Coherus Oncology, Inc. (CHRS) Q3 2024 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Q3 2024 Coherus BioSciences Earnings Conference Call. At this time, all participants are in a listen-only mode. [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, Jodi Sievers, Head of Investor Relations. Please go ahead.

Thank you, Daniel. Good afternoon and welcome to Coherus BioSciences third quarter 2024 earnings conference call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus; Bryan McMichael, Chief Financial Officer; Paul Reider, Chief Commercial Officer; Dr. Rosh Dias, Chief Medical Officer; and Dr. Theresa LaVallee, Chief 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. These statements include, but are not limited to, the following. Expectations for the time that it will take for our labeling and packaging CMO to resume packaging of UDENYCA and projections about the timing and number of units that it will complete. Projections about the timing and number of units that may be completed by our additional labeling and packaging CMO and projections about future revenues, market share and expenses. All of these forward-looking statements involve substantial risks and uncertainties that are beyond our control and could cause actual results, performance, or achievements to differ from those implied by the forward-looking statements. These statements are not guarantees of future performance and are subject to substantial risks and uncertainties, including risks and uncertainties inherent in the clinical drug development process and are reliance on third-party that are discussed in our press release that we issue today, as well as the documents that we file with the SEC. Forward-looking statements provided on the call today are made as of this date, and we undertake no duty to update or revise any forward-looking statements. And now, I’ll turn the call over to Denny.

Thank you, Jodi. Good afternoon everyone, and thank you for joining us today on the call. Today, we're pleased to share updates from the third quarter of 2024. Nine months into the year, we continue to first make good progress towards advancing innovative next-generation therapy innovative next-generation therapies with the potential to extend cancer patient survival. And secondly, execute well against our 4 part strategy to deliver long-term shareholder value, specifically to drive top-line growth, control operating expenses, advance our pipeline, and improve our capital structure. While we have done well across each of these four dimensions, we are particularly pleased with the sales performance of the UDENYCA franchise through the third quarter. So I will focus there first. Significantly, UDENYCA has achieved 100% revenue growth since Q3 2023 reaching $66 million in revenue this quarter. This includes a 30% increase from Q2 to Q3 this year as our franchise kicked into high gear, demonstrating that our 3 presentation franchise options and its On-Body, the auto-injector, and the prefilled syringe is working very well and delivering exceptional value to customers. Also in Q3, UDENYCA retained its number 2 position in the market with nearly 30% share. We expect UDENYCA to return to market growth in 2025. Now let me address the UDENYCA supply interruption and our overall supply chain strategy for just a moment. I'm happy to report to you that based on the updated production schedule, our labeling and packaging contract manufacturing organization is resuming final packaging of UDENYCA this week. While this is a few weeks later than previously targeted, it's important to note that now that the CMO is restarting, they plan to process all 13 backlog lots without further interruption or delay. This comprises about 120,000 UDENYCA units, representing several months' worth of supply, which are expected to be completed over the next 5 weeks. This will allow us to restock the distribution channels as fast as possible as we expect to ship these final product lots as they are completed, making sure they get to our customers in an expedited fashion. Now that we have the schedule, we have started working with our channel partners and customers to understand and model how the restocking exercise will impact Q4 sales and the uptake dynamics. Since that effort is just now starting, we do not have a Q4 sales estimate for you today, but plan to provide one in early January. We've also made significant progress bringing an additional labeling and packaging CMO online in order to expand and further diversify our supply chain. Set up and test lots have been completed, qualification of manufacturing is underway and the requisite regulatory discussions are ongoing. Saleable lots are planned to start manufacturing in December, and once the product from this operation is authorized for sale, we will have successfully doubled our labeling and packaging capacity to over one million UDENYCA units annually, consistent with the rest of our supply chain. We will be ready to meet the growing demand for UDENYCA and expect substantial market share increases in 2025 and beyond. Now I'll turn to LOQTORZI, approved in nasopharyngeal cancer and our first commercial immune-oncology agent. LOQTORZI sales grew 54% quarter-over-quarter, as we continue to execute well against our launch plan. Paul Reider, my Chief Commercial Officer, will provide a more detail later on our call. So let me just say that we have tremendous confidence in long-term potential for LOQTORZI in the treatment of NPC and as a foundational element of our combination therapy strategies. As our pipeline of innovative immune-oncology drug candidates, let me share why I'm so so excited about the opportunities there. First, our differentiated and diversified portfolio includes promising tumor microenvironment, immunotherapy antibody drug candidates focused on enhancing the innate and adaptive immune responses to enable a robust immunological response and improve outcomes for people living with cancer. Second, our targeted development strategy focuses on combinations that have a established proof of mechanism, providing the strong line of sight into target tumor types with the most potential for improving efficacy in the areas of unmet need. And thirdly, our drug candidates target large addressable patient populations and attractive market opportunities across several high unmet need tumor types that in turn will drive substantial shareholder value in the upcoming years. As far as near term catalysts, I'll let Dr. Theresa LaVallee and Dr. Rosh Dias speak to the detail, but we look forward to reporting on Phase 1 and 2 clinical trials for CHS-114 and [indiscernible] dose respectively in the first half of 2025. Lastly, I'd like to reiterate that discipline financial management remains a high priority at Coherus, and we are now seeing the positive impact from our cost-saving efforts over the last year reflected in our balance sheet, which Bryan McMichael, our Chief Financial Officer, will cover later on this call. We are very confident in our ability to create long-term value for our shareholders through both our product portfolio and our competitively positioned pipeline. We are executing well against our strategy and goals for the year and are excited about where our vision can take us moving forward. And with that, I'll turn the call over to Paul.

