very nicely. Where we have coverage today, we've got confirmed coverage for auto-injector in over 90% of those plans. So, you know, the team is now working with customers, getting it on formularies, and we'll be ready to launch at the end of the month.
spk24: Thank you.
spk23: Thank you. Please stand by for our next question. Thank you.
spk11: Our next question comes from the line of Celine Syed with Mizuho. Your line is now open.
spk15: Great. Good afternoon, guys. Thanks for the questions. I guess a couple for me, if I can. One on perhaps toropalumab and then another on Udenica. Tori, Paul, you mentioned that you believe on NPC you can reach a peak sales number around $200 million. I know you haven't disclosed your pricing framework here, but by my math, that would suggest something about like an $85,000 net price per patient. Just curious if you could point us in the right direction if that's ballpark-ish correct based on your $200 million peak if you were to actually be able to get into all patients, all lines.
spk19: Let me first take that one, Celine. As a matter of policy, we don't comment on pricing for products which are not approved. So after we have the product approved, we'll be happy to revert there on projected pricing. But as Paul said in his remarks, we will have full first line and other lines of care, and we do have about, I think, 2,500-plus patients per year. But we're happy to chat a little bit about pricing post-approval.
spk15: Okay, great. Maybe if you could comment a little bit then on, I guess I'll just ask my second question. Maybe you can comment a little bit on the warehousing. It sounded like you guys are trying to build a registry of patients for MPC with your website. Could you just maybe give us an idea how many patients are currently in the registry and How many do you plan to warehouse prior to approval? Thank you.
spk19: Yeah, thanks, Salim. Being a rare cancer and the only company and brand that's going to be entering the space, launching npcfacts.com is really the work of our market intelligence and our customer knowledge where we found that doctors and patients really don't have a qualified, centralized place to go to get information about npc and so that was that was the real driving force there now adding a community where we can invite patients and their caregivers to join enables us to now educate them and we'll understand if they're local localized or if they're metastatic and we can then communicate with them appropriately so we're going to be turning up the media around that to really start cranking up the noise level there we'll be having our field team through appropriate disease state efforts, share the website with the accounts directly so they can actually hand this out to their patients as they come in. So we will be reporting out on actual numbers on that. But so far, we like what we're seeing there. I would add the additional comment, Celine, that if approved, we will be the only agent approved by FDA for this terrible disease. We feel that we have a responsibility to reach out to these patients and find these patients and educate them. These patients are otherwise progressing without toropalimab. And as Rasha indicated, the benefits of toropalimab treatment are really substantial. And so we feel a tremendous responsibility to reach out to these patients and let them know there's hope.
spk26: Okay. Thank you so much, guys. Thank you.
spk11: Thank you. Please stand by for our next question. Our next question comes from the line of Mike Nadelkovich from TD Cohen. Your line is now open.
spk08: Thank you for the question. I have two on torpillomide. The first, and you've hinted at this already a little bit, But I'm curious if you have a sense of whether there's any off-label use of other checkpoint inhibitors in NPC that you may have to displace once Torpalamon is approved. I realize there's no approved checkpoint inhibitor. And then secondly, when we think beyond NPC, it would seem given a potentially differentiated mechanism of action and a potentially differentiated clinical profile that the world is your oyster. How will you go about selecting the next set of indications to advance into pivotal trials? Thank you.
spk19: Thank you. Mike, thank you very much for the question. I'll let Dr. Dias address your first question, and then Dr. LaValley can address the mechanism of actual questions subsequently.
spk02: So just thanks for the question. So I'll just reiterate a couple of points that we mentioned earlier. First of all, there are no approved therapies for nasopharyngeal carcinoma in the U.S. So what that means, so the current standards of treatment is typically chemotherapy, gemcitabine, cisplatin typically. Even though there is not an indication for other immunotherapies, the NCCN does include a couple of other therapies as potential treatments. But that, importantly, actually is on the basis of our data set because there are no other immunotherapies, no other indication.
spk19: Teresa, can you comment on how the mechanism of action brings forward other potential combination therapies with Torquilmab or IL-4 and so on?
spk10: Yeah, I think seeing the increase in potency on T-cells, which is really the true mechanism to be able to activate anti-tumor immunity, And seeing across three large phase three studies, the NPC Jupiter 2, the Choice 1 non-small cell lung cancer study, and the Jupiter 6, the ESCC study that was published in Cancer Cell, that Torapalimab in frontline studies in combination with chemotherapy works irrespective of PD-L1 status. really lends itself to combinations to really target mechanisms of resistance in those tumor types. So, our pipeline includes IL-P4, which is looking at macrophages, which is a known resistance factor in diseases such as small cell lung cancer. So, we'll be looking at the disease positioning based on the mechanisms, and as we've stated, a few times we're really engaged with a number of other companies that have compounds with Phase 2 data to help us position Tori in disease based on a strong clinical hypothesis. So, I think later this year you'll be seeing some nice development plans there.
spk24: Thanks for your question, Mike.
spk23: Please stand by for our next question.
spk11: Our next question comes from the line of Douglas Sao of H.C. Wainwright. Your line is now open.
spk06: Hi, good afternoon. Thanks for taking the questions. similarly for me. I'm just curious in terms of the counts that have adopted it, are they switching all their renabizumab volume to similarly, or are they typically still splitting it between similarly and Lucentis?
spk19: Thanks for your question, Doug. Paul, do you want to take that one? Sure. Thanks, Doug. Yeah, as of today, our source of business from a patient standpoint is coming from a combination of new patient starts as well as conversions from other anti-IGF therapies, including Lucentis. So, we expected this, and that's what we're seeing in the market. Did you have a follow-up question, Doug?
spk06: Yeah, also just in terms of UCMBRI's launch, I'm just curious, do you have a sense or have you been able to start to make some progress or finalize agreements with payers? Because from, you know, that seems to be a real focus of your strategy, just given the fact that you're not going to really be promoting into those indications.
