Coherus BioSciences, Inc. Stock

Good day, and thank you for standing by. Welcome to the Q3 2026 Coherus Oncology, Inc. 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.

Thank you, Heidi. Third quarter earnings conference call. Joining me are Denny Lanfear, Chief Executive Officer of Coherus; Dr. Rosh Dias, Chief Medical Officer; Dr. Theresa Lavallee, Chief Scientific and Development Officer; Sameer Goregaoker, Chief Commercial Officer; and Bryan McMichael, Chief Financial 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 form on Form 10-Q for more information on risks and uncertainties.

And now I'll turn the call over to Denny.

Thank you, Carrie, and good afternoon, everyone. Thank you for joining us on our third quarter 2026 earnings call. As you know, we have spent the last few years transforming Coherus from a biosimilars company into an innovative oncology company focused on overcoming immune resistance in cancer. We've made substantial progress in reducing our debt, lowering our operating expenses, establishing LOQTORZI in the market and advancing our clinical pipeline. We've conducted key clinical trials and developed sufficient data to set future development direction for our tagmokitug program and select the go-forward dose.

Today, I will discuss 3 strategic alternatives designed to make Coherus a financially self-sustaining innovative oncology company with best-in-class and first-in-class products by the end of 2027. First, the strategic prioritization of esophageal cancer is our focus for best-in-disease for tagmokitug. Second, the structural and financial benefits that flow directly from this prioritization. And then finally, our emphasis on driving LOQTORZI revenues over the next 4 or 5 quarters to a level where they can fully support the company's core cash burn.

When we launched tagmokitug clinical program, it was with a clear expectation that we would select the most promising area for continued development. This is exactly what we have done. As we reported on October 28, over the last 2 years, we have explored a wide range of mucosal system cancers from head and neck, esophageal, gastric, colorectal across various lines of therapy to understand where Treg depletion might best be advanced as combination therapy. The emerging data from this very systematic clinical investigation demonstrated that esophageal cancer comprises a best-in-disease opportunity across first and second lines of therapy.

Accordingly, going forward, we will be sharply focusing our tagmokitug development efforts there as this provides a substantial number of benefits. First, providing a treatment alternative to patients confronting a particularly difficult cancer with poor prognosis. Second, our integrated approach across first and second-line therapy will seek FDA support for rapid, efficient and affordable development path, leading to accelerated approval. Third, this enables ex-U.S. partnering. Our encouraging interim data in combination with toripalimab and our development efforts focused now enables partnering discussions for ex-U.S. rights. Toripalimab is approved in Europe and other regions for the treatment of ESCC, irrespective of PD-L1 status and is being widely adopted in those markets.

Esophageal cancer is the sixth in terms of annual cancer deaths globally, where over 400,000 patients are impacted annually, particularly in Asian countries. Our objectives for ex-U.S. partnering include. One, use of these upfront payments to offset clinical trial expenses and support the accelerated approval process. Secondly, partner funding for ex-U.S. registration trials in their territories, significantly lowering the portion of overall cost that Coherus would need to incur. And third, leveraging the global regulatory constructs such as FDA's Project Orbis for harmonizing approvals across regions to the benefit of all parties. With data and clinical direction in hand, we are now engaging a financial adviser to conduct the tagmokitug partnering process, particularly with companies in countries with a high incidence of esophageal cancer. We'll keep you informed on our progress.

Now let me address the structural and financial benefits derived from our strategic prioritization in esophageal cancer. Over the last 2, 3 years, we have pursued a broad development program across several cohorts, indications, more than 120 patients to identify the most promising indication of interest in the go-forward dose. But these objectives have now been both met with the dose indication both identified for FDA discussions over 2027.

At the same time and somewhat fortuitously, 2 other concurrent events provide rightsizing and cost reduction opportunities for us. First, our process transfer of toripalimab from China to the U.S. is now complete as of Q3 '26, and the action date for the FDA for the drug product portion of the application is November 30. You may recall the drug substance has already been approved earlier this year. This allows us to reduce the ongoing costs associated with this transfer and approval, which increased the burn over the last 2 years. Second, our transition services agreement with the acquirer of UDENYCA, Intas Accord, is now pretty much wound down, allowing us to further reduce our footprint across the company. These TSA efforts were very labor-intensive for us and artificially inflated our cash burn and were confusing for investors.

The confluence of these 3 events, strategic prioritization, wind down the TSA and the imminent manufacturing transfer approval allows us an ideal opportunity to align and rightsized our organization, consistent with the reduced scope of our efforts. Accordingly, we are announcing today that we are implementing projected 30% headcount reduction and intended expense reductions. Our CFO, Bryan McMichael, will elaborate more on this in just a moment. But let me give you just one key metric so you can understand the benefits in context. These rightsizing and prioritizing reductions amount to $6 million to $7 million a quarter, which reduces the quarterly LOQTORZI revenues required to support the core burn from a previously guided $30 million to $35 million a quarter down to $25 million to $30 million a quarter. This positions us to more readily establish a sustainable operating model, allowing us to continue investing in our high-value clinical opportunities with greater financial independence.

Next, let me address commercial and revenues, and Sameer will provide more data directly, but I'll just summarize here a few of the key growth drivers. While we continue to make steady progress in penetrating the NPC market, our current share is approximately only 20% to 22%. This means that too many patients are still receiving inferior therapy, and this represents a key growth opportunity for us. Also, the relatively low market share results in quarter-to-quarter volatility and lumpiness when one of the regions get a disproportionate number of patient fluctuations such as discontinuations. This has to be addressed by increasing market share and penetration to damp out this. There is substantial opportunity remaining with about 30% of the patients continuing to receive chemotherapy alone and not benefiting from the LOQTORZI 6-year survival of 64.8 months versus 33.7 months with chemotherapy alone.

Over the next year, we'll need to dramatically reduce that 30% share by focusing on identifying these patients and reaching their providers who can then prescribe LOQTORZI in combination with chemo per our label. Given the compelling survival data, this objective appears reasonably within reach over the next 12 months. We also plan to address the 40% of the patients who are being treated with off-label immunotherapies that lack clinical evidence of efficacy. This share is steadily going down, but faster progress is needed here also. Physician reach and education are key here. So HCPs know that we have superior data versus chemotherapy alone in our standard of care. Progress has been made here over the last 3 quarters, and Sameer is going to tell you about that and our strategies to reach these physicians. Finally, our payer strategy is starting to bear fruit as the step edits in place have proven very effective in modifying all prescribing behavior. They make physicians pay attention. So this is a successful strategy we are extending in 2027.

With that, I'll now turn the call over to Rosh Dias, MD, our Chief Medical Officer. Rosh?

Thank you, Denny. Today, I'm going to talk to you about why we have selected esophageal cancer for future development as a best-in-ease approach. We intend to pursue a second-line esophageal cancer study with both ology, esophageal squamous cell and esophageal adenocarcinoma as reported from our TREGCHECK 102 program in Q2. Firstly, the strength of the signal. Secondly, the high unmet medical need, particularly in the second-line setting where chemo alone is the current standard of care. And thirdly, the opportunity for a fast aftermarket strategy, leveraging FDA designations and development construct.

Let me start by addressing the second-line esophageal data and our plans. In this setting, we demonstrated activity in both squamous and adeno histologies at the go-forward dose of 700 milligrams tagmokitug with toripalimab. This includes 9 evaluable second-line esophageal cancer patients, 3 adenocarcinomas and 6 squamous cell carcinomas. The overall response rate data were very promising as we saw 3 confirmed PRs plus 1 unconfirmed PR, that is a 33.3% confirmed ORR and a 44.4% unconfirmed plus confirmed ORR. This activity exceeded the chemo-only benchmark of around 10% ORR in this area of high unmet medical need. Additionally, the clinical benefit rate was 55.6% with 2 patients remaining on treatment for over 5 months and 2 additional patients on treatment that have not yet had their first tumor scan. Importantly, this was a randomized study across the 2 doses with 22 patients treated to date. Of the 300-milligram tagmo dose in combination with Tori, there were no responses and all patients progressed by 4 months.

This demonstrates 2 key findings. One, these data show that toripalimab in the second-line setting has limited activity, thereby establishing contribution of effect. Second, it gives confidence in the tagmo go-forward dose of 700 milligrams as it exhibits clear dose-dependent activity. Very importantly, both in terms of response and duration, activity was observed both in patients who are PD-1 refractory and also patients and tumors that are PD-L1 low or negative, meaning that tagmo-tori doublet both rescue PD-1 resistance and also demonstrated activity in cold or PD-L1 low or negative tumors.

These data, irrespective of histology informs next steps and provide the opportunity to progress our next study in second-line ESCC and second-line EAC, a similar approach to that taken in the pembrolizumab Phase III KEYNOTE-181 study. Our study will investigate the tagmo-tori doublet versus chemotherapy. Our immediate next step is to meet with the FDA to align on 2 topics; first, the recommended Phase II dose to ensure we have satisfied the requirements of Project Optimus. And second, the second-line esophageal cancer study design and any potential for the data from this next study to support expedited development, including accelerated approval.

Let me now review for you again the first-line setting interim data. In our first-line ESCC study, a safety cohort with target enrollment of 12 patients with 700 milligrams of tagmo in combination with tori and cisplatin and 5-FU. We demonstrated an overall response rate of 89% and a 100% ORR in PD-L1 positive patients, including 1 complete response. That is 8 out of 9 of the efficacy evaluable patient population, importantly, with activity irrespective of PD-L1 status. The duration is also notable with 2 patients demonstrating activity for close to 8 months. The safety profile was manageable and acceptable whilst 4 of the 10 safety evaluable patients discontinued due to AEs. This rate was not dissimilar to that seen in the CheckMate 648 study and 50% of the discontinuations were due to cisplatin-related renal toxicity, which we plan to mitigate by topping out cisplatin, oxaliplatin for the future study.

In terms of the unmet medical need in first-line ESCC, there are 3 FDA-approved PD-1 chemo combinations for first-line disease, all with a limitation to PD-L1 positive patients only with ORRs ranging from 44% to 59% in PD-L1 positive population. Of course, with the usual caveat of cross-trial comparison, the fact that activity with the tagmo-tori chemo combination was seen irrespective of PD-L1 status and equates to 100% in PD-L1 positive evaluable patients speaks to the potential to improve on the current standard of care.

The current SOC in PD-L1 positive disease typically provides a median PFS of around 7 months. And whilst durability is not as yet mature in this cohort, we look forward to continued follow-up for PFS. These impressive first-line data provides us additional confidence in the Treg mechanism across esophageal cancers. We intend to address the first-line ESCC opportunity after we progress the second line as part of our integrated development strategy and commitment to the disease. In summary, these data confirming tagmo clinical activity in addition to the established strong pharmacology previously communicated, support continued advancement and this focus on second-line disease in the esophageal histology represents an area of clear unmet medical need where a chemo-free option will be well appreciated for patients.

With that, I'll hand over to Sameer. Sameer?

Thank you, Rosh. Third quarter net sales were $14 million, representing 3% quarter-over-quarter growth and 25% year-over-year growth. While sequential growth fell short of our 10% to 15% target due to slower new patient starts in a few territories, underlying drivers of long-term growth remain stable. Nationally, growth in accounts purchasing LOQTORZI for the first time was in line with the second quarter. Patient discontinuation rates were also consistent with prior quarters and duration of treatment continued to increase gradually. Based on a detailed assessment, we believe demand fundamentals remain strong and that localized patient flows in select territories tempered growth this quarter. Our long-term goal is to achieve a dominant market share in the NPC space by displacing suboptimal chemotherapy only and off-label IOs. We have made significant investments to achieve these objectives.

Due to the rare nature of NPC and patient flow dynamics, these efforts will take time. That being said, recent market research revealed positive leading indicators of demand and strong physician sentiment. We surveyed both academic and community oncologists to assess their perceptions of LOQTORZI and to help inform our view of future demand. The results were encouraging. 75% of surveyed oncologists now view LOQTORZI as the standard of care in NPC compared with fewer than 35% who hold a similar view for off-label IOs. This represents a significant favorable shift in opinion towards LOQTORZI since the last survey in early 2026. We believe this shift is driven by our focused promotional efforts on the LOQTORZI superiority story. In addition, 57% of oncologists are now aware of a 6-year overall survival data. Recall that this data demonstrated a near doubling of survival with LOQTORZI plus chemotherapy versus chemotherapy alone. We are pleased to have achieved this level of awareness within 3 quarters of the data being available.

To convert these favorable physician perceptions into accelerating demand, we are focused on 3 priorities. First, our field team remains focused on using claims-based alerts to identify physicians who use chemotherapy alone. About 1/3 of eligible patients still receive chemotherapy alone, and our educational efforts are geared towards minimizing the use of this suboptimal treatment. Second, we're now collaborating with large clinical organizations to identify patients who are not receiving LOQTORZI per the label and per the NCCN guidelines. We are then working to educate physicians within these partnered organizations on the superior survival benefits of LOQTORZI. And third, we are partnering with major national and regional payers to establish a preference for LOQTORZI in eligible NPC patients.

Where these payer partnerships are already in place, our share of addressable patients is approximately double the national average. We are now expanding these payer partnerships with the goal of covering a majority of U.S. covered lives. We've previously guided that we would achieve a $15 million quarter in 2026, and we expect to achieve that guidance in Q4. Longer term, we remain on track to reach peak market share by 2028, consistent with our prior projections.

I'll now pass the call to Bryan McMichael, our Chief Financial Officer.

Thanks, Sameer. I will start off today by discussing Coherus' liquidity, plans for managing cash burn and the advantages of the organizational rightsizing we announced today, including cost reductions and expected savings. At the end of Q3 2026, we had $83.6 million in cash, cash equivalents and investments, which is down $21.7 million from $105.3 million at the end of Q2. This change reflects an expected reduction in cash burn.

The use of cash in operations for Q3 was $34 million, which is a 43% decline from the quarterly average in the first half of 2026. As we signaled on the last earnings call, the slowdown in cash burn was primarily due to a significant reduction in cash being used to pay down TSA payables and accrued liabilities associated with the divested biosimilar business. As announced previously, during Q3, we paid off our $38.7 million term loan using the proceeds of a new $55 million term loan that closed during the quarter. This refinancing contributed a net $11.5 million in cash to the balance sheet.

As Denny outlined, the strategic prioritization will yield significant benefits to further reduce burn. Once implemented, we expect a sustainable reduction in recurring costs of $6 million to $7 million per quarter on average and expect to achieve most of this rate of savings within 2 quarters. These savings will come primarily from an approximately 30% reduction in headcount from about 140 to 100 FTEs, which will take place this month.

While these reductions will come from across the organization, we are preserving substantially all the commercial organization as we prioritize driving the growth of LOQTORZI sales. Consistent with our strategic prioritization, we plan to achieve savings by deprioritizing certain tagmokitug indications. Once successfully executed, these actions would help to extend the cash runway and reduce ongoing core costs, which comprise all the noncash costs of the business other than development costs. This lowers the quarterly LOQTORZI revenues required to cover these core costs from $30 million to $35 million as we previously guided to $25 million to $30 million per quarter.

Coherus recently received the revenue report in connection with the UDENYCA divestiture. Only a modest audit adjustment would be required to reach the earn-out threshold for the first $37.5 million milestone as the reported net sales came very close to meeting the threshold in the first earn-out period. As permitted under the purchase agreement, we are exercising our audit rights and other contractual rights, and we will thoroughly review the reported results. As a reminder, we will get the report on the second $37.5 million milestone after Q1 2027. Without considering the potential benefit of the cost reductions, the payment of the milestone or proceeds from ex-U.S. deals, our cash runway is less than 12 months from the date of the 10-Q we filed today. As such, that quarterly report included going concern disclosures to reflect this.

As the -- on the expense side, we had another strong quarter reducing costs versus the same quarter in the previous year. As covered by Sameer, LOQTORZI revenues were $14 million, up 3% from the prior quarter. While we remain optimistic about the future growth trajectory of LOQTORZI, the lumpiness experienced this quarter was greater than we anticipated. So we're revising the range of our revenue outlook for the year to $54 million to $57 million.

Turning to expenses. R&D expense from continuing operations for Q3 2026 was $22.6 million, down from $27.3 million in the third quarter of the prior year. The decreases were primarily due to reduced headcount, lower infrastructure costs and lower clinical trial and R&D manufacturing costs. SG&A expense from continuing operations was $21.2 million in the third quarter, which is down from $24.9 million in Q3 2025. The decreases were primarily due to lower headcount, decreased operating costs resulting from Coherus completely exiting the biosimilar business in 2025. For the full year 2026, we reiterate the expectation that combined OpEx will be between $170 million and $175 million.

With that, I hand the call back over to Denny.

Thank you, Bryan. Let me summarize first with respect to our molecule, tagmokitug, and then I'll review the strategic plan for you. We've now shown we have the right drug at the right target in the right disease to advance development in esophageal cancer. These results exceed benchmarks in first line, expanding on current chemo IO options and second line address the high unmet need with a chemo-free option. Esophageal cancer is the sixth most fatal cancer worldwide.

In the U.S., approximately 18,000 cases will be diagnosed each year, 16,000 people will die of the disease. Our immediate next steps are, first, to follow up with discussions of interested parties, both in the U.S. and ex-U.S. We're initiating these discussions. Secondly, align with the FDA on dose trials and development strategy and options for expedited development. Now regarding the strategic prioritization, as Bryan described, we're rightsizing the organization to align with our sharpened focus, thereby reducing costs. We're going to drive the commercial sales towards core burn breakeven as quickly as possible in 2027. And we'll pursue nondilutive funding options, including ex-U.S. partnering transactions.

Operator, we're ready for the questions.

[Operator Instructions] Your first question comes from Paul Jeng from Guggenheim.

I appreciate all the details on the call today. For tagmo, can you expand a little on how you're thinking about the potential regulatory path in the second-line setting? Is this a trial perhaps where you could use PFS or even ORR as an interim for accelerated approval within a Phase III? And how strong is the precedent for combining esophageal squamous cell carcinoma with EAC in this setting?

Thank you, Paul. I'll let Dr. Lavallee, our Chief Development and Regulatory Officer, address that. Theresa?

Yes, there is a clear path and it's commonly done. Many of the pembro studies included both histologies. The FDA recognizes esophageal cancer with 2 histologies as a disease. So there is clear precedence with KEYNOTE-181 being the most noteworthy and most similar. Secondly, the FDA has shown even with the recent approval with ORIC-104 last accelerated approval last week that ORR thicker with durability is an endpoint that could be discussed. So that is what we plan to go with a plan to them showing a randomized study against chemotherapy, which is the only available agent for these patients, particularly in the PD-1 refractory or PD-L1 low patient population and discuss the accelerated approval based on that and then what the confirmatory study would look like either as a seamless study or a stand-alone second study.

Yes. One quick follow-up. So obviously, you had very compelling data in the frontline setting as well. So just curious on how you think about the gating factor for initiating a frontline study. Is that something you could do in parallel with the second-line study, perhaps staggered somewhat? Or would that really be contingent on having a positive outcome in the second-line setting first?

Great question. Theresa?

And they definitely could go forward at the same time, the FDA would be enthusiastic about that because they like to see a commitment to the disease and with their push with project FrontRunner to move things earlier. Obviously, we prioritize second line given the complexity of contribution of effect in the first line and the size and length of the study in the first line. But given the activity that toripalimab has established in that disease and our objective of moving immunotherapy into earlier line settings, we'll continue to explore ways to develop and get more data in that disease type.

Your next question comes from Jay Olson from Oppenheimer.

Congrats on the new sharpened focus. Maybe just to follow up on the frontline opportunity. Recognizing that you're prioritizing second-line ESCC, you did have 8 of 9 confirmed responses in the front line. And I think I heard you say that you would continue building that data set. Can you just talk about what level of evidence would be required to preserve that frontline opportunity and push forward there? And then if I could ask one follow-up financial question. From the current $14 million quarterly base for LOQTORZI, what are some of the commercial pushes and pulls that could give you the leverage that you need to get to the new $25 million to $30 million quarterly LOQTORZI revenue threshold?

Thanks, Jay. So I'll let Dr. Lavallee take the question regarding frontline and your keen observation that was 8 out of 9 responding patients, quite impressive response rate. So Theresa, why don't you do that and then Sameer will follow up with the $14 million. Go ahead.

Yes. For that first line, I think we need 3 things to have a further conversation with FDA. The first being finish the enrollment in ORR, I know we all enjoy that early readout, but I remind people all the time that durability and CBR and PFS are important. We're pleased to see it trending in the right direction, but going to FDA with a frontline study with ORR only would not lead to the most productive conversation, having 22 patients in the second-line study and having randomized data really enables a productive and robust discussion about advancing development, particularly in an expedited fashion. But we obviously wouldn't take advantage of the opportunity in a meeting to discuss opportunities in first line to get their thinking while we get more data there and durability.

Thanks, Jay. So we'll have Sameer address the issue of moving up from the $14 million and the pushes and pulls as you put it, to move it up, at least past the $15 million that we are projecting for next quarter. Sameer?

Yes. Thank you, Jay, for the question. So obviously, our immediate goal is to exceed $15 million for the guidance. But more importantly, longer term, we want to maximize the opportunity. As Denny mentioned, we have a lot of upside here for the brand. There's too much chemotherapy alone going on, about 30% of patients are getting chemotherapy alone and too much KEYTRUDA and off-label IOs going on. So what are we doing about it, right? So we have a significant strong physician support to help us drive LOQTORZI utilization. But what's getting in the way is a typical rare disease dynamics and patient flows, which are relatively slow.

And then the other thing that's getting in the way is just habit, right? There's too many physicians who agree to use LOQTORZI, but 6 months later when the patient shows up, they don't remember to use LOQTORZI. So what we're doing about it is twofold. Our representatives are driving in from the bottom up, educating physicians. The other thing we're also doing is 2 main initiatives. We're working directly with large clinical organizations and large academic centers and working from the top down to identify patients, put them on LOQTORZI. Second thing we're doing is partnering with payer organizations to put preferences in place for LOQTORZI for utilization for label. And when we put those 2 steps in place, we believe that we can accelerate demand in the coming quarters.

I would just add, Jay, that our market share is about 22%. So 20%, 22%. So there's ample opportunity to grow. We definitely have to encroach on the 30% for the chemo-only patients. But also there's 40% of other IO, which we have to pursue. We believe that will primarily growth will come from the steps. To the other point, though, that Sameer just made, it's very important in the community that they convert those chemo-only patients to chemo plus LOQTORZI. So those patients get the full benefit of the 6-year survival. And we have found that they're very receptive to that when we talk to them about it.

We will take our next question. Your question comes from Mike Nedelcovych from TD Cowen.

I have 2. My first is on tagmokitug and specifically the combination with pasritamig. Were any patients dosed with that combination? And if not, will it be deprioritized before it started?

All right. Hold on. Mike, hold on to that. Let me get to that one first. And then I'll let Rosh take care of that, and then we'll hope for your second question. Go ahead, Rosh.

So for the pasri study, actually, we've initiated the study already. So there are a couple of sites that have initiated in screening already. So that is a priority that we are continuing. And the important point here is that this is in conjunction with the T Cell Engager. So that's -- again, we talked about the fact that it's first in disease, first in combination with T Cell engager. So yes, we're progressing that.

Just on that point, Mike, I think it's very interesting. Dr. Lavallee may have additional comments on the tumor microenvironment remodeling and some of the other things we've seen and how that might apply to other TCE undertakings. Theresa, do you want to comment?

Yes. The data that we've shared on the TREGCHECK program has shown removing immune suppressor cells, bringing the CD8s in and really potentiating an immune response. So I am particularly enthusiastic about a T Cell engager combination given that the challenge or the magnitude of benefit of those agents has been a lack of T cells and the Treg being present. So we are incredibly excited about that. We were excited to see on Saturday that J&J presented combination data with pasri and their PSMA-CD28 showing really nice safety and an ability to potentiate the PFA response. So we have our benchmarks, and we look forward a few day in this combination dosing patients.

Theresa, how does that bode for other similar TCE studies if the safety is borne out with pasritamig in prostate?

I think I'll be very, very busy with looking at all the options.

Okay. Mike, did you have a follow question?

Awesome. No, that answers it. We'll look forward to hopefully seeing some data from that cohort at some point in the future. My other question actually relates to casdozokitug. I guess I was just curious if you could clarify, I assume it's not being deprioritized per se. Presumably, you're waiting for the HCC data before making a go/no-go decision. If that's right, can you share with us what is the benchmark in your mind to support continued investment behind casdozo?

Well, I can handle the first part of that, and I'll let Dr. Dias handle the second part. No, no, no, casdozokitug has not been deprioritized. It's maturing nicely. I think that we've recently said, I think that it has shown, I think, very strong dose response differentiation. It's at the response is maturing. And so we'll probably have some additional insights on how that's going and have more to say about that sometime perhaps Q1, early part of the year. But it just is taking time for it to develop a bit. But when you have a situation where less than half of the patients have a sufficient number of scans, you just have to wait. With respect to the benchmarks, I'll let Dr. Dias talk about that, Rosh?

Yes, Mike. I'll just mention 2 points. So first of all, I'll reiterate that what we have seen so far is dose-dependent activity, right, with casdozo. The second point is that this data does take a little bit of time to mature. You'll recall that from our prior study, casdozo/atezo/bev, the first data set that we reported an ORR of 27% which over time went up to 38%. And also there was 0 CRs in the initial cut, which went up to 5 CRs in the final cut. So we do anticipate that similar pattern with the current study. I think if we see an initial ORR that matches our prior data, we'd be happy because the important point is that we have to see the data mature and deepen and increase with time. So I think that's what we're looking for at a minimum in our initial study. And of course, the safety profile that's consistent, which was very consistent with the atezo bev alone previously.

We will take our next question. Your question comes from Charles Wallace from H.C. Wainwright.

This is Charles on for RK. So I guess maybe for me, what specifically makes the second-line esophageal cancer setting, the fastest pathway to market? And when do you expect to have the meeting with the FDA? And at this point, what have you discussed with the FDA on this program?

All great questions, Charles. Dr. Lavallee, could you address those 2 issues, why second line the fastest and where we are with the FDA?

Yes. So it's clear that second-line esophageal cancer is a high unmet medical need and reading the most recent approval in second-line ESCC with tislelizumab. And if you read the FDA comments, on their approval. They discussed how underserved these patients are repeatedly. And one of the criticisms in that approval package was that they had not tested in PD-1 refractory diseases. And given that PD-1 was established that this would be limited availability to any patient in the U.S. But given the unmet medical need, it's still going to get approved. So I mean just in reading their writing their perspective of this disease.

In second-line EAC, there's really nothing approved. So these patients have chemotherapy as an option. They're clearly very sick as we saw in our study, the overall survival in this patient population is about 8 months. So in terms of following up on a compelling signal where we've shown contribution of effect, we have 22 patients in the randomized study with an ORR and importantly, several patients with stable disease out about 8 months on treatment.

So that enables the conversation as well as the powering of the study for what we would need to see in a randomized study to really go forward with the FDA on regulatory approaches. So that makes it streamlined fast. We know the drugs. We can talk about contribution of effect. We've had a Type B meeting with FDA to align on our Project Optimus randomized cohort that we just presented. The next 2 meetings that my team is working on immediately and plans to meet with the FDA early in 2027 are get the recommended Phase II dose buttoned up. And the second meeting is a Type B meeting to discuss development in esophageal cancer.

So activity in both histologies, squamous and adeno patients that are progressing very rapidly, unmet need with no real therapy other than chemotherapy and are going really to positively impacting patients' lives.

And one more thing, sorry, that I just want to add because there's a lot of chatter about applicability to U.S. medical practice. We have U.S. patients in the study, and U.S. patients that are part of the benefiting patients. So I think that really sets with meeting many of the FDA's requests for how to go forward in the disease.

[Operator Instructions] We will take our next question. The question is from Brian Cheng from JPMorgan.

Just building on the previous question here. As we think about the guided development path in second-line ESCC for tagmo and tori, how should we think about the potential setup of a study? I know that you recently talked about KEYNOTE-181 as comparable here. Is that a fair comp to think about accelerated trial here? And also any color on what kind of response metric and also the size of the study that you need?

Theresa, do you want to take that for Brian?

Yes. So the next study we're looking at is a randomized study against chemotherapy. So with both histologies looking across PD-L1 subtypes, and that's what we would want to refine with them as a Phase II study with an opportunity for accelerated approval on thicker ORRs, the blinded independent central review ORR with a duration of 6 months. So currently, chemotherapy is at 10% and the 6 months like we said, the median OS is around 8 months. So 6 months is a pretty healthy look. And I think doubling that to tripling that would be adequate, but those will be the conversations we'll have. I'll be able to answer specifically following an FDA regression.

Theresa, for Brian's benefit, when do we think we'll have those discussions? When do we think the package will go in? And when do you think we'll get something to say?

So we're actively working on it with it trying to have the meeting in the first quarter. So I mean, clearly, submitting at the end of this year, early next year, 60-day clock tells you March time frame is what we're looking at. And in terms of KEYNOTE-181, I just want to point out a couple of things about the Phase III KEYNOTE-590, the first-line esophageal study also combined pathology, so not unheard of. The 181 did fail in the PD-L1 below 10 and also failed in the EAC histology. So we're not looking to repeat that study. We're looking to go beyond that study and also treat patients who have progressed on frontline immunotherapy. But it has been commonly done and accepted by FDA in multiple lines of treatment.

There seems to be no further questions. I will hand back for closing remarks.

Thank you, Heidi. Thank you all for joining us today on our Q3 call. We will be at Guggenheim tomorrow. We'll see you there. We'll also see you in Jefferies in London. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Interim Tagmokitug Clinical Data Webcast.

[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.

Thank you, Heidi. Good afternoon and welcome to Coherus Oncology's tagmokitug interim clinical data disclosure conference call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus, Dr. Rosh Dias, Chief Medical Officer, and Dr. Theresa LaVallee, Chief Scientific and Development 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 for more information on risks and uncertainties.

I'd like to turn the call over to Denny Lanfear.

Thank you, Carrie. Today, I'll be speaking to you about a few things. We'll first talk about the tagmokitug opportunity in esophageal cancer, and then we will give you a data update on some additional indications. This will be followed by a KOL discussion and then some closing remarks and the Q and A. Joining me today is Dr. Rosh Dias, the company's Chief Medical Officer, as well as Dr. Theresa LaVallee, the company's Chief Scientific and Development Officer. Later on, we'll be joined by Dr. Doug Adkins from WashU, our Head and Neck Specialist, and Dr. Dan Feng from the Icahn School of Medicine at Mount Sinai, who will comment on the GI data.

Let me talk a little bit about the pipeline and just make one brief statement. I direct you to the bottom of this slide, where we talk about our casdozokitug program, which we shall not discuss today.

