Coherus BioSciences, Inc. (NASDAQ:CHRS) Q2 2025 Earnings Call Transcript

Coherus BioSciences, Inc. (NASDAQ:CHRS) Q2 2025 Earnings Call Transcript August 9, 2025

Operator: Thank you for standing by. My name is Jordan, and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the Coherus Oncology earnings conference call. [Operator Instructions] I’d now like to turn the conference over to Jodi Sievers, Head of Investor Relations for Coherus Oncology. You may begin.

Jodi Sievers: Thank you, Jordan. Good afternoon, and welcome to Coherus Oncology’s Second Quarter 2025 Earnings Conference Call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus; Bryan McMichael, Chief Financial Officer; Dr. Rosh Dias, Chief Medical Officer; Dr. Theresa Lavallee, Chief Scientific and Development Officer; and Sameer Goregaoker, Executive Vice President, Commercial. Before we get started, I would like to remind you that today’s call includes forward-looking statements regarding Coherus’ current expectations about future events. Actual results may vary significantly, and we undertake no duty to update or revise any forward- looking statement. Please see the press release that we issued today and our quarterly report on Form 10-Q for more information on risks and uncertainties. And now I’ll turn the call over to Denny.

Dennis M. Lanfear: Thank you, Jodi, and welcome all. In Q2 2025, we completed our strategic repositioning and renamed our company Coherus Oncology to better reflect our mission. Today, in addition to reviewing the progress we made in growing our commercial revenue and advancing our clinical oncology programs ahead of key data readouts in the first half of ’26, I want to take the opportunity to introduce you to our new company and highlight what sets us apart. Today, I’ll be focusing for you on three main points of Coherus Oncology. First, who we are as a company in terms of science, products and mission. Second, what we are doing clinically and strategically to advance that mission through combinations of products and collaborations with partners.

And third, why our proven track record in deals and partnerships and in development gives us confidence we will successfully execute globally on our plans, creating significant value for our U.S.-focused business. First, let’s talk about who we are. Coherus Oncology is a commercial stage innovative company built on deep science, focused on developing cutting-edge cancer therapies. Our goal is to deliver a step change in survival for cancer patients using new generation, first-in-class and best-in-class therapeutics. Our science is reading through the clinical results and patient benefit. For example, our next-generation PD-1 inhibitor, toripalimab has a unique FG loop binding site and significantly higher potency compared to standard of care PD-1s and this has translated to demonstrated efficacy in low PD-L1 cancers.

While other standard of care PD-1 treatments have lost approval for low PD-L1 esophageal cancer in the U.S., toripalimab has been approved across all PD-L1 levels for first-line esophageal in the EU, validating its genuine mechanistic and clinical differentiation. Approved for use in recurrent or metastatic nasopharyngeal cancer, LOQTORZI, which is the brand name for toripalimab demonstrated in a pivotal study a compelling 37% improvement in overall survival versus standard of care, earning top ranking on NCCN guidelines. We translated this to increased adoption by physicians and patients fueling commercial growth. LOQTORZI’s net revenue in the second quarter grew 36% over Q1 2025 to $10 million. Nasopharyngeal cancer represents a $150 million to $200 million market opportunity for us.

However, the larger commercial case for LOQTORZI lies in combination therapy with both our own pipeline product candidates as well as other companies’ products. In the latter case, we supply the drug but do not fund the trials, potentially expanding the LOQTORZI label very cost effectively. Now let me move on to the development strategy for the pipeline assets for just a moment. The step change in cancer patient survival we seek requires multiple mechanism of action working in concert to attack tumors. Our pipeline assets have complementary MOAs to LOQTORZI, and we are actively advancing combination studies across prioritized indications. Collaborations are key to combinations as we don’t want to overlook any potential significant therapeutic benefit in combining any of our assets with another company’s approved or experimental agents.

Thus, developing strategic partnerships is an integral part of our overarching development strategy and dovetails with our efforts to license the pipeline ex-U.S., as I will describe later. This results in a very capital-efficient indication expansion strategy for our products and sets us apart from other companies as we do not constrain ourselves to just using our own portfolio. Let me now briefly review each of our pipeline product candidates. First, CHS-114, our anti-CCR8 Treg depleter, and then casdozokitug, our anti-IL-27 antagonist, in terms of, first, how they were scientifically brought forward. Second, why they are so promising. And third, rationale for the development path we’ve chosen. Then Dr. Dias, our Chief Medical Officer, will review the ongoing studies and the upcoming data readouts expected in the first half of ’26.