spk19: I think it's fair to say that the focus of any Humira-similar market participant competitor will be payers, insofar as payers and PBMs are the primary determiners of formulary selection for this product. That being said, we have also previously indicated that we won't be making any comments regarding pricing particular payers' conversations. until after the launch in July. So, that's a fair question for our August call, which we'll talk about Q2, but no further comment on that particular point at this point.
spk01: Okay, great. Thank you.
spk11: Thank you. Please stand by for our next question. Our next question comes from the line of Balaji Prasad of Barclays. Your line is now open.
spk23: Our next question.
spk11: Balaji, are you there? Your line is open.
spk07: Let's move on to the next question. Operator, please come back.
spk11: Yes, I will. Thank you. Please hold for the next question. Our next question comes from the line of Ash Verma of UBS. Your line is now open.
spk12: Hi there. Congrats on the progress. Thanks for taking my questions. I had one on TORI and one on USIMRI. So on TAURI-PALIMAM, maybe I missed this. From FDA's point of view, is the key determination in the NPC approval just the site inspection or Does FDA still need to make up its mind whether it will or will not adopt regulatory flexibility as it looks for China-studied PD-1? And I'm just curious, I know that there has been a paper that was published in Lancet a couple of years ago where they commented on NPC and HCC being these indications of high unmet need. Do you have like a confirmation from the FDA if that's not an issue anymore? Does that apply to any other indications? That's my first question. And then on second, so similarly, so I think you mentioned the mid-single-digit royalty to be paid until mid-2024. Just wanted to understand if I heard that correctly. So is that like a industry standard term that you got and there's no royalty that you need to pay after 2024. It's just like based on your launch timeline.
spk17: All right.
spk19: Let me take the last one first. Okay. What McDavid still stated was that we had a low single-digit royalty on Udenica up to 2024, not similarly. So similarly is a different financial arrangement and in which we have a royalty profit split with our licensing. Slightly different, if that's clear. With regards to your question of regulatory flexibility, I'll let Dr. LaValley address the issue of what comprises regulatory flexibility for the FDA, what the status of that is, and the consistency of their comments, particularly as it applies to FEC. Theresa?
spk10: Yeah, thanks, Ash. It's complex, but as you stated, they have enumerated several times MPC warrants regulatory flexibility, both in the Lancet Oncology article and the New England Journal of Medicine article by Pasteur. And the way that they look at it is several folds. One on the epidemiology of the disease, the approved available therapies, and the the applicability to U.S. medical practice. And so, MPC is one that really, if you will, gets a get out of jail card free on all of those boxes, particularly given the lack of approved treatments and the profound benefit that we've observed with toropalimab, both in combination with chemotherapy in the frontline setting, and monotherapy and second and later lines. The only thing, when you miss a PDUFA date without a letter, it usually just means the FDA can't complete what they need to do, and they've said repeatedly about not being able to travel to China last year due to the COVID-19 travel restrictions. I think what speaks volumes is even in the pin sheet a couple weeks ago, the FDA stated they had not reinstated doing inspections in China. They had told us repeatedly, given the breakthrough therapy designation and the meaningful clinical benefit, that we would be at the front of the list. The fact that ours was scheduled this month tells you we're at the front of the list. And I don't think they would be using their resources to go places where they had worries.
spk19: Externally and internally, the FDA has been very, very, very consistent that nasopharyngeal cancer warrants regulatory flexibility.
spk12: Great. Yeah, that's great to hear. Thank you so much.
spk11: Thank you for your question. Please stand by for our next question. Our next question comes from the line of Chris Schott of JPM. Your line is now open.
spk13: Great. Thanks so much for the questions. The first one was just on Udenica. I'm still trying to get my hands around the, I guess, flow through of the competitive dynamics for the traditional presentation and how insulated basically the auto-injector and on-body opportunities are from that. So obviously, companies in a much, much improved competitive position with these approvals. But I guess does the more competitive environment for the traditional product impact the opportunity for the new presentations, or do you view them as almost like kind of separate markets as the, you know, we think about kind of where pricing could shake out, et cetera, for these?
spk19: Thanks, Chris. I'll let Paul reply to your question with respect to PFS and auto-injector presentations, the competitive dynamics. Paul? Yeah, Chris, so when you think about the pixel grass market, it's bifurcated into two segments. There's the in-office segment where largely the patients come back to the office. That's predominantly been where the pre-filled syringe presentations have been competing. The auto-injector can be used in that in-office setting based on nurse and patient preference. It will be billed under the same Q code and reimbursed through the same ASP. The differentiated device enables us to compete there. And that's 57% of the market. The at-home segment where OnPro has largely had a dominant share is where the auto-injector will be able to offer a new alternative. And in that case, it will be on the differentiation and the type of patient experience that the patient can realize using a simple, easy-to-use auto-injector versus wearing the on-body device. So then when we add the on-body, you know, if approved later this year, now we'll have, you know, the total solution for customers. So whether they're in the office, whether they're at home, whatever, they're in a hospital or a clinic, they'll have three presentations to meet the unique needs of the providers and the patients. So we believe that will put us in a strong competitive position with the franchise and will enable us to grow share later this year and in the coming years.
spk13: And can I just follow up on the auto-injector versus on-body? I guess of those two opportunities, what do you see as the bigger opportunity? Because it seems like one's kind of a unique presentation to Coherus versus the other's obviously a large segment of the market that you'll be the only kind of competitor, I guess, versus Amgen.
spk19: Yeah, well, listen, we're going to launch at the end of this month, and we'll really see how customer receptivity you know, unfolds here, but we're very, very excited about based on what we've heard now. I think at the end of the day, Chris, what's going to happen is, you know, patients are going to choose what type of experience they want, and the nurses are going to be key constituents in helping to identify which, if it's the auto-injector or the on-body, that's going to best fit them. So we want to be the brand that offers all three so that we're positioned, you know, strongly. So depending upon, whatever the patient and the doctor describes. We want to be the total solution for them. One additional point I would make, Chris, is that with the non-body system, it has to be filled by the nurse, attached to the patient, activated. The patient walks around with it for 24 hours. There's about a three-hour period that the patient is set aside for the injection. And then there's a 45-minute injection period in which the patient is basically doing everything. There's a sense, we think, with the patients of a loss of control. Your therapy is controlling you, right? And people are living with cancer, right? So it's very attractive for a patient to be able to be administered with an autoinjector at the time of their choosing. So I think that's a very powerful patient empowerment that we have seen very strong receptivity in the market. Your question is to which segment it'll take the most from. I think it'll probably take a share from non-PFS, that is the outbody. It's a new segment, but also the PFS. It's genuinely a new, unserved segment.