I will, however, indicate to you that casdozokitug is showing clear dose-dependent activity, both with respect to response and duration. We expect to have a data disclosure for casdozokitug in January of 2027. Our fight against cancer focuses on overcoming immune resistance because it is there that the battle for extending patient survival is fought and either won or lost. Appropriately, patient survival is generally the approval endpoint for regulators. While our therapeutic focus includes the shorter-term reduction in tumor size or ORR, as it is important, we pursue clinical benefit, duration of response, and stable disease, where we seek to provide patients more life. This is our commitment to cancer patients to extend their lives. You can see this clearly here. LOQTORZI nearly doubling the 6-year survival of nasopharyngeal cancer patients on a background of chemotherapy versus chemotherapy alone.

This is a textbook example of extending survival by addressing immune resistance, in this case, with checkpoint therapy. Today, we report on our efforts to overcome a core part of cancer immune resistance and how the immune response mediation activity of Treg cells in the mucosal system, extending top to bottom from head and neck through the GI tract, is hijacked by cancer. We have investigated several cancers along various lines of therapy, including first-line esophageal, second-line esophageal, second-line gastric and GI, second-line head and neck, and fourth-line plus colorectal, which I would comment is a particularly challenging setting. Tagmokitug has demonstrated clinical activity across all of these. As you will see today, these multiple solid tumor types with over 120 patients treated. I summarize our findings to date here for you as well as our projected development direction in first-line and second-line esophageal cancer.

First, across these studies, we saw a durable response and disease stabilization in pretreated IO-resistant populations, thereby demonstrating the ability to reverse immune exhaustion and rescue T cells. With these studies, we saw broad pan-tumor activity of tagmokitug, including in head and neck cancer with enrichment for HPV-positive disease and in GI cancers, demonstrating clear dose-related activity. Very importantly, we saw no new safety signals beyond what is seen with PD-1 inhibitors and very manageable safety profile. The esophageal studies have shown particular promise with the confirmed overall response rate of 75% in all comers. That is inclusive of PD-L1 high and low and 100% in PD-L1 positive patients with an N equals 8 evaluable patients in first-line esophageal. Dr. Dias will address this momentarily. The clinical benefit in first-line and second-line esophageal patients with PD-L1 negative tumors was also of note.

As I indicated, we now will proceed with an integrated development plan forward in both first and second-line, which Dr. LaVallee will further talk about. We plan to expand cohorts to add more patients and add more longer follow-up, and this year, leverage FDA designations as we discuss with them the path forward and these additional cohorts and patients.

With that, I'll hand the call over to Dr. Dias to discuss the specific results in first-line esophageal for you. Rosh?

Thank you, Denny, and good afternoon, everyone. Today, I'll present data from our TREGCHECK program. As a reminder, this is an ongoing program with continuing data entry. What I'll be presenting will be the interim data from the program. We'll present data from our GI program in 4 tumor settings, starting with esophageal squamous cell carcinoma in both first-line with chemotherapy and in second line. Our esophageal squamous cell cohorts will be the main focus in our development presentation due to the strong activity we're seeing. I'll also cover upper GI adenocarcinomas and colorectal carcinoma, as well as data in the PD-1 refractory head and neck squamous cell carcinoma cohort. As I go through the various cohorts, I'll cover key efficacy metrics and safety data.

For efficacy, as you heard from Denny, the important metrics focus will not only be objective response rate as well as clinical benefit rate as well, a metric that includes CR plus PR plus stable disease greater than 6 months. CBR is an important measure of durability in early-stage trials, which is particularly important as the benefit of IO has been in extending the tail of the curve and improving survival, which, of course, is the approvable endpoint. Let me now start first with first-line esophageal squamous cell carcinoma. This was designed as a single-arm safety cohort with 12 treatment-naive patients with advanced metastatic disease, including patients that includes both PD-L1 positive and negative tumors. Enrollment is ongoing, and at the data cutoff date, 10 patients have been dosed and 8 patients are evaluable.

We investigated our planned go-forward dose of 700 milligrams of tagmokitug in combination with toripalimab and with the U.S. standard of care chemotherapy, that is 5-FU and cisplatin, with safety as a primary endpoint and additional efficacy secondary endpoint. In terms of regional accrual, this was a multi-regional cohort with 20% of patients from the U.S., with 80% from the Asia-Pacific region. This slide outlines the interim clinical activity from the evaluable population in a waterfall plot. While the data set needs expanding, as you can see, tumor shrinkage was observed in 100% of evaluable patients.

As you can see from the legend below the waterfall plot showing PD-L1 status, the tumor shrinkage, importantly, was observed irrespective of PD-L1 status, so not only for PD-L1 positive patients, but also in patients who are PD-L1 negative, which, as you know, is not within the current approval in the U.S. label for PD-1s. In terms of best overall response of the 8 evaluable patients, one patient had a confirmed complete response, and additionally, 5 patients had a confirmed partial response, of whom 2 patients continue on treatment as marked by the vertical arrows, overall representing a 75% confirmed overall response rate. For the 2 remaining evaluable patients on the far left of the waterfall, one had an unconfirmed PR. So meaning at the time of data cutoff, they had just received a single scan and are waiting for the next scan to see if this confirms.

The other patient had tumor shrinkage, not quite meeting the criteria for a confirmed PR, but showing durability beyond 6 months and continues on treatment. These 2 patients were PD-L1 negative, and again, they do not qualify at the moment for IO treatment in the U.S. For the PD-L1 positive patients, all responded with either a confirmed PR or CR, representing a 100% ORR in this population. Since our data cutoff date of October 14, there has been some further improvement in activity with no attrition. We have since verified 2 additional participant scans that reflect the following. Firstly, the second from left patient with a PD-L1 negative unconfirmed PR has since confirmed. Secondly, a new evaluable patient who is not therefore currently represented on this waterfall has confirmed a PR.

If we were to include these additional scans since the October 14 date, the ORR in the evaluable population would go from 75% to 89%, and an ORR in PD-L1 positive patients would be maintained at 100%. For context, and bearing in mind that cross-trial comparisons do have limitations, the current standard of care of a PD-1 with chemo in the first-line setting have shown between a 44% and 59% ORR in PD-L1 positive patients. We do remain very encouraged by the interim activity demonstrated here. As we stress, durability and long-term stable disease is very important, and we look forward to these data continuing to mature. While these compelling data need to mature for durability, this does warrant cohort expansion to a larger data set, up to 30 or 40 patients.

This slide shows a representative CT scan from this cohort, and this is from the patient who had the complete response. Let me first orient you. This is an axial CT scan looking at a cross-section of the upper esophagus, showing an esophageal mass on the top panel and a supraclavicular node on the bottom, with baseline scan on the left and a follow-up scan on the right after almost 8 months. The participant had a PD-L1 positive MSS tumor. Looking from baseline on the left to follow-up 5 on the right, what you can see is complete disappearance of the target lesion in the esophagus. This is marked by the white arrow at the center of the left scan, which is no longer visible on the follow-up scan on the right.

There is also very clear diminution in size of the supraclavicular lymph node that you can see on the scan below. Overall, there was an 88% reduction in target lesions at the time of the reported complete response, and the response had also extended beyond target lesions. All non-target lesions had disappeared after 8 cycles, and no new lesions had appeared, representing a very deep response in this patient. The spider plot here represents the 8 evaluable patients, and this reflects the speed and the durability of the response. Again, all participants demonstrated tumor shrinkage, with all seeing this at the first scan, so this represented a very rapid onset of response. In terms of durability, PFS is not as yet mature, but I can highlight a couple of relevant points.

Firstly, 50% of patients, so 4 patients, still remain on therapy, as noted by the red arrows on the end of the relevant patient line. Secondly, 2 patients have demonstrated activity for close to 8 months, with the patient that is in stable disease still continuing on treatment. Note again that this is the patient who is PD-L1 negative, again reflecting activity irrespective of PD-L1 status. We do anticipate the potential for continued evolution of durability as the median PFS continues to mature. Let me now move on into the second-line esophageal setting. This, as you know, is a tumor setting where there is a huge unmet medical need, where the current standard of care remains chemotherapy for PD-1-experienced patients or a PD-1 inhibitor for PD-1-naive patients.

This cohort is an advanced or metastatic esophageal squamous cell population, with patients who have experienced progression after treatment with chemotherapy, with or without a prior PD-L1. We have a target enrollment of 20 total patients with 300 or 700 milligrams of tagmokitug in combination with toripalimab, with 10 patients in each dose level. Safety is the primary endpoint, with efficacy as secondary endpoint, and 17 of 20 patients have been dosed thus far. This is also a multi-regional cohort, and around 30% of patients were from the U.S., and this was a population that included PD-L1 refractory as well as PD-L1-naive patients. Let me orient you first to the waterfall plot that you see here. The green represents the 300 milligrams dose of tagmokitug with 700 milligrams in blue, of course, both in combination with toripalimab.

On the legend below, you see best overall response, prior PD-L1 status, and time since last PD-L1. As you can see, of the 8 evaluable patients, all but 2 had a best overall response of either stable disease or partial response, with one patient having a confirmed partial response equating to a confirmed ORR of 16.7% in the 700 milligrams dose and an additional patient having an unconfirmed PR, with treatment still ongoing. The confirmed PR was in a patient whose tumor was PD-L1 positive, whereas the unconfirmed PR was in a patient with PD-L1 negative tumor, again representing activity irrespective of PD-L1 status. The CBR, and that is, as a reminder, CR plus PR plus stable disease greater than 6 months, was 33.3% in the 700 milligrams target dose, representing the potential for this doublet as a chemo-free regimen in this tumor setting.

The swimmer's plot for second-line esophageal squamous cell, this showed all dosed patients, and this really does outline the activity we believe to be compelling in this cohort, and that is the clear tagmokitug dose response. As you can see, there is a very clear dose response in this randomized cohort. The 700 milligrams tagmokitug with toripalimab in blue shows benefit, whereas the 300 milligrams dose in green is not sufficient. At the 700 milligrams tagmokitug dose, we saw both the confirmed and the unconfirmed PR, and also what's pretty striking is the long-term stable disease, showing durability of activity in this dose level. Of note, 2 patients are still continuing treatment close to 8 months, including one patient with a PD-L1 negative tumor. Whilst the dataset is small and still maturing, the current median PFS of 5.5 months is encouraging.

With 6 patients in this cohort still continuing on treatment, several of whom are either in stable disease or unconfirmed PR and awaiting further scans, we do look forward to this data continuing to mature further too. As a relative comparator, again with the usual caveats of cross-trial comparisons, the current standard of care provides a median PFS of between 2 and 4 months and overall survival of less than a year. The safety profile for both first line in combination with chemo and second line as the tagmokitug/toripalimab doublet is very consistent with the overall integrated safety that I'll outline later. In the first-line setting, the discontinuation rate is around 40%, but of course, this is in combination with chemotherapy and is also very similar to the overall discontinuation rates reported, for example, in CheckMate 648 in the same setting.

Across both lines of therapy, there were no grade 5 tagmokitug-related events. The most common AE is related to any study drug I have shown, and the safety profile for both esophageal squamous cell cohorts support continued development.

Let me now hand over to Theresa to talk about the integrated plan moving forward for ESCC.

Thanks, Rosh. We recognize we need more mature follow-up and clearly more patients. But the signal to date is compelling. While we see activity across tumor types, which Rosh will show you in a couple of minutes, the early interim data here are exceeding benchmarks. The Coherus objective for additional tumor types for toripalimab approval beyond NPC has always been through improving standard of care with PD-1 beyond where it is today and bringing immunotherapy to patients who are ineligible. We see that that objective is possible in these data sets. Let's move on to the benchmarks. Shown on the left in gray in the first-line setting, you see the 3 approved PD-1 inhibitors plus chemotherapy in the United States, showing an overall response rate about 50% to 60%.

While toripalimab, through the JUPITER-06 study, is approved in China and Europe, it is not recognized by the U.S. FDA because it uses a different chemotherapy that is not used in U.S. medical practice. It did not include U.S. patients. The TREGCHECK program incorporates U.S. standard of care and U.S. patients, and we see an overall response rate in the PD-L1 positive patients of 100%. Importantly, patients with PD-L1 negative tumors, the FDA removed the label from PD-1. The only standard of care therapy is chemotherapy. It was the lack of benefit that made them revise the labels. Here we are seeing activity. 75%, 100% are big numbers. What always you would expect with more follow-up is attrition. We were pleased to see at the first look where we have another partial responder confirmed and a new evaluable patient as a partial response.

We maintained 100% and improved the 75% to 89%. In the second-line setting, Rosh showed you that swimmer's plot. When those patients are so sick, they cannot swallow, they are malnutritioned, they have gone through first-line chemo. When they fail, they fail fast. In the under-dosed tagmokitug dose with toripalimab, we see only one patient made it past 6 weeks on study treatment. In the 700 milligrams dose, we see a number of patients on past 33 weeks. 8 months is the chemotherapy median overall survival endpoint. That is why we focus on the clinical benefit rate, because this long-term stable disease is meaningful. What we show you here is that adding tagmokitug to toripalimab has improved on PD-1 treatment, in PD-1 naive patients, and in less inflamed tumors such as PD-L1 negative. In the second-line setting, we have shown activity in PD-1 resistance.

Tagmokitug can add to PD-1 in all settings. Shown here on the right-hand side of the slide is the data that we've talked about for JUPITER-06 with toripalimab and chemotherapy from the China study, where we see activity irrespective of PD-L1 status, as shown by the hazard ratio being the same. Why do we think this is true? We see this due to potency. Toripalimab has a higher binding affinity and a unique epitope. When used in combination with chemotherapy, the less inflamed tumor can have activation of anti-tumor immunity due to this potency. That is not true in the absence of chemotherapy. In the second-line setting, where IO alone is showing activity in PD-L1 negative patients, that can be attributed to tagmokitug, bringing in that remodeling of the tumor microenvironment and overcoming a less inflamed tumor.

Exactly the objectives of what we wanted with depleting Tregs from the tumor and remodeling the tumor microenvironment. How do we take this forward? We said expand the patient data set to 30 to 40 patients, get more mature follow-up, and engage with FDA about favorable regulatory strategies. With this compelling activity, what we see is 2 drugs, 2 approvals, or 2 drugs, 2 indications that can really change the treatment landscape in ESCC for a best-in-disease opportunity. Bringing in the opportunity to take 2 studies with randomized controlled trials and looking at accelerated approval endpoints with surrogates of ORR and DOR early on, and in the same study, using it to convert using the overall survival endpoint.

This has been done in the first-line setting by an initiative from FDA called Project FrontRunner, where they're encouraging development in earlier lines of therapy, and this was successfully implemented by Pfizer with the BREAKWATER study, where they achieved accelerated approval at the end of 2024 on the ORR/DOR endpoint, and about a year and a half later, got full approval based on the OS data. Immediate next steps are to meet with FDA and align on the go-forward dose. We've shown you the 700 milligrams data. Here, you'll see in the next set of studies that the GI tumors do show nice dose response. We see in the head and neck cohort that both dose levels are active. We think this is consistent with the biology of that viral-driven tumor and it being highly Treg sensitive.

The lower dose is able to overcome in a highly inflamed tumor to bring antitumor immunity and see activity. When we look at the tumor biopsy data in the head and neck cohort, we do see higher immune activation with the 700 milligrams dose level, consistently giving us confidence in the 700 milligrams dose as the go-forward dose. I also want to call your attention to the far right portion of this slide, where we talk about the full BLA package, in that 50% of the spend, 50% of the risk is also on the CMC components. Given the biosimilar heritage of Coherus, we feel confident we can put together a robust and quality CMC package for a BLA submission. Importantly, we've moved all manufacturing for our investigational agents to the U.S., really enabling ease of inspection for the FDA.

We will look at all expedited programs and all ability to move these programs forward, the last being Project Orbis, because in maintaining 2 drug approvals, which adds complexity. In Europe, toripalimab is approved in first-line esophageal squamous cell carcinoma. Project Orbis is an initiative by FDA that allows for concurrent submission and review of BLAs to multiple health authorities, including Europe, Japan, Singapore, Canada, U.S., working collaboratively together. So having toripalimab approved in this indication could be leveraged to decrease the complexity in getting both drugs approved in the U.S.

Thank you, Theresa. As you can see, we have launched a very well-considered clinical program with 5 different indications or lines of therapy. We have now elucidated a particular indication, esophageal cancer, where we believe we have a very synergistic and executable approach for first and second line. First of all, it leverages the differentiated activity and high unmet need in both settings. We believe there is a highly efficient development path, and as Theresa outlined, one with the potential for accelerated approval, leveraging various FDA indications. There are multiple paths to market, and there is a broad patient population, given the ability to address both PD-L1 positive and PD-L1 negative with no selection. It is also potentially a global program. As Theresa indicated, toripalimab is approved in Europe for esophageal irrespective of PD-L1 status, which creates the opportunity for, we believe, ready partnerships.

There is also a high disease burden ex-U.S., particularly in Asia, in China, and in Japan and other places, which opens the global development and partnering opportunities given this very promising data. Here in the U.S., there is approximately 5,000 to 7,000 patients to be addressed across these lines of therapy. As we will be using 2 novel agents for Coherus, this translates to an economic opportunity of about $1.5 billion and a rare indication, which is very suitable for our commercialization efforts.

With that, now, I will turn the call back over to Dr. Dias, who will talk to you a little bit about some of the other indications that we evaluated, Rosh.

Thank you, Denny. Let me move on now, first of all, to our head and neck squamous cell cohort. As a reminder, this builds upon the data that we presented last year in 2025 at AACR from earlier stages of this trial, where with tagmokitug monotherapy, we showed clear tumor remodeling to a more cytotoxic state with depletion of the intratumoral CCR8 positive Tregs and an influx of CD8s. As you can see in the immunofluorescence slide on the top left panel, and clear anti-tumor activity with the addition of toripalimab on the bottom left panel with a PR in a fourth-line patient whose tumor was refractory to a prior PD-1, a taxane, and a TKI. The current cohort I will report on is interim data from the second line specific population. This is a relapsed metastatic second-line head and neck population who must have received a prior PD-L1.

We enrolled 43 patients, all in the U.S., 25 in the HPV population, of whom 23 were evaluable, with 300 or 700 milligrams of tagmokitug in combination with toripalimab, with a roughly equal split between the 2 doses. Safety was the primary endpoint, with additional efficacy measures as secondary endpoints. We communicated at our last earnings call that we have seen activity both in terms of response as well as duration, with enrichment of activity in HPV positive patients. You can see this in the waterfall plot here. The waterfall shows HPV positive evaluable patients with both doses, 300 milligrams in green and 700 milligrams in blue, in combination with toripalimab.

The majority of the patients with HPV positive disease, as shown here, did have activity reaching criteria for either a partial response or stable disease at active doses, suggesting that tagmokitug is able to rescue PD-1 resistance at both of these levels. In this HPV positive population, there were 3 confirmed PRs and one additional unconfirmed PR, with activity in both PD-L1 positive and PD-L1 low patients, resulting in an ORR of 13% and a CBR of 26%. The durability, in particular, was encouraging, with several patients in the second-line HPV positive population out past 6 months of treatment. We also saw a patient continuing treatment for the past 1 year, and this patient still remains on treatment. This is encouraging for a couple of reasons.

Firstly, as we've mentioned, durability is a very important measure of activity because this, of course, is the best correlate to survival, and survival is the approvable endpoint. Secondly, the enrichment of activity in the HPV positive population represents a key area of unmet medical need, as many of the emerging therapeutics are either focused in on the HPV negative space or have activity that may be driven by HPV negative populations. This suggests the potential for further study in this HPV positive population, importantly with this as a chemo-free regimen, which represents a relative white space in terms of key development opportunity for patient benefit. The other area for potential enrichment that we've seen is with the baseline immune context. The Tumor Immune Regulatory Index, or TIRI, is a tumor-derived CCR8-containing biomarker score, which defines the baseline immune context.

We know that HPV positive tumors exhibit greater immune sensitivity and Treg-driven immune suppression. What our correlative work shows is that TIRI further enriches for both ORR as well as CBR in this HPV positive population. On the left, we have the HPV negative patients. On the right, HPV positive. I'll make a couple of observations. Firstly, both ORR and CBR overall are higher in the HPV population over the HPV negative population. Secondly, TIRI does enrich for activity in the HPV negative population. However, in HPV positive patients, not only was the ORR and CBR higher than in those that were HPV negative, but the enrichment by TIRI takes the ORR from 13% to 18%, and more importantly, the CBR from 26% to 45%.

Again, this is an improvement in durability, and in particular, it's encouraging as this represents a potential enrichment factor as we seek to move through the development pathways. In terms of the safety in the second-line head and neck squamous cell cohort, this again was consistent with the safety profile seen across cohorts, with the most common AEs related to any treatment being fatigue, infusion-related reactions, and diarrhea. The safety was overall acceptable and manageable, which in this context of emerging clinical trials is, of course, a very important point. I'll now move on to our upper GI adenocarcinoma cohort. This was a relapsed metastatic population, including gastric cancer, gastroesophageal junction, and esophageal adenocarcinoma, which, of course, is all the same adenocarcinoma histology.

Patients were HER2 negative with tumors with a lower mutational burden, and all must have received prior chemo with a platinum and 5-FU, with or without a prior PD-1. We enrolled 40 patients across the 2 active doses of 300 or 700 milligrams of tagmokitug in combination with toripalimab. Again, roughly evenly balanced between the 2 doses, and again with safety as primary and additional efficacy measures as secondary endpoint. This was a multi-regional cohort with 60% of patients from the U.S., and the predominant anatomical site was gastric, representing around 60% of the population, followed by GEJ and then esophageal adenocarcinoma. About a third of the patients were PD-1 naive. The waterfall plot here shows the overall activity in the response evaluable population, with the 700 milligrams dose in blue. 300 milligrams in green.

In our target go-forward dose of 700 milligrams, we saw 4 confirmed PRs, resulting in an overall response rate of 23.5%, 3 of whom were refractory to a prior PD-1, and a CBR rate of just under 30%, both suggesting that tagmokitug with toripalimab can rescue PD-1 resistance in this population. As you can see in the legend below the waterfall plot, tumor shrinkage was observed in both PD-L1 high and low tumors and was observed across all 3 anatomical subtypes, including 2 PRs in patients with EAC. Again, the latter represents activity in esophageal carcinomas. 6 patients from the response-evaluable population still continue on treatment, suggesting that there may be continued potential to improve on this interim data. The swimmer plot, again, shows very clear dose response in the upper GI adeno cohort as well, with 300 milligrams on top in green and 700 milligrams bottom in blue.

All responders have thus far been at the 700 milligrams target dose. As you can see, the durability is also more marked in the high dose, with several patients continuing past 6 months of treatment. This, again, speaks to the potential for durable benefit in this upper GI adeno cohort. As a reminder, the current standard of care for second-line upper GI adenos remains ramucirumab and paclitaxel, and so a chemo-free doublet would be a very valuable option for patients in this setting. In terms of the safety profile, again, the profile here was consistent with the safety across all cohorts, with the most common AEs that are related being infusion-related reactions, pyrexia, and lymphopenia. There were no grade 5 tagmokitug-related events at either dose. Overall, the safety, again, was acceptable and manageable. Let me end now with our colorectal cancer cohort.

Here we looked at a very late-line relapse metastatic population who had exhausted all approved prior standard therapies, including, for example, oxaliplatin, irinotecan-based chemo, fluoropyrimidine, or others. This was essentially a fourth-line and beyond population with a focus on patients without liver mets. The main goal of this cohort was to determine whether we could see activity in this late-line setting that may then allow us to move into earlier lines of therapy in colorectal carcinoma. We enrolled 20 patients as a single-arm cohort with 700 milligrams of tagmokitug in combination with toripalimab. The primary endpoint was safety, with additional efficacy measured as secondary endpoint. This is also a multi-regional cohort, with approximately 60% of the enrollment coming from the U.S.. What you see here are the waterfall and spider plots for the response-evaluable population.

First, on the waterfall plot on the left, we did see tumor shrinkage in this very late-line population, with just over half of the response-evaluable population showing some degree of tumor shrinkage, with one patient achieving a confirmed PR, representing a confirmed ORR of 6% and a CBR of 12%. In addition, we did have several patients with tumor shrinkage approaching, but not quite reaching, the criteria for a partial response. Additionally, we saw molecular response with ctDNA decline and CEA decreases, as you can see in the legend below the waterfall plot, broadly but not universally correlating with tumor shrinkage. The spider plot on the right shows the durability in this very late-line population, with 3 patients being treated past 24 weeks, 2 of whom are still continuing on treatment, which again is not trivial in this very late-line population.

Activity in this population supports moving to earlier lines, which was our original intent in exploring the fourth-line plus setting. Finally, in terms of safety for this CRC cohort, again, this was consistent with the safety profile across cohorts, with the most common related AEs being fatigue, rash, and anemia. Overall, again, safety was acceptable and manageable, with tagmokitug-related grade 3-plus events seen in 10% of patients, with no grade 4 or 5 tagmokitug-related events. Before we move on to our panel discussion, let me just summarize a couple of points. We're pretty encouraged overall, as you heard, by the data that we've outlined over the past 2 minutes, which has shown clinical activity across the cohort and, importantly, an expected and manageable safety profile in combination with toripalimab and also in combination with chemotherapy.

The ability to combine with chemo gives us the ability to move into earlier lines of therapy, where it's well known that immunotherapy is more active. Whilst this is interim data, the ESCC data offers a clear potential for continued development in a tumor type that is hugely underserved, with a clear unmet medical need. In first line, with strong activity, tumor shrinkage irrespective of PD-L1 status, and initial durability, this offers a development opportunity in combination with chemo. In the second-line setting in esophageal squamous cell, activity and clear dose response has been demonstrated, which allows development then as a chemo-free option. Additionally, in the GI cohort, the activity is observed in the 700 milligrams dose, with the 300 milligrams dose showing limited benefit, and that gives us confidence in the data being tagmokitug driven and also in the dose.

The enrichment of activity in HPV-positive head and neck offers a clear path to continued development in an area of relative white space. Overall, we're also encouraged by the safety profile across the program. Earlier in program, through tagmokitug monotherapy dose escalation, we showed no DLTs up to 1,200 milligrams and low-grade immune-related AEs, showing targeting the CCR8+ Tregs is relatively sparing of peripheral tolerance. In combination with toripalimab across over 120 patients, we've also seen no new safety signals over what is known for PD-1 inhibitors. As expected, we did see an increase in immune-related AEs, but importantly, this has been manageable and compares favorably to IO combinations such as ipi/nivo, for example, as you can see on the right panel. We've seen comparable safety across both the 300 and 700 milligrams doses with similar immune-related AEs.

Most of the AEs with tagmokitug and toripalimab were grade 2 or less and resolved with no grade 5 treatment-related AEs. In our first-line esophageal squamous cell cohort with tagmokitug and toripalimab in combination with chemo, again, we demonstrated a manageable safety profile, no new safety signals, and the majority of AEs were attributed to chemo. The safety profile is very similar to other phase III studies with PD-1 inhibitors and chemotherapy that led to their U.S. approvals. Overall, the most common treatment-related AEs with the tagmokitug/toripalimab doublet have been infusion-related reactions, fatigue, and rash. Let's move on to a brief panel discussion. I'm delighted to be joined by Dr. Doug Adkins, a Head and Neck oncologist from WashU School of Medicine, and Dr. Dan Feng, a GI Oncologist from the Icahn School of Medicine at Mount Sinai.

Doctors Adkins and Feng, thank you very much for joining us today to share your perspective. As mentioned, activity across GI cohorts with a particularly strong signal in ESCC that warrants further development is pretty exciting for us, and also with activity in head and neck squamous cell with enrichment in HPV-positive patients. I'd be particularly interested in your thoughts initially as clinicians treating these very hard-to-treat cancers about your impressions on the early data across cohorts and how this could fit in with clinical practice. Perhaps we can just start with esophageal squamous cell, particularly in the first-line setting, and really just discuss your initial reactions to the first-line data. I'll just remind you, as you know, we saw an overall response rate of 75% in the evaluable population, which then goes up to 89% if we include additional scans since the October 14 cut.

Maybe I can open it up to Dr. Feng. Dr. Feng, maybe some initial reactions to the esophageal data, starting with first line.

Yes. Thank you. I am a GI Medical Oncologist. I treat these diseases, and I am involved in a lot of the early phase drug development in this space. From my perspective, I think I want to just highlight a few things so that what my thoughts when I hear and see these data is, one, we know that esophageal squamous is actually a very bad diseases, very poor prognosis. Most of our patients, from the time they got diagnosed with advanced diseases, they have a median survival about 15 to 17 months. This is also a disease that we do not have effective options past the first line.

For me, in looking at the front-line data you have with toripalimab plus tagmokitug plus chemo, I was very impressed with the high response rate because you show the data that close to 90% for all comer and 100% for the PD-L1 positive patients. I think that it is worth noting that also that the benefits are also seen in the patient with PD-L1 CPS less than one, or we call them PD-L1 negative patients. This is way better than what has been reported in the clinical trial and what we have seen in our everyday clinical practice. In the second-line setting, the combo without chemotherapies also has shown really impressive activities because this is a space that we really rely on single-agent chemo therapies. For patients who were previously treated with PD-L1 or PD-1 antibodies, there is really no great options from these for chemo.

A lot of the patients are heavily pre-treated when they get to this point. I think it is worth noting that the combo actually had 2 response. I know one is unconfirmed among all the 6 patients and including patients who have PD-L1 negative status. I was encouraged by the data in the front line and the second line setting in the esophageal squamous cell carcinoma.

Thanks, Dr. Feng. You alluded to the fact that we saw activity irrespective of PD-L1 status in the first line setting, in particular. What are your thoughts on how this could fit in with the treatment paradigm? As we have said previously, the PD-1s are not approved in the PD-L1 negative space.

Yes. I think that this combination definitely has activities, so that is in the PD-L1 negative patient population. I think if we are going to look into further clinical studies, we should definitely include those patients, and this provides a great option for those patients.

Thank you for your perspective. The other point that we were discussing was second-line esophageal, where, as you quite rightly said, these patients are very advanced, and typically have a very poor performance status. What are your thoughts on the potential for a chemo-free option in this setting in particular?

Well, a lot of times in this patient population, we were using single-agent chemotherapies, right? I think the chemo-free option is quite attractive for the patient in this population, and also especially for the patient who is PD-L1 negative.

Yes, absolutely. Dr. Adkins, did you have any comments on the esophageal data that you saw today?

Yes, I agree with Dan. I think the data showing activity in PD-L1 zero patients is particularly interesting and applicable to patient care for which we don't have a good immunotherapy approach.

What were your initial reactions to the overall response rate that you saw in terms of tumor shrinkage across all of the patients?

It does seem to be more favorable than comparators in the literature.

Thank you, Dr. Adkins. Maybe we can move on briefly to head and neck. You saw the data there with activity overall, but more enriched in the HPV positive patients. I'd be very interested in your thoughts, Dr. Adkins, on what is the competitive environment or what is the unmet need really in the HPV positive space, and of course, any reactions that you had to the data that you've seen in the head and neck space.

