Coherus Oncology Inc (CHRS) 2016 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Coherus Biosciences fourth-quarter earnings conference call. My name is Skyler, and I will be your conference operator for the call today.

(Operator Instructions)

And as a reminder, this conference call is being recorded. I would now like to turn the call over to Patrick O'Brien, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Skyler, and good afternoon, everyone. After close of market, we issued a press release with the corporate highlights and financial results for the fourth quarter and full year 2016. This release can be found on the Coherus Biosciences' website.

Joining me for today's call will be Denny Lenfear, President, CEO, and Chairman; Barbara Finck, Chief Medical Officer; Lisa Bell, EVP, Global Regulatory Affairs; Jean Viret, CFO; Matt Hooper, EVP and General Counsel; and Michael Fleming, EVP, Commercial Strategy.

Before we begin our formal remarks, I'd like to remind you that we'll be making forward-looking statements with respect to product development plans, all of which involve certain assumptions, risks and uncertainties that are beyond our control, and could cause actual results to differ from these statements. A description of these risks can be found on our most recent Form 10-K on file with the SEC. In addition, Coherus Biosciences does not undertake any obligation to update any forward-looking statements made during this call.

I would now like to turn the call over to Denny.

Thank you very much, Patrick, and thank you all for joining us today. I'll first review progress on the Company's lead programs, CHS-1701, and then I will go on to CHS-1420, CHS-0214, and then, 131 on legacy small molecule.

In terms of CHS-1701, we've seen good progress with the BLA over the last quarter. It is progressing as expected, and we continue to interact with the FDA in a normal fashion on the application. And we believe that we continue to progress towards our action date of June 9, 2017.

We continue to prepare for our potential advisory committee, and we have no date thus far, but we will be ready, and we've had a number of dry run-throughs in preparation. We have had certain inspections of manufacturing facilities, as well as other inspections, and we have no major concerns for the BLA in the context of those inspections. We anticipate no impact to our commercial supply chain.

On the MAA side in Europe for that product, we are expecting our Day 120 comments, and we'll determine the timing of our response upon review of those. We are currently preparing for the European inspection, of course.

On the commercial side of CHS-1701, we continue to prepare for a mid second half of 2017 launch, and we believe the commercial potential of this product is quite strong, and we plan to capitalize on the substantial opportunity. There is a very large reference market. Price growth in the brand has been driving increased demand for biosimilars, and you'll hear more about this a little later, and we'll be happy to take questions during the Q&A. This pent-up demand, we believe will drive sales, and we would just guide you as we have had previously to some of the Zarxio experiences of recent, and we will update you with more specifics on the next call.

Turning my attention now to CHS-1420, let me just first give you a program review then I'll touch upon some of the patents and the legal activities. And then lastly, we'll have a little brief discussion about the BLA status.

In terms of the program development, we had a successful PK bioequivalance study there. This was Phase 3 material versus US Humira. As you know from our previous press releases, this met all primary endpoints including AUC, Cmax, et cetera and this robust result gives us great confidence that, as we move forward with other formulations, we'll be successful.

There's a couple other things going on, on the product development side of 1420, I can apprise you of. First of all, the [inline] portion of two other minor studies, 1420-04 and 1420-05 is now complete, and these two studies will enable registration of the auto injector configuration. There's two additional PK, PD style 1406 and 1407 are underway, and these will able MAA filing in Europe.

On that legal patent side for 1420, of course, you're familiar with the 135 issues moving forward. Oral arguments were heard February 16, and there is a final decision we expect on or before May 17 in terms of that patent. I would point out that that UK court recently struck down the EU version of this patent, citing very similar arguments that the Company had in their IPRs.

In terms of the 619 patent, and its IPR, the Company filed four IPRs this quarter on adalimumab formulations. The action date of this is August of 2017, and as I've spoken before, this is part of our broader overall formulations strategy for this product. With the successful PK results that I just encapsulated for you, we're now in position to file the BLA as guided for the first half of 2017.