Thank you, Denny, and good afternoon, everyone. Our dedicated commercial execution in oncology continues to deliver impressive results, highlighted by sixth consecutive quarter of top-line revenue growth for UDENYCA and strong progress on LOQTORZI following its third quarter of commercial launch. Total net product revenue for the quarter was $70.6 million, a 21% increase over Q2. Q3 UDENYCA net revenue was $66 million, a 30% increase quarter-over-quarter and a 100% increase over Q3 2023. LOQTORZI net revenue was 5.8 million in Q3 a 54% increase quarter-over-quarter. We reiterate our belief that LOQTORZI will follow a steady revenue ramp in the near term fuel by new patient acquisition with sustained growth over time, driven by duration, as 80% of long-term value is from early-line continuing patients, which we estimate will take three to four years to fully materialize. As I outlined in the Q2 call, there are approximately 2,000 NPC patients that are LOQTORZI eligible each year. In early line patients represent approximately two-thirds of the total eligible population. Based on the impressive PFS and OS results from Jupiter 2. Early line NPC patients would receive the combination of LOQTORZI and chemotherapy and are expected to have the longest duration of treatment and greatest therapeutic benefit. Therefore, acquiring early line patients are a top priority. In Q3, the total number of LOQTORZI treated patients grew by more than 60% and approximately 70% of total LOQTORZI patients are being treated in combination with chemotherapy indicating we are making strong progress in acquiring our targeted patient population. It's still too early in the launch to make conclusions on duration of treatment, but based on real-world evidence, the majority of early-line patients who have started on LOQTORZI remain on therapy. Overall, the launch is progressing well and we continue to project that LOQTORZI will achieve a dominant market share position in the NPC market that we estimate to be valued at $150 million to $200 million. In the near-term, our priorities remain focused on 3 revenue drivers, driving new patient share through strong HCP and patient identification, ensuring LOQTORZI messaging is delivered at the time of treatment decision, and optimizing the duration of LOQTORZI treatment. Now regarding UDENYCA, our overarching strategy for UDENYCA is to maximize the long-term revenue of the franchise. And I'm pleased to report UDENYCA delivered another quarter of revenue growth driven by continued strong execution and fueled by three drivers. First, the successful commercial launch of UDENYCA on-body. Second, UDENYCA is the only pegfilgrastim brand with three different delivery options to meet the unique needs of providers and patients. And third, broad payer coverage, which opens access to significantly more patient lives. Today, UDENYCA is covered on over 60% of commercial Medicare Advantage and fee-for-service plans in 2024 and we anticipate 2025 coverage to be similar, if not better than 2024. Despite overall franchise demand declining 3% quarter-over-quarter due to the temporary supply interruption, the 30% increase in Q3 revenue was driven by a 54% increase in demand for on-body as well as a higher overall net selling price. Regarding UDENYCA on-body, we remain pleased with the launch performance to date and customer receptivity continues to be very positive. Demand for on-body in Q3 is fueled by its differentiated features such as on-body’s 5-minute injection time compared to the 45-minute delivery for Neulasta Onpro. In Q3, on-body accounted for 21% of the franchise SKU mix, while the prefilled syringe and auto injector presentations represented 74% and 5% respectively. Regarding market share, UDENYCA maintained its number two position in the pegfilgrastim class with 28% market share. And with respect to the resupply plan that Denny laid out in his remarks, the replenishment timeline and quantity set us up to resume generating sales in the late November to early December timeframe. Therefore, we are focused on two priorities. First, replenishing the distribution channel. And second, working closely with each account to resume UDENYCA demand, the pace of which is difficult to predict as it could take customers time to reestablish order sets and patient workflows. That said, we remain confident that customers will resume UDENYCA prescribing in Q4 with demand, and market share acceleration in Q1 and throughout 2025, as the UDENYCA franchise remains in a strong competitive position based on our three brand pillars. The innovative and differentiated on-body presentation, the only brand with three device options and broad payer coverage, which for 2025 looks to be as good or better compared to 2024. With that, I'll now turn the call to Dr. Theresa LaVallee. Theresa?

