Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

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The interim financial statements included in this Quarterly Report on Form 10-Q and this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in the 2024 Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are subject to risks and uncertainties, including those discussed in the section titled "Risk Factors," set forth in Part II - Other Information, Item 1A below and elsewhere in this report, that could cause actual results to differ materially from historical results or anticipated results.

Overview

We are a fully integrated commercial-stage innovative oncology company with an approved next-generation PD-1 inhibitor, LOQTORZI, growing revenues and a pipeline that includes two mid-stage clinical candidates targeting liver, lung, head & neck, colorectal and other cancers. Our strategy is to grow sales of LOQTORZI in NPC and advance the development of new indications for LOQTORZI in combination with both our pipeline candidates as well as through our partners, driving sales multiples and synergies from proprietary combinations.

We primarily operate in the United States and partner with companies that operate in other countries.

Product and Product Candidates

Our portfolio includes the following product and product candidates:

Oncology

On December 11, 2023 we announced that NCCN updated the clinical practice guidelines for NPC to include LOQTORZI as a preferred, category 1 first-line treatment option for adults with metastatic or recurrent locally advanced NPC when used in combination with cisplatin and gemcitabine. On November 26, 2024, NCCN made a further update to the clinical practice guidelines for NPC to specify that LOQTORZI is the only preferred category 1 first-line treatment option for adults with metastatic or recurrent locally advanced NPC when used in combination with cisplatin and gemcitabine. The guidelines also recommend LOQTORZI monotherapy as the only preferred treatment in subsequent lines of therapy with disease progression on or after a platinum-containing therapy.

Further evaluation of LOQTORZI is expected through multiple current and planned clinical studies by us and our partners. We have a post marketing commitment study active and enrolling patients in locations in the U.S. and Canada in order to further evaluate the efficacy of toripalimab in combination with chemotherapy (cisplatin and gemcitabine) in patients with advanced NPC (clinicaltrials.gov identifier# NCT06457503). Junshi Biosciences is currently enrolling in a multiregional Phase 3 clinical study evaluating the treatment of LOQTORZI with its investigational anti-BTLA antibody in LS-SCLC (clinicaltrials.gov identifier# NCT06095583).

INOVIO Pharmaceuticals, Inc. plans a randomized Phase 3 study of INO-3112 and toripalimab in locally advanced, high risk HPV16/18+ oropharyngeal squamous cell carcinoma. Cancer Research Institute is evaluating toripalimab in combination with ENB Therapeutics' investigational agent ENB-003 in its Phase 2 trial titled, "Immunotherapy Platform Study in Platinum Resistant High Grade Serous Ovarian Cancer (IPROC)" (clinicaltrials.gov identifier# NCT04918186) that is being performed in collaboration with Canadian Cancer Trials Group. STORM Therapeutics, Ltd. is evaluating its METTL3 inhibitor STC-15 in combination with LOQTORZI in a Phase 1b/2 study (clinicaltrials.gov identifier# NCT06975293) for the treatment of non-small cell lung cancer and head and neck squamous cell carcinoma ("HNSCC"), and has plans for melanoma and endometrial cancer. On June 27, 2024, we entered into a license Agreement with Apotex, Inc. ("Apotex"), pursuant to which, we granted to Apotex an exclusive license under our rights to toripalimab to commercialize toripalimab within Canada ("Canada License Agreement").

License Agreement with Junshi Biosciences

On February 1, 2021, we entered into the Collaboration Agreement with Junshi Biosciences for the co-development and commercialization of LOQTORZI, Junshi Biosciences' anti-PD-1 antibody in the United States and Canada.

Under the terms of the Collaboration Agreement, we paid $150.0 million upfront for exclusive rights to LOQTORZI in the United States and Canada, an option in these territories to Junshi Biosciences' anti-TIGIT antibody CHS-006, an option in these territories to a next-generation engineered IL-2 cytokine, and certain negotiation rights to two undisclosed preclinical immuno-oncology drug candidates. On January 10, 2024, we announced that we had delivered a notice of termination of CHS-006 to Junshi Biosciences. We obtained the right to conduct all commercial activities of LOQTORZI in the United States and Canada. We are obligated to pay Junshi Biosciences up to an aggregate $380.0 million in one-time payments for the achievement of various regulatory and sales milestones, of which we have already paid $25.0 million, and a royalty in the low twenty percent range on net sales of LOQTORZI. On June 27, 2024, we entered into the Canada License Agreement pursuant to which, we granted to Apotex an exclusive license under our rights to toripalimab to commercialize toripalimab within Canada.

