On Thursday, Baird maintained an Outperform rating on Coherus Biosciences (NASDAQ: NASDAQ:CHRS) and increased the price target to $6.00 from the previous $4.00.
The adjustment follows the company's recent transaction with Intas Pharmaceuticals, where Coherus agreed to sell all formulations of Udenyca for a $483 million cash payment upfront, in addition to potential sales milestones that could total up to $75 million.
The sale of Udenyca is set to significantly impact Coherus's financial standing, as the cash infusion will allow the company to pay off its $230 million convertible note and approximately $50 million in Udenyca royalty obligations. This move is anticipated to alleviate any concerns regarding the company's balance sheet and provide a more solid financial foundation.
The capital from this deal is earmarked for advancing Coherus's immuno-oncology (IO) pipeline. The funds are expected to support the company through several upcoming data catalysts over the next few years, signaling a strategic shift in focus towards the development of its IO portfolio.
Baird's commentary highlighted the management team's ability to extract significant value from the sale of multiple assets in 2024. This strategic maneuvering is aimed at narrowing the company's focus on its IO pipeline, which is now backed by a robust cash reserve.
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