Coherus BioSciences, Inc. (Coherus or the Company NASDAQ: CHRS,)
today announced that it has entered into an asset purchase
agreement (the Agreement) dated December 2, 2024, with Intas
Pharmaceuticals Ltd. (Intas) for the divestiture of the UDENYCA
(pegfilgrastim-cbqv) franchise for up to $558.4 million. This
includes an upfront payment of $483.4 million, to be adjusted for
inventory at close, and $75.0 million in potential net sales
milestone payments. Coherus plans to use a portion of the
transaction proceeds to fully repay the entirety of the Company’s
$230.0 million in existing convertible notes due April 2026 and
$49.1 million to buy-out certain royalty obligations related to
UDENYCA.
“The proposed divestiture of UDENYCA represents the successful
execution of our strategy to focus R&D and commercial resources
on Coherus’ innovative immuno-oncology portfolio and to strengthen
our financial position,” said Denny Lanfear, Coherus Chairman and
Chief Executive Officer. “We have created significant value with
our UDENYCA franchise, and this proposed transaction allows us to
monetize that value in order to maximize the opportunity ahead for
LOQTORZI (toripalimab-tpzi), a novel PD-1 inhibitor with growing
sales and the only FDA-approved treatment for nasopharyngeal
carcinoma (NPC), allowing us to accelerate and advance the
development of our I-O pipeline in combination with LOQTORZI.”
“In addition, by paying off our convertible notes in their
entirety, we will significantly improve our capital structure and
align our operational footprint with our strategic focus. As we
enter this new phase of growth, we are well positioned to drive
significant value for both patients and shareholders as we advance
our mission to extend cancer patient survival.”
Terms of the AgreementUnder the terms of the
Agreement filed as an exhibit to Coherus’ Current Report on Form
8-K today, Coherus will receive an upfront cash payment of $483.4
million, subject to closing adjustments for final inventory
valuation, plus two net sales milestone payments totaling $75.0
million. In exchange, Intas will receive identified assets related
to the UDENYCA franchise, including the UDENYCA pre-filled syringe,
the UDENYCA autoinjector, and UDENYCA ONBODY™ and will assume
identified liabilities. Accord BioPharma, Inc., the U.S. specialty
division of Intas Pharmaceuticals, Ltd., focused on the development
of oncology, immunology, and critical care therapies, plans to
assume full responsibility for the UDENYCA franchise in the U.S.
following the Agreement closing.
The Coherus Board of Directors unanimously recommends that
Coherus shareholders vote in favor of the proposed UDENYCA
divestiture described by the Agreement. A Coherus proxy statement
relating to the proposed transaction will be filed with the
Securities and Exchange Commission (the SEC) and mailed to Coherus
shareholders when available.
The closing of the proposed transactions contemplated by the
Agreement is subject to customary closing conditions, including
approval by Coherus shareholders, expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, any required approval by the Committee on
Foreign Investment in the United States (CFIUS) as well as certain
other conditions. The proposed transaction is expected to close by
the end of Q1 2025.
Financial Considerations of the
DivestitureImportantly, upon close of the proposed
transaction, the Company expects to use tax attributes, which were
previously not deemed realizable, to offset substantially all of
the U.S. federal income taxes related to the divestiture.
- Following close of the proposed transaction, Coherus plans to
initiate a process to fully repay the Company’s outstanding $230.0
million in aggregate principal amount of 1.5% Convertible Senior
Subordinated Notes due 2026.
- At closing Coherus will pay $49.1 million to buy out the right
to receive royalties on net sales of UDENYCA in accordance with the
Revenue Participation Right and Sale Agreement with Coduet Royalty
Holdings, LLC that commenced May 8, 2024.
The Company expects to realize substantial cost savings on a
going forward basis by:
- Paying off certain financial liabilities resulting in expected
annual financing cash savings exceeding $10.0 million, with the
remaining $38.7 million in secured debt (maturing May 2029) costing
approximately $5 million to service annually;
- Transferring certain full-time employees to Intas to support
UDENYCA; and
- Eliminating UDENYCA-related overhead and commercial
expenses.
The Company plans to provide an updated Q4 2024 sales projection
and Q1 2025 cash projection in early January 2025. However, current
post-close cash runway projections exceed two years, past key data
readouts expected in 2026.
Focus on Immuno-Oncology Portfolio and Key Upcoming
MilestonesCoherus intends to strengthen and sharpen its
focus on the advancement of its innovative, next-generation,
immuno-oncology portfolio in combination with
LOQTORZI.
LOQTORZI is a next-generation, differentiated
PD-1 marketed in the U.S. in two indications. Coherus plans to
maximize the value of this product by:
- Continuing to build launch momentum as the first and only
FDA-approved treatment for recurrent, locally advanced or
metastatic NPC;
- Developing new indications by combining LOQTORZI with internal
pipeline assets to advance two drug candidates; and
- Entering into capital-efficient external partnerships for
additional label expansions. Additional partnerships evaluating
LOQTORZI with novel promising cancer agents are planned for
2025.