Let me turn my attention now to CHS-0214, which is our Enbrel biosimilar. The Company is prioritizing the 1701 and 1420 BLA activities, and there will be some impact on the 0214 filing into the second half of 2017. All else on that product proceeds as planned.

In terms of the CHS-131, the MS product, we're making very good progress there. We are having some animal studies underway to flesh out the mechanism of action, which we believe will be helpful in terms of the ultimate licensing of that product, which we project for the second half of 2017.

In terms of such licensing, just let me touch on a few key points here. First of all, US oncology, we continue, or I should say ex US oncology, we continue our efforts to license key patents of the onc portfolio ex US, particularly in Europe. I think we're having good progress there, and we continue to guide towards a first half of 2017 transaction.

On the anti-TNF front, we continue to prosecute that with potential partners, however, we believe that a PTAB decision on 135 in May will be critical in moving things forward, in terms of ultimately the licensing of 1420 in the US.

Now let me turn things over to Jean Viret, the Company's Chief Financial Officer to make some remarks. Jean?

Thank you, Denny. I will now review our financial highlights for the fourth quarter and year-end 2016.

Total revenue for the fourth quarter of 2016 was $844,000, as compared to $10.2 million in the fourth quarter of 2015. Total revenue for the FY16 was $190.1 million, as compared with $30 million in 2015. The increase over the same period in 2015 was due to increased recognition of collaboration revenue, as a result of regaining the full development and commercial rights for CHS-0214 from Shire in Europe, Canada, Brazil, the Middle East and certain other territories.

Research and development expenses for the fourth quarter of 2016 were $59 million, compared to $51.4 million for the same period in 2015. R&D expenses for the FY16 were $254.4 million, as compared to $213.1 million for the same period in 2015.

The increase in R&D expenses in the fourth quarter over the same period in 2015 was mainly due to analytical studies for early-stage programs, and our CHS-0214 programs, ongoing CHS-1420 pharmacokinetic and Phase 3 trials, offset by completion of the CHS-1701 BLA-enabling and CHS-0214 Phase 3 clinical trial. The increase in R&D expenses in the fiscal year ended 2016 over the same period in 2015 was mainly attributable to proceeding with clinical activities associated with a Phase 3 clinical study in psoriasis for CHS-1420, advances in other product candidates, and hiring additional personnel to support both late development and early-stage activities, partially offset by a decrease in costs related to BLA-enabling studies for CHS-1701, and a decrease in costs associated with the CHS-0214 Phase 3 trials that were completed in the first half of 2016.

General and administrative expenses for the fourth quarter of 2016 were $15.3 million, compared to $11 million for the same period in 2015. G&A expenses for the FY16 were $51.6 million, as compared to $36 million for the same period in 2015. Changes in G&A expenses were mainly attributable to hiring employees to support pre-commercial and accounting activities, costs associated with stock options granted since the third-quarter 2015, and legal fees to support our intellectual property strategy.

Net loss attributable to Coherus for the fourth-quarter of 2016 was $75.9 million or $1.71 per share, compared to a net loss of $52.4 million or $1.35 per share for the same period in 2015. Net loss attributable to Coherus for 2016 was $127.3 million or $3.04 per share, compared to a net loss of $223.3 million or $6.01 per share for 2015.

Cash and cash equivalents totaled $124.9 million as of December 31, 2016, compared to $[159.7] million as of September 30, 2016. Coherus raised an additional $120.3 million in net proceeds from a follow-on equity offering in February and March 2017, and begins [thus] 2017 with a pro forma cash balance of $[245.2] million. We anticipate prioritizing use of cash towards CHS-1701 commercialization activities, and seek non-dilutive sources of cash by partnering our anti-TNF, CHS-1701 and CHS-131 programs.

I will now turn back the call to Denny our 2017 guidance.

Thank you, Jean. Our 2017 guidance appears in our press release, and I've encapsulated these, the most essential parts of this in my previous remarks. I would only add that we expect approval in the MAA in the fourth quarter for CHS-1701 in Europe, and the others remain as stated in the press release. And we're happy to take any questions on these, of course, in the Q&A.

Thank you. Patrick?

Operator, we're ready for the Q&A?

