Forging an Innovative Oncology Future Post-Biosimilar Era
Executive Summary / Key Takeaways
- Coherus BioSciences has completed a significant strategic transformation, divesting its biosimilar businesses to focus exclusively on innovative oncology, anchored by its differentiated PD-1 inhibitor, LOQTORZI.
- LOQTORZI, the only FDA-approved treatment for nasopharyngeal carcinoma (NPC), is positioned for substantial growth, projected to reach $150 million to $200 million in annual revenue in this indication alone over the next three years, providing non-dilutive funding for the pipeline.
- The company’s pipeline features promising, differentiated mid-stage immuno-oncology candidates, Casdozokitug (anti-IL-27) and CHS-114 (anti-CCR8), with early clinical data supporting their mechanisms and potential in large markets like HCC and solid tumors, with key data readouts expected in the first half of 2026.
- Recent financial maneuvers, including the UDENYCA divestiture and debt paydowns, have significantly strengthened the balance sheet, resulting in a projected $250 million post-close cash balance and extending the cash runway beyond two years into 2027.
- While facing intense competition from larger pharmaceutical companies and inherent clinical development risks, Coherus aims to leverage its differentiated technology, focused commercial capabilities, and strategic partnerships to drive value creation.
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A Strategic Pivot Towards Oncology Innovation
Coherus BioSciences has undergone a profound strategic transformation, shedding its identity as a diversified biosimilar player to emerge as a focused, commercial-stage innovative oncology company. This pivot, culminating in the divestiture of its biosimilar assets, including the significant UDENYCA franchise in April 2025, is not merely a change in portfolio but a fundamental shift aimed at unlocking value through differentiated cancer therapies. The company’s journey from a biosimilar pioneer to an oncology innovator reflects a deliberate strategy to leverage its expertise in complex biologics development and commercialization within a market segment offering potentially higher growth and margin profiles.
The biopharmaceutical industry landscape is intensely competitive, characterized by rapid technological advancement and significant investment in oncology. Large, established players like Amgen (AMGN), Pfizer (PFE), AbbVie (ABBV), and Sandoz (SDZ) command substantial market share across various therapeutic areas, including biosimilars and innovative oncology. These competitors possess significantly greater financial, R&D, manufacturing, and commercial resources. However, Coherus aims to carve out its niche by focusing on potentially best-in-class assets and strategic combinations, rather than competing head-to-head across broad portfolios. The company’s strategic response to this competitive environment centers on leveraging its differentiated technology and focused execution.
The Technological Foundation: Differentiated Assets
At the heart of Coherus’ innovative oncology strategy lies its foundational asset, LOQTORZI (toripalimab-tpzi), a next-generation PD-1 inhibitor. Unlike many existing PD-1 antibodies, LOQTORZI is designed to block PD-1 interactions by binding to the FG loop on the PD-1 receptor. This unique binding epitope is believed to result in differential and potentially superior signaling within the T cell, clinically manifesting in efficacy irrespective of PD-L1 status in certain studies. This differentiation is critical in a crowded PD-1 market dominated by products like Merck’s (MRK) Keytruda and Bristol-Myers Squibb’s (BMY) Opdivo. For investors, this technological nuance translates into a potential competitive advantage, particularly in combination therapies and patient populations less responsive to current PD-1 inhibitors.
Beyond LOQTORZI, Coherus’ pipeline features two mid-stage clinical candidates targeting the tumor microenvironment (TME): Casdozokitug (CHS-388), an anti-IL-27 antibody, and CHS-114, an anti-CCR8 antibody. Casdozokitug is a first-in-class IL-27 antagonist. IL-27 is an immune regulatory cytokine often overexpressed in certain cancers, contributing to immune suppression. Blocking IL-27 aims to rebalance the TME and enhance anti-tumor immunity. Early clinical data for Casdozokitug in combination with atezolizumab and bevacizumab in first-line hepatocellular carcinoma (HCC) has shown compelling results, including a 17% complete response (CR) rate in a Phase 2 study. This compares favorably to CR rates of 3% and 8% reported in pivotal Phase 3 studies for existing standard-of-care regimens (IMbrave150 and HIMALAYA), suggesting a potential for improved outcomes in a large market with significant unmet need.
