Good afternoon. Welcome to the Jefferies Global Healthcare Conference. My name is Ryan Delaney with the Jefferies Investment Banking Team. It's my pleasure to introduce Denny Lanfear, CEO of Coherus BioSciences.
Thank you, Ryan, and thank you to the Bank for your kind invitation to this year's conference. I also want to thank the Bank for your kind assistance with respect to closing out of our $230 million convertible debt instrument over the last month, which you did an excellent job on. Coherus Oncology is working on a number of very interesting things. We have a proprietary PD-1, some very interesting assets in the pipeline. However, let me first apprise you to the forward-looking statements and direct you to the company's SEC filings with respect to all of these products. I'll first provide you a corporate summary of our pipeline and a few key facts. I'll then talk about Loqtorzi, our proprietary PD-1, which is on the market in nasopharyngeal cancer, which is our foundational asset. I'll then turn it over to Dr. Theresa LaVallee, our Chief Scientific and Development Officer.
Dr. LaVallee will talk to you about some of our combination work with our pipeline, our two pipeline assets, as well as work with expanding the label of Loqtorzi in conjunction with our partners. I'll then finish up talking about the commercial opportunity for the products and the pipeline before giving you the results and the outlook. Coherus Oncology is focused in three key areas. The first, of course, is Loqtorzi, our foundational PD-1 asset. This is now on the market for nasopharyngeal cancer. I'll talk to you about that in just a moment. This product has achieved the only preferred line in both first-line and follow-on lines in nasopharyngeal cancer. Using this asset as a key part of our combinations was a critical part of our overarching strategy. During 2025, we'll continue accelerating our growth for the product. This product was launched in 2024.
Our pipeline is comprised primarily of two key assets. One is CHS-114, which is an anti-CCR8, a cytolytic antibody. This is an emerging class of Treg depleters. We will discuss that with you with interesting data readouts in the first half of 2026, as well as casdozokitug, which is a first-in-class IL-27 antagonist which is working its way through HCC. These products, together with Loqtorzi, combine to address a potential market of over $15 billion together. The company, as you know, recently completed divestiture of some other assets and, in doing so, has greatly reduced its debt burden down to about $38.7 million a year and put $250 million on the balance sheet post-close of that transaction. This cash runway is sufficient to take us through key data readouts in 2026 and beyond. Loqtorzi and casdozokitug, again, 114, comprise our pipeline.
In here, you see, for example, first-line NPC, which is an indication that we are pursuing commercially, as well as second-line, both in monotherapy. As you see, we are also pursuing Loqtorzi with some additional combination indications. The CCR8 antibody is in, first of all, second-line head and neck cancer, secondarily gastric and other cancers, as Teresa will talk to you about, with readouts in the first half of 2026. Casdozokitug, which is looking very good in hepatocellular carcinoma, where an 18% response rate was seen, complete response rate was seen in a key study, and is also moving into squamous non-squamous cell cancer. Now, Loqtorzi is a very interesting molecule. Here, I'll just spend a moment on the biology of it. This molecule's approach to binding the PD-1 site on T cells was conceived by Lieping Chen.
Lieping Chen is best known for first ferreting out the role of PD-L1 on tumor cells and its relationship to PD-1 and the interruption of that particular interaction as a way to bring therapeutic benefit to cancer patients. Lieping Chen was at Johns Hopkins when he conceived of this approach, and it was to selectively bind the FG loop with very, very high affinity, which was selectively done. This is different than the approach taken with other PD-1s, which bind, for example, the CD loop and simply block. What happens with toripalimab, which is quite interesting, is this particular binding site results in the internalization of the PD-1 receptor off the surface of the T cell and much more potent signaling within the T cell, which is the subject of various publications.
This mechanistic differentiation of Loqtorzi is also manifest clinically, particularly in the low PD-L1 state, as you see here, in which you could see our Jupiter-6 study, which is in esophageal cancer, where the hazard ratio was preserved from low PD-L1 to high PD-L1 states, unlike Keytruda, which only showed efficacy in the high PD-L1 states. This makes Loqtorzi an ideal candidate for combination therapy with other agents. Dr. Lavallee will talk to you about some of the collaborations that we have subsequently put in place. Loqtorzi is the new standard of care in nasopharyngeal cancer. This is about 2,000 patients per year. This is about $150-$200 million market space. Again, as I said, we launched into last year. We're marching this product up. We're a little flat in Q1, as you can see, although overall demand was up 15% from the previous quarter.
