Welcome to the Q1 2021 Coherus Biosciences Inc. Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session.
I will now turn the call over to McDavid Stilwell, Chief Financial Officer. Mr. Stilwell, you may begin.
Thank you. Good afternoon, everyone, and thank you for joining us. We issued a press release earlier announcing our 2021 Q1 results. This release can be found on the Coherus Biosciences website. Today's call includes forward looking statements regarding Coherus' current expectations.
These statements include, but are not limited to, Our ability to advance our biosimilar and immuno oncology product candidates through development and registration, our commercialization well as our uses of capital, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause actual results to differ from these statements. These statements are not guarantees of future performance and are subject to certain risks and uncertainties are discussed in documents that we file with the Securities and Exchange Commission. Specifically, in our quarterly report on Form 10 Q for Coherus CEO, Denny Lamphere Paul Reeder, Executive Vice President of Commercial Operations and Market Access Chris Thompson, Executive Vice President of Sales and Doctor. Shah Rahimiem, Senior Vice President of Immuno Oncology Clinical Development. I'll now turn the call over to Denny.
Thank you, McDavid, and thank you all for joining us this afternoon. Today, I'll provide updates on UDENYCA commercialization, our biosimilar pipeline candidates as well as torapalumab, the PD-one antibody we in licensed from Junxi Biosciences earlier in the Q1. We are making strong progress with torapalumab and our biosimilar product candidates. Over the next 2 years, we anticipate bringing 4 new products to market in the United States, complementing UDENYCA in our commercial portfolio. The investments we are making in 2021 are expected to diversify and grow our revenues for years to come.
With the clinical data and regulatory milestones over the next 12 months, we expect the key elements to come together in our unique strategy of leveraging the strong cash flows from our biosimilar products into the rapidly growing immuno oncology market. Today, I'll start with a review of the performance of our first product, UDENYCA, which maintains its position as the most prescribed hypograstin biosimilar with 20% of the overall market as reported by IQVIA. In the Q1 of 2021, we recorded $83,000,000 in net sales of UDENYCA As compared to $110,000,000 in the Q4 of 2020 $116,000,000 in the year ago quarter. Market share for UDENYCA at 20% was relatively flat compared with the 4th quarter and within the 20% to 20% range 22% range we have experienced since the start of the COVID pandemic. The overall pegfilgrastim market grew by 1 Quarter over quarter revenue decline for UDENYCA in Q1 was driven primarily by 2 factors, Inventory changes and pricing.
1st, seasonal fluctuations in wholesale inventory Had a significant impact on quarter to quarter ex factory shipments. Wholesale inventory rose from 11 days on hand at the end of the Q3 2020 To 21 days on hand in the 4th quarter and then came back down at the end of the Q1 to 12 days. 2nd, as we have signaled since the Q3 last year, pricing pressure has intensified across the pegsilgrastin market. ASPs reported by CMS show the trends across the category. Price declines have been most significant for the originator, Neulasta, which now has the lowest ASP of any type of class.
I'd now like to introduce Paul Reeder, our Executive Vice President, Commercial Operations and Market Access. Paul brings over 30 years of relevant commercial experience in oncology other therapeutic areas to Coherus and will provide some additional color on the market dynamics we see going forward. Paul?
Thank you, Denny. I'd like to make a few comments regarding the pricing actions taken by the originator. It's highly unusual for the category leader with presumed differentiation Strong marketing capabilities to employ a value proposition of having the lowest price in the market. These actions by the originator combined with the revenue impact and unsustainability of price declines in a buy and bill reimbursement model Created an attractive opportunity for UDENYCA. Our strategy is to grow UDENYCA at the expense of Neulasta while maintaining pricing discipline and overall long term economic value for providers.
As you know, Neulasta retained 67% of the PEGFOVRASTA market with Onpro representing approximately 55% share. During COVID, physicians use this OnBody device to minimize patient visits into clinics and hospitals. Now that COVID is receding, the medical imperative to use Onpro is greatly reduced. We believe UDENYCA is well positioned to gain share in this For the following reasons. First, UDENYCA is the number one prescribed picklevergastim biosimilar with approximately 20% share.
2nd, UDENYCA is well positioned among commercial payers With over 90% of commercial medical lives covered. Thirdly, we've earned the trust of oncologists And have built a broad customer base with over 2,400 accounts currently purchasing UDENYCA. 4th, the majority of our field team has now been vaccinated and has resumed in person sales calls. And lastly, patient out of pocket costs for UDENYCA is on average $200 lower per syringe Compared to Neulasta, this according to Symphony's data for the last half of twenty twenty. Therefore, as COVID recedes, We expect UDENYCA will resume market share growth.