First, CHS-114, our potential best-in-class CCR8 Treg depleter. Now normally, T regulatory cells act as brakes on the body’s immune response, preventing autoimmune disease. In cancer, particularly with solid tumors, Tregs help tumors evade the immune system, allowing them to grow unchecked. While the existence and role of Tregs is known years before, in 2016, researchers found that Treg cells in the tumor microenvironment had a unique receptor, CCR8, on their surface. This sparked a rush to create antibodies that target CCR8 with the objective to eliminate these specific Tregs and not others and boost the immune system’s response against tumors. This was viewed as a potential major breakthrough goal in the year’s long battle against cancer.

CHS-114 was developed with great care to specifically target only CCR8, ensuring it doesn’t bind to other receptors outside the tumor microenvironment, which would cause side effects and limit its use. However, CCR8 is a GPCR receptor, and targeting such receptors is notoriously difficult as there’s so little protein on the cell surface for binding, making antibody development very challenging. The development process for CHS-114 was rigorous and candidate agents were screened against over 5,200 known off-target sites to ensure selectivity. The result of this effort is the only known anti-CCR8 Treg depleting agent with no off-target binding, which may avoid unexpected toxicity. Two key points here. First, some CCR8 competitors are accounting off-target binding in their development programs and some are finding dose-limiting toxicities.

Secondly, CHS-114’s high selectivity makes it potentially best-in-class, giving us competitive advantage in terms of development timing and market entry. It’s important to note that we are the only independent U.S. biotech developing a CCR8 and the U.S. FDA approval is highly valuable ex-U.S. in terms of partnering, which is a key focus for us. We are working efficiently and aggressively, of course, to bring CHS-114 to market for key indications in the U.S. as quickly as possible. And we’re making good progress. With our head and neck trial, Coherus Oncology is the first U.S. company to demonstrate that anti-CCR8 treatment can deplete Tregs in tumors. 114 treatment also led to increased CD8-positive T cell infiltration in the head and neck cancer patient tumors.

I would also note that in combination with LOQTORZI, in the same study, we saw a partial response and significant reduction of target and nontarget lesions in a fourth-line patient. Of course, given the promise of the mechanism of action, targeting CCR8 has become very competitive. However, the upside is that this class of treatments is gaining broad validation across various tumors and settings, particularly in combination with a PD-1. Importantly, given the MOA, there is also the potential for broad combinability of anti-CCR8s across other efficacious modalities such as T cell engagers, ADCs and so on. This is the subject of our partnering efforts, both in the U.S. and ex-U.S. We currently have clinical studies in head and neck, gastric and esophageal cancer, which we will review directly.

However, I wish to point out that Dr. Alexander Rudensky, Chairman of Immunology at Memorial Sloan Kettering and key member of our Coherus Oncology Scientific Advisory Board, recently published two important preclinical papers characterizing the immunosuppressive role of Tregs in colorectal cancer, an area of burgeoning unmet need. We are currently developing clinical plans to address this increasingly common disease, affecting younger patients as recently reported by the Journal of American Medical Association. We believe that in 2026, anti-CCR8s will start to realize their therapeutic promise and become a new treatment backbone used broadly across many solid tumor types. Let me now refresh you on casdozokitug, a unique first-in-class opportunity in our pipeline.

Casdozokitug is the only known anti- IL-27 treatment currently in development, and IL-27 plays a key role in the immune responses within barrier tissues such as liver and lung. It is well known that cytokines in the immune system are tightly linked to cancer, and it has been demonstrated that IL-27’s role in mediating the immune response is the basis for its mechanism of action. Mechanistically, within the tumor microenvironment, IL-27 facilitates tumor growth in three ways: First, by inducing checkpoint expression, such as PD-1s, LAG-3s and others on the surface of T cells, inhibiting the immune response. Secondly, by reducing pro- inflammatory cytokines, weakening the immune response. And lastly, affecting natural killer cells, preventing them from attacking tumors.

This makes IL-27 a novel and distinctive target with immunomodulatory mechanism that is synergistic with checkpoints, attacking immune resistance from a complementary direction. What’s important for you to think about here is that the translation of the data from our model systems to the human clinical trials is impressive, giving us a clear path forward for development. Across preclinical mouse models, IL-27 was shown to have an important role in turning off T cells and NK cells in lung and liver. These are the two key tissue types we have chosen to investigate for therapeutic effect and compelling efficacy has been demonstrated in first-line liver cancer patients as previously disclosed. Coherus Oncology has global rights to casdozokitug, and hepatocellular carcinoma is a global disease with particular incidents in Asia and other regions, including Europe and MENA.