Thank you, Paul, and good afternoon, everyone. Now to discuss our focus on the promise of the Coherus TME targeted pipeline for development in combination with toripalimab. PD1 inhibitors have revolutionized cancer care bringing long-term survival to some cancer patients. The limitation of PD1 inhibitors is that the treatment only works in a minority of patients, and tumor types that are classified as hot, such as lung, renal and bladder cancer. Less than half of patients enjoy long-term survival benefit from PD1 treatment. Moreover, there are many tumor types that do not respond to PD1 inhibitors, and these tumor types are classified as cold or immune desert, such as pancreatic and colorectal cancer. For tumors that don't respond to PD1 inhibitors, there have been a number of resistance mechanisms characterized and two major ones are myeloid cell and T-reg cell suppression of anti-tumor immune response blocking the activity of PD1 inhibitors. Many of these mechanisms have been targeted and evaluated clinically, but have failed due to lack of single-agent activity. Toxicity challenges are not having a targeted line of sight to indications for proof-of-concepts. In the next week at the Annual Citi Conference, we will present posters on Casdozokitug or IL-27 antagonist that targets myeloid-driven suppression and CHS-114, our CCR8 cytolytic antibody that eliminates T-Ray cell suppression in the tumor. The Casdozokitug presentation will focus on the promising clinical data in non-small cell lung cancer and particularly the squamous subtype where Casdozokitug treatment has resulted in monotherapy responses, immune activation, and a safety profile that lends itself to combination with other agents. The translation of the preclinical data showing activity in lung and liver cancer to clinic is encouraging and forwards us strong line of sight for proof-of-concept. We continue to advance CHS-114, our Cytolytic CCR8 antibody that is designed to overcome the limitations of previous efforts targeting T-reg cells, selectively targeting of tumor resident T-reg cells, avoiding broad T-reg depletion leading to autoimmune toxicity, and also depletion of other T-lymphocytes leading to decrease in anti-tumor immune activation. The [indiscernible] will expand on the CHS-114 Phase 1 data presented at ASCO, and support the selective depletion of CCR8-positive T-reg cells with an excellent safety profile to date and show immune activation in cancer patients establishing proof of mechanism. The clinical study is now in dose optimization in combination with toripalimab and head and neck squamous cell carcinoma. The study is designed to address dose selection in alignment with FDA's project Optimus and also safety biomarker and efficacy readouts. Many solid tumors have a high prevalence of CCR8-positive T-reg cells, including immune nonresponsive or cold tumors like colorectal and pancreatic cancer. The tumor types with the highest prevalence and density of CCR8-positive T-regs are head and neck, gastric, and cervical cancers. Advancing the clinical trials with CHS-114 and toripalimab is a key aim in 2025 with anticipated data readouts in the second half of 2025. I'll now turn the call to Dr. Dias, our Chief Medical Officer. Rosh?

