Welcome. Good morning. This is the second day of the Citizens Life Science Conference, and it's my pleasure to introduce the next company, Coherus Oncology. Here for Coherus is Denny Lanfear, CEO, and Theresa LaVallee, Chief Scientific Officer and Development Officer. New title today. Welcome, guys. Appreciate you coming. I never know exactly who's in the audience or who's listening to the webcast, and would love to maybe have you guys spend four or five minutes on just giving us an overview of what Coherus is about before we dive into some questions.
Sure. First of all, thank you very much for your kind invitation to the conference and the opportunity today to talk about our company, Coherus BioSciences. Soon-to-be Coherus Oncology, I would add, consistent with our focus now on innovative oncology. Let me start, first of all, with our foundational asset, toripalimab, brand name Loqtorzi. This was a very deliberate attempt when we began moving towards innovative oncology to bring in a PD-1. We thought that if you're going to be a major player in innovative oncology, you need your own proprietary PD-1. We screened over a dozen different assets across the world, and in particular, we became very focused on toripalimab because it had been developed very uniquely as a next-generation product, with a focus on the FG loop as the epitope.
This provides toripalimab with some significant differentiation, which has been demonstrated across a number of tumor types, including the esophageal, where it is active in the low PD-1 state, which is really very interesting and very rare. When you bind the FG epitope of PD-1 on the T cell, secondarily what occurs then is internalization of the PD-1, and then there is a very different set of signaling, which occurs around CHIP2, which Dr. LaVallee can give you greater illustration on. We brought that forward, and then we focused on getting it approved. COVID, of course, hit, but we are proud to say we were the first PD-1 approved on Chinese data, and we are now in recurrent metastatic nasopharyngeal cancer.
We are the only product that is approved across all lines of that, and we have very good positioning on the NCCN guidelines. We are the only preferred treatment across all that, and this has established Loqtorzi as the standard of care in nasopharyngeal cancer. We got that product launched last year, and we are happy to talk about that in a little more detail, how that launch is proceeding and how we are progressing with respect to both the breadth of the healthcare providers and also the depth getting re-upped as far as the scripts, and so forth, duration of therapy. toripalimab has a very elegant development strategy here at Coherus, developed by Theresa, and that is to develop in combination in three different ways.
First of all, of course, with our own pipeline, casdozokitug again, CCR8, which we'll talk about secondarily, but also in the hands of others, where we provide the product. We will supply the product, but they will do the pivotal trials and all the trials at their cost. We currently have a few of these going on. Our partner, Junshi, has toripalimab in a pivotal with BTLA in small cell cancer. They're also pursuing another Chinese study in first-line liver, with a background in lobectomy and so on. We also have our partner, Innovent, who's moving forward with a pivotal indication later this year. We have a number of partnerships that we have done with respect to toripalimab, and our strategy when we put the product forward was that we would proliferate it into the environment.
We would do a number of deals with others, and that way, we would be the second-generation PD-1 of choice as Keytruda came off patent in 2028, and so on. The strategy of co-developing Tor-Pellemab as a proprietary PD-1 in conjunction with our own pipeline, I think, is a very elegant one in that you get sales multiples for having two assets, on the label, when you go forward. As I said, Theresa will talk to you a little bit about how we're doing with Castozo and the CCR8. Secondarily, those two assets I think are very, very interesting. We have recently put forward some very interesting data, AACR and our CCR8.
Our view is that the CCR8 class, the anti-Treg class, is an emerging mega class really within pharma, and there's a number of folks, of course, that are in that class and moving forward, but we are the first to have U.S. patient data, and we had very, very nice biomarker data and scans that we put forward. The class is very interesting primarily because Tregs play a pivotal role in the tumor microenvironment in preventing CD8 positive T cells from attacking the tumor. People for a long time have sought to be able to remove Tregs in the tumor microenvironment selectively and thereby increase the activity of T cells. As I said, Theresa can walk you through some of the interesting data. Our second big asset with our pipeline is casdozokitug.
It's an anti-IL-27, and that asset, we're very pumped up, very, very positive. We have done a study in first-line liver with casdozokitug on the background therapy, and have shown five complete responses across 27 patients for a 17%-18% response rate, which is really very, very extraordinary and really shows both the promise of the biology, but also how we are going to move this forward in a very holistic fashion, in liver going forward. We have a great PD-1. It's moving forward in the market. We have an excellent combination strategy with both our own proprietary assets, which are proving out in the clinic, and also we're moving more broadly partnering with others, with Loqtorzi.