This makes the ex- U.S. licensing efforts of casdozokitug a priority for us, and we believe the success of such efforts will follow from strong clinical data. Such partnering across regions can be expected to provide three things: first, validation of the value of our pipeline; second, nondilutive financing for ongoing clinical development; and third, cost offsets for larger pivotal clinical trials to come later. Dr. Dias will now provide clinical development rationale and update, letting you know what you can expect next year as the data reads out. Then Sameer Goregaoker, our Executive Vice President, Commercial, will provide NPC market color as well as a summary of the large market opportunity of the pipeline product candidates. Rosh?

Rosh Dias: Thank you, Denny, and good afternoon, everyone. I’ll start with a review of our clinical program for CHS-114 before moving on to casdozokitug. Given the biology, CHS-114 has potential utility in multiple areas, and we have active trials across several tumor types. Firstly, in second-line head and neck squamous cell carcinoma, where the rationale for exploration is several fold. First, this is a tumor type that is well supported by high target expression in terms of the prevalence and density of CCR8-positive Tregs in the tumor. Additionally, this is an indication synergistic with the current indication for LOQTORZI in NPC, a subtype of head and neck cancer. And furthermore, clinically, we’ve been very encouraged by the confirmed partial response demonstrated earlier in the head and neck program in a very late-line patient previously refractory to prior PD-1 inhibition with this data being presented at AACR a few months ago and which firmly supports continued development in head and neck.

Our head and neck squamous cell trial explores two biologically active doses of CHS-114 in combination with toripalimab in the second-line setting, which is currently an area of very high unmet medical need with the goal of declaring a dose for continued development, whilst at the same time, developing further efficacy and safety data and aiming to address FDA’s Project Optimus. This trial is active and ongoing, and we remain on track to develop efficacy — to deliver efficacy and safety data in the first half of 2026 previously communicated. The second priority tumor type for CHS-114 is second-line gastric cancer, which again is supported by the biology and has demonstrated proof of principle of the CCR8 class in combination with toripalimab specifically as communicated in data presented at ASCO ’24.

The approach here is to include patients with gastric, GEJ and esophageal adenocarcinoma and again, to explore two biologically active doses in combination with toripalimab in 40 second-line patients. This trial is active and ongoing in U.S. and Asia Pacific sites, and we anticipate safety and efficacy results over the course of next year, as previously discussed. The third tumor type we’re pursuing is in esophageal squamous cell carcinoma, where we’re looking at both a first-line and a second- line population. As a reminder, LOQTORZI has demonstrated activity irrespective of PD-L1 levels in the first-line setting, and we’re exploring tori/114 combination with chemo in first-line ESCC. Concurrently, we’re also pursuing second-line esophageal squamous cell with the tori/114 combination as a fast-to-market strategy as the current standard of care constitutes a large area of unmet medical need.

Both cohorts are active and ongoing in the U.S. and Asia Pacific sites, and we anticipate safety and efficacy results over the course of next year. Casdozokitug, our first-in-class IL-27 targeting antibody is progressing in our first-line hepatocellular carcinoma study. As a reminder, the current ongoing Phase II study is a 3-arm, 72-patient study exploring two biologically active doses of casdozo in combination with toripalimab and bevacizumab compared tori/bev alone, which, in addition to generating further efficacy and safety data, aims to address FDA’s Project Optimus dose optimization requirement whilst at the same time, addressing contribution of components as we move through the development pathway. As a reminder, this ongoing study builds upon the very encouraging data presented at ASCO GI in January this year, demonstrating a 38% overall response rate and a 17% complete response rate with the addition of casdozo to the current standard of care atezo and bev, where historically, the overall response rate has been around 30% and the complete response rate around 80%.

In our study, we’ve shown a deepening of responses over time and responses irrespective of viral or non-viral etiology. This trial is currently active and ongoing in the U.S. and the Asia Pacific region, and we anticipate safety and efficacy data in the first half of ’26 as previously communicated. Finally, building upon the monotherapy activity previously demonstrated in late-line non- small cell lung cancer with squamous histology, casdozo is also under development in squamous non-small cell, with a randomized Phase II study sponsored by a prominent investigational group currently in the planning stages and expected to commence next year. With that, I will hand things over to Sameer. Sameer?

