Executive Summary / Key Takeaways

• Coherus Oncology has completed a profound strategic transformation, divesting its biosimilar assets to become a focused innovative oncology company with a strengthened balance sheet.
• LOQTORZI (toripalimab), a next-generation PD-1 inhibitor, is driving commercial growth in nasopharyngeal carcinoma (NPC), holding a preferred position in NCCN guidelines, with revenue projected to reach $150 million to $200 million annually in the NPC market.
• The company's proprietary pipeline, featuring CHS-114 (a highly selective CCR8 Treg depleter) and casdozokitug (a first-in-class IL-27 antagonist), demonstrates compelling preclinical and early clinical data, with key readouts anticipated in the first half of 2026.
• A significantly improved financial position, including $191.7 million in cash and investments as of Q3 2025 and a projected cash runway through 2026, supports ongoing operations and pipeline development.
• Strategic partnerships and technological differentiation, particularly CHS-114's unique selectivity and LOQTORZI's potency, are central to Coherus Oncology's capital-efficient label expansion and long-term value creation.

A Focused Future: Coherus Oncology's Strategic Transformation

Coherus Oncology, Inc. has undergone a significant strategic metamorphosis, shedding its diversified biopharmaceutical past to emerge as a singularly focused innovative oncology company. This transformation, culminating in the divestiture of its biosimilar franchises and a rebranding in May 2025, positions the company to pursue a mission of delivering a "step change in patient survival" for cancer patients. The company's strategy is anchored by its FDA-approved next-generation PD-1 inhibitor, LOQTORZI, and a promising pipeline of mid-stage clinical candidates.

The journey began in January 2021 with the in-licensing of toripalimab (LOQTORZI) from Junshi Biosciences, establishing a foundational oncology asset. This was followed by the strategic acquisition of Surface Oncology, Inc. (SURF) in September 2023 for a net $40 million, which brought global rights to casdozokitug and CHS-114 into the fold. These acquisitions were driven by the belief that these assets were differentiated and ideally suited for combination development with LOQTORZI. The subsequent systematic divestiture of the CIMERLI ophthalmology franchise in March 2024, the YUSIMRY immunology franchise in June 2024, and most notably, the UDENYCA biosimilar franchise in April 2025 for $483.4 million in upfront cash, streamlined operations and bolstered the balance sheet. This strategic pivot has allowed Coherus Oncology to concentrate its resources on developing cutting-edge cancer therapies and leveraging its technological advantages.

Technological Edge: Differentiated Immunotherapies

Coherus Oncology's core competitive advantage lies in its differentiated immunotherapy platforms, which are designed to enhance immune responses against tumors. These technologies are not merely incremental improvements but represent distinct approaches to cancer treatment.

LOQTORZI (toripalimab), the company's foundational commercial product, stands out among PD-1 inhibitors due to its unique binding epitope on the FG loop of the PD-1 receptor, resulting in significantly higher potency. This mechanistic differentiation has translated into tangible clinical benefits, including demonstrated efficacy in low PD-L1 cancers. For instance, LOQTORZI has been approved across all PD-L1 levels for first-line esophageal cancer in the EU, a notable achievement given that other standard-of-care PD-1 treatments have lost approval for low PD-L1 esophageal cancer in the U.S. This superior potency makes LOQTORZI an ideal combination agent, offering a cost-effective pathway to expand its label through partnerships where Coherus supplies the drug without funding the entire trial.

CHS-114, a highly selective CCR8 Treg depleter, represents another significant technological differentiator. T regulatory cells (Tregs) are known to suppress anti-tumor immune responses, and their presence in tumors correlates with poor outcomes. CHS-114 is a cytolytic antibody with ADCC enhancement, specifically designed to target CCR8, a protein preferentially expressed on tumor-resident Tregs. This precise targeting allows for the selective removal of immune-suppressive cells within the tumor microenvironment while preserving beneficial T cells in normal tissue. Rigorous development, including screening against over 5,200 off-target sites, has resulted in CHS-114 being the "only known anti-CCR8 Treg depleting agent with no off-target binding," which may mitigate unexpected toxicity seen with some competitors. Clinical data from head and neck cancer patients has demonstrated robust depletion of CCR8+ Tregs in tumor biopsies, accompanied by a marked increase in CD8+ T cell infiltration, effectively "turning tumors hot." This proof of mechanism, combined with a partial response observed in a heavily pretreated, fourth-line head and neck cancer patient, underscores CHS-114's potential as a best-in-class agent with broad applicability across various solid tumors, including colorectal, gastric, and esophageal cancers. Its mechanism suggests synergy with other modalities like T-cell engagers, ADCs, and bispecifics.