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Key Business and Other Updates

The following represents a summary of notable business updates and events since the filing of our Quarterly Report on Form 10-Q for the Quarterly Period ended June 30, 2025, including certain items from our press releases and Current Reports on Form 8-K, which readers are encouraged to review in full when they become available on our website at https://www.coherus.com. The content on the referenced website does not constitute a part of and is not incorporated by reference into this Quarterly Report on Form 10-Q.

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Regained Nasdaq Compliance

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As previously disclosed, on June 30, 2025, we received a deficiency notice from the Listing Qualifications Department (the "Staff") of the Nasdaq Stock Market LLC ("Nasdaq") notifying us that, for 30 consecutive business days, the bid price for our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq. We had a period of 180 calendar days, or until December 29, 2025, to regain compliance with the rule referred to in this paragraph.

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On September 5, 2025, we received a letter from Nasdaq notifying us that the Staff had determined that the closing price of our common stock was $1.00 or greater for the requisite period of time, that we had regained compliance with Listing Rule 5550(a)(2) and that the matter was now closed.

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Financial Operations Overview

Discontinued Operations

The UDENYCA Sale represented the last and most significant divestiture of the Company's biosimilar businesses, which comprised the UDENYCA, YUSIMRY and CIMERLI franchises; therefore, the strategic shift criteria had been met and discontinued operations presentation has been included in the condensed consolidated financial statements for all periods presented.

Revenue

LOQTORZI was approved in October 2023 and was launched in the United States in December 2023.

Cost of Goods Sold

Cost of goods sold consists primarily of third-party manufacturing, distribution, royalties and certain overhead costs.Cost of goods sold includes a royalty in the low twenty percent range on net sales of LOQTORZI.

Research and Development Expense

Research and development expense represents costs incurred to conduct research, such as the discovery and development of our product candidates. We recognize all research and development costs as they are incurred. We currently track research and development costs incurred on a product candidate basis only for external research and development expenses. Our external research and development expense consists primarily of:

Internal costs are associated with activities performed by our research and development organization and generally benefit multiple programs. These costs are not separately allocated by product candidate. Unallocated, internal research and development costs consist primarily of:

The process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming. Furthermore, in the past, we have entered into collaborations with third parties to participate in the development and commercialization of our product candidates, and we may enter into additional collaborations in the future. In situations in which third parties have substantial influence over the development activities for product candidates, the estimated completion dates are not fully under our control. For example, our partners in licensed territories may exert considerable influence on the regulatory filing process globally. Therefore, we cannot forecast with any degree of certainty the duration and completion costs of these or other current or future clinical trials of our product candidates. We may never succeed in achieving regulatory approval for any of our pipeline product candidates. In addition, we may enter into other collaboration arrangements for our other product candidates, which could affect our development plans or capital requirements.

Selling, General and Administrative Expense

Selling, general and administrative expense consists primarily of personnel costs, allocated facilities costs and other expense for outside professional services, including legal, insurance, human resources, outside marketing, advertising, audit and accounting services, acquisition-related costs, and costs associated with establishing commercial capabilities in support of the commercialization of LOQTORZI. Personnel costs consist of salaries, benefits and stock-based compensation. Reimbursement of expenses from counterparties to the TSAs are recorded as reductions to selling, general and administrative expense.

Interest Expense

Interest expense consists primarily of interest incurred on our outstanding indebtedness, our Revenue Purchase and Sale Agreement, and non-cash interest related to the amortization of debt discount and debt issuance costs associated with our outstanding debt agreements.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest earned on our cash and cash equivalents, non-cash accretion of discount on our investments in marketable securities, foreign exchange gains (losses) resulting from currency fluctuations, gains (losses) from financial instruments including the change in fair value of the Royalty Fee

Derivative Liability, gains (losses) from disposal of long-lived assets, and income related to certain services provided under transition service agreements.