Sameer Goregaoker: Thank you, Rosh. Q2 marked the first quarter when we operated as a dedicated innovative oncology company. This enabled us to maintain a singular focus on educating physicians on LOQTORZI as a differentiated and highly efficacious PD-1 for NPC patients. Our goal is to establish LOQTORZI as the standard of care and preferred regimen for all eligible NPC patients. We are happy to report strong progress towards that goal. Net revenue in Q2 was $10 million, a 36% increase quarter-over-quarter and a 65% increase year- over-year. Q2 performance was driven primarily by strong demand from new patients and some positive impact from wholesaler inventory rebuild following a drawdown in Q1. Our execution in Q2 was driven by a LOQTORZI-only sales force supplemented by robust digital marketing efforts.

We were focused on educating physicians on the updated NCCN guidelines, and we are pleased with the reactions that we have seen. Over 90% of the 33 NCCN institutions have now used LOQTORZI in their NPC patients. The number of new purchasing accounts has grown by 20%, an indicator of the increasing breadth of use. And we saw a 22% increase in accounts using LOQTORZI in a subsequent patient after initial trial, indicating greater depth of use. Among academic KOLs and head and neck specialists, we have seen a significant move towards adopting LOQTORZI in both the first-line and the second-line plus setting. This adoption comes at the expense of off-label IOs and chemo-only use, both of which are nonpreferred in the updated NCCN guidelines. Feedback from KOLs have been very positive, and we hear a strong preference for the brand over nonpreferred regimens.

While we are pleased with the results of our promotional efforts, significant growth opportunity remains primarily in the community setting. Over half of the addressable patients are managed in this segment, but adoption is generally slower in community oncology than in the academic centers. There are more than 3x as many target community oncologists versus academic HCPs, but these physicians typically see a much smaller number of NPC patients each year. As a result, advances in NPC treatment and NCCN guidelines are not top of mind for these physicians. So in second half 2025, we are using a combination of sales force, digital and data to unlock the community opportunity. First, we are launching a refreshed messaging platform this month that clearly articulates our strong efficacy and superiority versus chemo only.

Second, we’re developing highly engaging KOL-driven digital content to help educate community oncologists. And third, we are doubling down on our investment in real-time data to drive intelligent targeting of HCPs and patients at the time of diagnosis. With our strong focus on commercial execution, we expect that LOQTORZI revenue will follow typical rare disease dynamics with a steady ramp fueled by new patient acquisition and broad adoption in the community setting. I’d like to end this section by saying that we remain on track to achieve our 2025 revenue goals of between $40 million and $50 million and to achieve a dominant share in the NPC market, which is estimated to be in the range of $150 million to $200 million. While LOQTORZI will fuel our near-term growth, we are excited about the impressive commercial potential of our two pipeline assets.

A key point I want to note at this point is that all of our clinical trials for both CHS-114 and casdozo are paired with LOQTORZI. As a result, each new indication approval would represent a label expansion for LOQTORZI, and we would realize revenues from both the novel agent and LOQTORZI. Through our LOQTORZI commercialization efforts, we continue to build a best-in-class oncology organization with proven launch capabilities. At the time of potential approval of our pipeline indications, we will be well positioned to benefit from this commercial expertise as well as our relationships across the oncology community. For casdozo, HCC represents a U.S. market opportunity of about $4 billion and the potential for significant improvement in patient care.

If the data readouts continue to be positive for casdozo, the commercial organization will be well positioned to support the potential for a new standard of care for patients in this area of high unmet medical need. For CHS-114, as Denny mentioned, we believe we may have a best-in-class non-partnered U.S. asset. Second-line head and neck cancer for this molecule is a market of about $4.5 billion, while second-line gastric cancer represents $3.5 billion and esophageal cancer comes in at just under $1 billion. In isolation, any of these potential indications for our pipeline assets represent a significantly large U.S. commercial opportunity. With the potential for multiple indications compounded by incremental ex-U.S. markets, we are very excited about our innovative immuno- oncology portfolio.

While we remain in the near term focused on maximizing the NPC indication, our commercial organization stands ready to support the next phase of our growth in the coming years. With that, I’ll now pass the call to our CFO, Bryan McMichael.