Net product revenue of course will be a function of both volume and price. While our strategy is to maintain disciplined management of UDENYCA ASP within the context of the competitive pegfilgrastimarket, Price is the variable over which we have the least control. As we pursue our strategy of growing UDENYCA penetration And make inroads into the Onpro market, we expect revenue growth in the second half of the year. Let me now hand it back over to Denny to discuss the progress in our biosimilar pipeline.
Thank you, Paul. Together with UDENYCA, our biosimilars of Lucentis, Humira and Avastin Addressed an aggregate $28,000,000,000 to market opportunity. We've already demonstrated our ability to use our branded marketing other commercial capabilities to penetrate the competitive areas with biosimilar. We believe we will experience similar success taking significant share in these new markets. Our strategy is to take at least 10% of each of these markets and in some cases as with UDENYCA even significantly greater market share.
By 2023, we expect all 4 of these biosimilars will be on the market generating significant cash for Coherus. BioSomar products play a critical role in our corporate strategy. Cash flows from this portfolio will create a diversified source of funding We will redeploy as we enter the rapidly growing $25,000,000,000 immuno oncology market. Having this core economic engine allows us to pursue high growth, high return opportunities, while limiting dilution to our shareholders. Let me start with our next expected biosimilar launch CHS-two zero one, our Lucentis biosimilar candidate.
Our partner BioAcc continues to target mid year 2021 for the submission of BLA filing. As we previously reported, BioWac held a supportive pre BLA meeting with the FDA during the Q1 of 2021. We're very excited about the potential approval of this product in 2022 and have begun commercial planning activities in preparation for launch next year. We believe we could be among the 1st biosimilar Lucentis candidates to market and this could become another significant revenue opportunity for Coherus. Ophthalmology has a similar buy and build business model to oncology with analogous critical success factors that our commercial team understands very well.
We plan to leverage much of our existing commercial infrastructure to gain significant share of the overall 6 Now with respect to our Humira biosimilar CHS-fourteen twenty, The FDA has accepted our BLA for review for the December 2021 action date and it's making good progress. In March, the FDA conducted the on-site portion of the pre approval drug substance CMC inspection with no 483s reported. The anti TNF market represents a substantial commercial opportunity for Coherus. After years of double digit price increases With Humira, there is clearly significant pent up demand for the type of biosimilar value that Coherus will deliver in this market where lower cost alternatives can bring down the overall cost of healthcare. Our product, our patient focused offering And our manufacturing scale will match what payers are looking for.
We are making manufacturing and supply investments to Our objective of capturing greater than 10% market share. With respect to CHS-three zero five, Avastin biosimilar, we're currently conducting a three way PK study required to support the BLA filing. COVID has impacted the recruitment We now expect to receive data toward year end and to file the BLA for the 1st part of 2022. Once approved, Avastin commercial will provide additional scale to our oncology commercial efforts with nearly identical sales call points as UDENYCA
to torapalumab.
By 2023, we anticipate this diversified portfolio of 4 biosimilar products plus torapalumab, our first innovative product will be approved, Marketed and generating significant cash flows to fund our growing immuno oncology franchise, the next topic I'd like to cover with you today. Now as you know, in February, we executed the transformational first step on our strategy into a large and growing immuno oncology market With our collaboration with Junqi Biosciences, an innovation driven biotech company for torapelumab, their PD-one inhibitor antibody. We spent 2 years conducting a rigorous assessment of the global checkpoint inhibitor landscape. We define the optimal preclinical clinical properties for our investment in in a PD-one blocking antibody. We searched for a molecule that would ideally deliver near term revenue through monotherapy indications, I would also provide us with a clinical profile that would be ideal as a foundational asset for future combination therapies, So that is where the immuno oncology field is heading.
We reviewed over a dozen PD-one steps. Torpilumab demonstrated high potency and unique molecular properties, which appears to translate favorably across a broad Pivotal Clinical Development Program. Toropelumab has been in development since 2015 as being evaluated in 15 registrational clinical across a broad range of rare and highly prevalent tumor types. As a reminder, our portion of the development cost is limited to The torapalumab collaboration is already exceeding our expectations. We are pleased with the progress being made now that the clinical data are beginning to readout And the first regulatory submission in the U.
