Aurinia unit agrees to acquire Kezar Life Sciences in tender offer at $6.955 per share plus a CVR

A subsidiary of Aurinia Pharmaceuticals Inc. (Nasdaq: AUPH) has agreed to acquire Kezar Life Sciences, Inc. through a tender offer, according to a Form 8-K filed April 3, 2026. The merger agreement was signed March 30, 2026. Kezar stockholders would receive $6.955 in cash per share plus one contingent value right, or CVR. The filing says closing is expected in the second quarter of 2026.

The offer and its conditions

Aurinia Pharma U.S., Inc., a Delaware corporation the filing calls "Parent," signed the merger agreement with Kezar and Aurinia Merger Sub, Inc. Aurinia Pharmaceuticals Inc., an Alberta company, is a party only for the purposes of one section. Parent must start the tender offer by April 13, 2026. The offer would stay open for 20 business days, subject to extension. After the offer, Merger Sub would merge into Kezar under Section 251(h) of Delaware law, so Kezar stockholders would not vote separately.

The condition that matters most is cash. Closing Net Cash must be at least $50.0 million. The agreement lets Parent walk away if the offer is not completed by June 28, 2026, or if Closing Net Cash is below $50.0 million when the offer closes. The filing says the offer is not subject to a financing condition. Kezar would owe Parent a termination fee of $1.2 million in certain cases, including if it enters an agreement for a Superior Company Proposal. At least one share more than 50% of Kezar's outstanding common stock must be tendered, counting shares Parent already owns.

What the CVRs pay

The CVRs are the part of the price that may never be paid. Holders could receive 100% of the amount by which Closing Net Cash, set within 90 days after closing, exceeds $50.0 million. They could also receive 100% of net proceeds that Parent receives over 10 years from Kezar's March 6, 2026 asset purchase agreement with Enodia Therapeutics SAS. They would receive 90% of net proceeds over 10 years from Kezar's September 20, 2023 collaboration and license agreement with Everest Medicines II (HK) Limited.

Two further payments relate to legacy assets for zetomipzomib. Holders could receive 90% of net proceeds from a sale or license of those assets, if signed within 2 years after closing. If Parent starts a clinical study of a product derived from those assets in that period, holders could also receive milestone payments of up to $88.0 million and royalties of 3% of net sales. The filing says the CVRs cannot generally be transferred, carry no voting or dividend rights and are not registered with the SEC. It adds that there can be no assurance any CVR payment will be received.

Tang Capital Partners, LP, which has signed a tender and support agreement with Kezar and Parent, has irrevocably agreed to tender its Kezar shares. Those shares make up approximately 9.0% of the outstanding common stock. In-the-money options will be cashed out with one CVR per underlying share, and out-of-the-money options will be cancelled for no consideration.

Aurinia's own position

Aurinia describes itself as focused on autoimmune diseases. Its product LUPKYNIS (voclosporin), introduced in January 2021, is the first FDA-approved oral therapy for adult patients with active lupus nephritis. Aurinia is also developing aritinercept. Its annual report on Form 10-K, filed February 26, 2026, reports 2025 net product sales of $271.3 million, up 25% from $216.2 million in 2024.

The same report puts cash, cash equivalents, restricted cash and investments at $398.0 million on December 31, 2025. Over 2025 Aurinia repurchased 12.2 million of its shares for $98.2 million, and its SEC figures show net income of $287.2 million for 2025. Its main product faces generic challenges: in February and March 2025, companies including Hikma Pharmaceuticals USA Inc., Teva Pharmaceuticals, Inc. and Sandoz Inc. told Aurinia they had filed applications to sell a generic version of LUPKYNIS before its 2037 Patents expire. Aurinia filed patent infringement complaints against each of them.

The 8-K does not give the amount of cash Kezar held on March 30, 2026, so the distance between Kezar's cash and the $50.0 million test cannot be judged from the filing.

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