spk13: Great. And then one last one for me. I know you're going to comment on pricing on the biosimilar humera side of the market until it launches, but just any observations or surprises or thoughts at all on the, I guess, the market formation so far with the first biosimilar that's launched? Or is that generally trending as you would have anticipated for these first three or four months in the market?
spk19: I think it's a fair question, but I believe that the jury is out at this point. I think we've only had one team launch, Amgevita. The results have been made public and so on. I think you just have to really see it. I don't think market formation has really started for the Humira Biosimilar market. I don't think it will until after the July date when ourselves and some other market interests come in. But I think that's the point where you start to see things happen.
spk18: Great. Thanks so much.
spk19: Thanks, Chris.
spk11: Thank you. Please stand by for our last question. Our last question comes from the line of Jason Gerberry from Bank of America. Your line is now open.
spk04: Hey guys, this is for Jason. So two questions for me. The first one is, so we've seen the first price increase for Edenica in tandem with the auto injector launch. Should we expect to see pricing sort of stay state from here or are there more price increases to come? as the new formats come to market. And then the second question is going back to your March 2022 investor day where you set 2026 targets, how are you thinking about the 10% market share goal that leads to a 1.2 billion target as you transition to the commercial launch phase for multiple products? Thank you.
spk19: All right. Thanks for your question. With respect to Genica pricing, Do I understand correctly that you stated there was a price increase with the additional ?
spk05: From the data.
spk19: Oh, you mean the increase that just occurred?
spk03: Yeah. Oh, okay. Paul, could you explain the increase?
spk19: Yeah, sure. Just to clarify, the Udanica list price for the auto-injector will be the same price as the prefilled syringe. which is about a 35% discount to New Lasta.
spk14: As it relates to the ASP, you are correct that in the second quarter, we did have a 4% increase in our ASP, which puts it amongst the highest of the established brands in the class, including the Innovator. So higher ASP leads to higher reimbursement. So that's why we've been
spk19: very disciplined with management of ASP in preparation for these new presentation launches. With respect to your summary question and market share, I would point out that this market is developing consistent with our expectations. The readouts that we got one to two years ago from payers about what was important to That is to say, you know, pricing scale, robustness of supply, the auto-injector, you know, patient comfort. That's playing out pretty much as planned. We deliberately spent about $45 million to move into very large-scale manufacturing. That's an approval that Dr. LaValle and her team, you know, got last quarter. So I think we're well prepared in terms of scale for competing at 10-plus percent as we go forward. And, you know, just how long it takes us to get to that sort of benchmark in the market, we'll have to see given the dynamics. But I can say that we are totally geared up in all aspects of that with the device, with the scale, and with our cost structure for eSIMRI.
spk03: And then if I could have one follow-up.
spk04: Do you have any line of sight into competitor biosimilar Lucentis launches over the next 12 to 18 months?
spk19: do you want to take that question uh yeah we're only aware of one one competitor um ran a visit map biosimilar and um from what we understand they're not looking for a launch until 2024 based on their public statements i think the key issue though to keep in mind um with with similarly and the census biosimilar market uh is the impact on the q code uh that we that we garnered deployed on april 1st I had the opportunity in the last couple of weeks to go out and visit a number of customers and discuss with them firsthand whatever barriers to adoption they may have had with Simerly and so on. And every single one of those customers, and I think I saw four different practices and four different states, and I talked to at least 30 to 50 physicians within those practices. And they were all very enthusiastic about the impact of the Q code and its impact on their cash flow, their ability to be certain about reimbursement. So I think that's why you're seeing the acceleration in the market share and the uptake and some of the things, even that we've seen some additional data came out today on April utilization. So I think that follows directly from the Q code for our previous remarks and direct feedback to me from the customers indicate that's the case also.
spk03: Great. Thanks so much. Okay, great.
spk11: Thank you. At this time, I would like to turn it back to Denny Lanphier, the CEO of Coheris Biosciences, for closing remarks.
spk19: Thank you, Operator. And thank you, everyone, for joining us today. As you heard, 2023 will be an exciting year of catalysts for Coheris, and we look forward to keeping you all updated on progress. We'll be at the Bank of America conference this week, and we'll be at UBS following that later this month. Talk to you all soon. Bye-bye.
spk11: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
spk23: Goodbye. Thank you. Music Playing you Thank you. you Thank you. you you Thank you. you Good day, and thank you for standing by.
spk11: 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.
spk16: 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 Lavallee, Chief Development Officer, Dr. Raj Daya, 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.
spk19: throughout 2023, transitioning from a single product company to one with six products or presentations, including our first immuno-oncology agent to our Palmetto. 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. Udenica Auto Injector is now ready for launch later this month. key driver for market share increase this year. We're ready to launch Yosemite R.U. Meyer about similar in July, having gained all the requisite approvals in built inventory. Manufacturing facility inspection to support Tor Palvo approval is now scheduled for later this month, May. 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 lease 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, will update you on the status of the toropalimab 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 toropalimab clinical data being presented at ASCO, as well as progress on our TIGIT toropalimab combination studies and our ILT4 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 for profitability in 2024. And with that, I'll turn the call over to Paul Reeder, our Chief Commercial Officer. Paul? Thank you, Denny, and good afternoon. I'll provide you with an update this afternoon on the expansion of our commercial product portfolio and the potential launches of four products in 2023. We expect to 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 and 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 loading 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 of his net 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 PEG-Prograstim 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 Nulasta OnPro, the on-body device, which still retains 43% of the market. Udenica Auto Injector provides convenience, administration flexibility, independence, and certain delivery in under 10 seconds. The Auto Injector thus provides providers and patients a highly desired alternative to OnPro and has the potential to drive market share increase over the coming quarter. Q1 2023 was our last quarter competing with one undifferentiated presentation. The New Denica net sales were $26 million, 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 is 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 egg-filled 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 and beyond. We expect our next oncology launch to be toward 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. Torpalamab 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 Toripalamab 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 Torpilumab'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 Torapalamab-targeted prescribers. Therefore, the launch of Torapalamab is being efficiently integrated into our existing oncology commercial infrastructure. We are ready to launch Torapalamab with broad approval and expect to successfully address the entire NPC patient population across all lines of therapy and irrespective of 1 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.
