CHRS Coherus BioSciences Inc

​

​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

​

​

FORM 8-K

​

​

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

​

Date of Report (Date of earliest event reported): March 1, 2024

​

​

COHERUS BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

​

​

​

333 Twin Dolphin Drive, Suite 600

Redwood City, CA 94065

(Address of principal executive offices, including Zip Code)

​

Registrant’s telephone number, including area code: (650) 649-3530

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

​

​

Securities registered pursuant to Section 12(b) of the Act:

​

​

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

​

Emerging growth company  ☐

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

​

​

​

​

​

Introductory Note

​

As previously announced, on January 19, 2024, Coherus BioSciences, Inc., a Delaware corporation (the “Company”), entered into a Purchase and Sale Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”) by and between the Company and Sandoz Inc., a Delaware corporation (“Purchaser”). On March 1, 2024, the Company completed the previously announced divestiture of its CIMERLI® (ranibizumab-eqrn) ophthalmology franchise through the sale of its subsidiary, Coherus Ophthalmology LLC, to Purchaser (the “Disposition”) for upfront, all-cash consideration of $170.0 million plus an additional $17.8 million for CIMERLI product inventory and prepaid manufacturing assets. Such consideration is subject to certain adjustments that will be finalized following the closing pursuant to the Purchase Agreement.

​

The following events took place in connection with the completion of the Disposition.

​

Item 2.01 Completion of Acquisition or Disposition of Assets

​

The information included in the Introductory Note is incorporated herein by reference into this Item 2.01.

​

The foregoing description of the Purchase Agreement and the Disposition does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, a copy of which was attached as Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the SEC on January 22, 2024, the terms of which are incorporated herein by reference.

​

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

​

The information included in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 2.04.

​

As described in Item 1.01 of the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2024, which is incorporated into this Item 2.04 by reference, on February 5, 2024, the Company, as borrower and on behalf of itself and certain of its subsidiaries, entered into a Consent, Partial Release and Third Amendment to Loan Agreement (the “Consent and Amendment”) with Biopharma Credit PLC, a public limited company incorporated under the laws of England and Wales, as collateral agent (the “Collateral Agent”), BPCR Limited Partnership, a limited partnership established under the laws of England and Wales, as a lender (“BPCR”), and Biopharma Credit Investments V (MASTER) LP, a Cayman Islands exempted limited partnership acting by its general partner, BioPharma Credit Investments V GP LLC (as a lender, and together with as BPCR, each, a “Lender” and collectively, the “Lenders”), pursuant to which the Lenders and the Collateral Agent provided certain consents, and released certain assets and subsidiaries of the Company from their obligations under the Existing Loan Agreement and the other loan documents in connection therewith, and the parties thereto agreed to amend the previously disclosed loan agreement dated as of January 5, 2022 (as amended on April 7, 2022 and February 6, 2023, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date of the Consent and Amendment, the “Existing Loan Agreement”) among the Company, certain of its subsidiaries, the Collateral Agent and the Lenders.

​

Pursuant to and subject to terms and conditions in the Consent and Amendment, among other things: (1) the Lenders and the Collateral Agent provided consent to consummation of the transactions contemplated by the Purchase Agreement, and released certain subsidiary of the Company from its obligation and certain assets subject to the transactions contemplated thereby, (2) the Lenders and the Collateral Agent permitted the Company to make a partial prepayment of the principal of the loans outstanding under the Existing Loan Agreement in the amount of $175.0 million upon consummation of the transactions contemplated by the Purchase Agreement, subject to certain conditions and (3) the parties thereto agreed to adjust the minimum net sales covenant level under the Existing Loan Agreement.

​

Accordingly, upon the closing of the Disposition referenced in Item 2.01 above, the Company became liable to repay $175.0 million of the existing principal balance of $250.0 million of the loans outstanding under the Existing Loan Agreement on April 1, 2024 and the Company plans to repay $175.0 million and the prepayment premium and makewhole amount of $6.8 million to the Lenders on or before April 1, 2024 pursuant to the Consent and Amendment.

