GlobeNewswire Inc | Nov 8, 2021 04:01PM EST

November 08, 2021

Key milestones achieved driving near-term commercial product portfolio expansion

Three BLAs now under FDA review: PD-1 inhibitor toripalimab, biosimilar Lucentis, biosimilar Humira

Multiple additional applications to FDA expected in 2022

UDENYCA delivers 3rd quarter 2021 net sales of $83 million

Conference call today at 5:00 p.m. ET

REDWOOD CITY, Calif., Nov. 08, 2021 (GLOBE NEWSWIRE) -- Coherus BioSciences, Inc. (Coherus or the Company, Nasdaq: CHRS), today reported financial results for the quarter ended September 30, 2021 and highlighted recent achievement of key milestones toward potential near-term expansion of the commercial product portfolio:

ACHIEVEMENT OF KEY MILESTONES DRIVING NEAR-TERM COMMERCIAL PRODUCT PORTFOLIO EXPANSION

-- Successful UDENCYA on-body injector clinical trial is expected to enable 2022 submission of a prior approval supplement to the UDENYCA BLA. -- FDA accepted the BLA for CHS-201, a biosimilar Lucentis (ranibizumab), and assigned a target action date of August 2022. -- FDA review of the BLA for CHS-1420, a biosimilar Humira (adalimumab), is advancing toward the target action date in December 2021. -- FDA accepted the toripalimab BLA for advanced nasopharyngeal carcinoma and granted priority review with a target action date of April 2022. -- Positive esophageal squamous cell carcinoma Phase 3 clinical data is expected to enable submission of a toripalimab BLA supplement in 2022. -- Positive progression free survival data (PFS) from the CHOICE-01 Phase 3 clinical trial evaluating toripalimab in non-small cell lung cancer were presented in September. A final analysis of PFS and an additional interim overall survival analysis are expected by early first quarter 2022, after which Coherus and partner Junshi Biosciences plan to discuss a potential submission of a BLA supplement with FDA.

THIRD QUARTER 2021 FINANCIAL HIGHLIGHTS

-- Net product revenue, consisting of net sales of UDENYCA (pegfilgrastim-cbqv), was $82.5 million. -- GAAP net loss of $38.5 million was driven by lower net product revenue and increased R&D and regulatory expenses to support the development and regulatory submissions of toripalimab and biosimilar pipeline product candidates. -- Non-GAAP net loss was $26.6 million, adjusting for $11.9 million in stock-based compensation expense. -- At September 30, 2021, cash, cash equivalents and marketable securities were $468.7 million.

With three BLAs currently under FDA review, and positive clinical data expected to enable submission of multiple additional applications for marketing authorization in 2022, we are making rapid progress toward our goals to diversify and grow our commercial product portfolio, said Denny Lanfear, Coherus CEO. UDENYCA continues to provide strong funding for Coherus as we invest in our pipeline and prepare for a succession of anticipated new product launches in 2022 and 2023.

THIRD QUARTER 2021 FINANCIAL RESULTS

Net product revenue, consisting of net sales of UDENYCA, was $82.5 million and $113.6 million during the threemonths ended September 30, 2021 and 2020, respectively, and $253.2 million and $365.4 million during the nine months ended September 30, 2021 and 2020, respectively. The decreases were primarily due to a decrease in the number of units of UDENYCA sold during the three and nine months ended September 30, 2021, as well as an increase in discounts and allowances during the nine months ended September 30, 2021.

Cost of goods sold (COGS) was $21.3 million and $9.0 million during the three months ended September 30, 2021 and 2020, respectively, and $45.5 million and $26.0 million during the nine months ended September 30, 2021 and 2020, respectively. Until the first quarter of 2021, Coherus sold inventory that was manufactured and expensed prior to the approval of UDENYCA in late 2018. This inventory was depleted in the first quarter of 2021, and COGS now fully reflects per unit acquisition cost. Additionally, COGS for the third quarter of 2021 included a $5.2 million write-off of inventory that did not meet Coherus acceptance criteria. UDENYCA COGS also includes a mid single digit royalty on net sales payable through the first half of 2024.

Research and development (R&D) expense for the three months ended September 30, 2021 was $54.1 million compared to $38.9 million for the same period in 2020, an increase of $15.2 million which was mainly the result of higher development and regulatory costs in support of the advancement of pipeline product candidates. For the ninemonths ended September 30, 2021, R&D expense was $312.3 million compared to $98.1 million for the same period in 2020, an increase of $214.2 million which included the $136.0 million upfront license fee paid to Junshi Biosciences in 2021.

