Okay, we'll get started. Thank you, everybody. I'm Doug Sau, Senior Analyst at HC Wainwright. We are thrilled to have Coherus BioSciences Oncology with us next, represented by the company's CEO and founder, Denny Lanfear, and Theresa Lavallee, who's the Chief Scientific Officer.
Development Officer.
This is, Denny, 10 years since I've known you, which makes me feel old. Maybe as a starting point, I think just give us a brief overview of Coherus's focus and strategy, which has obviously shifted right over the last few years, you know, as you started as a biosimilar company. Maybe how you're thinking about the growth of LOQTORZI and the sort of differentiation as a whole, you know, for your IO pipeline.
Thank you for the question, Doug, and thank you for having us here today. Yes, we have been together a long time as we've marched along on our journey. I think you find us at a very momentous time. Over the last 12 months or so, we've successfully divested our biosimilar business and transitioned the company to a full-on immuno-oncology company. This is, I think, initiated in 2021 and then in 2023, with the acquisition of Surface Oncology, which gave us two excellent assets we'll talk about in a moment: CHS-114, our CCR8, and, because those are key to our anti-IL-27. Our commitment is to the patients and providing a step change in patient survival. To do that, you require a combination. The very first thing we did, when we focused, is we brought in a very, very efficacious PD-1, Toripalimab.
As you know, it has a unique binding site and also has very high affinity. It's demonstrated activity in low PD-L1 cancers. The reason we did that was so we could combine it with these other agents. The underlying strategy of the company, developmentally, is to combine Toripalimab, first of all, with CHS-114, which is a T-reg depletor across a number of cancers, solid tumors, turning cold tumors hot, for a very, very promising overture, which you'll see come to fruition next year. Then Casdozokitug, two key areas, one in liver and one in lung. I think what differentiates Coherus BioSciences from other companies is the way that we approach partnerships and the way that we approach collaborations. As you know, we have a number of partnerships underway with Toripalimab, where we simply provide drugs to other companies.
As they move their products forward, we will earn those labels as they are approved. Similarly, we are going to start now focusing on ex-US partnering and licensing of our pipeline. We have global rights to these assets by virtue of our acquisition of them. As you know, we intend to only commercialize in the U.S. As you will see the data roll out in 6, and 12, and 18 months with the pipeline, you'll see us becoming progressively more active with respect to this licensing. First of all, in Asia, perhaps, and then in other territories. We see partnering really as a key for us. Partnering will do three key things. First of all, it'll validate the platform. Second of all, it'll provide income to support our own internal development efforts. Thirdly, it'll provide shared cost sharing for the pivotal trials later on.
We're working on all those things that Dr. Lavallee has put that strategy together. We're happy to talk more in depth of it. I think that really differentiates Coherus. You know, we're not a very large pharma where we only have our own products and we just do what's in front of us. You know, we are very collaborative with others and many people now approach us. Theresa, maybe you want to talk a little bit about the CHS-114 and its complementarity with some of the other mechanisms of action and so on. With respect to your question with LOQTORZI, I think that's moving along pretty well. We had good increases across Q1 to Q2. I can delve into that and give you a few numbers if you like.
Overarching in the strategy, I think, you know, we find ourselves in a pretty good spot these days with money in the bank, clinical trials underway, and a number of data cards going to be turned over the next 12 months.
Before we get to Theresa and talk about the pipeline, I did want to clarify one thing that you just said, Denny, which is that through partnerships that you would potentially generate income. When you refer to that, are you talking about upfront payments from signing a partnership, or are you talking about residual income downstream from potential royalties on revenues? The other question I have is just going through the growth that you saw with LOQTORZI in the second quarter and what were some of those drivers and how you think about that commercial momentum.
Great. Pursuant to your first question with regards to the deals and so on, I think that you can expect reasonable upfronts. It's traditional in all these deals to have backside revenue sharing, milestones, and such things. Our focus really, though, in terms of the pipeline, is cost sharing around development. We are focused solely in the U.S., as you know. If we have partners that take rights to other territories and do development there, that's really a very, very significant cost offset for us. We consider that really a win-win. Let me talk a little bit about LOQTORZI in the nasopharyngeal market. As you know, in November, December of 2024, NCCN took LOQTORZI and positioned it at the very top of the guidelines. We are the only therapy that is category one and it is preferred. Everything else is below that.
That's by virtue of the really extraordinarily high efficacy data that LOQTORZI has shown and its benefit to patients. We saw a bump in Q2 when we got that story out with respect to the utilization of the product. There was a 36% increase quarter over quarter, Q1 to Q2. Certainly, that kind of increase won't occur quarter to quarter as we go forward. We expect really what to occur is for us to hit our target of $150 to $200 million, sometime, say, mid-ish 2028, and for the ramp to be steady and increasing till then. It's going to bounce around.
