Coherus Oncology, Inc. (NASDAQ:CHRS) Q3 2025 Earnings Call Transcript

Coherus Oncology, Inc. (NASDAQ:CHRS) Q3 2025 Earnings Call Transcript November 7, 2025

Operator: Good day, and thank you for standing by. Welcome to the Coherus Oncology Q3 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Carrie Graham. Please go ahead.

Unknown Executive: Thank you, Heidi. Good afternoon, and welcome to Coherus Oncology’s Third 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, Chief Commercial Officer. 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 statements. 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’d like to turn the call over to Denny.

Dennis Lanfear: Thank you, Carrie, and good afternoon, everyone, and welcome to our Q3 2025 earnings call. As we get started, let me first welcome Arvind Sood to Coherus Oncology, our newly appointed Chief Strategy and Corporate Affairs Officer. Arvind is responsible for Investor Relations, Corporate Development and government affairs. Welcome, Arvind.

Unknown Executive: Thank you.

Dennis Lanfear: Things are going very well and today, I’m very excited to tell you about the progress we have made on our strategic plan in the last quarter, as well as generally recap our progress for you over the past year as we approach the end of 2025. As you know, we take great pride in our ability to execute, and execution has been strong across the board. For example, you may recall last year me telling you that our objectives included driving the top line, reducing expenses and strengthening the balance sheet. I’m happy to report that we’ve made great progress across all 3. We are particularly pleased with our progress on the balance sheet and expenses, which shows a substantial improvement over the past year. My Chief Financial Officer, Bryan McMichael, will discuss these results with you directly.

Now the Coherus Oncology value proposition for investors is all about our drugs, our evolving data and the opportunity for deals. We have set ourselves up for success with a sound strategy and have gained significant momentum and hit our stride. Regarding our drugs, LOQTORZI is a next-generation PD-1, active in low PD-L1 cancers and approved in nasopharyngeal cancer, where it is a revenue generator for us, providing growing sales and margin contribution. Our Chief Commercial Officer, Sameer Goregaoker, will give you the color and detail on that shortly and reiterate our confidence that we will achieve our revenue targets. Our focus as a cancer company is achieving a step change in patient survival. That is our goal. We believe the future of extending patient survival lies in combinations, and we are combining LOQTORZI with both our own proprietary pipeline assets across indications.

LOQTORZI is also being used in combination with other companies’ therapeutic assets. And upon approval of any of these drugs, will be a revenue multiplier, its second key role in our strategy. We are currently pursuing liver and lung cancer with casdozokitug. And with CHS-114, our CCR8 Treg depleter, we are pursuing head and neck cancer, gastric cancer, esophageal and now colorectal cancer, an area of expanded focus for us, all in combination with LOQTORZI, which brings me to the second thing for investors to keep in mind, our data. In just a moment, Dr. Rosh Dias, our Chief Medical Officer, will update you on our enrollment and clinical trial progress in more detail. But I will note here that enrollment across all of the initiated studies is in full swing and on a global basis, with the vast majority of our sites open as we drive to deliver data for you next year in these promising indications.

With clinical development, we have hit our stride and with highly engaged clinical investigators enthusiastic about these highly promising mechanisms of action and enrolling their patients suffering from their unmet need to stop their cancers. Dr. Theresa Lavallee, our Chief Scientific and Development Officer, will spend a few minutes with you today discussing the mechanism of action of our drugs with particular focus on the therapeutic promise of T regulatory cells as a target. As you know, this field was the subject of a recent Nobel Prize in Physiology or Medicine, thrusting it to the fore and underscoring its therapeutic potential. As a leader in this rapidly advancing field, Coherus Oncology is proud to be the first company to demonstrate Treg depletion and subsequent CD8-positive T cell infiltration in a patient.

The organizers of the 2025 SITC meeting invited us to present our data at a webinar recently, which was the highest attended of the year. CHS-114, our highly selective CCR8 Treg depleter, is potentially best-in-class. And given the broad distribution and role of Tregs in the body, selectivity takes out a dominant role. With our broad yet focused clinical program reading out over 2026, we are well positioned to continue the scientific leadership that we demonstrated in 2025. We have global rights to CHS-114, as well as casdozokitug. So let me make a few comments about potential deals, the third part of our value proposition investors should keep in mind. Treg depletion is potentially complementary, mechanistically with a wide variety of existing therapeutics where the proportion and density of T regulatory cells is correlated to poor outcomes.