spk10: Thank you, Paul, and good afternoon, everyone. Let me begin with an update on our Torapalamab inspections and projected approval. As you know, due to COVID travel restrictions in China, The PDUFA date was missed for Toropalamus MPC application in December 2022. In January, the travel restrictions related to the COVID-19 pandemic were eliminated, and the inspection is now scheduled for the second half of this month, May. We wish to thank our partner, Junshi Biosciences, for their thorough and diligent preparation efforts to make the inspection a success. With respect to the sufficiency of the clinical data to support the MPC BLA, we note again that the FDA granted toropalimab breakthrough therapy designation as there are no approved treatments for MPC. The agency has consistently recognized this unmet need and stated MPC warrants regulatory flexibility. The review of the BLA is now substantially complete. The FDA conducted an extensive remote regulatory clinical assessment and did not identify any deficiencies. We continue to work with FDA to complete the clinical site inspection. Boropalimab is a next-generation PD-1 with a differentiated mechanism of action and has demonstrated an impressive survival benefit in multiple tumor types in combination with chemotherapy, irrespective of PD-L1 status. Based on these observations, we conducted mechanistic studies to better understand the basis of this differentiation. We have just completed preclinical studies for journal submission demonstrating that toropalimab has higher potency on T cell activation compared to PEMBRO-LizMAP. These data further support the evolving understanding in the field that PD-1 antibodies are not all the same or necessarily equivalent. And we plan to present our findings at a scientific meeting later this year. We believe that this makes toropalimab an ideal foundation for our IO pipeline. as well as a combination agent for non-coherence novel compounds. Thus, we are actively seeking additional development opportunities to expand Torapalimab use beyond MPC with combinations, as Dr. Diaz will describe. I'm also pleased to report that Coherence's regulatory and manufacturing teams continue to execute at a very high level. In the first quarter, we gained approval for the USMRI auto-injector, as well as the facility change for large-scale manufacturing. Additional approvals included the Udenica auto-injector presentation, the fourth approval of the quarter. Udenica's BLA supplement for the on-body injector presentation is progressing well, and we look forward to approval this year. Lastly, regarding tech transfer of the Tora Palamap manufacturing to the United States, I can report that we recently successfully completed a large-scale engineering run needed to onshore manufacturing supply. We plan to execute the process qualification lots this fall and have prioritized these efforts. I'll now turn it over to Dr. Rosh Dias, our Chief Medical Officer, for a clinical update on the Coherence IO pipeline. Rosh?
spk02: Thanks very much, Teresa, and good afternoon, everyone. Borupalamab continues to form the backbone of our immuno-oncology franchise. We believe that the publication of pivotal data across nasopharyngeal carcinoma, non-small cell lung cancer, and esophageal squamous cell carcinoma in top-tier journals Continuing positive datasets being released across multiple tumor types, together with its differentiated mechanism of action, will position toripalamab effectively as a partner of choice for combinations. Several toripalamab datasets across multiple tumor types and tumor settings have been accepted for presentation at the upcoming ASCO 2023 Annual Meeting. These include data in non-small cell lung cancer, final overall survival and biomarker analysis choice 01, first line non-small cell study, as well as event-free survival data from NeoTorch in the perioperative treatment of stage 2-3 non-small cell lung cancer being presented. In metastatic or recurrent triple negative breast cancer, TFS data will be presented from the Torchlight study. We will also be presenting the final overall survival analysis of Jupiter 02, registration of our DLA submission in NPC. With respect to our internal pipeline, we remain excited about our Phase 1-2A Torre Palomar Digit Study, which is currently active in the U.S. with anticipated results next year. In addition, our ILT4 asset remains on track as we proceed towards IND submission towards the end of this year. I'll now turn it over to David Stilwell, our Chief Financial Officer.
