After a major sale plan was announced, Coherus BioSciences, Inc. (NASDAQ: CHRS) shares jumped 48.53% to $2.03. This crucial action demonstrates Coherus’ dedication to enhancing its financial standing and narrowing its strategic focus.
Details of the UDENYCA Transaction
Coherus (CHRS) and Intas Pharmaceuticals Ltd. signed an asset acquisition agreement on December 2, 2024, wherein CHRS sold its UDENYCA (pegfilgrastim-cbqv) franchise for a maximum of $558.4 million.
The agreement includes an upfront payment of $483.4 million, adjusted for inventory, and milestone payments of up to $75.0 million tied to net sales. The proceeds will be carefully distributed to satisfy $49.1 million in royalties owed to UDENYCA and to completely repay $230.0 million in convertible notes that are due in April 2026.
Reinforcing Strategic Priorities
An important step in Coherus’ plan to reallocate its resources to cutting-edge immuno-oncology (I-O) developments is this divestment. The business wants to boost the expansion of LOQTORZI (toripalimab-tpzi), the PD-1 inhibitor authorized for nasopharyngeal cancer, by monetizing the value created by UDENYCA. By accelerating the development of its I-O pipeline, this action will put CHRS in a position to take advantage of new prospects in cancer treatment.
Financial Strength and Cost Optimization
The transaction will substantially enhance Coherus’ financial structure. The repayment of convertible notes will result in significant cost savings, with anticipated annual financing cash savings exceeding $10 million. Additionally, the transfer of UDENYCA-related overhead and certain employees to Intas will streamline operations, further aligning the company’s footprint with its strategic objectives.
Tax Benefits and Future Outlook
Upon transaction closure, Coherus plans to leverage tax attributes to offset a majority of U.S. federal income taxes linked to the divestiture. With this strengthened financial position, the company is poised to focus on high-value areas of its portfolio. The anticipated savings and operational efficiencies signal a robust foundation for CHRS as it embarks on a new phase of growth.
This divestiture not only reflects a decisive step toward strategic refinement but also equips Coherus with the resources to advance its mission in innovative oncology treatments.