However, we are the only NCCN-preferred category one IO treatment for both first-line and second-line. We expect during 2025 that this product will do probably about $40-$50 million top line in that period of time. With that, let me let Dr. LaVallee talk to you about our label expansion strategy for Loqtorzi and combination. Theresa.
Thank you, Denny. On the right side of this slide, you'll see the number of positive studies that our partner, Junshi, has delivered, really showing the potency of this molecule resulting in clinically meaningful benefit across a number of solid tumors. These reference data sets that come out of China can be used in the U.S. for contribution of component. Having the approval in the two indications in nasopharyngeal carcinoma, a rare subset of head and neck cancer, we're looking to continue to develop Loqtorzi, but now in combination to really advance patient care beyond PD-1 inhibitors to add more to the survival for these patients. Using these foundational studies, we're looking both internally to develop the molecule with our proprietary assets, which I'll talk about in depth in a couple of slides. In those cases, we're looking at getting two drugs approved.
For the development we're focused on, we'll end up getting both Loqtorzi and our novel agents approved. In addition, we look to expand Loqtorzi with partners. As a small biotech company that has prioritized this molecule, we're nimble and collaborative, working with small biotech that have very interesting mechanisms and clinical data to look at combination studies with PD-1. We've announced three of these. The most recent was Storm Therapeutics, with their STC-15, which is an RNA methyltransferase inhibitor. They have really nice phase one data showing monotherapy responses. Now we're looking at combinations with Loqtorzi in head and neck cancer and lung cancer.
Importantly, we've prioritized head and neck cancer for a lot of these combinations, such as the pivotal study that Inovio has to do as we get more and more head and neck doctors familiar with the drug and see how well it works and continue to advance it. This also has synergies with our commercial team looking at the NPC commercialization for Loqtorzi. Next, I'll talk to you about our CCR8 cytolytic antibody, CHS-114. People have attempted to target T regulatory cells for decades. Really, the challenge has been trying to find selective depletion in the tumor because broad depletion of Tregs leads to autoimmunity. We say that this is the missing puzzle piece. Through single-cell sequencing analysis of tumor-resident Tregs, CCR8 was identified as a marker on T regulatory cells that is highly upregulated, preferentially in the tumor. This is a targeted therapy.
The molecule is a binding kill. The idea is by removing the immunosuppressive cell, you open up the tumor microenvironment to now allow T cells in, turning cold tumors immunologically hot. Since it's a targeted therapy, I'll walk you through how we're identifying patient populations by characterizing where the target is abundant. What's exciting about this is that while we see a high abundance in many hot tumors, we also see a high expression of CCR8-positive Treg cells in tumors that have been woefully underserved by immunotherapy, such as colorectal cancer. Alexander Radinsky, one of the founders of Tregs, really characterized FOXP3 and made the cell type well understood in the field, is on our scientific advisory board and works very closely with us and sees this as an incredibly compelling approach in terms of looking at a way to bring therapeutics to cancer patients.
In the middle, we're looking at the prognostic association of T regulatory cells across patient outcomes in different solid tumors. It is well understood that a high level of T regulatory cells has a poor outcome for cancer patients broadly. What isn't well understood is what brings Tregs into the tumor. While they're present at diagnosis, things like wound healing, immune responses, anti-angiogenic responses, chemotherapy, radiation, immune checkpoint inhibitors, and VEGF inhibitors will all upregulate T regulatory cells. We see this as a real marker of resistance across multiple modalities. While our development is focused on combination with Loqtorzi PD-1 inhibition, we see this could have broad potential with multiple modalities. I'll show you some data to support that. Given the excitement and the data that are emerging, a number of players are in the field.
For our molecule, CHS-114, we will walk through how we see that being differentiated. The overall expression characterizing, as I said, this is a targeted therapy. Who to treat, the way that we're approaching it is characterizing the density of CCR8-positive cells in the tumors. You can see, I mean, if you think about 25 cells per millimeter squared, that's a really good density. There is a large number of solid tumors, including bladder cancer, lung cancer, colorectal cancer, breast, that have a high density. The highest density is in head and neck, gastric, and cervical. Additionally, the next question is not all Tregs express CCR8. What's the prevalence? Because clearly, if it's 10%, is removing 10% of the suppressor cells sufficient?
