Coherus Oncology is giving away its old drug business. On September 30, shareholders become entitled to any money the company collects from selling its remaining biosimilar patents, royalties, and cell lines. They cannot sell those rights, and if nothing is sold within two years, they expire with nothing paid.
The instruments are called contingent value rights, or CVRs. For shareholders, the CVR dividend amounts to a claim on assets the company has decided it no longer wants, with an expiry date attached. Coherus said in its August 17 announcement that it has retained an investment bank to run the sale process, starting immediately. No buyer has been named and no value has been placed on the assets.
The package being separated out includes biosimilar patents, a royalty stream under an existing licence, cell lines, and regulatory filings. CEO Denny Lanfear said in the announcement that the assets could appeal to an established biosimilars company or a new entrant, pointing to draft FDA guidance that would remove the requirement for comparative clinical trials in biosimilar approvals. The release attributed no dollar value to the assets.
One further constraint: the CVRs are expressly subject to a loan agreement Coherus signed with Innovatus Life Sciences Lending Fund I on August 12, five days before the CVR announcement. That agreement restricts both the disposal of the biosimilar assets and payments to CVR holders. The release did not detail what those restrictions mean in practice.
What Coherus is keeping is an oncology company built around LOQTORZI (toripalimab-tpzi), an approved PD-1 inhibitor — a class of cancer drug that helps the immune system identify tumour cells — and two mid-stage candidates targeting liver, head and neck, colorectal, and gastrointestinal cancers.
Shares closed 16.52% higher at $1.3400 on August 18, after the announcement, on dollar volume of about $4.5 million.
The rights distribute on October 7 and expire exactly two years later. Any assets unsold by then produce nothing.