REDWOOD CITY, CA – Coherus BioSciences, Inc., a biologics company, announced today that it is facing a temporary supply interruption of its UDENYCA product line due to over-commitments and capacity constraints at its Contract Manufacturing Organization (CMO) responsible for final labeling and packaging. UDENYCA, a biosimilar to Neulasta, is offered in various formulations to meet patient and doctor preferences.
The supply issue, which does not affect the active pharmaceutical ingredient or the manufacturing of the drug product, is expected to significantly deplete channel supply by mid-October. However, Coherus anticipates that manufacturing will restart by mid-October with product availability projected to resume in early November.
In response to the interruption, Coherus has implemented expedited shipping measures and is working closely with wholesalers and prescribers to minimize disruption. Additionally, the company is accelerating plans to enhance its final packaging capabilities, including engaging an additional CMO with an aim to commence commercial supply in the first quarter of 2025.
Since 2021, Coherus has invested over $30 million to diversify and expand its supply chain. These investments are expected to double drug substance manufacturing capacity, significantly increase drug product fill manufacturing capacity, and more than double UDENYCA packaging and labeling capacity. These expansions are projected to reduce UDENYCA production costs by about one-third.
Coherus also reaffirmed its 2024 R&D and SG&A expense guidance, expecting it to range between $250 to $265 million. This guidance accounts for various factors, excluding the effects of acquisitions, collaborations, and other transactions not yet identified.
The company plans to provide an update on the supply interruption during its third quarter 2024 earnings announcement. Coherus emphasizes its commitment to ensuring timely delivery of commercial products to patients and maintains that it has used the same CMO for more than a decade without previous incidents. This announcement is based on a press release statement.
In other recent news, Coherus Biosciences (NASDAQ:CHRS) has seen some significant shifts in its financial outlook and strategic direction. The company reported substantial revenue growth during its first quarter 2024 earnings call, largely attributed to the US FDA approvals and market launches of Loqtorzi and the Udenyca on-body injector. In a strategic move, Coherus sold the rights to Yusimry, a biosimilar to Humira, for $40 million.
On the analyst front, UBS downgraded Coherus from Buy to Neutral and reduced the price target due to concerns over future revenue growth. Meanwhile, Baird maintained an Outperform rating but reduced the price target to $8. TD Cowen has kept its Buy rating, indicating confidence in the company's strategic direction.
In terms of mergers and partnerships, Coherus entered into a significant agreement with Apotex Inc., securing an exclusive license to commercialize the cancer drug toripalimab in Canada. This follows Coherus's 2021 collaboration with Shanghai Junshi Biosciences Co., Ltd.
InvestingPro Insights
As Coherus BioSciences navigates through its current supply interruption, a glance at the company's financial health and market performance provides a broader context for investors. According to recent data from InvestingPro, Coherus has a market capitalization of $149.2 million, reflecting its standing in the biologics industry. Despite a substantial revenue growth of 69.37% in the last twelve months as of Q2 2024, the company's profitability challenges are evident with a negative P/E ratio of -4.79 and an adjusted P/E ratio for the same period of -38.82.
InvestingPro Tips indicate that analysts have revised their earnings upwards for the upcoming period, which could signal a potential turnaround or positive developments on the horizon. However, the same analysts also express caution, noting the company's rapid cash consumption and lack of profitability in the past year, with no dividends being paid to shareholders. These insights, coupled with a significant price drop over the last year, suggest that while Coherus is taking steps to address its supply chain issues, investors may need to consider the broader financial picture.
For those seeking more in-depth analysis, InvestingPro offers additional tips on Coherus BioSciences, which can be found at https://www.investing.com/pro/CHRS. This information could be invaluable for understanding the company's future prospects and making informed investment decisions.
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