Coherus BioSciences Inc

1. Organization and Summary of Significant Accounting Policies

Organization

Coherus BioSciences, Inc. (the “Company” or “Coherus”) is a fully integrated commercial-stage innovative oncology company with an approved next-generation PD-1 inhibitor, LOQTORZI® (toripalimab-tpzi), and a pipeline that includes two mid-stage clinical candidates targeting liver, lung, head & neck, and other cancers. The Company’s commercial product is LOQTORZI, a novel next-generation programmed death receptor-1 (“PD-1”) inhibitor. The Company is developing an innovative immuno-oncology pipeline that is expected to bring forward new potential indications for LOQTORZI in the U.S. and the development of new product candidates.

The Company previously owned UDENYCA (pegfilgrastim-cbqv), which was launched commercially in a pre-filled syringe presentation in the United States in January 2019, followed by the launch of UDENYCA in an autoinjector presentation in May 2023 and the launch of UDENYCA ONBODY in February 2024. On December 2, 2024, the Company and Intas Pharmaceuticals Ltd. (“Intas”) entered into an asset purchase agreement (the “UDENYCA Purchase Agreement”), pursuant to which, and upon the terms and subject to the conditions thereof, the Company agreed to divest the UDENYCA franchise (the “UDENYCA Business”) to Intas (the “UDENYCA Sale”). On April 11, 2025 (the “UDENYCA Closing Date”), the Company completed the divestiture of the UDENYCA Business to Intas for upfront, all-cash consideration of $483.4 million, inclusive of $118.4 million for UDENYCA product inventory. Such consideration is subject to certain adjustments that will be finalized following the closing pursuant to the UDENYCA Purchase Agreement. In addition, the Company is also eligible to receivetwo additional payments of $37.5 million each (together, the “Earnout Payments”). The first such payment is payable by Intas to the Company if net sales (as defined in the UDENYCA Purchase Agreement, “Net Sales”) of UDENYCA for four consecutive fiscal quarters from July 1, 2025 through September 30, 2026 are equal to or greater than $300 million, and the second such payment is payable by Intas to the Company if Net Sales of UDENYCA for four consecutive fiscal quarters from July 1, 2025 through March 31, 2027 are equal to or greater than $350 million. The UDENYCA Sale culminated in the divestiture of the Company’s biosimilar businesses and represented a strategic shift. As a result, the Company classified its condensed consolidated statements of operations and condensed consolidated balance sheets for all periods presented as discontinued operations. Refer to Note 6. Discontinued Operations for more information.

On October 27, 2023, the Company announced that LOQTORZI was approved by the U.S. Food and Drug Administration (“FDA”) in combination with cisplatin and gemcitabine for the first-line treatment of adults with metastatic or recurrent locally advanced nasopharyngeal carcinoma (“NPC"), and as monotherapy for the treatment of adults with recurrent unresectable, or metastatic NPC with disease progression on or after platinum-containing chemotherapy. LOQTORZI is an anti-PD-1 antibody that the Company developed in collaboration with Junshi Biosciences Co., Ltd. (“Junshi Biosciences”). The Company announced the launch of LOQTORZI in the U.S. on January 2, 2024. Further evaluation of LOQTORZI is expected through multiple current and planned clinical studies by the Company, Junshi Biosciences and the Company’s biopharma partners.

The Company’s pipeline comprises earlier stage clinical and preclinical immuno-oncology programs that it plans to develop in combination with LOQTORZI as well as in partnership with other companies with immune activating or cancer treatment agents. The Company’s clinical stage product candidate, casdozokitug (CHS-388), is an investigational antagonist antibody targeting IL-27, an immune regulatory cytokine, that is overexpressed in certain cancers, including hepatocellular, lung and renal cell carcinoma. Casdozokitug received orphan drug designation from the FDA for the treatment of hepatocellular carcinoma (“HCC”) in October 2020 and fast track designation from the FDA for the treatment of patients with HCC previously treated with standard therapies in November 2020. Casdozokitug is currently in three on-going clinical studies, including a Phase 1/2 study in patients with advanced solid tumors, including

combination with toripalimab in non-small cell lung cancer (clinicaltrials.gov identifier# NCT04374877), and a Phase 2 study in HCC (clinicaltrials.gov identifier# NCT05359861). The Company initiated a randomized Phase 2 study in HCC evaluating casdozokitug in combination with toripalimab and bevacizumab in the fourth quarter of 2024 (clinicaltrials.gov identifier# NCT06679985).