Thank you, Theresa, and good afternoon, everyone. LOQTORZI as the foundational asset of our immune-oncology portfolio remains the only indicated agent in nasopharyngeal carcinoma with its demonstrated profound survival advantage in first line and strong data in second line and beyond. Perhaps most importantly for further development, with its FDA approval in NPC, it does give us the ability to continue to develop it together with our pipeline across additional tumor types of our foundational PD-1 combination agent. We previously articulated our development strategy outside NPC to be formed by three key strategic pillars, which represents an effective and efficient way of resource allocation to optimally develop our IO pipeline. Firstly, in combination with our internal pipeline of the very well-competitively positioned assets. Casdo is a key target, our first-in-class IL-27 targeting antibody, and CHS-114, our CCR8 cytolytic antibody, which affords us the opportunity to further explore the patient benefit of LOQTORZI in combination with our own pipeline in tumor types beyond the NPC indications in areas that are underserved by immunotherapy. Secondly, a combination with external partner compounds at the discovery or close to discovery stage, which allows us to develop LOQTORZI in combination with early-stage development assets in additional tumor types, such as a study in combination with ENB Therapeutics and the Cancer Research Institute, where we're providing LOQTORZI in ovarian cancer. And thirdly, combination with external partner compounds at the later registration enabling study stage where, again, we're providing LOQTORZI for combination with later stage external agents such as the combination study with the INOVIO vaccine in head and neck cancer and also the combination with junishi's BTLA in limited stage small cell lung cancer, which again allows us to develop LOQTORZI in additional tumor types with combination partners. For the latter two approaches, whilst we're providing LOQTORZI, our development partners bear the development costs of these trials. Let me now take each of these in turn, starting first with our internal pipeline development. Firstly, casdozokitug. We're developing casdozokitug in two specific indications, non-small cell lung cancer and hepatocellular carcinoma. Both approaches build on very encouraging data sets previously communicated at International Congresses with further data from these trials to be presented at upcoming congresses. For non-small cell, casdozo has shown monotherapy activity in advanced disease with both partial responses being observed in squamous cell carcinoma patients, where IL-27 is more densely present and where, arguably, there's a greater unmet medical need. Both responses were also in PD-L1 refractory subjects and in less inflamed tumors. We're taking these data forward in our ongoing trial in the US with the toripalimab combination in advanced disease, which includes key academic centers in the US and is recruited to plan. For HCC, casdozo has shown encouraging responses in the first line setting when added to the existing standard of care, atezo and bev with data presented at ASCO GI at the start of this year showing an overall response rate of 38% with three complete responses, an increase from the 27% ORR and zero complete responses communicated a little over a year ago. Again, we look forward to communicating further extended follow up of these data at upcoming congresses. We're building upon these data with a new study in the U.S. as previously communicated of casdozokitug in combination with tori and bev and we remain on track to open this multinational study later this year. With a relatively low anti-drug antibody rates of tori, we remain excited about the potential of this particular combination as the current standard of care atezo with bev has a high ADA rate that may hinder patient benefit. For CHS-114, our primary approach is in head and neck squamous cell carcinoma, a tumor type that is complimentary to our existing atezo indication, where disease linkage is strong and our ongoing trial in the U.S. investigating both monotherapy and combination with tori continues to recruit to plan. As a reminder, we're aiming to get paired biopsy samples from this study and are planning on increasing outpatient number further indication expansion in head and neck. I'm also pleased to announce that we're currently in planning to open a further study with CHS-114 in combination with tori in gastric cancer on the basis of strong disease linkage, showing a high prevalence of CCR8-positive T-regs in gastric cancer and the encouraging data from Lenova presented at ASCO this year with their CCR8 antibody in combination with toripalimab with the selectivity and potency of our anti-CCR8. We're excited about the potential of our combination, which will form the first cohort of a study exploring CHS-114 with tori in additional tumor types and which we're preparing to open in quarter one next year. For our partnership approaches, the studies utilizing lock tools in previously communicated remain either in startup for both the EMB therapeutics combination of in ovarian cancer and the combination in head and neck with [indiscernible] or ongoing. As with the Junshi sponsored multinational study investigating Junshi's BTLA in combination with Tori, tori alone or observation in limited stage small cell. Finally, we have a very active investigator-sponsored program ongoing with much interest of physicians being received for the investigation of toripalimab for IST in head and neck cancer and beyond. And with that, I'll hand over to Bryan McMichael, our Chief financial Officer. Bryan?