I think it's fair to say that when you have a rare disease in a patient population where patients don't show up for the physician once every one or two years, it's going to be sort of lumpy early on until you get a fair number of patients on. I think we're still in the lumpy phase. You'll see highs and lows and so on. I would just keep in mind the long-term trajectory, what we've talked about in terms of 2025 and then on to 2028.
Are you seeing sort of faster adoption in the sort of academic centers of excellence? How is the, you know, what kind of progress are you making in the community? How should we think about the relative opportunity between those two, you know, sort of customer sets?
We're doing very well in the academic centers. 90% of the NCCN institutions have ordered LOQTORZI and put a patient on, and that's very good. Those physicians, I think, are very cognizant of the NCCN guidelines. They're more cutting-edge and up to speed in a number of things. The community setting, though, is a bit different. Those physicians only see a patient once every one or two years, as I indicated. We have to redouble our educational efforts there. We have significant efforts, for example, with our Medical Affairs team. We have media efforts, digital efforts, and so on. We also buy data so we know when patients have been diagnosed and look at the ICD-9 codes. I think that takes more time to create awareness in the community. Those docs are busy with quite a few things.
There's a significant reservoir of patients on the community side of the ledger that we'll continue to work at and you'll see progress on over the coming quarters.
Maybe turning to the pipeline, Theresa, you may be starting with Casdozokitug, your IL-27 antibody, which is being developed in combination, I think with Tori and bevacizumab, in first-line HCC in a phase 2 study. How is enrollment going in the U.S. or in that study? What should we expect from the initial data release, which I think is next year?
Yeah, and thanks, Doug. We're super excited about the indication. So Casdozokitug is an IL-27 antagonist that in early clinical studies showed nice safety profile, rebalances the immune system, and monotherapy responses. One of the things we look for at the programs in Coherus is really an understanding of the patient population to get to proof of concept. This program really showed that IL-27 has particular immune suppressive mechanisms when liver and lung are involved. Seeing those early monotherapy responses in lung cancer and efficacy in liver cancer has got us super excited. The study Doug is referring to is a randomized phase 2 study evaluating Tori Bev versus Casdozokitug Tori Bev.
What we would look for in the early signal from that is at least equivalent efficacy because in the 30-patient study that was done with PD-L1 VEGF blockage with Casdozokitug triplet therapy, and not a randomized study, what we saw was a 17% CR rate. That's double what any other molecules have shown. We've shown an improvement in ORR and PFS. Importantly, it took time for those data to mature, which would be consistent with a cytokine-based mechanism. The first data read showed a 27% response rate, no CRs. A couple of months later, we saw a 38% ORR and three CRs. A few months later, we got to the five CRs.
When we look at the initial data set, safety, maintaining that nice safety profile, which is so important in liver cancer and has a lot of partners and KOLs excited to see that Casdozokitug has an added, it's added efficacy, but has an added toxicity. We want to look for that safety profile to be maintained. We want to see initial responses and efficacy there, but then allow it to mature over 2026.
I'm just curious, is there any sort of enrichment or was there any stratification of patients by PD-1 or PD-L1 status?
We’ll always look at PD-L1. It has shown different responses, but it’s really not something that’s looked at broadly in HCC. We’ll also look, most people stratify based on AFP. We’ll look at those as well as the important thing from the initial data set is that we saw activity across etiologies. HCV, HBV, and non-viral, which is very important since it differs regionally. To have that global development plan, we’ll continue to evaluate those patient subsets that everyone looks at.
To be clear, with regards to PD-L1 states, it's all comers, highs and lows. There's no exclusion criteria one way or another. We're very confident, of course, in the activity of the molecule. I think that's an inherent advantage of Toripalimab.
Your CCR8 antibody CHS-114 is in several phase 1 studies in solid tumors. Can you remind us the sort of differentiated mechanism of CCR8 versus other T-reg targets such as TIGIT, which is something that you pursued, although you have chosen to focus on CCR8?
Yeah, and for TIGIT, it also depends upon FC-silent and FC-active. We had an FC-silent, but TIGIT clearly has a mechanism as a checkpoint inhibitor on T cells in terms of reinvigorating the T cells. What is particularly exciting about CCR8 is people have tried to target T-regs for decades. CTLA4, we've heard lots of different flavors of that to deplete them. There are other mechanisms. Clearly, CTLA4 inhibition will also activate neoantigen T cell responses. IL-25, CCR4, all of these have caused toxicity because they broadly deplete T-regs. T-regs are critical for homeostasis. What is attractive about CCR8 is it's preferentially upregulated in the tumor microenvironment, and they're the most immunosuppressed T-reg cells. It is a targeted therapy. The antibody is super easy for a mechanism, bind and kill. Just get rid of them, clean out the tumor, open up the microenvironment, let the T cells in.