CHS-114 targets CCR8, a chemokine receptor highly expressed on regulatory T cells (Tregs) within the TME. Tregs suppress anti-tumor immune responses, contributing to resistance to therapies like PD-1 inhibitors. CHS-114 is designed as a cytolytic antibody to selectively deplete these tumor-resident Tregs. Coherus emphasizes the high selectivity of CHS-114, noting that profiling of some competitor CCR8 antibodies revealed off-target binding with potential toxicity implications. Recent Phase 1 data presented at AACR showed visually compelling biomarker evidence of CHS-114-mediated Treg depletion and subsequent CD8+ T cell infiltration into the tumor, establishing proof of mechanism. This translational data, coupled with an observed partial response in a heavily pretreated, PD-1 refractory head and neck cancer patient, supports the potential of CHS-114 to turn “cold” tumors “hot” and synergize with other immunotherapies. The strategic intent behind these pipeline assets is to develop novel combination therapies with LOQTORZI, addressing mechanisms of resistance and expanding the addressable patient population beyond those currently benefiting from PD-1 monotherapy.
Strategic Execution and Commercial Momentum
The strategic pivot was executed through a series of divestitures. Following the sales of the CIMERLI ophthalmology franchise in March 2024 and the YUSIMRY immunology franchise in June 2024, the UDENYCA divestiture in April 2025 marked the completion of the exit from the biosimilar business. This move was driven by the need to strengthen the balance sheet and focus resources on the innovative oncology pipeline.
LOQTORZI’s commercial launch in the U.S. in January 2024 is central to the new strategy. In the first quarter of 2025, LOQTORZI generated $7.3 million in net revenue, a significant increase from $2.0 million in Q1 2024, reflecting a nearly 269% growth rate. Patient demand grew 15% quarter-over-quarter, driven by new patient starts and increasing duration of treatment. The company’s commercial team is focused on increasing market penetration in the NPC indication, leveraging strong NCCN guidelines that designate LOQTORZI as the only preferred Category 1 first-line treatment option in combination with chemotherapy. While NPC is a rare cancer, requiring a steady ramp-up period, management projects annual LOQTORZI revenue from this indication to reach $150 million to $200 million over the next three years. Achieving quarterly revenues above $15 million is expected to cover commercial costs and contribute to R&D, underscoring LOQTORZI’s role as a funding engine for the pipeline.
The pipeline development strategy leverages LOQTORZI as a backbone for combination therapies. Internally, Coherus is advancing Casdozokitug and CHS-114 in combination with LOQTORZI in tumor types with strong biological rationale, such as HCC, NSCLC, head and neck squamous cell carcinoma (HNSCC), and gastric cancer. Externally, the company is pursuing strategic partnerships where other companies fund clinical trials evaluating LOQTORZI in combination with their novel agents. Examples include collaborations with INOVIO (INO) in HPV-positive HNSCC, CRI in ovarian cancer, and Junshi Biosciences with its anti-BTLA antibody in small cell lung cancer. This “elegant and efficient” approach aims to expand LOQTORZI’s label across multiple indications with minimal cost to Coherus, while also setting up future revenue opportunities from proprietary combinations with its own pipeline assets.
Financial Performance and Strengthened Liquidity
Coherus’ financial performance in the first quarter of 2025 reflects the ongoing transition and the early stages of the oncology focus. Net revenue from continuing operations (primarily LOQTORZI) was $7.6 million, a substantial increase from $2.3 million in Q1 2024. Cost of goods sold for continuing operations increased proportionally with LOQTORZI sales, reaching $2.7 million. Research and development expenses from continuing operations decreased to $24.4 million in Q1 2025 from $28.4 million in Q1 2024, primarily due to reduced co-development costs with Junshi, partially offset by increased investment in the internal pipeline (CHS-114 and Casdozokitug). Selling, general, and administrative expenses from continuing operations saw a significant decrease to $26.0 million in Q1 2025 from $40.2 million in Q1 2024, driven by lower headcount and the absence of a prior-year impairment charge. The loss from continuing operations was $45.4 million in Q1 2025, an improvement from the $67.8 million loss in Q1 2024.2014201620182020202220240100M200M300M400M500M−300M−200M−100M0100MRevenue (USD)Net Income (USD)Revenue (USD)Net Income (USD)AnnualQuarterlyRevenue (USD)Net Income (USD)
Results from discontinued operations (biosimilars) show net revenue of $32.1 million in Q1 2025, down from $74.8 million in Q1 2024. This decrease is attributable to the divestitures of CIMERLI and YUSIMRY in 2024 and the impact of UDENYCA supply interruptions from late 2024 that affected Q1 2025 sales. Net income from discontinued operations was $9.2 million in Q1 2025, significantly lower than the $170.9 million reported in Q1 2024, which included a $153.6 million gain on the sale of the CIMERLI franchise.
