Coherus' Target Price Raised by Baird Following Udenyca Sales Agreement

On Thursday, Baird maintained its Outperform rating on Coherus Biosciences (NASDAQ: CHRS) while raising the price target from the previous $4.00 to $6.00. This adjustment follows the company’s recent agreement with Intas Pharmaceuticals, in which it accepted to sell all formulations of Udenyca for a $483 million upfront payment along with potential sales milestones of up to $75 million.

The sale of Udenyca is expected to significantly impact Coherus' financial position. The influx of cash will enable the company to pay off its $230 million convertible notes and approximately $50 million in Udenyca royalty obligations. This move is anticipated to alleviate concerns regarding the company’s balance sheet and provide a more robust financial foundation.

The capital obtained from this agreement is earmarked for advancing Coherus' immuno-oncology (IO) portfolio. The funds are expected to propel the company towards various upcoming data catalysts over the next few years. This signifies a strategic shift in focus towards the development of the IO portfolio.

Baird’s commentary highlighted the management team’s capability to derive significant value from the sale of multiple assets in 2024. This strategic maneuver aims to narrow the company’s focus to the IO portfolio, now supported by a strong cash reserve.