Coherus Oncology, Inc.

Good day, and thank you for standing by. Welcome to the Cohere's Biosciences third quarter 2023 earnings conference call. At this time, all participants are in 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 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 speaker today, Jamie Taylor, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us. I am Jamie Taylor, Coherence's new Head of Investor Relations. I'm happy to be with you today. We issued a press release earlier today announcing our financial results for the third quarter of 2023. This release can be found on the Coherence Biosciences website. and is also attached to the Form 8K that we filed with the FCC today. Today's call includes forward-looking statements regarding Cochiris' current expectations about future events. These statements include, but are not limited to, our ability to gain approval for multiple new products and launch them, projections of expenses and revenue, projections of future market share or demand for a new product, our expectations for market opportunity, and the timing of our return to being cash flow positive. All of these forward-looking statements involve substantial risks and uncertainties that are beyond our control and could cause actual results, performance, or achievements to differ from those implied by the forward-looking statements. These statements are not guarantees of future performance and are subject to substantial risks and uncertainties that are discussed in our press release that we issued today, as well as the documents that we file 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. Third quarter 2023 results are not necessarily indicative of results for future periods. With me on today's call are Jenny Lampier, CEO of Coheris, Dr. Theresa Lavallee, Chief Development Officer, Dr. Rosh Daya, Chief Medical Officer, Paul Reeder, Chief Commercial Officer, and McDavid Stilwell, Chief Financial Officer. I'll now turn the call over to Demi.

Thank you, Jamie, and welcome to the team. Thank you all for joining us today on our Q3 2023 earnings call. We continue to make good progress on our overarching strategy. Lactorsine, our PD-1 inhibitor, is now approved. The surface oncology acquisition is now completed, providing us a competitively positioned development program focused on the tumor microenvironment. Similarly, our Lucentis biosimilar, after garnering its Q-code, continues to gain share in sales, and our Udenica franchise has returned to growth. However, even as we progress on the overarching strategy, we are cognizant that our revenues and our expenses must come into alignment. Progress has been made here also. This quarter saw a 27% increase in revenues over last quarter, to 74.6 million, representing a 64% quarterly increase year over year, while year-to-date SG&A plus expenses was reduced by some 30% from the same period last year. So while we plan to expand Lactorsi utilization beyond NPC by developing it in combination with other synergistic therapeutics, including our own, This internal development will be constrained until mid-2024 as we continue to reduce expenses and seek profitability. While we plan to enter into partnerships with other companies interested in combining their novel assets with Lactorsi or our TME assets, we do not foresee sharing clinical development costs, which would increase our R&D expenses. So even as revenues increase from the growing number of commercial products, across the board, we'll see opportunities to constrain and reduce expenses as we pursue profitability. With that, I'll hand the call over to Paul Reeder, our Chief Commercial Officer. Paul. Thanks, Denny, and good afternoon, everyone. As a commercial organization, we remain in launch mode with Simmerly, Udenica Auto Injector, and USIMRI, and are prepared to launch two new products in the first quarter next year, Octorzi, which was approved last month, and the Udenica on-body injector following FDA potential approval. This will bring our total number of marketed assets from one to six over an 18-month time period and will drive top-line revenue growth over the coming years. For the third quarter, combined net product revenue was $74.4 million, an increase of 27% over Q2. I'll now speak to each brand, and we'll start with similarly, or biosimilar to Lucentis. Our strategic approach to the retina market is first, to maximize the conversion of existing Lucentis business, and second, to grow share through new patient starts and the conversion from other anti-VEGF products. Execution against this plan remains strong, as we report net sales in Q3 of $40 million, an increase of 50% quarter-over-quarter, driven by strong demand. Similarly, market share within the Ranavizumab class was 28.6%, an increase of 11.6 market share points quarter-over-quarter. We also announced it similarly passed a major milestone, where in the first year of launch, we sold over 100,000 doses to retinal specialists, which reinforces the retinal community's receptivity of biosimilars a desire for a safe and effective similar option to lucentis summary total 2023 net sales for similarly through q3 are 73 million so we refer guidance that similarly net sales will exceed 100 million for 2023. now on to you danica stated previously our strategy has been to fortify our base pre-filled syringe business while making price and share trade-offs in order to maintain a competitive ASP in advance of the launches of both the auto-injector and on-body presentations, respectively. We guided that Udenica demanded market share will return to growth this year. Based on our strong execution of this plan, I'm pleased to now report two consecutive quarters