In response to the company sharing fourth-quarter results with investors and providing guidance for the year ahead, shares of Coherus Biosciences (NASDAQ: CHRS), a clinical-stage biotech focused on biosimilar drug development, jumped 37% as of 11:25 a.m. EST on Friday.
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Here's a review of the key numbers from the fourth quarter:
- Net loss was $49.1 million, or $0.84 per share. That was much lower than the net loss of $75.9 million, or $1.71 per share, recorded in the year-ago period.
- Cash balance at quarter's end was $127 million, down $23 million from the end of September.
Since Coherus is still in the clinical stage, its financial results don't matter as much to investors as its pipeline updates. On that front, here's the guidance for 2018.
- CHS-1701 -- which is a biosimilar product candidate for Amgen's (NASDAQ: AMGN) Neulasta that was shot down by the Food and Drug Administration last year -- is expected to be resubmitted to the FDA after the company receives the minutes from its recent meeting with the agency at which its complete response letter was discussed. Immunogenicity sample processing data integration is also required. If all goes well, the drug could be launched in the U.S. in the second half of 2018.
- A European approval opinion on CHS-1701 is also anticipated in the back half of the year. The company remains in active discussions with partners related to certain international markets.
- CHS-3351 -- a prospective biosimilar of Roche's Lucentis -- is expected to enter clinical development.
- CHS-1420 -- a potential biosimilar of AbbVie's Humira -- is on track for a 2022 launch.
- Two decisions from the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office related to CHS-0214 -- a biosimilar product candidate for Amgen's Enbrel -- should be released within the next week.
- Cash used in operations is forecast to be $30 million to $35 million per quarter in the first half of the year.
While there are multiple catalysts for Wall Street to look forward to in the year ahead, the updated timeline for CHS-1701 appears to be taking center stage.
Coherus hasn't been a fun stock to hold for a long time, but if the company succeeds with its resubmission of CHS-1701 -- which is a big if -- then I could easily see its fortunes turning around.
What are the odds of a favorable outcome? That's hard to say. On the one hand, the FDA's rejection was related to manufacturing issues, not the product itself. That bodes well for the second time around since the agency didn't require any new clinical trials to be run. On the other hand, it's hard to feel comfortable backing a company that messed things up so badly the first time.
My hunch is that Cohuerus will succeed with its resubmission of CHS-1701. However, given the company's rocky history, I wouldn't feel comfortable enough to put real money behind this stock anytime soon.
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