Selling, general and administrative (SG&A) expense for the threemonths ended September 30, 2021 was $39.9 million compared to $32.0 million for the three months ended September 30, 2020, an increase of $7.9 million which was primarily driven by increased commercialization expenses to support UDENYCA sales. For the ninemonths ended September 30, 2021, SG&A expense was $119.7 million compared to $101.4 million for the same period in 2020, an increase of $18.3 million, which was primarily due to an increase of $10.7 million in stock-based and other compensation expense and an increase in UDENYCA commercialization expenses.

Net loss for the third quarter of 2021 was $38.5 million, or $(0.49) per share on a diluted basis, compared to a net income of $27.9 million, or $0.33 per share on a diluted basis for the same period in 2020.

Non-GAAP net lossfor the third quarter of 2021 was$26.6 million, or$(0.34)per share on a diluted basis, compared to non-GAAP net income of$39.7 million, or$0.47per share on a diluted basis for the same period in 2020. See Non-GAAP Financial Measures below for a discussion on how Coherus calculates non-GAAP net (loss) income and a reconciliation to the most directly comparable GAAP measures.

Cash, cash equivalents and investments in marketable securities were $468.7 million as of September 30, 2021, compared to $454.4 million at June 30, 2021.

2021 FINANCIAL OUTLOOK

Excluding the upfront payment made to Junshi Biosciences in the first quarter, Coherus projects full year 2021 R&D and SG&A expenses in a range of $370 million to $400 million. R&D spending is focused on development, regulatory and other activities in preparation for the potential launch of toripalimab, as well as manufacturing-related and regulatory activities for CHS-1420 (Humira biosimilar), development activities for CHS-305 (Avastin biosimilar), and additional presentations of UDENYCA. Increases in SG&A spending in 2021 are primarily driven by marketing activities and headcount to support UDENYCA and the potential launches in 2022 of toripalimab and CHS-201 (Lucentis biosimilar).

This financial guidance excludes the effects of any potential future strategic acquisitions, collaborations or investments, the exercise of rights or options related to collaboration programs, and any other transactions or items not yet identified or quantified. This guidance is subject to a number of risks and uncertainties. See Forward-Looking Statements described in the section below and the section titled Risk Factors in the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 to be filed with the Securities & Exchange Commission on November 8, 2021.

Coherus is planning to host an analyst day event in January 2022.

Conference Call Information

When: Monday, November 8, 2021 starting at 5:00 p.m. ET

Dial-in: (844) 452-6826 (Toll-Free U.S. and Canada) or (765) 507-2587 (International)

Conference ID: 1838568

Webcast: https://investors.coherus.com/upcoming-events

Please dial-in 15 minutes early to ensure a timely connection to the call.

About Coherus BioSciences

Coherus is a commercial stage biopharmaceutical company with the mission to increase access to cost-effective medicines that can have a major impact on patients lives and to deliver significant savings to the health care system. Coherus strategy is to build a leading immuno-oncology franchise funded with cash generated by its commercial biosimilar business. Coherus markets UDENYCA (pegfilgrastim-cbqv) inthe United Statesand through 2023 expects to launch toripalimab, an anti-PD-1 antibody, as well as biosimilars of Lucentis, Humira, and Avastin, if approved.

For additional information, please visitwww.coherus.com.

UDENYCA is a trademark ofCoherus BioSciences, Inc.Avastin and Lucentis are registered trademarks ofGenentech, Inc.Humira is a registered trademark of AbbVie Inc.

