Guggenheim 3rd Annual Healthcare Innovation Conference - COHERUS ONCOLOGY INC

All right, so welcome to the first session of the second day of the Guggenheim conference. My name is Paul Jang. I'm a biotech analyst with Gugkenheim, and I'm very pleased to welcome our first company of the day to kick things off, Coheris Oncology. And with us today is Denny Lanphier, president and CEO, Raj Dias, CMO, Teresa Lavallee, chief scientific and development officer. Thank you all for joining. Thank you, Paul. It's good to be with you today. We appreciate the bank inviting us to the conference. Great. So maybe just to kick things off, for those who might be newer to the story, could you provide a quick introduction to the company and the current pipeline and commercial product? Sure. So a couple of years ago, we acquired Service Oncology and then set about divesting our biosimilar business, which went pretty well. We did about $800 million in divestitures and paid off almost $500 million in debt. We dropped $250 million onto the balance sheet and set about the task of developing Tegmo-Ketog, our CCR8 T-reg depletor, and also Casdoza-Ketoge, our anti-out 27. We had a very broad clinical plan for Tegno-Keta, which encompassed a number of tumors, esophageal first line, second line, head and neck, various gastric tumors, and even fourth line CRC. What we're very happy with now is having cast our net so broadly, we're able now to focus on esophageal. And so this is something I think where Dr. Daya will talk about the data, but allows us really to strategically focus the organization in a way that we haven't been able to do before. So we've taken one particular disease focus, first line and second line esophagial, and Now we're going to pursue various accelerated approaches, particularly in second line with the priority. But the strategic prioritization has a number of other benefits for us. First of all, it's very expensive, and there's a lot of overhead in pursuing so many clinical indications concurrently. And so by focusing, we're able really to put ourselves in a position where we can reduce the organization. At the same time, a couple other very fortuitous things happened. From the divestiture, we had transition services agreements with the Acquirer Intest Accord, and so those are all now winding down. That actually inflated our burn a bit. I think it was a little confusing for investors, but now we're in a position where we don't have to deal with that. And then the third fortuitus thing which occurred is that we have now completed our process this transfer of toropalimab, our PD-1, from China to the US. So that overhead and that burn also is being dramatically reduced. So all three of these things allowed us really to right-size the organization here. We are putting in place a 30% headcount reduction. That's primarily across the non-commercial side of the business. And focusing very, very tightly on esophageal and where we can go. And just, I'll let Raj talk about the data as indicated, but what I like about esophageal is that it's a very large market ex-US. It's the sixth leading cause of cancer deaths, and there's over 400,000 patients annually ex-us, particularly in Asia. So one of our strategies we've talked about for some time is the partnering, and being able to bring in partnering funds, offset clinical costs, expenses, and then have partners of course contribute to future clinical development costs. So now that we have an indication, and we have very strong data, now we're able to go and look for partners for Tegmo Kitug. And we actually have a financial advisor that we're signing up to go in and help us with that. So that's all worked really, really well. The other thing that I would note about the reductions in the organization and the savings is they amount to about $6 or $7 million a quarter, and that has duration to it. So what we're going to do, really, is now we're able to drive the company to core burn break even a little earlier. So one of the things we're focusing on is driving the sales of Lactorsi up from like 14 or 15 million up to like 25, 30, or 35 million. At which point the core burn, which is basically the overhead and the cost and so forth without the clinical trials. So that'll be taken care of. I think that's very exciting because that way it puts us in a self-sufficiency mode. we're going but just back to the data for a moment um i think that's it's a very exciting data the mechanism of action for t-reg depletion now is is coming very clear dr lavalley can talk a little bit about that but i think we're very pleased with the way things are working out for us uh great so yeah lots to chew on there but um it's great to talk to you guys after you provided such a meaningful clinical update as well as strategic updates so maybe starting with the clinical part of things. You know, we recently saw the data for TAGMO across a basket of solid tumor indications, and you've announced you're prioritizing esophageal. So can you sort of walk us through what you saw in that update and why the decision to prioritize esophgeal? Yeah, good morning, Paul. No, thank you. So, you know, let me just take a step back. First of all, we ran a very intentional program where we looked at five different tumor settings associated with mucosal immunity, where the prevalence of Tregs, CCR8-positive Treg, was was high and really our intention overall with this TregCheck program was to do two things number one show activity and see where we had activity and secondly to really