The Company’s other clinical-stage product candidate, CHS-114, is an investigational IgG1 antibody targeting CCR8, a chemokine receptor highly expressed on regulatory T cells (“Treg cells”) in the tumor microenvironment (“TME”). The Company is enrolling patients with advanced solid tumors and head and neck squamous cell carcinoma (“HNSCC”) in the U.S. in a clinical trial evaluating safety and pharmacokinetics of CHS-114 with and without LOQTORZI (clinicaltrials.gov identifier# NCT05635643). The Company is currently evaluating CHS-114 in combination with toripalimab in a Phase 1b clinical study in second-line HNSCC (clinicaltrials.gov identifier# NCT05635643). The Company also has an ongoing Phase 1b clinical study of CHS-114 in combination with toripalimab and/or other treatments in participants with advanced solid tumors with the first cohort evaluating gastric cancer (clinicaltrials.gov identifier# NCT06657144).

The Company also has an early-stage development candidate, CHS-1000, an investigational antibody targeting human ILT4, designed to improve anti-PD-1 clinical benefit by transforming an unfavorable TME to a more favorable TME. The Company’s investigational new drug application (“IND”) for CHS-1000 was allowed to proceed by the FDA in the second quarter of 2024 and initiating the first-in-human clinical study remains subject to further evaluation in the Company’s portfolio prioritization process.

In addition, the Company has a product candidate, GSK4381562, which is exclusively licensed to GlaxoSmithKline Intellectual Property No. 4 Limited (“GSK”). Through September 2033, the Company has an obligation to pay 70% of all milestone- and royalty-based payments that it or its affiliates receive from GSK4381562 to the holders of contingent value rights (“CVRs”).

Basis of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Coherus and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Act. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring accruals that the Company believes are necessary to fairly state the financial position and the results of the Company’s operations and cash flows for interim periods in accordance with U.S. GAAP. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. Estimates are assessed

each period and updated to reflect current information. Accounting estimates and judgments are inherently uncertain and therefore actual results could differ from these estimates.

Segment Reporting and Geographic Disclosures

The Company operates and manages its business asone reportable and operating segment, which is the business of developing and commercializing human pharmaceutical products. The Company’s chief executive officer, as the chief operating decision maker (“CODM”), manages and allocates resources to the operations of the Company on an entity-wide basis. Managing and allocating resources on an entity-wide basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions. The CODM assesses operating performance and makes operating decisions primarily based on net income (loss), cash on-hand and cash flows. All expense categories on the condensed consolidated statements of operations are significant, and there are no other significant segment expenses that would require disclosure. Primarily, all revenue is generated and all long-lived assets are maintained in the United States.

Restricted Cash

Restricted cash consists of immaterial deposits for letters of credit that the Company has provided to secure its obligations under certain leases and is included in other assets, non-current on the condensed consolidated balance sheets.

Trade Receivables

Trade receivables are recorded net of allowances for chargebacks, cash discounts for prompt payment and credit losses. The Company estimates an allowance for expected credit losses by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The corresponding expense for the credit loss allowance is reflected in selling, general and administrative expenses. The credit loss allowance was immaterial as of March 31, 2025 and December 31, 2024.