Recall my earlier comments about combinations. This means that adding something like CHS-114 to ADCs, bispecifics or radiation treatment or other therapeutic approaches may improve outcomes and extend survival. We are pursuing such partnering opportunities both in the U.S. where we are commercially focused, but also globally ex U.S., where we are not focused yet have full rights. Such arrangements will provide us with income from upfronts to offset ongoing clinical development costs, but more importantly, cost contribution to pivotal or registrational trials, which need to be conducted globally. Over the next 6, 12 and 18 months, we can expect our emerging clinical data to drive such deals, and we’ll keep you updated on our calls. And with that, let me hand it over to Theresa.

Dr. Lavallee?

Theresa Lavallee: Thank you, Denny, and good afternoon. I’m excited to update you on Coherus Oncology’s innovative pipeline aimed to advance cancer treatment. Let me start with this year’s Nobel Prize for physiology or medicine, recognizing the importance of T regulatory cells and immune homeostasis. If Tregs are defective or missing, this results in severe autoimmune disease, providing strong evidence for the critical role these cells play in peripheral immune tolerance. Tumors exploit these cells as a key mechanism to evade the immune system. This is a problem because it results in cancer growth and progression. The presence of Tregs in tumors is known to be associated with poor outcomes to any cancer therapy, including chemotherapy, radiation and of course, PD-1 inhibitors.

While this is well known, what has been a problem in the field is a way to selectively target Tregs in the tumor and not in peripheral tissue. CCR8 is a protein preferentially expressed on tumor-resident Tregs, enabling a targeted therapy approach to selectively remove these immune suppressive in the tumor. We have been focused on CCR8 as a drug target for several years and believe our program is set apart from the field. CHS-114 is a cytolytic antibody with ADCC enhancement designed to find and kill CCR8-positive Tregs. This mechanism is akin to an ADC molecule. And in this case, the payload is enhanced effector function leading to Treg killing. Our preclinical and clinical data have shown differentiation, potency and tumor response. CHS-114 was evaluated for binding to over 5,000 human proteins, the entire proteome available on the outside of the cell.

Importantly, CHS-114 only binds to one protein, its target, CCR8. Eliminating off-target binding has the potential to have a differentiated safety profile. CHS-114 is the only known selective CCR8 antibody. Additionally, it has shown an acceptable safety profile, selective CCR8 Treg depletion in tumors and also a remarkable ability to lead to the increase of CD8 T cells in tumors, thus characterizing the tumors as hot or immunologically responsive. In the initial safety cohort of 7 U.S. patients evaluating CHS-114 with toripalimab, response was observed in a fourth-line head and neck cancer patient. All of these data not only show the idea works, targeting CCR8 will mainly remove tumor Tregs, but also show CHS-114 treatment remodels the tumor to be more immune active.

This weekend at the Annual SITC conference, we will present additional biomarker data showing significantly enhanced immune activations in head and neck cancer patients following CHS-114 treatment with toripalimab. This is important as we are testing whether the combinations of CHS-114 with toripalimab can overcome PD-1 resistance in refractory patients. CHS-114’s pharmacological and clinical attributes establish it as having good drug-like properties. And this, coupled with our program’s focus on generating data to address 2 areas of increased scrutiny by the U.S. FDA. First, data in a Western population; and second, dose optimization, establish our scientific leadership in the space. The last point I want to make on CHS-114 is that it is a targeted therapy.

So, we know who to treat, essentially tumors with a high prevalence of CCR8, its target. Tumor types that have a high degree of CCR8 include lung, colon, head and neck and gastric to name a few. Coherus Oncology is prioritizing some of these tumor types and is now enrolling in a new cohort evaluating CHS-114 and toripalimab in a patient population without any approved immunotherapy yet, microsatellite stable colorectal cancer. The clinical program is designed to generate data on a variety of solid tumors and further inform where CHS-114 and toripalimab treatment results in meaningful clinical benefit alone or in combination with chemotherapy. Now switching gears to discuss our other promising clinical program, casdozokitug. Another approach to overcoming immune evasion is activating NK cells.

T cells and NK cells are the body’s immune killer cells. Casdozokitug, Coherus Oncology’s first-in-class IL-27 antagonist results in immune activation of both T and NK cells. At this week’s International Cytokine and Interferon Society meeting, we presented preclinical and clinical biomarker data showing an important role for NK cell activation and casdozokitug’s efficacy, particularly in first-line HCC, a tumor type rich with NK cells. The updated biomarker data continue to support that casdozokitug treatment leads to inhibition of IL-27 signaling and enhanced cytolytic immune activity by NK and T cells. Why is this important? Two reasons. One, casdozokitug treatment results in strong NK cell activation may give a mechanistic explanation for why the results showed a more than doubling of the complete response rate, activating both NK and T cells could optimize tumor cell killing and lead to its disappearance.

