Kezar Confirms Receipt of Unsolicited, Non-Binding Acquisition Proposal

Rhea-AI Summary

Kezar Life Sciences (Nasdaq: KZR) has received an unsolicited, non-binding acquisition proposal from Concentra Biosciences, The offer includes:

• Cash consideration of $1.10 per share
• A contingent value right for 80% of net proceeds from any out-license or disposition of Kezar's development programs or intellectual property

Tang Capital Management, , the controlling stockholder of Concentra, owns approximately 9.9% of Kezar's outstanding common stock. Kezar's Board and management team will evaluate the proposal to determine the best course of action for the company and its stockholders. No immediate action is required from Kezar stockholders.

Positive

• Potential acquisition offer could provide immediate cash value to shareholders
• Offer includes contingent value right for future proceeds from company's assets
• Proposal represents a potential exit strategy for investors

Negative

• Unsolicited nature of the proposal may indicate lack of prior negotiations
• Non-binding nature of the offer provides no guarantee of completion
• Proposed cash consideration of $1.10 per share may be considered low by some shareholders

Insights

Financial Analyst

This unsolicited acquisition proposal from Concentra Biosciences is a significant development for Kezar Life Sciences. The offer of $1.10 per share represents a substantial premium of approximately 37.5% over Kezar's current market price of about $0.80. The additional contingent value right (CVR) offering 80% of net proceeds from potential out-licensing or asset sales adds further value potential.

However, investors should note that this is a non-binding proposal and there's no guarantee it will lead to a completed transaction. The involvement of Tang Capital, already owning 9.9% of Kezar's stock, suggests a strategic move to gain control of the company's assets, particularly its immune-mediated disease pipeline.

The Board's careful evaluation will be crucial. They'll need to assess whether this offer fairly values Kezar's potential, especially considering its clinical-stage status in the competitive biotech landscape. Shareholders should watch for any counter-offers or strategic alternatives that the Board might pursue to maximize value.

Biotech Industry Expert

This acquisition proposal highlights the potential value in Kezar's novel small molecule platform for immune-mediated diseases. The offer structure, combining upfront cash with a CVR, is typical in biotech acquisitions where the acquirer wants to limit upfront risk while giving sellers upside potential.

The 80% CVR on future out-licensing or asset sales is particularly intriguing. It suggests Concentra sees significant value in Kezar's intellectual property and development programs, potentially beyond what's reflected in the current share price. This could include Kezar's lead candidate, zetomipzomib, which has shown promise in lupus nephritis and other autoimmune conditions.

For the broader biotech sector, this move indicates continued interest in acquiring innovative platforms at relatively low valuations in the current market. It may spark renewed interest in other small-cap biotech companies with promising early-stage assets. Investors should monitor how this situation unfolds, as it could set precedents for valuations and deal structures in similar acquisitions.

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Kezar Life Sciences, Inc. (“Kezar” or the “Company”) (Nasdaq: KZR), a clinical-stage biotechnology company developing a novel small molecule to treat unmet needs in immune-mediated diseases, today announced that it has received an unsolicited, non-binding proposal from Concentra Biosciences, LLC (“Concentra”), a Delaware limited liability company, to acquire all of the outstanding shares of common stock of Kezar for cash consideration of $1.10 per share, plus a contingent value right that represents the right to receive 80% of the net proceeds from any out-license or disposition of Kezar’s development programs or intellectual property.

According to a Schedule 13D filed on October 8, 2024, with the U.S. Securities and Exchange Commission (the “SEC”) disclosing Concentra’s proposal, Tang Capital Management, LLC (“Tang Capital”) is the controlling stockholder of Concentra, and Tang Capital beneficially owns approximately 9.9% of the Company’s outstanding common stock.

Consistent with its fiduciary duties, Kezar’s Board and management team will carefully evaluate the non-binding proposal to determine the course of action that it believes is in the best interest of the Company and all Kezar stockholders and respond appropriately.

Kezar stockholders do not need to take any action at this time.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “can,” “should,” “expect,” “believe,” “potential,” “anticipate” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on Kezar’s expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties that could cause actual future events or results to differ materially from those expressed or implied by the forward-looking statements. There can be no assurance that the non-binding proposal will result in a formal offer or that any such offer will ultimately result in a completed transaction. Readers are cautioned not to put undue reliance on forward-looking statements. Many factors may cause differences between current expectations and actual events and results, including those factors that are discussed in Kezar’s filings with the SEC, including the “Risk Factors” contained therein. Except as required by law, Kezar assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241010708833/en/

Investor and Media Contact:

Gitanjali Jain

Senior Vice President, Investor Relations and External Affairs

Kezar Life Sciences, Inc.

gjain@kezarbio.com

Source: Kezar Life Sciences, Inc.

FAQ

What is the acquisition offer for Kezar Life Sciences (KZR)?

Concentra Biosciences has offered to acquire all outstanding shares of Kezar Life Sciences (KZR) for $1.10 per share in cash, plus a contingent value right for 80% of net proceeds from any future out-licensing or disposition of Kezar's assets.

Who made the acquisition proposal for Kezar Life Sciences (KZR)?

The unsolicited, non-binding acquisition proposal for Kezar Life Sciences (KZR) was made by Concentra Biosciences, , a Delaware liability company controlled by Tang Capital Management,

What percentage of Kezar Life Sciences (KZR) does Tang Capital Management own?

According to the press release, Tang Capital Management, beneficially owns approximately 9.9% of Kezar Life Sciences' (KZR) outstanding common stock.

What action is required from Kezar Life Sciences (KZR) shareholders regarding the acquisition proposal?

No immediate action is required from Kezar Life Sciences (KZR) shareholders. The company's Board and management team will evaluate the proposal and respond appropriately.