Coherus slashes staff by a third after Amgen biosimilar knockback

Coherus BioSciences says reductions will trim around $10 million off its annual operating costs.

The FDA's rejection of Coherus BioSciences' biosimilar version of Amgen's Neulasta means that 51 people at the company will lose their jobs, reducing its headcount by around 30%.

Coherus disclosed the cutbacks in a filing with Securities and Exchange Commission, saying the job losses were needed to "better align its workforce with the needs of its business" in the wake of the FDA's complete response letter for CHS-1701, the lead program in its pipeline of biosimilar drugs.

It expects the reductions to trim around $10 million off its annual operating costs, but will add $3.7 million in restructuring charges that will be booked in its second-quarter results.

Neulasta (pegfilgrastim) is used to boost white blood cell counts in patients undergoing cancer chemotherapy, and is one of Amgen's top-selling products. It hit around $5 billion in sales last year and the bulk of that revenue stream—almost $4 billion—came from the U.S. market. Coherus has been hoping to bring its cheaper version to market later this year.

The Redwood City-based company revealed on June 12 that the FDA had asked for a reanalysis of some immunogenicity data submitted in the marketing application as well as more information on manufacturing processes, but did not ask for another clinical trial. At the time, Coherus said it was confident it would be able to address the agency's concerns "in the coming months."

Coherus wasn't the first would-be Neulasta biosimilar developer to stumble at the last hurdle. Novartis' subsidiary Sandoz saw its Zioxtenzo candidate rejected by the U.S. regulator last year and subsequently withdrew a marketing application in Europe. The setbacks leave a biosimilar from Mylan/Biocon in pole position in the U.S., with the FDA due to complete its review of the candidate—called MYL-1401H—in October.

There's still no indication on a new timeline for approval of Coherus' candidate, but the decision to slash the workforce suggests the company is making provision in case it faces a long wait. Conserving cash will also help it bring its other biosimilar candidates through development.

Its other candidates include CHS-0214—a version of Amgen's Enbrel (etanercept) geared up for marketing applications later this year—and CHS-1420, a version of AbbVie's $16 billion Humira that it hopes to file in the first half of 2018. It was sitting on around $125 million in cash reserves at the end of the first quarter.

In the meantime, Amgen continues to fight lawsuits with biosimilar developers in a bid to block any launches, claiming it has U.S. patent protection for Neulasta until 2024.