Results of Operations

Comparison of Three and Nine Months Ended September 30, 2025 and 2024

Revenue

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The increase in LOQTORZI net revenue for the three and nine months ended September 30, 2025 compared to the same periods in the prior year was driven primarily by volume growth of LOQTORZI, which launched in December 2023. Other revenue decreased in the nine months ended September 30, 2025 compared to the prior year period primarily driven by the $6.3 million for the outlicensing of rights to commercialize toripalimab within Canada on June 27, 2024.

We expect net revenue from continuing operations in 2025 to be higher than in 2024 because of continued growth of LOQTORZI.

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Cost of Goods Sold

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The increase in cost of goods sold from continuing operations for the three and nine months ended September 30, 2025 compared to the same periods in the prior year was primarily due to volume growth of LOQTORZI, which launched in December 2023.

We expect cost of goods sold from continuing operations for 2025 to be higher than 2024 because of continued growth of LOQTORZI.

Research and Development Expense

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The increase in research and development expense from continuing operations in the three months ended September 30, 2025 compared to the prior period was primarily due to the following:

The increase was partially offset by a decrease of $1.4 million in facilities, supplies and materials and other infrastructure related expenses to support our research and development programs.

The increase in research and development expense from continuing operations in the nine months ended September 30, 2025 compared to the prior period was primarily due to the following:

The increase was partially offset by the following:

We expect our research and development expense in 2025 to be higher than 2024 due to continued investments in our immuno-oncology pipeline.

Selling, General and Administrative Expense

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The decrease in selling, general and administrative expenses from continuing operations in the three months ended September 30, 2025 was primarily due to a lower average headcount which resulted in reductions of $3.3 million in employee-related costs including stock-based compensation and lower professional fees of $1.4 million. These reductions were partially offset by a $1.6million net impairment charge in the third quarter of 2025 relating to the write-off of the net carrying value of the out-license intangible asset of $2.1 million and the final remeasurement of the CVR liability of $0.5 million related to GSK4381562to its fair value of zero (see Note 5. Balance Sheet Components).

The decrease in selling, general and administrative expense from continuing operations in the nine months ended September 30, 2025 was primarily due to a lower average headcount resulting in reductions of $8.7 million in employee-related costs including stock-based compensation,the $6.8 million net impairment charge in the first quarter of 2024 relating to the write-off of the net carrying value of the out-license intangible asset of $10.6 million and the final remeasurement of the CVR liability of $3.8 million related to NZV930 to its fair value of zero, lower professional fees of $3.6 million and a reduction of $1.4 million in facilities, supplies and materials and other related expenses to support our commercial infrastructure. These reductions were offset by the $1.6million net impairment charge in the third quarter of 2025 relating to the write-off of the net carrying value of the out-license intangible asset and the final remeasurement of the CVR liability related to GSK4381562to its fair value of zero (see Note 5. Balance Sheet Components).

We expect our selling, general and administrative expense from continuing operations for the full year 2025 to be lower than the full year 2024 primarily as a result of decreased operating costs and headcount.

Interest Expense

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The decrease in interest expense from continuing operations in the nine months ended September 30, 2025 was primarily due to prepaying the remaining $75.0 million of the principal amount due under the 2027 Term Loans on May 8, 2024, partially offset by interest expense on the $38.7 million 2029 Term Loan and the LOQTORZI portion of the Revenue Purchase and Sale Agreement, both of which commenced on May 8, 2024 and incurred nine months of interest during the nine months ended September 30, 2025.

Interest expense from discontinued operations was zero and $2.5 million in the three months ended September 30, 2025 and 2024, respectively, and $3.5 million and $13.0 million in the nine months ended September 30, 2025 and 2024, respectively, and was related to the 2026 Convertible Notes, the UDENYCA portion of the Revenue Purchase and Sale Agreement, and $175.0 million of the $250.0 million principal amount due under the 2027 Term Loans.

We expect interest expense from continuing operations to be lower in 2025 than 2024, primarily as a result of repaying the remaining $75.0 million principal amount of the 2027 Term Loans during the second quarter of 2024.

Loss on Debt Extinguishment

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The $12.6 million loss on debt extinguishment in the nine months ended September 30, 2024 resulted from the payoff of the 2027 Term Loans in May 2024, and the charge included the write-off of the remaining debt discount and debt issuance costs, the prepayment premium fee, the make-whole interest payment, and lender fees.