spk19: David. Thank you, Raj. Today, we reiterate our prior financial guidance for 2023. We project revenue growth from accelerating similarly sales and with the launches this year of Toro Palomar, Yosemite, and the Eugenica auto ejector and on-body ejector. For the full year, we expect to book at least $275 million in net sales with at least $100 million of similarly net product revenue. In the first quarter, we took measures to reduce operating expenses. with a reduction in force and the re-scoping of the Toro-Palombab Joint Development Plan. Along with other measures we implemented last year, we have significantly reduced expected 2023 R&D and SG&A expenses to a range of $315 to $335 million. This range excludes non-recurring milestones and upfront payments, and it includes approximately $50 million in non-cash stock compensation expense. Near the start of the year, we requested and obtained a waiver for the revenue covenant of our term loan through the first two quarters of 2023, recognizing that the Simmerly Q code would not be available until April 1st, and that the Udenica auto injector would not launch until May. For my review today of first quarter financial results, I'll touch on just a few highlights, as the details are in the press release 8K and 10Q we filed this afternoon. That loss for the first quarter of 2023 was $75.7 million, or $0.96 per share, on a diluted basis, compared to that loss of $96.1 million, or $1.24 per share, on a diluted basis for the same period in 2022. We incurred approximately $4.9 million to non-recurring charges in connection with restructuring in March 2023. Net revenue for the first quarter of 2023 was $32.4 million and included $26.2 million of net sales of Eugenica and $6.2 million of net sales of Simerly. Net sales of Eugenica were reduced by a $1.7 million charge for a contingent liability related to resolving a dispute. Net revenue declined compared to the same quarter one year ago, primarily due to a decrease in the number of units of Eugenica sold, as well as a lower net realized price. Cost of goods sold was $16.9 million during the first quarter of 2023. Recall that Udenica COGS includes a mid-single-digit royalty on net sales payable through the first half of 2024. And similarly, COGS includes a low to mid-50% royalty on gross profits. COGS in the first quarter of 2023 included two non-recurring items, a $3 million contract modification fee with one of our manufacturers, and a $2.7 million write-off of inventory that was damaged during processing at one of our manufacturers. Research and development expense for the first quarter of 2023 was $34.2 million, significantly lower than the year-ago quarter when we reported $47.9 million in R&D expenses after excluding a $35 million license fee paid to Junshi Biosciences for the Tidget Antibody, PHS-006. R&D expense for the first quarter of 2023 included $3.6 million in costs associated with the recent reduction in force. Selling, general, and administrative expense for the first quarter of 2023 was $49.2 million, roughly equivalent to the $48.8 million in SG&A expenses for the same period in 2022. SG&A expenses are primarily driven by commercialization activities to support current UDINACA and similarly sales and costs incurred. preparation for multiple anticipated new product launches in 2023. scna expense for the first quarter 2023 included 1.3 million dollars in costs associated with the recent production reports cash cash equivalents and investments in marketable securities were 128.1 billion dollars as of march 31 2023 compared to 191.7 million at year end cash burn was elevated and was further impacted by introductory payment terms for the similarly launch, which delayed cash receipts for product sales. We expect the timing of cash receipts to normalize in the second half of the year. In 2023, we are focused on ensuring the success of our new product launches and generation of the anticipated revenue growth. We will continue to maintain tight control over our operating expenses as we aim toward a potential return to profitability in 2024. And I'll turn the call back to Denny. Thank you, McDavid. And thank you all for joining us on our Q1 2023 hearings call. Now that the Assembly Q Code is active and we're beginning to see the impact of the second quarter, we look forward to accelerating Assembly sales throughout the year. On the Udenica front, a launch later this month of a new innovative product presentation, Udenica Auto Injector, will provide patients and physicians with a unique option to differentiate Udenica driving share gains. Development of our immuno-oncology franchise is progressing well. Thor Palmet, our foundational asset and anchor, continues in study after study to demonstrate strong efficacy and safety across multiple tumor types. As the next generation of PD-1, physicians cohere as ideally as the partner of choice for those developing combination treatments with their own proprietary agents and number of cancers. And the first indication, these will trigger cancer, will occur in Q3. Lastly, through thoughtful and disciplined cost and expense control, we've significantly reduced our 2023 expenses by about $100 million to about $325 million. And we'll continue to look for more efficiencies and savings as we progress our efforts to drive revenue increases while controlling expenditures to achieve profitability in 2024. Operator, we're ready for the questions.
spk11: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Robin Karnowskis of Truist Security. Your line is now open.
spk20: Hi, thanks for the question, and congrats on getting the manufacturing inspection. That's great news. So, I have two sets of questions. I'll be really brief. So, on Tori, it seems like there was a press release by your partner, Jinshi, around small cell lung cancer, which has typically been very difficult to treat with sequin inhibitors, given it's a cold tumor. I had a few questions on that. What are your thoughts on, like, why Tori worked, you know, given the differentiated epitope and MOA? Do you think it's driving the response? And then how does this change your overall strategy with Tori? You talked about partnering going forward. It seems like this would be a pretty big deal if it works in SDLC. So talk a little bit about how much collaboration interest there is and how aware people are of this new data set. And then I have one on Adenica.
spk19: Thank you, Robin, for that question. Yeah, we were very pleased to see the small cell data announcement this morning. I'll let Dr. LaValley address the issues of mechanism of action to our panel map. I'll subsequently have Dr. Dias address your secondary question, which is of the potential combinations in these other indications, including small cell with other agents. Teresa?
spk10: Yeah, thanks, Robyn. We are excited to see yet another positive phase three clinical study with toropalimab, and particularly in a difficult tumor that has not shown benefit with some other PD-1 antibodies. These positive survival results are consistent with our preclinical studies, showing that toropalimab has more potent activation of T cells compared to pembrolizumab. And I think that really sets it up well to really think about combinations I'll let Raj expand further.
spk02: Yeah, thanks, Teresa, and thanks, Robin, for the question. So I think you're quite right. First of all, looking at small cell lung cancer, I think there's a real unmet need here. You know, it represents about 15% to 20% of all lung cancers. Extensive stage continues to have a poor prognosis, and the current therapies that are out there continue to have marginal benefits. So with that in mind, I think we are very excited about the benefit co-primary endpoints um and and i think if we look at the overall uh space you know we i think this data set continues to add to the breadth of the data available across multiple different tumor types as we mentioned for lung alone we have choice zero one now in also lung cancer we have near torch in perry uh operative analysis
spk19: across small cells, but also other forms of lung cancer, and then also additional genotypes with our additional data sets. Robin, just an additional remark with respect to this. When we selected to our PALMAP from a broad array of available PD-1 agents some three years ago, we consistently saw it outperforming other agents such as PEMBRO and various in vitro and cell-based studies, although we didn't quite understand all the implications of it now. I think it's very rewarding, first of all, to see the mechanism of action story read out, as Dr. LaValley indicated, but it's also now very rewarding to see this read out in several cancers where toropalumab continues, as we said, to demonstrate a really very potent track record here as far as With that, I think you had a follow-up question on Udenica, perhaps, you said?
spk20: Yeah, and one small one. I mean, given that it's an Asian-based study, I mean, I'm sure that doctors will be super excited to see the detailed data. Do you have any sense of whether it would be in a publication or presentation on that? And the Udenica question is really about the autoinjector and the fact that you're going to have the autoinjector, the on-body device, and the pre-filled syringe. I'm just trying to get a better sense of, you know, how do payers use the autoinjector? What are you getting as an early read on the interest for this auto injector and that's being differentiated now? And then, you know, it's really giving you a three. I mean, just help us tease out, like, how do we think about these three products taking share in different markets? Thanks.