Thank you, Rosh, and good afternoon everyone. As Denny and Paul shared, it was a strong quarter as we continue to successfully execute on our strategy. Our sharpened focus on oncology is delivering results. Third quarter 2024 revenues were comparable to Q3 2023. Despite the divestiture of non-core products with higher gross profits, lower operating expenses, and lower interest expense. This past quarter saw continued savings from reduced expenditures and improved gross margins, primarily driven by these divestitures and lower headcount. Cost of goods sold for Q3 2024 was $20.7 million down $12 million from third quarter last year. This significant decrease in cost coupled with only slightly lower net revenue year-over-year led to a 20% improvement in quarterly gross profit or $8.2 million. R&D expense totaled $21.7 million, a decrease of $4 million or 15% from Q3 a year ago. Savings and R&D offset by investment in our pipeline. R&D expenses for the year reflect significant investments in our commercial products and pipeline candidates related to pre-approval costs for expanding supply chain capacity and redundancy and further derisking inventory supply through onshore and manufacturing. SG&A expense in Q3 totaled $34.7 million a decrease of $13.5 million or 28% compared to the prior year. Interest expense in Q3 was $5.4 million which reflects a decrease of $4.9 million or 48% from Q3 last year. The decline was primarily the result of fully paying off our $250 million term loan during the first half of the year, partially offset by interest on our $38.7 million principal amount term loan, and our revenue purchase and sale agreement both commencing May 8, 2024. The Q3 2024 net loss was $10.8 million or $0.09 per diluted share compared to a net loss of $39.6 million or $0.41 per diluted share for the same period in 2023. The non-GAAP net loss was $1.7 million or $0.01 per diluted share in Q3 2024 compared to $26.9 million or $0.27 per diluted share in the same period in 2023. Cash equivalents and investments in marketable securities were $97.7 million as of September 30, 2024, compared to $117.7 million at year-end. The direct impact of the temporary supply interruption on net revenue will primarily be realized in Q4 earnings, while the impact on cash will primarily lag to Q1 2025 due to payment terms with customers. Today, we are reducing the high end of our expected range of combined R&D and SG&A expenses for 2024, which is now $250 million to $260 million. This guidance includes approximately $30 million of stock-based compensation expense and excludes certain business development activities. With that, I'll turn the call back over to Denny for closing remarks.

Thank you, Bryan. Year-to-date, as we continue to execute on our four-part plan to deliver shareholder value. I want to thank our commercial team for their outstanding results and our manufacturing team for their hard work and progress on our supply interruption issue. While together we have accomplished a lot, there is more to do as we strive to bring innovative therapies to cancer patients and extend their survival. I'm now happy to turn the line open for questions. Operator?

[Operator Instructions] Our first question comes from Kripa Devarakonda with Truist Securities. Your line is open.

Hello. This is Alex Xenakis on for Kripa. Congrats on the quarter. We're all excited to see the supply chain is getting up and running. And I actually have a question on casdo and tori in the second line lung. Just gotten some attention. What are your expectations for the trial given some of the failures that we've seen from some of the competition? There's some high-profile ADCs in the area have performed as well as some people would have liked. And, what's the outlook from your team on seeing responses in both squamous and non-squamous histologies? Thank you.

Great. Thanks for the question, Alex. I'll let Dr. Rosh Dias, our Chief Medical Officer, answer that one for you, and then we'll let Dr. LaVallee add to it. Rosh?

Thanks, Alex for the question, so for non-small cell lung cancer, specifically, I think what we're seeing is that we're building upon some nice data sets that we previously communicated. We have demonstrated that we have seen a couple of monotherapy partial responses. Obviously, that's rare, particularly in PDL1 refractory subjects, and previously, and also in terms of patients who have less inflamed tumors. So that's a rare observation that we're taking forward, and we're encouraged by. The study that we have ongoing right now, is a stage design. So we're proceeding very measurably in terms of what we would like to see. The bar in second line is actually pretty low. The standard of care is docetaxel alone, typically in second line with a pretty low overall response rate. So I think, we're really following the science and we'll see how these results plan out. If we depending on how we go we plan to move forward subsequent to this with a Phase 3 study, looking at the combination versus the, again, standard of care docetaxel. Theresa, have any additional comment?