Bryan J. McMichael: Thank you, Sameer, and good afternoon, everyone. Today, I will limit my discussion to key financial updates and refer you to our earnings press release for the second quarter and year-to-date 2025 figures and detailed results. I’m happy to report that Coherus has made strong progress on its operational and financial transition, fully consistent with our plans outlined in last quarter’s call. Following the close of the divestiture in April, we used a portion of the $483 million in upfront cash proceeds to complete the payoff of substantially all the $230 million convertible notes as well as buy down the UDENYCA royalty obligation. We ended Q2 with $238 million in cash and investments, and we project sufficient cash to provide runway through 2026 beyond key data readouts.

Cash burn continues to moderate as per plan quarter-to-quarter in 2025 as we wind down the transition service agreement activities associated with the divestiture and settle pre-close remaining liabilities. The majority of the $97 million in accrued rebates, fees and reserves of the balance sheet, down from $148 million last year, will be settled over the coming quarters through 2025 and 2026. I’m also pleased to report in Q2, we achieved additional progress on managing of our cost structure and expenditures. We now expect to save approximately $30 million on an annualized basis from Q2 headcount reductions, up from $25 million communicated in Q1. This includes the employees transitioned in the divestiture and other reductions initiated during Q2.

We remain on track per plan to be at 150 FTEs or less by year-end, which will yield an additional approximately $5 million in annualized savings over the Q1 guidance. Exiting the legacy business has allowed us to simplify our operations and reduce operating costs, particularly as they relate to supply chain and commercial activities. Net of non-reimbursed transition service costs, SG&A incurred solely for Coherus programs and expenses for the full year 2025 is projected to be between $90 million and $100 million. R&D expenses will be a function of data readouts in our ongoing portfolio prioritization process, and we’ll be able to provide more detail on that later in the year. With that, I’ll hand it over to Denny.

Dennis M. Lanfear: Thank you, Bryan. Let me close with a few key points that reflect the strength of our company, our focus on our drugs, our data and our deals with effective execution making it happen. The science behind our drugs is first rate, next-generation, first-in-class and arguably best-in-class, addressing very large markets. Our data, our science is already and continues to translate strong clinical data, step change survival benefit to patients. Strong clinical execution is keeping us on track to turn over key data cards in the first half of next year, meeting your expectations. And then there’s our deals. Excellent deal execution defined our strategic transformation into a focused innovative oncology company, and it will now unlock significant pipeline value through ex-U.S. licensing deals, which will do three things over the next 6, 12 and 18 months.

First, validate our science and our products; secondly, monetize our global rights with upfront; and third, offset our global development cost for the future. And in the U.S., we will seek collaborations that expand our labels cost efficiently through combinations with development partners. Strong execution across all three of these dimensions will deliver value to shareholders and is enabled by world-class advisers and Board members working integrally with our team. We expect our strong balance sheet to support operations through ’26, well beyond our key clinical catalysts. Operator, we’re happy now for you to open the line for questions.

Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Brian Cheng from JPMorgan.

Lut Ming Cheng: Maybe let’s start off with the pipeline. As you think through your CCR8 program, your 114 program in your overall approach in the near term, can you just talk about how important it is to identify a partner to — perhaps regional partners to accelerate some of the progress that you have made in the near term? And if there is interest in that, when do you think it will be a good time to look for a partner here? And then I have a follow-up.

Dennis M. Lanfear: Yes. Thanks, Brian, for that. First of all, Rosh, do you want to recap for us when we will see the data cards turned over for 114?

Rosh Dias: Yes, absolutely. Thanks, Brian, for the question. So we will — for both molecules, actually, we anticipate seeing both efficacy and safety data in the first half of next year. But specifically for CHS-114 for our head and neck program, we — again, we will see efficacy and safety data in the first half of the year, building, of course, on the data sets that I’ve — the very encouraging data sets actually that I’ve previously communicated. For gastric and esophageal for 114, we anticipate safety in the first half of the year and then efficacy in the second half of the year.

Dennis M. Lanfear: So Brian, we’re funded through those studies with the product. But as I indicated in my prepared remarks, we expect partners to work collaboratively with us and help us offset these development costs. And I think the issue of the timing really strikes also to the development of others. Theresa, do you want to add a comment?

Theresa M. Lavallee: Yes. Thanks, Brian. I think there’s a couple of key data sets as we look as we — Rosh outlined that we’ll be getting to a recommended Phase II dose. So that simplifies the development and I think makes it more attractive for partners in other regional areas. Additionally, what we showed at AACR and besides just Treg depletion and clinical response, we showed a marked infiltration of CD8 T cells, which really has caught the attention of several folks because that clearly lends itself to combinations with other modalities outside of toripalimab, such as T cell engagers. And so I think what we’re having is active conversations with people to look for the right partner, both to test other tumor types as well as other combinations and then folks that are prioritized are tumor types where we expect to see efficacy and look at other regions.

