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Here's Why Coherus BioSciences Is An Underappreciated Biosimilar Pure Play

Here's Why Coherus BioSciences Is An Underappreciated Biosimilar Pure Play
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Baird’s Michael E. Ulz views Coherus Biosciences Inc (NASDAQ: CHRS) as an underappreciated pure play biosimilar company and a potential leader in the biosimilar space.

Ulz initiated coverage of the company with an Outperform rating and price target of $40.

Robust Candidates

“Coherus boasts a robust late-stage biosimilar pipeline, including CHS-1701 under regulatory review, CHS-1420 in Phase 3, and CHS-0214 filing early next year in Europe,” the analyst mentioned.

Ulz expects upside potential driven by several meaningful catalysts in the near term, culminating in the launch of the company’s first biosimilar product in 2018.

The Biologics License Agreement for Coherus Biosciences’ most advanced candidate, CHS-1701, was accepted by the FDA, with the BSUFA data set for June 9, 2017.

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Sales Expectations

“With key IP protection for Neulasta already expired and remaining IP not infringed by CHS-1701, we see a clear path to commercialization. We expect a launch in 2018, with conservative peak WW sales of $425 million,” the analyst stated.

In addition, regulatory filing for CHS-1420 is likely in Q4:16 or Q1:17. Given the positive top-line data from the Phase 3 study, Ulz believes there is limited regulatory risk.

Expectations For The Launch

The analyst expects a 2020 launch, with peak worldwide sales of $1.2 billion and Coherus Biosciences receiving risk adjusted royalties of $160 million.

Ulz also pointed out that “a key near-term milestone is an initial PTAB decision on the ‘166 IPR, which, if successful, would remove another legal barrier for CHS-1420.”

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Latest Ratings for CHRS

May 2017BMO CapitalInitiates Coverage OnOutperform
Nov 2016Standpoint ResearchInitiates Coverage OnSpeculative Buy
Oct 2016BairdInitiates Coverage OnOutperform

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