(Operator Instructions)

Mohit Bansal, Citigroup.

Great, thanks. Good afternoon, and thanks for taking my question. So my question is two parts. Number one is about Neupogen biosimilar, and if you look at ZARXIO's market share so far, I mean, they have penetrated roughly 20% market within first year of launch. So do you think that should be a comparable metric to look at, when you launch your Neulasta biosimilar, or do you see any reasons to -- for it to better than what ZARXIO did? And the second question, I mean, I'll probably wait, and then I'll ask my second question after that.

Hi, Mohit. This is Denny. Thanks for the question. I will let Michael Fleming, the Company's Executive Vice President of Sales and Marketing take the point of the ZARXIO precedent for market share, and how we think that'll shape up? Michael, do you have a comment?

Yes, I do. I mean, the short answer to your question is, it's a good analog to start with if you're thinking about pegfilgrastim. Both are G-CFS, one is short-acting filgrastim, one is long-acting pegfilgrastim.

Pegfilgrastim is used almost entirely in the outpatient clinics, either stand-alone clinics or hospital ambulatory clinics. In addition to those settings, filgrastim, ZARXIO is used in the hospital inpatient setting, and a significant amount is sold in the retail segment.

So ZARXIO was also arguably a second competitor to Neupogen after Granix, whereas CHS-1701 what will potentially be the first competitor to Neulasta. So in this sense, from the point of view of commercialization, the pegfilgrastim market dynamic for us is more simpler and straightforward as an opportunity.

Due to the relatively greater size of the pegfilgrastim market compared to filgrastim, our research indicates there's a far greater pent-up demand for a pegfilgrastim biosimilar. So I think it's a good place to start, and we think we can do as well, if not better than ZARXIO, and that's what we would attempt to do.

Yes, I think, before we get to the second part of your question, Mohit, I think that is an excellent bogey and aspiration for the Company, is what Zarzio has done, that's exiting 20%. As Michael said, we think there's considerable pent-up demand on this, but we'll take a little better, closer look at the competitive dynamic a few months out, and revisit this issue for you.

Got it. Very helpful. And then, the other part is, I mean, looking at -- your [limited] capacity, you are definitely trying to find a partner for your immunological franchise, but thinking about, I mean, [Merck KGaA] is trying to offload their biosimilar business, and then, I mean, some other of your [competitors] are also looking for Humira partners.

So I mean, a lot of previous players who were in the market are trying to get out. I mean, what sort of pressure does it put on you, and then how do you -- are you differentiated in that regard, when there are other players who are trying to get [deals] out.

Thanks, Mohit. I think that it is fair to say the Company has a highly differentiated intellectual property strategy. There are those, who spoke about the number of competitors a couple of years ago, and then took a look at how this market was shaping up.

Intellectual property is really the key issue with Humira. As you've heard me say before, each of these biosimilars has a particular aspect to it, which defines its difficulty, and in a way the advantages that I think, in the differentiation that Coherus enjoys.

Pegfilgrastim, for example, is very difficult molecule in terms of its clinical biology. Etanercept is a very difficult molecule in a relative way, in terms of its production and so on, and its characterization.

The issue with adalimumab and Humira, of course, is the intellectual property. So I am not surprised that folks are shying away from this market, and we have predicted for some time that there would be some significant attrition. I'm on record as saying only, perhaps two or three competitors will actually make it across the line by 2023, and I would reiterate that here.

So I think that a robust intellectual property portfolio, focused around formulation is very important. But it's also, of course, very important to take on these other patents, 135, the dosing patents, as well as others. It's a complex intellectual property situation that you have to address. And I think that to the degree that you've done that, to the degree you'll be successful, and to the degree that, I think, you can successfully get a partner.

Douglas Tsao, Barclays Capital.

Hi, this is Morgan Williams on for Doug. So just a couple questions. If you end up being unsuccessful with the 135 IPR, what would your thinking be on partnering the anti-TNF franchise? Specifically, would you consider a partnership with some sort of contingent value built in or another more creative deal structure? And then secondly, a lot has been said about your adalimumab IP, and just wondering when you we think about asserting that IP against follow-on biosimilar developers, since we have seen some approvals come in?