There are 2 striking findings that I observed in review of this data with the tagmokitug and toripalimab. Number one was the interesting observation of the apparent sensitivity of HPV positive disease to this combination. Number 2 was the durability of CBR. The current data that my review of the context of literature shows that for patients with HPV positive PD-1 platinum-refractory disease, current drugs result in, at best, a 10% progression-free survival at 4 months. When I reviewed the data for tagmokitug and toripalimab, it looks like that number is close to 40%, which is very striking. Although the response rates are relatively low, the durability of clinical benefit rate is striking. The fact that it's demonstrated in HPV positive disease is a very unique data set.

Generally, most of the registrational pathway drugs that are being pursued in recurrent metastatic head neck cancer are focused on HPV negative disease. The number of EGFR bifunctionals are, for the most part, targeting HPV negative disease. There's very little going on in drug development for the HPV positive population, and that represents about 30% of patients with recurrent metastatic disease. There's a clear unmet need for looking at strategies to target HPV positive disease. It looks like tagmokitug and toripalimab might be that combination worthy of pursuing.

Thank you, Dr. Adkins. One of the other things that we think about with HPV positive patients, of course, these patients tend to have a better performance status. Often they tend to be working as well. I think that may also be a potential opportunity for these patients. What are your thoughts on the safety profile, again, in the context of the emerging therapeutics?

I do think it's, in my experience, the combination has been quite tolerable. Many patients have had limited side effects, and the side effects that I've observed that you've shown in your slides, infusion reactions or diarrhea or transaminitis, have been mild and manageable with appropriate therapy. In terms of impact on quality of life, I found it, compared to chemotherapy, far better quality of life on this combination. I do think there's a good rationale for a favorable adverse event profile.

Thank you, Dr. Adkins. Very helpful to get your perspective on that. Maybe we can get some initial thoughts, Dr. Feng, from you on the upper GI adeno cohorts and the colorectal as well. As a reminder, I think a couple of the things that I said was that we saw very clear dose differentiation in terms of activity with the upper GI adeno cohort. Also remember that we had those 2 additional patients with EAC within that cohort, also perhaps forming a little bit of a package here, really, in terms of being able to plant a flag in a real area of unmet medical need in esophageal. What are your initial reactions to the upper GI adeno data that you've seen before we move on to colorectal?

Yes. In this space, I think the few things that I really noticed from the data are, one, as you pointed out, it's the 700 milligrams that really make a big differences, and that's the true effective doses for patient in this population. 2 is that I think that in the second line setting, while we did not really see, I mean, the response rate is somewhat comparable, if not superior, to the current standard of care chemo plus ramucirumab options. I think that I definitely would appreciate the toxicity profile, at least I've seen in my own experiences and also from your own data for these patient population, because this is also a population, a lot of them also, again, very heavily pre-treated because we now use FLOT in the locally advanced settings.

Two is I think that we just unfortunately haven't had the mature PFS data yet, but I'm hoping based on the trend we've seen right now, I look forward to see the PFS data because I think in your experiences and also in your preliminary data, this suggests that duo IO not only is attractive option for patients who are heavily pre-treated with chemo, but also can potentially have much more durable response. The last thing that I do want, I think I want to note that is that I think the responses in PD-L1 pre-treated patients, the vast majority of your patients are understood in your cohorts are treated with PD-L1 or PD-1 before. Actually, I think the first 3 out of the 4 patient responders were actually treated before.

I think that the signal, the efficacy we've seen in patients who were previously treated with PD-L1, that's also I think for me, that's actually really worth noting. That's exciting.

That's awesome. Thank you for, again, your commentary there. Colorectal, as I said in our comments, the whole intention here was to start in the late-line setting, see if we can see activity in a very hard-to-treat population, and then maybe think about progressing early in the treatment paradigm. What do you think of the data in terms of support of that strategy for colorectal?

Well, we've seen the combination activities, even though it's very limited signals in the advanced settings. Personally, I think that in my experience, a lot of the colorectal patients have gone through 2, 3 years of more therapy until they get on the clinical trials. The efficacy of IO in that patient population was really poor. I think that with the preliminary, with the limited clinical activities even, in the advanced setting, I actually personally think that there is potential more activities in the earlier-line setting before the patient has gone through years of the chemotherapies. I think that colorectal is a space that there's a lot of changes over time. I do think that at earlier-line, potentially we can see more IO activities.

Your safety profile actually in the esophageal cancer, as well as your own safety data on the duo and the tagmokitug plus the toripalimab, I think that supports us to move into the earlier line to combine with chemotherapies.

Very helpful. I know we've taken up quite a little bit of your time. As a company, we're very proud of being able to explore therapeutics in areas of real unmet medical need. Perhaps I could just end with by asking your final comments, particularly on the esophageal space, where we do believe there's low competitive density in terms of the developmental environment married together with a real unmet medical need. Perhaps I can just ask for some final comments, both in the first line setting in terms of development, in combination with chemotherapy for this doublet, and also in second line as a chemo-free option as the doublet itself. Perhaps, Doug, we can start with you and then some final thoughts after that from Dr. Feng.

Rosh, this is for esophageal, you said?

Yes. First line as well as second line. In terms of the unmet medical need, perhaps the lack of the competitive options within this space and the potential for the 4-drug combination, so tagmokitug/toripalimab in combination with chemo in the first line and as a chemo-free option in the second line for tagmokitug/toripalimab.

Well, combining tagmokitug/toripalimab with chemo is a tolerable regimen, and it is important that adding drugs to the chemo is a tolerable combination. I think that those 2 agents are clearly tolerable and safe to combine with chemotherapy. The initial activity, particularly in PD-L1 zero disease, is very promising and also in patients who have PD-1 refractory disease is very promising. So in both the first line and the second line plus settings, the rationale looks very favorable to proceed forward with those combinations.

Thank you, Dr. Adkins. Dr. Feng, any final thoughts on esophageal squamous cell and the data that you have seen?

I think the ESCC really represents a field that with a lot of unmet needs. As I pointed out earlier, I think the overall prognosis is still very poor with these diseases. We lost majority of the patient within the first year and a half. For me, a lot of times, the esophageal cancer, when recurring locally, can cause a lot of difficult trouble eating and rapid decline in the patient's nutritional status and functional status. I think there's a huge need to improve the response rate in the front line setting and also in the second line setting because we really don't have a very good option in there. This is a landscape that's also changing, too.

There are other drugs currently in development, but I think a pure IO combination provides an attractive option for these heavily pre-treated patients, as well as for patients who really need durable disease control.

Wonderful. Dr. Adkins, Dr. Feng, thank you so much for your perspective. It's been invaluable. Really do appreciate it. I'm going to hand over to Denny again, just to close, and then we'll open it up for Q and A. Denny?

Thank you, Rosh. Let me just briefly summarize where we land on this. Once again, we think that the first and second line offer a very unique, highly integrated, synergistic development opportunity. As you just heard from our KOLs, a significant opportunity. These patients are just tragically underserved. We have differentiated activity. We're building on the existing track record of toripalimab in esophageal, irrespective of PD-L1 status. We have approval in Europe already, where it's doing very well commercially. We're able to avail ourselves to a number of FDA designations to facilitate a very efficient, rapid development plan such as orphan, breakthrough status, Fast Track, and so on. We like the size of the U.S. opportunity. We think it fits very well with our commercial footprint so far and the rare diseases that we have gone after.

We believe also that there's a very strong opportunity for ex-U.S. partnering, giving the data we've shown, the dose responses that we've shown in tagmokitug, a clear impact on survivability and durability. I would just say that there's also the opportunity now for us to go forward with some additional combinations. As you know, we do have a study starting with J&J and metastatic prostate. We're going to get that going here just shortly and be able to tell you about that sometime, I think, in the first quarter, early second quarter. But I think that this data really opens up a lot of opportunities for tagmokitug and so on. With that, we will close. We will thank you for listening in today and look forward to seeing you at the meetings.

Very good. Thank you. Heidi, why don't we go ahead and start the Q&A?

[Operator Instructions] The question comes from the line of Paul Jeng from Guggenheim.

Thanks for providing this very comprehensive update today. My first question, can you just comment on any early PFS trends you're seeing in frontline esophageal? Obviously, the durability of response and how that translates to survival will be pretty critical from a regulatory perspective. So just curious on anything you're seeing that gives you confidence even at this early stage. Then I have a follow-up.

Thank you, Paul, for the question. We talked a little bit about the need for this data to mature. It actually is way too early in terms of the esophageal first line specifically, to really talk about median PFS. We will be obviously following. We will give you updates as they arise. What I can say is that for the evaluable data set, the CBR, which perhaps is at this stage in the absence of a median PFS, perhaps the most informative, we are seeing about an 87% or thereabouts CBR rate. I think that bodes pretty positively right now, but again, we have to see median PFS mature and the patients stay on therapy for a little bit longer.

Great. My second question is on the regulatory path in esophageal. It was great to see the plan for an interim ORR analysis that is contemplated in the phase III. I think otherwise these studies could tend to take 3-plus years to read out to OS. My question is, what do you view as the bar for response rate to get an accelerated approval in the frontline setting? Likewise, how confident are you that a positive response rate interim is also possible in second line based on what you have seen? Thank you.

Yes, great question, Paul. I think at this time, what we would need to do is really meet with the regulators. Clearly, if there was an attrition in the signal we are seeing, that would be definitive. As we get more mature follow-up and more patient data set, we can answer that sufficiently. There are 2 aspects. We have shown improvement in response, but also opened up a patient population that is underserved by immunotherapy. A key point with regulators is with chemotherapy having a 30% response rate in PD-L1 negative, what is required to really show significant improvement? We will evolve those numbers. In the second-line setting, I do think the duration of benefit CBR rate would be a discussion we would have. You have seen that we have started to include ctDNA. Those analyses are ongoing for the esophageal cohort, and we talk with the FDA about complementing the data sets with molecular response as well.

Your next question comes from Jay Olson from Oppenheimer.

Congrats on all the impressive progress, and thank you so much for providing this informative update. Can you talk about the timeline to enroll additional first-line and second-line ESCC patients to enable a regulatory discussion for next steps? If you expect to provide updates on durability for these reported patients sometime maybe next year? Then I had a follow-up if I could, please.

Yes. Thank you, Jay, for the question. I will answer the first part of that, and maybe Theresa can chime in a little bit on timing of any FDA discussions that we can have. Importantly, I think there are a couple of important metrics, right? We have talked about overall response rate as well as CBR and durability. Remember, the esophageal cohorts have not as yet completed accrual. They are close, but they have not as yet completed accrual. Step 1, we will be waiting for the remaining few patients to enroll and dose and then see what the durability is then. I think that is the most important point. The point about when we can expand, I think this data does support expansion into an additional population to around 30 to 40 subjects or patients. I think that is the next immediate step.

I think the question will be how much durability do we wait for before we start the expansion? I think sometime around the second or third quarter of next year, we could move into an expansion, pending further FDA discussions. But I will let Theresa comment on a little bit more on timing of FDA discussions.

Yes. Immediate next steps are to align on the dose. The meeting package is being finalized now, so we plan that for the first quarter of next year. You always have your development plan in there in a discussion with FDA. To have a robust discussion with them, we would need a minimum of 30 patients, to talk about other favorable regulatory strategies and how to design the magnitude of the benefit. But clearly saying toripalimab already has orphan drug designation in the U.S. for esophageal cancer. Engaging FDA, even through programs like that for tagmokitug is our strategy. Talk often, talk frequently, and really partner with them on our development strategy.

Great. I appreciate that strategy there. If I could ask a follow-up. Given that toripalimab is approved in first-line ESCC in Europe, and now you have clear efficacy signals for tagmokitug plus toripalimab in ESCC, would you consider taking another look at filing toripalimab in ESCC with the FDA?

Yes, I would love that. I don't think 10 patients is going to be enough. The issue with the data from JUPITER-06 is the chemotherapy comparator in that study comes out at above 50%. The applicability to U.S. medical practice, they have a pretty strong argument. We will continue in discussions with the European group on their experiences and leverage everything we can to have those conversations as early as possible.

Okay, great. Maybe if I could ask one more question. In second-line ESCC, how are you thinking about the patient population for your registrational study? Any differences on PD-L1 status or prior ICI exposure? Would all patients need prior ICI exposure?

Yes, I think that's the beauty of this, right? We would take all comers, so PD-1 refractory, clearly an unmet medical need. In fact, if you read the FDA comments on the most recent approval in the second-line setting, tislelizumab, they actually comment that they don't even think it's going to be used much because most patients will have PD-1 in the frontline setting. But having that option to treat all comers, PD-1 refractory, PD-1 naive, and irrespective of PD-L1. The other thing to remember is KEYNOTE-181, the pembro approval in the second-line setting only got approved in PD-L1 high, CPS greater than 10. So I think this really opens up an IO treatment for these patients that they aren't eligible for today. So super exciting.

And the question comes from Mike Nedelcovych from TD Cowen.

I have 2. My first relates to your potential commercial strategy. How does your thinking about potential commercialization in the U.S. versus ex-U.S. and partnering strategies play into your thinking about the development path for tagmokitug? That is my first question. My second question relates to the competitive landscape. I know data are sparse, so comparing your data set to others is very difficult at this point. Are there any data sets you could point to that would help us understand how tagmokitug with these new data fit into the competitive landscape? I think gastric cancer may offer the best opportunity there. Thank you.

Yes. Thanks for that, Mike. I will take the first part about partnering and commercial, then I will let Dr. LaVallee take the second part. Obviously, there is an advantage of having toripalimab approved in Europe for esophageal, irrespective of PD-L1 status. I think there is a reasonable opportunity of partnering with someone in Europe and the read-through to the clinical development and so forth. Similarly, in Asia, there is a very high incidence, of course, of esophageal as well as gastric cancer in Asia. One of the things that we will do is take this data and begin talking to some parties there.

With respect to the development plan, I think ultimately, I think we could reasonably expect to see perhaps 50% or 60% of the patients in Asia, 30%-ish, maybe 40% of the patients in the U.S., and maybe 10%, 20%-ish of the patients in Europe. We have had a longstanding strategy of globalization of these products because we do have global rights, both to tagmokitug and casdozokitug. I think that addresses that very well.

Secondarily, I think that we're getting some very good experience in these more rare cancers. Nasopharyngeal cancer has about 2,000 patients in the U.S., incidence per year. This is about 6,000, so it is about 3x as large. I think a lot of the approaches, the infrastructure and so on, and ways of addressing the market should be very similar. I wouldn't contemplate that we'd have to expand our footprint in order to do so. I think we fit in quite well, particularly since you're also promoting toripalimab at the same time, right? So you have NPC plus esophageal. I think that makes a lot of sense. Overall, I think it's a pretty good fit. Theresa, do you want to talk about the.....

Yes. Hopefully, I understand your question right, Mike. I'm going to answer it, and if you need a follow-up, let me know. From a competitive landscape, first in esophageal, like all tumor types today, ADCs are showing some activity. The data in the frontline study that Rosh shared with you, showing that we can combine and enhance activity with chemotherapy, really lends itself to think about combinations there. So continue to add novel combinations, and ADCs is a combination that I think makes a lot of sense for tagmokitug. Additionally, in gastric cancer, I think that's what you asked specifically about, in the second-line setting, these data are still maturing. The current data sets do not exceed the standard of care benchmark. If it improves, we'll have a different conversation, but it clearly shows activity in the disease.

Here again, ADCs are an important regimen as well as VEGF, another well-known mechanism to combine with Treg depletion. So looking at novel combination strategies now that we've shown a baseline for activity. Thirdly, the analysis for the CCR8 TIRI scores across the various tumor types is still ongoing. So if we have any enrichment strategy to move forward with, we would explore that.

The question comes from Brian Cheng from JPMorgan.

Maybe just first, when we look at toripalimab plus chemo performance back in the JUPITER-06 study, I believe in the supplemental, the investigator-assessed response rate was about 72%. Here, I think you are reporting 75% from N of 8 at the time of cutoff. How confident are you that the contribution of tagmokitug here is indeed clinically meaningful? Will you be able to need to as you run later stage studies? Then I have a follow-up.

Well, thanks for your question, Brian. Dr. LaVallee, you want to address that?

Yes, Brian, thanks, and as always very detailed, so we appreciate that. So at this stage, like I said, for the JUPITER-06, you're right, it's 72.4% for toripalimab plus chemo in the JUPITER-06 study. The chemo is 58%, so exceeding the benchmarks. That's why we said the relevant U.S. benchmarks for comparison here, we believe, is the 3 approved U.S. studies in the U.S.. The data that we have to give us confidence that tagmokitug is bringing some of the activity is seeing the activity in the second-line setting. So toripalimab does not have differential activity in the absence of something to stimulate the immune system, like chemotherapy. So tagmokitug has potentiated PD-1 in a less inflamed tumor. So we'll need to build out the dataset in the PD-L1 low. Clearly, we need more patients, more follow-up. We have 2 patients in the PD-L1 low, so happy to see that depth of response and that durability of response, and we'll continue to build that dataset out.

I'll just add, Brian, let me just add one more thing. You talked about JUPITER-06, so one thing, I know you know this, but I'll remind you, of course. JUPITER-06 was a China-only study, whereas our study is multi-regional, and I think that's also an important point. The second point to your comment about the addition of tagmokitug is, I think it's important to look at that question with the totality of the cohort. So we're seeing not only in second-line esophageal, where there's 2 arms, we're also seeing in second-line upper GI adenos that very clear dose differentiation in terms of the addition of tagmokitug to toripalimab at the higher dose as well.

Great. Thanks for the color. Maybe just a quick one. Just looking at the swimmer's plot that you presented during your webinar here. It seems that a lot of the patients have dropped off before you reach 20 weeks of treatment. Even though they have shown really nice partial responses at the week 12 endpoint. What are the reasons for them dropping off treatments?

Which tumor type are you talking about? Are you talking about second-line esophageal or -- maybe just clarify that.

Yes, front-line ESCC. I mean, second line ESCC, you also have one patient that already dropped off out of the 2 responders, right?

Got it. Let me just summarize some of the safety data there in terms of the drop off. We have had 4 out of the 10 discontinuing treatment due to a treatment emergent AE. Remember that in the first-line setting, there is a 4-drug combination in combination with cisplatin as well as 5-FU. Cisplatin is well known to have toxicity, in particular renal toxicity. A couple of those patients, 2 of the 4, dropped off due to either an elevated creatinine or some form of renal tox. The other couple dropped off due to a rash. Those are the reasons. One thing that we and so obviously, a probable immune relate, the rash is probably immune related. I think that was the split in terms of the actual drop offs.

Patients do still continue treatment, in terms of we have some patients who are still on study treatment, as I mentioned. Also we have a couple more additional patients to add to this specific set. But in terms of your question on drop off, a couple due to chemotherapy-related toxicity, so cisplatin in particular, which can be mitigated, and in a future study, we can of course swap out to carbo, which does not have as much renal tox, as an example.

The question comes from Swayampakula Ramakanth from H.C. Wainwright.

This is RK from H.C. Wainwright. Appreciate me having an opportunity to ask you questions. Most of them have been answered. I have just a couple of them. Rosh, just to understand how you're framing clinically meaningful benefit as you're targeting in each of these settings, both first line and second line, beyond just the response rate. For example, in the first line, what duration of response PFS and improvement, especially in swallowing or nutritional status, would actually justify having tagmokitug added to the PD-1 plus chemo, especially when you account for some of the toxicities and treatment discontinuations that you just talked about? And in the second line, specifically among patients that progress beyond PD-1, what response durability and PFS would make this chemo-free therapy clinically valuable?

Yes. Let me answer both of those questions, and thank you for the question. Your first question was on quality of life, essentially, and how this could affect quality of life. We did not measure quality-of-life measures specifically in this initial study. Obviously, it will be a future additional measure that we'll incorporate into later-stage designs. But I think it's pretty intuitive that typically, when you see a response there, quality of life will improve. So while I can't answer your question about specific metrics for level of improvement in quality-of-life measures, that's something we will be looking at in future studies. Also, I'll draw your attention to the CT scans that I showed earlier, which really shows that disappearance of that esophageal mass.

You can imagine, right, how that diminution in size or complete disappearance of an esophageal may help in terms of swallowing or in terms of nutrition status, et cetera. So that's your first question. I think your second question was in terms of what kind of metrics are we looking at in terms of durability for the second line setting. Was that your question?

Yes.

Okay. The current standard of care is pretty dire in terms of the median PFS. Again, while it's not yet mature, what we showed in the second line setting was a median PFS of around 5.5 months. The standard of care gives you somewhere between 2 and 4, depending on what treatment regime you're talking about. So that's- Again, we need to replicate this with a larger patient number and more duration. Again, I'll remind you, we haven't completed accrual as yet. 17 of 20 patients are currently in that second line cohort. So right now, based on a small data set, admittedly with pretty wide confidence intervals, given the small patient number, it's pretty encouraging given the rough benchmarks of the current standard of care of 2 to 4 months.

One quick follow-up. Are you prospectively going to define your go, no-go thresholds for these expanded cohorts that you're planning? Would you make that public after your discussion with the FDA?

Dr. LaVallee, would you like to take that question?

Yes, I don't think that we would make that public. I think it's the totality of the data, as we've always said. I mean, the thing that is compelling in the second-line setting is it is a randomized study, essentially. It's nice to have that dose response so you can have confidence in the tagmokitug effect. The other thing that's challenging in the second-line setting, to your earlier questions, is the PD-1 approvals in the first-line settings are relatively recent. So data sets in the PD-1 refractory patients are nascent, so really setting that up. But it would be a randomized study with looking at comparison to chemotherapy and seeing duration landmark effects that are exceeding expectations.

This concludes today's question and answer session. I will now hand back for closing remarks.

Thank you, Heidi. Thank you all for joining us today on our tagmokitug data reveal. I particularly want to thank our 2 advisors, our KOL clinicians, Dr. Adkins from WashU, our Head and Neck Specialist, and Dr. Dan Feng from Mount Sinai, to give the clinical perspective. Secondarily, I would just urge all of you to reach out to the company if you have any further questions about the data or our plans going forward. We'd be happy to chat, and we'll see you. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Afternoon, everybody. Thanks for joining us here for the next session. Really pleased to have Coherus with us.

I'm going to turn it over to Denny to make some opening comments, and then we can jump into Q&A.

Thank you very much, Matt, and thank you for the opportunity to speak at your conference this afternoon. So Coherus is about the business of overcoming immune resistance in cancer. And we do this, I think, with three of our products, which are very interesting. First of all, of course, we have a next-generation PD-1 Toripalimab brand name LOQTORZI, which we launched into NPC, which is moving along quite well.

This has demonstrated differential activity against KEYTRUDA in a number of settings. And I think the -- primarily the NPC market has shown some very strong 6-year survival data there and good positioning on the NCCN guidelines. However, in terms of the pipeline, we're very, very excited about Tagmokitug, which is a CCR8-driven Treg depleter, again, very focused. Treg Depletion is a fundamental mechanism of action to help overcome immune resistance. Tregs, as we'll talk about in just a moment, proliferate upon the destruction of tumor cells with a number of mechanisms. And it is supposed that if you were able to get rid of these Tregs selectively in the tumor microenvironment, then the antitumor response of T cells can be restored.

And then the last product, which I like a lot, of course, is Casdozokitug, which is an anti-IL-27. We're moving that forward in first-line hepatocellular carcinoma. IL-27 was discovered by Chris Hunter, Penn, as a fundamental mechanism for stopping immune response in barrier tissues, such as liver and lung and so on. We'll have a little bit more to say about that.

Importantly, though, after 2, 3 years after moving these things forward, this half of the year now is very exciting. We're getting ready to turn over our data cards on a number of these studies. We have six different tumors under investigation with our Treg depleter, Tagmo. And of course, we have the HCC study going with Casdozo. So we're happy to answer any of your questions around that. But I think it's an eventful time, a bit stressful watching data evolve, but we're having fun with it.

Great. Wonderful. So maybe we can just talk a little bit about your commercial program, and then we'll hop into the pipeline. But can you just, sort of, for everybody's benefit, talk about how big you think that product can be and obviously, sort of from a business standpoint, what that provides for you as you're developing the pipeline?

Sure. I think it's one of the key differentiators of Coherus as innovative oncology story that we have a commercial product that's out in the market launching and making money. So we're approved in nasopharyngeal cancer. We are the only available and approved therapy in the U.S., the only guys out there selling. It's about 2,000 patients a year. This translates to about $250 million in opportunity. We estimate that we'll probably be able to reach about 70% of that at maximum market share. That's perhaps $175 million per year.

We've been marching that product up. Last quarter, we did 15% quarter-over-quarter, which was pretty strong. We certainly won't do that every quarter, but we are happy to see it last quarter. When we -- last year -- last quarter, I think we did about $13.6 million in sales. When we get to about $15 or so million in revenue from that product, the cost of the commercial team, the COGS, the royalties and all that will all be taken care of.

So any sales beyond $15 million a quarter, we start to cover the overarching SG&A of the company, which, of course, is our focus. We project that next quarter, probably in the second half, Q3 or Q4, that will reach 30-plus per quarter with that product. I think that's a reasonable rate to achieve. At that point, the SG&A and the core burn of the company ex the clinical trial costs will be covered. So that will be a big deal for us and that we won't have to keep going back to the market just to keep the lights on and so on.

We've reduced the size of the company over the last 3 years to about 140-ish people from a max of about 360 as we sold off the Lucentis biosimilar or the Humira biosimilar, et cetera. So we've got a nice tidy little innovative oncology company here with a very well-controlled burn. So as I indicated about in 2027, we'll get to 30-ish plus and have the burn covered. And then ultimately, I think in '28, somewhere along there, we'll be able to, I think, hit a plateau on a quarterly basis. So that's like 40-plus per quarter. So there's a little extra that cover things that come up here and there. And then I suppose in 2029-ish, we'll actually get up to where we max out for the year.

But we're projecting 150 to, say, 200 sometime in that general time frame between '28 and '29. And I think that it gives us considerable operating latitude. The challenges that we have in the market there is that KEYTRUDA has been used in head and neck cancer for a long time. And these are the same physicians that are treating Nasopharyngeal cancer, even though with respect to etiology, it's a much different cancer.

So there's an educational process upon which we show them the 6-year survival data, which is over 65 months versus chemotherapy, which is 33-plus months, something like that. We show the 6-year survival data, the NCCN 1A guidelines and so on. And it's educational process. And we find them responsive once we show them that. But we do have to do that convincing. And so we're very focused this past year on, first of all, binding enough data to where you understand while the physicians are and who's writing the scripts, understanding where we're missing the scripts and then focusing the team in a sort of multiple disciplinary fashion to block and tackle our way through that.

So that's the lift that we're doing right now on that, and you'll get more updates on that as we go forward this year. The interesting thing, though, about having your own approved PD-1 is two or threefold actually. First of all, if you go to do clinical trials, you're not buying drug from other people. You have a proprietary PD-1. And as we pivoted the company strategically, that was one of the things that was most important to us to have one.

Secondarily, we're combining that with both Tagmokitug, the anti-CCR8 and Casdozo. So ultimately, if those are approved, we'll get an additional label indication approval for LOQTORZI for each of those indications and sell two vials -- two more of these for each sale. So I think that's actually a very efficient way to generate additional sales and additional label indications in the future. I think that's -- it's a differentiated story. I think that there's a challenge of overcoming the KEYTRUDA resistance, but we're up for it.

Okay. Great. And then maybe just one other commercial question. Just would you think about adding additional commercialized products into that sales force that you've built to gain additional leverage?

Absolutely. I think that once we get a little further on with the progress in the NPC, we'll have bandwidth to do that. We continually monitor developments in the market for additional products. We looked at a couple last year, for example. I think that you have to be very, very selective with particular products. Maybe the best ones, the ones that you developed yourself. But I think that we're open to collaborations and working with others and so on. But that certainly is top of mind.

Okay. Great. Great. So CCR8, Tregs -- look, I think investors right have heard a lot about Tregs, understand sort of the biology to a certain degree, but I want to understand, do you have the right Tregs? You're going to make the right impact on the tumor? What's your specific biology? So maybe we could just walk through a little bit of why you think you have the right approach here.

Sure. So certainly, Treg depletion, like a lot of things in oncology is an area of tremendous promise. But oncology by its nature, very nature is a prove me sort of area. There's countless companies where people didn't think their products were going to do very well, and then they did spectacularly well.

Treg depletion, I think, has significant promise, but the issue has to be that in which particular cancers, in which particular line of therapies can its benefit be realized. So first, in that direction, Treg depletion frees the immune system and potentially reactivates the T cells to go after the tumors. We were the first team to show remodeling of the tumor microenvironment. Last year, we showed data in a head and neck study in fourth line in which we showed Treg depletion and subsequent infiltration and proliferation of CD8-positive T cells.

In that very same study, we saw a significant diminution of a tumor. It was a 2.8 centimeter tumor in a patient's lung. So it was a head and neck patient with a lung metastasis. And we saw a diminution of that tumor. And that was really proof of concept. That happened with co-therapy with Toripalimab, so the activation of T cells pursuant to PD-1 administration. But that was a very, very exciting. Based on that data, Rosh and his team have gone forward now with a second-line study in head and neck, which we talked about on our call in August, and we're going to have a little bit more to say about next month.

Generally speaking, though, I think that one has to be careful with Treg depletion and the CCR8 agents. This was the discovery that the T regulatory cells in the tumor microenvironment were differentially expressing CCR8 on their surface was made by Rudensky & Company in 2016, Memorial Sloan Kettering. And the race was then on to try to find molecules that would attach to that CCR8 and then subsequently provide effector cell-driven depletion selectively in the tumor microenvironment. And of course, we've done that.

But this is a GPCR receptor, which is a very small piece of real estate, putting -- sitting there on the top of the cell. And so it has been very difficult to find significant -- sufficiently selective agents to do that because if you make an antibody, it will cross-react with a lot of different things. As a matter of fact, we were unable to -- we tried for 2 years, we were unable to make a selective antibody ourselves.

We acquired Surface Oncology, and they had screened their agent against 5,280 surface cell proteins in the genome, and they found that it only binds to CCR8, which is quite good. So we believe we have a best-in-class asset, high affinity textbook PK. And again, we've shown remodeling and so on. A couple of the players in the field, I think, are seeing various flavors of cross-reactivity, significant infusion site reactions or other types of side effects.

In general, Rosh could comment further. But in general, I think that the tolerability profile is very -- sufficient for us as we go forward here. But I think that is really the key. And that's why there has been attrition with respect to the CCR8 agents by a number of the players in the field. But I think there's 2 or 3 players, though, that probably have decent molecules that are going to go forward, and we count ourselves among them.

Okay. Great. Great. Well, maybe we should talk a little bit about the trials you're running, the tumor types you've picked. And sort of how that sequences with some of the data updates we'll get in the near future?

Sure. I'll tee up for Rosh. So overarchingly, there are six different tumor types that we're going after, given the proof of concept that we saw with the fourth-line head and neck.

The first is a second-line head and neck. We're then investigating the GI tract in a number of cancers, first, esophageal, second and first line, then a gastric and finally, CRC fourth-line colorectal. Additionally, we did a deal with J&J, and we're investigating late-line prostate cancer. So Rosh, do you want to talk a little bit about the second-line head and neck study?

