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CHRS

Coherus Biosciences

$20.65

-2.05 (-9.03%)

, AMGN

Amgen

$164.06

1.41 (0.87%)

15:42
06/12/17
06/12
15:42
06/12/17
15:42

Coherus crashes after FDA rejection, but Wall Street says problems manageable

Biosimilar researcher Coherus Biosciences (CHRS) announced this morning that the FDA rejected its current application for CHS-1701, which aims to mimic Amgen's (AMGN) Neulasta. The stock fell heavily on the news, but Wall Street analysts argued that issues raised by the FDA appear resolvable. BACKGROUND: Coherus Biosciences is a developer of "biosimilars" -- nearly identical copies of original biologic drugs -- whose product pipeline includes CHS-1701, a biosimilar of Amgen's Neulasta, and CHS-1420, a biosimilar of AbbVie's (ABBV) Humira. FDA REJECTION: Early Monday, Coherus announced receipt of a "complete response letter" from the FDA, rejecting the company's current application for CHS-1701. According to Coherus, the letter primarily focused on a request "for a reanalysis of a subset of subject samples with a revised immunogenicity assay, and requests for certain additional manufacturing related process information. The FDA did not request a clinical study to be performed in oncology patients." COMPANY SEES ONE-YEAR TIMELINE: On a conference call this morning, Coherus executives outlined a roughly one-year timeline for potential approval, stating: "We anticipate that we will need a Type 1 meeting... FDA scheduling guidance is 30 days for such meetings. We believe that we can generate responses to the CRL within six months... The agency can take up to six months to evaluate resubmission." REDUCED CASH PLANS: Coherus also announced during its call this morning that "we have developed a revised financial plan for 2H17 which calls for an average use of cash of $40M per quarter... which is a significant reduction from 1H. Further, we project quarterly cash use of $30M-$35M per quarter for 1H18... We believe we can operate at this rate into 2H18 or until product approval." CREDIT SUISSE SAYS NOT WORST CASE: Keeping an Outperform rating and $38 target on Coherus, Credit Suisse analyst Alethia Young says the news isn't a worst case scenario and that she is "cautiously optimistic" on timelines. Understanding how long the requested reanalysis will take is key, she says, and her conversations today with Coherus revealed a "high degree" of management confidence in running an analysis that would ultimately lead to FDA conversations in about six months. Young highlights that the CRL didn't identify "major issues" like misguided trials or manufacturing problems, but she reiterates her view that shares could trade to $12-$15 on the event. Approval remains the key positive catalyst for Coherus and that driver is now likely shifted until mid-2018 or the second half of next year, the analyst contends, adding that shares could be range bound until further clarity on the reanalysis. For Amgen, Young says today's news is positive, as she doesn't expect another biosimilar competitor until perhaps 2019 at the earliest. COWEN SAYS NO ISSUES WITH DRUG: Cowen analyst Ken Cacciatore says the CRL issues "appears resolvable" with a total delay of likely one year. The rejection didn't seem to raise any specific criticism of CHS-1701 and instead reflected FDA desire to use the most advanced testing possible. It is likely, says Cacciatore, that the agency concluded during other recent reviews that a stricter test should be used and that it is now "asking everyone" to adopt enhanced standards. While unfortunate for Coherus, the FDA is "likely just being complete and thorough," the analyst argues. Accounting for the company's expectations for a one-year delay, Cacciatore says Coherus is now "on track" for possible 2H18 approval and launch. JPMORGAN CALLS SELLOFF OVERREACTION: JPMorgan's Chris Schott argues that the CRL "appears very much addressable," and continues to believe CHS-1701 will be one of -- if not the -- first Neulasta biosimilar. Today's selloff is an overreaction, the analyst says, calling Coherus an "attractive" pure play in biosimilars with upside to $30-plus given 2018 approval for 1701. PRICE ACTION: Shares of Coherus are down 25.5% to $15.38 in afternoon trading, while Amgen is up 0.25%.