The second reason I highlight this is that when a new drug is added to standard of care, we need to show the contribution of components or said plainly, is casdozokitug adding anything to standard of care. These data give further confidence the deepening of response is associated with casdozokitug treatment since patients who respond show IL-27 inhibition and significant NK cell activation. Also, I want to reiterate Dennis comments that identifying partnerships that accelerate the development of the pipeline is a priority. We own global rights for both casdozokitug and CHS-114, and these compelling clinical data across the 2 pipeline assets are supporting discussions with potential partners. Before I turn it over to Dosh, let me just summarize why we are excited about recent developments with our key pipeline molecules.

We were thrilled the Nobel Prize for Physiology or Medicine recognizes the importance of T regulatory cells in immune homeostasis. We will present biomarker data at SITC meeting this week, showing enhanced immune activation in head and neck cancer patients following treatment with CHS-114 in combination with toripalimab. Also, our presentation of biomarker data earlier this week at the International Cytokine Meeting provides further support of casdozokitug’s contribution on top of standard of care in liver cancer patients. With that, I’ll turn it over to Dr. Dias, who will further describe the clinical development.

Rosh Dias: Thank you, Theresa, and good afternoon, everyone. Given the clear unmet medical need and the potential for improvement over available therapies, we are aggressively advancing our programs for both casdozokitug and CHS-114 in our focused indications. For both molecules, investigators globally maintain strong engagement and enthusiasm for our programs with very active participation in our trials. Starting first with casdozo in first-line hepatocellular carcinoma. Our ongoing study is a 3-arm multinational study, randomizing patients to 2 doses of casdozo in combination with toripalimab and bevacizumab versus tori/beva and is designed to achieve 3 objectives: firstly, efficacy and safety data; secondly, address the FDA’s Project Optimus and thirdly, address contribution of components as we move through the development pathway.

As a reminder, this trial builds upon the very encouraging data we presented at ASCO GI in January of this year. In Study 201, we showed that casdozo in combination with atezo and bev achieved an overall response rate of 38% and importantly, a complete response rate of 17%, which was both an improvement in ORR, as well as a deepening of the responses compared with the initial data from this same trial and which compares favorably to historical benchmarks with atezolizumab of 30% and 8%, respectively, for ORR and CR. With these exciting results in hand, global investigator sentiment has been very enthusiastic about the potential of the casdozo, tori/bev combination. This trial is recruited to plan, and we remain on track to deliver early efficacy and safety data in the first half of 2026.

Let’s move now to CHS-114, our CCR8 targeting cytolytic antibody. Given the biology of CCR8, CHS-114 has potential utility across a multitude of tumor types, and we have a very targeted approach in 4 specific tumors where there’s strong biological and clinical rationale for evaluation. First, in second-line head and neck squamous cell carcinoma. Earlier this year at AACR, we reported a partial response with significant tumor shrinkage in a fourth-line patient. Importantly, this patient was refractory to multiple prior therapies, including a PD-1, a TKI and a taxane. We were invited to highlight this data again during the SITC seminar a couple of weeks ago, which, as Denny mentioned, was most highly attended of the SITC webinar series. We’re recruiting to plan in our ongoing study investigating 2 doses of CHS-114 in combination with tori in the second-line head and neck squamous cell population refractory to prior PD-1 therapy and are on track to report efficacy and safety data in the first half of ’26.

This data will inform us of the importance of CCR8 as a resistance mechanism in second-line head and neck squamous cells specifically. Second, in second-line upper GI adenocarcinoma, including a population of second-line gastric, GEJ and esophageal adenocarcinoma refractory to one prior line of therapy, we’re also exploring 2 doses of CHS-114 in combination with tori. As a reminder, second-line gastric cancer is an indication where proof of mechanism has already been established with the CCR8 class in combination with tori. We’re recruiting to plan and are on track to report efficacy data in the second half of ’26. Third, we’re pursuing esophageal squamous cell carcinoma. This takes advantage of the activity of tori irrespective of PD-L1 levels, and we’re looking at both first line and second line where the medical need remains strong.

