Guggenheim 3rd Annual Healthcare Innovation Conference - COHERUS ONCOLOGY INC

Financial Performance:

• Completed ~$800M in divestitures from the biosimilar business, used to pay off ~$500M in debt and retain ~$250M on the balance sheet.
• Implemented a 30% headcount reduction (non-commercial side), generating ~$6–7M in quarterly run-rate savings.
• Reduced core burn (overhead excluding clinical trials) from a required $30–35M quarterly revenue to a target of $25–30M.
• Current Lactorsi sales are ~$14–15M; the target is to grow sales to $25–35M to achieve core cash flow breakeven.
• Transition services agreements and PD-1 transfer overheads (Toropalimab from China) are winding down, reducing future burn.

Guidance and Future Outlook:

• Strategic pivot to prioritize Esophageal Cancer (first and second-line) following broad clinical activity confirmation.
• FDA alignment meeting scheduled for early 2027 to confirm Recommended Phase 2 Dose (RP2D) and discuss second-line development.
• Goal to accelerate a registrational study for second-line esophageal cancer, potentially utilizing accelerated approval pathways.
• First-line registrational studies planned for later, pending second-line data maturity and FDA feedback.
• Targeting partnership deals for Tegno-Ketog (TAGMO) to offset clinical costs and fund future development.
• Commercial strategy for Lactorsi aims to reach $35M quarterly sales within the next 4–5 quarters.

Business Segments and Product Lines:

• Tegno-Ketog (Tegmo-Ketog): CCR8 T-reg depletor; prioritized for esophageal cancer.
  • First-line esophageal squamous cell: 89% ORR (100% in PD-L1 positive) in small cohort; benchmark is 44–60%.
  • Second-line esophageal: 33% ORR (44% with unconfirmed PR), median PFS ~5.5 months (benchmark chemo ~2–4 months), CBR ~55%.
  • Activity observed across other indications (Head & Neck, Gastric, CRC), but resources now focused on esophageal.
• Lactorsi (Lactruxi): Anti-CTLA-4; licensed in Europe for esophageal cancer.
  • 6-year survival data shows 64.7 months vs. 33.5 months for chemotherapy.
  • Currently holds ~20–22% market share; competing with 30% (chemo alone) and 40% (off-label IO).
  • Strategies to increase share: engaging community oncology to identify chemo-only patients for labeling compliance and implementing step-edit protocols with payers for off-label IO patients.
• Upcoming Trials: Initiating safety study with J&J's Pazritamib (KLK2 TCE) in prostate cancer to evaluate combination with Tegno-Ketog.

Market and Competitive Landscape:

• Esophageal cancer is the 6th leading cause of cancer deaths globally, with >400,000 annual patients ex-US (high concentration in Asia).
• High unmet medical need in second-line esophageal setting (standard of care chemotherapy ~10% ORR).
• Lactorsi already has a market precedent in Europe for this indication, aiding potential partnerships.
• Competitive landscape includes BMS data in NSCLC and other T-cell engager combinations; Coheris believes Treg depletion enhances efficacy of standard care and ADCs.

Risks and Challenges:

• Clinical execution risk in expanding to larger, randomized Phase 2/3 trials for accelerated approval.
• Dependence on achieving $25–35M in quarterly Lactorsi sales to cover core operational costs.
• Need to secure partnering funding to offset clinical development costs.
• Regulatory uncertainty regarding first-line combination data and PFS/OS requirements in complex settings.

Management Commentary and Tone:

• Tone is highly confident and strategic, emphasizing a "right-sizing" of the organization to drive efficiency.
• Management expressed strong satisfaction with the clarity of the Treg depletion mechanism and the strength of esophageal data.
• CEO Denny Lanphier highlighted the strategic benefits of focusing on one indication to reduce overhead and increase speed to market.
• CFO/CSO Teresa LaVallee emphasized proactive regulatory engagement (FDA meetings) to avoid late-stage dose optimization issues.

Analyst Questions and Answers:

• Q: Why prioritize esophageal over other solid tumors? A: Strongest signal, large unmet need, potential for fast-track approval, and existing Lactorsi footprint.
• Q: What are the next regulatory steps? A: FDA meeting in early 2027 for RP2D alignment and Type B meeting for second-line development plan.
• Q: How is the second-line study designed? A: Likely randomized Phase 2 or seamless design; may treat both squamous and adenocarcinoma histologies; potential for chemo-free regimen if safe.
• Q: Will non-prioritized indications be abandoned? A: No, patient follow-up will continue, and data will be used to facilitate future partnerships.
• Q: How will Lactorsi penetration be improved? A: Identifying chemo-only patients for compliant combination therapy and using payer step-edit strategies to displace off-label IO.
• Q: Outlook for TCE combinations? A: Primary goal is safety; proven biology suggests Treg depletion will enhance T-cell engager efficacy.

Other Key Points:

• Coheris has transferred the PD-1 asset Toropalimab from China to the US, eliminating significant overhead.
• The company is hiring a financial advisor specifically to assist with the partnering process for Tegno-Ketog.
• First-line data supports entering earlier in the disease course where the immune system is more functional, potentially opening the PD-L1 negative population.
• The "TregCheck" program demonstrated the ability to reverse PD-1 resistance and activate "cold" tumors.