S. Is underway. The accumulating external validation for torapalumab includes The selection of the nasopharyngeal carcinoma abstract for ASCO's plenary session and press program, breakthrough therapy designation from FDA And the additional recent approvals in China for NPC and ureterial cancer, supplementing the original approval there for second line melanoma. We expect toropelumab's emerging clinical validation as a potent PD-one inhibitor to drive partnership discussions with third parties seeking to combine their portfolio with a high quality PD-one backbone. We are already making progress towards registration in the United States initiation of the rolling submission BLA for metastatic or recurrent MPC.
We're also working closely with our partner on the registration strategy for multiple additional tumor types, which we will outline subsequently. And we expect to meet with FDA to discuss our registrational strategy some of these key programs. We expect several near term torapalumab catalysts in areas of high unmet need, including NPC, Lung cancer, esophageal cancer, triple negative breast and ureterial carcinoma. Now, let me introduce you to Doctor. Shah Rahimi, our Senior Vice President in Immuno Oncology, who is leading Coherus toricelimab development program and will provide you with an overview.
Sean?
Thank you, Denny. I'm excited to Today about a number of tauriclomab studies for which we expect clinical data over the next year. Let me start with nasopharyngeal carcinoma or NPC. FDA has granted tardololumab breakthrough therapy designation for recurrence or metastatic NDC. As a reminder, this is granted when preliminary clinical evidence reviewed by the agency indicates that the drug may demonstrate Essential improvement over available therapy on a clinically significant endpoints.
But keeping that in mind, we expect the BLA submission for this indication To be completed is here. The first NPC BLA submission is based on the Polaris-two CT05 clinical trial. The study enrolled 190 patients to current or metastatic MPC refractory to standard chemotherapy. Results of this study were published in the Journal of Clinical Oncology in January of this year. The tauripolumab approval for this indication as soon as first half of twenty twenty two.
We also expect to submit a BLA supplement First on MPC based on results from the randomized TRIPERE-two CT15 trial with 289 treatment naive patients. TRIPERE-two is a Phase 3 study with first line MPC and we are excited that the study results will be featured by ASCO As the late breaking abstract in the plenary program on Sunday, June 6 and in ASCO's official press release, We look forward to the meeting and the opportunity to introduce toripolumab to the audience of U. S. Physicians and investors. We expect toripolumab to become the 1st PD-one inhibitor approved for these 2 NPC indications in the United States.
Recurrence or metastatic NTC is an orphan indication in the United States. Because toripolumab has the potential to be the 1st PD-one approved for the treatment of NTC And to address an unmet need, we see this indication as an excellent opportunity to educate opinion leaders, community oncologists and payers on to a bone. Now let me review our lung cancer program, which compromised 4 pivotal trials. As you know, lung cancer presents over 60% of immuno oncology market opportunity and we believe these trials will support Comprehensive label thoroughly address this dominant segment. I'll let you briefly comment on each of the studies in some detail.
CHOICE-one for CT19 is a randomized first line non small cell lung cancer study with 4 65 patients. The primary endpoint of the study is progression free survival and the key secondary endpoints are overall survival and objective for SMART III. This study is progressing well. In December 2020, an interim analysis showed that the primary endpoint of progression free survival has been met and this will be presented later this year. We expect the final data readout of this study to be available by year end.
The second study, 1625 is a randomized trial with 350 patients with EGFR mutations, failed prior treatment Enrollment is expected to be completed by the end of the year, which with final data expected in 2022. The 3rd non small cell lung cancer study, CT18, is a randomized trial of 4 50 patients Comparing to rivolumab versus placebo in the new adjuvant setting, enrollment is expected to be completed the end of the year with final data expected in 2022. Forward study of the program is in small cell lung cancer. TURPRETER-eight CT28 is a randomized first time study with 4 20 patients with primary endpoints of The next indication I will discuss today is esophageal squamous cell carcinoma. After 18,000 patients in the United States diagnosed with Approximately 95% of patients with metastatic disease die within 5 years of diagnosis.
Last month, interim analysis of TRUBER-six CT21 randomized Phase 3 study with 500 patients met both primary endpoints of progression free survival and overall survival. We expect the presentation of JUPITER-six data later in 2021 and the potential supplemental BLA-five Triple negative breast cancer is another high unmet medical need. It accounts for approximately 10% to 15% of all breast cancers in the United States and nearly 90% of these patients The cystitic disease die within 5 years of diagnosis. Phase three-four-five or CT26 study is enrolling 600 triple negative breast cancer patients. Data from this study are expected in 2022.