Liquidity has been significantly bolstered by the UDENYCA divestiture. As of March 31, 2025, cash and cash equivalents stood at $82.4 million. The UDENYCA sale, completed in April 2025, brought in $483.4 million in upfront cash (including inventory value). A portion of these proceeds was used to repurchase approximately $170 million principal amount of 2026 Convertible Notes and buy out the UDENYCA royalty obligation for $47.7 million. Following these transactions, Coherus expects to have approximately $250 million in cash on its balance sheet, extending its cash runway beyond two years into 2027. This improved financial position is critical for funding ongoing clinical trials and advancing the pipeline through key data milestones projected in 2026. Management expects full-year 2025 SG&A from continuing operations to be lower than 2024 ($90 million – $100 million projected), driven by approximately $25 million in annualized headcount savings. R&D expense is expected to be higher in 2025 due to increased pipeline investment.2014201620182020202220240100M200M300M400M500MCash and Cash Equivalents (USD)Cash and Cash Equivalents (USD)AnnualQuarterly2014201620182020202220240100M200M300M400M500MTotal Debt (USD)Total Debt (USD)AnnualQuarterly
Competitive Dynamics and Risks
Coherus faces formidable competition in the innovative oncology space. The market for PD-1 inhibitors is crowded, with established players and new entrants like Penpulimab-kcqx recently approved for NPC. While LOQTORZI’s differentiation and NCCN positioning provide an edge in NPC, expanding into other indications will require competing against numerous approved IO therapies and pipeline candidates from companies with vastly superior resources. Similarly, pipeline assets like Casdozokitug and CHS-114 face competition from other novel IO targets and combination strategies being pursued by large pharmaceutical and biotechnology companies.
Key risks include the inherent uncertainties of clinical development, where promising early data may not translate into success in later-stage or pivotal trials. Regulatory approval is not guaranteed, even with positive data. Manufacturing and supply chain risks, highlighted by the recent UDENYCA interruption, could impact product availability. Intellectual property challenges, including potential infringement claims or the inability to adequately protect its own technology, pose significant threats. Financial risks include the need for future funding beyond the current cash runway, the uncertainty of receiving UDENYCA earnout payments, and potential liabilities under transition service agreements. The company also acknowledges a material weakness in internal controls related to inventory documentation, though remediation efforts are underway. Dependence on a limited number of wholesalers for revenue and the impact of healthcare reform measures, such as the IRA, also present ongoing challenges.
Outlook and Path Forward
Coherus’ outlook is centered on driving LOQTORZI growth in NPC and advancing its innovative pipeline. Management projects continued revenue growth for LOQTORZI, aiming for market leadership in NPC. The focus for the pipeline is on achieving key data readouts in the first half of 2026 for studies evaluating Casdozokitug in first-line HCC (in combination with LOQTORZI and bevacizumab) and CHS-114 in second-line HNSCC and gastric cancer (in combination with LOQTORZI). These readouts are critical catalysts that could validate the potential of these assets and inform future development decisions, including potential pivotal trials.
The strengthened balance sheet provides the necessary runway to reach these milestones. The company’s strategic partnerships are expected to contribute to label expansion for LOQTORZI across various tumor types without significant R&D expenditure from Coherus. While the path forward involves significant execution risk in clinical development and commercialization within a highly competitive market, Coherus believes its focused strategy, differentiated assets, and improved financial position provide a solid foundation for creating long-term value by bringing innovative therapies to cancer patients.
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Conclusion
Coherus BioSciences has successfully executed a transformative pivot, transitioning from a diversified biosimilar company to a focused innovative oncology entity. Anchored by the differentiated PD-1 inhibitor LOQTORZI and supported by a promising pipeline of TME-targeted antibodies, the company is now positioned to pursue growth in the oncology market. The strategic divestitures have significantly improved the balance sheet, providing crucial funding for pipeline development through key data catalysts expected in 2026. While navigating intense competition and inherent industry risks, Coherus’ ability to leverage its technological differentiation, execute its commercial strategy for LOQTORZI, and advance its pipeline through successful clinical trials will be paramount to realizing its vision of extending cancer patient survival and delivering value to shareholders. The coming quarters, particularly leading up to the projected data readouts in 2026, will be critical in validating the potential of its innovative oncology franchise.