So all of those conversations are ongoing, but I think it will be really important for us to find a partner that can run with us and not complicate the speed at which we want to move this program.

Dennis M. Lanfear: And I would add two other points for you, Brian. First of all, the CCR8 Treg depleter class is under vigorous development, as you know, globally. And there are data sets being put forward at various meetings. And we would expect that, and we would expect those data sets sometime over the next 6 to 12 months, say, to accelerate. We think 2026 will be the year that CCR8s come to the fore. The second point, as Theresa indicated, is that we’re very open-minded with respect to combining our CCR8 with others’ drugs. We’re not constraining ourselves just to our own portfolio. We think there’s broad applicability for the mechanism of action here, and we intend to take advantage of that.

Lut Ming Cheng: Great. And then maybe just one quick one on LOQTORZI. Just based on the trajectory and also some of the dynamics you’re hearing from doctors, how confident are you on your path towards the $150 million to $200 million goal for the franchise? Are there any indicators that you’re now seeing that get you confident in yourself moving towards that goal?

Dennis M. Lanfear: Thanks, Brian. Sameer, do you want to handle that?

Sameer Goregaoker: Yes. Thank you, Brian. First of all, let me just kind of answer that. So we feel pretty confident. We expect that we’ll get to peak revenues by 2028. And just one piece of anecdotal evidence that gives us confidence. After the NCCN guidelines were updated, we saw a pretty strong uptake in the academic setting, in the hospitals and the head and neck specialists. They’re the ones who are waiting for the guidelines updates. And once the guidelines got updated, we communicated the data to them. They really jumped on the bandwagon. So what we need to do now is do the same thing and educate the community on our data sets. So we feel pretty confident, Brian.

Operator: Your next question comes from the line of Michael Nedelcovych from TD Cowen.

Michael Thomas Nedelcovych: I have two. My first question is on the anti-CCR8 program. You mentioned competitor readouts that could serve as sort of stocking horses for your molecule. Are you aware of any as you survey the competitive landscape that would — that you would consider proof of concept for the mechanism, so perhaps a randomized trial? That’s my first question. And then my second question is actually on the competitive landscape for your anti-IL-27. I know you have the potential here to be first-in-class. Have you seen any follow-on molecule — any follow-on programs from competitors? Are there other anti-IL-27 molecules in development that perhaps we don’t know about?

Dennis M. Lanfear: Thank you, Michael. Thoughtful and very pertinent questions. Theresa, do you want to address the competitive profile, both on the two molecules, CCR8 and casdozo?

Theresa M. Lavallee: Yes. I’ll start with the second line first, casdozokitug. We are not aware of anyone else going into clinical development with an IL-27 antagonist. And we have garnered a lot of interest from partners with the HCC CR rate to continue those discussions. For the CCR8, what I find compelling is every time we see a data card turned over, we’re seeing efficacy. We saw at ASCO this year that Renovo presented data in pancreatic cancer showing a 22% overall response rate, I believe, in combination with toripalimab, which is quite impressive in refractory pancreatic cancer. Additionally, Shionogi, with their IgG1 wild-type antibody, so a less potent molecule than ours, showed a complete response and a PR in colorectal cancer, a tumor type that really MSS colorectal cancer has been underserved.

So as we see each data readout come, it’s looking quite interesting. The only randomized study that has been reported publicly is Renovo advancing in MSI-high colorectal cancer. So we actively control clinicaltrials.gov and the reporting of these molecules as we’ve heard a lot of buzz in the community and expect to see updates in the next year from other folks as well as our own programs.

Dennis M. Lanfear: Yes. I just dovetail on Theresa’s remarks, Michael, there is, of course, robust development activity across a number of big pharmas. No one’s talking very much right now. But we suspect over the next 6 or 12 months, there’s going to be quite a bit of data come to the fore, certainly maybe next year by ASCO.

Operator: The next question comes from the line of Colleen Kusy from Baird.

Colleen Margaret Kusy: A few from us. You spoke about on the commercial side, making some investments into the community that’s largely untapped right now. Can you just walk us through those? And when you expect those might bear out into the sales trajectory? And then I have a couple of follow-ups, please.

Dennis M. Lanfear: Sameer, do you want to handle that?