Yes, just to add that, I think, that's as we're looking broadly across the lung cancer subtypes, as well as lines of therapy, the responses that were, the monotherapy responses were in second and third line. We also have a patient who was on the surface study with casdozokitug in combination with pembro that has had stable disease for over a year. So I think really focusing on that subset where we've seen a signal to limit it to second and third line, and squamous really makes a lot of sense. And from a biology standpoint, when we think of the way that casdozokitug really got IL-27 as a target became of interest with showing that in response to infection that IL-27 was important to dampen the immune response in barrier tissues such as lung. The squamous is, lung cancer is more akin to an infection since the incidence is more common from smoking. Whereas adenocarcinoma is more common due to mutations. So in these later lines of therapy, it might be a way to really enrich for greater activity. We still think looking earlier in lung cancer could be also of keen interest across the histology subtypes since IL-27 expression is high across all lung cancer.

Thank you. Our next question comes from Yigal Nochomovitz with Citi. Your line is open.

This is [indiscernible] on Yigal. Thanks for taking my questions. I wanted to ask a couple on the UDENYCA situation. Can you give us some clarity on when UDENYCA will be available in the commercial channel again? My understanding is that the production will start this week, but wondering when inventory might see some restocking. And can you give us a sense for how accounts have managed without UDENYCA? Were they using other products or was there maybe enough products on the shelf at the hospital level where they didn't necessarily feel any particular impact? Any color that would be helpful. Thank you.

Thank you so much for the question. We're certainly happy to be putting this upon interruption behind this, and I'll let Paul make some comments for you with respect to availability in the Schultz and the building on the shelves and the customers are hanging with us. Paul?

Yes. Thanks for your question. So we're expecting sales to resume in the late November, early December timeframe. So we'll have product beginning in our 3PL at that time. And then based on the anticipated demand from customers, we expect very robust replenishment in the supply chain to occur over the course of that time, late November through December and then beyond. We also expect customer demand to resume. But as I mentioned, the pace of which we're going to have to watch as customers start to reintegrate UDENYCA into the workflows. However, I can tell you that my confidence has been bolstered over the last few days based on the number of conversations that we've had with customers who were using UDENYCA prior to the supply interruption, and who have given us the assurances that they will resume UDENYCA prescribing as soon as it's available. So I think we're going to start seeing sales coming back again late November, early December with demand accelerating by the end of the year and into 2021 and that confidence by the customers continues to be bolstered by the fact that we've got an innovative and differentiated on-body device. We're giving customers the three presentation options and we've got broad payer coverage. And those three things are of high value to the market. So that demand for UDENYCA that was there prior to the supply interruption is there today as we come out of that. So we feel very bullish and confident coming out of this period of time. Now you asked me about how the accounts managed without UDENYCA. It's a good question, two ways. Number one, if they were to access product that we had in the channel to be able to bridge them during that time, then there was really very minimal impact for them. But some accounts may not have been able to access product throughout that entire period. And so they've gone to either back to the innovator if they needed an on-body device because that's the only product available other than on-body or they would have gone to a competitive pegfilgrastim brand. As I mentioned, all indications that we're hearing is that they're going to be coming back to us upon resupply.

Thank you. Our next question comes from Michael Nedelcovych with TD Cowen. Your line is open.

Hi, Thanks for taking my question. I have a follow-up on the casdozo trial in late line lung cancer. The docetaxel response rate, especially in early trials and especially in subgroups based on histology, it's kind of a moving target. Could you give us a little more detail on maybe a response rate that you think is a good benchmark or maybe a trial that you have in mind as a decent benchmark as it relates to docetaxel and perhaps the threshold that you have in mind for the combo. Thank you.

Yes, Rosh, you want to take that.

