Coherus Stock Plummets As FDA Rejects Neulasta Biosimilar

Coherus Biosciences, Inc. (NASDAQ:CHRS) shares declined nearly 24% in yesterday’s trading as it announced that it has received a complete response letter (CRL) from the FDA for its biosimilar version of Amgen Inc's (NASDAQ:AMGN) blockbuster drug, Neulasta. The CRL will delay the potential regulatory clearance for the biosimilar CHS-1701.

Neulasta is used to prevent the chance of infection in patients with non-myeloid cancer who receive anti-cancer therapies.

We note that Coherus’ share price has declined 44.1% so far this year, underperforming the Zacks classified Medical-Biomedical and Genetics industry, which increased 2.3%.

The CRL doesn’t request for additional studies. However, it is primarily focused on a reanalysis of a subset of treated patients for a revised assessment of the biosimilar’s immunogenicity. It also requests for additional information on certain manufacturing related process. .

In its press release, Coherus noted that it will coordinate with the FDA to address the requested information and define a path to get approval for the candidate. The company has also submitted a marketing application for the biosimilar in the EU.

Approval for a biosimilar of Neulasta will offer a huge market potential for the company as Neulasta is a preferred treatment in patients receiving chemotherapy. It generated sales of $1.2 billion in the first quarter of 2017 and $4.6 billion in fiscal 2016.

Neulasta biosimilars are already available in the EU while U.S. companies are currently developing them. The biosimilar of the drug from Mylan N.V. (NASDAQ:MYL) and India-based Biocon Ltd is under review with a decision expected in October this year. The FDA also issued a CRL to Novartis AG’s (NYSE:NVS) generic arm, Sandoz’s biosimilar last year and it is working to resolve the issues.

Zacks Rank

Coherus currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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