Forward-Looking Statements

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the potential for UDENYCA net sales to continue to provide strong funding for Coherus operations, investments in its pipeline programs and anticipated commercial launches of new products; Coherus' ability to submit a prior approval supplement to the UDENYCA BLA on schedule during 2022; the potential approval of the CHS-201 biosimilar candidate to Lucentis (ranibizumab) in August 2022 and Coherus ability to launch the product, if approved; the potential approval of the toripalimab BLA for nasopharyngeal carcinoma in April 2022, and Coherus ability to launch the product, if approved; the timing of a final PFS and additional interim overall survival analysis in the toripalimab clinical trial in non-small cell lung cancer; the potential for Coherus and Junshi Biosciences to file with the FDA for additional indications for toripalimab, including esophageal squamous cell carcinoma or lung cancer, and the timing of these BLA supplement filings; the timing of the FDAs approval decision for CHS-1420, a Humira (adalimumab) biosimilar, and the risk that the product may not be approved on time, if at all; Coherus ability to continue other CHS-1420 activities to advance toward a projected market entry in the United States on or after July 1, 2023; Coherus ability to advance the CHS-305 biosimilar candidate to Avastin (bevacizumab) in-licensed from Innovent toward an expected 351(k) BLA submission with the U.S. FDA in 2022, the risk that the product may not be approved on time, if at all, and Coherus ability to launch the biosimilar candidate to Avastin in the United States; the potential submission of additional applications for marketing authorization to the FDA in 2022; the timing of the analyst day event Coherus is planning for January 2022; and Coherus ability to meet its R&D and SG&A expenses guidance for the full fiscal year 2021. Such forward-looking statements involve substantial risks and uncertainties that could cause Coherus actual results, performance or achievements to differ significantly from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the risks and uncertainties inherent in the clinical drug development process; the risks and uncertainties of the regulatory approval process, including the timing of Coherus regulatory filings; the risk that Coherus is unable to complete commercial transactions and other matters that could affect the availability or commercial potential of Coherus biosimilar drug candidates; and the risks and uncertainties of possible patent litigation. All forward-looking statements contained in this press release speak only as of the date on which they were made. Coherus undertakes no obligation to update or revise any forward-looking statements.For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Coherus business in general, see Coherus Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021, to be filed with the Securities and Exchange Commission on November 8, 2021 and its future periodic reports to be filed with the Securities and Exchange Commission. Our results for the quarter ended September 30, 2021 are not necessarily indicative of our operating results for any future periods.

Coherus BioSciences, Inc.Condensed Consolidated Statements of Operations(in thousands, except share and per share data)(unaudited)

ThreeMonthsEnded NineMonthsEnded September30, September30, 2021 2020 2021 2020Revenue: Net product $ 82,503 $ 113,551 $ 253,180 $ 365,405 revenueOperating expenses:Cost of goods 21,280 9,000 45,487 25,994 soldResearch and 54,085 38,851 312,343 98,131 developmentSelling, generaland 39,925 31,984 119,661 101,386 administrativeTotal operating 115,290 79,835 477,491 225,511 expenses(Loss) Income (32,787 ) 33,716 (224,311 ) 139,894 from operationsInterest expense (5,771 ) (5,656 ) (17,166 ) (15,495 )Other income, 30 56 102 548 netNet (loss)income before (38,528 ) 28,116 (241,375 ) 124,947 income taxesIncome tax ? 183 ? 2,411 provisionNet (loss) $ (38,528 ) $ 27,933 $ (241,375 ) $ 122,536 income Net (loss)income per share:Basic $ (0.49 ) $ 0.39 $ (3.22 ) $ 1.72 Diluted $ (0.49 ) $ 0.33 $ (3.22 ) $ 1.52 Weighted-averagenumber of sharesused in computing net(loss) incomeper share:Basic 79,013,240 71,649,350 74,984,811 71,138,973 Diluted 79,013,240 87,470,337 74,984,811 82,043,469

Coherus BioSciences, Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited)

September30, December31, 2021 2020Assets Cash and cash equivalents $ 360,540 $ 541,158Investments in marketable securities 108,167 ?Trade receivables, net 136,346 157,046Inventory 83,940 92,189Other assets 52,733 51,256Total assets $ 741,726 $ 841,649Liabilities and Stockholders? Equity Accrued rebates, fees and reserves $ 84,744 $ 81,529Convertible notes due 2022* 80,978 79,885Convertible notes due 2022 - related 26,992 26,628parties*Convertible notes due 2026 223,971 223,029Term loan - current portion 17,308 ?Term loan - non-current portion 57,924 74,481Other liabilities 119,049 75,123Total stockholders' equity 130,760 280,974Total liabilities and stockholders? equity $ 741,726 $ 841,649

* The Convertible notes due 2022 and the Convertible notes due 2022 - related parties were classified in current liabilities as of September30, 2021 and in non-current liabilities as of December 31, 2020.

Coherus BioSciences, Inc.Condensed Consolidated Cash Flow(in thousands)(unaudited)

