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Why Coherus BioSciences Plunged 37% in January

By Brian Feroldi - Feb 12, 2016 at 12:42PM

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The biosimilar pure play is sold off hard despite having good news to share with investors.

What: Shares of Coherus BioSciences (CHRS 8.15%), a clinical-stage biotechnology company focused on creating biosimilar drugs, lost more than 37% of its value during January, according to data from S&P Global Market Intelligence.

CHRS Chart

So what: Despite the stock's drubbing, the company did have some good news for investors during the month:

  • At the J.P. Morgan Healthcare Conference, Coherus outlined its market opportunity and key milestones for 2016. Importantly, the company confirmed that it is on track to submit all three of its biosimilar compounds for regulatory approval during the year.
  • Coherus and Baxalta (NYSE: BXLT) announced that CHS-0214, their biosimilar version of Amgen's blockbuster drug Enbrel, met its primary endpoint in a phase 3 trial. This was the second of two phase 3 studies of CHS-0214, and the trial confirmed that there was no clinically significant differences between the compound and Enbrel. Baxalta and Coherus confirmed that they are on schedule to submit CHS-0214 for regulatory approval in the second half of the year. 

Given that the news flow was positive, it's likely that shares were simply sold off as a result of investors dumping just about everything related to the biotech sector during the month. The iShares Nasdaq Biotechnology ETF fell roughly 20% during January, a clear indicator of a growing distaste for risky biotech stocks.

Now what: In 2014, worldwide sales of the three drugs that Coherus' biosimilars product candidates mimic topped more than $25 billion. If the company can successfully navigate them through the regulatory process, the market opportunity looks huge. Coherus has also wisely aligned itself with deep-pocketed players in the space such as Baxalta and Daiichi-Sanyo, which should make it easier for it to launch the products if they do find their way to market.

Coherus continues to look like it has a very bright future ahead of it, so investors with a strong stomach for risk might want to take advantage of this huge sell-off and put this biosimilar pure play on their radar. 

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