Citi Analyst Sees 45-60% Upside In Coherus Biosciences

Neulasta and Humira biosimilar clarity over next 12 months could lend significant upside to shares of Coherus Biosciences Inc CHRS, Citi’s Mohit Bansal said in a report. He maintained a Buy rating on the company, with a price target of $36.

Although Coherus Biosciences is among the frontrunners, it seems to be “an underappreciated pure-play biosimilar,” analyst Mohit Bansal commented. The company has five products at different stages of development, with a total brand market of ~$39B.

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Biosimilars are likely to face lower clinical and regulatory risks and have pricing strength due to potential cost savings, Bansal noted.

Upside Over 12 Months

The analyst estimated 45-60 percent upside over the next 12 months, citing the reasons as:

1. Humira biosimilar data expected in mid-2016
2. Clarity on IP roadmap for Neulasta and Humira biosimilars in 2H16 and 2017
3. Partnership deal for Humira biosimilar in 2017

Neulasta could be launched in 2018 and take 25 percent share among biosimilars, which represents a 15 percent share of the market. Humira biosimilar may be launched in 2020 in US, taking a 15 percent share among biosimilars, which represents a 7 percent share of the market.

Bansal further wrote, “The biggest roadblock to biosimilar entry is IP related which at worst would cause delay (vs outright failure). We think CHRS is smartly maneuvering this by either designing around patents or tackling them proactively.”

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