I would just let Theresa offer a few other comments about some of the other things that we have planned to do with respect to the pipeline.
Yeah, now I think the key for Coherus is when we look at our pipeline is looking for agents that have a strong line of sight. One of the challenges in the field with immuno-oncology is who to treat. If you have to do 15 phase IIs to figure out where there's a signal, it's a big spend with a long, not as good return. Understanding with casdozokitug that the mouse data showed us that lung and liver were very specialized tissues for this immune regulatory cytokine. Only seeing activity in those tissues and then having it go into clinic and see monotherapy responses in lung cancer, and then this impressive CR rate that is unprecedented in liver cancer really sets that up for a focused development.
Likewise, CCR8 is that preferentially targeted tumor Treg agent and seeing a partial response in head and neck cancer, a tumor type where the majority of Tregs, over 75%, express CCR8 and a high density really gives that early proof of principle to give us excitement. As Denny Lanfear mentioned, we have a nasopharyngeal carcinoma for Loqtorzi as the U.S. label, so broadening its use in head and neck is a really exciting opportunity for us.
Let's dive a little bit more into, you know, some of the data you had at AACR, CHS-114. How does this differentiate, right? So CCR8, like as a target, right, has been, I believe it's been sought after, you know, I'd love to kind of know how you differentiate from kind of what's out there. And then maybe more importantly for our listeners, as we think about the head and neck landscape, right, and the other players that, you know, are kind of dominating the headlines, right, whether it's Merus or Bicara, how do you guys plan on kind of threading the needle there with your asset?
Yeah, so to start, CCR8 was identified with single-cell analysis, and people have tried a variety of targets for T regulatory cells. It's not a new concept getting rid of the immune suppressive cell. The problem is Tregs are important for homeostasis. If you take out too many Tregs, you get autoimmunity, and then Treg is a subset of a CD4 T cell. Not taking out normal CD4s or CD8s has been a challenge. That was the problem with CCR4, for example. Single-cell analysis of tumor resident Tregs identified this upregulation of this target. As that's really come forward, there's a number of players who have developed afucosylated antibodies, so it's a bind-and-kill mechanism. The challenge with GPCRs is that it's a protein that doesn't have a lot on the exterior of the cell.
While there are hundreds of small molecules approved on GPCRs, there's only a handful of antibodies because getting selectivity is a challenge. From the screens that we did, there's one and only one antibody that exclusively binds CCR8. That is very unique in an antibody lead identification campaign where you only have one that's selective. When we profiled three competitor programs, we found they all have off-target binding, including one of the programs having J-chain binding. What does that mean? I worry about GI toxicity if you bind J-chain, and we've heard chatter in the field. There hasn't been a lot of data disclosures of toxicity with some programs. There was a presentation at SITC from a Chinese program, Kuilu, with their QLP molecule, and they had dose-limiting toxicity about the midpoint, around 540 mg, really suggesting that that could be an off-target issue.
Our program is highly selective. We were able to dose up to 1,200 mg in phase I without toxicity and then really move it forward now with two other dose levels that are lower than that in combination with toripalimab. At AACR, we showed safety with that combination, as well as in seven patients with the combination, we had a PR at the highest dose level. Really excited about that. In terms of Bicara and Merus, I mean, I think what's really exciting in the field is this real demonstration that two targets are better than one. So the EGFR plus something may be better, is really a breakthrough in head and neck, which has really been a patient population that's highly underserved for decades.
The EGFR space is a mechanism that will really benefit patients, but there's still opportunities in the second line and later for other treatments, and then eventually targeting Tregs with that could also be of interest. We think that there's room to have orthogonal approaches. This is tried and true across oncology, and we love the fact that these bispecifics are really showing that you get synergy, that it's not just additive benefit.
Yeah, this complementarity of mechanism of action, I think, is really powerful, and one of the key things I think that's going to drive the CCR8 class forward in the coming years is, I think there may be just a gold rush as people just go after these products.
Got it. As we think about the next development steps, right, when do we get the next set of data about, you know, how many patients? And I think most importantly, as you look at this data objectively, what kind of constitutes your kind of go, no-go hurdle, you know, that you'd like to beat?