​

The above description of the material terms of the Consent and Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Consent and Amendment, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2024 and is incorporated herein by reference.

​

​

Item 8.01 Other Events.

​

On March 4, 2024, the Company issued a press release announcing the completion of the Disposition. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

​

​

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information

​

The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference. The unaudited pro forma condensed combined financial information and the related notes are filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference. They present the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statements of operations of the Company after giving pro forma effect to (i) the Disposition, and related transactions and (ii) the acquisition of Surface Oncology, Inc. (“Surface”) (the “Merger” and together with the Disposition, the “Combined Transactions”). The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 were prepared as though the Combined Transactions occurred on January 1, 2022. The unaudited pro forma condensed combined balance sheet as of September 30, 2023 was prepared as though the Disposition and related transactions occurred on September 30, 2023.

​

​

​

(d) Exhibits.

​

​

​

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

​

​

​

​

​

Exhibit 99.1

​

Coherus Completes Divestiture of Ophthalmology Franchise
​

– Upfront cash payment of $170 million strengthens capital structure –

​

– Transaction solidifies Coherus’ strategic focus in oncology –
​

​

REDWOOD CITY, Calif., March 4, 2024 -- Coherus BioSciences, Inc. (NASDAQ: CHRS) today announced the completion of the previously announced divestiture of its CIMERLI® (ranibizumab-eqrn) ophthalmology franchise through the sale of its subsidiary, Coherus Ophthalmology LLC, to Sandoz, Inc. for upfront all-cash consideration of $170 million. This divestiture included Coherus’ CIMERLI biologics license application, ophthalmology sales and select field reimbursement teams, and access to proprietary commercial software.

​

“This transaction sharpens the focus of our business as we advance our novel immuno-oncology pipeline and continue the launch of LOQTORZI™ in nasopharyngeal carcinoma and UDENYCA® ONBODY™,” said Denny Lanfear, Chairman and Chief Executive Officer of Coherus. “Completion of this transaction allows us to pay down debt, reduce interest costs, reduce headcount and overhead costs, thereby significantly advancing our efforts to become a sustainable and growing oncology business.”

​

Coherus’ oncology assets include the UDENYCA® (pegfilgrastim-cbqv) franchise, with three FDA-approved presentations; LOQTORZI™ (toripalimab-tpzi), an FDA-approved, next-generation PD-1 inhibitor; and a diversified immuno-oncology pipeline with drug candidates with distinctive targets designed to inhibit immune suppressive mechanisms in the tumor microenvironment.

​

Coherus received upfront, all-cash consideration of $170 million plus certain purchase price adjustments, which will be finalized following the closing pursuant to the agreement between Coherus and Sandoz.

​

Advisors

J.P. Morgan Securities LLC acted as the Company’s financial advisor, and Latham & Watkins LLP acted as legal counsel to Coherus in connection with the transaction.

​

About Coherus BioSciences
Coherus 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 of tumor microenvironment agents with the potential to achieve a step change in patient survival and benefit.

​

​

Coherus’ immuno-oncology pipeline includes multiple antibody immunotherapy candidates focused on enhancing the innate and adaptive immune responses to enable a robust immunologic response and enhance outcomes for patients with cancer. Casdozokitug is a novel anti-IL-27 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, ADCC-enhanced anti-CCR8 antibody currently in a Phase 1/2 study as a monotherapy in patients with advanced solid tumors. CHS-1000 is a preclinical candidate targeting immune-suppressive mechanisms via the novel pathway ILT4 with an IND filing planned in the first half of 2024.

​

Coherus markets LOQTORZI™ (toripalimab-tpzi), a novel next generation PD-1 inhibitor, UDENYCA® (pegfilgrastim-cbqv), a biosimilar of Neulasta®, and YUSIMRY™ (adalimumab-aqvh), a biosimilar of Humira®.