Hi, Morgan. Thanks for the question. So first of all, the Company, of course, would decline to discuss publicly its intellectual property strategy, in terms of other potential competitors until the appropriate time. So we would have to ask you to just to wait and see on that. But I think that investors are certainly capable of reading these various patent filings, and looking at the various dates, and understanding them.

The other issue though, I think is that in terms of 135, it's currently blocked in the United States, of course, until that patent falls, but that doesn't affect Europe and other markets. In fact, 135 and its [analog] I should say just went down in Europe. So it's still possible, of course, to do a ex US deal, although arguably the US comprises the lion's share of that.

So in terms of 135, I think we'll just have to wait and see. It's not that long. It's going to be May 17, we'll see how the cards fall with that. But I think if it falls our way, I think it will be a positive catalyst for the Company, and also for our partnering efforts.

Okay. Thank you. And just a quick follow-up. Can you remind us when we would know about a potential AdCom on 1701?

That's a great question. As I indicated in my remarks, we have not heard about an Advisory Committee so far. But we do have Dr. Lisa Bell here, the Company's Executive Vice President of Global Regulatory Affairs, and perhaps Lisa would like to give you a little more color or observations on this. Lisa?

Hi, Morgan. Yes, so we, obviously are -- have been working as Denny said earlier, we've been working hard in preparing for an advisory committee, because we're going to be ready, irrespective of when the date comes through. I think it's also important for us to remember, and there's been various points made on this, both by us, and actually the FDA has also publicized things in podcasts, and other forums, about how they are trying to progress through the year under new administration, and also under situations where they're quite resource constrained.

So in short, this something that we're monitoring closely. Obviously, we have to follow FDA's lead because it's the advisory committee is called at their request, and under situations where they're resource constrained, I think that they're going to try to manage appropriately to make sure they get the [investment] that they need, when needed.

But so, just a follow-up -- (multiple speakers) Sorry, just a quick question for Lisa. But if you do not have an AdCom that is not necessarily a negative, or any sort of indicator going into the PDUFA date, correct?

Correct, absolutely correct. I think that there is a variety of different applications obviously, under review for biosimilars and other products. And I think it's worth noting, that if you look at their current schedule, the advisory committee, there is very few that have been scheduled. So I don't see this as a commentary on the status of the review at all.

Yes, they're certainly not obligated to have an advisory committee. And I would caution investors not to read anything negative into the fact that we have not been notified of an advisory committee thus far.

Okay. Thanks, Denny. Thanks, Lisa.

Alethia Young, Credit Suisse.

Hey, guys. Thanks for taking my question. The first one -- in your comments around the first half for a partnership, if the 135 is invalidated, I guess, would you expect that time line to change, if it is invalidated? Is that exactly how we should interpret that front? And then, I have one more question.

What I am indicating to you is that 135 will be important to be dealt with one way or another, to try to get a licensing deal accomplished in the first half of the year. If it is dealt with successfully, and that patent falls, then obviously, I think we can move forward directly with licensing. However, if it is not, what we're signaling is licensing will, I think, understandably be hampered on the product.

And then, just a second question. On the OnPro for Neulasta or the version that you may create, like what are the time lines for that? Just give us an update there.

Yes. We have not disclosed time lines for our particular device. We did disclose a couple months ago that we are working on it. It is in development, and we have not offered the market any particular milestones along its trajectory of development.

I think it's fair to say, that you'll hear something a little later in the year on that. Which is important though, is that we don't want to leave any segment of the market, no matter how small unaddressed. And we believe, as we've said earlier, that the particular segment of the market that genuinely benefits to this, is perhaps 15%, plus or minus. But even that, we want to make sure that we address.

Great, thanks.

Chris Schott, JPMorgan.

Great. Thanks very much for the questions. Just a couple here.

First, can you talk a little bit about OpEx and cash burn for 2017, as you prepare for the US launch of 1701, and any just rough metrics we should be keeping in mind there? And I have a couple follow-ups from there.