The urothelial carcinoma program consists of 2 studies. The first study is POLARIS-two or CT12, The Phase 2 study which supported indication approval in China earlier this year. 2nd study, CD38, Large Phase 3 evaluating torepilumab or placebo in combination with standard of care chemotherapy as first line treatment, Rich Tsangou. I'll turn the call back to David.
Thank you, Shah for that very exciting review. In the second half of twenty twenty one together with Junshi, we plan to engage with FDA to discuss the filing strategy for these and the other indications. We look forward to providing you future updates on both the clinical data and the regulatory progress of these programs. I'll only say a few words about torquilumab combinations. As previously disclosed, the Junshi transaction also includes options to their anti digit antibody and engineered IL-two cytokine as well as certain negotiation rights with respect to additional assets.
For the anti tingeta antibody, we expect Phase 1 study to begin later this year. We'll have the opportunity to review the data and make our opt in decision when the study is complete. Together with Junshi or other partners, We expect to explore and develop synergistic combinations with torapalumab, particularly given its emerging strong efficacy profile and the market's direction towards combinations. Launch planning is well underway and our commercial team is excited to add toricpalumab to our oncology product portfolio. There is significant overlap with our established footprint of over 2,400 accounts and inbound customer comments such as they're eager to support competition in the anti PD-one market.
We believe displacing entrenched competitors is one of our demonstrated commercial competencies I look forward to the market entry in 2022. Now, I'll turn the call over to McDavid for a review of the quarter's financial results. McDavid? Thanks, Cindy.
The details of our financial results are in the press release and in the 10 Q we filed this afternoon. So I'll focus now only on a few highlights. The Q1 of 2021, we reported a $173,000,000 net loss on a GAAP basis. On a non GAAP basis, we reported net income of $400,000 or about a penny a share on a fully diluted basis. The translation from GAAP to non GAAP included 3 items, the $145,000,000 upfront payment to Junshi Biosciences, The $11,500,000 in charges related to the termination of the CHS 2020 program as part of a strategic R and D resources toward immuno oncology and $16,900,000 in non cash stock based compensation.
Cash flow from operating activities was $1,400,000 for the Q1 of 2021. As detailed earlier in the call, net product revenue was $83,000,000 a decline from the prior quarter and the year ago quarter. The decline was primarily attributable to seasonal fluctuations in wholesale inventory as well as increased allowances and discounts to customers. Research and development expenses for the Q1 of 2021 were $203,500,000 compared to $33,100,000,000 the same period in 2020. The increase was mainly due to the $145,000,000 upfront payment to Junshi Biosciences, The $11,500,000 charge related to the termination of the CHS 2020 program as well as development costs in support of the advancement of toricamab and the biosimilar pipeline product candidates.
Selling, general and administrative expenses were $39,400,000 in The Q1 of 2021 as compared to $35,400,000 in the year ago quarter and the increase was primarily driven by higher stock Compensation expense. We ended the quarter with cash, cash equivalents and marketable securities of $399,500,000 compared to a balance of $541,200,000 at year end 2020. Subsequent to quarter end, Coherus received $50,000,000 from Junqi Biosciences acquisition of approximately 2,500,000 shares at a price per share of $20.06 For financial guidance, now that we have closed the Junshi Biosciences collaboration, we are Our expected operating expenses for the year to a range of $370,000,000 to $400,000,000 Excluding the $145,000,000 upfront payment to Junxi Biosciences in the Q1, The expense guidance includes approximately $50,000,000 to $55,000,000 in stock based compensation expense. Our external R and D spending is focused on manufacturing related activities in preparation for the potential launch of torapamumab and CHS-fourteen twenty and development activities for CHS-three zero five and for additional presentations of UDENYCA. Increases in SG and A spending in 2021 are primarily driven by marketing activities and headcount to support UDENYCA and the potential launches in 2022 of torapenumab and CHS-two zero one.
In the Q1, we exhausted the remaining inventory that was manufactured and fully expensed prior to UDENYCA approval. As a result, we estimate that the cost of goods sold as a percentage of net product revenue will be in the range of mid to high single digits, Excluding a mid single digit loyalty on net product revenue that we owe through July 1, 2024. As Paul noted earlier, we expect UDENYCA revenue and market penetration to rise in the second half of twenty twenty one, Assuming treatment patterns normalize as the COVID-nineteen pandemic recedes and subject to pricing trends in the overall pecfilgrastim market. Finally, on the Investor Relations front, we'll be participating in the Bank of America Healthcare Conference next week Our presentation scheduled for May 12 at 1:15 p. M.