Casdozokitug, a first-in-class IL-27 antagonist, further diversifies Coherus Oncology's technological portfolio. It is the "only known anti-IL-27 treatment currently in development." IL-27 plays a crucial role in immune responses within barrier tissues like the liver and lung, facilitating tumor growth by inducing checkpoint expression, reducing pro-inflammatory cytokines, and affecting natural killer cells. Casdozokitug's immunomodulatory mechanism is synergistic with checkpoints, offering a novel approach to attacking immune resistance. Preclinical models highlighted IL-27's role in suppressing T and NK cells in lung and liver, leading to the strategic focus on these tissue types. Compelling Phase 2 data in first-line hepatocellular carcinoma (HCC) demonstrated a 38% overall response rate (ORR) and a 17% complete response (CR) rate when combined with atezolizumab and bevacizumab. This compares favorably to historical benchmarks of 30% ORR and 8% CR for atezolizumab alone, providing a strong rationale for its continued development. The observed NK cell activation further supports its unique contribution to deepening responses.

For investors, these technological differentiators translate into a strong competitive moat. LOQTORZI's unique binding and efficacy profile provide a durable advantage in the PD-1 space, particularly as biosimilars for other PD-1s emerge. CHS-114's selectivity and demonstrated immune remodeling offer a potentially superior safety and efficacy profile compared to less selective CCR8 competitors, positioning it for significant market penetration in underserved tumor types. Casdozokitug's first-in-class status and promising HCC data open up a large market opportunity with potentially high barriers to entry for future rivals. These innovations are expected to drive higher average selling prices (ASPs), lower development costs through efficient combination strategies, and ultimately, better margins and sustained revenue growth.

Competitive Landscape and Strategic Positioning

Coherus Oncology operates in a highly competitive biopharmaceutical market, facing both large, established players and agile, early-stage companies. Its strategic repositioning to innovative oncology is a direct response to this dynamic environment, aiming to carve out a niche through differentiated products and a capital-efficient development model.

In the nasopharyngeal carcinoma (NPC) market, LOQTORZI holds a unique and strong competitive position. It is the "only approved and available therapy within the U.S." for NPC and boasts "the only positive data" compared to competitors like pembrolizumab (Keytruda) and nivolumab (Opdivo), which lack positive data in this indication. Furthermore, LOQTORZI is the "only preferred therapy on NCCN guidelines with first-line categorization for -- with essentially Category 1 designation." Despite this strong clinical and guideline-backed position, off-label use of Keytruda and chemotherapy-only regimens persist in the community setting, primarily due to "habit" rather than a lack of efficacy for LOQTORZI. Coherus Oncology is actively addressing this by expanding its sales force by approximately 15% in select geographies, onboarding a remote sales team, and enhancing multichannel digital capabilities to educate community oncologists. This targeted commercial strategy aims to overcome the "lower share of voice" experienced in some regions and drive broader adoption.

The CCR8 landscape is becoming increasingly competitive, with several companies, including Bristol-Myers Squibb (BMY), Gilead Sciences (GILD), Shionogi, AbbVie (ABBV), and Amgen (AMGN), developing programs. However, CHS-114 distinguishes itself as the "only known selective CCR8 antibody," a critical advantage given that "some CCR8 competitors are accounting off-target binding in their development programs and some are finding dose-limiting toxicities." While Shionogi has shown promising complete and partial responses in colorectal cancer with a less potent CCR8 antibody, CHS-114's enhanced cytolytic mechanism and demonstrated tumor immune remodeling position it favorably.

For casdozokitug, the competitive landscape is less crowded, as Coherus Oncology is "not aware of anyone else going into clinical development with an IL-27 antagonist." This first-in-class status provides a significant advantage, particularly in the hepatocellular carcinoma (HCC) market, where casdozokitug's clinical data compares favorably to existing standards of care.

Compared to larger biopharmaceutical companies like Amgen, Bristol-Myers Squibb, and Merck (MRK), Coherus Oncology operates at a smaller scale, which can lead to higher operational costs and potentially lower margins. These larger competitors possess substantially greater financial, R&D, and marketing resources, enabling them to pursue broader pipelines and global market penetration. However, Coherus Oncology leverages its agility and strategic partnerships to mitigate these disadvantages. Its strategy of supplying LOQTORZI for partners' clinical trials allows for cost-effective label expansion, while ex-U.S. licensing deals for CHS-114 and casdozokitug provide non-dilutive financing and cost offsets for pivotal trials. This partnership-driven model enhances capital efficiency and validates the value of its pipeline, allowing Coherus to compete effectively in specialized segments.

Financial Performance and Liquidity

Coherus Oncology's financial performance in 2025 reflects its ongoing transition and the initial impact of its focused oncology strategy. For the three months ended September 30, 2025, LOQTORZI net revenue reached $11.169 million, marking a 12% increase quarter-over-quarter and a substantial 92% increase year-over-year. This growth was primarily driven by increased patient demand, with inventory levels remaining flat in Q3 2025, indicating genuine end-customer uptake. The gross margin for continuing operations stood at a healthy 68% in Q3 2025.