In the second-line population, we’re looking at limited dose expansion of CHS-114 in combination with tori, and our first-line cohort is a safety cohort aiming to gather data for CHS-114 in combination with tori and standard chemotherapy. Here, too, we’re tracking — we’re on track to report efficacy data in the second half of ’26. Fourth, as Denny alluded to earlier, we have expanded the CHS-114 program to include a colorectal carcinoma arm. In addition to a large unmet medical need, this tumor type also have strong supportive biological rationale given the elevated prevalence and density of CCR8-positive Tregs in CRC. Our approach in CRC aims to explore the combination of CHS-114 and tori initially in a fourth-line plus MSS population where the current standard of care in late line provides a mid-single-digit ORR and patients are in real need of additional therapeutic options.

Our trial looks first at the combination in the non-liver mets population and will move quickly into the liver mets population, which historically has been more resistant to existing therapies. We’re excited about the progress we’re making with our clinical programs as we work towards getting superior alternatives to market for cancer patients in need and look forward to turning over multiple data cards in 2026. With that, I’ll hand it over to Sameer. Sameer?

Sameer Goregaoker: Thank you, Rosh. Today, I will focus my discussion on 3 areas. First, I’ll cover LOQTROZI Q3 business performance. I will then discuss the evolving market dynamics, specifically in the community versus the academic setting. And third, I’ll outline our plans for driving continued growth in the coming quarter. Q3 LOQTORZI net revenue grew to $11.2 million, a 12% increase quarter-over-quarter and 92% increase year-over-year. However, this is down from the 35% growth that we saw in Q2. So, I’ll offer some perspective and context. Growth in Q2 included inventory accumulation as a result of previously depleted inventory levels. So, demand growth was actually about 20% in that quarter. In contrast, inventory levels remained flat in Q3, so almost all of our growth came from end customer demand.

I’ll point out that our sales team has 4 regions across the country. For this quarter, the average growth for 3 out of the 4 regions was 21%, close to the Q2 results. However, demand in the fourth region was flat, driven by post-restructure vacancies, which resulted in a lower share of voice impacting the overall national average. This issue has now been addressed, and I’ll explain in a moment why consistent message reinforcement is critical across our customer base and how we’re addressing it. Growth this quarter was driven by new patient starts in both new and existing accounts and increasing duration of treatment. The total number of accounts purchasing LOQTORZI grew over 15%, indicating increasing breadth of use. Additionally, 30% of existing accounts are now using LOQTORZI in a subsequent patient, indicating strong physician satisfaction.

Longer-term, we expect to achieve a dominant share in the NPC market, which is estimated to be in the range of $150 million to $200 million. This translates into an expected average 10% to 15% demand growth over the next 3 years, which puts us on track to achieving our long-term goals. Transitioning now to market dynamics. As you know, there are approximately 2,000 LOQTORZI eligible patients each year. These patients are seen by both hospital-based head and neck specialists as well as community physicians. However, there are key differences in these 2 segments that we have to keep in mind to achieve a dominant share in both. First, hospital-based head and neck specialists see several NPC patients each year and are well informed on the NCCN guidelines and our clinical data.

In this setting, we are seeing strong LOQTORZI growth, both in NCCN institutions and other large hospital systems. Accordingly, we are now shifting our focus from brand awareness to new patient identification and generating advocacy from academic KOLs. However, in our second segment, the community, the dynamics are very different. This is primarily because community physicians manage multiple tumor types constantly and NPC being rare is not always top of mind. The addressable opportunity in the community is very widely spread and physicians typically only see 1 to 2 new NPC patients each year. As a result, awareness of our preferred position in the NCCN guidelines and our clinical superiority data is relatively low. So, chemo alone or off-label IO continue to persist.

So, the task in front of us is very clear. We have to consistently reinforce our clinical story in the community. But with a smaller sales force post divestiture, our reach and share of voice has been limited, particularly as we saw in this quarter’s lagging region. With that background, let me now describe to you our 3-point plan to drive growth in the community. First, we’re expanding our sales force by approximately 15% to increase our reach in select geographies. This is a very targeted expansion that we believe is financially responsible and will drive a positive ROI. Second, we’re onboarding a remote sales team to drive engagement with oncologists that are not being reached by a sales representative. Covering these physicians in a cost-effective manner will expand our reach deeper into the community.

And thirdly, we’re significantly expanding our multichannel capabilities to educate community physicians. Specifically, we’re developing a campaign of highly engaging KOL-driven digital programs. These will be distributed by our field team, our website and third-party distributors. In summary, we see significant growth opportunities for LOQTORZI in the coming quarters. In recently conducted promotional effectiveness research, physicians stated strong resonance with our overall survival messaging and the NCCN guidelines. We remain confident that our focused execution will drive strong demand growth, and we are on track to achieving our long-term commercial objectives. With that, I’ll now pass the call to Bryan McMichael, our Chief Financial Officer.