We've seen that CHS-114 has shown immune activation, robust tumoral CCR8 T-reg depletion. Very early on in our safety cohort with Toripalimab, we saw responses. We know that CCR8 positive T-regs are abundantly expressed both from a prevalence, a high density, as well as a %. The majority of T-regs in head and neck cancer are CCR8 positive. To see that response in a fourth-line refractory head and neck cancer patient was super exciting.
In the head and neck and gastric cancers in the phase 1, what are your thoughts on the potential in all comers versus PD-L1 high only patients in the next stage?
Yeah, so we'll always look at that because it's an important criteria in looking for any subset of patient that can enrich. We are looking, what we were excited about, competitor data when they used their CCR8 antibody in combination with Toripalimab in gastric cancer. When they looked at PD-1 refractory gastric cancer patients, 11 patients, they showed a 63% response rate. Why that's exciting is there's so many mechanisms for PD-1 resistance that it could be T-regs, it could be macrophages, it could be all kinds of things. What that says is the predominant mechanism is T-reg. Patients who progress on PD-1, you add in a CCR8 depleting antibody, you get response, you reverse that resistance. That was irrespective of PD-L1 status.
One question I've gotten from some investors is sort of how you think about, you know, maybe trickling back to Tori for a minute. Is there any impact from potential loss of exclusivity for Keytruda, or do you think that your sort of position is sufficiently differentiated?
No, no, we don't believe so. Two key issues. First of all, it's true that the biosimilars will arrive with Keytruda probably in 2028. It's important to note that they only really get the indications for which Keytruda is labeled. For the agents that we're doing the studies with, such as our CCR8 or Casdozokitug, or other agents that we would combine Toripalimab with, that really won't be an issue. Secondarily, there will be certain cost adjustments and pricing adjustments to Keytruda going forward. I think that'll cause a bit of chop in the market and realign incentives in various ways. On the other hand, we expect the pricing of Toripalimab to be very stable. We're taking small price increases, once or twice a year. We think that's actually a better place for the payers and for the HCPs where there's stability and predictability.
Having come out of the biosimilar business, I can tell you about some of the pricing dynamics and the effect that they have on utilization. That's not something that's really going to impact Toripalimab at all.
Okay.
Just to add one thing, I also think it's an advantage to us from the collaboration standpoint, right? Because as Merck and other pharma have deprioritized those programs, we're highly collaborative and we've had a lot of players come to us that have drug supply arrangements that aren't getting the attention that a biotech needs urgency. We're highly collaborative in that sense. When you think about developing in tumor types that have been underserved by PD-1, such as colorectal cancer, if you had a drug supply arrangement like with the CCR8 and PD-1, you have to work to get that agent approved. We have an advantage with developing Tori with our molecule there. It works both with our ability to collaborate with other biotechs, which is fundamental to how we do our business, as well as really have an advantage to go in spaces where PD-1s haven't been.
We're getting close to the end of our time. Denny, you've consistently sort of defined yourself as an IO company. I'm just curious to the extent that you think about or look at opportunities outside of IO in oncology.
I think we're focused really on delivering benefit to patients. We're a bit agnostic. Yes, we are an innovative oncology company, but it's important to note that Toripalimab and our CCR8 agent CHS-114, Casdozokitug, are potentially complementary with a number of agents that aren't directly IO agents per se, you know, whether those be ADC agents or whatever. I think we're fairly agnostic across MOAs.
Finally, in our last few minutes, maybe walk through the milestones that we expect over the next 12 months, maybe even a little longer.
I'll let Theresa cover the clinical milestones, and I'll talk about some of the other business milestones. Theresa?
Yeah, so we have the enrollment in the HCC study on Casdozokitug that we'll be announcing at top line results next year. Then the progression for CHS-114 in head and neck and gastric cancer with Toripalimab, as well as seeing additional indications there and more partnerships for Toripalimab.
On the deal side, you'll see as the data runs out, you'll see this pursue transactions across various territories to offset development costs and others. The other point that I would make is that our partner Accord Healthcare is doing very well with the Edenicare franchise. There's $75 million there with respect to earnout payments. Those folks are up to 31% of market share. I think they're like a point, point and a half behind the innovator. That's moving along pretty well. We're quite pleased with that, and we look forward to snagging those payments out in 2026.
Okay. With that, I think the clock is telling us that we're out of time.
Oh, thank you, Doug.
Thank you so much.
Thanks, Doug. Okay.