Eastern Time. And I'll now turn the call back to Denny for closing remarks.
Thank you, McDavid. As you can see, we're making strong progress with UDENYCA about similar pipeline and our strategic realignment towards immuno oncology. On the financial side, we are focused on optimizing the cash flow potential of our biosimilar product candidates to fuel our IO growth engine. With clinical data announcements, medical and scientific presentations and regulatory milestones for torapalumab and our biosimilar product candidates, We expect frequent important news flow for the remainder of the year. We look forward to engaging with you through these announcements and also to our Analyst Event Day later this year.
I'll now ask the operator to open the line for your questions.
Thank you. We will now begin the question and answer session. And our first question online comes from Mohit Bansal from Citi. Please go ahead.
Okay. Thanks for taking my question.
Anshan,
another contributing factor in Q1 that was The severe weather in some part of the country, I think you're not managing that. So the question is, Is it a smaller part than previously anticipated and then pricing and inventory are through the bigger parts First, and then as you think about the math, so if I think about 4th quarter number and takeout that we might remove, I calculate roughly $100,000,000 was the demand. Is this a fair number of demand To think about the Q1 and beyond because obviously price is an important point, but how should we think about demand there?
Yes. Hi, Mohit. Thank you. I think you cut out the first part of your question. Could you repeat the first part of your question, please?
Sorry, I mean, I just wanted to get some color on the weather, severe weather in some part of the country part, which you kind of mentioned earlier in the quarter, but You are not mentioning it today, so was it a smaller portion of the in terms of impacting the quarter number?
David, do you want to address that?
Sure. Mohit, it's hard to measure the effect of the weather. So we're focusing Today on the two aspects of inventory and pricing. And so the way to think about it, As we said in the script is that at the end of Q3 of 2020, we had about 11 days on hand in inventory, which jumped in the Q4 to the high end of the normal range at 21 days on hand, due to seasonal buy ins from customers. And then in the Q1, this extra inventory was depleted and now we're back into the normal range of 12 days on hand.
And then additionally, UDENYCA ASP declined 6% in the Q1 versus the 4th quarter, which directionally indicates how pricing changed in the market. So this decrease I think is accounts for
Thanks, McDavid. Mohit, did you have a follow on question?
So if I can ask one more question on So you in this press release, you are mentioning other formulations or other presentations of SIDARICA. So now that you seem to be working on that, is there anything you can disclose in terms of timelines or how we are thinking about it?
We have made no formal disclosures as you know with respect to these additional formulations.
Okay, got it. Thank you for that.
However, as soon as we have a material development, we will of course disclose such.
Thank you. Our next question online comes from Jason Gerberry from Bank of America. Please go ahead.
Hey guys, thanks for taking my question. First just on torprelumab, just the positive interim Data and lung cancer, just wondering, do you think that's a sufficient basis for a BLA? Or I know a number of competitors are saying that they're going to need Phase 1 Bridging data in U. S. Subjects.
So just sort of curious if that's a gating item or something in the final Top line update that you're looking to see. And then just on the pegfilgrastim ASP dynamics called out in the prepared remarks.
Do you have a sense of
what proportion of oncology providers participate in like capitated or value based payment Pilot programs, just trying to get a rough sense of what proportion of the market Amgen might be trying to cater to with the lowest net cost offering? Thanks.
Thank you. Thank you for your question, Jason. With respect to your first question, which strikes to the issue of the lung studies and the interim analysis, I don't believe that you want to conflate that with the issue of any additional Studies that others might be doing to supplant their indications. That being said, I'll let Shaw make some remarks about the lung study, The interim analysis and the patient population there. Sean?
Thanks, Danny. And thanks for the question. Really the short answer is that We believe that the study is well designed, is well powered and was conducted within the Industry and International Rules and Regulations. And we believe that this study is sufficient For a BLA submission, of course, once the study is presented to the agency, the agency has to ask.
Yes. The other point that I would make here, Jason, is that other people studies may not have included The appropriate subset of patient histologies and one thing about this study I believe is that include both squamous and non squamous histologies, which I think is very important. So I don't think it's really an apples to apples comparison when you look at other studies. But so far, no, we don't believe that we will have Any supplemental studies with the caveat that we will be talking to the agency later this year with Jun Chi to validate that. And lastly, what I would point out is that there's 3 non small studies in lung and one small cell study.
So we think there's going to be a plethora of data in the indication. Now with respect to the ASP question, Paul Reeder Perhaps or Chris Thompson may address that. Chris?