​

Forward-Looking Statements
Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 including, but not limited to, statements regarding how Coherus will use the proceeds from the divestiture; whether this divestiture will allow Coherus to reduce headcount and overhead costs; whether Coherus’ oncology business will continue to grow; impact of the I-O pipeline on patient survival and the timing for the IND filing for CHS-1000. Such forward-looking statements involve substantial risks and uncertainties that could cause Coherus’ actual results, performance or achievements to differ significantly from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, risks and uncertainties inherent in the clinical drug development process; risks related to our existing and potential collaboration partners; risks of the drug development position of Coherus’ competitors; the risks and uncertainties of the regulatory approval process, including the speed of regulatory review and the timing of Coherus’ regulatory filings; the risk of FDA review issues; the risk that Coherus is unable to complete commercial transactions and other matters that could affect the availability or commercial potential of Coherus’ drug candidates; the risk that Coherus is unable to close the divestiture at all or without incurring substantial costs and other resources; and the risks and uncertainties of possible litigation. All forward-looking statements contained in this press release speak only as of the date of this press release. Coherus undertakes no obligation to update or revise any forward-looking statements. For a further description of the significant risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Coherus’ business in general, see Coherus’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the Securities and Exchange Commission on November 6, 2023, including the section therein captioned “Risk Factors” and in other documents that Coherus files with the Securities and Exchange Commission. 

​

Coherus Contact Information
Investors:
​

​

Jami Taylor, Head of Investor Relations for Coherus
IR@coherus.com

​

Media:

Jodi Sievers, VP Corporate Communications
media@coherus.com

​

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introductory Note

As previously announced, on January 19, 2024, Coherus BioSciences, Inc., a Delaware corporation (“Coherus”), entered into a Purchase and Sale Agreement (the “Purchase Agreement”) by and between Coherus and Sandoz Inc., a Delaware corporation (“Purchaser”). On March 1, 2024, Coherus completed the previously announced divestiture of its CIMERLI^® (ranibizumab-eqrn) ophthalmology franchise (“CIMERLI”) through the sale of its subsidiary, Coherus Ophthalmology LLC, to Purchaser (the “Disposition”) for upfront, all-cash consideration of $170.0 million plus an additional $17.8 million for CIMERLI product inventory and prepaid manufacturing assets. Such consideration is subject to certain adjustments that will be finalized following the closing pursuant to the Purchase Agreement.

The purpose of the following unaudited pro forma condensed combined financial information is to reflect the closing of the Disposition and related transactions, including the partial prepayment of Coherus’ term loans due in January 2027 (the “2027 Term Loans”) anticipated to occur on or before April 1, 2024 in accordance with the terms the Consent, Partial Release and Third Amendment with the lenders of the 2027 Term Loans. Because Coherus completed the acquisition of Surface Oncology, Inc. (“Surface”) on September 8, 2023 (the “Acquisition Date”), that acquisition is also included within the pro forma financial information and has been updated for the appropriate periods in accordance with Article 11 of Regulation S-X.

Unaudited Pro Forma Condensed Combined Financial Information

The following unaudited pro forma condensed combined financial information included herein presents the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statements of operations of Coherus after giving pro forma effect to (i) the Disposition, and related transactions and (ii) the acquisition of Surface (the “Merger” and together with the Disposition, the “Combined Transactions”). Surface’s historical operations for the period prior to the Acquisition Date (“Pre-Acquisition Surface”) are presented separately in the pro forma condensed combined financial information and the historical operations for the period including and after the Acquisition Date for the surviving subsidiary of the Merger, Surface Oncology, LLC, have been presented within the consolidated results of Coherus.

The unaudited pro forma condensed combined financial information presented below has been derived from:

​

​

​

​

The unaudited pro forma condensed combined financial information has been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information, as amended by the final rule, Release No. 33-10786

“Amendments to Financial Disclosures about Acquired and Disposed Businesses,” which is referred herein as “Article 11.” Article 11 provides the following pro forma adjustments to the historical financial information:

