DEFA14A: Coherus BioSciences Addresses Stockholder Lawsuits with Additional UDENYCA Sale Disclosures

Coherus BioSciences provides supplemental disclosures regarding the proposed sale of its UDENYCA franchise to Intas Pharmaceuticals in response to stockholder demand letters and lawsuits.

Summary

• Coherus BioSciences is supplementing its proxy statement related to the proposed sale of its UDENYCA franchise to Intas Pharmaceuticals in response to demand letters and stockholder actions alleging disclosure deficiencies.
• The company denies any wrongdoing or legal necessity for the additional disclosures but aims to expedite the transaction and minimize legal expenses.
• The supplemental information includes details about the UDENYCA sales process, specifically the outreach to potential counterparties by J.P. Morgan.
• J.P. Morgan contacted nine potential counterparties in addition to those initially contacted by Mr. Lanfear.
• Six parties, including the Purchaser Parties, executed non-disclosure agreements with the Company, all of which included a one-year standstill provision.
• The supplement also provides further details on the financial analysis conducted by J.P. Morgan, including public trading multiples and selected transactions analysis.
• J.P. Morgan compared UDENYCA Business with similar data for selected publicly traded companies including Organon & Co., Supernus Pharmaceuticals, Inc., Ani Pharmaceuticals, Inc., UroGen Pharma Ltd., Mersana Therapeutics, Inc., ADC Therapeutics SA, Heron Therapeutics, Inc., and Coherus BioSciences, Inc.
• J.P. Morgan selected a FV/2025E Revenue reference range for the UDENYCA Business of 1.1x to 5.7x.
• J.P. Morgan compared UDENYCA Business with similar data for selected public transactions including Patient Square Capital/Gurnet Point Capital acquiring Radius Health, Inc., Halozyme Therapeutics, Inc. acquiring Antares Pharma, Inc., Pacira Biosciences, Inc. acquiring Flexion Therapeutics, Inc., Supernus Pharmaceuticals, Inc. acquiring Adamas Pharmaceuticals, Inc., and Covis Group S. r.l. acquiring AMAG Pharmaceuticals, Inc.
• J.P. Morgan selected a FV/LTM Revenue reference range for the UDENYCA Business of 2.2x to 5.6x.
• The company also provided unlevered free cash flow projections for the UDENYCA Business from 2025 to 2029, with revenue ranging from $186 million in 2025 to $240 million in 2029.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there are legal challenges, the company is proactively addressing them. The financial projections for UDENYCA are also reasonably positive.

Positives

• Coherus is proactively addressing stockholder concerns to facilitate the UDENYCA transaction.
• The company is providing additional transparency regarding the sales process and financial analysis.
• The company believes that the allegations contained in the Demand Letters and Stockholder Actions are entirely without merit.

Negatives

• The existence of stockholder demand letters and lawsuits suggests potential dissatisfaction with the transaction or its disclosures.
• The company is incurring expenses to defend against the Stockholder Actions.
• The company is making voluntary disclosures, which may imply that the original disclosures were not fully comprehensive.

Risks

• The Stockholder Actions could potentially delay or disrupt the closing of the UDENYCA sale.
• Additional similar demand letters or complaints may be received or filed, or the Stockholder Actions may be amended.
• The outcome of the Stockholder Actions is uncertain, and the Company cannot predict the possible loss or range of loss from these matters.

Future Outlook

The company is focused on completing the sale of the UDENYCA franchise to Intas Pharmaceuticals, subject to stockholder approval and other customary closing conditions.

Management Comments

• The Company believes that the allegations contained in the Demand Letters and Stockholder Actions are entirely without merit.
• The Company specifically denies all allegations in the Demand Letters and the Stockholder Actions, including that any additional disclosure was or is required.

Industry Context

The sale of UDENYCA reflects a strategic decision by Coherus BioSciences to focus on other areas of its business, potentially including innovative therapies or other biosimilars. The transaction is part of a broader trend of pharmaceutical companies divesting assets to streamline operations and focus on core competencies.

Comparison to Industry Standards

• The FV/LTM Revenue multiples for selected transactions ranged from 2.2x to 5.6x, with the Radius Health acquisition by Patient Square Capital/Gurnet Point Capital at 3.6x, Halozyme Therapeutics, Inc.'s acquisition of Antares Pharma, Inc. at 5.1x, Pacira Biosciences, Inc.'s acquisition of Flexion Therapeutics, Inc. at 5.6x, Supernus Pharmaceuticals, Inc.'s acquisition of Adamas Pharmaceuticals, Inc. at 4.8x, and Covis Group S. r.l.'s acquisition of AMAG Pharmaceuticals, Inc. at 2.2x.
• The FV/2025E Revenue multiples for selected companies ranged from 1.1x to 5.7x, with Organon & Co. at 1.9x, Supernus Pharmaceuticals, Inc. at 2.7x, Ani Pharmaceuticals, Inc. at 2.5x, UroGen Pharma Ltd. at 3.7x, Mersana Therapeutics, Inc. at 5.7x, ADC Therapeutics SA at 1.2x, Heron Therapeutics, Inc. at 1.8x, and Coherus BioSciences, Inc. at 1.1x.

Legal Proceedings

• The Company has received a number of demand letters from purported stockholders and four complaints have been filed with the Supreme Court of the State of New York with respect to the Transaction.
• The Demand Letters and the Stockholder Actions allege that, among other things, the Proxy Statement contains certain disclosure deficiencies and/or incomplete information regarding the Transaction.

Stakeholder Impact

• Shareholders will vote on the proposed sale of the UDENYCA franchise.
• Employees associated with the UDENYCA business may be impacted by the sale to Intas Pharmaceuticals.
• The transaction could impact the company's financial performance and strategic direction.

Next Steps

• Stockholder vote on the proposed sale of the UDENYCA franchise on March 11, 2025.
• Closing of the transaction, subject to stockholder approval and other customary closing conditions.
• Potential resolution of the Stockholder Actions.

Key Dates

Keywords

UDENYCA, Coherus BioSciences, Intas Pharmaceuticals, Stockholder Actions, Proxy Statement, Transaction, Sale, J.P. Morgan, Financial Analysis, Disclosures