Thanks, Teddi. Thanks for your question, Jason. You had asked us about do we have an idea how many customers participate in value based incentives. And I would have to say I don't have an exact number, but Many of the customers do, that's what they tell us. They participate both on the commercial side as well as on the Medicare side.
With the Medicare side sometimes going in and out of programs, but let's say this, although they are participating in value based incentives, They evaluate not only the cost of the product, but also the revenue derived from the product. And they try to balance that in their decision making. We believe that we've made the right decisions as it relates to being good stewards of ASP And we'll continue to do so. Hope that answers your question.
Thank you.
We're ready for the next question, operator.
Thank you. Our next question on line comes from Chris Schott from JPMorgan.
Great. Thanks for the questions. On Neulasta, just directionally, are you seeing signs of Either normalized pig filgrastim usage or willingness to switch away from Onpro over to biosimilars as we've Kind of move from this environment we're in, in January, February to where we're sitting today in April May. I guess directionally, you're starting to see that? Or is that still TBD in terms of when that transition is going to start to happen.
And then just a second one on pig filgrastim, just on pricing. You talked about a 6% erosion in 1Q. Has pricing stabilized at this point? Or are you still seeing some erosion on the pricing front? And I just have one follow-up after that.
Okay. Thanks, Chris. So I'll let Paul Reeder address your first question with respect to Neulasta and so forth. Paul?
Yes. Hi, Chris. Thanks for your question. Yes, I mean, I think with respect to the shared shift with Onpro and Neulasta, you saw that in the Q1. And so we do expect as COVID recedes As we laid out the opportunity for the market in that Onprobe opportunity To open up to greater opportunity, we believe we're well positioned there for that particular market.
As it relates to pricing, I think we expect prices to continue to erode as new competitors enter the marketplace. I think if you look at what's happened in the last quarters, the steep decline is really fueled by the Neulasta decline, but also The pandemic where these new entrants, the biosimilar entrants were forced to compete for share in that smaller Pre filled syringe segment. So now again as COVID is receding, we feel we're well positioned that that entire market opportunity will open up for More competition as the need for Onpro becomes more diminished.
And price decreases will moderate.
We do believe price decreases will moderate. Over time, yes.
Thank you, Chris. Did you have a follow on question?
Yes. I just had a quick one on then on torpumab. Is there any thought or need in your view to think about doing a head to head against KEYTRUDA, just given they are Obviously, dominant in many of these indications you're pursuing over time. Do you think that does that would that help at all from a commercial standpoint? Or do you think The data will be comparable enough that you won't need that type of data?
No, we don't think so. It is an issue that we took a look at earlier on. However, our research studies and our conversations with the customers Particularly with the providers indicated that really they would look at the data generated with the particular PD-one. And if that data compared favorably that would be fine to generate utilization. This is why we're very pleased with the data that's being generated With torapalumab so far, it's showing very strong efficacy in each of the indications that it's been put in.
So we're feeling that this We'll continue and we'll have excellent data to go forward, particularly in lung and some of these breast and some of these other indications. So no, we don't think there's a need to go forward We have seen nothing in the market that indicates that.
Okay, perfect. Thanks so much.
Thank you. Our next question online comes from Salim Syed from Mizuho. Please go ahead.
Hi. This is Bennett on behalf of Salim. Thank you for taking our questions. A couple, if we may, although both are related. We found last month in the cyaclinicalhero.com2 trials listed, one for UDENYCA administered with an auto injector and another one using a non body injector.
We haven't seen similar trials in clinicaltrials dot gov. If we could get some color regarding this, please? And also, if you could comment on the type of studies that are Needed when developing an auto and an onboard injector? I mean, it is only a Phase 1 PKPD study needed? Or do you think a
Thank you. As I indicated previously, we haven't made any formal announcements With more disclosures with respect to alternative dosage forms for UDENYCA. With respect to the requirements, I would direct you to the studies that Amgen performed To say efficacy studies are probably not required.
I see. Good. Thank you very much.
Thank you. Our next question online comes from Georgi Georgiordanov from Cowen and Company. Please go ahead.
Hey guys, thank you so much for taking our questions. I guess first, if you could talk about the opportunity for Lucentis and anti VEGF market. Do you believe that having only one of the 2 products as a biosimilar could allow you to have access to the whole anti VEGF market? And then maybe if you could talk about your expectations for the competitive dynamics at the time of launch and thereafter? And then I have a quick follow-up.
