Shares of Coherus Biosciences (CHRS 5.70%) were down by about 30% as of 3:25 p.m. ET Tuesday after the company announced disappointing third-quarter results and lowered its full-year guidance.
Quarterly revenue grew by 27% year over year to $74.6 million, translating to an adjusted (non-GAAP) net loss of $26.9 million, or $0.27 per share. Analysts, on average, were expecting a narrower net loss of $0.20 per share on revenue of $82 million.
A quarter of (delayed) progress for Coherus
Coherus' top line included $33 million of net sales of its pegfilgrastim biosimilar, Udenyca, up modestly from $31.7 million last quarter and representing a market-share gain of 4.3 percentage points. It generated $40 million of net sales of Cimerli, which treats retinal conditions -- up 50% from the prior quarter -- and $1.4 million from arthritis treatment Yusimry.
Coherus highlighted its recently resubmitted biologic license application for Udenyca OnBody, its on-body injector presentation of Udenyca, after the completion and satisfactory resolution of a Food and Drug Administration (FDA) review of inspection findings at a third-party filler. That was the only issue identified by the FDA in its response letter to Coherus in mid-September, so Coherus now expects potential approval for Udenyca OnBody either later this year or by early 2024.
Coherus lauded the long-awaited FDA approval late last month of Loqtorzi, a treatment for recurrent or metastatic nasopharyngeal carcinoma that it developed with partner Shanghai Junshi Biosciences. Coherus reiterated plans to launch Loqtorzi in the U.S. in Q1 2024.
Finally, Coherus closed on its acquisition of Surface Oncology in early September, enhancing its next-gen immuno-oncology pipeline.
What's next for Coherus investors?
"Looking forward, we expect further revenue growth driven by Cimerli, the Udenyca franchise, Yusimry, and Loqtorzi," said Chairman and CEO Denny Lanfear, "while holding the line on expenses and focusing on returning to profitability."
In the meantime, however, Coherus also lowered its outlook for 2023 net product revenue to a range of $250 million to $260 million (down from at least $275 million previously). The company simultaneously lowered its guidance for combined research and development, and sales, general, and administrative expenses for 2023 to a range of $300 million to $310 million (down from $315 million to $335 million before). Primarily to blame, management says, were delays in the commercial launches for Udenyca OnBody and Loqtorzi.
In the end, this is not to say that Coherus is a broken business. On the contrary, between its strategic acquisition of Surface Oncology, its pending FDA decision on Udenyca OnBody, and its pending launch of Loqtorzi, it appears to have all the makings of a thriving, successful business with a clear path toward sustained, profitable growth.
But the market hates being told to hurry up and wait for such paths to materialize. And given its reduced near-term guidance, Coherus stock is understandably falling hard on Tuesday.