Sameer Goregaoker: Yes. Thank you, Colleen. So the community — one of the dynamics of the community is that there’s — we have to target at least 3x as many physicians in the community as the academic setting. And the number of patients in the community is very dispersed. So each physician sees maybe 1 or 2 patients a year. So — but at the same time, we can’t ignore the community because half the patients are in the community. So what’s going to happen is we’re focusing — now refocusing our efforts on the community, both from the sales force standpoint, digital standpoint. And we’re also purchasing a lot of data to identify the physicians with the patients at the time of diagnosis. So that whole multipronged approach is underway. But I think because of those dynamics, the time for us to really get to peak sale is going to be about those 3 to 4 years because making a difference in the community is going to be an ongoing process.

Dennis M. Lanfear: Do you have a follow-on question, Colleen?

Colleen Margaret Kusy: Yes. I know historically, you — and you spoke to, you out-licensed LOQTORZI in a capital-efficient way to potentially expand the indications there. Is there anything on the horizon from any partners we should be aware of in terms of potential data readouts? And then on the strategy, what sort of deals do you think you’d prioritize for LOQTORZI licensing in the future?

Dennis M. Lanfear: I’ll handle the first one, and I’ll let Theresa handle the second one. To be clear, we have not out-licensed LOQTORZI. What we have done is we have entered into collaborative strategic arrangements whereby we supply LOQTORZI for others’ clinical trials. The strategy being that as they develop those products, we will eventually get a label that we can promote against. And we do that, we just — the only cost to us really is just supply of the drug, which is not very significant. So this is very cost effective.

Theresa M. Lavallee: Yes. On the last call, we talked about STORM Therapeutics having those study ongoing and enrolling in both head and neck cancer and lung cancer, two tumor types that complement the data sets we have in hand for tori. I mean, I can’t speak for how they would disclose data, but knowing that team, I would anticipate some update next year. The other studies are on track to start. And additionally, we would look towards more announcements later this year. We’re now only announcing them when first patient is dosed. So we don’t have to wait a long time for data. So hopefully, next year, we’ll see some data readouts.

Dennis M. Lanfear: The other point I would make pursuant to your question is a point though that Theresa makes frequently is that if you are a company developing a new therapeutic, you want to make sure that you have a highly active next-generation PD-1. We’re not constrained to using the standard of care, which will go biosimilar in a few years, in 2020 or whatever. So the interest that we have had in terms of partnering and co-development, I think, is driven from that is LOQTORZI’s outstanding efficacy and safety profile.

Colleen Margaret Kusy: Great. That’s really helpful. And then last one for us. Just on the randomized Phase II for casdozo/tori in front-line HCC. Can you just comment on how enrollment is going there?

Dennis M. Lanfear: Rosh, how is enrollment going?

Rosh Dias: Yes. Thanks for the question, Colleen. So yes, so recruitment is going well. We are recruiting in the U.S. and in the Far East. So these are active trials that, again, we’re on track to report data for in the first half of next year, both for efficacy and safety. Just recall, though, that with HCC in particular, responses can take a little bit of time to mature and become more kind of deeper as well, which is what we saw in our earlier trials. So bear that in mind as well, but we’re on track with improvement.

Operator: Your next question comes from the line of Li Chen from H.C. Wainwright.

Li Chen: This is Li Chen for Doug Tsao. Congratulations on the quarter. So maybe to start with, I’m curious to know if you still follow the first- line HCC patients treated with the triplet of carbo, atezo and bev. And if there’s any insight into the durability there? Or maybe when should we expect those data to be presented? And then I have a follow-up.

Bryan J. McMichael: So the data set that you referred to is with the atezo triplet data, and we did present the final data in January of this year at ASCO GI. And that was the data set that I referred to in my prepared remarks with an overall response rate of 38%, a CR rate of 17%, which compares obviously favorably with current benchmarks. So that trial is the atezo trial. The trial that we report — that’s ongoing right now and that we will report out next year, early next year initial — in terms of initial data is the toripalimab, casdozo, bevacizumab triplet, right? So we’ve switched obviously to our own PD-1, and that’s the 72-patient study that I described.

Li Chen: I see. So I guess I’m asking for PFS and OS data from the initial triplet results. So it sounds like you don’t plan to report.

Bryan J. McMichael: Yes. So the atezo data was reported in January. And in terms of durability, a couple of things I’ll mention. Number one, there was a deepening of response over time and also obviously an increase in response rate. And secondly, for those responses, there was durability. The majority of those responses were 6 months or more.

Theresa M. Lavallee: But the PFS was reported at 8.9, so higher than the IMbrave150 and the OS data is still maturing.