see where the activity was strongest where we can then progress further in terms of development broadly speaking we learned three things with the program first of all that we can reverse in the second line setting in pd one experienced patients that we could reverse pd1 resistance secondly we also learned that in the first line setting so earlier that we would enhance anti-tumor activity in combination with chemotherapy which is of course important right because we know that the immune system is more active in the first-line setting or in earlier lines and thirdly we also learnt that in colder tumors, so PD-L1 low, PD-1 negative, colorectal cancer, for example, that we could activate the immune system. So broadly, we learned from this program, we did see activity across all of the different tumor settings that we looked at, which was very positive. Our strongest signal, as you alluded to, was in esophageal cancer. So let me just briefly take you through the data. In first-line esophagal squamous cell, we saw eight out of nine of the evaluable patients responded, including one complete response, which is pretty encouraging. So that equated to an 89% ORR. Just for benchmarks purposes, the current standard of care is a PD-1 plus chemotherapy that is only in PD-L1 positive patients. And their ORR is roughly in the range of 44 to, depending on which trial and which agent you're looking at, somewhere between 44% and 60%. Ours was 89% overall. It was 100% for PD-L1 positive patients, so obviously very encouraging there, despite being a small patient number. So strong signal in first line. In second line, we looked at both the esophageal squamous histology as well as the esrophageal adenocarcinoma histology. and this is an area of huge unmet medical need so as we looked at those two different both of those histologies in the second line setting we saw overall out of nine evaluable patients we saw three partial responses so a 33 percent ORR if we added in the additional unconfirmed partial response as well that then went up to 44 percent and again the benchmarks for this kind of setting is essentially chemotherapy, and that's around the 10% ORR range, typically between two to four months PFS, medium PFS. And again, whilst our data is not yet fully mature, we showed a medium PFF of the range of 5.5 months or thereabouts. Durability is important. So that's a very important metric. And if we also look at the, we've talked about the clinical benefit rate, right? which is CR plus PR plus six months of stable disease, the overall CBR rate was in the region of 55%, so also pretty encouraging. So that's an overall summary of the data and the focus in on esophageal specifically. So I think we're able to plant our flag now in esophagal overall, first line, second line, area of huge unmet medical need. Denny talked about the overall patient population, which globally is very large. And I think that's really where we're progressing initially with a focus in on second line. Because I think, again, for three reasons. First of all, there's a huge unmet medical need. There's a potential fast path to approval, potentially leveraging some of the accelerated FDA designations, and of course, the signal as well. The other thing that I would note, addition to Raj's remarks, is that Lactorsi has previously demonstrated strong activity in PD-L1 negative patients in a background of chemotherapy in esophageal, and actually is licensed in Europe accordingly. So this is very promising, and from the viewpoint of partnering, it puts us in a position where there's already a market where Lacturzy is in this indication in Europe. So, this is fortuitous for us. Makes sense. So can you talk about, I guess, the next steps in terms of, I guess, confirming the signal or further expanding it? Are you going to have additional follow-up? Are you gonna have more patients? And what should the cadence of, I guess, subsequent updates be in the next year or so? Dr. LaValle is busy working on the regulatory approach. Teresa, do you want to just review your thoughts? Yeah, so immediate next steps are twofold. First, it's very important to align with FDA on the dose. I mean, we've seen a lot of companies that have had to dose optimize later. We've done that early. So we are putting together a meeting request right now to go to FDA early in 2027 to get alignment on the recommended phase two dose. Importantly, we've incorporated Western patients, U.S. patients in our study early. So we've gotten that data set to show applicability to U.F. medical practice and U.C. patients. I mean, the CR patient that Rush referred to actually is a U.S. patient, and we have responses in the second line setting in U. S. As well. The second meeting that we intend to have with FDA in the first part of next year is on a type B meeting on development and esophageal second line and talk to them about plans to go towards first line as we get more mature follow up in more patients. It's more complicated on top of standard of care because of contribution of effect and showing PFS and OS in that setting. So we would align with them on a randomized study and the opportunity for expedited development, fast track, breakthrough, accelerated approval. Okay. And so can you just expand on how you're currently thinking about the second line registrational study, I mean, pending FDA feedback, of course, but this would conceivably be a chemo free regimen. You know, how do you think about including both squamous and adenocarcinoma histologies? And, you