Thank you. I'll let Paul Reeder offer some additional insights on the LUCENTIS. But the short answer to your question is yes. We think that the entire market that is approximately $2,000,000,000 for Lucentis and $4,000,000,000 for EYLEA It's addressable to some degree with a Lucentis biosimilar. As you know that market is stratified from We formulated Avastin at the low end all the way up to a very long duration moieties at the top end with EYLEA and LUCENTIS in between.
So we feel that LUCETIS is an ideal entry point for this. And we further think that it will be a couple of years before EYLEA biosimilars actually get on the market. So we look forward to market formation with the Lucentis biosimilar Starting sometime next year and we are now working on our launch for next year as we said. Paul, do you have any additional comments with respect to LUCENTIS?
I don't think I have much to add any. I think that was very comprehensive. So nothing more to add.
Thank you so much.
Thank you. And then just a quick follow-up on UDENYCA. What is your sales force seeing in terms of market And are there any other UDENYCA competitors that are not yet to market Do you expect it will be coming up in the next 6 to 12 months?
Great question. I'll add Chris Thompson, Our Executive Vice President of Sales handle that one. And Chris, how's the competitive set look out there?
Thanks for your question. So you're seeing activity amongst all of the competitors that are out there. As Paul had mentioned earlier With COVID being here, it's a smaller competitive set we all have to compete with, which probably attributed to some of the price declines. But now with COVID receding and everybody getting vaccinated and my sales force Able to get into these accounts, I think what we're going to see here is the pie gets bigger, right? The opportunity to compete for The Onpro business that 55% of the business really gives us an opportunity to expand as well as the competition to expand.
But We're pretty confident that based on our past history, we're going to do a pretty good job there. Thanks.
Thank you so much.
Thank you. Our next question online comes from Greg Gilbert from Truist Securities. Please go ahead.
Thank you. It's Greg Fraser on for Greg Gilbert. The expectation for UDENYCA sales to rise in the second half, is that Relative to the first half or is that on a year over year basis?
Yes. Would you like to take that one Paul?
It's based on the
first half, Greg. Okay. And the operating expense guidance change, how much of that was related to the Jiangxi Collaboration versus higher spending in other areas?
Sure. So for the Jin Ji collaboration, as you might recall, we have A $25,000,000 per molecule per year R and D expense contribution And so that's already kicking in. And then we are also preparing for commercialization there, which involves some
Tech transfer activities.
Got it. Okay. And then you mentioned that you could potentially do better with some of your future biosimilar launches than you've done with UDENYCA. Is Lucentis one that you put into that category where you could perhaps be better than 20%, 25% share? Thank you.
Yes. Let me so let me just correct that. What we indicated was that we felt that for any biosimilar launch We'll do at least 10% and that would include for example the 14/20, the Egenmeier biosimilar launch, certainly the Lucentis launch. We're very proud of the UDENYCA launch. We did 20% of the 1st year, which was actually 50% of the syringe segment.
So We did quite well there. I'd be very, very happy to replicate that success with Humira or Lucentis. But we are optimistic that Our proficiency in biosimilar commercialization will be demonstrated with the Lucentis launch, the Avastin launch, the You might have asked some of the launch and so on. We feel this is our playing field and we're the folks who have demonstrated specific competencies in these areas without resorting To extraordinary price cutting.
Got it. Thank you.
Thank you.
And thank you. Our next question on line comes from Douglas Tsao from H. C. Wainwright. Please go ahead.
Hi, good afternoon. Thanks for taking the questions. Just Denny, so much of the strategy, certainly Success that you've enjoyed both with Yanica and hopefully with some of the other biosimilars that come to market has been driven by your sort of outreach to payers. I'm just curious, Since you've moved ahead in the PD-one market and immuno oncology, have you engaged with payers extensively And talk to them about the sort of opportunity to sort of come to market as a value brand. And what is it what are they looking for in their receptivity, just given the significant increase in spend in the immuno oncology category?
Thank you.
Thanks for the question, Doug. I think that the first thing that we're going to do is To get torapalumab approved, it's an orphan indication, it's got breakthrough status. And so we don't see I need to position it as a value brand per se given this indication going forward. How things roll out in the future, we'll handle In the future as they come. But I think the main thing to focus on here though is that torapelumab really It's being extraordinarily validated in a number of ways.
It got breakthrough status from the FDA, the selection at ASCO for the plenary session, The additional approvals in China, Junxi Biosciences distribution agreement with AZ in China And so on. And so we feel that we have a very, very strong molecule on our hands. We'll be able to address each
of these indications as they come up.
