Coherus Oncology, Inc. (CHRS) stock intrinsic value fair value estimate & owner earnings analysis

Coherus Oncology has changed almost completely in the last two years. It used to sell three biosimilar drugs (UDENYCA, CIMERLI and YUSIMRY). It sold CIMERLI and YUSIMRY in 2024 and UDENYCA on April 11, 2025, and used the proceeds to repay convertible notes and other debt. What remains is one marketed cancer drug, LOQTORZI (toripalimab), which treats nasopharyngeal cancer and is licensed from Junshi Biosciences, plus early-stage cancer drug candidates (casdozokitug, aimed at the immune signal IL-27, and tagmokitug, aimed at CCR8). Because the old business is gone, we ignore earlier years when judging today's earning power. What the business earns today: LOQTORZI sales were $40.8 million in 2025, up from $19.1 million in 2024, at a 67% gross margin. Against that, research spending was $108.9 million and selling and administrative costs were $100.6 million, for an operating loss from continuing operations of $181.1 million. We measure owner earnings as operating cash flow, less working-capital swings, less stock compensation, less capital spending. On that basis the company lost about $1.28 per share in 2025 and about $0.91 in 2024. Earlier owner earnings of +$1.46 and +$1.69 per share in 2019 and 2020 came from the biosimilar franchise that no longer exists, and every year since 2021 has been negative. The 2025 reported net income of $168 million is a one-time gain on selling UDENYCA, not an earnings stream. We did not add the company's cash to our estimate, and we did not deduct its remaining debt (a $38.7 million term loan due May 2029 and a $14.0 million revenue-participation liability); the value comes only from what the operations earn. Base case: worth $0 per share. Growth rate check: owner earnings did not grow in 2025 (they fell from -$0.91 to -$1.28 per share), so we start year one no better than that. Management says 2026 revenue, research and administrative costs will change (higher revenue, lower costs), but it gives no figures we can verify, and the drivers of value that would close a $150 million-a-year gap are not yet in evidence. Rapid LOQTORZI growth, new indications and the pipeline are launch and trial outcomes that have not happened yet, so we credit none of them. Nothing we can name and evidence makes the business earn more than it consumes, so the base case is zero. Bear case: $0 per share. The company spent about $150 million more than it generated in 2025, holds $172.1 million of cash and securities, and pays 8% plus SOFR on its term loan. Penpulimab (from Akeso) received FDA approval for nasopharyngeal cancer on April 23, 2025 and, although not yet launched, could compete directly with LOQTORZI, which today is the only immunotherapy approved for this cancer that is available in the United States. If the cash burn continues and sales stall, cash runs out within a couple of years and shareholders are left with nothing. This case is floored at zero because a shareholder's loss is limited to the amount invested. Bull case: $0.60 per share. Here the company cuts its research and commercial costs to a level LOQTORZI can carry, as management says it is doing, and LOQTORZI keeps growing off its 2025 base, reaching roughly $65 million of sales at the 67% margin, with a leaner cost base of roughly $30 million. That yields owner earnings of about $0.085 per share a year, which we credit for ten years and then fade to zero because we cannot name anything that continues after that. This case is a stretch, not our central expectation, because it needs both revenue growth and steep cost cuts that have not yet been shown. What could prove this wrong: if quarterly LOQTORZI sales keep compounding and management shows a concrete cost plan that brings spending in line with gross profit, value would move well above our base case. Conversely, a competing launch would push it toward the bear case. Cash needs beyond about two years would probably be met by issuing new shares, which would dilute existing holders. We could not reconcile the size of management's planned 2026 cost cuts from the filing, since it states direction but not amounts.