Casdozokitug is a first-in-class,
clinical-stage IL-27 antagonist, with demonstrated monotherapy
activity in treatment-refractory non-small cell lung cancer (NSCLC)
and clear cell renal cell carcinoma (ccRCC) and combination
activity in hepatocellular carcinoma (HCC). The Company plans
to:
- Initiate a Phase 2 randomized trial of
casdozokitug/toripalimab/bevacizumab in first-line (1L) HCC in Q4
2024;
- Announce final data from its Phase 2 trial of
casdozokitug/atezolizumab/bevacizumab in 1L HCC in Q1 2025;
and
- Report data from its Phase 1 study of casdozokitug/toripalimab
in second to fourth line (2-4L) NSCLC in 1H 2025.
CHS-114 is a highly selective cytolytic CCR8
antibody that specifically binds and preferentially depletes CCR8+
tumor regulatory T cells (Tregs) with no off-target binding. Phase
1 dose escalation is complete, establishing safety and proof of
mechanism. Coherus plans to:
- Report Phase 1 monotherapy biopsy data as well as
CHS-114/toripalimab combination safety data in head and neck
squamous cell carcinoma (HNSCC) in 1H 2025;
- Initiate a Phase 1b CHS-114/toripalimab combination dose
optimization study in 2L head and neck squamous cell carcinoma
(HNSCC) in Q1 2025 with a first data readout expected in Q2 2026;
and
- Initiate a Phase 1b CHS-114/toripalimab combination dose
optimization study in 2L gastric cancer in Q1 2025 with a first
data readout expected in Q2 2026.
AdvisorsJ.P. Morgan Securities LLC is acting as
Coherus’ financial advisor and Latham & Watkins LLP as legal
counsel to Coherus.
Conference Call Information
When: Tuesday, December 3, 2024, starting at 8:00 a.m. Eastern
Time
To access the conference call, please pre-register through the
following link to receive dial-in information and a personal PIN to
access the live call:
https://register.vevent.com/register/BId14c70118ce44561902dd39c791136fa
Please dial in 15 minutes early to ensure a timely connection to
the call.
Webcast Link: https://edge.media-server.com/mmc/p/ypqpachc
A replay of the webcast will be archived on the “Investors”
section of the Coherus website at http://investors.coherus.com
About Coherus BioSciencesCoherus is a
commercial-stage biopharmaceutical company focused on the research,
development and commercialization of innovative immunotherapies to
treat cancer. Coherus is developing an innovative immuno-oncology
pipeline that is expected to be synergistic with its proven
commercial capabilities in oncology.
Coherus’ immuno-oncology pipeline includes multiple antibody
immunotherapy candidates focused on enhancing the innate and
adaptive immune responses to enable a robust antitumor immunologic
response and enhance outcomes for patients with cancer.
Casdozokitug is a novel IL-27 antagonistic antibody currently being
evaluated in two ongoing clinical studies: a Phase 1/2 study in
advanced solid tumors and a Phase 2 study in hepatocellular
carcinoma. CHS-114 is a highly selective, competitively positioned,
cytolytic anti-CCR8 antibody currently in a Phase 1 study in
patients with advanced solid tumors, including HNSCC. CHS-1000 is a
novel humanized Fc-modified IgG1 monoclonal antibody specifically
targeting ILT4 (LILRB2). An IND for CHS-1000 was allowed to proceed
by the FDA in the second quarter of 2024 and proceeding to the
first-in-human clinical study is subject to further evaluation in
our portfolio prioritization process.
Coherus markets LOQTORZI® (toripalimab-tpzi), a novel
next-generation PD-1 inhibitor, and UDENYCA® (pegfilgrastim-cbqv),
a biosimilar of Neulasta.
Neulasta® is a registered trademark of Amgen, Inc.
Forward-Looking Statements
The statements in this press release include express or implied
forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act about the
proposed transaction between the Company and Intas that involve
risks and uncertainties relating to future events and the future
performance the Company and the UDENYCA business. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. Words
such as “will,” “could,” “would,” “should,” “expect,” “plan,”
“anticipate,” “intend,” “believe,” “estimate,” “predict,”
“project,” “potential,” “continue,” “future,” “opportunity,”
“likely,” “target,” variations of such words, and similar
expressions or negatives of these words are intended to identify
such forward-looking statements, although not all forward-looking
statements contain these identifying words. You can also identify
forward-looking statements by discussions of strategy, plans or
intentions.
Examples of such forward-looking statements include, but are not
limited to, express or implied statements regarding: the Agreement
and related matters, including, but not limited to, the ability to
satisfy the closing conditions to consummate the proposed
transaction at all or in the estimated time; prospective
performance and opportunities with respect to the Company or the
UDENYCA business; post-closing operations and the outlook for the
Company or the UDENYCA business; the Company’s targets, plans,
objectives or goals for future operations, including those related
to the UDENYCA business, product candidates, research and
development, and product candidate approvals; future receipt of
sales milestone payments from the proposed transaction; projections
of or targets for cost savings related to transfers of employees
and reductions in indebtedness; projections of the amount of time
that the Company’s will be able to operate using its cash balance
and proceeds from the proposed transaction; statements about the
potential uses of proceeds from the transaction and the assumptions
underlying or relating to such statements.
