Coherus BioSciences January Business Update
Taking a Look at Coherus BioSciences (CHRS).
I've transitioned to exclusively logging my weekly activity and tracking my portfolio in real-time on Savvy Trader.
For those not yet in the loop, I invite you to join me on this journey. Subscribe using the link below to gain direct insights:
By subscribing, you'll engage directly with me regarding specific companies, access my performance in real-time (with data starting just over a year), and get detailed views of my investments, real-time trading actions, cash positions, and more. This move is driven by my commitment to transparency. I believe that sharing my analytical insights and the reasoning behind my investment choices offers immense value, empowering you with the information you need to make informed decisions.
What Should We Expect?
After their most recent earnings call, Coherus BioSciences (CHRS) mentioned they’d be providing a detailed update on their operations, specifically around supply issues with the Udenyca franchise. Fast-forward a few weeks, and they’ve now announced plans to divest the Udenyca franchise (see my latest article for more on that).
On January 24th from 11:30AM to 1:00PM, we’re expecting to learn how they’ll use the proceeds from the divestment, what their R&D budget will look like, and what the projections are for Loqtorzi and the rest of their pipeline. This event should give us a clearer sense of where the company is headed in the near term.
My Take
I find this situation pretty odd for both shareholders and management. Initially, the entire thesis for this company hinged on Udenyca’s revenue and growing market share—now that Udenyca is being divested, the thesis is essentially broken. What’s left are Loqtorzi, pipeline data, and cash, which is how the market will value the company going forward: they’ll look at Loqtorzi’s projections, the future pipeline’s potential/data, and how much cash is on hand—particularly in light of R&D expenses. Right now, Loqtorzi revenues are minimal, so growth projections are going to be crucial.
The stock hasn’t stayed above $2 because there’s simply no clarity on these key points. The Street wants to know how much money will go toward R&D, what Loqtorzi’s commercial roadmap looks like (since it’s the only current product), and how much cash remains once Udenyca is divested. I’m not changing my stance on CHRS, but I’m trying to be realistic. Everything I said in my last article about my plan still stands, except that a respectable exit around $2 for half my position isn’t going to happen unless we get some transparency.
Before I speculate on what might happen if January’s business update is positive, I want to get inside the management’s head. Clearly, when they announced earnings last quarter, they were already in talks to sell Udenyca—something I flagged as a concern in my previous piece. It was probably the only practical route to clear their debt, but it also eliminates a key revenue driver. Part of me wonders whether they’re eyeing a buyout—showcasing Udenyca’s value to attract bids for the whole company before the divestment closes. That’s just speculation, but it’s worth considering.
Regarding the upcoming business update: if management can provide real clarity on the pipeline, how they plan to use their cash, and exactly where Loqtorzi fits into the big picture, we might see more liquidity enter the stock. That could push shares higher, maybe surpassing the levels we saw after the initial Udenyca announcement. For now, I’m holding onto all my shares until I hear what they have to say. That seems like the most sensible approach. Once we get that clarity, I’ll have a better idea of when (or if) it’s time to exit my position.