Revenue Purchase and Sale Agreement and Royalty Fee Derivative Liability

The Revenue Participation Right Purchase and Sale Agreement (the “Revenue Purchase and Sale Agreement”), dated as of May 8, 2024 among the Company and Coduet Royalty Holdings, LLC, as administrative agent and each buyer named in an annex thereto (collectively, the “Purchaser Group”) (see Note 8. Financial Liabilities) contains an embedded derivative that meets the criteria to be bifurcated and accounted for separately from the Revenue Purchase and Sale Agreement (the "Royalty Fee Derivative Liability"). The Royalty Fee Derivative Liability was recorded at fair value upon entering into the Revenue Purchase and Sale Agreement, and at each reporting period the change in fair value is recognized in other income (expense), net in the condensed consolidated statements of operations. Refer to Note 3. Fair Value Measurements for details regarding the fair value.

The Revenue Purchase and Sale Agreement is accounted for as a liability net of a discount comprising issuance costs and the initial fair value of the embedded derivative. The Company imputes interest expense associated with this liability using the effective interest rate method on a prospective basis. The effective interest rate is calculated based on the rate that would enable the liability to be repaid in full over the anticipated life of the arrangement. Interest expense is recognized over the estimated term on the condensed consolidated statement of operations. The interest rate may vary during the term of the agreement depending on a number of factors, including the level of actual and forecasted net sales. A significant increase or decrease in actual or forecasted net sales could materially impact the revenue participation liability, interest expense, and the time period for repayment.

On April 15, 2025, the Company paid$47.7 million to buy out the Purchaser Group’s right to receive future payments with respect to UDENYCA in accordance with the Revenue Purchase and Sale Agreement.

Net Revenues

The Company sells to wholesalers and distributors, (collectively, “Customers”). The Customers then resell to hospitals and clinics (collectively, “Healthcare Providers”) pursuant to contracts with the Company. In addition to distribution agreements with Customers and contracts with Healthcare Providers, the Company enters into arrangements with group purchasing organizations (“GPOs”) that provide for United States government-mandated or privately negotiated rebates, chargebacks and discounts. The Company also enters into rebate arrangements with payers, which consist primarily of commercial insurance companies and government entities, to cover the reimbursement of products to Healthcare Providers. The Company provides co-payment assistance to patients who have commercial insurance and meet certain eligibility requirements. Revenue from product sales is recognized at the point when a Customer obtains control of the product and the Company satisfies its performance obligation, which generally occurs at the time product is shipped to the Customer. Payment terms differ by jurisdiction and customer, but payment terms typically range from 30 to approximately 80 days from date of shipment and may be extended during the launch period of a new product.

The Company recognizes revenue from the sales of vaccines to the U.S. federal government for placement into vaccine stockpiles in accordance with SEC Interpretation, Commission Guidance Regarding Accounting for Sales of Vaccines and BioTerror Countermeasures to the Federal Government for Placement into the Pediatric Vaccine Stockpile or the Strategic National Stockpile. This interpretation allows companies to recognize revenue for sales of vaccines into U.S. government stockpiles even though these sales might not meet the criteria for revenue recognition under other accounting guidance.

Discontinued Operations and Held for Sale

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value, and when certain other criteria are met. A business classified as held for sale is recorded at the lower of (i) its carrying amount and (ii) estimated fair value less costs to sell. When the carrying amount of the business exceeds its estimated fair value less costs to sell, a loss is recognized and updated each reporting period as appropriate.

The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the condensed consolidated statements of operations; and (iii) assets and liabilities are reported as held for sale in the condensed consolidated balance sheets in the period in which the business is classified as held for sale.

Reclassifications

Certain amounts in prior years’ financial statements have been reclassified to conform with the current period presentation of discontinued operations, including amounts in the condensed consolidated balance sheets, condensed consolidated statements of operations and various footnotes. There were no changes to net income (loss). In addition, certain amounts in the condensed consolidated statements of cash flows have been reclassified to conform with the current period presentation, and these changes had no impact on the net cash provided by (used in) operating and financing activities.