know, what are the sort of parameters in terms of the bar for perhaps accelerated approval? Yeah, so the idea of doing histologies, I think a lot of people are familiar or with lung cancer, where we often talk about adeno and squamous, and some development is exclusive to one subtype or another. In the upper GI, you see a variety of trials of how people put together the different gastric, GEJ, esophageal, adeno, squamous. The idea of focusing in on esophagal with both histologies is something that has precedence. Pembroke did it both in the first line and second line setting, Keynote 590 and Keynote 181. So this is something that we look at treating the disease. In terms of benchmarks, Rosh very nicely described what chemotherapy does. So in a PD-L1 refractory, PD-1 low is not indicated in the first line setting. And we have activity in PD-O1 negative patients. So chemotherapy would still be the comparator there. And it's 10%. So a threefold increase is already worthy of a conversation with FDA of what their expectations would be. And the PFS going from two and a half, three and a month to five and a months, early immature dataset, but trending in the right direction and having patients on study of protein eight months, which is the median overall survival, I think gives us a lot of data, the totality of the data to really talk with FDA about a chemo-free regimen in this patient population. Okay, and I guess, how should we think about the size of the opportunity in second line, which is initial focus indication, when you think about the type of trial that you might run? Yeah, so I mean, we talk with the FDA about a randomized phase two, we have to align with them on the numbers, but this, and the team is working through scenarios for either a randomized Phase II, you know, enough to see the signal, or doing a seamless design where you would then go into the overall survival with a larger, a Part A and a Part B, or two independent studies. And I think that will be the point of discussion with FDA, but you can imagine with the numbers we're sharing today, it would be a very manageable phase two pivotal for accelerated approval. But we can give more color on that after we align with FDA because what really matters is what they think. Sure, yeah. And then obviously the signal in frontline was also very compelling. I guess at this point, given the initial focus on second line plus, what is your line of sight into moving frontline as well into a registrational study at some point? Yeah, I think that's a pretty tried and true path. I mean, the nice part about doing integrated development across the disease with a line to best in disease treatment. So as Raj said, in the first line setting, Very importantly, we've shown we can move earlier in disease where the immune system's more intact. We can go beyond chemo plus PD-1 and open up in the U.S. the PD-L1 negative patient population, so expand the patient population. So importantly, what I'm describing is what's the unmet medical need, because that's always important for risk-benefit assessment. So contribution of effect and getting that is a bigger study, longer study with a pretty active regimen. So we will have conversations with FDA about that and what that would look like and can update you afterwards. But we'd be keen to move that forward. Just one thing I'll add to Theresa's remarks, Paul. We talked about the huge unmet medical need in esophageal generally. Second line, that is particularly because of the some of the benchmarks we talked about but first but starting second line first before first line allows us then to follow up these first line patients for longer because of course they take a longer period of time to to to progress so it allows that follow-up to happen initially the first line setting whilst we start the second line study as well so I think there's a nice synergy there too sure so you're prioritizing esophageal and as you've mentioned you're sort of deprioritizing the other solitude and tumor indications. But I guess, were there any key learnings from that experience in head and neck, colorectal, gastric cancer? And would we expect any additional follow-up from those patients as a way of learning more about TAGMO? Yeah, I can start, and Teresa can jump in too. So I outlined some of the key things that we learned initially. So first of all, and these are very important in the sphere of immune oncology, first of all, that we can reverse PD-1 resistance in the second-line setting. So PD-2 experienced patients, we could reverse that and show activity. Secondly, we were able to activate the immune system and enhance antitumor activity in first-line patients. And that's important because the immune system is much more functional in these early settings, first line, even in the neoadjuvant earlier stage setting too. And thirdly, activating and enhancing antitumor activity in these cold tumors, such as fourth-line colorectal. For example, in colorextal, we showed activity. We showed tumor shrinkage in multiple patients as well. And that's a very, very late-line patient population. So we did learn all of these things in terms of the overall program in head and neck. also we showed enrichment in terms of activity for specific subsets also based on the the immune context of these tumors as well and then in terms of the cadence yes we'll continue to follow up the the what we call the non-prioritized tumor types and we'll continued report data as they evolve we made it clear actually in our disclosure a