Coherus BioSciences, Inc. has entered into a significant agreement with Canadian pharmaceutical company Apotex Inc., securing an exclusive license to commercialize the cancer drug toripalimab in Canada. The deal, announced on Tuesday, follows Coherus's 2021 collaboration with Shanghai Junshi Biosciences Co., Ltd., which granted them the rights to toripalimab in the U.S. and Canada.
Under the terms of the new License Agreement, dated June 27, 2024, Apotex will make an upfront payment of $6.25 million to Coherus.
Additionally, Apotex has committed to milestone payments that could total up to CAD 51.5 million, contingent upon achieving certain regulatory and sales benchmarks. Furthermore, Apotex will pay Coherus a low double-digit percentage of net sales of toripalimab in Canada, a sum Coherus is obligated to partially pass on to Junshi Biosciences as per their prior agreement.
The exclusive arrangement is set to last for ten years following the first commercial sale of toripalimab in Canada, with an option for Apotex to extend for another decade. However, Apotex retains the right to terminate the agreement after a specified notice period. The deal also includes automatic termination clauses in the event of a material breach not being remedied, challenges to the licensed patents by Apotex, or certain insolvency events.
The License Agreement is a strategic move for Coherus, expanding their commercial footprint in the Canadian market for biological products. Toripalimab, an anti-PD-1 antibody, represents a class of immunotherapy drugs that have shown promise in treating various forms of cancer by enhancing the immune system's ability to fight cancer cells.
The financial details of the License Agreement will be disclosed in Coherus's upcoming Quarterly Report on Form 10-Q for the quarter ending June 30, 2024. This move is expected to bolster Coherus's position in the biopharmaceutical industry, particularly in the oncology sector.
The information reported is based on a press release statement.
In other recent news, Coherus Biosciences (NASDAQ:CHRS) reported significant revenue growth during its first quarter 2024 earnings call. This growth was largely attributed to the US FDA approvals and market launches of Loqtorzi and the Udenyca on-body injector.
In a strategic shift, Coherus Biosciences sold the rights to Yusimry, a biosimilar to Humira, for $40 million, a move seen as aligning with the company's broader objectives and strengthening its financial position. Baird, following this development, adjusted its outlook on Coherus Biosciences, reducing the price target to $8 from the previous $9, while maintaining an Outperform rating.
Coherus Biosciences has also been making notable strides in its product pipeline. The launch of Loqtorzi is progressing well, and its pipeline products, including Casdozokitug, CHS-114, and CHS-1000, are being closely watched for their potential market impact. Of particular interest is Casdozo, an anti-IL-27 antibody, considered a potential first-in-class treatment with crucial clinical readouts expected over the next 12 to 18 months.
TD Cowen has maintained its Buy rating for Coherus Biosciences, indicating confidence in the company's strategic direction and the anticipated success of its product pipeline.
As Coherus Biosciences continues to navigate the competitive pharmaceutical industry, these developments provide insight into the company's ongoing strategies and future growth opportunities.
InvestingPro Insights
In the wake of Coherus BioSciences' recent strategic licensing agreement with Apotex, a look at real-time data and analysis from InvestingPro provides a deeper financial context for investors. Coherus, with a market capitalization of $184.71 million, has not been profitable over the last twelve months, as indicated by a negative P/E ratio of -2.79. This aligns with the InvestingPro Tips, which caution that analysts do not anticipate the company will be profitable this year and highlight concerns over a valuation that implies a poor free cash flow yield.
Despite these challenges, Coherus has demonstrated significant revenue growth, with a 64.63% increase over the last twelve months as of Q1 2024, and an even more impressive quarterly growth rate of 137.58% in Q1 2024. However, it's worth noting that the stock has experienced a substantial decline, with a six-month price total return of -48.73%. This may reflect market reactions to the company's financial performance and outlook.
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