Recent Accounting Pronouncements

The following are recent accounting pronouncements that the Company has not yet adopted:

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The new standard is effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this ASU may have on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03*, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses,*which requires public entities to disclose certain disaggregated costs and expenses on an annual and interim basis in the notes to the financial statements. It also requires disclosure of the total amount of selling expenses, and the Company’s definition of selling expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective or retrospective basis. The Company is currently evaluating the impact this ASU may have on its financial statement disclosures.

The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business or that no material effect is expected on the condensed consolidated financial statements as a result of future adoption.

2. Revenue

The Company launched LOQTORZI in December 2023. Net revenue for sales of UDENYCA, YUSIMRY and CIMERLI are classified within discontinued operations (refer to Note 6. Discontinued Operations). All LOQTORZI net product revenue was generated in the United States, and the Company’s net revenue was as follows:

For continuing operations, gross product revenues by significant customer as a percentage of total gross product revenues were as follows:

Product Sales Discounts and Allowances

Chargebacks and discounts for prompt payment are recorded as a reduction in trade receivables, and the remaining reserve balances are classified as current liabilities and other liabilities, non-current on the accompanying unaudited condensed consolidated balance sheets.

In connection with the sale of the CIMERLI ophthalmology franchise and the YUSIMRY franchise, the Company retained and will continue to be responsible for sales discounts and allowance liabilities incurred prior to March 1, 2024 for CIMERLI and June 26, 2024 for YUSIMRY. Sales discounts and allowances incurred on behalf of the respective counterparties following the close of the Sale Transactions in accordance with the Company’s Transition Services Agreement (the “CIMERLI TSA”) with Sandoz Inc. (“Sandoz”) in March 2024 for CIMERLI and the Company’s Transition Services Agreement (the “YUSIMRY TSA” and, together with the CIMERLI TSA, collectively the “TSA”) with Hong Kong King-Friend Industrial Company Ltd. (“HKF”) in June 2024 for YUSIMRY are reflected within TSA receivables, net and TSA payables and other accrued liabilitiesin the unaudited condensed consolidated balance sheets and are excluded from the below table.

The activities and ending reserve balances for each significant category of discounts and allowances that constitute variable consideration were as follows:

3. Fair Value Measurements

The fair values of financial instruments are classified into one of the following categories based upon the lowest level of input that is significant to the fair value measurement:

The fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.

Unrealized gains and losses on available-for-sale debt securities are reported as a component of accumulated comprehensive income (loss), with the exception of unrealized losses believed to be related to credit losses, if any, which are recognized in earnings in the period the impairment occurs. Impairment assessments are made at the individual security level each reporting period. When the fair value of an available-for-sale debt investment is less than its cost at the balance sheet date, a determination is made as to whether the impairment is related to a credit loss and, if it is, the portion of the impairment relating to credit loss is recorded as an allowance through net income. Realized gains and losses, if any, on available-for-sale securities are included in other income (expense), net, in the condensed consolidated statements of operations based on the specific identification method.

In connection with the acquisition of Surface Oncology, Inc. (“Surface”) on September 8, 2023 (the “Surface Acquisition”), the Company recorded contingent consideration liabilities related to CVRs. The fair value of the CVR liabilities were determined using a Monte Carlo simulation-based model discounted to present value and represents a Level 3 measurement within the fair value hierarchy. Assumptions used in this calculation include estimated revenue, discount rate and various probability factors.

In connection with the Revenue Purchase and Sale Agreement (see Note 8. Financial Liabilities), on May 8, 2024, the Company recorded the initial estimated fair value of the Royalty Fee Derivative Liability of $9.2 million in accrued and other current liabilities on the condensed consolidated balance sheets. To estimate the fair value, the Company uses Monte Carlo simulation models that require the use of Level 3 unobservable inputs, primarily the amount and timing of our expected future revenue, the estimated volatility of these revenues, the discount rate corresponding to the risk of revenue, and the probability of certain events. The Company estimated the total fair value of the Royalty Fee Derivative Liability at March 31, 2025 and December 31, 2024, to be $26.2 million and $13.6 million, respectively.