Hi Chris. Thanks for your question. I'll hand that one over to Jean Viret, our Chief Financial Officer. Jean?

So hi, Chris. How are you? So I've indicated we actually not put a guidance for 2017, but we did a financing that gives us about $245.2 million in cash. As you can see last year, this was -- or you will see when our 10-K is on file, you will see how much we use in cash flow from operations.

This is the order of spending that we've had in a typical year, I would say in the past. However, going forward things are going to change. And in particular, use of cash flow will depend greatly as to when we're going to start making the material for 1701, and obviously when we will start receiving revenue. And we could be receiving revenue this year. As you know, it depends on when the Supreme Court would adjudicates the 180 day rule (inaudible). So we then, obviously, we'll have to make material earlier, and then we'll have hopefully revenue earlier, and cash coming in earlier.

Vice versa, if we, the Supreme Court does not adjudicate, or it's delayed, or sides with the originator companies, then we would see revenue later in the year, if not next year. So as a result, we have an approach to OpEx, we're prioritizing the use of cash flow towards 1701, and get from there. So that's sort of our practical guidance at this point.

Okay. The second question was just on the IP landscape -- 1420. Can you talk a little bit about the IP landscape for this alternative formulation that you've run the PK study. Just time lines there, with regards to a potential 2018 introduction, is there any other, beyond 135, any other IPRs, et cetera we need to be watching, that would be rate limiting to that 2018 introduction?

Hi, Chris. I'll let Matt Hooper, the Company's General Counsel comment a little first, but first just let me make a small correction. The PK study that we did was with the material from the Phase 3. So we have not stated that this material in this PK study was subject to any particular patent, 166 or 619 or others.

The second thing is, is we have not offered guidance to the Street, as to when we would file with additional formulations and so on, and just exactly what they would be, primarily for competitive and strategic reasons. However, the patent landscape for the formulations is a bit complex, and I'm happy to let Matt Hooper offer you some additional commentary. Matt?

Thanks, Denny. You see that we have filed IPRs at the end of January directed to the 619 patent. And Denny commented on the differentiated IP strategy, and the fact that we have multiple formulation options that we are advancing is part of that strategy.

The 619 patent is directed to formulations that exclude buffer. So we've looked at formulations that contain buffer and those that do not. And as we've said before, our primary objective is to preserve maximum optionality, and sort weave the development of formulations in with our understanding of the patent landscape, in a way that we believe can mitigate risks and maximize our ability to get to market, without being stopped by formulation IP.

I will offer you one observation in terms of strategy, Chris, and that is we intend to first get past the 135 IPR hurdle in May. That's obviously a very important one. That is the therapeutic use patent, of course. That's one thing you really can't engineer around. So we think it's important to get past that. And then, we see the intellectual property playing field moving directly to formulation up front and center. And as you have seen, we've laid out that strategy for a number of years, and you're now watching it play out in real time.

Thanks. And one last, just really quick one, just coming back to an earlier question on the AdCom. I thought one of the goals, that FDA was to hold a panel for the first biosimilar for any given innovative product. I think you're referencing some resource constraints, et cetera. Is -- just anything you're hearing from FDA? Or just any reason to believe that, that trend may not be the case here? I mean, just trying to -- just want to make sure I was clear with your comments you made earlier?

Yes. I think -- I'll let Lisa Bell, our Executive Vice President of Global Regulatory comment more. But I think it's fair to say, that the statements of the past, and the statements now, are under two very different regimes and conditions. Lisa, can you offer Chris a few more observations?

Yes, I mean, I think, what Denny just said, was absolutely right. Under -- any time that the agency is making plans about how they apply their resources, it's really in the context of what they know they have access to as a government agency.

So plus, there's other things that have been advocated by the administration that I think are also weighing into their decision-making about how and when to take different products to advisory committee. But I think that the point still stands, the advisory committee is called at their behest. They can make a plan to do so, and then that plan can get revised. I mean, I don't think this would be the first instance, if that were to happen.