of Udenica revenue and market share growth. In Q3, net sales were $33 million. an increase of 4% quarter over quarter, driven by increased demand, partially offset by lower net selling price. Market share grew to 16.5%, an increase of 4.3 market share points quarter over quarter. Both demand and market share gains were driven primarily from our core pre-filled syringe presentation and occurred across all segments of the business. Also in the quarter, we launched the innovative Udenica auto-injector and are working with accounts on how to best position and operationalize the auto injector within their respective clinical process throws. Since commercial launch, we've had over 300 accounts for the Udenica auto injector and are seeing a consistent flow of new account ordering every week. We expect increases in Udenica auto injector demand as the launch progresses. Another positive development that occurred in the quarter is payer coverage. which significantly increased as both Udenica pre-filled syringe and auto-injector presentations were newly added onto a number of commercial and Medicare Advantage plans. Effective start dates of this expanded coverage varied and ranged from September 2023 to January 2024. But regardless of the start date, these contracts extend through calendar year 2024, significantly expanding Udenica's access going into next year. Regarding our novel, Udenica On-Body Device, we are awaiting FDA approval and will launch directly thereafter. Udenica is now a franchise, and following the anticipated approval, Udenica On-Body Injector will be the only Pegfield Graston brand the three presentations offers, becoming the total solution for oncology providers. This will enable us to compete directly with the Blast On program which retains 42% of the market. Turning now to USMRI, or biosimilar to Humira. The high cost of adalimumab treatment remains a problem for the healthcare system and for many patients. Our patient-centric strategy is to provide USMRI at a single, transparent, low price. We launched USMRI on July 3rd, and we're the innovators of the low list price strategy. launching at a list price of $995 per carton for two auto-injectors, representing a discount of more than 85% to Humira. As part of our low-list price strategy, we established partnerships with Mark Cuban Cost Plus Drugs Company and through its Team Cuban card at independent retailers nationwide. We also signed an agreement with Superior Biologics, a specialty pharmacy who services more than 1.5 million patients across the country. We will continue to pursue partnerships with organizations who look for low-list price alternatives as we build our Yosemite business from the bottom up. In Q3, we sold 2,300 cartons of Yosemite, generating net sales of $1.4 million. While the market formation period for biosimilar adalimumab is still in its early stages, Humira retains formulary position for nearly all PBM and health plan formularies in 2023, and likely in 2024. Therefore, we expect slower growth for Humira biosimilars through 2024, and then greater acceleration of biosimilar adalimab adoption with the implementation of the Inflation Reduction Act in 2025. IRA will shift financial risk during the catastrophic phase of the benefit from the government to the Part D plans, which could affect how plans consider their formulary selections. Finally, let me reiterate our excitement about the approval and coming launch of Lactorsy, the first and only FDA-approved treatment for patients diagnosed with relapsed or metastatic MPC. We've commenced launch activities and are working to ensure that patients and providers have access to Loctorsi as soon as product is in the channel, which we estimate to be in the early Q1 timeframe. Let me share with you now some more details about the MPC market opportunity for Loctorsi. First, the MPC market. We estimate that approximately 2,000 relapsed metastatic MPC patients in the U.S. are diagnosed each year. And the split is even between those in first line versus second line plus. With Lactorsi's broad indication, we can access all of these patients and promote across all lines of therapy, including first line. Second, the prescriber base. NPC is fairly concentrated, approximately 2,200 oncologists, accounting for 80% of NPC treatment. 60% of the business is in the hospital setting, 40% is in the clinic. We know these doctors, and our existing oncology team currently calls on all of the accounts for these doctors' practice. So the call points are highly efficient and synergistic with Udenica. Third, the current treatment landscape for NPC. Claims data suggest that chemo-only regimens are prescribed 60% of the time, which provides an immediate opportunity for lactorsis. will target these treating physicians and position Lactorsi to be added to the existing chemo regimen, irrespective of the line of treatment. For the 40% where a combination of chemo and PD-1 is used, we'll position Lactorsi as the preferred PD-1 and the new standard of care regimen based on our approved indication and the totality of the evidence, which includes overall survival data. Finally, patient engagement. Through npcfacts.com, we've enrolled a community of over 2,100 NPC patients or caregivers and will appropriately communicate branded information about Lactorsi so they are informed and educated when speaking with their doctors about their individual treatment plans. Patients will also be supported through Lactorsi Solutions, our patient services hub, that can be accessed via Lactorsi.com. These are planned to go live next week. We look forward to updating you on our progress as the Lactorsi launch progresses. With that, I'll now hand it over to Teresa.