​

The transaction accounting adjustments are based on available information and assumptions that Coherus’ management believes are reasonable. However, such adjustments are preliminary estimates and actual experience may differ materially from expectations. There were no autonomous entity adjustments. Article 11 permits presentation of reasonably estimable synergies, dis-synergies and other transaction effects that have occurred or are expected to occur (“Management’s Adjustments”); however, Coherus has elected not to present Management’s Adjustments. No tax effects related to Transaction Accounting Adjustments were included as the related impacts were immaterial.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 were prepared as though the Combined Transactions occurred on January 1, 2022. The unaudited pro forma condensed combined balance sheet as of September 30, 2023 was prepared as though the Disposition and related transactions occurred on September 30, 2023. The unaudited pro forma condensed combined financial information is for illustrative purposes only, does not reflect what Coherus’ financial position and results of operations would have been had the Combined Transactions occurred on the dates indicated, is not necessarily indicative of Coherus’ future financial position and future results of operations and does not reflect all actions that may be taken by Coherus after the closing of the Combined Transactions. Additionally, the unaudited pro forma condensed combined financial information does not give effect to anticipated synergies, dis-synergies, operating efficiencies, tax savings or cost savings that may be associated with the Combined Transactions including the related transactions. There were no existing contractual relationships between Coherus and Surface or between Coherus and Purchaser during the periods presented in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information constitutes forward-looking information, is subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated and should be read in conjunction with the accompanying notes thereto.

​

Coherus BioSciences, Inc.

Unaudited Pro Forma Condensed COMBINED Balance Sheet

September 30, 2023

(in thousands, except share and per share data)

​

​

See accompanying notes to the unaudited pro forma condensed combined financial information.

​

Coherus BioSciences, INC.

Unaudited Pro Forma CONDENSED COMBINED STATEMENTS OF OPERATIONS

for the Nine Months Ended September 30, 2023

(in thousands, except share and per share data)

​

​

See accompanying notes to the unaudited pro forma condensed combined financial information.

​

Coherus BioSciences, INC.

Unaudited Pro Forma CONDENSED COMBINED STATEMENTS OF OPERATIONS

for the Year Ended December 31, 2022

(in thousands, except shares and per share data)

​

​

See accompanying notes to the unaudited pro forma condensed combined financial information.

​

Coherus BioSciences, INC.

Notes to the Pro Forma Condensed COMBINED Financial Information

(unaudited)

Divestiture of CIMERLI

On March 1, 2024 (the “Divestiture Date”), Coherus completed the sale of all issued and outstanding interests of Coherus Ophthalmology LLC from Coherus to Purchaser. Pursuant to the Purchase Agreement, Purchaser paid to Coherus $170.0 million in cash plus an additional $17.8 million for CIMERLI product inventory and prepaid manufacturing assets. Such consideration is subject to certain adjustments that will be finalized following the closing pursuant to the Purchase Agreement. This divestiture also includes Coherus’ CIMERLI biologics license application, ophthalmology sales and select field reimbursement teams, and access to proprietary commercial software.

In connection with the Disposition, the following related transactions occurred on and will continue subsequent to the Divestiture Date:  

Acquisition of Surface

On the Acquisition Date, in accordance with the plan of merger (the “Merger Agreement”) by and among Coherus, Crimson Merger Sub I, Inc., a wholly owned subsidiary of Coherus (“Merger Sub I”), Crimson Merger Sub II, LLC, a wholly owned subsidiary of Coherus (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”), and Surface, where Merger Sub I merged with and into Surface, with Surface surviving such merger as a wholly owned subsidiary of Coherus, and, as part of the same overall transaction, promptly after such merger, Surface merged with and into Merger Sub II, with Merger Sub II surviving this merger and changing its name to Surface Oncology, LLC. The total consideration paid by Coherus in the Merger was $64.6 million, which consisted of 11,971,460 shares of Coherus’ common stock at a per share price of $4.89, the fair value of a contingent value right (“CVR”) liability of $5.3 million for CVRs provided to Surface shareholders, and equity of the combined company owned by Surface former employees of $0.8 million.

In connection with the Merger, the following related transactions occurred prior to the Acquisition Date, for which disclosures of pro forma financial information would be material and are included as transaction accounting adjustments described in Note 4 hereto:  

The transaction accounting adjustments to reflect the Combined Transactions include but are not limited to:

​

The unaudited pro forma condensed combined financial information has been prepared by management under U.S. generally accepted accounting principles (“U.S. GAAP”) in accordance with Article 11 and is presented in U.S. dollars. The adjustments presented in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an understanding of Coherus after the consummation of the Combined Transactions. No tax effects related to Transaction Accounting Adjustments were included as the related impacts were immaterial.

