aibioCoherus (now Coherus Oncology) to repurchase about $170 million of convertible notes
Tickers CHRS
The buyback depends on closing the sale of the UDENYCA franchise. Coherus plans to buy back the remaining $60 million after that deal closes.
Key facts
- Company
- Coherus Oncology, Inc. (NASDAQ: CHRS)
- News type
- Financings
- Primary source
- Coherus Oncology, Inc. 8-K (2025-04-01)
The repurchase
Coherus BioSciences, Inc., now Coherus Oncology, Inc., said on April 1, 2025 that it had agreed, in privately negotiated transactions with certain holders, to repurchase approximately $170 million of aggregate principal amount of its 1.500% Convertible Senior Subordinated Notes due 2026. The company will pay 100% of principal plus accrued and unpaid interest to the repurchase date. Convertible notes are debt that holders can exchange for shares, and the release does not say what conversion terms apply to the notes being bought back.
The company said approximately $60 million of the notes will remain outstanding after the repurchases. Once the UDENYCA sale closes, Coherus intends to make a repurchase offer for those notes at the same price, using the fundamental change repurchase right in the indenture dated April 17, 2020. The indenture's trustee is U.S. Bank Trust Company, National Association.
The repurchases are conditioned on the closing of the UDENYCA sale to Intas Pharmaceuticals Ltd. under an asset purchase agreement dated December 2, 2024. The release says that sale is expected to close early in the second quarter of 2025.
Consents and what the release leaves out
The holders in the repurchases constitute a majority of the outstanding notes. They have agreed to consent to amendments to the indenture that permit the UDENYCA divestiture. The company and the trustee will sign a supplemental indenture to carry out those amendments.
The release does not name the holders, and it does not say how much of the $170 million each one holds. It does not say how the company will fund the repurchases, although it makes them conditional on the sale closing. It gives no cash balance and no net loss figure.
The release names no financial advisor, placement agent, dealer or law firm for the repurchases. The only financial institution it names is the trustee, U.S. Bank Trust Company, National Association.
The sale, the royalty and the company's position
The 10-K filed on March 17, 2025 says the company expects to use the UDENYCA sale proceeds to fully repay its $230.0 million in principal of 1.5% Convertible Senior Subordinated Notes due 2026. It also expects to pay $47.7 million to buy out the right to receive royalties on UDENYCA net sales under a Revenue Purchase and Sale Agreement dated May 8, 2024 with Coduet Royalty Holdings, LLC and the buyers named in an annex. That buyout figure assumes the sale closes late in the first quarter or early in the second quarter of 2025. The 10-K names Coduet as the royalty counterparty, not as an adviser.
The UDENYCA sale is priced at $483.4 million in cash, including $118.4 million of product inventory, with two earnout payments of $37.5 million each tied to net sales thresholds. The sale is to Intas Pharmaceuticals Ltd., which designated Accord BioPharma, Inc. to buy the physical assets.
The 10-K describes Coherus as a commercial-stage company whose products are UDENYCA, a biosimilar to Neulasta, and LOQTORZI (toripalimab-tpzi), a PD-1 inhibitor the FDA approved on October 27, 2023 for certain nasopharyngeal carcinoma indications. The company says LOQTORZI is the only immune checkpoint inhibitor the FDA has approved for those indications. The company's lead pipeline candidate, casdozokitug, is in three ongoing studies, including a Phase 2 study in liver cancer.
The release calls the company's pipeline promising and describes two mid-stage clinical candidates. The 10-K describes its pipeline as made up of earlier stage clinical and preclinical programs. The two descriptions do not match, and the 10-K's wording is the one a reader can check against the study phases it lists.
What comes next
Coherus expects the UDENYCA sale to close early in the second quarter of 2025, according to the release. The repurchases of about $170 million of notes depend on that closing. If the sale closes, about $60 million of the 2026 notes would remain for the planned repurchase offer, which the company says would be made at 100% of principal. The release does not say whether the company will hold any cash after the notes are retired.