Financial liabilities related to long-term debt obligations are summarized in Note 8. Financial Liabilities. Other financial assets and liabilities from continuing operations measured at fair value on a recurring basis are summarized as follows:

4. Inventory

Inventory of continuing operations consisted of the following:

Inventory expected to be sold more than twelve months from the balance sheet date is classified as inventory, non-current on the condensed consolidated balance sheets. As of March 31, 2025 and December 31, 2024, the Company did not have any inventory of continuing operations classified as non-current.

Prepaid manufacturing of $6.9 million as of March 31, 2025 included prepayments to CMOs of $1.1 million for manufacturing services, which the Company expects to be converted into inventory within the next twelve months, and $5.8 million for research and development. Prepaid manufacturing of $6.7 million as of December 31, 2024 included $0.3 million for manufacturing services of the Company’s product and $6.4 million for research and development.

5. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net of continuing operations consisted of the following:

Depreciation and amortization expense related to property and equipment, net was $0.4 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 and December 31, 2024, the net book value of software implementation costs of continuing operations related to hosting arrangements was$1.1 million and$1.7 million, respectively, and the amortization expense was immaterial for all periods presented.

Intangible Assets, Net

Intangible assets, net of continuing operations consisted of the following:

Amortization expense related to finite-lived intangible assets was $0.7 million and $0.9 million in the three months ended March 31, 2025 and 2024, respectively.

The out-licensed partnership program with Novartis Institutes for Biomedical Research, Inc. (“Novartis Institutes”) (NZV930), acquired as part of the Surface Acquisition, was terminated by Novartis Institutes with an effective date of October 2, 2024. As a result, during the first quarter of 2024, the Company recognized a net impairment charge of $6.8 million inselling, general and administrative expenses in the condensed consolidated statements of operations relating to the write-off of the net carrying value of the Novartis Institutes out-license intangible asset of $10.6 million and the final remeasurement of the CVR liability related to NZV930 of $3.8 million to its fair value ofzero.

Accrued and Other Current Liabilities

Accrued and other current liabilities of continuing operations consisted of the following:

Other Liabilities, Non-current

Other liabilities, non-current of continuing operations consisted of the following:

6. Discontinued Operations

On December 2, 2024, the Company and Intas entered into the UDENYCA Purchase Agreement. On April 11, 2025, the Company completed the divestiture of the UDENYCA Business to Intas for upfront, all-cash consideration of $483.4 million, inclusive of $118.4 million for UDENYCA product inventory. Such consideration is subject to certain adjustments that will be finalized following the closing pursuant to the UDENYCA Purchase Agreement. In addition, the Company is also eligible to receive two additional Earnout Payments of $37.5 million each. The first such payment is payable by Intas to the Company if Net Sales of UDENYCA for four consecutive fiscal quarters from July 1, 2025 through September 30, 2026 are equal to or greater than $300 million, and the second such payment is payable by Intas to the Company if Net Sales of UDENYCA for four consecutive fiscal quarters from July 1, 2025 through March 31, 2027 are equal to or greater than $350 million.

On June 26, 2024, the Company completed the sale of its YUSIMRY immunology franchise, which comprised certain assets, including certain YUSIMRY intellectual property, contracts, YUSIMRY inventory, and all activities related to research and development of YUSIMRY for upfront cash consideration of $40.0 million and assumed certain liabilities, including $17.0 million of inventory purchase commitments (the “YUSIMRY Sale”).

On March 1, 2024, the Company completed the sale of its CIMERLI ophthalmology franchise through the sale of its subsidiary, Coherus Ophthalmology LLC (“Coherus Ophthalmology”), to Sandoz for upfront, all-cash consideration of$187.8 million, inclusive of$17.8 million for CIMERLI product inventory and prepaid manufacturing assets (the “CIMERLI Sale” and, together with the UDENYCA Sale and the YUSIMRY Sale, the “Sale Transactions”).