The pro forma adjustments related to the Disposition are preliminary and based upon available information and certain assumptions which management believes are reasonable under the circumstances and which are described in the accompanying notes to the unaudited pro forma condensed combined financial information. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information. The pro forma adjustments related to the Merger which are described in the accompanying notes to the unaudited pro forma condensed combined financial information are based on the fair value of Surface’s tangible and identifiable intangible assets acquired and liabilities assumed on the Acquisition Date. Coherus believes that, even after reassessing its identification of all assets acquired and liabilities assumed, it was able to acquire Surface for a price that was completely allocable to identifiable assets acquired and liabilities assumed with no residual attributable to goodwill.

Coherus was the legal acquiror of Surface. For accounting purposes, Surface was treated as the “acquired” company. This determination is primarily because subsequent to the Merger, Coherus’ stockholders have a majority of the voting power of the combined company, Coherus controls a majority of the governing body of the combined company and Coherus’ senior management comprises the senior management of the combined company. In accordance with U.S. GAAP, the assets and liabilities of Surface have been recorded at their fair values as of the Acquisition date.

The unaudited pro forma condensed combined balance sheet as of September 30, 2023 reflects adjustments that depict the accounting for the Disposition and the related transactions as if they had occurred on September 30, 2023. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022 and for the nine months ended September 30, 2023 each reflect adjustments that give effect to Coherus’ results of operations as if the Combined Transactions had occurred on January 1, 2022, the first day of the earliest period presented.

Surface’s historical operations for the period prior to the Acquisition Date (“Pre-Acquisition Surface”) are presented separately in the pro forma condensed combined financial information and the historical operations for the period including and after that Acquisition Date for the surviving entity, Surface Oncology, LLC have been presented within the consolidated results of Coherus.

The pro forma financial information does not give effect to any anticipated synergies, dis-synergies operating efficiencies, tax savings or cost savings that may be associated with the Combined Transactions including the related transactions. There were no existing contractual relationships between Coherus and Surface or Coherus and Purchaser during the periods presented in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information constitutes forward-looking information, is subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated and should be read in conjunction with the accompanying notes thereto.

Coherus and Surface have incurred certain non-recurring charges in connection with the Merger. These charges consist of severance compensations offered to Surface’s executives and non-executive employees, a termination fee resulting from the early termination of Surface’s operating lease, and the repayment and final balloon payment of Surface’s convertible note. Coherus incurred certain additional non-recurring charges in connection with the Disposition. These charges primarily consist of accelerated share-based compensation and cash compensation arrangements offered to Company Employees (as defined in the Purchase Agreement). Transaction costs related to financial advisors, legal services and professional accounting services have also been incurred in conjunction with the Combined Transactions. These costs are not expected to be incurred in any period beyond twelve months from the closing dates of the Combined Transactions. Accordingly, the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 reflects the effects of these non-recurring charges, which are not accrued for in the historical combined balance sheet of Coherus as of September 30, 2023.

The unaudited pro forma condensed combined balance sheet as of September 30, 2023 reflects the following adjustments:

Transaction Accounting Adjustments related to the Disposition

Transaction Accounting Adjustment related to the Merger

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 reflect the following adjustments:

Transaction Accounting Adjustments related to the Merger

Transaction Accounting Adjustments related to the Disposition

The below table presents the calculation of pro forma combined basic and diluted net loss per share of Coherus common stock as if the Combined Transactions had occurred on January 1, 2022 for the nine months ended September 30, 2023 and for the year ended December 31, 2022:

** The following pro forma outstanding dilutive potential shares were excluded from the calculation of pro forma diluted net loss per share due to their anti-dilutive effect:

The amounts in the table above exclude any shares contingently issuable pursuant to the CVR agreement because the conditions that could result in a payment becoming due were not met.