Okay, great. Thank you.
Thank you. And our next question on line comes from Jason McCarthy from Maxim Group.
Hey, this is Michael Keunwich on the line for Jason. Thank you for taking my question. So I'd like to see on UDENYCA, if you could provide a bit more color on how the pricing and reimbursement breaks down between UDENYCA and Neulasta now, I know you touched on that a bit before, but could you provide a bit more color?
Thank you for the question. Perhaps Paul or Chris have the actual ASP numbers for UDENYCA and that recently been published UDENYCA versus the last Paul, do you
have this?
Yes. How are you doing, Michael? Yes, I think The Q2 published prices will be coming out soon, but looking at Q1, which were publicly available, Neulasta had the lowest ASP published price amongst all of The pegfilgrastim set just a little over $2,900 So from a as Chris mentioned, many of these segments are Class recovery sensitive, so they look at both cost and the reimbursement on that. So I'll refer you to Amgen's earnings report for specifics around their specific ASP declines year over year and quarter over quarter.
I think it's fair to say that we have exercised ASP and pricing discipline, we've talked about that a lot that's showing up in the numbers and our ASP is well above that of Amgen's.
All right. Thank you. And then on the competition in the biosimilar space, historically, The idea has been that new entries come in and they're going to take share from Neulasta rather than from each other. However, with Amgen taking the ASP leadership position, does that change the calculus at all when looking at the competitive dynamics?
Yes. Paul, do you want to take that one?
Yes. Sure, Michael. Yes. I mean, with It's pretty expected with a
lot of these
biosimilars to compete for the overall share of it. I think with COVID And the pandemic favoring the On Body device, it caused this competition for The segment which was really for prefilled syringes and we own that segment. We're the number one peg fill, grass and biosimilar. And now that COVID is receding, we believe that's why we're in the strongest position to be able to go after that 54% Onpro share, which is available to the market. So that's our stand.
We're not focused The newer entrants, our focus is on taking share from the originator who has 2 thirds of the business still.
All right. Thank you very much.
Thanks.
Thank you. And our last question comes from Greg Gilbert from Truist Securities.
Yes. Hi. This is the other Greg from Truist with a follow-up here. Two part question. One is on revenue.
Do you want investors to take away that you expect to sell More than 4 times the Q1 level of Edenica. I just want to make sure you have the opportunity to kind of set the stage here and reduce variability of estimates. But it sounds like second half higher than first half means most likely that your sales would be higher than Q1's sort of run rate. So that's Part 2 is Denny about interchangeability. We may see for the first time ever, well, the biggest drug ever seeing biosimilar competition, but you may also see a mix of interchangeable biosimilars and many that are not.
Are you pursuing interchangeable status? I think you're not, but I'm curious on your Whether you would consider it and whether you think it matters? Thank you so much.
That's a great question. Let me answer the second question before the first. First, I think it's important to keep in mind that Interchangeability thus far has not been a requirement at all to support biosimilar adoption. Secondarily, what we'd say is that Our payer research indicates that interchangeability will not be a major impediment to biosimilar market biosimilar Adoption, specifically in the Humira market, we expect the parent to be very, very active in that market, But we don't expect the requirement to be interchangeability or not. And the third thing I would say is there is not interchangeability requirements in Europe and that has an impeded biosimilar adoption there whatsoever.
So I don't we don't really think so and no we are not seeking a biosimilar interchangeability study Or to invest in such, we don't believe it's required. With respect to first half versus second half revenues, I'll let McDavid comment on that.
Yes. I think another way of phrasing your question is whether or not we could you can take Q1 revenue and multiply it by 4. And I would say, no. We expect that the second half will have higher revenues, as we penetrate into the On Premarket. Of course, that's dependent on the overall pricing environment, but we believe that revenues will rise in the second half.
Thank you.
Okay, great.
We have no further questions at this time. I'd like to turn the call over to Adani Lanfear for closing comments.
Thank you all very much for joining us today on our Q1 call. As you can see, I think we're making excellent progress with respect And I think the Junshi transaction going forward will turn out to be a very positive one for the company, particularly Since we are now Speritan, we have a very high quality asset, which I think will give us a lot of readouts With respect to the clinical programs over the next 6 to 12 months and we look forward to seeing you all on our next call. We'll be at Bank of America And also we'll have a few things to say at our R and D Day, which will be towards the end of the year, most likely in Q4.
We'll give you some
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.