ThreeMonthsEnded NineMonthsEnded September30, September30, 2021 2020 2021 2020 Cash, cashequivalentsand restricted $ 330,178 $ 225,057 $ 541,598 $ 177,908 cash atbeginning ofthe period Net cashprovided by $ 13,711 $ 47,353 $ 14,890 $ 121,021 operatingactivities Purchases ofinvestments in (31,449 ) (41,981 ) (171,779 ) (273,845 )marketablesecuritiesProceeds frommaturities ofinvestments in 47,700 63,000 62,700 63,000 marketablesecuritiesUpfront andmilestone ? (2,500 ) (136,000 ) (7,500 )based licensefee payments*Cash used inother (261 ) (2,112 ) (821 ) (6,112 )investingactivitiesNet cashprovided by(used in) $ 15,990 $ 16,407 $ (245,900 ) $ (224,457 )investingactivities Proceeds fromissuance ofConvertible ? (674 ) ? 222,156 Notes due2026, net ofissuance costsPurchase ofcapped calloptions ? ? ? (18,170 )related toconvertiblenotes due 2026Proceeds fromissuance ofcommon stockto Junshi ? ? 40,903 ? Biosciences,net ofissuance costsProceeds fromissuance ofcommon stock 1,280 4,909 9,726 13,014 upon exerciseof stockoptionsProceeds frompurchase underthe employee ? ? 1,985 2,557 stock purchaseplanCash used inother (179 ) (147 ) (2,222 ) (1,124 )financingactivitiesNet cashprovided by $ 1,101 $ 4,088 $ 50,392 $ 218,433 financingactivities Net increase(decrease) incash, cash $ 30,802 $ 67,848 $ (180,618 ) $ 114,997 equivalentsand restrictedcash Cash, cashequivalentsand restricted $ 360,980 $ 292,905 $ 360,980 $ 292,905 cash at end ofthe period Reconciliationof cash, cashequivalents, and restrictedcashCash and cash $ 360,540 292,465 $ 360,540 292,465 equivalentsRestricted 440 440 440 440 cash balanceCash, cashequivalents $ 360,980 $ 292,905 $ 360,980 $ 292,905 and restrictedcash

* 2021 payments includes license fees of $145.0 million pursuant to the collaboration agreement with Junshi Biosciences paid in the first quarter which was partially offset by a $9.0 million credit related to the fair value of the discount for lack of marketability on the common shares purchased under the stock purchase agreement with Junshi Biosciences in the second quarter.

Non-GAAP Financial Measures

To supplement the financial results presented in accordance with GAAP, Coherus has also included in this press release non-GAAP net income, and the related per share measures, which exclude from net (loss) income, and the related per share measures, stock-based compensation expense, upfront and milestone payments under the license agreements, costs related to termination of a research and development program as part of a strategic realignment of research and development resources toward other development programs and the related income tax effect of those non-GAAP adjustments. These non-GAAP financial measures are not prepared in accordance with GAAP, do not serve as an alternative to GAAP and may be calculated differently than similar non-GAAP financial information disclosed by other companies. Coherus encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations set forth below, to more fully understand Coherus business.

Coherus believes that the presentation of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. In particular, Coherus believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors and analysts ability to meaningfully compare Coherus results from period to period, and to identify operating trends in Coherus business. Coherus also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions.

Coherus BioSciences, Inc.Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net (Loss) Income(in thousands, except share and per share data)(unaudited)

ThreeMonthsEnded NineMonthsEnded September30, September30, 2021 2020 2021 2020GAAP net(loss) $ (38,528 ) $ 27,933 $ (241,375 ) $ 122,536 incomeAdjustments: Stock-basedcompensation 11,939 9,308 40,418 28,287 expenseUpfront andmilestonebased ? 2,500 136,000 7,500 licensefees*Costsrelated totermination ? ? 11,503 ? of CHS-2020developmentprogramIncome taxeffect of ? (77 ) ? (691 )the aboveadjustmentsNon-GAAP net(loss) $ (26,589 ) $ 39,664 $ (53,454 ) $ 157,632 income GAAP net(loss) $ (0.49 ) $ 0.39 $ (3.22 ) $ 1.72 income pershare, basicGAAP net(loss)income per $ (0.49 ) $ 0.33 $ (3.22 ) $ 1.52 share,dilutedNon-GAAP net(loss) $ (0.34 ) $ 0.55 $ (0.71 ) $ 2.22 income pershare, basicNon-GAAP net(loss)income per $ (0.34 ) $ 0.47 $ (0.71 ) $ 1.93 share,dilutedShares usedin computingbasic net 79,013,240 71,649,350 74,984,811 71,138,973 (loss)income pershareShares usedin computingdiluted net 79,013,240 87,470,337 74,984,811 82,043,469 (loss)income pershare

* 2021 expense includes license fees of $145.0 million pursuant to the collaboration agreement with Junshi Biosciences expensed in the first quarter which was partially offset by a $9.0 million credit related to the fair value of the discount for lack of marketability on the common shares purchased under the stock purchase agreement with Junshi Biosciences in the second quarter.

ContactMcDavid StilwellChief Financial OfficerCoherus BioSciences, Inc.IR@coherus.com+1 (650) 395-0152