Coherus Biosciences Could Be First-To-Market With A Neulasta Biosimilar

Barclays maintained its Overweight rating on Coherus Biosciences Inc (NASDAQ: CHRS) saying there is an increased likelihood of CHRS being first-to-market with a Neulasta biosimilar (CHS-1701) after Sandoz's complete response letter.

Neulasta is used to help reduce the chance of infection due to a low white blood cell count, in people with certain types of cancer.
"[W]e now see peak sales opportunity of nearly $400M, worth $24/share, though could see upside to $800M, worth $28/share," analyst Douglas Tsao wrote in a note.

Tsao expects BLA acceptance on CHS-1701 on or before October 9 and an AdComm in April 2017 and approval soon thereafter. The launch timing depends on need for 180-day waiting period.

"While Sandoz has not disclosed the reason for its CRL, we believe the company could be set back 2-3 years. Apotex position to market remains unclear, but lack of FDA public disclosures since BLA acceptance in December 2014 point to problems with its filing," Tsao continued.

Meanwhile, investor interest is always centered on rheumatoid arthritis drug Humira despite Amgen's approval. Coherus is expected to file BLA in the fourth quarter and the analyst opines that the company "has much more clarity on the legal path to market."

Coherus expects to receive an institution decision on its '166 IPR challenge in mid-November and final decision on its '135 IPR in mid-May 2017.

"Given competitors legal obstacles, CHRS could be first-to-market in mid-'18 and enjoy market exclusivity until a key Humira patent falls in 2022," Tsao highlighted.

Moreover, Tsao noted that Shire's recent return of CHRS's Enbrel etanercept biosimilar, a nonstrategic asset acquired with the Baxalta merger, gives CHRS the opportunity to sign a global partnership across its entire anti-TNF portfolio including etanercept & adalimumab (Humira).

"With potential first-to-market biosimilar launch positions with Neulasta and Humira, we expect investors will find it hard to ignore CHRS's value potential," Tsao added.

The analyst has a $46 price target on shares, which were down 3.25 percent to $25.91.