Yes, absolutely. Thanks, Denny. So a couple of points I'll mention upfront. So we did a -- as Denny mentioned, we have a very broad program, but one that's well supported by the biology in that all of these tumor types have pretty good expression in terms of CCR8 levels within the tumor.

The second thing I'll say is that we have two protocols then that are active and a third protocol about to start. Protocol 1 is the head of second-line head and neck squamous cell program. Protocol 2 is the GI program that essentially Denny mentioned, which has 4 cohorts. It's second-line upper GI adeno, it's second and first-line esophageal squamous cell and then fourth line plus CRC. And then the third protocol about to start is the prostate cancer protocol with Pasritamig.

Before I just kind of dive into a little bit about what we're seeing so far, I think it's important to bear in mind exactly what questions we are asking of this program because I think they are a little bit different depending on which cohort we're talking about. For the 3 cohorts that are second line specific, so that is esophageal, upper GI adeno and head and neck, we're asking the question, can we reverse PD-L1 resistance because most, if not all, of these patients will have previously received a PD-1. So that's a very specific question we're asking.

For the first-line esophageal squamous cell cohort, we're asking, can we combine with chemotherapy, which then if we can safely and effectively do so, enables us to go earlier in the treatment paradigm. And then for the colorectal cohort, very late line, we're asking the question, can we convert a cold tumor and make it into a hot tumor, right? And then that allows us then to go earlier in the colorectal space. And of course, Pasritamig, we're asking the novel, novel question.

So what we've communicated so far in the second-line head and neck study, the 40 patients, it's totally fully accrued. At our last earnings call, we did communicate three things. First of all, number one, we are seeing an acceptable and manageable safety profile, which is very important in the context of the evolving CCR8 space. And in fact, also in terms of the evolving head and neck space as well.

Secondly, we communicated that we are seeing activity both in terms of response, but also in terms of duration. That duration is very important with IO specifically because that's historically where IO has benefited has been in extending that duration of therapy rather than purely response rates.

The third thing that we are seeing is enrichment of activity, and we're seeing enrichment in 2 areas: number one, those patients who are HPV positive. And secondly, in those patients who have a high expression of CCR8, so a lot of CCR8 within their tumor, we're calling that -- we've coined the phrase TIRI or Tumor Immune Regulatory Index, which is a measure fundamentally of the CCR expression within the tumor. One other thing I'll say is that with HPV positive specifically, which is where we're seeing a signal, or enrichment of that signal, that is where we feel that there is significant white space because if you look at the EGFR bispecifics, the ADCs, et cetera, in particular, the EGFR bispecifics are being focused mainly on or their efficacy is being driven by HPV negative.

So we think that's a nice space to play in, and I think our data is guiding us towards that space specifically. So more to come in October, but that's kind of a high-level summary of what we're doing and what we've seen so far.

Okay. Perfect. So I guess maybe two follow-on questions to that. So we'll also likely get peto data before the end of the year, it sounds like. So that's obviously a different [indiscernible]. So how does that -- how will that data influence how you think about head and neck as a population?

And then I think the second thing is, as you point, some of the tumor types you're studying, right, the standard of care is fairly robust and others like CRC, standard of care is very, very poor. So how do you think about sort of the bar that you need to see for some of these tumor types to move ahead?

Great question. So let's take two questions in turn. So first of all, peto, yes, absolutely. But that's what I was alluding to in terms of the EGFR bispecifics. peto in particular, so peto is the one that is looking at both HPV positive as well as negative. But if you look at the data so far, we still feel there's white space in the HPV-positive space because that efficacy so far has been driven really by HPV negative.

The second thing is the durability is hugely important. And I think -- I emphasize the importance of durability, but one of the key reasons for that is -- that is really what matters from the patient perspective. They want to live longer. It's also the approvable endpoint, right? So you don't get approved on response rate, you get approved on survival, PFS, durability essentially. So I think that's the second point.

And then the third point is there's a significant amount of toxicity. So if you speak to some of the KOLs, they will say there is -- the toxicity really needs to be managed for some of these EGFR bispecifics, rash, et cetera, et cetera. So I think that's where we could show an advantage. And that's also why I emphasize the acceptable and manageable safety profile we're seeing so far.

So to the second question, I think, yes, we are looking at fourth line plus, as you say, for CRC, maybe earlier lines for some of the other tumor types. But we are fundamentally looking at areas where there remains a clear unmet medical needs. Again, if you look at the head and neck space right now, the current standard of care is cetuximab, other chemotherapies, you're looking at a response rate of 13% to 15%. So the bar, at least in terms of response as well as duration, I mean, the PFS is about 2 months is pretty -- there's a lot to be improved upon, and that's where we are hoping that we can help.

As Rosh indicated, the KOLs we've talked to believe that the etiology of peto and the other EGFR-driven bispecifics is primarily in the HPV-negative space and the what's interesting with the data that we've looked at so far, as we indicated on our call, is that Tagmokitug appears to be working much better in HPV positive, and there appears also to be an opportunity to select patients on the basis of CCR8. And so I think selectivity in those 2 dimensions is something that we'll take a look at after we turn over the rest of the data cards. And look -- but I think that presents the opportunity, I think, for having a better impact on patients.

Got it. Okay. Helpful. And then I guess the last thing maybe on CCR8 is -- so could you just talk a little bit about the plan from here? So you'll get some of this data in. And this is sort of what I was alluding to in the prior question, how are you going to make decisions on what you do next from here? And do you need the whole cohort across all of these tumor types? Or might you take data from, say, head and neck and decide on a path forward alone with that?

Just to rotate that, that's a great question, which is -- it's just difficult to answer in the absence of data. But I'll answer the hypothetical regardless. I think, first of all, as Rosh indicated, we're going to develop a very good understanding where Treg depletion can be efficacious. What is the immune context of each of these and what can go?

I think what's very what's very, very interesting about Treg depletion is its ultimate combinability with some of the other therapies. ADCs, KRAS, radiation, VEGF, these tumor-killing modalities all generate Tregs. So therefore, it's the combinability. So we don't really feel that we're going head-to-head against peto, right, or we're going head-to-head against KRAS. We see that as a synergistic mechanism of action, whereby the ORR generated by these therapies can have the adjunct of duration added by Treg depletion.

So that's ultimately where we're going. So it's not really how we have to beat them on ORR out of the gate. It's how we combine. It is true, though, that we are combining now with our PD-1, so we can understand the activity of T cells and restoring the immune response. But we fully expect to continue to have partnership combinations as we did with J&J with T cell engagers, right?

T cell engager needs a T cell to engage. And if there's not one in the tumor microenvironment because they've been excluded by Tregs, that's an issue. So that's why they're very excited. All that being said, I think that would be very interesting across these tumor types, these 6 different tumors that Rosh is investigating to see how the presence of CCR8 and the signal are correlated. And I think that would be very interesting.

So if we see consistency, for example, from CRC and esophageal and gastric and so on and even head and neck, and we understand how we can follow the signal. I think that lends more credibility to that targeted therapy. And I think that's what's particularly interesting for us. That said, we have to also keep in mind, though, that these are early-stage studies. These are Phase I studies. They're not really controlled studies, single arm. So we'll have to follow up with the appropriate Phase II program and see what's very promising where we can roll into a pivotal.

Okay. Great. Great. So maybe we should switch to IL-27. I think as you referenced, right, the biology there is known. I guess the question is, how do you pick the tumor types that you think made the most sense? And how do you think about differentiation with your molecule?

Yes. Let me cover the mechanism of action for just a bit, then I'll let Rosh talk about the basket study that we did. So IL-27 is quite interesting. It's -- it's actually one of my favorites because of the very straightforwardness of the mechanism of action. IL-27 is in barrier tissues. It's responsible for turning off the immune response subsequent to invasion.

And it does that in 3 ways. It first up-regulates all of the checkpoints, PD-1, LAG-3 and all these different things. Secondarily, it down-regulates the expression of all the inflammatory cytokines, interferon gamma and so on. And thirdly, turns off a natural killer cell response. So this is a very, very powerful response.

In the knockout model, as you might recall, when you knock out rodent with IL-27 and then you give them a pathogen as an insult, the body will respond and deal with the pathogen and resolve it, but the immune system does not turn off the animal dies of autoimmune disease. So -- this is quite interesting. The -- what we did is we did a basket study across a number of cancers. And Rosh, why don't you just update on how that came out and how we got to the indication selection?

Yes. So as Denny said, so IL-27 is expressed significantly in barrier tissues, right, such as liver, lung and renal. So our initial study, our initial Phase I study did include those three tumor types. And what we saw was responses actually in those three tumor types, some as monotherapy, some as combination. So following that, we did move into first-line HCC with obviously, there's potential to move outside that, but our initial area for exploration based on that initial study is first-line HCC.

The study that we presented so far that is complete, we presented at ASCO GI last year, 2025. And what we showed was a pretty impressive 38% ORR and a 17% CR rate. So the study was Casdozo added to the current standard of care, which is Atezo, Bev, single arm, just adding to the standard of care. So I mentioned 38% what Atezo, Bev alone has given is 30%. And also, I mentioned a 17% CR rate, what Atezo, Bev alone has shown is 7.7%. So again, bear in mind, these are cross-trial comparisons, so they're not exactly like-to-like.

But nevertheless, I think very encouraging to see double what Atezo, Bev alone has shown in terms of CR. There was also very good durability, a couple of patients out in CR for a couple of years. And the PFS was 8.1 months, which again beats what the current standard of care does. Safety was pretty good as well, right? There was no added toxicity over and above the toxicities of Atezo, Bev alone. So based on that, we've moved on now into the study that we're doing, but that was essentially the rationale for the initial tumor type selection. And our initial focus is first-line HCC. We have the potential to expand into additional tumor types as well.

Yes. What I like about the Casdozo program is we're in the follow-on study already, right? Whereas with the Tagmo program, all well and good, but really, they're single-arm studies, they're not controlled. Casdozo has two doses of Casdozo, high and low together with Toripalimab and Bev versus Toripalimab and Bev alone. right? So you'll be able to see the IL-27 response. You'll be able to see if there's a dose response and you'll be able to see if the duration really pans out.

So I think when we get done with this study, while it may take a while to see that duration develop over the various scans, we'll be able to understand if it's indeed IL-27 driven. We have a -- we've got a good antibody for it, we can assay for it. And our conversations with the KOLs lead us to believe that they would be very welcoming of a targeted therapy where they could select the patients. So it's a question of how many of these patients, but this is first-line liver. So this is a very nice indication. It's a huge unmet need.

The other thing that I would say about Casdozo is it's very, very safe. There doesn't appear to be a lot of adverse events. It's very much just like using Atezo, Bev itself. So that's a very nice thing in cancer to have something with very modest side effect profile. But I'm pretty excited about it. It's -- I think the other thing from an investor viewpoint, just diverge for a minute, what I find interesting about it is the balance and the diversification that it brings to the portfolio.

So on the one hand, Casdozo is highly focused, very nice indication, very sort of a clean biology that you can test a biomarker right down the road. And on the other hand, Tagmo, although I suppose you could argue it has much broader potential clinical utility across a number of cancers and combination therapies and lines of therapies, very, very large, revolutionary. You have that inherent balance for your investors, and I find that very attractive.

And obviously, you're going to need that data to mature. It's a larger study, et cetera. Can you just talk about how you're thinking about the time line for that data set?

Yes, absolutely. So let me just reiterate the design that Denny was just talking about because, again, I think it's important to bear in mind what the aims are of the study. So it's 72 subjects. What we've done is we swapped out Tori or swapped out Atezo for Tori, two doses of Casdozo in combination with Tori, Bev versus Tori, Bev alone. That enables us to do three things.

Number one, first of all, characterize safety and efficacy with a higher number of patients. Number two, it allows us to get some data towards Project Optimus with those two doses of Casdozo. Number three, it allows us to get data towards contribution of components with the Tori, Bev arm alone to see what Casdozo adds on top. That's what the study is. That's what the aim is. So we completed accrual to the study around March. We are now just waiting for that data to mature.

what we anticipate is that the initial effect will be due to VEGF. So that will be the VEGF effect that initially causes that response because, of course, HCC it's a very vascular tumor. Vascular remodeling happens quickly. And then we anticipate that durability to be again with Casdozo, which is actually what we saw in the first study as well.

I'm sorry, I was just going to follow up from Rosh's remarks because you asked about the potential pivotals. The other attractive thing is you with Casdozo in terms of follow-on registration study is you're basically -- you're going on top of standard of care, which makes it very, very straightforward and very easy. I would like to be in that same situation with Treg depletion and Tagmokitug, where if you look into a second line or a first-line indication and somehow you can go on top of standard of care, I think that that's a better bet and a good spot to be in.

Yes. Now, very helpful. And I guess the last question here was just remind us on the -- in terms of development of the CRs that you saw in the initial study. So they obviously took longer to convert some of those. Exactly. That's why the durability here is going to.

Well, exactly. Yes, I think that's exactly what I was going to say that basically, the durability will take time to mature. So as I said, the trial completed accrual in March. We're just waiting for the sufficient number of patients to have had a sufficient number of scans in order to see -- to make a good judgment about the data. When that happens, we will communicate that data.

And the point that I would make with that is that's entirely analogous to what was seen when PD-1s first came to the forefront, right? You had chemotherapy, then you had chemotherapy plus the PD-1s. And where you see the benefit is not early in the response with PD-1 treatment. You see it on the tail, just like with Toripalimab, right, 67 months of response. Survival versus 33, 34 months just on chemo alone. So you see that at the tail end of the curve and the patients are living longer, and that's the approval endpoint. So that's how taking care of the immune response works. So we'll have to wait for it a bit.

Matt, I'll just make one last comment to your question. The other thing that we are looking at with the study is biomarkers, of course. So we'll be looking at baseline IL-27 levels, but also ctDNA as well. And that could be actually an early indicator of activity as well as a level of baseline disease.

Perfect. Perfect. Maybe just to round us out, obviously, you're a biotech company, Cash is an important component of the business here. So how are you thinking about your runway? How are you thinking about...

Well, the one thing about being a public biotech company is people have very good visibility into your cash and your burn at most times. I think we do a really good job with our cash and managing our cash going forward. I think we're very good with our organization, which is, I think, highly effective and very, very highly integrated. There's additional pieces of cash out there, for example, milestones from our partners that are lying around a few other things. But we focus on that quite a bit. We're very cognizant of that.

Ultimately, our strategy is to drive the company to SG&A breakeven on the back of LOQTORZI at the end of next year, bridge that with the required cash. And then I think if you go to the investors with the case, look, here's the data, here's the study, they can vote with their wallets. And I think that's really what you have to do. And the investors that we have talked to, though, when they look at our studies, particularly like the Casdozo study where it's controlled and so on, I think they view that favorably and the feedback that we've gotten from investors on how we are proceeding with Tagmokitug and understanding the biology of Treg depletion is very, very positive.

We're not out there just throwing mud on the wall and trying to understand what's going on. We're very systematically working through a number of cancers, a number of lines of therapy. We're looking at all the biomarkers. We're characterizing the immune environment. And so I think that's very thoughtful drug development.

Great. Wonderful. Great to have you both here.

Thank you very much, Matt.

Thank you.

Good day, and thank you for standing by. Welcome to the Q2 2026 Coherus Oncology, Inc. 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.

Thank you, Heidi. Good afternoon, and welcome to Coherus Oncology's Second Quarter 2026 Earnings Conference Call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus; Dr. Rosh Dias, Chief Medical Officer; Dr. Theresa Lavallee, Chief Scientific and Development Officer; Sameer Goregaoker, Chief Commercial Officer; and Bryan McMichael, Chief Financial 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'll turn the call over to Denny.

Thank you, Carrie, and thank you all for joining us this afternoon on our Q2 2026 quarterly call. As you know, we are now in an exciting period of initial clinical data generation and readouts, not definitive data reporting, and we'd like to provide you with the available insights on how things look so far. But first, let me make a few remarks about the scientific focus on overcoming immune resistance in cancer to provide you with a lens through which to view our pipeline and our development strategy.

Our review of the data on immuno-oncology drugs in cancer reminds us that immunotherapy's benefit is primarily seen at the far end of the survival curve, where it matters most to both patients and regulators. Additionally, the combination agents can make a substantial difference. A good example is the combination of chemotherapy and PD-1s, where PD-1s revolutionized cancer care by addressing immune invasion and showed some of the most pronounced survival benefits when used in combination with drugs that lead to tumor cell death. It's essential to keep in mind that tagmokitug as a Treg depleting agent is mechanistically positioned not as another response rate agent like chemo or ADCs, but as a horizontally enabling durability layer that removes the brake, Tregs, which potentially limit both depth and the durability of response with various active agents. This translates directly to our tagmokitug development program, which, first, represents a rational scientific framework to evaluate Treg depletion across a number of cancers and various lines of therapy for response and duration.

Secondly, it is deliberately constructed to provide insights as to where Treg depletion is best positioned with what combinations and in what lines of therapy and to identify the best patients for long-term survival benefit, the key approval criteria. And importantly, to elucidate the relationship of Treg depletion with immune context, T cells and other factors necessary for efficacy.

Understanding the relationship between biomarkers and immune context factors and response duration requires a robust biomarker program for context and to provide the direction for future development. We have this in place and are in the process of analyzing this data. Our immune resistance focus on survival and duration of clinical benefit also translates to the casdozokitug program and the ongoing first-line HCC study in combination with toripalimab, and bevacizumab, which follows the previous casdozokitug study that demonstrated improved survival and strong complete response data. But noting both the duration and the depth of response took several months.

Again, we have the appropriate biomarker program in place and are in the process of analyzing this data now that CADILYZE study is fully enrolled. We previewed this for you on our last call. And today, on this call, Dr. Lavallee, our Chief Scientific and Development Officer, will go further and discuss with you TIRI, our tumor immune regulatory index in the context of our Tagmokitug studies. Theresa will be followed by our Chief Commercial Officer, Sameer Goregaoker, who will review the LOQTORZI business; and Bryan McMichael, our Chief Financial Officer, who will give you some color on our quarterly operational results and cash and balance sheet.

But first, let me hand things over to Dr. Dias, our Chief Medical Officer, to provide you an update on the emerging data from the clinical studies. Rosh?

Thank you, Denny. I'm pleased to report that 3 of our studies have completed full enrollment, and I'm able to provide some initial color on emerging data sets. In addition to our [ CADILYZE ] study in first-line HCC already being fully enrolled, our TAGMO cohorts in both head and neck squamous cell and colorectal cancer are also now fully enrolled. However, other cohorts have yet to complete patient accrual. This is important to keep in mind since as we approach initial data readouts for our clinical program, the 2 key determinants of data timing will be the numbers of patients in study and also the numbers of scans that may be required to provide a meaningful indication of activity.

In addition to providing information of response, having a sufficient number of scans provides valuable information on durability of activity for both response and stable disease. This is particularly important as much of the benefit with IO has been seen in extending the tail of the curve, i.e., the durability of activity.

We have 2 active protocols and one to initiate in the coming few months, and let me take each pipeline program in turn, starting first with the TREGCHECK program for tagmokitug, our highly selective CCR8 cytolytic antibody. Our first protocol is looking at TAGMO in head and neck squamous cell carcinoma. This is a 40-patient study investigating 2 doses of TAGMO in combination with TORI in a second-line head and neck squamous cell population, asking the very specific question of whether we're able to reverse PD-1 resistance in the second-line population.

As mentioned, I'm pleased to report that this is now fully enrolled. The study builds upon the prior data we previously communicated at AACR last year, where in earlier stages of this same study, we demonstrated clear tumor remodeling with TAGMO monotherapy and a partial response in a fourth-line patient with HPV-positive head and neck squamous cells out of 7 patients who received a combination of TAGMO and TORI. The ongoing study is yet to have a sufficient number of patients reaching maturity of data that would trigger formal data cleaning, but I can make the following high-level comments based on emerging data from a subset of patients.

Firstly, the combination of TAGMO and TORI have thus far shown an acceptable and manageable safety profile. Secondly, we've seen evidence that the addition of TAGMO to TORI for the treatment of PD-1 resistance in the second-line head and neck population has shown activity with respect to response rate and treatment duration. In particular, in our analyses of baseline tumor samples, preliminary data from the early batches of samples indicates there may be an immune context that enriches for patient benefit. Based on the small sample size of the data we have in the subset of patients with matched biomarker data, we're seeing greater activity in patients who are HPV positive, an area where there remains a significant unmet medical need and in patients who have a higher tumor immune regulatory index or TIRI score, a point on which Theresa will elaborate on momentarily.

With the important caveat that these initial observations are based on data that is not yet fully mature and importantly, the data that has not yet been formally cleaned and may therefore be subject to change. If these trends persist with further maturation of data, this may support an [indiscernible] strategy in head and neck squamous cell carcinoma.

I anticipate further maturation of the data over the coming months, including analysis of the remaining biomarker samples and current projections indicate we're likely to have all patients having had sufficient follow-up and biomarker analyses to enable a formal disclosure in October.

Moving on to our second protocol, which investigates TAGMO in a selection of GI cancers. Cohort A is a second-line upper GI adeno population, including gastric adenocarcinoma, esophageal adenocarcinoma and GEJ cancers with 40 patients, again, with 2 doses of TAGMO in combination with TORI. Whilst we are nearing completion of accrual, we have not yet done so, and therefore, it's too early to make any more detailed comments on this cohort.

In terms of our projections, we anticipate that the full complement of patients will have had a sufficient number of scans in the coming months, and therefore, we currently anticipate the ability to report data later this year. Cohort B and C are investigating the TAGMO-TORI combination in second-line and first-line esophageal squamous cell carcinoma, respectively. Enrollment continues in both cohorts. The second-line cohort is looking at 20 patients with the doublet combination and the first-line cohort adds in chemo as well to the doublet as a safety cohort of 12 patients. Thus far, we've seen an acceptable and manageable safety profile.

Cohort D evaluates TAGMO in combination with TORI in colorectal carcinoma with 20 patients in the fourth-line plus MSS population with initial focus on non-liver mets and with an intention to expand to a potential additional 21 patients and also a liver mets population. I'm very pleased to say that despite being the last cohort to start, we've completed accrual of the initial 20 patients, which really is a clear recognition of the unmet medical need in colorectal carcinoma. Current projections indicate that all 20 patients should have had a sufficient number of scans in the next couple of months, and so we continue to anticipate initial data to be available later this year.

Finally, the third protocol, which is designed to accommodate TAGMO combinations with novel agents remains on track to initiate in the fall time frame with its first cohort of TAGMO in combination with Pasritamig, J&J's T-cell engager in metastatic castrate-resistant prostate cancer.

Let me end with Casdozo in hepatocellular carcinoma. This is a 72-patient study investigating the Casdozo-TORI-bev combination in the first-line HCC population and is designed to achieve 3 things: data to support both contribution of component and Project Optimus and of course, to further characterize efficacy and safety. As a reminder, this builds upon the encouraging data from the prior study where Casdozo was added to the current standard of care, atezo and bev. Despite completion of accrual in March, currently only around 50% of patients have had 3 scans. Thus, we have not as yet reached a sufficient level of data maturation to trigger a formal analysis. Additionally, the ctDNA and baseline IL-27 level collection and analysis is still ongoing. With this in mind, we anticipate initial data availability in Q4 this year.

With that, I'll turn it over to Theresa. Theresa?

Thank you, Rosh. Good afternoon. To further expand on what Rosh has mentioned on the TREGCHECK study, early available data from a subset of patients with head and neck squamous cell carcinoma who are resistant to a PD-1 inhibitor therapy showed that TAGMO can rescue PD-1 inhibitor anticancer activity. And this signal may be enriched if the tumor immune regulatory index or TIRI score was detected. We have described our TREGCHECK clinical development program as one that is intentional and designed to determine the best immune context where patients will benefit from Tagmokitug treatment.

Why do we think this is important? Because it has proven to contribute to the success of the PD-1 drugs. It is well understood that tumor PD-L1 expression can be required to enrich for patients who will benefit from PD-1 and PD-L1 targeted antibodies. This is because it defines the immune context for when the treatment can reinvigorate the immune response in the tumor. The level of PD-L1 expression required for treatment varies across tumor types from a score of greater than 1, 10, 20, 50 and also varies whether the treatment is monotherapy or combination treatment. Identifying a TIRI score as a tumor immune regulatory index that enriches for patients in the PD-1 resistant space to treat with tagmokitug and toripalimab has the potential to be informative.

It is satisfying to see that we are observing a higher TIRI score in the HPV-positive tumors. And in an interim analysis in a subset of patients, we are seeing improved clinical benefit rate in head and neck cancer patients whose tumors are HPV positive. We need to stress that this is early data and not only are the numbers small to date, but this analysis is also retrospective. However, given that it is related to the target CCR8-positive Tregs, we are encouraged and focused on building on these data as we consider development strategies. In particular, HPV-positive head and neck cancer is a high unmet medical need as a growing incidence and limited treatment options.

Now the question that we will explore is whether the same TIRI score will enrich for clinical benefit in other tumor types or in the first-line setting with and without chemotherapy. As I just walked through, a focus of our clinical development program is to evaluate immune context and biomarker enrichment opportunities. And a second aim is to explore which combinations are tolerated and significantly improve activity in combination with tagmokitug. We continue to show tagmokitug and toripalimab are tolerated. We will report in the coming months on the full chemotherapy cohort and additionally, expand to a new combination when we initiate the study with Pasritamig, a T-cell engager.

Now to go back to head and neck cancer. We are aware of the rapidly emerging treatment landscape and the anticipated shifting standard of care. The EGFR bispecifics in ADC have shown impressive overall response rate, but come with an appreciable level of toxicity and some with more frequent dosing schedules than IgG-based monoclonal antibodies. Some of these therapies may result in short-term responders that may not drive meaningful overall survival. It is important to point out that there are distinct differences between immunotherapy and targeted therapy responses.

Immunotherapy often has a lower overall response, as was seen in the KEYNOTE-048 Phase III study for pembrolizumab in head and neck cancer, but delivers durable clinical benefit and raises that tail on the survival curve. The pembrolizumab monotherapy arm in KEYNOTE-048 had the lowest overall response rate among the 3 arms, but had a strong tail leading to an OS benefit that supported approval. For [ TAGMO-KEYTRDA ], we are focused on the tolerability profile, dosing schedule and ability to deliver durable benefit.

Now let me turn it over to Sameer, our Chief Commercial Officer.

Thank you, Theresa. We are pleased with our commercial execution in Q2 as we continue to capitalize on the opportunity to establish LOQTORZI as the leader in NPC. The brand has 2 powerful engines, compelling 6-year data that demonstrates superior efficacy and preferred NCCN guidelines that reinforce LOQTORZI as a clear treatment choice for NPC patients. Q2 net sales reached $13.6 million, representing a 15% quarter-over-quarter growth. Importantly, demand rebounded to the 10% to 15% quarterly range following the seasonal slowdown earlier in the year. During the quarter, we also delivered our highest number of new patient starts since launch. At the same time, patient discontinuations returned to the longer-term historical levels following the temporary increase we observed in Q1. We also continue to see gradual improvements in duration of therapy.

Taken together, these trends point to a healthy durable revenue base, giving us confidence that we will meet our long-term projections. As we look to the future, we see significant runway ahead of us. Our expanded claims analysis shows meaningful opportunity to further reduce inferior chemotherapy alone, particularly in the community setting. In addition, we remain focused on displacing off-label IOUs and supporting appropriate treatment duration for current patients. To capture these opportunities, we have continued to invest in capabilities that enable us to identify, educate and engage the right physician at the right time using physician-level claims data. We continue to make education on the 6-year long-term survival data central to every customer interaction. Recent advisory boards confirmed that this data is very motivating and can drive meaningful physician behavior change. Additionally, an innovative pilot program with leading HCP AI platform is now live, further enabling timely physician education.

Looking ahead, we expect average quarterly growth in the 10% to 15% range, supported by broader adoption across segments. Importantly, our experience shows that once a physician gains experience with LOQTORZI, utilization deepens over time, thus reinforcing the durability of our growth opportunity. In summary, we exited the quarter with renewed momentum and strong execution. We remain confident that LOQTORZI is well positioned to achieve a $15 million quarter in 2026, a $30 million quarter in 2027 and a peak market share quarter by 2028, consistent with our prior projections.

With that, I'll now turn the call to Bryan McMichael, our Chief Financial Officer.

Thanks, Sameer. Q2 2026 marked the 1-year anniversary of the divestiture of the UDENYCA franchise, which allowed us to decrease our secured and convertible debt by over 90% as well as reduce our overarching cost structure and core cash burn rate as we refocus the business. The benefits have been positive and significant. R&D from continuing operations for Q2 '26 was $21.4 million, down from $26.3 million in the second quarter of the prior year. The decrease was primarily due to savings from reduced headcount and lower clinical trial and R&D manufacturing costs. SG&A expense from continuing operations was $21.0 million in the second quarter, down from $26.0 million in Q2 2025. The decrease was primarily due to savings from lower headcount and reduced operating costs following the exit from the biosimilar business. Q2 extends our streak to 6 quarters in a row with decreasing SG&A expense from continuing operations going back to Q4 2024. For the full year 2026, we expect combined OpEx to be between $170 million and $175 million.

Furthermore, during Q2, we significantly reduced our liabilities from legacy biosimilar business. We expect the remaining obligations to be substantially settled by the end of the year and thus cease to burn cash. Specifically, accrued rebates and reserves, which primarily comprise balances related to divested products, decreased from $28.8 million at the end of Q1 to $14.9 million at the end of Q2. Importantly, this reduction came mostly from changes in estimates due to uncertainties being resolved favorably and not from the use of cash. Additionally, TSA payables and accrued liabilities decreased from $61.6 million at the end of the prior quarter to $22.7 million at the end of Q2. As covered by Sameer, LOQTORZI net revenues continue to increase in line with expectations. For the full year 2026, we expect LOQTORZI revenue to be between $57 million and $62 million.

Turning to the balance sheet. The total of cash, cash equivalents and investments at the end of the second quarter was $105.3 million, down from $167 million at Q1. As I mentioned earlier, about $39 million of this decrease was due to TSA obligations, and we expect that this use of cash will be substantially diminished as we headed into 2027. We reiterate that we believe we are sufficiently funded through key data readouts in 2026 and 2027. Q2 was the first in a series of 4 consecutive quarter milestone earn-out periods from the UDENYCA divestiture. Based on buyer reported results, the $37.5 million milestones were not achieved in Q2, but they remain eligible for achievement heading into Q3. Achievement remains subject to finalization of the buyer's results, including any permitted adjustments under the asset purchase agreement.

With that, I will hand it back over to Denny.

Thank you, Bryan, and thank you all for joining us on our Q2 2026 call. As you have heard, we are in an exciting time of maturing data across the pipeline programs with good financial results across sales, costs and cash. At the 1-year mark post divestitures, we are building clear organizational momentum. I am particularly looking forward to the second half of this year and the projected public disclosure of especially mature data sets in October. We remain encouraged about the pipeline and the potential to advance tagmokitug and casdozokitug to overcome immune resistance for cancer patients.

