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Shifting strategy, Coherus buys rights to experimental cancer drug.

Coherus Biosciences, a maker of copycat biologic drugs, is getting into the business of developing new ones, announcing Monday a deal with Shanghai Junshi Biosciences for rights to a cancer immunotherapy that could compete with Merck & Co.'s Keytruda and Bristol Myers Squibb's Opdivo.

Coherus will pay Junshi $150 million upfront under the deal. Junshi could receive $380 million more if the drug, called toripalimab, succeeds and certain development and sales milestones are met. The deal also gives Coherus option rights to several earlier stage cancer drugs for a fee of $35 million each.

Coherus signaled the deal is the first step in a shift toward developing new cancer medicines using profits from its biosimilar business as funding. Chinese drugmakers like Junshi, meanwhile, have become sought-after partners for Western pharmaceutical companies like Eli Lilly and Novartis.

Coherus has proven successful at making biosimilar drugs. The company launched Udenyca, a cheaper alternative to Amgen's Neulasta in 2019 and, through the first nine months of last year, recorded $365 million in sales. In its biosimilar pipeline are copycat versions of Roche's cancer drug Avastin and eye medicine Lucentis as well as AbbVie's top-selling anti-inflammatory treatment Humira, each of which have annual sales measuring in the billions of dollars.

But the California-based company aims to expand beyond biosimilars and with Udenyca earning money, now has the cash flow to fund its plans. Junshi offered Coherus U.S. and Canadian rights to toripalimab, which is a type of cancer-fighting drug called a PD-1 inhibitor.

Six such drugs (or their close cousins) are approved in the U.S, but Merck's Keytruda is dominant, earning more than $10 billion from January through September last year. Its success has drawn competitors like Junshi, which has begun testing toripalimab in lung cancer, Keytruda's biggest market.

Toripalimab is already approved in China for treating melanoma under the brand name Tuoyi, which was the first domestically developed PD-1 blocker to be launched there. In the U.S., Junshi and Coherus this year hope to ask the Food and Drug Administration to approve the drug for use in treating patients with advanced nasopharyngeal carcinoma.

Executives portrayed the deal as the first step in a transition to "Coherus 2.0," which could be aided by the options included in the Junshi deal. For a fee, Coherus can pick up rights to earlier-stage drugs targeting cancer pathways called TIGIT and IL-2. The two companies are also in talks for two other immuno-oncology programs.

In partnering with Coherus, Junshi joins an array of Chinese immuno-oncology companies that have linked up with U.S. and European pharma companies on PD-1 drugs. Innovent Biologics signed a deal with Eli Lilly for rights to Tyvyt; BeiGene partnered with Novartis on its drug tislelizumab; and CStone is working with EQRx on development of sugemalimab.

Author:Jonathan Gardner


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