These forward-looking statements are based on the Company’s
current plans, estimates and projections. By their very nature,
forward-looking statements involve inherent risks and
uncertainties, both general and specific, assumptions and changes
in circumstances, many of which are beyond the control of the
Company. A number of important factors, including those described
in this press release, could cause actual results to differ
materially from those contemplated in any forward-looking
statements. Factors that may affect future results and may cause
these forward-looking statements to be inaccurate include, without
limitation: uncertainties as to the timing for completion of the
proposed transaction; uncertainties as to the Company’s ability to
obtain the approval of its shareholders required to consummate the
proposed transaction; the possibility that competing offers will be
made by third parties; uncertainties of receipt of sales milestone
payments in the future; the occurrence of any event, change or
other circumstance that may give rise to a right of one or both of
Intas and the Company to terminate the Agreement; the possibility
that the proposed transaction may not be completed in the time
frame expected by the Company or at all, including due to the
possibility that a governmental entity may prohibit, delay, or
refuse to grant approval, if required, for the consummation of the
proposed transaction (or only grant approval subject to adverse
conditions or limitations); the risk that the proposed transaction
disrupts the Company’s current plans and operations or diverts the
attention of the Company’s management or employees from ongoing
business operations; the risk that the Company may not realize the
anticipated benefits of the proposed transaction in the time frame
expected, or at all; the effects of the proposed transaction on
relationships with the Company’s employees, suppliers, business or
collaboration partners or governmental entities, or other third
parties as a result of the proposed transaction; the ability to
retain and hire key personnel; significant or unexpected costs,
charges or expenses resulting from the proposed transaction; the
potential impact of unforeseen liabilities, future capital
expenditures, revenues, costs, expenses, earnings, economic
performance, indebtedness, financial condition and losses on the
future prospects, business and management strategies for the
management, expansion and growth of the Company after the
consummation of the proposed transaction; potential negative
effects related to this announcement or the consummation of the
proposed transaction on the market price of the Company’s common
stock and/or the Company’s operating or financial results;
uncertainties as to the long-term value of the Company’s common
stock; and the nature, cost and outcome of any litigation and other
legal proceedings involving the transaction, the Company or its
directors, including any legal proceedings related to the proposed
transaction.
While the foregoing list of factors presented here is considered
representative, no list should be considered to be a complete
statement of all potential risks and uncertainties. There can be no
assurance that the transaction described above will in fact be
consummated in the manner described or at all. For a further
discussion of these and other factors that could cause the
Company’s future results to differ materially from any
forward-looking statements see the section entitled “Risk Factors”
in the Company’s Quarterly Report on Form 10-Q for the period ended
September 30, 2024, filed with the SEC on November 6, 2024, as
updated by the Company’s subsequent periodic reports filed with the
SEC and, when available, the proxy statement of the Company
relating to the proposed transaction. Any forward-looking
statements speak only as of the date of this press release and are
made based on the current good faith beliefs and judgments of the
Company’s management, and the reader is cautioned not to rely on
any forward-looking statements made by the Company. Unless required
by law, the Company is not under any duty and undertakes no
obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or factors,
of new information, data or methods, future events or other
changes.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company expects
to file with the SEC a proxy statement on Schedule 14A, and it may
also file other documents regarding the proposed transaction with
the SEC. Promptly after filing its definitive proxy statement with
the SEC, the Company will mail the definitive proxy statement and a
proxy card to each stockholder entitled to vote at the special
meeting relating to the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE
PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS THERETO AND
ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN, IN THEIR ENTIRETY
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION,
RELATED MATTERS AND THE PARTIES TO THE PROPOSED TRANSACTION.
You may obtain a free copy of the proxy statement and other
relevant documents (if and when they become available) that are or
will be filed with the SEC for free at the SEC’s website at
www.sec.gov. Copies of the documents filed with the SEC by the
Company will be available free of charge on the Company’s website
at https://investors.coherus.com/sec-filings or by contacting the
Company’s Investor Relations Department at IR@coherus.com.
Participants in the Solicitation
The Company and certain of its directors and executive officers
and other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive
officers of the Company, including a description of their direct or
indirect interests, by security holdings or otherwise, is set forth
in the proxy statement for its 2024 Annual General Meeting, which
was filed with the SEC on April 15, 2024 and other documents that
may be filed from time to time with the SEC. Other information
regarding the participants in the proxy solicitations and a
description of their direct and indirect interests in the proposed
transaction, by security holdings or otherwise, will be contained
in the proxy statement and other relevant materials to be filed
with the SEC regarding the proposed transaction when such materials
become available.
Coherus BioSciences Contact Information:For
investors:Jodi SieversVP, Investor Relations & Corporate
CommunicationsIR@coherus.com
For media:Argot Partners(212)
600-1902coherus@argotpartners.com
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