[Operator Instructions] We will take our first question and the question comes from the line of Paul Jeng from Guggenheim.

For TAGMO, I thought your comments on the early data from the head and neck cohort and Series 4 are really interesting. Do you see any potential to prospectively enroll patients based on HPV status as the study progresses? And have you also looked into orpharyngeal versus non-orpharyngeal as a possible [ asatciation ] factor? And I have a follow-up.

Okay. Great. Paul, thanks for the question. I'll let Dr. Dias answer that.

Thanks, Paul, for the question. So yes, I think the plan right now, Paul, is to continue accrual and to continue follow-up, most importantly, obviously, to the head and neck cohort. We are still waiting for biomarker data samples to come in. So I think that will really inform how we proceed. And I think we'll be ready in October, as I mentioned, to really communicate that data more formally. Your point about oropharyngeal carcinoma is well taken. Obviously, that's where a lot of the HPV-positive disease is. So that will be part of the -- how we look at the data and we communicate it in the October time frame.

What's your follow-up, Paul?

Yes. So second question is on Casdozo. Just for the Phase II study, you mentioned the data might evolve with subsequent updates after the one coming up in the second half. Do you have any visibility into when you might be able to pull the trigger on a Phase III? Is it enough to see some mature response rates? Or are you going to wait for overall survival on that study down the line?

Yes. Thanks again, Paul. So I think overall survival certainly will take some time to develop. So I don't envisage having to necessarily wait for an overall survival endpoint in order to proceed. I think, again, we'll do some updates later this year. We do anticipate with the data maturing as it is, we'll have something to say towards the end of this year. And then it's going to be subsequent follow-up in terms of the numbers of scans and again, the durability question. But no, I don't envision that we'll need to wait for formal overall survival analysis.

We will take our next question and the question comes from Brian Cheng from JPMorgan.

Maybe just to start off on LOQTORZI. You guys have guided 10% to 15% quarterly growth here. I'm curious if you can give us a better sense of what is driving the improvement in duration of therapy here? Are you seeing a greater shift from patients that are coming from first-line usage, particularly after your 6-year JUPITER-02 data read? And then I have a quick follow-up.

Okay. Sameer, do you want to answer that for Brian?

Sure. Yes. Thank you, Brian. So Brian, I think what's driving our growth in this quarter is the same thing that's been driving in previous quarters. There's way too many patients who are receiving chemotherapy alone and off-label IOs, and we're in the process of converting those physicians to start using the proven alternative, the proven preferred treatment of LOQTORZI. So as we did in previous quarters, we got more physicians using LOQTORZI for the first time, and we had more physicians using LOQTORZI for a subsequent time. Secondly, regarding duration of treatment, we're seeing a gradual increase in duration of treatment. And that will continue, I believe, to be gradual because of our dual indication, where we also have the second and third line indication, which has pretty low duration of treatment. So we have headroom both on new patient starts as well as duration, which we will continue to accomplish in the coming quarters.

Brian, did you have a follow-up?

Yes. And maybe just one quick one to touch on TAGMO heading into the head and neck data read later this year. I'm curious if you can talk through when -- as we think about the data read, how do we get a better understanding of TAGMO contribution on top of TORI, right? Are there any specific metrics or any biomarkers that you think investors really need to lean on? And whether at the data read, whether you'll be able to establish that association of these changes you see in those biomarkers to the durability response clearly?

Great question. Dr. Lavallee?

Yes. And obviously, incredibly topical given the recent discussion at the advisory committee. This is a PD-1 refractory population. So these patients are progressing -- the patients enrolled have progressed on prior PD-1 therapy. And we're looking closely at the time between progression and enrolling on our study. So immediate progression and then enrolling would be they're not responding. So the addition of TORI plus TAGMO has rescued that resistance. Having it associated with a metric that has within it the target CCR8 positive Tregs is also reassuring.

And of course, we have different biomarkers that we're looking at as we always do in terms of showing the immune activation specifically of TAGMO versus TORI alone. So that will be a robust conversation with the FDA, but we have a lot of plans to look at the contribution of effect robustly and early to save on patient numbers having to contribute to that.

We will take our next question. And the question comes from Jay Olson from Oppenheimer.

Congrats on all the progress. Since LOQTORZI continues to deliver strong growth, you had the highest number of new patient starts since launch and improving treatment duration. Can you just comment on how you expect various LOQTORZI growth drivers to evolve over the long term, including continued penetration within NPC, longer duration of therapy or combination opportunities for LOQTORZI across other tumor types? And then I had a follow-on, if I could, please.

Thank you, Jay, for the question. I think I'll start with what we don't anticipate in the foreseeable future. We're not pursuing a combination in NPC at this point, but we have plenty of opportunities within the NPC current indication that we have. As I mentioned earlier, we're still seeing a pretty high level of chemotherapy used in the community setting, and we're just going practice by practice, physician by physician talking about our 6-year data, and that is having a significant impact. As I mentioned in my prepared remarks, we did multiple ad boards, and we talked to physicians who have never seen this data. And upon seeing this data, they were completely overwhelmed by the strength of this data. So really educating on this data and getting the nonusers on board is a critical priority right now.

The second priority, as I mentioned earlier, was the duration of therapy is also important because there's 2 drivers in duration therapy. One is getting more earlier line patients on therapy. And we also see for first-time users, some inappropriate dosing and discontinuations. So our focus is on educating those physicians to kind of put a stop on that. So those would be my priority drivers for LOQTORZI.

Sameer, can you comment a little further on what we're seeing with respect to the breadth and the depth of adoption?

Yes. So breadth of adoption is really important because we're seeing almost -- our market share is growing, and we're seeing more than half of our addressable physicians had not used LOQTORZI. And it's purely because of an awareness issue. They don't see that many NPC patients. And when they do see an NPC patient, they're not -- LOQTORZI is not top of mind. So we're growing our breadth -- every quarter, we're getting a pretty high number of new accounts and new physicians using LOQTORZI. So that breadth is really important component. The second one is depth, right? Because every time we get a physician converted to LOQTORZI, we want to make sure that they continue to use LOQTORZI for every single subsequent patient. And we're making good progress there. We're seeing a pretty good depth and repeat use of LOQTORZI in the current new physicians who are using LOQTORZI.

Great. And if I could sneak in a follow-up question on TAGMO. Based on the data you've seen so far, as we look ahead to your October data disclosure, what would you like investors to focus on, especially any metrics besides ORR that you think should be important to watch out for?

[indiscernible] Rosh.

Yes. Thanks, Jay. Great question. So I think we've always talked about the need to look at the totality of evidence, and that's what we will be focusing in on. So as we approach the October disclosure, what we'll be looking at, obviously, as you mentioned, in addition to the overall response rate is also very importantly, the clinical benefit rate. So that is the response rate of stable disease, the durability of that stable disease and response as well. And I think those will be very important measures in addition to, of course, the safety and tolerability. We already spoke about the EGFRs and some of the toxicities there. So I think this will be another important factor, and then we'll be looking at those same metrics within the different biomarker analyses as well.

Your next question comes from the line of Colleen Kusy from Baird.

It's Nick on for Colleen. Just had one on the Casdozo program. So just with upcoming triplet data in HCC, just wanted you to talk about the metrics you expect to show there? And then just specifically, what results do you think you would need to show to come away with more confidence on the triplet in this indication? And particularly, is there anything else we should be paying attention to as ORR would likely not be as high as it will be with more mature data?

Yes. Thanks for the question. So again, as I mentioned earlier, we'll be looking at the totality of data, right? So yes, response rate, we'll be looking at the durability of the CBR, et cetera, et cetera, everything that I mentioned previously. In addition, we're also looking at the ctDNA to guide how we think about the potential for response durability and survival. And then we'll also look at baseline IL-27 levels as well to see whether we -- how those may correlate with what we are seeing. We pointed this out previously. And one thing to bear in mind is that this data in HCC in particular does take some time to mature. If we look at the previous study, there was some time to get a baseline and then increase in response rate at baseline and then a deepening of the response. So that's kind of our expectation here as well, but we'll be looking at all of those different metrics that I initially alluded to.

[Operator Instructions] We will take our next question, and the question comes from Douglas Tsao from H.C. Wainwright.

Just Sameer, you made a comment about needing to correct dosing with some clinicians. And I was just curious if you could provide more detail in terms of what you're seeing or what is happening there?

Yes. I mean I'll just touch upon it. This is some early analysis that we've done this quarter where we found some opportunities. We have 2 indications. Our frontline indication is a Q3 weekly dosing and our late-line indication is Q2 weekly dosing. So we had a suspicion that some physicians might not be dosing for the indication and doing a Q 3-week dosing where it deserves to be a Q2-week dosing. So that's an opportunity for us to address. Additionally, also our indication is to treat to progression and not for 6 cycles. So that's another area that we might have an opportunity to correct and drive appropriate dosing of the drug. Again, I would stress that, that's a secondary opportunity. Our biggest opportunity is to get the people who are not using LOQTORZI to get using LOQTORZI, but we will also be driving appropriate dosing with our existing physicians.

And Sameer, I mean, I understood that it's not the sort of primary initiative. I am curious, though, how material or if you can give us some sense of the scale of the problem that might -- that you're sort of maybe -- how much sort of revenue is being left on the table because of some of these dynamics?

So I think I'll just say that we have significant opportunity on the duration upside. I can't put a number right now because this is all based on claims data, and we're just really digging a little deeper into it. So give us a little bit of time to dig a little further. But what I will say is we did see some signals of opportunity there.

And Sameer, if I can, just one follow-up on that. I mean, have you engaged with clinicians and had the opportunity to sort of just interrogate them in terms of what might be happening? Is it purely just a misunderstanding of the dosing? Or do they have sort of some different perspective in how they want to use the drug?

I think it's purely a misunderstanding of the dosing. Because remember, as I mentioned earlier, they're not using -- they're not treating NPC more than maybe once a year. And when they see it, unless we are in the office before they initiate the therapy and educate them exactly how to do it, there's an opportunity for misdosing, right? So it's primarily an educational issue that we are trying to address.

There seems to be no further questions. I would like to hand back for closing remarks.

Thank you, Heidi. Thank you all for joining us on our Q2 2026 call. We're happy to give you our current updates on our clinical development program and our good progress with respect to the sales. I want to thank Sameer for the 15% increase. Just want to remind you, there'll be a number of investment conferences that we will attend in New York and in [ Byrons ] in September, and we look forward to updating you on our clinical progress very excitingly in October. Thank you.

Goodbye. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Q1 2026 Coherus Oncology, Inc. 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.

Thank you, Heidi. Good afternoon, and welcome to Coherus Oncology's First Quarter 2026 Earnings Conference Call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus; Dr. Rosh Dias, Chief Medical Officer; Dr. Theresa Lavallee, Chief Scientific and Development Officer; Sameer Goregaoker, Chief Commercial Officer; and Bryan McMichael, Chief Financial 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'll turn the call over to Denny.

Well, thank you, Carrie, and thank you all for joining us this afternoon on our Q1 2026 quarterly call. Let me first give you a quick flyby of the company's strategy to make sure we level set everyone, including our new investors. That strategy starts with LOQTORZI, our next-generation differentiated PD-1 inhibitor, which is both a revenue generator in the context of nasopharyngeal cancer and a revenue multiplier in the context of its combination with the novel molecules in our pipeline, such as casdozokitug, which we are exploring in liver cancer and tagmokitug, which we are exploring across a number of cancer indications, including gastrointestinal, head and neck and most recently, prostate cancer.

We are executing a well-integrated financial, commercial and development strategy that maximizes LOQTORZI's potential across both these dimensions while moving the pipeline forward efficiently.

NPC is large enough to cover the core cash burn at a projected $175 million a year at peak share, which does not include clinical trial costs, something which we view separately. Proprietary combinations of LOQTORZI with the pipeline asset translates to a 2-for-1 win. Label expansion for LOQTORZI included upon any approval. This will, of course, also translate to commercial synergies. This is how we can target $33 billion in market opportunity with our current efforts.

The third leg of the strategic triad is a Treg depletion with tagmokitug across cancers and across nonproprietary combinations, which we view as a foundational Treg depletion platform and not merely another checkpoint adjunct. We further wish to explore Treg depletion as a potential new scaffold across cancer therapies. Tregs broadly mediate immune response and cancer hijacks immune mediation to grow and proliferate. Many cancer therapies either result in or are limited by Tregs [indiscernible]. Our strategic objective then is to broadly deploy tagmokitug across cancers and nonproprietary therapies.

Last quarter, we concluded the first such arrangement with J&J in prostate with pasritamig, a T-cell engager. We are currently exploring other partnering opportunities, which include not just T-cell engagers, but ADCs, radiotherapy and various biospecifics. Now as we have been saying for some time across all of our presentations, CCR8+ Treg depletion could be challenging for a lot of reasons. You need to have the right molecule and the right target. The right molecule translates to a number of things across selectivity, affinity, pharmacology and all the rest. And the right target translates to immune context and the nuances of the biology. More recently, it's become clear that the therapeutic promise of Treg depletion, notwithstanding some market participants are pausing or stopping the programs, while others are accelerating and expanding their programs.

It's essential for all of us to understand the nuances playing out. Accordingly, I've asked my Chief Scientific Officer, Theresa Lavallee, to spend a few minutes with you today and provide a lens through which to view the field's evolution. I hope you find it useful. Also today, Rosh Dias, our Chief Medical Officer, will update you on the trials, the enrollment and the timing results. Sameer Goregaoker will review the Q1 revenues as well as provide an update on our commercial execution.

We continue to project that we will hit some $15 million per quarter sometime this year in 2026 and $30 million to $35 million per quarter sometime in 2027 and a market share peak of about $44 million per quarter sometime in 2028, which translates to about $175 million a year.

After Sameer, Bryan McMichael will review for you our financials. And with that, now let me turn the call over to Rosh. Dr. Dias?

Thank you, Denny, and good afternoon, everyone. We continued to advance our highly focused clinical development program for our pipeline molecules, casdozokitug and tagmokitug through Q1, and we're pleased with our progress in both molecules with accrual progressing well, and we are tracking to plan.

Recently, we announced that we have completed our target accrual to our CATALYST-202 randomized study in first-line hepatocellular carcinoma. As a reminder, this is a 72-patient 3-arm study investigating 2 active doses of casdozo in combination with toripalimab and bevacizumab versus tori/bev alone and is designed to further characterize the efficacy and safety of this triplet as well as address FDA's Project Optimus and contribution of components.

This study builds upon the previous data we presented last year at ASCO GI, where the combination of casdozo on top of the current standard of care of tori and bev demonstrated an overall response rate of 38% and a very encouraging complete response rate of 17%, both of which are greater than the historical data for atezo/bev alone of 30% and 7.7%, respectively. Patient accrual has gone well, and we anticipate having initial data available around the midyear time frame, as projected. Given what we observed in the prior Casdozo HCC trial, we expect the response data to mature over time after that, perhaps quarter-to-quarter.

Moving to tagmokitug, our CCR8 cytolytic antibody. We're currently running 2 active protocols in a targeted clinical program in tumor types where CCR8 intratumoral expression levels and the demonstration of activity previously in the CCR8 field provide rationale for investigation. Our first protocol expands our approach in head and neck squamous cell carcinoma and builds upon the late-line head and neck squamous cell data we presented at AACR 2025, where we demonstrated tumor immune cell remodeling to a more cytotoxic state with tagmo monotherapy and a partial response in the fourth-line patient with the tagmo-tori combination. Our current 40-patient expansion explores 2 active doses of tagmo in combination with tori, specifically in a second-line population. Accrual has progressed well, and we anticipate having data for 40 patients with a varying number of scans around the midyear frame.

Our second protocol looks at multiple cohorts under an umbrella protocol as previously discussed. Cohort A investigates the tagmo-tori combination in 40 patients with second-line upper GI adenocarcinoma, which includes the gastric adeno, gastro-esophageal-junction adeno and esophageal adenocarcinoma in 2 dose levels of tagmo in combination with Tori. This cohort is ongoing and continues to accrue well. We anticipate having initial data available midyear as projected.

Cohort B, C and D are all active and accruing, and we remain on track to show initial data through the second half of this year as previously communicated. Cohort B and C of this protocol are in esophageal squamous cell carcinoma, where the activity of Tori irrespective of PD-L1 status is particularly marked and forms the basis of tori's approval in Europe as the only PD-1 approved across all PD-L1 levels in this tumor type.

We're investigating the tagmo-tori combination in second-line ESCC and in first-line ESCC, we're exploring tagmo and tori in combination with chemotherapy as a safety cohort.

Cohort D is exploring tagmo and tori in fourth-line plus microsatellite stable colorectal carcinoma without liver-mets, an area of increasing incidence, particularly in younger age groups and where there is a large unmet medical need as the current standard of care demonstrates very limited benefit.

Lastly, we've made excellent progress on the J&J pasritamig T-cell engager combination cohort of tagmo in prostate cancer, which will be the first of a new multi-cohort protocol, which is an approach that will enable us to add additional tagmo combination cohorts with other novel mechanisms under a single protocol efficiently. We continue to anticipate first patient in this fall.

With that, I will hand it over to Theresa. Theresa?

Thank you, Rosh, and good afternoon. Today, I will cover 3 topics. Two aspects for tagmokitug, as the CCR8 competitive field is evolving, I will briefly review the importance of pharmacology and drug development. And then I will review our own tagmokitug pharmacology data to date. These data have supported the opportunity to expand tagmokitug development with J&J T-cell engager, pasritamig, a novel combination with CCR8 depleting antibodies and a potentially complementary anticancer therapy. We are excited this is our first nonproprietary combination to advance to clinical development.

So, let me start with reviewing some of our analysis plans for the casdozokitug randomized CATALYST-202 study. Having the casdozokitug study fully enrolled now allows for the biomarker analysis to be done. We have prioritized 2 aspects for data readouts, biomarkers associated with response and pharmacodynamic biomarkers to support contribution of effect for casdozokitug.

The previous casdozokitug study provided a small data set suggesting that higher levels of IL-27 expression in tumors were associated with response. However, we had just 7 tumor samples, which is only 25% of the evaluable patients. Despite that, the analysis showed the tumors from the 4 patients with response had a higher level of IL-27 protein compared to the 3 progressive disease patients. In the current CATALYST-202 study, we have trained pretreatment tumor samples for almost all of the patients and expect to have IL-27 expression data when we read out the study.

We also plan to perform circulating tumor DNA analysis. Circulating tumor DNA is emerging as an important biomarker to evaluate tumor burden and treatment response. As tumor cells grow, they shed DNA into the patient's blood. And many studies show a decrease in circulating tumor DNA levels following treatment correlates with better survival outcomes. Circulating tumor DNA already serves as a marker for minimal residual disease in hematological malignancies, and there is a large effort in the field to have the same for solid tumors. Given the delayed responses in HCC, we are interested in exploring this as an earlier surrogate marker for efficacy.

Let me shift now to our cytolytic CCR8 antibody, tagmokitug, which we are investigating across a number of indications. As the competitive field is evolving with some teams pausing or stopping their programs, while others are advancing their programs into late-stage development, these disparate outcomes may be explained by the basics of drug development.

Early phase clinical studies must answer 2 questions: right drug, right target. To have the right drug requires four critical pharmacological elements: good PK and potency, showing you can deliver the drug at the needed exposure, and thirdly, dose-dependent effects on the intended target, showing the drug has hit the target and affected the target as related to dose and fourthly, an acceptable safety profile alone in combination.

The majority of the CCR8 antibodies aim for a bind and kill MOA to deplete intratumoral Tregs. However, as we have consistently stated, the CCR8 receptor is a GPCR. It is well known GPCRs are challenging to make selective and potent antibodies against. This is now being reinforced with the CCR8 class.

In April, at the AACR meeting, Amgen and Gilead presented on their CCR8 programs. The data show mixed results, and these antibodies show a toxicity profile that is not seen by some other CCR8 programs. Amgen halted enrollment in their program after presenting data showing only 2 responses in 77 patients treated. About 1/3 of the patients were treated with a combination of AMZ355 and pembrolizumab. From the 12 with gastric cancer, one partial response was observed. These results contrast with the gastric cancer data from LaNova, now Sino Biopharma, where LM-108 in combination with PD-1 inhibitors demonstrated a 36% overall response rate.

Gilead, in contrast, showed antitumor activity, including single-agent activity in tumor types known to have a high degree of CCR8+ Tregs. Gilead is now advancing their denikitug into Phase II development in multiple studies, and we await additional data sets. In summary, it would seem that many CCR8 programs that are stopping are doing so due to drug-like properties falling short and failing the right drug criteria. In contrast, tagmokitug has shown good pharmacology and has met all the criteria for right drug, excellent linear dose and dose-dependent PK, potency for both binding and killing the target, dose-dependent immune effects and acceptable safety profile, both with and without toripalimab.

With the right drug under investigation, we have now turned our attention to answering the question of hitting the right target. As you have seen, we are aggressively pursuing data to support right combinations for the best efficacy across cancers, lines of therapy and immune context. We are evaluating tagmokitug in combination with either toripalimab, a PD-1 inhibitor or pasritamig, a T-cell engager. We plan to evaluate tagmokitug in other combination where Tregs are associated with therapy resistance such as ADCs or radiotherapy. We believe this will inform our development broadly across anticancer therapies on the best way to overcome Treg-driven resistance in cancer patients.

With that, I will turn the call over to our Chief Commercial Officer. Sameer?

Thank you, Theresa, and good afternoon, everyone. Today, let me offer you some color on our Q1 results, what we saw with respect to demand signals and our focus going forward to drive growth. In Q1 2026, LOQTORZI net sales were up 61% versus Q1 2025. On a quarter-over-quarter basis, net sales were $11.8 million versus $12.4 million in Q4 '25. This result was consistent with typical first quarter seasonal trends, but this year, it was impacted by severe weather across large parts of the country as others have also seen.

To better understand this year's seasonal impact, we assessed a basket of 85 oncology products. We found an average of 5% decline from Q4 to Q1 over the past 4 years. However, in 2026, the decline for this basket was more pronounced at 10%, likely driven by the severe winter storms that hit most of the country. With this seasonal impact now behind us, we expect LOQTORZI revenue growth to build through the remainder of 2026, given a closer analysis of our growth drivers. We are pleased to report that LOQTORZI new starts reached an all-time high in Q1. This was driven by: one, broader prescribing in new accounts; and two, deeper use through repeat ordering in existing accounts.

Overall, breadth and depth of ordering accounts increased 21% and treatment duration continues to increase quarter-over-quarter.

Looking ahead, we see 2 clear levers to drive continued demand growth. First, we're focusing on reducing chemo-only use, particularly in the community setting through continued education on NCCN guidelines and our Phase III data, including the 6-year long-term survival benefit analysis. Secondly, we are working to curb off-label PD-1 use in NPC that is mainly driven by guideline and indication misperceptions. On both fronts, our efforts reinforce LOQTORZI's position as the only approved and available immune therapy in NPC, offering a superior survival benefit over chemotherapy alone. We are moving this plan forward, utilizing targeted investments to enhance our execution.

Importantly, new claims data purchases have expanded our visibility into chemo-only and off-label I-O use across up to 70% of addressable patients. This expanded visibility is being incorporated into patient alerts to enable earlier, more precise field targeting and multichannel execution. Our inside sales team is now fully operational, significantly expanding our reach into the community setting, a key growth driver.

We're also scaling digital education through KOL video programs, targeted EMR initiatives and pilots on emerging HCC AI platforms. These AI platforms are seeing rapid growth -- rapid adoption by oncologists and are increasingly used to drive treatment decisions. Regarding our guidance, we continue to expect 10% to 15% demand growth per quarter averaged across 2026 quarters. Our focus will continue to be on driving broader and deeper adoption across the community and academic settings, supported by growing duration of treatment.

With that, I'll now turn the call over to Bryan McMichael, our Chief Financial Officer.

Thank you, Sameer, and good afternoon, everyone. I'll start with notable financial and operational updates, then run through the company's financial position at the end of the quarter and results for Q1 2026. The key financial event this quarter was the follow-on equity offering, which we mentioned on last earnings call. As an update, total net proceeds were $54 million and include the full exercise of the underwriters' overallotment option. These funds have strengthened our liquidity position and are supporting the new tagmokitug CRC and prostate studies, enhanced investments in LOQTORZI commercialization capabilities to reach revenue targets faster and general corporate purposes.

Regarding sales, in addition to the color on LOQTORZI net revenues provided by Sameer, I will add that we expect to provide full year 2026 revenue guidance on the earnings call in August, as indicated on our last call.

Let me turn to operating expenses. R&D expenses from continuing operations for Q1 2026 were $21.5 million, down from $24.4 million in the first quarter of the prior year. The decrease was primarily due to savings from reduced headcount and infrastructure costs, reflecting tight spending discipline, partially offset by increased investments in the pipeline.

SG&A expenses from continuing operations were $23.1 million in the first quarter, down from $26 million in Q1 2025. The decrease reflects continued savings from Coherus' complete exit from the biosimilar business, which, as we talked to you today, was completed more than 1 year ago.

Now turning to the balance sheet. Total cash, cash equivalents and investments at the end of the quarter was $167 million, down slightly from $172.1 million at year-end. Given the recent raise in our financial plans, we believe we are sufficiently funded through key data readouts in 2026 and 2027.

With that, I'll hand the call back over to Denny.

Thank you, Bryan. Operator, we're ready to go to the questions.

[Operator Instructions]

We will take our first question and the first question comes from the line of Jay Olson from Oppenheimer.

On LOQTORZI, can you talk about the dynamics driving the average duration of treatment among existing patients, which continues to grow? Is the growing duration driven by first-line patients? And then related to that, congrats on the new patient starts in the first quarter. Can you maybe share some color on how the patients split between first and second line? And where should we eventually expect a percentage of patients on LOQTORZI in the first-line setting? And then if I could, I have a follow-up on tagmo, please.

Thank you, Jay. I'll let Sameer unpack that for you. Sameer, would you like to address Jay's question about the treatment duration and so on?

Thank you, Jay. Thanks for the question. And you had a couple of points to that question. So just to make sure I got your question correctly. The first question was the average duration of treatment and how that split between new and existing patients. Is that correct, Jay?

Yes. And then -- yes.

Yes. So in terms of the duration of treatment, what I can say is our duration of treatment depends on the type of patients. We have 2 types of patients. One type of patient is the first-line locally advanced and first-line metastatic patients. And the second type of patient is a monotherapy patient, which is the later-line metastatic patients. We -- in the clinical trials in the real world, we're seeing higher duration of therapy for the first-line patients than the second-line monotherapy patients.

In terms of new and existing patients, I think it's the same dynamic playing out for both the new and existing patients. So across the board, we're seeing that the duration continues to grow as we get further away from launch and eventually, hopefully, we'll get close to the clinical trial duration.

And the next question was about new patient starts in first line and second line. So currently, we're seeing about 75% to 80% of our patients are coming from the metastatic setting, both the frontline metastatic setting and the second-line metastatic setting and a smaller percent of patients coming from the locally advanced recurrent setting. And that's in line with physicians initially at launch, putting patients in the later line patients and then moving the use of therapy to an earlier line setting. As we get further into the launch, we would expect that we get more locally advanced recurrent patients.

And last thing I'll say is we also now have visibility into where these patients are. We've purchased a lot of claims data. So we know which physicians are managing these locally advanced recurrent patients, and we're going after those accounts and physicians to educate them on LOQTORZI.

That was super helpful and extremely comprehensive. Thanks for the detailed explanation. Just on tagmo, given that the second-line head and neck and gastric cancer readout is expected midyear, could you just talk about what investors should expect to learn from those 2 updates? And will you be providing next steps in the clinical development for those 2 programs?

Rosh, do you want to take that one about the data? And then Theresa, you can take next steps.

Yes. Thank you, Jay, for the question. So in terms of data readouts, yes, so we anticipate initial data for the second-line head and neck and the second-line upper GI adeno around the midyear time frame. A couple of things I'll say. First of all, we anticipate at least 50% of the patients to be reported. As you think about the data and timing, there are probably 2 key determinants, right? One is the number of patients. Number two is the number of scans that may be needed to show activity. So again, for the number of patients, I anticipate more than 50% or more of patients. The -- in terms of the numbers of scans, that's a little bit more variable. We'll be looking at overall response rate. We'll be looking at clinical benefit rate. We'll be looking at safety, but duration will take a little bit longer to really mature. And as you know, the real benefit of IO has been in extending that tail. So I'd look out for those key metrics to start with.

To add to that, Jay, thanks because we're super excited to think about next steps. And so as we look at the data, particularly with durability, I mean, ORR is nice. It's 30% or greater tumor shrinkage, durability is what matters because the regulatory endpoints are survival. So thinking about, is there sufficient efficacy to support favorable regulatory strategies, which all of these studies are designed if the signal is there to have sufficient patients to do that.

Additionally, is there a patient population or a way of enriching patients is another output that we're really looking at for what's the immune context. And is there a way then to advance into a study to look more towards later-stage development. So we'll be looking for both of those outputs and directions from the studies as they read out.

Your next question comes from the line of Paul Jeng from Guggenheim.

For tagmo, I have a follow-up question on the head and neck cancer data that you'll be reporting, mostly on patient demographics. Can you speak to what proportion of patients you would expect to be PD-1 experienced? And do you plan to break out responses by HPV status? And then how do you think about the...

Yes. Paul, Paul, let's stop there and just do one question. Let's answer that, and then we can follow on. Theresa, Rosh, do you want to take that?

Yes, I can take that. So thanks, Paul, for the question. So yes, all of the patients in the second-line head and neck study will be PD-1 or PD-L1 experienced. And yes, one of the key stratification factors is the HCV status.

I did. Yes. So I just wanted to ask about how you're thinking about the bar for response rates in light of what some of the investigational EGFRs and even ADCs have shown in the setting.

Yes, I can take that one as well. So first of all, the current standard of care is pretty dismal in terms of the overall response rate. It is cetuximab and that overall response rate tends to be in the 13% to 15% ORR range. You're absolutely right. We do see the environment changing and evolving with the EGFRs. And a couple of points I'll mention. So first of all, there is positive data in the first line as well as the second-line setting, which I think better positions these agents in the first-line setting. And secondly, I think the majority of the benefit is really driven by HPV negative status. And so I think that also leaves the HPV positive patients, which accounts for roughly about 40% of subjects overall pretty wide open. So I think that's the way we kind of look at the current benchmarks and the evolving data sets.

Theresa, additional comments?

Yes. And we're actively watching it, obviously, with announcements from the Nectin ADC data that's super exciting, shows a rapid development path in the head and neck space. data coming out really showing a non-EGFR approach in the frontline setting shows room and interest for novel agents. What we find particularly interesting about this mechanism, obviously, our initial output is with PD-1 and tagmo.

And to your question, the first study is only asking, can we rescue PD-1 resistance since they're all PD-1 failures. Moving into combination with any and all of these agents could make a lot of sense. So in addition to streamlining our development with a way to advance the later stage, we also see ways to broaden and improve on durability of a lot of these responses, particularly with ADCs as we do combinations.