You can see that all of these tumors, except for renal cell carcinoma in our analysis, have a high percentage of Tregs that express CCR8. Again, the highest expression is in gastric, head and neck, and cervical. We were thrilled last year at ASCO when Lenovo Medicines presented their data in gastric cancer, showing a very high response rate when they combined their CCR8 antibody with toripalimab in gastric cancer, really giving that proof of principle that that high density and prevalence is the primary mechanism of PD-1 resistance. At this ASCO, we saw data in colorectal cancer, both monotherapy and combination activity, with a naked IgG1 from Shionogi, and also some data in pancreatic cancer, really showing that there is broad activity across solid tumors for this agent. Our molecule is CHS-114.
The target CCR8 is a G protein-coupled receptor, which has notoriously been difficult to develop antibodies against. A third of the drugs approved by FDA target GPCRs, yet there's only about five antibodies approved. The problem for antibodies is getting selectivity because there's not a lot of protein real estate to bind selectively and not have off-target binding. When we did our antibody discovery screen, we found one and only one antibody in lead identification that exclusively bound CCR8. That is highly unusual in an antibody discovery screen. We have characterized some of the competitor molecules, and all of them that we've characterized have off-target binding, including J-chain. When I see something binding J-chain, a protein that's highly expressed in the gut, important in secretions, I would worry about GI toxicity.
I think as we see data emerging from other programs and the toxicity profile, we'll have to think about, is this target-mediated or off-target-mediated? We've presented data on the first two parts of our phase one clinical study. I'm pleased to report last year from ASCO when we showed the dose escalation up to 1,200 milligrams. We had no dose-limiting toxicity, really proving that this higher expression in the tumor did not lead to autoimmunity. We did not see broad depletion of T regulatory cells. We saw selective depletion of CCR8-positive Tregs. Nice pharmacokinetics and proof of mechanism in the blood. Last month at AACR, we presented data on the monotherapy expansion at the pharmacologically active doses, two doses, as well as the initial safety cohort with Loqtorzi in head and neck cancer specifically.
We are currently enrolling in a randomized dose expansion at two doses to address Project Optimus and come up with a recommended phase two dose, hopefully early next year in combination with toripalimab. We have had an FDA meeting and presented them with the data package we're generating and have alignment on our approach. The data that we showed at AACR is very exciting and shows that these are both pharmacologically active doses and that the drug does exactly what it's intended to do. We saw marked CCR8-positive Treg depletion in tumors from 52% to 97%. The immunofluorescence plot on the right, the green, the top panels are the pretreatment. The bottom panels are the on-treatment biopsies. The green does show a marked decrease from the top to the bottom, showing the depletion pictorially.
The part that was the surprise and has us super excited is the CD8 T cells. Seeing that high degree of infiltration in the tumor really shows that we've turned these tumors immunologically hot. This is super exciting for PD-1 combination. We were equally thrilled to see in the safety cohort with three patients at two different dose levels with toripalimab to see a partial response in a fourth-line head and neck cancer patient that had progressed previously on PD-1. This has us very excited. This patient had symptomatic relief. In fact, he told the physician, Dr. Atkins, as he went in for his scan, that he knew the tumor was shrinking. That's always great with these horrible tumors that are affecting their ability to swallow. We had a 40% decrease in target lesions, but we also had observed tumor shrinkage in non-target lesions.
We're excited to further enroll that dose expansion cohort and read out the data early next year. We additionally have a study enrolling in gastric cancer to really establish the proof of concept for this molecule. Esophageal squamous cell carcinoma, as Denyce showed you, the difference in the PD-L1 high and low activity with Loqtorzi, we think this could be a very exciting opportunity to really bring treatment to PD-L1 low esophageal squamous cell carcinoma patients, which the FDA has said that they will not approve drugs in the PD-L1 low. We saw that in their recent ODAC, where they looked at pembrolizumab and atezolizumab, showing a lack of clinical benefit. This is a differentiated tumor type for us and an exciting development. Our other pipeline asset that is also very exciting is casdozokitug. It's an IL-27 antagonist antibody.