Other Income (Expense), Net

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Other income (expense), net from continuing operations in the three months ended September 30, 2025 was comparable to the same period in the prior year.

Other income (expense), net from continuing operations in the nine months ended September 30, 2025 changed unfavorably compared to the same period in the prior year primarily due to a reduction of certain TSA reimbursements classified in other income of $1.8 million, a decrease in foreign exchange gains of $1.3 million, and the change in fair value of the LOQTORZI Royalty Fee Derivative Liability of $0.8 million, partially offset by an increase in interest and investment income of $2.6 million.

Net Income from Discontinued Operations, net of tax

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The decrease in the three months ended September 30, 2025 was primarily driven by lower net revenue of discontinued products partially offset by lower cost of goods sold. Total net revenues attributable to our divested products, UDENYCA, CIMERLI and YUSIMRY, which are reflected in discontinued operations, were $10.7 million and $64.7 million for the three months ended September 30, 2025 and 2024, respectively, and $65.9 million and $194.2 million during the nine months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025, net revenue was primarily driven by a favorable settlement, resulting in a non-cash accrual release of $8.7 million.

The increase in the nine months ended September 30, 2025 was primarily driven by the $162.0 million favorable change in gain on Sale Transactions (2025 period included the UDENYCA gain and 2024 period included CIMERLI and YUSIMRY gains) and lower cost of goods sold of $51.5 million, partially offset by lower net revenue and an $11.8 million charge in the first quarter of 2025 for the change in fair value of the Royalty Fee Derivative Liability related to UDENYCA.

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Liquidity and Capital Resources

Certain relevant measures of our liquidity and capital resources are summarized as follows:

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As of September 30, 2025, we had cash, cash equivalents and marketable securities of $191.7 million and an accumulated deficit of $1.3 billion. We have generated significant operating losses in all the years since our inception except for certain periods that had gains from divestitures and 2020 and 2019. We currently have one commercial product, LOQTORZI, which generated $11.2 million in net revenues during the three months ended September 30, 2025. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. As of September 30, 2025, our investment in cash, cash equivalents and investments in marketable securities are primarily held in money market accounts, commercial paper and corporate notes, U.S. Treasury securities, and U.S. government agency securities. We have funded our operations primarily through sales of our common stock, issuance and incurrence of debt, the Revenue Purchase and Sale Agreement, the Sale Transactions and sales of our products.

The following is a summary of recent key liquidity events and financing transactions:

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We may utilize our ATM Offering from time to time in order to sell our common stock. As of September 30, 2025, we had approximately $64.9 million of our common stock remaining available for sales under the ATM Offering.

We believe that our available cash, cash equivalents and marketable securities, product sales, and ATM Offering proceeds received to date will be sufficient to fund our planned expenditures and meet our obligations for at least the twelve months following our financial statement issuance date.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development and commercialization sooner than planned. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into additional agreements with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated research and development activities, and on-going and future licensing and collaboration obligations. We may need to raise additional funds in the future; however, there can be no assurance that such efforts will be successful or that, if they are successful, the terms and conditions of such financing will be favorable. Our future funding requirements will depend on many factors, including the following:

For further discussion of risks related to our financial condition and capital requirements, please see "Risk Factors- Risks Related to Our Financial Condition and Capital Requirements."

Contingent Milestones

We have obligations to make future payments to third parties that become due and payable upon the achievement of certain development, regulatory and commercial milestones (such as clinical trial achievements, the filing of a Biologics License Application ("BLA"), approval by the FDA or product launch). These milestone payments and other similar fees are contingent upon future events and therefore are only recorded when it becomes probable that a milestone will be achieved or other applicable criteria will be met. Because the achievement of these milestones had not reached the threshold for recognition as of September 30, 2025, such contingencies were not recorded in our financial statements.

The following presents a summary of our active partnerships and collaborations that have material contingent regulatory and sales milestones as of September 30, 2025:

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Contingent Value Rights

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As of September 30, 2025, the remaining CVRs in connection with the Surface Acquisition consisted of the CVRs associated with the receipt by us of any upfront payments pursuant to ex-U.S. licensing agreements related to casdozokitug or CHS-114. The potential payments are only due if we first receive upfront payments pursuant to ex-U.S. licensing agreements. Payments to CVR holders can be in the form of cash, stock or a combination of cash and stock.