Your next question comes from the line of Brian Cheng from JPMorgan.

Maybe just first on LOQTORZI. Can you provide a little bit more about this weather impact to the top line here? Are patients not able to get another round of LOQTORZI? Is there access issue because of weather? And just on top of that, how do we reconcile that dynamic with the record new patient starts that you're seeing this quarter? And we have a follow-up.

Okay. Thanks, Brian. Sameer, do you want to take that?

Yes. Thank you, Brian, for the question. So we're now into the third year of our launch. So we're getting a better sense of the seasonality patterns. We saw some seasonality last year. It was kind of early to understand that. So this year, again, we saw the seasonality. And that's why we dug into an analysis of what's really happening in the oncology setting, and we took a basket of 85 oncology molecules. And really interestingly, for the last 4 years, this basket, we saw a very consistent 5% decline from Q4 to Q1. And what we didn't expect is a larger magnitude of decline in 2026, where we saw a 10% decline for that basket from Q4 to Q1. So it's like as we expected, it's a pretty consistent decline pattern in Q1 and then most products go back to growth in Q2. So we're following a similar pattern it looks like, right?

That being said, in terms of reconciling the new patients and the existing patients, so we believe what happened is we had, I think, about 2 major winter storms, which affected about 2 to 3 weeks throughout the first quarter. And I think what happened is a lot of patients who are on either 3-week cycles or 2-week cycles missed their cycles. And as a result, we lost that entire cycle for a big chunk of patients, and they reset their cycle clock. So we lost these individual cycles for a chunk of patients. That is totally separate from the new patient starts, right? Because new patients are really important for us to drive future growth. And we're pretty excited that we saw robust new patient growth, which is going to become the existing patients for future quarters. So those are the 2 dynamics that play.

The other point that I'd say, Brian, is I think Q4 to Q1 last year, we went down, I think, about 3%. So this year, I think it's like 5%. So given the storms, it's pretty much in line. But also given the starts, I think that we should go back on the growth curve here directly this quarter. Did you have a follow-up question, Brian?

Yes, we do. Maybe just on the 202 study, Theresa, you talked about how the importance of circulating tumor DNA and also IL-27 expression in the upcoming data in terms of figuring out the association of those expressions to tumor reduction. Do you have a sense based on preclinical model, do you have a sense of how correlated they are in terms of the magnitude of IL-27 reduction to tumor reduction in preclinical model?

TThanks, Brian.

Yes. the preclinical models don't have a good readout there. I mean what we have seen in the mouse is that it's very tissue specific. So that the tumors have to be in the lung or the liver. And given the amount of IL-27 that's expressed there, that comes through. And the 2 things that we're really looking for, I think, just to set expectations for the midyear readout, we've talked about this at several times is that it's an initial readout. The first readout in the CATALYST-201, the previously atezo/bev study, the overall response rate was only 27%. But a lot of patients were on study, and we saw tumor shrinkage deepening. And that's where we think that the initial readout with trends in circulating tumor DNA as well as looking at are there differences in the outcomes based on IL-27 levels will really give us a look see about the probability of it being a positive study as the data mature.

[Operator Instructions]

Your next question comes from the line of Colleen Kusy from Baird.

It's Nick on for Colleen. I just had a quick one on the casdozo program. So between atezo/bev and tori/bev as the backbone in combination there, do you expect to see any differences in the efficacy or safety profile?

Yes. Thanks, Nick, for the question. So I think you'll recall that we talked about HEPATORCH, which is the study of toripalimab and bev versus sorafenib. And that really showed very similar, if not slightly higher overall survival compared to atezo/bev, obviously, not a head-to-head. So I think we have confidence in that. And the other thing I'll say is that the ADA rate for atezo tends to be a lot higher than for toripalimab. So I think those 2 points really give us some confidence that the tori/bev is a good backbone on which to add

casdozokitug.

And the safety profile has been quite good. That's actually one of the standouts, particularly in this disease in the frontline HCC setting. And Casdozo across the board really hasn't added any additional or new toxicities to any treatment, whether it be atezo, whether it be tori, whether it be pembro that has been evaluated to date.

Your next question comes from the line of Mike Nedelcovych from TD Cowen.

I have 2. I'll start with my first on tagmokitug. Theresa, you alluded to this in your remarks, but I believe LaNova has initiated a Phase III trial for its CCR8 antibody. Can you elaborate a bit on your previous remarks? How important is this development from the point of view, both of validating the mechanism, but also in terms of what it means for the competitive landscape? And to the extent that you can speak to specific similarities or differences between their molecule and approach in tagmokitug, that would be super helpful.

Thanks for that, Mike. Theresa?

Yes, I love this question. And I think this is really important because we see programs advancing and programs stopping. Sino Biopharma with LM-108, or filled keybart has started 2 Phase IIIs. In fact, last week, they announced dosing the first patient in the gastric cancer Phase III, they also have an MSI-high CRC study as a pivotal study ongoing. So they really have confidence and doubling down on this program and the molecule, and they also will be reporting at ESMO this year.

Additionally, we see players like Gilead opening 2 Phase II randomized study, gastric cancer, colorectal study, AbbVie advancing in colorectal cancer and BMS continuing to add patients to their study. So we think that the differences from the programs that are being parked or the negative data that the lack of activity that Amgen showed down to pharmacology. So we're super excited about seeing programs advancing and seeing the properties of our molecule really making it exciting to now look at the data readouts later this year.

Mike, did you have a follow-on question for us?

I have another on LOQTORZI, if that's okay.

Sure.

I'm just curious, given that you now have a better sense of seasonality, do you still think LOQTORZI can get to that roughly $30 million to $35 million in quarterly sales in 2027? Or might it take a bit longer than that?

We are confident in doing so. In my prepared remarks, I reiterated guidance on 3 key issues with respect to the revenues. First being reaching $15 million per quarter sometime this year in '26. second, reaching $30 million to $35 million per quarter sometime in '27 and then thirdly, reaching what would be an annualized $175 million per year, which is about $44 million a quarter sometime in 2028. And I think that our data purchases and our knowledge now of the therapeutic area gives us confidence we'll be able to do that.

[Operator Instructions]

We will take our next question, and the question comes from Douglas Tsao from H.C. Wainwright.

Sorry, can you hear me? Can you hear me... Sorry about that. I had you on mute. I guess just maybe on the LOQTORZI issue in terms of the impact on storms, was this something that affected largely new patient starts? Or was it just simply a function of patients ongoing therapy? And should we think of this as just sort of purely deferred revenue that eventually should catch up for the rest of the year?

Sameer, do you want to take that one first?

I'll take a shot at that. Thank you, Doug, for the question. So I think the first part of that question is it did affect are -- I believe it affected our existing patients. New patients, as I mentioned in my prepared remarks, we had more new accounts either starting or restarting new patients than we had in the past. So our new patient growth seems robust. I believe what happened is the existing patients because of seasonality, insurance changes plus the weather, there were some hiccups in ongoing treatment. So that's where we lost some cycles. I don't think we're going to get those cycles back because if you're in a 3-week cycle and you miss your cycle this week, you basically go back in a new 3-week cycle, so that one cycle is lost basically forever.

But again, let me just kind of go back to what we said earlier, right? So that's Q1, right? So we're pretty excited about the new patient starts continuing on track and our ability to drive demand growth for the rest of this year.

Can I jump to a follow-up, Denny?

Sure.

So just maybe on tagmo, obviously, we have a significant number of readouts through beginning in the middle part of the year and into the second half of the year. I guess just when you think about where you are from a balance sheet, Denny, are you able to -- and I think you would certainly plan to succeed or assume that you're going to succeed with these studies. Do you think that you're in a position to continue to sort of prosecute all these opportunities? Or is there some prioritization that might need to happen?

I would direct you back to my prepared remarks at the beginning of the call. But we are certainly funded through the '26 and all the '27 turning over of all the data cards. One thing that we do is if we have an unfunded clinical trial or we have something that we believe is worthwhile, we take it to our investors. And currently, all of our clinical trials are funded. We just raised, as you know, and that really addressed the issues of the CRC study, which were not funded as well as the prostate study with J&J, both of which I think you'd agree are very worthwhile. So that's pretty much our approach to it. We don't foresee any additional trials right now. I think that we've done a very good job with a very broad development program across tagmokitug and a very highly focused program with respect to casdozokitug. So I think we're set.

There seems to be no further questions. I would like to hand back for closing remarks.

Thank you, Heidi, and thank you all for joining us today in our Q1 2026 call. We look forward to seeing you again on our August call, which will be very exciting. In the interim, we'll see you at Jefferies where we'll be presenting, and we'll also be at ASCO. Thank you. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect. Goodbye.

Good day, and thank you for standing by. Welcome to the Q4 and Full Year 2025 Coherus Oncology, Inc. 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.

Thank you, Heidi. Good afternoon, and welcome to Solaris Oncology's Fourth Quarter and 2025 Year-end Earnings Conference Call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus; Dr. Theresa Lavallee, Chief Scientific and Development Officer; Dr. Rosh Dias, Chief Medical Officer; Sameer Goregaoker, Chief Commercial Officer; and Bryan McMichael, Chief Financial Officer.

Before we get started, I would like to remind you that today's call includes forward-looking statements regarding Coherus' 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 annual report on Form 10-K for more information on risks and uncertainties.

And now I'll turn the call over to Denny.

Thank you, Carrie, and thank you all for joining us today on our Q4 2025 call and our 2025 annual summary to investors. This was a year in which we completed our strategic transformation to an innovative oncology company focused on overcoming immune resistance in cancer. This transition was initiated in September of 2023 with the acquisition of Service Oncology, a transaction through which we acquired 2 very promising assets. Tagmokitug a potentially best-in-class CCRA, Treg cell depleter, and casdozokitug, a first-in-class anti-IL-27 inhibitor.

Over the subsequent 18 months or so, we have successfully divested our biosimilar franchise, putting $250 million on the balance sheet, reduced our $480 million secured and convertible debt by over 90% to $38.8 million. reduced our head count and expenses, sharply refocusing the company. Building on our past successes, we enhanced our team as well as our Board of Directors to meet the new mission. We also initiated an elegantly efficient clinical development program across our pipeline products in combination with actors as well as partners products, potentially enabling the initiation of a registration trial in 2027. You will hear details of our clinical strategy and progress from Dr. Rosh Dias, our Chief Medical Officer.

We also launched our first innovative oncology commercial product LOQTORZI in 2024, a next-gen PD-1 inhibitor as the only available and approved product for recurrent, locally advanced or metastatic nasopharyngeal carcinoma in the U.S., a $250 million addressable market. We have made very rapid progress on our transformation in the context of our products, our development strategies and our dealmaking. Let me provide you then with a strategic lens through which to view the company going forward.

First, to our financial strategy. LOQTORZI plays a foundational role as both a revenue generator in the context of MPC and revenue multiplier in the context of combination therapy with our pipeline assets. I believe Coherus is unique as a clinical stage small biotech company because we have a commercial asset with growing sales in a rare disease space with no FDA-approved competing products on the horizon, outstanding 6-year survival data, and we are positioned at the top of the NCCN guidelines for recurrent metastatic MPC. This gives us confidence in LOQTORZI's continued growth. And as you will hear from my colleagues, LOQTORZI more than doubled its sales in 2025 over 2024.

We view LOQTORZI as reliable, growing nondilutive revenue source and financing vehicle to support operations while we advance the promising pipeline, increasing in value along the way. That's its fundamental role. Our expected trajectory achieves peak market share sometime in 2028, corresponding to $175 million in annualized revenues or about 70% market share of a $250 million market total. You will hear more about that from Sameer Goregaoker, our Chief Commercial Officer in just a moment, but let me make some key observations for you.

First, while $175 million a year revenue may appear modest, it's very important to us as it's more than sufficient to fund our core burn and overall headcount, not including development costs or other [indiscernible] items like stock option expense. Secondly, along the way, once we achieve about $15 million or $16 million a quarter in sales, the commercial effort will have paid for itself and start contributing to covering the company's overall SG&A. We believe this will happen sometime in 2026.

Lastly, once we achieve approximately $30 million to $35 million per quarter, our core burn, which does not include clinical trial expense, which are someone elastic and discretionary will be paid for by such revenues. We believe this will happen sometime in 2027. We recently raised about $50 million which included support for the commercial effort, so we can get to that $175 million run rate faster. Also, we deemed it strategically prudent to further invest in the Tagmokitug clinical program as the Treg field is increasingly competitive with some expected data readouts by other parties this year.

Given the recent raise in our financial plans, we believe we are certainly sufficiently funded through key to day rate outs in '26 and on into 2027. My Chief Financial Officer, Bryan McMichael, will provide more color in just a moment.

Now let me turn to our product strategy. In addition to LOQTORZI, we have 2 well-positioned product candidates, both showing promising early clinical results. Their differentiated key attributes provide risk diversification for investors. On the one hand, we see Tagmokitug as potentially a best-in-class in a competitive space with broad clinical therapeutic utility and very promising biology. In a moment, Dr. Lavallee will provide you some additional scientific insights on its mechanism of action and combination therapy considerations.

The breadth of potential utility in mandates broader early-stage clinical investigation. So we have several trials underway. We intend to exploit this potential broad utility by not just pursuing proprietary combinations but also by joining with partners, our objective to be the Treg depleter of choice across cancer treatments and modality. On the other hand, we also believe that casdozokitug is the first and only in class and with impressive translational data sharply focused on barrier tissue cancers, such as liver and lung. Consistent with that data, casdozokitug demonstrated highly durable complete response rates in first-line hepatocecular carcinoma. Follow-on trial is underway, and Dr. Dias will describe this to you subsequently.

Lastly, let me talk about the deals. Coherus has a strong track record of creating value for investors with strategic transactions, including acquisitions, divestitures and product partnerships. We believe that this demonstrated competency is the key to unlocking latent value, opening up new markets and creating synergies therapeutically and globally. As an example, I'll point out that the J&J collaboration is important for a number of reasons.

First, it stands as the first example of our objective to be the Treg depleter of choice broadly across companies and treatment modalities. More such relationships are in development. Secondly, it stands as validation of our high scientific competency and the quality of our assets. And lastly, it shows that we have constructed a strategy that is both executable and potentially accretive to shareholders.

As you know, we have global rights to Tagmokitug and casdozokitug and we look forward to ex U.S. partnership opportunities as the data readouts emerge this year and next. We believe that it is reasonable to expect such partners will provide upfront payments and contribute their share to significantly offset pivotal registration trial cost as they carry the expenses for the patients in their territories. This will leave us responsible for a minority share of overall cost which we expect to be manageable.

In closing, let me summarize for you. Over the last 18 months or so, we have made substantial progress on putting together a highly executable plan comprised of integrated financial product and transaction strategies, positioning us to provide significant investor value accretion.

Let me now turn the call over to Dr. Theresa Lavallee, our Chief Scientific and Development Officer, who will provide some greater insights into the use of key regulatory cell depletion as a therapeutic approach to overcome immune resistance in cancer. Theresa?

Thank you, Denny, and good afternoon. Today, I will focus my remarks on Tagmokitug, our potent and selective cytolytic anti-CCR8 antibody, its mechanism of action, and the potential for its therapeutic use. And background, key regulatory cells, or Tregs, are an increasingly recognized important cell type for the treatment of cancer. As tumors exploit Tregs to evade the immune system, this has a consequence of promoting cancer growth and metastasis and higher levels of Trigs are associated with poor prognosis in many different tumor types, including head and neck, lung, breast, colon, prostate, stomach cancers.

The other problem with Tregs is that key rigs are not only associated with core prognosis but also can be upregulated with anticancer treatment. The reason I highlight this is as drugs that deplete Tregs may be able to improve patient outcomes for many different anticancer treatments. Tagmokitug targets CCR8, which is preferentially expressed Tregs tumors.

We recently published the characterization of Tagmokitug pharmacology and Molecular Cancer Therapeutics. What we have shown in the clinic with Tagmokitug that treatment leads to important changes in the tumor immune makeup. First, the selective and significant depletion of CCR8 positive Tregs in tumors. And second, a massive increase in CD8 T cells. These data show that Tagmokitug both removes the suppressor cell in tumors and leads to an increase in T cells that can kill the cancer cells.

However, the CCR8 class of drugs has shown limited single-agent activity which raises the question of what do these T cells need to activate them to kill the tumor. We are investigating 2 different approaches for T cell activation. PD-1 antibodies are one way to activate killer T cells. Over the last decade of using these drugs, we have learned the mechanism of PD-1 inhibitors is to reinvigorate T cells that have previously tried to attack the tumor but are now exhausted.

We are trying to understand if the T cells observed in the tumors following Tagmokitug treatment, our antigen experience exhaustive T cells or possibly naive T cells. Raj will describe in more detail our Tagmokitug clinical study evaluating treatment with toripalimab, our PD-1 antibody. The results of our Phase I study include a partial response in a fourth line head and neck cancer patients who had progressed on prior PD-1 therapy.

Since Tagmokitug added to torapalimab rescued the prior PD-1 fails response, this exciting data demonstrated that CCR8 positive Tregs were a primary mechanism of resistance. Our ongoing expansion cohort in head and neck cancer, is to designed to answer if CCR8 positive Tregs are a primary PD-1 resistance mechanism in this second-line patient population.

The other approach we are investigating for T cell activation following Tagmokitug treatment is the direct activation with T cell receptor complex by simulating a protein called CD3. This allows for the activation of naive T cell. Many T cell engagers or TCEs are bi-specific antibodies that find a tumor protein on one end and CD3 on T cells on the other hand. TCEs lead to redirected T cell killing of the tumor and had success in hematological malignancies, but limited success so far in solid tumors.

Data support, there are 2 main issues in solid tumors leading to modest TCE activity. a low density of T cells in the tumors for the molecule to bind both the tumor and the T cell in close proximity. And secondly, Treg presence and also activation leading to suppressing T cell response. We are pleased to have announced the agreement with Johnson & Johnson to study the combination of Tagmokitug, a Treg depleting antibody with [indiscernible], a prostate-specific TCE finding to KLK2 untrusted tumors. With the advancement of this combination study, Tagmokitug becomes the first CCR8 antibody in prostate cancer and the first CCR8 antibody in combination with the TCE. And Coherus Oncology continues to lead the science for the CCR8 class of drugs.

As I indicated earlier, Tregs are known to limit cancer therapy and Tagmokitug has now shown, it is a targeted therapeutic approach to deep fleet regs and change the immune balance by increasing T cells in tumors. Importantly, all immune activating agents, immune checkpoint inhibitors like PD-1 inhibitors and TCE increase the number of Tregs in tumors as do most anticancer treatment.

For example, a recently published study showed that androgen receptor deprivation therapy increases Tregs in prostate cancer. And there is a number of scientific reports showing that radiation, chemotherapy, targeted therapies angiogenesis inhibitors also increased Tregs in tumors and this associates with worse outcomes for patients.

We believe that there is broad potential for Tagmokitug to be used in combination with other therapies as a cancer treatment. And we are excited that [indiscernible] Tagmokitug combination is the first with a partner company. And of course, we continue to explore novel combinations with other partners.

With that, I will turn it over to Dr. Dias, who will further describe the clinical development. Raj?

Thank you, Theresa, and good afternoon, everyone. I'm pleased with the continued progress of our multiregional clinical development programs for both Tagmokitug and casdozokitug. Programs of both molecules address areas of clear unmet medical need in very intentionally designed clinical studies which are supported by strong scientific and clinical rationale, and we remain on track for initial data readouts from mid-26 onwards as we've previously communicated. Let me now take a few minutes to highlight each program individually.

Firstly, Tagmokitug, our highly selective CCR8 cytolytic antibody for which we're currently running 2 protocols in what we've named our TRegCheck program. The first protocol in a second-line head and neck squamous cell population, builds upon the exciting data we presented at AACR 2025 and where we showed data demonstrating clear tumor remodeling with Tagmo monotherapy with depletion of CCR8 positive Tregs accompanied by a profound increase in the CD8 positive T cells consistent with a much more site toxic tumor microenvironment.

As you've just heard, combinations facilitate activation of these ingressed Tcells and in the same study when toripalimab was added, we showed a partial response in the fourth line head and neck squamous cell patients refractory to prior PD-1 therapies. Our current head and neck squamous cell approach looks at 40 patients in 2 doses of Tagmo in combination with tori and asks the question as to whether Tagmo is able to reverse PD-L1 resistance in the second-line population. We continue to anticipate initial data midyear '26.

Our second protocol is an umbrella protocol with 4 targeted tumor types in cohorts A to D, including second-line upper GI adenocarcinoma, second-line ESCC, first-line ESCC and fourth line plus colorectal carcinoma, respectively. The upper GI adeno cohort is a second-line cohort, including gastric adeno, GEJ and esophageal adenocarcinoma, also broadly asking the question of whether Tagmo is able to reverse PD-L1 resistance.

As a reminder, this is a tumor type that has shown principle of the class with Lenovo medicines showing data for their CCR in combination with our PD-1 inhibitor Tory at ASCO with an encouraging overall response rate in the second-line plus gastric population. Our upper GI Adena cohort looks at 2 doses of Tagma in combination with tori in 40 subjects. And again, we continue to anticipate early data around the middle of this year.

Our esophageal squamous cell cohort to take advantage of the activity of tori irrespective of PD-L1 levels, which is perhaps most marked in this type and which forms the basis of tori's approval as the only EU approved PD-1 for esophageal squamous cell irrespective of PD-L1 status. Cohort B is a second line esophageal cohort with 2 doses of Tagma in combination with tori and cohort C looks at first-line esophageal population with Tagma in combination with both Tory and chemo with the explicit intention of developing safety data in combination with chemo, which could allow us to explore earlier treatment paradigm.

We anticipate data in the second half of this year for these 2 cohorts. Cohort D looks at Tagma in combination with Tore in the fourth line plus colorectal carcinoma population, an area which constitutes an increasing public health issue, particularly in younger age groups. As a reminder, the CCRE field has shown some responses in CRC and our approach looks at 20 patients with an initial focus on the non-liver population before moving on [indiscernible] into the liver mets population. We started the CRC cohort in the second half of last year, and so we anticipate early data late this year or perhaps even early '27.

Finally, we're very excited to start the Tagmo [indiscernible] combination cohort, which, as you heard from Theresa, represents both the first TCE CCR8 combination study as well as the first in CRPC and is a very rational combination based on the mechanism of action of both agents. This combination aims to build upon the PASI data shown at ASCO 2025, demonstrating an encouraging PSA50 in a late-line metastatic castrate-resistant prostate cancer population supporting advancement into pivotal studies.

Metastatic CRPC is considered an immunologically cold tumor and has limited treatment options once patients get to later lines of therapy. Our initial approach will be in a third-line plus population looking at a safety cohort and additional PSA50 endpoints, which we anticipate starting in the second half of this year.

Moving on now to casdozokitug, our first-in-class antibody targeting IL-27, a context-dependent immunosuppressive cytokine, particularly relevant in tumors such as hepatocellular carcinoma and non-small cell lung cancer. Our recently named catalyze program focuses initially in first-line HCC and builds upon the very encouraging data presented at ASCO GI 2025 and where we demonstrated that the addition of [ casdozo ] to the current standard of care, Atezo and Bev provided a 38% overall response rate and perhaps more importantly, a complete response rate of 17%, both of which compare very favorably to historical benchmarks with activity irrespective of etiology and a strong durability of response with a favorable safety profile.

Our current ongoing study swaps out Atezo for our PD-1 tour and includes 72 patients in 3 arms, that is 2 dose levels of casdozo in combination with Tori/Bev versus Tori Bev alone and is designed with 3 aims. Firstly, to further characterize efficacy and safety as well as address FDA's project optimist and address contribution of components as we move through the development pathway. This trial continues to accrue well globally, and we remain on track for initial data around midyear '26. As a reminder, the previous study demonstrated an increase in response rate and a deepening of response with time and so we do anticipate the same with the ongoing program.

In summary, our TRegCheck program with Tagmo in several targeted cohorts is intended to inform us in which of these specific tumor types, we may see a signal to take forward into broader programs and our catalyst program with casdozo is asking the question of whether we can improve on the current standard of care with the addition of casdozo. The 2 key determinants of exact timing of data availability are firstly, the numbers of patients accrued to study; and secondly, the number of scans that may be required to show activity, which will differ by program. We remain on track to show initial data midyear '26 and beyond, and we'll continue to provide updates on progress.

With that, I'll hand it over to Sameer. Sameer?

Thank you, Rosh. We're happy to report that LOQTORZI net revenue grew to $40.8 million for full year 2025 versus $19.1 million in 2024, representing a 113% growth year-over-year. As we have stated previously, going forward, we expect average quarter-over-quarter demand growth of 10% to 15%.

Similar to 2025, we will see some variability in individual quarters due to patient flow and other factors. For Q4, net revenue was $12.4 million, an 11% growth over Q3. We saw strong quarter-over-quarter demand growth of 15.5% in Q4. The delta between net revenue and demand growth was driven by wholesaler inventory decline in Q4 versus Q3. Demand growth was driven by new patient starts in both new and existing accounts and we saw an 11% increase in purchasing accounts, indicating continued increase in breadth of use.

While we're happy with our 2025 growth, there remains a significant opportunity, especially in the community segment for use of chemo-only and off-label IO persists. As you will recall, the NCCN guidelines for NPC were updated late in 2024 placing LOQTORZI as the only preferred treatment for recurrent and metastatic NPC. These guidelines serve as a stimulus for LOQTORZI growth in 2025, and we remain focused on driving education on the guidelines and our superior overall survival versus chemotherapy alone.

That brings me to the exciting and game-changing 6-year long-term overall survival data that was presented at ESMO Asia in December. This new data shows that patients on LOQTORZI plus chemo live for almost 65 months or over 5 years. In contrast, chemo-only patients live for less than 3 years. That is a 2.5 years of additional survival benefit for locos patients.

With this data, we believe that no patient should be receiving chemo alone for NPC, a belief that is shared by a vast majority of KOLs. Our primary focus is thus on educating all target oncologists on this new survival data. We're pulling all stops to get this game-changing data in front of physicians. Our sales team has been fully trained and is focused on educating physicians as we speak. On the multichannel side, we are taking a multipronged approach with several tactics, including KOL educational videos, short messages and e-mails that are being delivered to target physicians.

We're also making significant investments into CRM technology platform and data enhancements to raise our rare disease execution using advanced analytics. We have doubled our investment to purchase additional claims data and patient alert data. This provides us visibility into almost 70% of all U.S. claims, which are then used to alert our sales team on real-time patient opportunities. Additionally, we have expanded our field footprint to reach more physicians.

While a field team focuses on Tier 1 or high-value targets, NPC being a rare disease, patients can present at any oncology office across the country. We are thus expanding our reach by activating a remote sales team that will reach Tier 2 physicians, while the field team focuses on Tier 1 targets. There's also a sizable NPC opportunity in the veterans affairs hospitals. The VEGF hospitals are typically hard to access. So we've engaged a specialized team of contract representatives, all of whom have extensive experience selling in the VEGF.

In summary, we remain confident in meeting our goal of achieving a dominant share in the NPC market with peak share expected in 2028. With a profound survival advantage that we see in the 6-year long-term data, our entire commercial organization remains committed to ensuring that no patient misses the opportunity to live longer with LOQTORZI.

With that, I'll now pass the call to Bryan McMichael, our Chief Financial Officer.

Thank you, Sameer, and good afternoon, everyone. I'll start with a review of the company's financial position at the end of the year and results for Q4. Then I will provide additional insights into how our balance sheet has evolved and some forward-looking color.

As mentioned by Denny, over 2024 and 2025, we decreased the principal balance of our term and convertible debt by over 90% from a high of $480 million to $38.8 million at year-end 2025. This resulted in a significant reduction of interest costs, which I will cover later. This is extended -- this also extended our earliest debt maturity to May 2029. Headcount decreased from about 228 at the end of 2024 to about 147 at the end of 2025, an approximate 35% reduction.

Some of the most significant changes for Q4 include the reduction of legacy liabilities associated with the divested businesses. Specifically, accrued rebates fees and reserves, which comprised mostly legacy product liabilities totaled $30 million at December 31. This is less than half of the $67 million balance 1 quarter earlier. The transition of commercial contracts to accord was mostly complete at the beginning of Q4. This initiated the wind down of TSA assets and liabilities.

Substantially all of the TSA receivables were collected in Q4 bringing the balance from $241 million at the start of the quarter to less than $1 million at year-end. The cash collected has been used to reduce TSA liabilities from $254 million at the start of Q4 to $65 million at year-end. We expect the remainder of these legacy business liabilities to be paid down in the coming quarters in a front-weighted fashion. In addition, let me remind you that we are eligible to receive 2 earn-out sales milestones of $37.5 million each.

The criteria to earn these milestones is based on 4 consecutive quarters of UDENYCA sales starting in Q3 2025. The $300 million within 5 quarters or through Q3 2026 for the first $37.5 million milestone and $350 million within 7 quarters or through Q1 2027 for the second milestone. With 2 quarters of sales relative to the earn-out turn behind us, we believe we are favorably positioned to earn these payments, and we'll keep you updated. Sameer covered in detail, LOQTORZI net revenues year-over-year growth and the additional investments in commercial infrastructure to expand sales that we are making. We expect to provide full year 2026 revenue guidance on our earnings call in August in August.

Let me now turn to OpEx. With Q4 falling largely in line with the trends we saw throughout 2025. Specifically, SG&A expenses from continuing operations decreased to $23.6 million, down from $29.6 million in Q4 last year. It's important to note that this represents the fourth consecutive quarter that these expenses were flat or down as we completed the transformation of the business. The decreases are primarily due to reduced head count exiting biosimilars and spending discipline.

R&D expenses from continuing operations in Q4 were $31 million as compared to $20.8 million in Q4 2024. In contrast to SG&A, R&D expenses slightly increased every quarter in 2025 as we invested in Coherus' promising pipeline. Of course, reduction of debt has resulted in a significant reduction in cash paid for interest. This relates to borrowings reflected in both continuing and discontinued operations and was $9.9 million in 2025. This reflects the savings of greater than $15 million over the $25.4 million paid in 2024 and underscores the benefit from the paydowns of debt in 2024 and 2025.

We had cash, cash equivalents and investments of $172.1 million at year-end. As you know, we recently raised capital, including a $50 million follow-on offering last month. Use of these funds include: first, investments to support the significant upside potential of the pipeline. This includes additional indications for not as Treg depletion has emerged as a very important MOA in cancer therapy. Recent examples include our Phase IIa CRC study as well as the anticipated start of the combination study with J&J in metastatic prostate cancer. Second, we are making additional investments in our commercial footprint and capabilities to pursue the $250 million commercial opportunity presented in LOQTORZI and MPC as covered by Sameer.

Denny discussed how our growing Loctorsey sales will cover more and more costs in the coming years. To add some color at the point that our commercial effort is paying for itself, we mean that LOQTORZI sales will cover costs, royalties and cash costs of the sales force. When revenues cover core burn, we're referring to the commercial -- these commercial efforts, plus other cash costs other than those directly related to clinical trials.