spk19: Thanks. That's a great question. So I'll let Paul frame that out for you. First of all, what the differentiated value proposition is for the auto injector. compared to the various dosage forms which are on the market today. And then secondarily, some of the progress that we're making with the payers on that front. Paul? Hey, Robin. Thanks for your question. Yeah, we're excited to launch the auto-injector later this month, and we expect it will cause market share stabilization this quarter and then really increase growth in the second half of the year. I think with the auto-injector, enables us to do in the market is to now compete in both the in-clinic segment against the competitive pre-filled syringe competitors. But it also enables us to now compete more effectively in the at-home segment, where OnPro still has 43% share. It'll do that because of the patient benefits. There's really three important ones. First is the auto-injector will give patients more independence over their injection experience. So you know, essentially they'll be able to inject when and where they desire. The second is ease of use. So this can be delivered in less than 10 seconds, you know, as opposed to wearing the body for an entire day and navigating through a 45-minute injection time. And then the third is flexibility. So the patients who live far away or can't come back to the office can simply do this at home. So we believe it's going to be able to penetrate all segments of the market. And our payer coverage is actually – coming online very nicely. Where we have coverage today, we've got confirmed coverage for auto-injector in over 90% of those plans. So, you know, the team is now working with customers, getting it on formularies, and we'll be ready to launch at the end of the month.
spk24: Thank you.
spk23: Thank you. Please stand by for our next question. Thank you.
spk11: Our next question comes from the line of Celine Syed with Mizuho. Your line is now open.
spk15: Great. Good afternoon, guys. Thanks for the questions. I guess a couple for me, if I can. One on perhaps toropalumab and then another on Udenica. Tori, Paul, you mentioned that you believe on NPC you can reach a peak sales number around $200 million. I know you haven't disclosed your pricing framework here, but by my math, that would suggest something about like an $85,000 net price per patient. Just curious if you could point us in the right direction if that's ballpark-ish correct based on your $200 million peak if you were to actually be able to get into all patients, all lines.
spk19: Let me first take that one, Celine. As a matter of policy, we don't comment on pricing for products which are not approved. So after we have the product approved, we'll be happy to revert there on projected pricing. But as Paul said in his remarks, we will have full first line and other lines of care, and we do have about, I think, 2,500-plus patients per year. But we're happy to chat a little bit about pricing for approval.
spk15: Okay, great. Maybe if you could comment a little bit then on, I guess I'll just ask my second question. Maybe you can comment a little bit on the warehousing. It sounded like you guys are trying to build a registry of patients for MPC with your website to just maybe give us an idea how many patients are currently in the registry and How many do you plan to warehouse prior to approval? Thank you.
spk19: Thanks, Salim. Being a rare cancer and the only company and brand that's going to be entering the space, launching npcfacts.com is really the work of our market intelligence and our customer knowledge where we found that doctors and patients really don't have a qualified, centralized place to go to get information about npc and so that was that was the real driving force there now adding a community where we can invite patients and their caregivers to join enables us to now educate them and we'll understand if they're local localized or if they're metastatic and we can then communicate with them appropriately so we're going to be turning up the media around that to really start cranking up the noise level there we'll be having our field team through appropriate disease state efforts, share the website with the accounts directly so they can actually hand this out to their patients as they come in. So we will be reporting out on actual numbers on that. But so far, we like what we're seeing there. I would add the additional comment, Celine, that if approved, we will be the only agent approved by FDA for this terrible disease. We feel that we have a responsibility reach out to these patients and find these patients and educate them. These patients are otherwise progressing without toropalimab. And as Rasha indicated, the benefits of toropalimab treatment are really substantial. And so we feel a tremendous responsibility to reach out to these patients and let them know there's hope.
spk26: Okay. Thank you so much, guys. Thank you.
spk11: Thank you. Please stand by for our next question. Our next question comes from the line of Mike Nadelkovich from TD Cohen. Your line is now open.
spk08: Thank you for the question. I have two on toropalimab. The first, and you've hinted at this already a little bit, but I'm curious if you have a sense of whether there's any off-label use of other checkpoint inhibitors in NPC that you may have to displace once toropalimab is approved. I realize there's no approved checkpoint inhibitor. And then secondly, when we think beyond MPC, it would seem given a potentially differentiated mechanism of action and a potentially differentiated clinical profile that the world is your oyster. How will you go about selecting the next set of indications to advance into pivotal trial? Thank you.
spk19: Thank you, Mike. Thank you very much for the question. I'll let Dr. Diaz address your first question, and then Dr. LaValle can address the mechanism of action questions subsequently.
spk02: So just thanks for the question. So I'll just reiterate a couple of points that we mentioned earlier. So first of all, there are no approved therapies for nasopharyngeal carcinoma in the U.S. So what that means, so the current standard of treatment is typically chemotherapy, gemcitabine, cisplatin typically. Even though there is not an indication for other immunotherapies, there is... The NCCN does include a couple of other therapies as potential treatments, but that importantly actually is on the basis of our data set because there are no positive data sets in NCCN for other immunotherapies nor an indication.
spk19: Teresa, can you comment on how the Mechanism of Action brings forward
spk10: Yeah, I think seeing the increase in potency on T-cells, which is really the true mechanism to be able to activate anti-tumor immunity, and seeing across three large Phase III studies, the NPC Jupiter II, the Choice I non-small cell lung cancer study, and the Jupiter VI, the ESCC study that was published in Cancer Cells, that Torapalimab in frontline studies in combination with chemotherapy works irrespective of PD-L1 status and really lends itself to combinations to really target mechanisms of resistance in those tumor types. So, our pipeline includes IL-T4, which is looking at macrophages, which is a known resistance factor diseases such as small cell lung cancer. So, we'll be looking at the disease positioning based on the mechanisms, and as we've stated a few times, we're really engaged with a number of other companies that have compounds with Phase II data to help us position TORI in disease based on a strong clinical hypothesis. So I think later this year you'll be seeing some nice development plans there.