So even if they have said something in the past, what may happen as time goes on as they have more experience, as the advisory committees become a little bit more routine. If -- you'll recall, that the last ones went through similarly without problems. So I think that as a whole, these advisory committees are getting much more comfortable with the concept of biosimilars and the various topics around them.

The other comment I would make for you, Chris, is we view all of these dynamics as positive for the biosimilar business in general, and Coherus in particular, as a leading pure play biosimilar Company. Whether you hear incoming FDA folks talk about pricing, or faster approvals, or any of these issues, we think that biosimilars are a win-win situation all around, for access to the patients, for cost constraints to the healthcare system, for all these things. And so, we believe that the Company is positioned with its products in the right place, at the right time, to help solve this problems. So we see all this as very, very positive for us.

Great. Thanks so much for the color.

Mike Ulz, Baird.

Hey, guys. Thanks for taking the question. Maybe I could just ask for a follow-up question on the advisory committee meeting for 1701. I just wonder if you could comment on the types of questions you're preparing for from the FDA, just given that we've seen some other filers run into some issues? Thanks.

Hi. Thanks for your question. I would observe that Coherus was the first company -- the only Company so far to have a dedicated immunogenicity study, and also a very novel pharmacokinetic [BE] study which would address the inter-patient variability, which is one of the key issues that you see.

Some of the other folks you know in Europe, had their applications run through a little bit of turbulence over their pharmacokinetic studies, and indeed this is very difficult product to develop, I think in terms of its clinical biology. But I think we have developed excellent data on both those fronts, so we have a high confidence in our application, and our molecule, and how we move forward. So that's the reason why I think that we're confident that we will move forward on schedule as we think.

But on the other hand, you are in a review, and Lisa and her team I think are doing an excellent job in their conversations back and forth with FDA, and as things move forward. Lisa, any additional comments on that?

Yes. I just would just echo what Denny said. I think that the -- as with anything our -- we try to take a broad approach, to making sure that we're prepared. So we can obviously speculate on any types of questions the agency may raise to the advisory committee. But I'd say that they're pretty standard, relative to the types of things that have gone before advisory committees before, and therefore probably not very novel.

Great. Thank you.

(Operator Instructions)

Tyler Van Buren, Cowen and Company.

Hey, guys. Good afternoon. Thanks for taking the questions. Just have a few questions on 1701, and then a final question on 1420.

But I guess, with respect to 1701, maybe you could just give a little granularity in terms of the ramping up of the commercial operations, and when you'll be ready to launch assuming approval, how many people you plan to originally launch with?

And then, also with respect to the OnPro device, even though it's a small portion of the market, what kind of conversion are you seeing there currently? And how do you think about patients potentially, not having have to go to the doctor's office or the hospital, and how would you counter detail around that?

Also with respect to coverage, maybe just speak a little bit about how you expect coverage to evolve over the course of the first year or two with launch, obviously related to potential Part B coverage, et cetera?

Okay. A bit of a long question there, Tyler. Thank you for it. We're clearly in a transition year. As I indicated in my remarks, we're currently running our launch team, and putting in place the supply chain infrastructure internally to be able to address the market, in consideration with the manufacturing, and a number of other things.

In terms of the ultimate penetration of the market that we expect in the first year, I think we've covered that in our previous disclosures and presentations and so on. And as our Michael Fleming has indicated, we think that a 20% exit percentage at the end of the first year is something to aspire to. But again, be very careful that we have not established guidance, nor have we said that we think that we can do that.

In terms of OnPro system, the, as we see it, we believe that there's about -- as I said about a 15% of actual pent-up demand where -- I should say a value proposition, where folks that are remotely located actually enjoy the benefit and [so on] of that.

Now that product has gotten far more penetration than that, but we believe that's reversible through appropriate contracting and other types of strategies. So if there's any part of your question I have not answered, I am happy to offer a little more color if you want to run it by me again.

Okay. And I guess, just maybe on 1420. Obviously, a lot of focus is on the IPR's and IPR strategy, but once you guys file here soon, how do you expect the more traditional legal pathway to evolve, particularly focusing on the potential patent dance and the time lines around the decisions that have to be made with respect to that?