As of the date of the Company’s stockholder vote, the UDENYCA Sale represented the last and most significant divestiture of the Company’s biosimilar businesses, which comprised the UDENYCA, YUSIMRY and CIMERLI franchises; therefore, the strategic shift criteria had been met. Accordingly, for all prior periods presented, the results of the discontinued operations have been reported as a separate component of income on the condensed consolidated statements of operations, and the assets and liabilities of the discontinued operations have been presented separately in the condensed consolidated balance sheets.

The Company is using a portion of the proceeds of the UDENYCA Sale to fully repay the outstanding 2026 Convertible Notes and to buy out the right to receive royalties on net sales of UDENYCA in accordance with the Revenue Purchase and Sale Agreement (see Note 13. Subsequent Events); therefore, the interest expense associated with these arrangements has been presented as discontinued operations. Additionally, the interest expense on the$175.0 million portion of the$250.0 million aggregate principal amount ofthe senior secured term loan facility that the Company entered into on January 5, 2022 (as amended, the “2027 Term Loans”) that was required to be repaid in April 2024 in connection with the CIMERLI Sale has been presented as discontinued operations.

The following table presents a reconciliation of discontinued operations for the three months ended March 31, 2025 and 2024:

Net revenue from discontinued operations during the three months ended March 31, 2025 included$31.5 million of UDENYCA sales. Net revenue from discontinued operations during the three months ended March 31, 2024 included$42.7 million of UDENYCA sales,$28.2 million in CIMERLI sales and$3.9 million of YUSIMRY sales.

The following table presents a reconciliation of assets held for sale at March 31, 2025 and December 31, 2024:

The following amounts related to discontinued operations but did not transfer to any of the buyers in the Sale Transactions, and thus were not classified as held for sale at March 31, 2025 and December 31, 2024:

Cash flows from continuing operations and discontinued operations are presented together in the condensed consolidated statement of cash flows. During the three months ended March 31, 2025, changes in operating assets and liabilities of discontinued operations were primarily due to an increase in inventory of$22.9 million. During the three months ended March 31, 2024, changes in operating assets and liabilities of discontinued operations resulted in a net cash inflow primarily due to a decrease in prepaid manufacturing of$10.0 million and a decrease in inventory of$2.4 million.

In connection with the Sale Transactions, the Company entered into separate Transition Services Agreements (“TSAs”) with each of the buyers pursuant to which the Company is providing certain business support services including billings, collections, and the remittance of rebates, to ensure business continuity for patients and customers for specified periods. Under each of the TSAs, the Company is entitled to be reimbursed for its costs and has recorded income of$0.1 million and$0.3 million for the three months ended March 31, 2025 and 2024, respectively, in other income (expense), net in the condensed consolidated statements of operations.

7. Collaborations and Other Arrangements

In-Licensing Agreement

Junshi Biosciences

In March 2024, the Company entered into an Amendment No. 2 (the “2 nd Amendment”) to the Exclusive License and Commercialization Agreement (the “Collaboration Agreement”) with Junshi Biosciences to revise the timing of the$25.0 million milestone payment to Junshi Biosciences that became due in connection with the approval by the FDA of toripalimab for the treatment of patients with NPC in the first quarter of 2024. Under the terms of the 2 nd Amendment, the$25.0 million milestone payment was split into two installments of$12.5 million each, one that was paid in the second quarter of 2024 and one that was paid in January of 2025.

The licensing transaction and the exercise of the option were accounted for as asset acquisitions under the relevant accounting rules. The research and development expense recognized for obligations to Junshi Biosciences for the three months ended March 31, 2025 wasnot material. During the three months ended March 31, 2024, the Company recognized a reduction in research and development expenses for the release of certain liabilities of $4.8 million pursuant to the 2 nd Amendment with Junshi Biosciences. In the condensed consolidated balance sheets as of December 31, 2024, the Company classified $12.5 million in accrued and other current liabilities, as well as $0.4 million in accounts payable related to the co-development, regulatory and technology transfer costs related to these programs.