CHRS

Coherus Biosciences

$20.65

-2.05 (-9.03%)

AMGN

Amgen

$164.06

1.41 (0.87%)

ABBV

AbbVie

$69.44

-0.23 (-0.33%)

  • 12

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    Aug

CHRS Coherus Biosciences
$20.65

-2.05 (-9.03%)

06/12/17
LEER
06/12/17
NO CHANGE
Target $161
LEER
Market Perform
Amgen price target raised to $161 on Neulasta biosimilar delay at Leerink
Leerink analyst Geoffrey Porges noted that Coherus Biosciences (CHRS) received a complete response letter from the FDA for its biosimilar to Amgen's (AMGN) Neulasta, which he views as likely delaying its launch by at least a year. However, the "windfall" is offset by the Supreme Court decision that "effectively eliminates" the 6-month delay for biosimilars associated with notification, Porges tells investors. Based on his forecast for a six-month delay in the timing of a Neulasta biosimilar launch in the U.S., to the second quarter of 2018 from the fourth quarter of 2017, Porges increased his 2018 Amgen revenue forecast by $500M and raised his price target to $161 from $159, though he keeps a Market Perform rating on the stock.
06/12/17
SBSH
06/12/17
NO CHANGE
Target $33
SBSH
Buy
Coherus price target lowered to $33 after complete response letter at Citi
Citi analyst Mohit Bansal, in an intraday follow up note on Coherus Biosciences, lowered his price target on the stock to $33 from $38, stating that the CRL for its Neulasta biosimilar creates uncertainty and delays the product's potential launch by about one year. The analyst, who noted that a positive Supreme Court decision today eliminates a 180 day notice after approval and could expedite launch for the drug by six months, keeps a Buy rating on Coherus shares.
06/12/17
JPMS
06/12/17
NO CHANGE
JPMS
Overweight
Coherus shares can hit $30-plus on 2018 approval, says JPMorgan
JPMorgan analyst Chris Schott said that while today's news from Coherus Biosciences of a complete response letter on CHS-1701 is "clearly disappointing," the letter appears "very much addressable." The FDA is requesting reanalysis of a subset of samples using a more sensitive immunogenicity assay, which likely will result in a one year delay in approval, Schott told investors earlier in a research note. He notes the FDA did not request additional clinical studies. Schott continues to believe CHRS-1701 will be one of the first approved biosimilar versions of Neulasta. He views today's selloff in Coherus shares as an overreaction and keeps an Overweight rating on the name. The analyst sees upside to $30 per share assuming CHS-1701 gets approved in 2018. Coherus in afternoon trading is down 27% to $14.98.
06/12/17
COWN
06/12/17
NO CHANGE
Target $45
COWN
Outperform
Coherus Biosciences CHS-1701 CRL 'appears resolvable', says Cowen
Cowen analyst Ken Cacciatore said Coherus Biosciences' CHS-1701 CRL "appears resolvable," with a delay most likely being a year. There does not seem to be any specific issue with 1701, but the FDA would like further analysis with a more refined assay to ensure the highest quality possible, the analyst wrote. Cacciatore rates Coherus a Buy with a $45 price target.
AMGN Amgen
$164.06

1.41 (0.87%)