spk24: Thanks for your question, Mike. Thank you.
spk23: Please stand by for our next question.
spk11: Our next question comes from the line of Douglas Dow of H.C. Wainwright. Your line is now open.
spk06: Hi, good afternoon. Thanks for taking the questions. Just a question similarly from me. I'm just curious in terms of the accounts that have adopted it. Are they switching all their renabizumab volume to Simmerly, or are they typically still splitting it between Simmerly and Lucentis?
spk19: Thanks for your question, Doug. Paul, do you want to take that one? Sure. Thanks, Doug. Yeah, as of today, our source of business from a patient standpoint, is coming from a combination of new patient starts as well as conversions from other anti-IgF therapies, including Lucentis. So we expected this, and that's what we're seeing in the market. Did you have a follow-on question, Doug?
spk06: Yeah. Also, just in terms of Usembri's launch, I'm just curious, do you have a sense Or have you been able to start to make some progress or finalize agreements with payers? Because that seems to be a real focus of your strategy, just given the fact that you're not going to really be promoting into those indications.
spk19: I think it's fair to say that the focus of any Humira-similar market participant competitor will be payers insofar as payers and PBMs are the primary determiners of formulary selection for this product. That being said, we've also previously indicated that we won't be making any comments regarding pricing fiscal payers' conversations until after the launch in July. So that's a fair question for our August call, which we'll talk about Q2. But no further comment on that particular point at this point.
spk01: Okay, great. Thank you.
spk11: Thank you. Please stand by for our next question. Our next question comes from the line of Balaji Prasad of Barclays. Your line is now open.
spk23: Our next question.
spk11: Balaji, are you there? Your line is open.
spk07: Let's move on to the next question. Operator, please come back.
spk11: Yes, I will. Thank you. Please hold for the next question. Our next question comes from the line of Ash Verma of UBS. Your line is now open.
spk12: Hi there. Congrats on the progress. Thanks for taking my questions. I had one on TORI and one on USIMRI. So, on Tau De Palma, maybe I missed this, like from FDA's point of view, is the key determination in the NPC approval just the site inspection or Does FDA still need to make up its mind whether it will or will not adopt regulatory flexibility as it looks for China study PD-1? And I'm just curious, I know that there has been a paper that was published in Lancet a couple of years ago where they commented on NPC and HCC being these indications of high unmet need. Do you have like a confirmation from the FDA if that's not an issue anymore? Does that apply to any other indications? That's my first question. And then on second, so similarly, so I think you mentioned the mid-single-digit royalty to be paid until mid-2024. Just wanted to understand if I heard that correctly. So is that like a uh industry standard term that you got and there's no royalty that you need to pay after 2024 um it's just like based on your launch timeline all right let me let me take the last one first okay um but mcdavid still stated was that we had a low single-digit royalty on eudenica up to 2024 not similarly um so uh similarly uh is a different financial arrangement uh and
spk19: in which we have a royalty profit split with our licensing. Slightly different, if that's clear. With regards to your question of regulatory flexibility, I'll let Dr. LaValley address the issue of what comprises regulatory flexibility for the FDA, what the status of that is, and the consistency of their comments, particularly as it applies to FEC. Theresa?
spk10: Yeah, thanks, Ash. It's complex, but as you stated, they have enumerated several times MPC warrants regulatory flexibility, both in the Lancet Oncology article and the New England Journal of Medicine article by Pasteur. And the way that they look at it is several folds, one on the epidemiology of the disease, the approved available therapies, the applicability to U.S. medical practice. And so, MPC is one that really, if you will, gets a get-out-of-jail-cart-free on all of those boxes, particularly given the lack of approved treatments and the profound benefit that we've observed with toropalimab, both in combination with chemotherapy in the frontline setting, and monotherapy and second and later lines. The only thing, when you miss a PDUFA date without a letter, it usually just means the FDA can't complete what they need to do, and they've said repeatedly about not being able to travel to China last year due to the COVID-19 travel restrictions. I think what speaks volumes is even in the pink sheet a couple of weeks ago, the FDA stated they had not reinstated doing inspections in China. They had told us repeatedly, given the breakthrough therapy designation and the meaningful clinical benefit, that we would be at the front of the list. The fact that ours was scheduled this month tells you we're at the front of the list. And I don't think they would be using their resources to go places where they had worries.
spk19: Externally and internally, the FDA has been very, very, very consistent that nasopharyngeal cancer warrants regulatory flexibility.
spk12: Great. Yeah, that's great to hear. Thank you so much.
spk11: Thank you for your question. Please stand by for our next question. Our next question comes from the line of Chris Schott of JPM. Your line is now open.
spk13: Great. Thanks so much for the questions. The first one was just on Udenica. I'm still trying to get my hands around the, I guess, flow through of the competitive dynamics for the traditional presentation and how insulated basically the auto-injector and on-body opportunities are from that. So obviously, companies in a much, much improved competitive position with these approvals. But I guess does the more competitive environment for the traditional product impact the opportunity for the new presentations, or do you view them as almost like kind of separate markets as the, you know, we think about kind of where pricing can shake out, et cetera, for these?
spk19: Thanks, Chris. I'll let Paul reply to your question with respect to PFS and auto-injector presentations, the competitive dynamics. Paul? Yeah, Chris, so when you think about the pixel grass to market, it's bifurcated into two segments. There's the in-office segment where largely the patients come back to the office, and that's predominantly been where the pre-filled syringe presentations have been competing. The auto-injector can be used in that in-office setting based on nurse and patient preference. It will be billed under the same Q code and reimbursed through the same ASP. The differentiated device enables us to compete there. And that's 57% of the market. The at-home segment where OnPro has largely had a dominant share is where the auto-injector will be able to offer a new alternative. And in that case, it will be on the differentiation and the type of patient experience that the patient can realize using a simple, easy-to-use auto-injector versus wearing the on-body device. So then when we add the on-body, you know, if approved later this year, now we'll have, you know, the total solution for customers. So whether they're in the office, whether they're at home, whatever, they're a hospital or a clinic, they'll have three presentations to meet the unique needs of the providers and the patients. So we believe that will put us in a strong competitive position with the franchise and will enable us to grow share later this year and in the coming years.