Operating expenses are being actively managed as the company streamlines its operations post-divestiture. Research and development (R&D) expenses for continuing operations were $27.252 million in Q3 2025, a 24% increase from Q3 2024, reflecting targeted investments in the innovative pipeline, partially offset by savings from deprioritized programs. Selling, general and administrative (SG&A) expenses from continuing operations decreased by 11% year-over-year to $24.931 million in Q3 2025, primarily due to headcount reductions. Total OpEx related to discontinued biosimilar operations dwindled to less than $1 million in Q3 2025, a stark contrast to over $40 million for fiscal year 2024, highlighting the significant cost savings from the divestitures.

The company's liquidity has significantly improved following the biosimilar divestitures. As of September 30, 2025, cash, cash equivalents, and marketable securities totaled $191.7 million.

Total liabilities on the balance sheet were $428.745 million, with over half ($253.908 million) related to transition service agreements that are expected to be settled by reimbursements from buyers or direct cash collection from their customers. The remaining non-TSA liabilities decreased by 69% since the end of 2024, underscoring the substantial deleveraging achieved. The upfront cash proceeds of $483.40 million from the UDENYCA divestiture were instrumental in repaying substantially all of the $230 million outstanding 2026 Convertible Notes and buying out the UDENYCA royalty obligation for $47.70 million. This strengthened financial position, combined with expected receivables collections and growing LOQTORZI revenues, is projected to provide a cash runway through 2026, extending beyond critical pipeline data readouts.

Outlook and Risks

Coherus Oncology's outlook is characterized by anticipated growth in LOQTORZI sales and significant pipeline catalysts. Management projects LOQTORZI to achieve a dominant share in the NPC market, estimated to be in the range of $150 million to $200 million annually, with an expected average demand growth of 10% to 15% over the next three years. The company is reiterating its full-year 2025 revenue goals for LOQTORZI to be between $40 million and $50 million. SG&A expenses from continuing operations for the full year 2025 are guided to be between $90 million and $100 million, reflecting a leaner, more focused operational structure. Headcount is expected to further reduce to less than 140 FTEs by year-end 2025, down from approximately 225.

Key pipeline data readouts are anticipated in the first half of 2026, including early efficacy and safety data for casdozokitug in first-line HCC and CHS-114 in second-line HNSCC. Additional CHS-114 efficacy data in upper GI and esophageal squamous cell carcinoma are expected in the second half of 2026. These milestones are crucial for validating the pipeline and driving future partnering opportunities. Management believes that once LOQTORZI's quarterly revenue exceeds $15 million, it will cover commercial costs and begin to contribute to corporate and R&D expenses.

Despite the positive outlook, several risks warrant investor attention. The successful adoption of LOQTORZI in the community setting remains a challenge, as "awareness of its preferred position in the NCCN guidelines and its clinical superiority data is relatively low," leading to the persistence of "chemo alone or off-label IO." The company's ability to effectively educate these physicians through expanded sales efforts and digital campaigns will be critical. There is also "no guarantee" that Coherus Oncology will receive the two $37.5 million earnout payments from the UDENYCA divestiture, which are contingent on specific net sales thresholds. Furthermore, while the material weakness in internal control over financial reporting related to inventory reconciliations was decommissioned with the UDENYCA sale, the company must maintain robust internal controls as it grows. The evolving regulatory landscape, including potential FDA staff turnover and changes in policies, could also impact development timelines and approval processes.

Conclusion

Coherus Oncology has successfully executed a transformative strategic pivot, emerging as a lean, focused innovative oncology company with a clear path to value creation. The divestiture of its biosimilar assets has significantly strengthened its financial foundation, providing a robust cash runway to advance its promising pipeline. LOQTORZI, with its differentiated mechanism and NCCN-preferred status, is poised for continued growth in the NPC market, serving as a critical revenue generator and a versatile combination agent for label expansion.

The company's proprietary assets, CHS-114 and casdozokitug, represent compelling opportunities in large, underserved cancer markets. CHS-114's unique selectivity and demonstrated immune remodeling position it as a potential best-in-class Treg depleter, while casdozokitug's first-in-class status and impressive HCC data highlight its therapeutic promise. Upcoming data readouts in 2026 for both pipeline candidates are significant catalysts that are expected to drive further validation and unlock partnering opportunities, leveraging Coherus Oncology's global rights. The company's ability to execute on its commercial strategy for LOQTORZI in the community and advance its pipeline through strategic partnerships and technological leadership will be paramount to realizing its long-term vision of delivering a step change in patient survival and enhancing shareholder value.