Yes. Thanks Michael, for the question. So you're right, The docetaxel -- so docetaxel or dosi-rami is typically the second line standard of care. Typically, what you see, as you say is around a 12% overall response rate in second line. So we will be looking for an increment over that. I won't go too deep into the stats, but this will essentially be a standard Simon two stage design. So we'll be -- we have certain thresholds that we would like to meet at different stages, but the base in answer to your specific question, Michael, the baseline docetaxel, ORR that we're looking at is around the 12% mark.

Thank you. Our next question comes from Douglas Tsao with HCW. Your line is open,

I guess just to follow up on UDENYCA, I'm just curious, so you'll be selling again at the end of November. At what point do you think you'll be able to meet all demand in the marketplace?

Thanks to your question, Doug. I think that's a great question. We have scheduled some 120,000 units to be produced in five weeks, so that's prior to the end of the year, and I think that's several months production. So I would say within three, maybe five weeks, we'll have all this product into the market. So it's moving very quickly on the resupply.

So Denny, so by the beginning, so while the fourth quarter will sort of be obviously impacted by the first quarter, hopefully, you'll sort of be back up and running, and do you think it will take any time given the fact that customers had to come up with sort of contingencies, or do you think that once you get back to full supply, you'll be sort of back to normal, so to speak?

Yes, well, once again, I think that resupplying the channels in particular, the distributors will be occurring in December, certainly into January. But I'll let Paul come a little further on your follow up question about just how things shake out going forward from there in Q1. Paul, any thoughts for Doug?

Yes, thanks for your question, Doug. So the pace of which the demand acceleration will return the prior quarters, I think will be ultimately dependent upon decisions that each of the different practices make on how they're going to treat each patient. In other words, if they've had to start a patient on another therapy, during the supply interruption, they're going to have to make a decision as to whether or not they're going to switch that patient to UDENYCA, which requires some operational burden on the account's behalf. They got into reverify the insurance and it requires some work. I think that some accounts have signaled their intention to do that, which means the pace of demand acceleration returning will be faster. I think, there's other accounts that are gonna just not disrupt the patient's treatment and let them run, and then we'll be getting all new patient stores. So I think those are the dynamics that we're going to be monitoring. Most importantly, just we want to ensure a very smooth and easy transition with each account so that we can get our demand to be at or even greater levels that we had prior to the TSI.

Thanks, Paul. Doug, I think it's important to keep in mind that UDENYCA demonstrated six consecutive quarters of growth, including a 30% increase from Q2 over to Q3. And as Paul pointed out, this was largely driven by our very well-differentiated on-body device, our three presentations, and our strong coverage. Those conditions existed before the supply interruption, and they will drive the recovery of our market share after the supply interruption. So as Paul indicated, we're fairly bullish on that. Hard to predict the exact trajectory and acceleration. But these customers are coming back to us.

And have you had any customers that have indicated that they're going to purchase in less volume just as they diversify their supply chain because of the disruption.

No.

Okay. Great. That's good to hear.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Brian Chang with J.P. Morgan. Your line is open.

Thanks for taking our call this afternoon. On restocking, do you expect an even restocking across three of your UDENYCA formulation or is there a priority given to pre-filled syringe over on-body or vice versa. And I have a quick follow-up.

Paul, you want to take that one.

Sure. Thanks for your question, Brian. Yes, we're going to follow kind of a sequential restocking flow. On-body is going to come in first followed by pre-filled syringe then auto injector. So it'll come in that order and of course now we'll be working with each account on their ordering for each of the SKU respectively. So it will occur sequentially. Once we get past the initial, then everything will be in the channel. It will be continually resupplied and then it will just follow the steady state as prior.

Okay. And that's very helpful. And then maybe just one more on your contingency plan that you discussed during the shortage? Do you have to reimburse patients who are -- who have to switch over to other treatments and given that they may have to purchase from other suppliers?

Generally, no.

Okay. Thank you.

Thanks, Brian.

Thank you. This concludes the question and answer session. I would now like to turn it back to Denny Lanfear for closing remarks.

Thank you very much, Daniel, and thank you all for joining us today on our call. As you can see, we continue to make very good progress with our UDENYCA franchise in Q3. We look forward to continuing that on the other side of supply interruption in Q1. And we will keep you updated on all the progress on our IO pipeline, our tumor microenvironment agents, and so on. And lastly, we'll see you at Citi. Thank you, Daniel.

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