Yes, I'll let Matt Hooper, our General Counsel take that one. Matt?

Yes, thanks, Denny. We're not going to comment in too much detail about the legal strategy that could be deployed, as in when we get into the timing after the BLA. In fact, we haven't publicized whether we're going engage in the patent dance or not. I will comment that the litigation time line can go fast or slow, or depending upon certain actions that can be taken. But further than, beyond that, I can't really comment in detail on the litigation strategy that we anticipate.

So Tyler, I think the next two steps are the 135 adjudication on May 17, and then the BLA filing. And then we'll have another call, and we'll tell you how things are going at that point. So we'll [strap] the log in front of us here, and get through a few of these things, then update you.

Understood. Thank you.

Ian Somaiya, BMO Capital Markets.

Hi, guys. This is [Andrew Lamb] in for Ian. Thanks for taking another question. I just want to see if you could provide some of the feedbacks that you guys are getting from your conversations with peers and physicians. Specifically, what are some of the gating factors for them, in considering switching to biosimilar Neulasta? Has it been a focus on manufacturing, IP, or anything else that has been brought up during these conversations?

Hi. Thanks. I'll going to let Michael Fleming take that one. Michael, would you take that one?

Yes, I will. I mean, I think it's been stated on previous calls, there's a pretty strong pent-up demand for choice and value in this marketplace. And our research indicates that as long as you can deliver a high quality and reliable alternative, the brand choice is really going to be based on practical economics, and our ability to deliver value, because that's the largest value driver in the market.

So you got to deliver a quality product. That's partly a function of GMP. It's partly a function of the label, and the perception of the molecular match; and you've got to be able to demonstrate that you can reliably supply the market. Those are prerequisites for success.

The market is also pretty particular about delivery of patient support services, health services, co-pay assistance, those sorts of things that they've come to expect from Amgen for Neulasta. And as long as you can deliver those branded benefits, then you can deliver biosimilar value through economic benefit. So that's the feedback that we've got.

I would just add that our research also shows that providers and patients and others prefer a biosimilar manufacturer, particularly in the US, and not US and Europe. And so, our material of course, is manufactured in the US, and we think that's a big plus for us. It is very high quality. It does have an excellent micro match.

And the other thing that's important too, is the clinical data, and we think that we have excellent clinical data. As I indicated earlier, we have both a immunogenicity study and a PK, a very nice PK BE study with a very novel design. So we think we're in good shape on both those counts.

Okay. And just a follow-up question. What do you hope to learn from the Amgen litigation with AbbVie related to biosimilar Humira?

Matt, would you like to take that one for us?

Sure. I guess, whatever is available on the public record will be closely scrutinized by every biosimilar participant and the public. I think, we may begin to learn more about the specific patents that were asserted, and what defenses have been raised. And as that information becomes publicly available, we'll learn more about where the parties are focusing on the issues. But it's just a question of watching the public record.

Yes, I would add, that we did read the recitation of the patents in the complaint, and none of those were a surprise to us. As you know we have monitored patent landscape very actively and so on. I think that litigation actually got pushed out for a few years, so I don't know if there's going blow by blow, as that rolls out over the coming years.

But I think it's also fair to say, that each Company comes up with their own legal strategy for accessing the market, and our is certainly different than Amgen's and others. But the list of patents in and of themselves didn't surprise us.

Okay. Thanks for taking the question.

And we do have time for one more question. [Salim Syed], Mizuho. If your phone is on mute, please unmute it. And with no additional questions, I will now turn the call back over to Mr. Lanfear for closing comments.

Thank you very much. Thank you for joining us today on our quarterly call.

As you can tell, the team and I are very excited about the progress that the Company has made on a number of fronts, particularly the commercialization, and the regulatory advancements we have with 1701. We think that this will roll out forward, as we go out further on the year. With the financing on the way, I think we're in good position to prepare fully for launch.

The 1420 program is shaping up, very much along the lines that we anticipated. So that's actually going very positively also. We thank you all for joining us today, and we will see you on the next call. And thank you very much for your support. Bye-bye.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.