While it's well understood that inhibiting a cytokine can rebalance the immune system in inflammatory diseases, this is the first demonstration in cancer patients that inhibiting a single cytokine can lead to immune activation, has a very nice safety profile lending itself to combination. Importantly, monotherapy responses in tumor types that the preclinical models told us should work, lung cancer. Now we'll also show you activity in liver cancer. The mechanism that IL-27 turns off the immune system is this immune regulatory cytokine will upregulate checkpoint inhibitor receptors on T cells, LAG3, TIM3, TIGIT, PDL1, all turns off the T cell. It dampens the immune cytokines, interferon, TNF from T cells, and turns off the cytolytic activity of NK cells. It essentially shuts down the killing mechanism of the immune system against the tumor. By inhibiting it, we activate T and NK cells.
In the clinic, we showed this robustly in dose-dependent fashion. The heat map at the top shows you in the first row an IL-27 signaling signature that at 3 mg per kg, the red indicates the IL-27 signaling is active. We do not see immune activation of T and NK cells as indicated by blue color. At 10 and 20 mg per kg, you can see we have completely shut down IL-27 signaling and activated T and NK cells. The HCC study that was initially done was casdozokitug, atezobev as standard of care in the first line. This is in the first line HCC patient population. We just presented the final dataset at ASCO GI this year, showing a very nice response rate as well as PFS.
Building on the phase three study and approval in China of ToriBEV showing similar activity, we have a randomized study going on, a global study evaluating ToriBEV versus CASDOSA-ToriBEV. This study should enroll this year with a look to data reading out next year. To really show you the data that has us excited and is differentiated in this tumor type, as I mentioned, it has a 38% overall response rate across viral etiologies. This is important. Non-viral HPV and HCV patients responded. There is durability with these responses. The most notable part of this is the 17% CR rate. Shown in this graph, looking at several phase three studies with active agents in the disease, you can see the 38% response rate is higher than the others reported. What stands out as differentiated is the depth of response.
That 17% is much higher than the best reported 8% in any other study. We continue to advance the development in liver cancer and really see some nice activity with toripalimab across this disease. Later this year, Junshi will be reporting out data on JUPITER-11, which is a tori-lenvatinib study in the front line. Pending a positive signal there, we could also look at developing casdozokitug with its nice safety profile, not adding any new toxicity to atezobev. I think we're super excited to have agents that can help this underserved patient population and continue to advance treatment. With that, I'll turn it back to Denny to talk about the commercial.
Thank you, Theresa. With respect to the commercial opportunity, as Dr. LaVallee has just outlined, across the portfolio in combination with toripalimab, these assets add up to over a $15 billion market opportunity just for the indications that we contemplate now. Certainly, what we really appreciate about CHS-114, the Treg depleter, is that there is a plethora of larger indications that are available to us as we move forward, including CRC and some other key ones. The partner indications are being developed very elegantly, I think, without significant cost to the company. We simply do supply agreements with those. We also have the ability, I should say, to out-license the pipeline assets ex U.S. We intend on focusing only in the U.S. for these, but we have global rights. We are seeking partners for casdozokitug ex U.S., as well as CHS-114, the Treg depleter ex U.S.
Let me just finish up here with a few reviews of our financial outlook and results. We ended Q1 2025 with some $82 million in cash. I think, as you all know, we completed our divestitures at the start of Q2 this year. We divested some $800 million worth of assets over the last 12-14 months, including a $483.4 million upfront for the Udenyca franchise. We were able with that then to reduce our debt significantly, including our $230 million convertible loan. We then dropped almost about $250 million to the balance sheet upon the closing of that transaction. Meanwhile, we are reducing the size of the organization from about 225 employees earlier this year, targeted to about 150 employees later this year by the end of the year, and thereby yielding about $25 million in savings during that period of time.
Just to finish up on the value proposition here, first of all, a next-generation PD-1 with a unique binding epitope demonstrated higher activity, including activity in low PD-L1 states. For example, I would add that Loqtorzi is licensed in Europe for low PD-L1 states in esophageal cancer. This puts us in great position for combination studies, both with our own assets, but also those of partners. A very robust clinical development program yielding results in the first half and beyond in 2026 with both our assets and large indications where we are approaching multi-billion dollar markets. Lastly, our fiscal responsibility and our strong executions left us with a lot of money on the balance sheet, able to bring all these forward, over $250 million as we look forward into 2026. Thank you for your attention today, and thank you for listening to Coherus Oncology.