Li Chen: Great. And my second question is regarding the next phase in — the next phase of development in first-line HCC. How do you think about the comparator arms for the Phase III? Do you think the data in first half ’26 will be enough for decision-making?

Bryan J. McMichael: Well, I think we’ll have — so we’ll have initial data in terms of efficacy and safety, as I’ve mentioned, in the first half of the year. But again, in HCC, it can take a little bit of time for the data to mature, meaning it can take a little bit of time for the data — the full effect to be realized, right, in terms of depth of response. So once we have that, the next stage will — we anticipate will be a next stage trial, Phase II, Phase III with — compared to the current standard of care. The majority of — in the majority of countries worldwide, the current standard of care is atezo/bev. So that’s what we anticipate will be the comparator. And again, some of those benchmarks that I mentioned earlier of 38% for us — for overall response rate compared to 30% for atezo/bev and also 17% CR rate for our combination versus around 8% for the CR rate. That gives us confidence at this stage.

Operator: Your final question comes from the line of Jason McCarthy from Maxim Group.

Jason Wesly McCarthy: So thinking longer term, given your extensive knowledge of biosimilars, do you foresee any risk of off-label competition when KEYTRUDA comes off patent and begins to face pricing pressure from biosimilars?

Dennis M. Lanfear: Thank you for your question, Jason. I’ll let Rosh take a look at that. Rosh?

Rosh Dias: So yes, thanks for the question. So in NPC specifically, a few points I’ll mention. First of all, I think it’s very well appreciated that toripalimab is a differentiated PD-1 on its molecular characteristics as well as on some of its clinical characteristics as well. For NPC specifically, we remain the only approved and available therapy within the U.S. So the approval is with us. Secondly, we have really the only positive data compared to — pembro and nivo do not have positive data in NPC. And thirdly, we are the only preferred therapy on NCCN guidelines with first-line categorization for — with essentially Category 1 designation in first-line specifically. So yes, we do not anticipate any effect from that perspective.

Dennis M. Lanfear: I would say unequivocally none. There’s a failed Phase II study. We are the only labeled PD-1. And I think that there is a good appreciation by physicians of the power of strong data, and our data is very, very strong for nasopharyngeal cancer.

Theresa M. Lavallee: And you have to remember that biosimilars only get the label for the reference product. So it would be…

Rosh Dias: They would not have a label.

Theresa M. Lavallee: Yes.

Operator: Your final question comes from the line of Douglas Tsao from H.C. Wainwright.

Douglas Dylan Tsao: I hope I didn’t miss it. But I did want to ask about the impact of the guidelines. I think you touched on sort of the difference between the centers of excellence as well as in the community setting. And I’m just curious, are the guidelines sort of permeating or the impact of the guidelines permeating out into the community and it’s just taking a little bit longer. Or is it really they are not necessarily following them as closely as what you’re seeing in the major academic centers?

Dennis M. Lanfear: That’s a good question on the guidelines. Sameer, can you just recap the guidelines for Doug just briefly and how we do it?

Sameer Goregaoker: Yes. I mean we’re very excited about the guidelines. The guidelines put us in a Category 1 preferred position, LOQTORZI plus chemotherapy. So we’re the only ones in that preferred position. So after the guidelines were put in place, we did a lot of work with the hospital setting, KOLs and head and neck specialists, and we were able to really move the needle. And we’ve gotten a lot of hospital specialists and head and neck specialists using LOQTORZI because they’re the ones who see a lot of patients, patient volume. The issue in the community is it’s not so much that they don’t follow the guidelines. They only see a very small number of patients every year, and they just go by what they remember from last time.

And it takes a while for them to — head and neck basically or nasopharyngeal carcinoma is not top of mind for them. So it’s our job to keep detailing them and educating them until those guidelines get really established in their practice. So it’s going to be a process, but we’re really focused on executing that process, and we believe that we will make an impact to the community as well.

Operator: There are no questions. That concludes the Q&A session. I’ll turn the call back over to Denny Lanfear for closing remarks.

Dennis M. Lanfear: Thank you. Thank you all for joining us on our call. I think as you can see in today’s call, we’ve really hit our stride with regards to the execution, both clinically and commercially and otherwise with the company. Strong balance sheet will keep us moving through next year while we turn over the data cards, and we look forward to seeing you guys at the Baird and the HCW conferences the second week of New York. Thank you.

Operator: This concludes today’s conference call. You may now disconnect.