Bryan McMichael: Thank you, Sameer, and good afternoon, everyone. After more than a year of deal activity, Q3 2025 was the first full quarter following our exit from the biosimilar business. We used divestiture proceeds to pay off all near-term maturity debt and are now transitioned into an innovative company solely focused on novel oncology. Today, I will share key observations about the company’s position at the end of Q3 as we head into year-end and next year’s data readouts. First, we have significantly improved our balance sheet compared to the end of last year. The total of cash and investments at the end of Q3 was $192 million. Of the $429 million in total liabilities on the balance sheet at the end of the quarter, more than half or $254 million related to transition service agreements.

These liabilities will be settled using reimbursements from buyers in the divestitures or cash collected directly from their customers. The remaining non-TSA portion of liabilities decreased 69% since the end of last year. By the end of Q3, we have successfully transferred or wound down a majority of the UDENYCA-related operations, freeing up Coherus to focus more on the priorities outlined by Denny, namely growing LOQTORZI sales and developing our pipeline. We are tracking towards a headcount of less than 140 FTEs by the — around year-end. That’s an update from the target of 150 FTEs communicated previously. Today, I will limit my discussion of the results to key updates. You can find detailed quarterly results and figures in our earnings press release.

As Sameer covered in detail, growth in LOQTORZI volumes drove increases in net revenues from continuing operations in both the quarterly and year-to-date periods. Our continuing operations demonstrate strong execution on our strategy, starting with OpEx. R&D expenses were $27.3 million for the quarter, up 24% from Q3 last year. The increase was due to investments in our pipeline and were partially offset by savings from programs we deprioritized last year. SG&A expenses were $24.9 million for the quarter, which is down 11% compared to last year, primarily due to decreased headcount. As a reminder, these figures are for continuing operations. Total OpEx related to discontinued operations, which captures the biosimilar business, dwindled to less than $1 million in Q3 2025.

To put the savings from the divestitures into context, OpEx for discontinued operations for FY 2024 totaled more than $40 million. For the full year 2025, we are reiterating our projection that SG&A expense from continuing operations will be between $90 million and $100 million. This range reflects costs incurred solely for Coherus programs and excludes non-reimbursed TSA costs and asset impairment charges. Before I hand the call back over to Denny, let me recap the progress we’ve made since transforming Coherus into the innovative oncology company it is today. There are 3 things to remember. First, we’ve bolstered our balance sheet by significantly decreasing our liabilities, while retaining sufficient cash, which we expect will be — will fund operations through 2026 beyond key data readouts next year.

Second, we are driving LOQTORZI sales — by making targeted investments in the commercial infrastructure to enable growth in the coming quarters and years. Third, we’ve demonstrated spending discipline, streamlining our operations, including lower SG&A expenses and focused investments in R&D that target our pipeline molecule, CHS-114 and casdozokitug. With that, I’ll hand the call back over to Denny.

Dennis Lanfear: Thank you, Bryan. So let me summarize our progress this quarter for you and the momentum we are carrying into Q4 and why we’re so excited. First, strong execution across the board in all critical dimensions of the business and disciplines. On the financial front, we drove the top line with higher sales of LOQTORZI while reducing the overall expenses and strengthening the balance sheet, as Bryan just talked about. We advanced the pipeline, as Raj talked about. As clinical trials combining LOQTORZI with our own proprietary assets continue to progress, we prepare to turn over key data cards next year on more than a half dozen studies. Importantly, having full global rights to our pipeline products at this point in the company’s evolution enables partnering opportunities outside the U.S., which will serve as currency to offset ongoing clinical development costs all the way through approval.

Lastly, let me just take a moment to thank all of our dedicated team members here at Coherus Oncology for their extraordinary commitment to the company and their high performance, as we work to create value for patients and for shareholders. Heidi, we’re ready for the questions.

Operator: [Operator Instructions] We will take our first question, the first question comes from the line of Mike Nedelcovych from TD Cowen.

Q&A Session

Michael Nedelcovych: I have one, and it’s more of an R&D type question. It seems like the CCR8 mechanism would be complemented not just by anti-PD-1, but potentially both targets on the same molecule in a bispecific format. I’m curious if that makes biologic sense. And if so, if you’ve explored that option at all?

Dennis Lanfear: Mike, thanks for the question. Dr. Lavallee would be happy to give you a little further insight on that. Theresa?

Theresa Lavallee: Just to clarify, do you mean to make a molecule that targets CCR8 plus something else?

