Coherus Shares Surge Following $558 Million Udenyca Sales Deal
On Tuesday, Coherus BioSciences, Inc. (NASDAQ:CHRS) shares rose by over 40% following the announcement of an asset purchase agreement with Intas Pharmaceuticals Ltd. for the divestiture of the UDENYCA franchise. The agreement, valued at up to $558.4 million, includes an upfront payment of $483.4 million and potential milestone payments of up to $75 million based on net sales.
The company plans to use the proceeds from this transaction to fully repay its $230 million convertible bonds, which are due in April 2026, and to purchase certain royalty obligations related to UDENYCA for $49.1 million. This divestiture aligns with Coherus's strategic decision to focus on its immuno-oncology programs, including the FDA-approved PD-1 inhibitor LOQTORZI® as well as other significant combination programs such as casdozokitug and CHS-114.
Denny Lanfear, Chairman and CEO of Coherus, stated that the divestiture of UDENYCA allows the company to capitalize on the value created by the franchise while redirecting resources to advance its immuno-oncology portfolio. This move is also expected to significantly improve the company's capital structure and operational footprint.
A Citi analyst noted that the sale exceeded expectations in terms of both valuation and timing, alleviating a financial burden and enabling Coherus to accelerate its research and development efforts in the immuno-oncology space.
According to the terms of the agreement presented in Coherus's Form 8-K Current Report, Intas will acquire the assets related to the UDENYCA franchise, and Coherus expects to offset nearly all U.S. federal income taxes related to the divestiture using tax attributes. The transaction is subject to customary closing conditions and is expected to close by the end of the first quarter of 2025.
Coherus will focus on maximizing the value of LOQTORZI and advancing its innovative portfolio, anticipating several milestones for its immuno-oncology programs in the coming years. The company expects to realize cost savings from the divestiture, with pro forma cash runway extending beyond the significant data releases expected in 2026. J.P. Morgan Securities LLC and Latham & Watkins LLP are serving as financial and legal advisors to Coherus, respectively.