05/22/17
FBCO
05/22/17
NO CHANGE
Target $177
FBCO
Neutral
Amgen romosozumab U.S. approval in July 'off the table,' says Credit Suisse
After Amgen (AMGN) and UCB (UCBJY) announced that the Evenity "ARCH" study met both primary endpoints but that there was also a newly observed cardiovascular safety signal in the trial, Credit Suisse analyst Alethia Young said any potential U.S. approval by the drug's July 19 PDUFA date is "off the table" and it is unclear as of now what U.S. approval timelines may be. She reduced her probability of success for romosozumab to 80% from 100% and lowered her price target on Amgen to $177 from $178. Young keeps a Neutral rating on Amgen shares.
05/22/17
LEER
05/22/17
NO CHANGE
Target $159
LEER
Market Perform
Leerink sees only 50/50 chance of Amgen's Evenity hitting market
After Amgen (AMGN) and UCB reported an "imbalance of positively adjudicated serious cardiovascular adverse events" in its Phase 3 study of Evenity, Leerink analyst Geoffrey Porges believes the product now has only a 50/50 probability of coming to market at all. The analyst lowered his price target for Amgen shares to $159 from $160 and keeps a Market Perform rating on the name. Radius Health (RDUS), which has a drug that would compete with Evenity, is trading up 16% to $40.58 in the premarket.
05/22/17
ADAM
05/22/17
NO CHANGE
Target $85
ADAM
Buy
CV events 'may kill' Amgen's romosozumab development, says Canaccord
Canaccord analyst John Newman said Amgen (AMGN) and partner UCB's report of a higher rate of cardiovascular Serious Adverse Events for romosozumab in the Phase 3 ARCH study in osteoporosis suggests a much lower chance of FDA approval for the drug and may "kill" romosozumab's development. He notes that Merck's (MRK) cathepsin-K inhibitor was previously discontinued due to increased risk of atrial fibrillation and stroke. In addition to the safety signals, Newman points out that romosozumab was worse than Radius' (RDUS) Tymlos for non-vertebral fracture and for vertebral fracture, suggesting Radius' drug also has much better efficacy, said the analyst, who keeps a Buy rating and $85 price target on Radius Health shares, which are up $4.47, or 12.8%, to $39.40 in pre-market trading.
ABBV AbbVie
$69.44

-0.23 (-0.33%)

06/12/17
RHCO
06/12/17
NO CHANGE
RHCO
AbbVie should be bought on weakness, says SunTrust
SunTrust analyst John Boris says that AbbVie should be bought on weakness after the USPTO invalidated two of the company's patents for Humira. The analyst says that the ruling "makes a small dent" in the company's IP for Humira, as he notes that the company has more than 100 patents for the drug. He thinks that Humira biosimilars will enter the market later than the Street expects. Boris, maintaining that the company has over a dozen pipeline catalysts this year, recommends buying the shares on weakness.
06/12/17
LEER
06/12/17
NO CHANGE
Target $90
LEER
Outperform
Eli Lilly price target lowered to $90 from $93 at Leerink
Leerink analyst Seamus Fernandez lowered his price target for Eli Lilly (LLY) to $90 to reflect reduced sales forecasts for baricitinib, an oral JAK1/2 inhibitor to treat rheumatoid arthritis which the company collaborates with Incyte (INCY). Following AbbVie's (ABBV) positive Phase 3 data last week for its JAK1 inhibitor upadacitinib, Fernandez dropped his U.S. peak sales estimate for baricitinib by more than 50% to $400M and pushed out his U.S. launch time to 2020 from 2018. The analyst keeps an Outperform rating on Lilly shares.
05/25/17
PIPR
05/25/17
NO CHANGE
PIPR
Piper calls AbbVie and Pfizer dividends 'compelling'
In a research note on large-cap Pharma, Piper Jaffray analyst Richard Purkiss calls the dividends of AbbVie (ABBV) and Pfizer (PFE) "compelling." These two dividends "stand out with an unusually compelling combination of high yield alongside a high growth outlook," Purkiss tells investors in a research note, citing his analysis. He reiterates Overweight ratings on both stocks.
05/17/17
MAXM
05/17/17
NO CHANGE
Target $44
MAXM
Buy
Coherus could beat Humira competitors to market by 4 years, says Maxim
Maxim analyst Jason McCarthy said the invalidation of AbbVie's (ABBV) dosing patent for Humira is a "major victory" for Coherus Biosciences (CHRS) that has reduced its risk profile. The last IP hurdle to launching a Humira biosimilar is formulation, where Coherus has the advantage, said McCarthy, who believes the company could be first to market with a biosimilar by late 2018, which would be four years or more ahead of its competition. He raised his price target on Coherus shares to $44 from $43 and keeps a Buy rating on the stock, which is up $1.95, or 8.8%, to $24 in pre-market trading.

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