Michael Nedelcovych: That’s right. Yes, and potentially anti-PD-1 or the older.

Theresa Lavallee: Yes. So, the challenge with that, I mean, people are looking at bispecifics. But I think that given the mechanism is a bind and kill mechanism to try to kill the Treg cell and then inhibit PD-1 on a cytotoxic T cell would be challenging. There are people making bispecifics for CTRE, but what I think looks really promising from treating with CHS-114 is not only the marked depletion of the Tregs, the immunosuppressive Tregs in the tumor, but bringing the CD8s in. So, I think a more traditional combination therapy approach to look at other ways of immune activating would probably give — I mean, based on scientific hypothesis would give a stronger clinical response. But there are folks looking at CCR8 bispecifics. So, we’ll have to watch those data.

Operator: We will take our next question, and the question comes from the line of Brian Cheng from JPMorgan.

Lut Ming Cheng: Maybe just first on LAQTORZI. How do we think about the trajectory today? And when do you think the next inflection point when you draw the line from today to — I think you had a sales goal of $150 million to $200 million peak sales by mid-2028. How do you think that trajectory was going to look like? Where do you see the biggest gating factor is today? And I have a quick follow-up

Dennis Lanfear: Yes, thanks for the question, Brian. Let me handle that one first, and then we’ll go to the follow-up. I’ll keep it, if I can get this right or I’ll hand it over to Sameer. So, first of all, Sameer outlined, if we just take where we are today and you straight line 10% to 15% per quarter, you land in the target region of about $150 million to $200 million out in mid-2028-ish. So that’s sort of the benchmark. Although I would point out 2 key things that were part of Sameer’s recitation. First of all, we did an actual demand growth in Q2 of around 20%, even though the Q1 to Q2 growth was something like 36%, the rest of that was inventory. In Q3 over Q2, 3 out of 4 regions grew an average of 21%. So that’s pretty good.

That’s 2 quarters in a row clipping along at 20%. Now there is one region that lagged because of some staffing issues and turnover issues that happened in Q3. But as Sameer recited, we think we’ve got a pretty good handle on that. If we are — clearly, if we were to proceed at 20% per quarter at this rate, we would reach the target range, $150 million to $200 million much earlier than mid-2028. So, I think we’re actually overachieving right now. But just where that sort of curve kicks in is difficult to say. I would also add, though, that Sameer gave us some very clear guidance on his plans to get us there and why the conversion of the community is dependent upon the education of the community. And this is really where we’re focused. We have found that once these physicians are exposed to the clinical data that they see the significant benefit of LOQTORZI in terms of survival for these patients, they’re easily converted.

So really, it’s just a matter of reach and the converts. And again, this is why we see that once these physicians use LOQTORZI, they use it again as a follow-up patient. Happy to take your follow-up question.

Lut Ming Cheng: Yes. And then just on the colorectal front, just curious how you think about the benchmarks as we think about the data in colorectal later next year, fourth-line setting is fairly late line. How should we think about the benchmark for win there? And then I think just kind of stepping back as you think about 114 as holistically, there are multiple data reads coming across a number of indications. Do you have a sense of how you will ultimately prioritize indications since you do have a number of multiple — a number of data readouts coming up?

Dennis Lanfear: All right. So let me take the first one first here and hand that off to Dr. Dias. So, first of all, we think that — as we said in our prepared remarks, we think that the Nobel Prize for physiology medicine, recognizing the importance of T regulatory cells is really, really something to know. We intend to show scientific leadership and be at the forefront of this, and we’ve done that. I’ll just remind you of our remarks compared to — relative to the SITC webinar and so on that Dr. Dias was on. And we felt compelled to move into colorectal where first-line colorectal is chemotherapy, same treatment for 20 years. So, this is a disease that is striking ever younger patients and is really, really critical. So, we’re — I think that we believe it’s really worthy of thorough investigation. Regarding your specific questions to colorectal, Rosh, do you want to make some observations?

Rosh Dias: Yes, sure. Thanks, Brian, for the question. So, on your first question on how should we think about the benchmarks for colorectal, I’ll make a few points. First of all, colorectal, as Denny mentioned, it’s a large indication and it’s growing, particularly the younger population. And currently, it is an area where there are — there’s real room for improvement for patients in terms of potential improvements in the standard of care. The fourth line plus population has an overall response rate currently in the mid-single digits. The typical standard of care is chemotherapy. And again, it’s around 5%, 6% in terms of the overall response rate. We tend to look at the totality of evidence, so we would want to beat that in terms of overall response rate, of course.

but also durability is important, disease stability is important. There are multiple different factors that are important as you look at the whole totality of evidence. So, really excited about the potential for the Tori-CCR8 combination in late line. And obviously, the plan is to move into earlier lines subsequent to that.