Yeah, so we, I'm thrilled that we were able to show the critical parameters at AACR. One of the aspects in development that I think is not as appreciated for time and money and risk is your recommended phase II dose, particularly with Project Optimus. We showed in the poster the two doses that we're advancing are pharmacologically active. We saw greater than 50% Treg depletion in the tumor at both dose levels, and that's important because preclinical work showed that you had to decrease at least 50% to get activity. All doses, the, was 52%-97% depletion. The other exciting part that was underappreciated was the increase in CD8 T cells. The tumors really lit up, really sending it for a PD-1 combination, but also thinking about partnerships with T cell engagers.
You know, this is an opportunity where you need T cells in proximity in the tumor to have activity, so it lends itself to new combinations. We will fully enroll. I said we had the safety cohort with toripalimab. Now we are doing the full Project Optimus 40 patients at the two doses. We hope to show further efficacy as well as a recommended phase II dose from head and neck and gastric cancer early next year to really set us up to advance this agent. To seeing that activity so early is really exciting. From the casdozokitug program, it is enrolling now. We have the combination with toripalimab, casdozokitug/bevacizumab, and frontline liver cancer in a randomized study. Having that fully enrolled this year for data readouts next year is really what we are excited about.
For both programs now, since we've touched on both, what do you think, I mean, for you guys is to advance the products forward, but also for investors to kind of pay attention to? What do you, what would you, you know, kind of say is your bogey that you want to hit in terms of objective response rates or maybe even PFS or duration of response?
Yeah, so I think that hitting the benchmarks in the second line head and neck space, really looking at the 20% ORR with a PFS, you know, approaching the nine-month mark would be really exciting to really advance it. And looking at the patients at the two doses to really get into, is that enough data to set it up for the next study that could be with pivotal intent? And then for the casdozokitug, I think repeating that CR rate in the 15%-above range would really set it up for a pivotal study.
Switching to casdozokitug real quickly, you know, would love to kind of understand its, its potential. You had some data at ASCO GI. Maybe just very quickly, you mentioned the CRs are, you know, are the CRs still ongoing? Will we get an update on those, on those patients? I think even more importantly, in this environment, right, like trying to harness the power of cytokines has been, you know, a challenge, right, at best, for many, many years, and we've been following the space. Why do you think, you know, something like casdozokitug is likely going to finish, you know, get to the finish line?
Yeah, I mean, I think of, we think in therapeutic areas. From an immunology standpoint, cytokines are validated, particularly the IL-12, IL-23, IL-27 family. It is a cytokine that is proven to rebalance the immune system. I think, and the honest answer is I was not enthusiastic about this program when it got started because I have seen so many failures in oncology. Human data is the aspect that really takes us forward in a data-driven way to show that inhibiting a cytokine in cancer patients can rebalance the immune system. We had beautiful dose-dependent effects. Not until we showed full inhibition of IL-27 did we see that T and NK cell activation. The other aspect that I think, it goes back, I mean, it has been, I mean, Ren and I have known each other for decades.
My frustration in this field is people don't pay attention to who to treat. You don't just go after, oh, this is the big market. You gotta follow the science. The fact that the mouse showed us that there was activity in lung and liver, three different preclinical models in liver cancer, if you do a standard ectopic sub-Q tumor model, there's no activity. It has to be in the right tumor microenvironment. To see that translation and see those responses in the clinic exactly where it's supposed to be. It may not be, I mean, we think we have hypotheses about other tumor types where it could make sense, but we're laser-focused on where the mouse, where the biology has said, and the clinical data are there. If the clinical data didn't really translate, we wouldn't advance the program.
Again, that CR rate is different than anything that's been seen. So the relative contribution of casdozokitug/Keytruda is clear.
Do we have an expectation for updated data later this year, or is everything kind of on the randomized side for next year?
Yeah, so we have to enroll this study and have it read out so that that'll be next year.
Okay, excellent. I wanna switch gears very quickly to your PD-1 inhibitor, right, and kind of how things are going, as far as the launch is concerned. 'Cause you're in a very unique position within the biotech world. You have a product. We'll get to the cash position 'cause I think the audience would be very interested in that as well. Maybe right now, just starting off, how is that launch going? You know, where do you think it could ultimately go as far as market potential, total addressable market?
The launch is going consistent with our expectations. This is a, this is a rare disease. So there's 2,000 of these patients out there. They have to show up at the doctor, you know, every two or three years a doctor sees a patient. There was no real standard of care. There wasn't anything approved. People were using chemo or they're using off-label PD-1s like Keytruda or whatever. There's an educational process that we've embraced for the first year with the product, but we have an absolutely terrific label and super compelling data. The data, I would add, is so compelling that the NCCN committee actually met off-cycle and moved it to the top of the guidelines. We are the only preferred first line in this disease.