With that, I will hand the call back over to Denny.

Thank you, Bryan. We're pleased with our progress in 2025 having doubled LOQTORZI sales while completing the transformation from a biosimilar company to an innovative oncology company focused on overcoming immune resistance in cancer. We are particularly pleased that at the same time, we were able to reduce overall debt by over 90% since its peak in 2024 to just $38.8 million at the end of 2025.

We are now strategically well positioned with growing revenues from our fine notional PD-1 inhibitor deal opportunities across the portfolio and geographies and 2 promising pipeline candidates with multiple 2026 clinical readouts.

Operator, we're ready to take the questions.

[Operator Instructions] The first question comes from the line of Jay Olson from Oppenheimer.

Congrats on the progress. We had a couple of questions on LOQTORZI. Can you please provide some more color on the dynamic between new patient starts and repeat patients in 2025? And then how you anticipate that balance to shift throughout the course of 2026. And also, if you could talk about the promotional sensitivity of LOQTORZI and any details in the sort of commercial infrastructure investments that you're planning to make this year, such as increased field force?

And then I had a follow-up on Tagmo, if I could.

Thank you for your question, James. I'll let Sameer address the issue, the new versus repeat patients and then move on. Go ahead, Sameer.

Yes. Thank you for the question, Jay. So regarding new versus existing patients in 2025, approximately 25% of our business came from new patients and the rest came from continuing patients. And as you mentioned, what does that look like in the future. I think that shift -- that mix will shift slightly more towards new patients because we have a lot of opportunity to grow in the new patients. But the existing patients will always remain a strong base of our business because over time, we expect the duration of therapy to keep increasing as well.

Sameer, can you address Jay's question regarding the promotional sensitivity of the product?

Sure. Regarding promotional sensitivity, LOQTORZI is extremely promotion-sensitive because our challenge is that physicians in the community, they usually see 10 to 15 different cancer types and they don't see -- they see maybe 1 or 2 NPC patients in a given year. So they have to be continuously reminded about LOQTORZI and the benefits of LOQTORZI. So we have to continuously be those doctors' offices to remind them.

But I'll say this, when we do promote LOQTORZI to a physician when we present the efficacy data, almost always, we get complete buy-in about using LOQTORZI for the appropriate patients. So again, highly promotionally sensitive, and we see a lot of opportunity to drive further growth.

Does that answer your question, Jay?

Yes. And I guess maybe just any details you could provide on the additional investments in commercial infrastructure. Would that include field force expansion.

Yes. So we did do a modest field force expansion about a quarter ago that we announced. We did a 15% expansion in the live sales force. Now we're adding about 4 inside sales representatives to expand our reach into Tier 2 targets. As I mentioned in my prepared remarks, we're also adding a VA targeted contract sales force to focus on the Veterans Affairs business. So that's the expansion we've done in a very targeted and focused manner.

The other area of investments, Jay, is our information technology infrastructure. Because this is a rare disease, we feel that we need to make all efforts to capture as many of the patients as we can. Last year, we captured about 30% to 35% of the diagnosis code alerts. But this year, we've expanded that to about 65% to 70%. We have very -- we have also made investments in our display technology for the dashboards for the sales team. And then further, as Sameer just alluded to, we have the inside sales force, which is also organizing and pursuing these alerts.

I would just make one closing [ rug ]. We believe all these are appropriate in the context of driving to the potential $175 annualized million annualized sales per year, which we think is important for us to do as soon as possible.

Super helpful. If I could ask one more question on Tagmo. Can you just talk about any plans for exploring a triple combination? I know J&J just reported Phase I combo data for [indiscernible] and docetaxel. How are you thinking about adding Tagmo into that for a triple combo in prostate cancer?

Dr. Lavallee?

Yes. No, I think that maximizing patient benefit in CRPC is what we're looking for. So clearly watching the results of those studies. But I think we'll take the first step, which is the prudent step of putting the 2 drugs together to see what the contribution of effect is the safety the efficacy. And then if it's possible to move up into earlier lines through other combinations that would be of interest.

Your next question comes from the line of Mike Nedelcovych from TD Cowen.

I have 2. My first is on casdozokitug. I believe the frontline HCC trial is randomized but not blinded. So I'm curious if you're tracking responses? And if so, is what you're seeing giving you more or less confidence in casdozo's outlook. That's my first question.

And then my second question relates to Tagmokitug. You have a wealth of data coming mid this year in various tumor types. So I'm just curious how you're planning to disclose those data. Will we get press releases kind of indication by indication, one lump release of data across the solid tumor trial? How do you plan to disclose this data.

Thanks, Mike. I'll let Dr. Dias take those 2 questions for you. Rosh, would you like to answer the casdozo and then the Tagmo data questions.

Sure. Mike, thanks for the question. So in response to your first question on casdozo. So obviously, these are ongoing trials. These are open label, but obviously, because there are ongoing trials, we we'll report them when they are mature. What I will remind you is that for the previous Atezo-Bev casdozo study, I outlined the top line results in my prepared remarks. We did see a maturation of data with time in terms of an increase in response rate and a deepening of the response to again, casdozo ongoing study. So no further comments at this stage on that.

In terms of the Tagmo question, your question is essentially how will we be reporting them. So again, as I said in my prepared remarks, there are really 2 determinants of data availability, the number of patients and then the numbers of scans. These will differ by the different tumor types and the different programs. And what that essentially means is that it's not easy to predict the exact timing, right? So fundamentally, there are 2 scenarios. Either the timing aligns to the submission deadline for our Congress or it doesn't. If it's the former, we will release it at a congress if it doesn't we will essentially release by corporate disclosure. I'll just remind you that we have -- we do have like a track record of releasing data as it becomes available. I'll refer you to the AACR data last year. So that would be our kind of high-level plan.

Your next question comes from the line of Colleen Kusy from Baird.

Congrats on the progress. Maybe a follow-up on the casdozo frontline HCC study to start understanding those data will continue to mature over time. But can you give us a sense of what you think that maturation time line is? And how many of those patients that you'll report in this initial readout will be in that mature window? And is there a bar at this kind of early readout that you'd be hoping to set?

Yes. So let me unpack that a little bit. So your first question in terms of what we will be expecting, what we'd want to do is really have an overall response rate over what we saw previously in terms of the current standard of care. I'll remind you that was around 30% for the Atezo/Bev alone combination.

The maturation time period for our previous study was somewhere between 6 to 12 months, right? So there were several different data cuts. And over those 3 data cuts over that kind of 6-, 9-, 12-month period, there was an increase in response rate and a deepening of the response. So that's really, again, what we would expect.

In terms of the numbers of patients and what data we will be likely to report, that's a bit of a tough 1 to comment on exactly primarily because of what I said in my prepared remarks, right? There are 2 determinants. It's a number of -- it's how patients are accrued, but also the number of scans that were reported out. So we will continue to report that out as we know. What I will say is that I think we'll have enough patients within our scans to give an indication of early activity around midyear time frame as we've communicated previously.

Great. That's helpful. And then if you could just kind of walk us through what you're viewing as some of the important updates on the competitive front for CCR8 this year and how that might impact your development strategy going forward?

Thanks for the question, Colleen. Will let Dr. Lavallee address that. Theresa any comments on the competitive dynamic in the CCR expense?

Yes. I mean I think we expect to see the book end of more data disclosures would be the positive and seeing updates from the programs, particularly from some of the big players that have upwards close to 1,000 patients on their study. So we would anticipate -- I mean what I'll note for BMS is that they -- in the last 2 JPMorgan have had CCR8 under launch map by the end of the decade. So a data disclosure soon would be there. And then we may see other programs being parked because of molecule issues.

Colleen, one additional point I'd like to -- Colleen, just one additional point I wanted to also mention in terms of data availability. Obviously, I've said this before and I'll repeat it, we are not just looking at ORR alone, durability is important, safety is important and overall clinical benefit rate is important. So it's really that kind of totality of data that we'll be looking at as we move through the program.

And then last one, if I can. Just congrats again on the recent J&J deal. Just thinking about what for the next BD deals, what you might find most attractive for TagMo?wh would you stay within the T cell engagers or what would be most appealing to you there.

Well, as we mentioned in our prepared remarks, one of the very interesting things that so promising about Tagmokitug is the potentially broad application of the mechanisms of action across modalities whether it be ADCs, T cell engagers, radiation. And as Dr. Lavallee indicated in her prepared remarks, a lot of cancer therapies result and greater rank generation. So we think it's very broad. And we, I think, we'll focus on doing additional arrangements with other parties and see what we can get done so far this year.

And the question comes from the line of Brian Cheng from JPMorgan.

Just for Tagmo, how should we think about the strategy to develop your prostate cancer combo here with past in terms of priority, given your hands is currently in multiple indications today.

Yes. I think all the studies are executable. So I mean, I think really getting the data across the tumor types that have a strong scientific rationale for a high degree of target expression with different immune context is our priority. I mean given the prevalence and the need in CRPC I mean those studies should enroll relatively quickly. So it could be a very exciting indication to look at.

But it's equally important to all the other ones. We're really looking for the data to learn as Rosh and I have talked about in the past, our program is very intentional to learn the best context for how to use Tagmokitug and now, not just with toripalimab but also with the T cell engager.

And as you think about the bar for MCRPC here, what do you want to see in this third-line plus setting in terms of PSA 50 endpoint.

Yes. I mean a couple of points, I'll say. So as I said in my prepared remarks, we'll be looking at safety as well as PSA 50, so both will be important. I won't comment too much on expectations at this stage. But what I will say is if you look at the current treatment environment for PSA 50, it really goes -- it drops dramatically after the second line, right?

So first line, it can go up to about -- it's around 70% or up to 70% in terms of PSA 50 when you get to second line, it's in the 45% range. And then when you get to third line, it's around the 20% or less stage. So those are really kind of the current benchmarks further than that, I won't comment until we start opening up the study, which we anticipate to be in the second half of this year.

Brian, I think -- this is Denny. I think you can look forward to having a little more comment on the study on the August call, which we'll report Q2 given the fact that we anticipate initiating in the second half of the year.

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

Denny, I think it was you said that around $35 million, the revenue level, you sort of basically become sort of cash flow breakeven excluding R&D. I guess -- and then you made a comment sort of that R&D was discretionary or sort of you had -- or not discretionary, but you sort of had sort of ability to make choices where you're spending the money and how much?

And I guess maybe if you could just help us with the framework in terms of what you think is an appropriate level of R&D spend that -- and how do you find that balance between sort of the revenues that you're bringing in versus maybe needing some additional outside capital to fund the R&D program just given the fact that the aperture of opportunities for the company seems to have been expanding quite nicely.

Thanks, Doug. Let me try to frame our view and provide you a lens through which to view the budgetary considerations. Firstly, as I indicated, with the commercial team, the commercial spend includes the commercial team itself, all the commercial spends, the computer systems, the IT spend, whatever the sales force needs. Also, royalties, there's -- for example, there's a 20% royalty to Junshi. There's COGS. I characterize all of that as sort of the spend to get the sales. And that is probably $15 million, $16-ish million a quarter.

Regarding the other spend, the $30 million to $35 million, that includes carrying also, those same commercial spends with the increased COGS because of increased sales, but also the internal SG&A, the rest of the head count in the company and so on. In fact, everything except what I would characterize as additional development or clinical trial costs. So those we view in a separate bucket. And I would put those in bucket number 3. And so when we initiated the development of the assets post the biosimilar spinout, we had $250 million. We are moving forward and we identified a series of trials that we wanted to do.

What we had done since then, of course, we did expand that a bit. We feel that it's very strategically worthwhile to pursue the engagement with J&J, with prostate. We also think that CRC is an area of unmet medical need. But for the time being, we feel we're clearly funded for the clinical trials we've done.

Tagmokitug, as Dr. Lavallee recited to you, has very broad potential applicability. But on the other hand, I think that we've shown ourselves to be very judicious and thoughtful with our spend, and we'll continue to do so. We want to understand the mechanism of action. We're going to understand really where it works and why it works and place our bets there. But I think that overall, we've positioned the company well for the future. We -- as you've known a long time, we put a pretty sharp eye on our finances.

And lastly, I think that our track record with core over the past couple of years, particularly the doubling of revenues, '25 over '24 gives us a fair degree of confidence that we'll be able to march it up to of $175 million as annualized sales in 2028. And as I pointed out, sign post along the way are some $15 million or $16 million were the commercial team pays for itself and then on to 30-plus square be carrying the rest of the company. And that's the fundamental role of Lavori really, is to pay for all those things for us so we can develop the drugs. And that's the lens through which we view it.

Okay, Denny. That's really helpful. And then just maybe a follow-up for Sameer. Just what is the current duration of therapy for patients on LOQTORZI right now? And I mean, I think you sort of indicated that you expected to see an increase in the number of new patient starts I'm just curious how much of an opportunity is there for you to see an improvement on the persistence equation?

Yes. Thanks for the question. So just to remind you, there's 2 types of indications we have. You've got a frontline indication in a locally advanced recurrent setting and the frontline metastatic. And then we also have the second-line metastatic and the third-line metastatic indication. The duration of therapy in the second line indication is much -- should be much shorter than the frontline indication. So that's kind of the basic assumption from the clinical trials.

That being said, the -- we look at the duration of therapy every 3 months, looking at claims data. The durational therapy continues to grow every time you look at it. I'm still not ready to give you a number on the average duration of therapy because we simply don't have enough patients and cohorts to look at an average number. But what I can say is that duration continues to increase. And we still have room to grow from where we are today to where the clinical trial duration was.

So to answer the other implied question you had, the contribution from the existing patients and the contributions from new patients will continue to bode through ever go through the next couple of years.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning everyone. It's still the morning. Thanks for joining us for another session at the 44th JPMorgan Healthcare Conference. I'm Brian Cheng. I'm one of the senior biotech analysts here at the firm.

On stage, we have the team from Coherus Oncology. I will now pass the mic to Dennis Lanfear, who is our CEO, for a short presentation, followed by a live audience Q&A. Denny, the stage is yours.

Thank you, Brian, and thank you to the organizers for having us again. I'm happy today to give you an update on the progress of the company over the past 12 months since the last time we chatted with you at the organization.

Let me first apprise you, of course, of the forward-looking statements and direct you to the company's SEC filings for comments specifically to LOQTORZI, Tagmokitug and Casdozo.

Today, I'll talk to you about a few things, but I'll spend some time, first of all, talking about our evolution and transformation to an innovative oncology company focused on overcoming immune resistance in cancer. The cornerstone of our therapies is LOQTORZI, which is a revenue multiplier in our backbone PD-1. I'll then spend some time talking about a very, very promising asset that's in an evolving class of Treg depleters, Tagmokitug and give you a bit of a flyby on the mechanism of action and why this is such a promising new treatment paradigm. I'll also then talk to you about Casdozokitug, which is in first-line HCC in combination with toripalimab. And lastly, I'll spend just a moment underlying some of the data that we will see in 2026 in midyear across the portfolio. We anticipate a very data-rich year this year with our products, and I'm very excited to show you today.

Let me first start now with a bit of a recap of the transformation that we've done with the company over the past 2.5 years. First thing, we, of course, licensed into our LOQTORZI in January of 2021 as our key product. But then we acquired Surface Oncology, and that transaction closed in September of 2023. Surface was renowned for its high science and its quality scientific advisory board. And with Surface, we gained global rights to 2 very promising products. First, Tagmokitug, CCR8 Treg depleter and then Casdozo. Directly thereafter, we initiated the complete divestiture of the biosimilar business through 2024 and 2028, which was also significantly successful. We divested the CIMERLI asset to Sandoz for about $175 million and then turn directly to the divestiture of the UDENYCA asset for $558 million, which closed in April of 2025, putting that then behind us.

This is the total divestitures of about $800 million, done on a market cap of about $150 million, paying down $480 million in debt and dropping $250 million to the balance sheet to support the ongoing clinical studies that you will see today about 2 years of cash. There remains 2 milestones for the UDENYCA transaction outstanding, both for $37.5 million, one for $300 million look back 4 quarters to Q3 and one for $37.5 million look back in Q1 2027. Not included in the projections of cash, but I would say that those market opportunities are moving forward very well. And particularly in the hands of Intas, Accord, UDENYCA has achieved over 35% market share most recently.

Coherus Oncology is about 3 key things: drugs, data and deals driving shareholder value creation. I'll talk to you about LOQTORZI and talk to you about our very elegant strategy to include LOQTORZI as a therapy with both Tagmokitug and with Casdozokitug. The data readouts you see in 2026 are significant and pivotal. We're undergoing perhaps 6 clinical trials with Tagmokitug across a number of cancers, GI and so forth. And Casdozokitug in first-line HCC. Deals have been a significant value driver for the company in the past with acquisitions and divestitures. We pride ourselves on our deal capability. Over 2026, you'll see additional deals, particularly as we seek to have partners with Tagmokitug, which I'll talk about in just a moment and provide you the rationale.

We also have global rights to the pipeline to these 2 assets. So that means that we can do ex-U.S. deals, which not only bring in funding, but also give us partners to help offset the development cost. And of course, as you're already familiar, LOQTORZI has been subject to a couple of different U.S. supply agreements in which we put the product in the hands of collaborators. We pay for manufacturing costs, but then our partners develop product on their cost.

Here is our pipeline. The key point that I'll make here is that toripalimab LOQTORZI is a revenue generator in the context of nasal pharyngeal cancer, but also our revenue multiplier in the context of combination with each of these other agents. It's indicated both with GemCis in the first line for NPC and in monotherapy for second line. And here, you see the other studies that are mostly in Phase II that I'll talk about today. This pipeline, together with LOQTORZI comprises about a $29 billion market opportunity for us, as you can see here, very broad across the pipeline, partnered indications across -- represent additional upside. And as I indicated, this does not include ex U.S. markets, which are roughly the size of the U.S. markets.

Now let me just take a moment and talk to you about LOQTORZI and why that is such an important part of the strategy here at Coherus. I'm going to spend a little bit of time on the science, which I think is important for you to understand because I want you to appreciate the very high quality of this asset. LOQTORZI is a unique next-generation PD-1, which was conceived to bind the FG loop to PD-1 and do so with very, very high affinity. This results in the internalization of PD-1 from T cells. And as you can see, very, very high activity, particularly, let me focus you on the right side of the slide. And there, you will see in the low PD-L1 state, LOQTORZI having equal activity to the high PD-L1 state. This is important in the context of competition because here you see KEYTRUDA, which does not have such a label.

So if you are going to combine your PD-1 with other agents such as Tagmokitug and Casdo, you want to start higher. You do not want to start lower or even even. This is really very, very important. And in particular, this esophageal data, I'll cite later when we talk a little bit about Tagmokitug. Now this data in NPC has very good effect. I would just point out to you that last month in December, the 5-year survival data. The 5-year survival data, just take a look at this for LOQTORZI was disclosed. And this has gone from 65 months to about 34 months. So a patient on chemotherapy survival of 34 months versus a patient on chemo plus LOQTORZI, 65 months. This sort of data has earned as top ranking in NCCN guidelines, as you can see in the right portion of the slide.

And here, I'll just take a moment to show you how our commercial team is very successfully converting this in the market. Here, you see the growth on the left panel. This is demand growth quarter after quarter. Now there's 2 ways to look at how much LOQTORZI the market is using. The first is demand. That's actually going from the distribution centers to the physicians and being used. So this is probably the most relevant metric of utilization. And you can hear 16%, 19%, 12%, 15%. We've guided the street to 10% to 15% growth per quarter, and we exceeded that in 2025. The results you see now on the right side, is a doubling of revenues from 2025 over 2024, estimated $40.8 million versus $19 million. If you take the guidance of the 10% to 15% revenue growth per quarter, and you project that, we will arrive at our target of $150 million to $200 million by mid-2028.

Let me now take a moment to talk to you about Tagmokitug, our highly selective best-in-class Treg depleter. Let me just take a step back. There's been really substantial progress, of course, in the past 10 or 15 years in immuno-oncology with PD-1s in treating patients. But 70% of these patients remain not to be treated. They are T cell deserts. These are places where either there is low or absent PD-L1 expression, there's a high infiltration of Tregs or there's low T cell infiltration. Many, many cancers then remain untreated, liver, prostate, colorectal, pancreas, as you can see. And this is where we are going to focus with Tagmokitug in the context of Treg depletion. This is the key to turning gold tumors hot and particularly to get CD8 positive T cells into the tumor microenvironment.

Now CCR8 Tregs present a real problem in treating cancer and are predictive of lower survival in solid tumors. And on the left side of this panel, what you see here is that when you have high levels of Tregs, then you have lower survival outcomes. And on the right panel, what you see is this delicate balance. Tregs enforce immunological homeostasis systemically. But this creates a problem in tumors, particularly in the tumor micro environment. You must deplete the Tregs in order to allow CD8-positive T cells to infiltrate. And this has been the key focus of these Treg depleters, and this is some of the key data that I'll talk to you about now today. I would just lastly add at the importance and therapeutic potential of Tregs was underlined by the awarding of the Nobel Prize just this past year.

Now Coherus prides itself on a scientific leadership as a small company in the Treg depletion space. And there's 3 key things I want you to take away from on this slide that are requirements for success with Treg depletion. First of all, you have to have significant Treg depletion from the TME and not in normal tissue. It has to be selective. It was discovered in 2016 that Tregs in the tumor micro environment have on their surface CCR8, a receptor. And if you were able to bind the receptor and use it as a place where you could then induce depletion of these cells, that would be very advantageous therapeutically. And you can see that here with the graph. We have successfully demonstrated such. The second thing you need is subsequent T cell infiltration. And thirdly, what you need is the activation of these T cells.

Here's the surface of the CCR8, as I just talked to you about a minute ago. It's a very -- it's a GPCR receptor. So it's a very small amount of real estate that you have there. And the folks at Surface Oncology were very diligent and careful in bringing this forward. This particular asset was screened against 5,280 surface cell proteins in the proteome. The result, Tagmokitug is that it only is the only known selective CCR8 binder that has been disclosed. Unlike the comparators, which you see at the bottom of the center panel, where we take a look at some of the other competitive molecules have significant off-target binding. Tagmo has best-in-class potential. First of all, demonstrated proof of mechanism, significant depletion in the tumor of CCR8-positive Tregs. And it's the only one to show remodeling in the immune system. Secondarily, high selectivity and last, very strong pharmacology, high affinity, high potency with enhanced ADCC and excellent PK.

This is really some very, very significant data that we disclosed last year at AACR. And on the left side of this panel in the green, what you see is the depletion of CCR8, which are in the greens, which you can see here. And you can see pretreatment, the green, and you could see post treatment with Tagmo, the almost complete depletion of these CCR8. What is really significant in what was hoped for, but not expected was the infiltration of CD-positive T cells. And you can see that here in the top panel, the red. And you can see how many enhanced T cells show up in this bottom panel. This is in a monotherapy patient in head and neck. So this is in a fourth line patient for head and neck.

On the right panel, you can see in another arm of this very same study, a patient who received Tagmo, but also received toripalimab. And you can see a large 2.8 centimeter tumor in this patient's lung. So this is a head and neck metastases in the lung, which is then over 3 or 4 months by follow-up 3, almost completely decreted. This is a partial response. This is the first time such data has been shown where you have seen CCR8 depletion, T cell infiltration and subsequent diminution of a lesion. This data, of course, warrant an expansion of our program with our CCR8. And you can see here, we are prosecuting a very broad set of indications in 2026.

First of all, as I pointed out, and I started, there is a significant issue with Tregs in the GI track, whether it's gastric esophageal and colorectal. And so we have programs in gastric. And I would say in all of these, we are combining Tagmo, our CCR8 with toripalimab. The rationale for this gastric is very compelling data in the hands of others on a background of toripalimab, I would add, positive clinical data in CCR8. So we feel very bullish about this particular indication. Two indications, both second line and first line in esophageal. And then colorectal, we're currently exploring fourth-line colorectal with -- in a non-liver met setting, and we'll be spooling up the liver met setting subsequent to that. And we are proceeding now, of course, with the head and neck study so on. Each of these data will read out during the course of mid- to late 2026. We got started in the colorectal little late, just in later 2025. That will probably read out near the end of '26 or early '27. Most of these, though, are mid-2026.

Now let me take a step back because I've talked a lot about Tagmo or CCR8 in the context of toripalimab, a PD-1. But the important point to take home here is that it is not just of use in such a setting. Our strategy is to broadly develop Tagmo as the CCR8 Treg depleter of choice with partners across treatments. So as a small biotech company, what we were able to do is put our products even like LOQTORZI in the hands of others. And as they develop their products, we get that label also. We will pursue a similar construct with Tagmo because there are a number of therapies that other companies are developing, whether they be ADCs, T cell engagers, CAR-Ts or even radiation, where the proliferation of Tregs is problematic in stunting the efficacy.

So there's a number of indications here. And let me just talk about one of these, which is T cell engagers. And here, you see it here. So yes, you have the depletion of the CCR8 Tregs and yes, you have infiltration of these C8-positive T cells. That is what you need, but you must have these T cells in the tumor microenvironment for the T cell engager to latch onto and to bring in proximity of the tumor cell. So this is a particular promise. We're exploring a number of these collaborations. You'll hear more about this over the next year or so as we go forward with these. But this is really the take-home message is that these sorts of applications are very, very broad, and we will not take a parochial view to it. We will take a very broad view.

Let me talk a little bit about now Casdozo. And while Tagmokitug, we believe, is a best-in-class asset, Casdozo is a first-in-class IL-27 antagonist. Now IL-27 has some very interesting functionality. It's a cytokine. Cytokines, of course, regulate the immune system. But IL-27 has 3 key functions. First of all, it upregulates these various checkpoint receptors, PD-1, LAG-3, TIGIT and so forth. This is, of course, is very negative for immune response in the tumor microenvironment. The second thing it does is it downregulates all these pro-inflammatory cytokines. And thirdly, it constrains the behavior of natural killers cells and all the talk of T cells and so on, natural killer cells are sometimes forgotten. They are very, very important. And IL-27 does all 3 of these things. It's a response actually to pathogen invasion in barrier tissues, such as liver, lung, kidney, et cetera. And it plays a key role in those tissues.

So this is data that we have just generated in HCC. And I'll just walk you through the waterfall plot on the left side of this, where you see 5 complete responses and 11 objective responses in this data. This is a 38% overall response rate and a 17% complete response rate. Equally impressive is the duration of the response, which you see on the right panel. The spider plot showing more than 2 years of duration for these patients. Keep this in mind as you see the trajectory here of the duration because this is something as we go ahead and we do the next part of this study and build on this, I won't build your expectations for how long they take this duration to develop. But this is very, very impressive.

And here, you can see its comparison to the other standards of care, whether they're atezo/bev or various TKIs. And you can see how the overall response rate of 37.9% compares very favorably with, for example, atezo/bev, lenvatinib, TKIs and so on and also the complete response rate. Here's a study of my team is currently conducting. And this we will use, for example, toripalimab and bev instead of atezo/bev, we're exploring 2 different doses of Casdozo in this. This, again, is first-line HCC. The first patient was dosed last year, and we expect to see this data start to emerge in mid-'26, and then we will watch the duration expected to deepen as we go on further in the year.

We're confident in using toripalimab for this. Toripalimab has shown significant efficacy. I talked about its mechanism of action being unique, significant efficacy earlier in the HEPATORCH study. We're compared very, very favorably against TKI.

So before I take the questions, let's just have a recap here of our progress. The value proposition, our drugs, LOQTORZI, our cornerstone product, a very active next-generation PD-1, particularly active in low PD-L1 states in esophageal, we're subsequently exploring with Tagmokitug. Tagmo, which we believe is the best-in-class CCR8 antibody being developed across a number of indications in our hands in conjunction with LOQTORZI. But also, we will reach out during 2026 for collaboration agreements with others in which we will put it in their hands and also get further development. And then Casdozo, a first-in-class asset that is moving forward, I think, very successfully in hepatocellular carcinoma. This data all will reach readout in mid 2026 and beyond.

And then lastly, I'd again just mention a few things to the deals. Our deal efficiency, I think, is quite good in terms of acquisitions, divestitures, collaborations and so on, you'll see more of these, these are all value creation exercises for our investors. In particular, as the data evolves from these clinical trials, you'll see us do ex U.S. licensing exercises, which will actually help us offset long-term development costs for the global programs.

And with that, I'll just stop for just a moment, and thank you for your attention, and then we're happy to take some questions from Brian and just introduce my Chief Scientific and Development Officer, Dr. Theresa Lavallee. Thank you.

Great. Thank you for joining us. [Operator Instructions] Just to kind of kick off the conversation here. As you think about last year, you have done a lot of move to really reposition yourself. How do you think about 2026? Where do you think 2026 is going to lead Coherus Oncology? There are multiple data catalysts ahead of us that are spread across 2026. What are you most excited about?

Thanks for the question, Brian. I think we're very bullish on 2026. I think things are really coming together very nicely.

Let me first just make a comment about LOQTORZI and how pleased we are that the sales are very, I think, systematically marching up towards our target in 2028. That gives us assurance that we'll have very strong financings as we go forward. But I think with respect to the 2 products, and I'll let Theresa chime in just a little bit. I think that we are following the science with respect to where the T regulatory cells really are present and where they are a problem. It's substantiated, I think, by all the data. And I really like the data in Casdozo. So as I look forward, I'm very excited about the gastric cancer study with Tagmo. I think that's -- that has already been done once. And so I think there's a very strong, probably, a success there. But I also like HCC with respect to Casdo. Theresa?

Yes. No, I agree. I think it's a data-rich year for us, and it's an exciting progression from the pipeline. So for Tagmokitug, I mean, I think the studies designed are very intentional to really learn where is the best setting. I mean, the data we've seen to date with the CCR8 depletion has shown this is a good drug. Now we need to figure out the best setting and the risk combination to advance it into more mature studies. And these studies will really inform us, including the dose selection. So dose optimization is a key aspect and development.

The Casdozokitug study, I mean, we're just trying to build on the very nice preclinical, so strong translation to high expression in liver cancer, preclinical models showing selectivity in 3 different models where we see activity when the tumors in the lung or the liver, not in other locations and then that translation to humans with a very nice safety profile that CCR8 stands out in all treatments in liver cancer. And the safety profile is so important in this disease where these patients are so beat up. So that readout -- a positive readout from the randomized study that's ongoing now would set us up for a pivotal study. So I think a lot ahead.

And I guess just maybe switching gear and looking at Tagmokitug, your CCR8 asset. It's interesting that there are other CCR8 that are out in the space and others are running really large studies, too. Where do you see yourself differentiating in this space? And can you talk about just a molecule itself? I mean, how much do you know now in terms of differentiation?

Sure. Like pharmacologically, we do have differentiation, the most notable being the selectivity in the potency. So from the screen, I mean, it's well known that GPCRs are druggable. 1/3 of FDA-approved drugs are against GPCRs. But there's only like 5 antibodies approved because it's tough, right? Dennis showed you the structure of the molecule, getting that -- there's a small amount of the protein exposed and the confirmation to get that selective binding is really hard. And we saw that in the screen even for lead identification. We were -- the molecule we advanced to the clinic was the only selective binder.