Dennis Lanfear: And Brian, let me take your question with respect to how we would prioritize these indications, and I’ll let my team members chime in. First of all, we think there’s strong clinical justification and mechanism of action justification for all of these. You can identify where Tregs are an issue, and those are the cancers we’re going after. Regarding gastric cancer, there’s always been strong efficacy shown, I will remind you, on a background of toripalimab in others’ hands. So, we think that is — has a very strong probability of success, and that’s a very substantial indication. With esophageal cancer, that’s an area where toripalimab has actually shown efficacy in low PD-L1 states, where it’s approved in Europe, for example.

So that’s some place while it’s not a huge indication, it’s some place where we are very interested in investigating further. Regarding head and neck cancer, I think you’re already familiar with the data that we’ve shown, the partial response and so on. And so, we think they’re strong there. Frankly, we would probably investigate further indications with our CHS-114, but we think we have these very promising ones now. And I was just wondering, Theresa, any further comment on indication selection or the sort of things we would go after next?

Theresa Lavallee: Yes, I mean I think that we’ve characterized a large number of solid tumors that have a high density and prevalence of CCR8-positive Tregs. I mean, so tumor types that we’re currently not seeing that would be of interest, and there’s been some hints of efficacy in competitor programs or lung cancer, breast cancer, we saw data at ASCO this year in pancreatic cancer. Our program is really designed to inform us of the best setting where we see the largest effect. So, is it the density of CCR8-positive Tregs, is it the percent of CCR8 positive Tregs? Or is it the ratio with the T cells? So, our program is really designed next year to read out some important information on how best to look at ways to do quick development and then development to get in combination with other agents to get broader efficacy across multiple tumor types.

Dennis Lanfear: I would just add that our program, we believe, is both broad sufficiently across many of these indications, but also highly targeted, right? And so, I think that’s really, in the end, going to be very beneficial for us.

Lut Ming Cheng: Looking forward to the data next year.

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

Jason Mccarthy: Yes. So for casdozokitug, what would we need to see from the Phase II to justify moving straight into a pivotal study?

Dennis Lanfear: Thanks for the question, Jason. Dr. Dias, would you like to talk about that?

Rosh Dias: Yes, absolutely. Thanks, Jason, for the question. So, one thing that’s really important to realize, and I referenced this earlier, is that we really look at the totality of evidence, not any one single measure. We are hugely encouraged by the atezo-bev/casdozo data that we presented earlier this year. I’ll remind you again that what we saw was initial results and then an increase in response rate and a deepening of the response over time. So, what we would like to see next year when we report our data in the first half of the year in this initial data at least is we’d like to see a very solid overall response rate. We’d like to see some durability there. We’d like to see some really nice durability in terms of how long some of those last and then an increase over time in response rate itself and then also a complete deepening of the responses as well.

So, I think those are some of the key measures. But really, I would like to really emphasize that it’s really totality of evidence rather than a single measure or 2.

Operator: We will take our next question, the next question comes from the line of Nick Quartapella from Baird.

Nick Quartapella: This is Nick on for Colleen. Can you help quantify the increase in duration on LOQTORZI that you’re seeing? And can you speak of to what you think might be driving that increase and whether you think there’s room for that to grow further? And I have a follow-up question after that.

Dennis Lanfear: I’m sorry, Nick, what particular indication did you have in mind?

Nick Quartapella: Sorry, this is on commercial for NPC.

Dennis Lanfear: Great. Do you want to talk about that, Sameer?

Sameer Goregaoker: Yes, sure. Thank you so much for your question, Nick. So, duration of therapy is — continues to increase. So, every quarter, we’re seeing an increase in the duration of therapy. We still haven’t approached the average duration of therapy that we saw in the clinical trials, but that’s simply because we haven’t had enough time on the market to achieve that average duration of therapy. So, we’re a little too early in the launch to give you an exact number on the duration of therapy, but both in a monotherapy indication as well as a combination therapy indication, each quarter, we’re seeing an encouraging increase in the average duration. And when we have numbers where we can confidently say what the average on-market duration is, we’ll communicate that on a future call.

Dennis Lanfear: Did you have a follow-up, Nick?

Nick Quartapella: I did, yes. And then for the CHS-114 tori study in second-line head and neck, can you speak to some of the expectations around the dose optimization data coming first half of ’26, what you’re hoping to show and then what would be the next steps — what the next steps for that program would look like?