spk13: And can I just follow up on the auto-injector versus on-body? I guess of those two opportunities, what do you see as the bigger opportunity? Because it seems like one's kind of a unique presentation to Coheris versus the other's obviously a large segment of the market that you'll be the only kind of competitor, I guess, versus Amgen.
spk19: Yeah, well, listen, we're going to launch at the end of this month, and we'll really see how customer receptivity you know, unfolds here, but we're very, very excited about based on what we've heard now. I think at the end of the day, Chris, what's going to happen is, you know, patients are going to choose what type of experience they want, and the nurses are going to be key constituents in helping to identify which, if it's the auto-injector or the on-body, that's going to best fit them. So we want to be the brand that offers all three so that we're positioned, you know, strongly. So depending upon, whatever the patient and the doctor prescribes. We want to be the total solution for them. One additional point I would make, Chris, is that with the non-body system, it has to be filled by the nurse, attached to the patient, activated. The patient walks around with it for 24 hours. There's about a three-hour period that the patient is set aside for the injection. And then there's a 45-minute injection period in which the patient is basically doing anything. There's a sense, we think, with the patients of a loss of control. Your therapy is controlling you, right? And people are living with cancer, right? So it's very attractive for a patient to be able to be administered with an autoinjector at the time of their choosing. So I think that's a very powerful patient empowerment that we have seen very strong receptivity in the market. Your question is to which segment it'll take the most from. I think it'll probably take a share from non-PFS, that is the outbody.
spk17: It's a new segment, but also the PFS. It's genuinely a new, unserved segment.
spk13: Great. And then one last one for me. I know you're going to comment on pricing on the biosimilar Humira side of the market until it launches, but just any observations or surprises or thoughts at all on the, I guess, the market formation so far with the first biosimilar that's launched? Or is that generally trending as you would have anticipated for these first three or four months in the market?
spk19: I think it's a fair question, but I believe that the jury is out at this point. I think we've only had one team launch, Amgevita. The results have been made public and so on. I think you just have to really see it. I don't think market formation has really started for the Humira-Bas similar market. I don't think it will until after the July date when ourselves and some other market interests come in. But I think that's the point where you start to see things happen.
spk18: Great. Thanks so much.
spk19: Thanks, Chris.
spk11: Thank you. Please stand by for our last question. Our last question comes from the line of Jason Gerberry from Bank of America. Your line is now open.
spk04: Hey guys, this is for Jason. So two questions for me. The first one is, so we've seen the first price increase for Edenica in tandem with the auto injector launch. Should we expect to see pricing sort of stay state from here or are there more price increases to come? as the new formats come to market. And then the second question is going back to your March 2022 investor day where you set 2026 targets, how are you thinking about the 10% market share goal that leads to a 1.2 billion target as you transition to the commercial launch phase for multiple products? Thank you.
spk19: All right, thanks for your question. With respect to Genica pricing,
spk05: Do I understand correctly that you stated there was a price increase with the additional prices? From the CMS data?
spk19: Oh, you mean the AST increase that just occurred?
spk03: Yeah. Oh, okay. Paul, could you explain the AST increase? Yeah, sure. Just to clarify, the Danica list price for the auto-injector will be the same price as the pre-filled syringe. which is about a 35% discount to New Lasta. As it relates to the ASP, you are correct that in the second quarter, we did have a 4% increase in our ASP, which puts it amongst the highest of the established brands in the class, including the Innovator. So higher ASP leads to higher reimbursement.
spk19: So that's why we've been very disciplined with management of ASP in preparation for these new presentation launches. With respect to your summary question and market share, I would point out that this market is developing consistent with our expectations. The readouts that we got one to two years ago from payers about what was important to That is to say, you know, pricing scale, robustness of supply, the auto-injector, you know, patient comfort. That's playing out pretty much as planned. We deliberately spent about $45 million to move into very large-scale manufacturing. That's an approval that Dr. Valiant and her team, you know, got last quarter. So I think we're well-prepared in terms of scale for competing at 10-plus percent as we go forward. And, you know, just how long it takes us to get to that sort of benchmark in the market, we'll have to see given the dynamics. But I can say that we are totally geared up in all aspects of that with the device, with the scale, and with our cost structure for December.
spk03: And then if I could have one follow-up.
spk04: Do you have any line of sight into competitor biosimilar Lucentis launches over the next 12 to 18 months?
spk17: Paul, do you want to take that question?
spk19: Yeah, we're only aware of one competitor, Ranabizumab, biosimilar, and from what we understand, they're not looking for a launch until 2024 based on their public statements. I think the key issue, though, to keep in mind with Simerly and the biosimilar market is the impact on the Q code that we currently deployed on April 1st. I had the opportunity in the last couple of weeks to go out and visit a number of customers and discuss with them firsthand whatever barriers to adoption they may have had with Simerly and so on. And every single one of those customers, and I think I saw four different practices and four different states, and I talked to at least 30 to 50 physicians within those practices. And they were all very enthusiastic about the impact of the Q code and its impact on their cash flow, their ability to be certain about reimbursement. So I think that's why you're seeing the acceleration in the market share and the uptake and some of the things, even that we've seen some additional data came out today on April utilization. So I think that follows directly from the Q code for our previous remarks and direct feedback to me from the customers. indicate that's the case also.
spk03: Great. Thanks so much. Okay, great. Thank you.
spk11: At this time, I would like to turn it back to Denny Lanphier, the CEO of Coheris Biosciences, for closing remarks.
spk19: Thank you, Operator. And thank you, everyone, for joining us today. As you heard, 2023 will be an exciting year of catalysts for Coheris, and we look forward to keeping you all updated and in progress. We'll be at the Bank of America conference this week, and we'll be at UBS following that later this month. Talk to you all soon. Bye-bye.
spk11: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
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