Others have shown that they have off-target binding. We have characterized some and identified off-target binding. Off-target binding obviously can complicate development with toxicity, PK, those issues that can show up during development. The potency is also a standout, both from the affinity with the binding and the picomolar range as well as being ADCC-enhanced. Not all molecules have that enhancement. Shionogi showed really nice data at ASCO with a CR and PR in colorectal cancer, MSS, CRC, super exciting. They are a wild-type IgG-1.

So I think those features as well as the commutation with toripalimab and looking at novel combinations will really set us up to differentiate and advance this competitively.

The other point that I would make to complement Theresa's remarks is that when it became known that the CCR8 was the ideal binding target for Tregs in the tumor micro environment, many team rush to the fore to bring products forward into development. Some of those teams now are having trouble. For example, there's teams that have dropped out. And if you take a look, they had inadequate PK really to support a therapeutic indication or cross reactivity. And so I think with something like this, it's more important to be very deliberate and careful with your development than it is just to go fast and sort of just do a lot of patients. Big pharma can afford to do thousands and thousands of patients and throw the spaghetti on the wall, but that's not -- that's really not a strategy that we endorsed at all. I think we're quite deliberate. We have to really just follow the science, and we think that's the best way to be best and not really to be first.

There was this one slide that I find interesting is you see Tagmokitug being -- you're positioning it as the depleter of choice, right? So how do you leverage partnership over time to get you there? Can you talk about perhaps for some of the ideal modality that you should shoot for? And then -- and also where are you in the process in lining up these additional partnerships to make sure that you will be the CCR8 of choice?

Let me -- I'll let Theresa handle the back half of that question, but let me handle the first half of the question. I think that it's first very important shows strong data, and we have been at the forefront of producing data. We are the first U.S. team that show CCR8 depletion and then subsequent T cell infiltration and then a response. So in that regard, that generated a lot of interest in pharma. And so we're having conversations with a number of teams.

But I think that the Tregs are -- that's an approach that is very broadly applicable through a number of modalities as you can see here on the slide. I would probably manage your expectations that over the next 6, 12 and 18 months, you will see these kind of agreements come forward. As a small company, as I indicated in my earlier remarks, we can do these sorts of arrangements collaboratively and so on, where I think perhaps larger companies are less willing to do so. But there's certainly sufficient scientific rationale to have conversations with a number of folks, perhaps Theresa wants to make some additional remarks.

Yes. I think that looking at the T regulatory cells that have been studied for years as poorly prognostic, a resistant sector, I mean, Tregs are upregulated with wound healing, so chemotherapy radiation. I mean it's well characterize that PD-1s and radiation are compromised in efficacy due to upregulation of Tregs. So that's a rational combination science-driven.

I mean, as Denny showed in the immunofluorescence slide, having that many CD8s in the tumor poised to be activated really lends itself to strong scientific evidence to combine with the T cell engager. The bane of development for those in solid tumors is really getting enough T cells in the tumor because they are limited by the ability they have to tickle the tumor on one side to bind and then tickle the T cell on the other. Well, if it's not -- if the 2 aren't closed, they can't activate. I mean we've seen phenomenal efficacy with T cell engagers in heme malignancies and starting in solid tumors. So really improving on that is something exciting. CARs are another example that have had real challenges getting into solid tumors. And then even bispecific molecules could be very exciting. So we see broad applicability and are energized to really explore those combinations from safety and efficacy.

Any questions from the audience? I guess as you think about the upcoming data readouts, can you give a sense -- a sneak peek into what to expect? What would be good data for you to move into the next stage of development? What should we be expecting?

Yes. No. So I think what we're looking for is, again, I want to recap what we've shown to date. We've shown strong pharmacokinetics impressive pharmacodynamics, proof of mechanism that full depletion of Tregs in the tumor. So we have the right dose. So defining that and further characterizing the safety profile, which has shown an absence of dose-limiting toxicities to date and really acceptable safety and convention with toripalimab.

So now looking for efficacy, we've seen response. We've reported a response from the safety cohort in head and neck. Now do we have sufficient activity to reach benchmarks. We're aware of the field. We're watching the competitive landscape with IO and other bispecific molecules and ADCs. And so I think that this -- overall, what we'll see from these studies is where is the tumor type that really lends itself to overcome PD-1 resistance because that's what we're asking. We're taking patients who have progressed in head and neck and gastric and esophageal on PD-1, given a PD-1 again with a new drug. So our T regulatory cells the primary resistance mechanism to that be a therapy in that line of therapy. We're also looking at combination with chemotherapy to show safety so we can advance to the frontline setting. So we're looking for where is the fastest development and the best efficacy to really pursue in larger studies.

And turning to Casdozo. There's going to be HCC data coming up in the first half. Can you talk about just -- I guess, the response, whether -- how confident are you that you already saw some response with atezo plus bev combination. How confident that the response that you saw there will also translate to your current combo work with tori and bev?

Yes. I think the strength of the data from the mechanism and the preclinical and the clinical data, tori, bev, I mean, we've seen PD-1 VEGF inhibition, PD-1, CTLA-4 translate very nicely across the class in first-line HCC. Now we're looking to advance beyond that with the triplet.

So seeing initial ORR. So I'll remind people that Casdozo data when we first looked at it in June of 2023, the ORR was 27% and 0 CRs. So what we're looking for in the initial data set is maintaining that safety profile, no added new or added toxicity to PD-1 plus VEGF, a comparable ORR. 6 months later, we saw an improvement in both depth of response and ORR, 38% response rate and 3 CRs. A few months later, 5 CRs that continue over 2 years. So the initial data set, we want to see benchmarked activity for PD-1 VEGF and patients to stay on therapy to look for that improvement in depth and ORR.

Got it. Maybe just in the last couple of minutes we have. I also want to touch on your LOQTORZI franchise. Denny, can you talk about where we are in terms of sales trajectory? I'm curious if you can give us some color in terms of the adoption dynamics that you see on the ground. How confident are you that you can get to that $150 million to $200 million goalpost?

Thanks for the question. We're very confident. I think we have a very firm understanding of the market at this point. We understand the market drivers and what goes on. Regarding the NCCN guidelines, having such preferred positioning has been very, very helpful. So when that first occurred in November of 2024, it resulted in an immediate and substantial increase in penetration, particularly in the academic setting in Q1, which then went into Q2.

This year, I think that the survival data out to 65 months from 34 months will be equally impactful. So we're looking forward to that educational process with the physicians. However, I would make the point that the -- in academia, the physicians are very proficient regarding NCCN guidelines and standard of care and evolving practices. This is a rare disease forever, there's only 2,000 patients. So that means that the community physicians see perhaps a patient every 1 or 2 years. The rest of the time, they're seeing breast cancer, lung cancer and all these more common cancer patients. So it is more difficult to have the opportunity to educate the community physicians. So we have to reach out to them.

So what we have done is put in place a sophisticated system of alerts. Last year, we were able to detect about 30% to 35% of the alerts and the patients that are diagnosed by receiving data on the diagnosis codes. This year, we just completed a project in which we grow up to 65% or 70%. We've also enhanced our team with additional head count to reach each of these physicians as they get a patient.

And then lastly, as per the label, we're able to put patients on LOQTORZI who have already started chemotherapy. So you saw us march up 10% to 15% per quarter, as I showed you earlier on the slides, we feel very confident we can do that. We do that. We'll go ahead and we'll hit the midpoint of the $150 million to $200 million by mid-2028, just mathematically. But overall, I think the table is set, the strategy is sound, the people are in place, and I think we understand the market very well.

Great. Thank you so much for your time today. It's a great pleasure to have you guys. Thank you.

Thank you, Brian.

Excellent. Great. Well, thank you, everyone, for joining us, joining our fireside chat with Coherus. I'm David, one of the biotech analysts here at UBS.

It's our great pleasure to have Denny Lanfear, Chief Executive Officer; and Theresa Lavallee, Chief Scientific and Development Officer. Thank you for joining us.

But before we start, I just want to quickly say that from just logistics for anybody who are in the room, if you have a question, please you can scan the QR code on the screen if they pop the screen here and then you can ask a question and it will show up on my iPad here. So feel free to ask away any questions you have, and I'll be happy to ask here for the management team to answer. All right.

So with that out of the way, Denny, Theresa, welcome.

Thank you, David, and thank you for the invitation to be at UBS today.

Yes. Thank you.

Yes. Thank you. Great to have you here. So to start things off, maybe you can quickly give us a high-level overview of Coherus in some of your pipeline programs and also your overall strategy.

Sure. Well, first of all, let me say that Q3 was the first quarter in which we were solely an innovative oncology company having finished the divestiture of the biosimilar business in Q2. And we're very excited. We had a very good quarter. We have a considerable momentum now going into the end of the year and into next year, particularly with respect to the patient accrual with our clinical studies.

As you know, we have studies across more than half a dozen indications with our CCR8 molecule, CHS-114. We have a study that's launched and doing very well with casdozokitug and liver. We're spooling up another study with a cooperative group in lung. But all of the sites are enrolling and at full bore. So we're pretty fired up. We find that the investigators are very interested in the mechanism of action of our products and how they might help the patients.

So our team has been going and talking to the investigators, and they find that they're really very enthusiastic to put patients on the study and see how they work because these are really significant breakthrough therapies. But I think that Coherus presents a very unique value proposition in the oncology space for investors.

We have excellent products. Our products, for example, our PD-1, toripalimab is a next-generation PD-1 has very unique binding sites to the FG loop to demonstrate activity in low PD-L1 states. And the lens that we view toripalimab, LOQTORZI through is one of both a revenue generator in nasopharyngeal cancer, but also a revenue multiplier because we're combining it with both our key assets in the pipeline.

And I'll talk in a little bit about how we're also combining it with others. We're very, very open about doing combinations. And we feel that combinations of therapies are the way that we're really going to move the bar with respect to patient survival. And Theresa will say something about the various combinations that we're contemplating in a number of therapeutic areas later.

But back to the drugs for just a moment. So we have a next-generation PD-1 that's doing well. And secondarily, we have a CCR8, which we think is best-in-class. Theresa talked to you a little bit about it, but 114 is highly selective. And when that molecule was brought forward, it was screened against over 5,000 other proteins on the surface of cells in your body, and it only reacts to CCR8. And this is the reason why it's so highly selective. And of course, we have some excellent data that we produced in patients, the biomarker data, which we have presented.

And casdozokitug is, I think, a very interesting molecule also. It's anti-IL-27. So as it turns out, IL-27 plays a very key role in immune system homeostasis upon pathogen invasion. And so this happens, for example, of course, in barrier tissues, in liver and in lung. And it has shown really strong efficacy in lung in a particular study on a background of atezo/bev, which is standard of care, it showed, for example, a 17% complete response rate, which I think compares quite favorably with the 8% of standard of care.

And we're going on and we're doing a follow-on study at 2 doses on it also. But the second key thing about the company, I think, that is unusual with the value proposition is the data catalysts we're going to come forward in mid-2026, all these studies. For example, with CHS-114, we have studies that are underway in gastric cancer, esophageal, colorectal with metastases, colorectal without metastases and of course, head and neck.

So it's a very, very growing vibrant field. And as you know, the Nobel Prize was just awarded for the scientists to move this forward recently. Casdozokitug turn over some data cards next year in liver, 2 doses, as I said, again, with atezo with toripalimab. So that's exciting. And I'll talk a little bit in my closing remarks about some of the deals, which is, I think, the third very, very interesting part of the company's value proposition. Deals are important to us because unusually for a company at our state, we have global rights to these products. We haven't sold these rights off.

So we have the opportunity now to develop all this data in Phase II going into pivotal studies and to do both U.S. deals and ex U.S. deals with these products. So ex U.S., particularly in some Asian countries, liver cancer, as you know, is a big issue in hepatocellular carcinoma. So we look forward to getting partners in Asia for casdozokitug. But also for CHS-114, we think there's the opportunity to do a number of things there.

So I'll just stop there. But I think for a company of our size, we have a lot going for us. We put together some very strong deals over the past year, divesting the biosimilar business. We reported $198 million in cash on the balance sheet at the end of Q3. We're very strong with our financial and our fiscal management and our operations. So we look forward to turning over the data cards as we go forward.

That's great. Thanks, Denny. It's very exciting, especially coming into next year, we're going to get a lot of updates and potentially probably a little more on the deals front, too. So very excited to see what's happening in the next 12 to 18 months. Now let's talk specifically about some of the programs here. The first one, of course, is LOQTORZI, toripalimab, as mentioned, is now approved for frontline and second-line nasopharyngeal carcinoma. And so you mentioned a little bit about some of the differentiation of this drug versus other anti-PD-1s such as binding size, affinity, combinability. So you can just tell us about some of the things you're doing to expand that some of the combination strategies you're planning for toripalimab?

I'll let Theresa take that. Theresa, do you want to talk a little bit about where we're using toripalimab in conjunction with other therapeutics.

Yes. Thank you. And as you said, it's a next-generation PD-1 based on its increased potency, unique epitope and differentiated clinical activity in Phase III studies showing similar activity in both -- when in combination with chemotherapy in PD-L1 high and PD-L1 low. PD-1s are foundational as standard of care. So advancing treatment in combinations requires a PD-1, the head-to-head studies goes against standard of care, which is a PD-1.

So you want to make sure your combination with a PD-1 inhibitor at least starts toe to toe. And if it's a little bit better, then your probability of success and your hazard ratio is higher. So we really see moving the field forward and treatments for patients in combinations with our own pipeline, which we'll talk about, I think, in more detail and the excitement of the data there. But also now with working with other biotechs because we're nimble, we're fast. We have a prioritized program in toripalimab.

So we've announced a couple of collaborations where other people are using their unique mechanism of action, their clinical data to advance tori in tumor types that are important to us, such as head and neck, lung, liver, it really complements our own development and continues to build out the awareness and the use in the U.S., which also helps our commercial team. So we think overall, looking at these combination strategies and continuing to gather data and advance toripalimab in development as well as look to get it to other indications on the market is a really important approach for us.

Got it. Great. And so let's talk about the nasopharyngeal carcinoma. LOQTORZI is approved in that in 2023. You have seen a few quarters of revenue so far. And in the most recent quarter, you got about $11 million, up 12% quarter-over-quarter from $10 million last quarter. How has -- can you just talk a little bit more about how has the adoption been so far across different segments, including academic settings as well as community settings?

Well, first point that I would make is that LOQTORZI really has real outstanding efficacy in this disease state, nasopharyngeal cancer, really, really strong hazard ratio and further extends survival out from like 22 months, well past 48 months and so forth. So when you talk to physicians about the data and you show them the data in the studies, and by the way, there isn't another PD-1 that has this sort of data in the U.S. When you do that and you talk to them, the physicians are converted, right? They become toripalimab users in this disease state. And what we have seen them doing is use toripalimab when their additional MPC patients show up.

So we launched this product in Q1 2024. So we're in the second year of launch. Now Q2 over Q1, we saw about a 36%, 37% increase in sales. A big chunk of that was inventory build because inventory had been depleted but about 20% or so of that was actual pull-through increase in demand Q2 over Q1. So that's a pretty good clip. Now what we saw last quarter, Q3 over Q2, we saw 3 of our 4 regions, and I would say we have 4 regions in the United States. 3 of 4 regions did 21% average growth, which is really, really good.

We had one region that was lagging, it was flat, pulled everyone else down. But that being said, I think we were pleased with those results. If we do 10% to 15% revenue growth from here somewhere out in the middle of sort of 2028, we get to our target of $150 million to $200 million. However, we want to make sure that we get these folks and there's actually 2 segments of the toripalimab market, which are important. The first are the academics who are very cognizant of and observing of the NCCN guidelines. So we are the only first-line preferred treatment with nasopharyngeal, very strong NCCN positioning.

Now these physicians are more specialists. So they're up to speed in the literature. They know exactly what's working and so on. So they're early adopters, and we've seen very good progress there. But another significant part of the physician population is the community physicians. And they treat a wide variety of cancers. They treat everything that comes in the door. So they only see a nasopharyngeal patient like 1 or 2 years. And so that's a higher bar because those physicians are sort of just not cognizant that toripalimab is on the market that this is really an outstanding therapy, and it's what they should use for their patients.

When we get to those doctors, they understand they start writing scripts. But I think we needed some additional -- a couple of additional things really to get to these community physicians and make sure that these patients get treated. So we added some additional headcount across there. We also have some virtual sales reps that are going. And we've also done some additional things with our electronic efforts. But we feel confident that we'll get on the escalator with this into next year, and this will be a very nice growth rate for the product. But overall, it's really just a function that it's a very rare disease and the community guys, they just don't see it that often.

Got it. That's really good. And then just in terms of the label expansion strategies, you mentioned about the combo strategies that you combine you're thinking about. Can you help us understand what are some of the label expansion strategy you're thinking about going forward?

Yes. And so I think as we talk about the pipeline, we can look to the different indications that we're evaluating to get additional -- so -- and the important thing there is that it's a 2-for-1 strategy, right? So we invest in the pipeline, but when we get CHS-114 or casdozokitug approved, we also get toripalimab. So when we look at what it would take to take the positive Phase III studies and like toripalimab was just featured at the presidential session at ESMO with the combination with the ADC and bladder cancer, standing ovation with the PFS curves. So it just continues to deliver. Those data are beautiful. But to bring that to the U.S. as a China-only study, it would be a couple of hundred patients in a couple of years -- so we feel like it's better to keep advancing beyond the data sets that are here today, but it gives us continued confidence in the molecule seeing data like that in the New England Journal of Medicine article. So label expansion with the pipeline and others.

Got it. That's really helpful. Great. Moving on to your second program, which is the 114 and the anti-CCR8 program. Tell us a little bit about that program, a very interesting mechanism of action because you're targeting a CCR8 Treg. And apparently, the scientists who discovered this path was recently awarded Nobel prize for that, right? So -- just describe a little bit more about the target, what makes it so compelling?

I'll give you the sort of the high-level fly by, and I'll let Dr. Vale backfill a little more science. But I think that it's really significant that the whole Treg field has now moved to the fore at this point, right? There's a number of teams, as you point out, that are working on Tregs. And Tregs over the past 20 years have -- it's become very clear that Tregs play a significant role with the immune system in cancer and so on. And a lot of people have hoped that if Tregs, particularly in the tumor microenvironment were depleted, then what would happen next is the infiltration of CD8-positive T cells. You would remodel the tumor microenvironment. So this was a long-held hope.

So I think the Nobel Prize fundamentally underlies the scientific impact of this and its potential therapeutic potential across these. What I like best about the Tregs in the space and Tregs depleters is it's highly targeted. You can go after cancers where there's a high percent of the Tregs present are CCR8 positive or on the other hand, you can also go where there's a lot of these high density. And so the clinical program is one of exploring just what happens when you deplete across these various cancers. And there are many cancers. There's the entire GI tract here, esophageal, gastric, colorectal, then there's pancreatic, prostate. There's a plethora of cancers that are so-called cold, where they are not immune responsive, and this is the promise of this.

And so what's very interesting about CHS-114 is that it is such a highly selective molecule. So as I indicated before, when it was screened, it was screened against over 5,000 different cell surface proteins. It only engaged with CCR8. And I think this is going to be an important differentiator because a lot of the other teams, we know have molecules that react not only just against CCR8, but elsewhere in the body. So you end up with GI tox or skin tox or whatever those types of things.

So having a very, very high-quality molecule, I think, is going to be a significant difference. But having this sort of highly targeted therapy where you know where to go with the rifle shot, I think, is very important. Maybe, Theresa, you want to add a little bit about the clinical product selection and the MOA?

Yes. Maybe just taking a step back for why we're so excited about the T regulatory cells getting recognized for the Nobel Prize. We were surprised and thrilled to see that happen. I actually worked with Fred Ramsdell at the Parker Institute and found it historical that he was off the grid camping, which is so typical [indiscernible] to get the call and be like Fred. So it tells you how much we didn't, as a group, think that it would be recognized. But I think it's the right time, and it's consistent with how the Nobel committee has really tried to focus on emerging areas of science that are really important.

And clearly, like Alexander Rudensky is another father of Tregs, but consistent with how the Nobel is awarded to first discovery went with Fred and Sakaguchi. But the idea of T regulatory cells really holding down peripheral immune tolerance. And if you deplete them, you get rid of that. So Fred and Saka are also involved in a company to do treat with Tregs to dampen autoimmunity. Since tumors exploit this to turn off the immune system and resistance to therapy broadly, chemotherapy, radiation and of course, PD-1, right?

So everybody has known this forever, but how do you get rid of Tregs only in the tumor and not cause terrible toxicity to the patient because we know we need Tregs for peripheral tolerance. CCR8 is the answer. And what was really missing is a way to just get in there and selectively target Tregs in the tumor, removing the immune suppressant and really opening it up now as you take the resistance mechanism away to potentiate therapy broadly.

And our clinical program is really designed to evaluate since it's a targeted therapy, where is the target highest and also in what context. So we're -- the studies that we're doing with the different tumor types are very strategic and designed to inform us how to move forward to bring immunotherapy within PD-1 approved indications like head and neck, gastric, esophageal, but also tumor types that have really been underserved. I mean we see Tregs in a lot of breast cancers. We see it in colorectal cancer, MSS CRC. So I think there's a large opportunity here for CHS-114 across solid tumors.

Got it. Can you just help us understand some of the clinical data you've generated in head and neck cancer so far?

Yes. So I think in early phase development, you want to know, does your drug does what it said it would do? And do you get the exposure you want? And do you have the safety profile? So we've answered those target -- those questions resoundingly, yes, hits the target, tickles the target, has the safety profile to do combinations.

The thing that's surprising, which usually get surprised and like, oh, it's going to be harder. We got a surprise that as we took the Tregs out of the tumor after treatment of CHS-114, this large infiltration of CD8 T cells, which we know is essential for immunotherapy to work. What's been the limitation for T cell engagers in solid tumors? There's no T cells in the tumor for them to activate. They bind the tumor, then they got to tickle the T cell, if it isn't there, CAR-Ts phenomenal in heme malignancies, how do they get into the tumor.

So treatment with CHS-114 and these types of treatments can really lead that. So we've shown that. We've shown that we have the right dose. We have immune activation. We've done exactly what we said without causing terrible autoimmunity. And we've seen early signs of response with -- in combination with toripalimab. So now it's about delivering data in 2026, where do we see that efficacy signal that we can take it quickly in development.

Yes. That's helpful. So on that front, you have 4 indications that are planning to go into, right? I mentioned head and neck, gastric, esophageal, CRC which one is most exciting to you? Or do you have a favorite child?

So I think it's really important that this clinical development plan is purposeful and thoughtful. So I think that we've seen activity in head and neck. We know that there's a treatment approach that could affect disease. The question is, does toripalimab and CHS-114 in the second-line head and neck setting reverse PD-1 resistance at benchmarks that are currently being shown with Nobel agents. EGFR bispecific ADCs are hitting high ORR and duration. So we have to be competitive in that space.

We're hopeful, but the data will show us if that is -- if we have sufficient activity to be competitive in second-line head and neck. And what we started with when Denny was talking about is the targeted therapy, I mean, I'll use 2 analogies of how you need to learn early in development. So Peto Merus' compound, shockingly good data in head and neck, right? The target was identified in CRC. That was the tumor type where the LGR5 EGFR bispecific was going to knock it out of the water.

Head and neck did, CRC is showing some activity, not as good, right? So they've learned something about the biology. The BRAF MEK inhibitors, when they went in, you just go and treat RAS-mutated tumors, right? They have a label across solid tumors, except for colorectal. And we learned that, that's because of EGFR and then breakwater this year, got that phenomenal data and got approval now in colorectal. So some of it is about learning. It's not that it didn't work in colorectal, it's just that it needed something else, right?

So our study is designed to learn. Is it the density of CCR8 positive? Is it just that? Is it the ratio of Tregs to CD8s? And then also looking in tumor types like colorectal cancer, where there's a lot of biology and no approved PD-1, is that the right context given the biology there. So I think what we want to learn next year is what's the efficacy marks we're hitting what's the dose? What's the safety profile? And what's the fastest development to advance this molecule. So the one -- I think I like all of them that show activity. The one that I'll love next year is the one that gets me to market fast.

Yes. I agree. I think that the promise is very broad with the whole CCR8 Treg depletion class. Certainly, in other people's hands, there's been excellent data in gastric. There's been very good data in panc and a number of things. So I think that overall, as Theresa said, we have a broad yet focused program. We placed bets. But the nice thing is there's very strong mechanistic justification for investigating where we're going. And we'll just have to turn over the data cards and see how that turns out.

But in all these places, especially places like head and neck, where others are moving forward, CHS-114 also has potential not just to compete, but to be complementary as an additional orthogonal mechanism of action. Those drugs don't deplete Treg cells and Treg cells are a problem there. So you can go head-to-head and so on. But we're also getting -- and back to the deals for a moment. We also get good interest from companies who talk to us about potentially combining our CCR8, CHS-114 with the other products in these indications. And that's a win for us, too.

I would just say as a small company, we're sort of uniquely positioned. We don't have an to grind where we have to stay just in our own space like some of these big shops, right? In the first instance, we are a small biotech. So any success broadly with the mechanism of action and the products will be disproportionately beneficial for Coherus, right? We'll get a bang for a buck than for one of the big giant pharmas go ahead.

The second thing is we're free to do deals and combine with others. Theresa has a lot of very close ties throughout the scientific community and a lot of big companies. And we're very open-minded, and we really want to benefit the patients. We want to provide that step change in patient survival. So we're okay if they take CHS-114 and combine it with a bispecific or an ADC or radiation therapies, we're fine with that. That's a win-win, anything that gets you there. And so that's the kind of things that we look at. For example, we are talking about collaborations within the U.S. It's just like collaborations that we do with toripalimab. We'll just give them toripalimab, put in your studies. And when they get approved, we get approved, we get a label claim. So we think the rising tide floats all boats, and we think it's a unique strategy. But one, our company being what it is, we're able to embrace.

Got it. Got it. That's helpful. Great. And then just last question on 114. And we've seen a few different competitors from big pharma also developing CCR8 target. Can you just tell a little more about your 4 differentiation compared to other CCR8 competitors out there?

It's a good question, and we're learning about these. And Denny has mentioned a couple of times, selectivity matters. We know off-target binding can have liabilities, particularly toxicity. And we have heard chatter from a few folks. We were just at SITC and maybe some of the programs in the big pharma shops are shelving their programs because they've hit toxicity. So we know that ours is selective. We have an acceptable safety profile with the data we have to date.

We also have potency, both from where it binds, it's in the picomolar range from an affinity, but it's ADCC enhanced, not all of the programs out there are ADCC enhanced. Shionogi showed data at ASCO this year with responses to CR in MSS CRC, low, nice, right? They are wild-type IgG1, not as potent as ADCC enhanced. And then there's the differences do you bind to compete with the ligand. We think it's better not to compete with the ligand because it's competition, so you don't get as much binding, and this is a bind and kill mechanism. That's also important because ligand blocking, you kill the cell. It's not going to signal.

So dead cells don't signal. And then clinically, we're going to differentiate through the combinations through the approaches, we think adding it with Tori. We feel very confident and excited that we can compete and deliver data and continue to be the one showing data. We are the first to show CD8 infiltration in the tumors. Shionogi is the second. No one else has shown that yet.

I think in -- just to dovetail on Theresa's remarks, I think, David, in 2025, Coherus Oncology demonstrated significant leadership in this field. We were the first one to show depletion, then the attendant infiltration positive T cells and so on. And the SITC webinar, which just occurred 2 weeks ago, was the most highly attended. Now we have the Nobel Prize. And you will see us in 2026, continue to press forward with our scientific leadership being in panels going to meetings and moving the field forward for the benefit of patients. I think that's very important. And again, as a very high science small company, it's something that we'd love to do.

Got it. Great. We have about 2 minutes left. I just wanted to kind of touch base really quickly on casdozo, your third program. So just curious around the data expectation in your first half '26. Can you maybe set some expectations around what kind of data we should be expecting from that?

With respect to the hepatocellular carcinoma data. Theresa, do you want to chat about that?

Yes. So clearly, you mentioned the activity we've seen in the initial Phase II showing improved depth of response, improvement in ORR improvement in PFS on top of standard of care. So now we have the randomized study with tori/bev. We want to see that safety. We want to see that improvement. So initial data, we need activity equivalent to. It takes time for it to mature to see that depth and improvement in ORR. So that's what we'll be looking for, and that would be a data set that would really set us up to then design a Phase II/III and have all the appropriate health authority conversations.

So a second data set that shows that profound depth of response and improvement in duration would be enough to advance development.

Got it. Now how quickly do you think you can actually move into a Phase III trial?

It's the usual metrics, right, get the data, put the package together, have the conversation. So half a year...

Very exciting.

I think that's a very interesting -- that's a very interesting molecule and a great indication. Hepatocellular carcinoma is a $4 billion space in the United States. We've shown phenomenal efficacy. We have a lot of folks interested in ex U.S. in that molecule. It's first-in-class, which I think is also very remarkable. IL-27 plays a fundamental role as I talked about with respect to pathogen infiltration into barrier proteins. The biology and the translational aspect of the biology really holds water. And I think that's why it's doing well.

Got it. Great. And just lastly, Denny, you mentioned about some of the B deals you're planning to do and some of the key catalysts over the next 12, 18 months. Maybe just highlight a little more what kind of things we should be watch for over the next 18 months?

I think we've demonstrated the ability to do outsized deals, particularly with our divestitures and a number of other things. Our acquisitions have been low. Our divestitures have been high. We have a really extraordinary portfolio here at these 2 assets. We have global rights to both these assets, and that's really important. So there's a lot of flavors that we can do, certainly ex U.S. deals. But I think the key thing with deals is that, first of all, they validate the value of the assets in the eyes of big pharma or the other partner. They bring in upfronts to offset the clinical costs.

And lastly, they set us up for cost sharing for pivotal trials later on. So I think that's very good. But we have a lot of latitude with the deals. For example, as I said, we can do not just ex U.S. deals, but we're very happy, for example, to take CHS-114 and put it in the hands of other people to mutually advance their products, which I think is mutually beneficial. So we'll do those sorts of things, too. So stay tuned. As the data rolls out 6, 12, 18 months, you'll see us go chase those things down.

Great. We're looking forward to exciting 12, 18 months.

Going good so far.

Great. I think with that, we're out of time. Thank you, Denny and thank you, Theresa.

Thanks David. Thanks, UBS, for having us.

Thanks David.

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.

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.

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.

Thank you.

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?

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.

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?

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.

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.

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

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?

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

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

That's right. Yes, and potentially anti-PD-1 or the older.

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.

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

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

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.

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?

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?

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.

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?

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.

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.

Looking forward to the data next year.

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

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

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

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.

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

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.

I'm sorry, Nick, what particular indication did you have in mind?

Sorry, this is on commercial for NPC.

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

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.

Did you have a follow-up, Nick?

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?

Great. Head and neck, Rosh?

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.

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

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.

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?

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.

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.

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

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.

Good bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.