Dennis Lanfear: Great. Head and neck, Rosh?

Rosh Dias: Yes, absolutely. So, the study that we’re doing is in second-line head and neck. We’re looking at 40 subjects, a couple of biologically active doses of casdozo in combination with toripalimab. I’ll say again, the trials are — the trial is recruiting well and to plan, and we anticipate efficacy and safety data in the first half of the year. So again, the totality of evidence is important. The currently, at least in terms of the current standard of care in second line, with cetuximab, you’re seeing roughly around 13% in terms of overall response rate, which is against the current standard of care. So, we’d like to substantially beat that. But again, we also want to see durability, right? We want to see durability, disease stability, et cetera. And I think seeing some of the results we communicated at AACR really kind of encourages us as we look at what we — as we move forward in this ongoing trial.

Theresa Lavallee: An important output of that study, too, is the biopsy data as well as the dose to get to a recommended Phase II dose. And we did have a very productive Type B meeting with FDA, getting alignment on the data package we’ll bring to them next year to declare a recommended Phase II dose, which will enable us to move more nimbly to have a single dose to look at in multiple indications.

Operator: [Operator Instructions] Your next question comes from the line of Douglas Tsao from H.C. Wainwright.

Douglas Tsao: Denny, I guess sort of sticking to the colorectal study, I guess just trying to sort of understand sort of the rationale. I mean, I think, Dosh, you mentioned that you’re looking in the fourth-line setting sort of single-digit survival levels. And so just from your perspective, your expectation in terms of finding a really compelling signal in a population that is already quite sick.

Dennis Lanfear: Thanks for your question, Doug. So let me make this remark for you. First of all, going to the fourth-line setting is part of an overall development plan that moves us much further up the treatment paradigm over time. And I think that we have a very efficient and well-conceived strategy, and we can talk about at a future time to do that. With regard to your question in particular, I’ll let Dr. Lavallee talk about 2 things. First of all, the mechanism of action and the rationale, particularly for CRC for CHS-114 or Treg depleters. And then secondarily, how results — positive results from that study will set us up for future studies. Theresa?

Theresa Lavallee: Yes. So, the importance of the clinical program with 114 goes to what I started with, that it’s really designed to inform us. So, the colorectal is an important tumor type for several reasons that it has a good density and prevalence of CCR8-positive Tregs. Alexander Rudensky, one of the real pioneers in Tregs and CCR8 biology has published several papers on the diversity and differentiation of Tregs, particularly in the colon, showing that the CCR8 positive Tregs are really the pathogenic ones. So, gives it a stronger sense in that tissue that, that tumor should be particularly sensitive. Colorectal has not MSS colorectal. So, we know from the microsatellite instable population that a PD-1 inhibitor can work in the disease in the right context.

But 85% to 90% of colon cancer is MSS microsatellite stable CRC, which PD-1 inhibitors have failed. And a large component of that is the high density and prevalence of Tregs. So, colorectal is particularly exciting given the biology. Shionogi with a CCR8 antibody that is not ADCC enhanced showed a complete response and partial response with single-agent treatment at ASCO this year. We’ve seen some long-term stable disease in our early clinical program. So, that signed together with toripalimab really sets as an exciting opportunity to bring immunotherapy to a tumor type that hasn’t had any. So, the totality of data, the preclinical, the clinical and the biology of the target give it a very important attribute. As Denny said, the other things we’re testing are the highest density of CCR8 positive in gastric cancer and head and neck cancer.

And then esophageal, which is a little different in that toripalimab has differentiated activity and an approval in Europe. So, I think strategically, the whole program gives us a lot of levers to look at how we can do the fastest development with the highest impact to advance the program.

Dennis Lanfear: Thank you, Theresa. Doug, I would just anecdotally add that we are very honored to have Dr. Alexander Rudensky as a key member of our Scientific Advisory Board because he is really one of the seminal leaders in this entire field of Tregs, which has now come to the fore. And I think he’s responsible really for a large part of our scientific leadership in this field, which, as I said in my prepared remarks, we look forward to continuing into 2026.

Operator: This concludes today’s question-and-answer session. I’ll now hand the call back to Dennis Lanfear for closing remarks.

Dennis Lanfear: Thank you, Heidi, and thank you all for joining us on the Coherus Oncology Q3 call this afternoon. I would just add that we will be at the UBS Conference in sunny with Palm Beach, Florida, and we will also be attending Jefferies in London, and we hope to see you there. Thank you. Bye-bye.

Theresa Lavallee: Good bye.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.