Other Commitments

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We enter into contracts in the normal course of business with CROs for preclinical research studies and clinical trials, research supplies and other services and products for operating purposes. We have also entered into agreements with several CMOs for the manufacture and clinical drug supply of our commercial and product candidates.Our non-cancelable purchase commitments as of September 30, 2025 were $13.2 million, as outlined in Note 9. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

There have been no significant changes to our leases during the nine months ended September 30, 2025, as compared to the disclosure in our 2024 Form 10-K.

Summary Statement of Cash Flows

The following table summarizes our cash flows for discontinued and continuing operations on a combined basis as follows:

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Net cash used in operating activities

Cash used in operating activities of $118.8 million for the nine months ended September 30, 2025 was primarily due to adjusting net income by the net gain on Sale Transactions of $338.7 million to reflect that transaction as an investing activity, interest payments of $8.2 million and changes in operating assets and liabilities, partially offset by adjustments for non-cash items including stock-based compensation expense of $14.2 million, change in fair value of derivatives of $12.6 million, and loss on debt extinguishment of $10.3 million.

Cash used in operating activities of $49.0 million for the nine months ended September 30, 2024 was primarily due to net income of $79.2 million adjusted for non-cash items including stock-based compensation expense of $21.4 million, loss on debt extinguishment of $12.6 million, impairment of out-license asset net of CVR liability remeasurement of $6.8 million, other non-cash adjustments of $6.2 million and changes in our operating assets and liabilities, partially offset by the net gain on Sale Transactions of $176.6 million and interest payments of $18.8 million.

Net cash provided by investing activities

Cash provided by investing activities of $377.9 million for the nine months ended September 30, 2025 was primarily due to $483.4 million cash received for the UDENYCA Sale, partially offset by $89.6 million in purchases of investments in marketable securities, the second out of two $12.5 million milestone payments to Junshi Biosciences and $4.7 million in retention bonus payments in connection with the CIMERLI Sale.

Cash provided by investing activities of $230.9 million for the nine months ended September 30, 2024 was primarily due to cash proceeds of $187.8 million from the CIMERLI Sale, cash proceeds of $40.0 million from the YUSIMRY Sale, proceeds from sale of investments in marketable securities of $8.7 million, and proceeds from maturities of investments in marketable securities of $6.2 million, partially offset by a $12.5 million milestone payment to Junshi Biosciences.

Net cash used in financing activities

Cash used in financing activities of $281.8 million for the nine months ended September 30, 2025 was due to $233.2 million for repayment of substantially all the 2026 Convertible Notes and $47.7 million for the UDENYCA Buy-out.

Cash used in financing activities of $187.2 million for the nine months ended September 30, 2024 was primarily due to $260.4 million in payments to fully repay the 2027 Term Loans (excluding interest which is presented as an operating activity) and $2.5 million in tax payments related to net share settlement of RSUs. These payments were partially offset by $37.0 million of proceeds from the 2029 Term Loan, net of debt discount and issuance costs, $36.5 million of proceeds from the Revenue Purchase and Sale Agreement, net of issuance costs, and $1.5 million of proceeds from the ATM Offering, net of issuance costs.

Discontinued operations

Cash flows from continuing operations and discontinued operations have been presented together in the condensed consolidated statement of cash flows. During the nine months ended September 30, 2025, operating cash flows of discontinued operations were primarily related to the adjustment for the net gain on UDENYCA Sale of $338.7 million, partially offset by a loss on debt extinguishment of $10.3 million. During the nine months ended September 30, 2024, operating cash flows of discontinued operations were primarily related to the adjustment for the net gain on Sale Transactions of $176.6 million and an increase in UDENYCA inventory which resulted in a net cash outflow of $22.7 million.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of our condensed consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported revenue generated and expense incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

There have been no significant changes to our critical accounting estimates during the nine months ended September 30, 2025, as compared to the critical accounting estimates described in our 2024 Form 10-K. We believe that the critical accounting estimates discussed in the 2024 Form 10-K are meaningful to understanding our historical and future performance, as these estimates relate to the more significant areas involving management's judgments and assumptions.

Recent Accounting Pronouncements

For a description of the impact of recent accounting pronouncements, see Note 1. Organization and Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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