couple of weeks ago that this was interim data and of course because that durability is is so important that's what we will be following up on. And maybe to add on that, I mean, so we selected esophageal cancer because it exceeds benchmarks. So it's a streamlined development. We showed activity across the board. I mean so Saturday I was in Phoenix at the SITC conference and BMS showed their data with NICE activity in non-small cell lung cancer. They've also seen activity in colorectal speaking to the gentleman at the poster and he said that their plans were to go on top of long-serve Bev which our data would support that as well but clearly then it's get the combination data show the activity and then do the development so what Denny said very clearly on our call yesterday and what we've talked about is wanting to engage partners and this data set having activity it's hard to talk to someone about a colorectal development when you haven't shown you have activity there so we've done that and now we can have conversations with folks about how to develop in colorextal cancer across the board head and neck gastric and with other agents whether it be standard of care or ADCs is a modality that's really showing great promise in multiple disease settings, that combination safety data with chemotherapy sets us up. And then the remodeling of the tumor microenvironment with the T-cell engagers really has a lot of promise. And we're just about to start our study with Pazritamig, KLK2 TCE, and prostate cancer. So I think the totality of the data that we saw and how we'll follow-up on it would be engaging partners looking at other combinations to keep advancing TAGMO-KTUG. Teresa, just one follow- up question with respect to J&J's Pazritamig and the the TCE and the remodeling of micro environment. After that safety study reads out and reads out satisfactorily, how do we think about other TCEs and different areas to go? Yeah, so, I mean, the metric for this study seeing success, in my mind, is safety. Because once we've set up that it's safe to combine TAGMO KeyTag with a T-cell engager, the biology that we've shown across solid tumors with removing the Tregs, increasing the CD8s, really the bane of T-Cell engagers and solid tumors, is that they have to bind the tumor and the T cell at the same time to activate it. If there's a low density of T cells, you know, just you're not going to hit your neighbor. And so I think that safety alone will be exciting. Of course, we are encouraged by the data that J&J showed on Saturday at CITSE, where their combination with the PSMA CD28 with Paziridamig improved activity and had safety. So we know that you can increase what they're seeing there. And looking forward to Tagmo KeyTag showing efficacy as well, but safety alone would be enough to really open up the field. Okay. I'm worried that we're running low on time. I did want to spend one minute on Lactorsi and just, you know, essentially what's the major near-term focus on driving commercial sales and increased penetration into the nasopharyngeal segment? Great. So in MPC, I think the primary thing there is that we have really outstanding six-year survival data, 64.7 months versus 33.5 months for chemo alone. And during 2026, we've been able to really advance the awareness of the physicians and the healthcare providers there. But it's very frustrating, however, that we're still at 20, 22% market share. There's about 30% market share with chemo alone, which is a real detriment to the patients, and then, you know, 40% market share in off-label IO. Now, we're making good progress against these, but I think that we have to go faster, and we have to advance for the patients. We have to advanced here a little bit quicker. With respect to the chemo-only segment, what we're doing there is we've engaged with a number of community oncology groups. We're actually, you now, reviewing their records. We're identifying the chemo-only patients because we can then, per our label, add Lactorsi to that. So that's one of our key strategies. And the messaging is highly focused on the six-year survival, of course, in that context. Secondarily, though, with respect to the off-label IO, we've put in step edits in conjunction with the payers. And what that does really is sort of alert the doctors that, look, there is an approved therapy with outstanding data and make them step through it. That's also proving very effective. With the payers that we have put the step at it in, we're about, oh, maybe 60% market share instead of the low 20s. And so in 2027, then we're going to extend that strategy also. So we need to drive that business a little faster over the next four or five quarters, I would say. And particularly, I want to get it up to the point where those sales are covering our core burn, which is X the clinical studies and the development budget. Prior to our focusing, that required about 30 to 35 million a quarter. But with our reduced footprint in our focus now, we're down to 25, 30 million a quarter. We should be able to get to that break even point. So I've got the team really highly focused on the commercial story. And I actually met with them all and did a group call yesterday in a Zoom. So I look forward to moving the ball there over the next four quarters. Okay, fantastic. So I think with that, we are up on our time. But it was really great to speak with you all today at such an exciting time for the company, and I really appreciate you coming. Thank you, Paul. Thank you. MR. Thank you, thank you.