That's very powerful when you approach a doctor and you start illustrating to them, hey, you know, you can't just do chemo. You need to do chemo plus Loqtorzi to benefit your patients. That said, the patients currently are being treated either simply with chemotherapy or some people with an off-label PD-1 and then Loqtorzi. We're focused very sharply on that, particularly with patients that are on chemo where our label allows us to add Loqtorzi to that. That's one part where we're getting significant growth. We are focused on increasing the breadth of our efforts, getting more institutions and more doctors. Those efforts are very focused now with our commercial team just focused only on Loqtorzi and also, you know, not looking at Loqtorzi, you know, plus our former biosimilar assets. The second is depth, right?
That means that the doctor writes one script, the next patient shows up, writes another script, and we're doing very, very well with that. That's growing, very consistently. Lastly, revenues will be driven by how long the patients stay on therapy, duration of therapy, right? You want those patients to stay on until they progress for an extended period of time. That is also marching up very nicely. We're very focused on putting Loqtorzi on the escalator, as I like to say. I think that's moving along pretty well.
And it's a rare, you know, it's a rare oncology disease. You know, how many patients, what do you think the market potential is?
It's about 2,000 patients, and we can get to, you know, almost all of them. There's about 4,000 physicians that we have to get to. We are staffed to do that, with our team. The way we view Loqtorzi, though, it's, you know, I wouldn't, I won't represent to you that it's a giant product, but for us, it's very significant insofar as it will offset a lot of our development costs. After we get past, for example, about $15 million a quarter, the sales force and all the promotional teams will have been paid for. After that, it'll start to pay for some of the, you know, the SG&A, the clinical trials, and other things all the way up.
We feel fairly confident that we'll march it up to $150 million-$200 million a year, and that'll probably be three years out.
Excellent. And Denny's no stranger to actually selling drugs. This is actually pretty unique as well. You know, you have a background in this. Actually, UDENYCA, one of the drugs at Coherus BioSciences before it's becoming Coherus Oncology, has been divested. This was also sold. Can you just tell us a little bit about that, how much you sold it for, and kind of in the last minute and a half we have, what kind of cash position you have once it's all divested?
Yeah, so, you know, I really love that product. It, you know, we were the very first biosimilar company in the U.S. I'm a huge Star Trek fan. So, you know, the product number for UDENYCA was 1701, which is, of course, the number of the hull of the Starship Enterprise. And to boldly go where no man had gone before, right, biosimilars. We went and did that. We were very happy with that. It was time to take that product and put it in the hands of a team who was really going to expand that globally and take it into the U.S. to even larger market share than we were able to do. The biosimilar business is a great business. We did better than anybody else at very, very strong execution, commercially.
Our focus always as a company has been on patient benefit. You know, the ability to have a small, nimble, highly effective, innovative oncology company that's able to extend the life and the survival of cancer patients is a passion my team and I all share. I, you know, we have served the healthcare system with the biosimilars and savings. Innovative oncology is an area where as a small company, you can really deliver disproportionate benefit to your patients and to your shareholders who come along with you. I think that is a very noble cause.
How much was the, how much were you able to sell this for, and what's your cash position?
Yeah, I think we sold it, I think we sold it for more than people expected we sold for. You know, I probably could have got a little more for it if I hadn't had a supply interruption in the middle of the process, which of course generated a little tap dancing here and there. But we did, I think, $558 million, $75 million on the backside with an earnout. We feel very confident that we'll get that, those goals are within reach. We are able with these sets of transactions that we've done over the last 12 months, which I think totals about $800 million in divestitures on a market cap of maybe $150 million. We are able to pay off almost $500 million in debt and drop $250 million into the balance sheet post-deal close.
That's where we sat the day the deal closed. We, you know, a very nice cash balance. We've got a couple years of runway there. Certainly time for Dr. LaVallee here to turn over data cards and show how things are going. I'm extremely pleased with the outcome, and I'm very proud about our execution. You know, Coherus is a company that's been, you know, through COVID, you know, ying-yangs with the regulators and all sorts of other things. We really pride ourselves on our execution, whether that be our development execution, where we've done well, our regulatory execution, where we've got numerous approvals, or our commercial execution where we were the class leader in biosimilars in Medicare Part B.
Now we're gonna go ahead and do it again with these, with casdozokitug and these other assets and Loqtorzi.
Thank you very much. We look forward to following Coherus Oncology going forward.