The accrued royalty obligation to Junshi Biosciences was$1.5 million as of March 31, 2025 and December 31, 2024. The additional milestone payments, option fee for the IL-2 cytokine and royalties are contingent upon future

events and, therefore, will be recorded if and when it becomes probable that a milestone will be achieved, or when an option fee or royalties are incurred.

8. Financial Liabilities

A summary of the Company’s debt obligations as of the dates indicated, including level within the fair value hierarchy (see Note 3. Fair Value Measurements), is as follows:

2029 Term Loan

On May 8, 2024, the Company entered into a senior secured term loan facility of up to $38.7 million (the “2029 Term Loan”) and received proceeds, net of the original issuance discount, of$37.5 million. The net proceeds were used by the Company as part of the full repayment of the 2027 Term Loans.

The 2029 Term Loan matures on May 8, 2029. The amount borrowed under the 2029 Term Loan accrues interest equal to 8.0% per annum, plus a three-month SOFR rate. The 2029 Term Loan provides for interest-only payments on a quarterly basis until maturity. The loan agreement, by and among the Company, Ankura Trust Company, LLC and the lenders signatory thereto (the “2029 Loan Agreement”), contains certain covenants, and the Company was in full compliance withno events of default as of March 31, 2025.

Interest expense on the 2029 Term Loan was $1.3 million for the three months ended March 31, 2025, and it is classified within continuing operations on the condensed consolidated statements of operations.

Revenue Purchase and Sale Agreement** **

On May 8, 2024, concurrent with the 2029 Term Loan, the Company entered into the Revenue Purchase and Sale Agreement with the Purchaser Group. Under the terms of the Revenue Purchase and Sale Agreement, the Purchaser Group paid the Company$37.5 million, subject to certain conditions at closing (the “Purchase Price”). In exchange, the Company sold to the Purchaser Group a right to receive 5.0% of U.S. net sales of UDENYCA and LOQTORZI with respect to a specified threshold applicable to UDENYCA net sales and a specified threshold applicable to LOQTORZI net sales

during an applicable year and 0.5% of U.S. net sales of UDENYCA and LOQTORZI that exceeded the specified threshold during that year (the “Revenue Payment”) for each calendar quarter commencing May 8, 2024. The Purchaser Group’s right to receive the Revenue Payment terminates and the Company no longer has the obligation to pay Revenue Payments once the Purchaser Group receives the amount equal to 2.25 times the Purchase Price allocated to each product. The Company may also buy-out the Purchaser Group’s rights to receive the Revenue Payments by triggering certain conditions and paying the Purchaser Group the unpaid portion of the 2.25 multiple on the Purchase Price. The proceeds from the Purchase Price were used by the Company as part of the full repayment of the 2027 Term Loans. On April 15, 2025, the Company paid$47.7 million to buy out the Purchaser Group’s right to receive the Revenue Payments with respect to UDENYCA in accordance with the Revenue Purchase and Sale Agreement.

The Revenue Purchase and Sale Agreement contains certain covenants, and the Company was in full compliance with the agreement as of March 31, 2025.

The Revenue Purchase and Sale Agreement contains an embedded derivative that meets the criteria to be bifurcated and accountedfor as a freestanding derivative instrument subject to derivative accounting. The allocation of the Purchase Price to the embedded derivative resulted in a$9.2 million discount on the revenue participation liability. Additionally, there was$1.4 million in issuance costs. The discount and issuance costs are amortized to interest expense over the estimated term of the Revenue Purchase and Sale Agreement using the effective interest method. For the three months ended March 31, 2025, there was$2.6 million of interest expense related to the Revenue Purchase and Sale Agreement, of which$1.7 million related to UDENYCA and is presented within discontinued operations. For details on the Royalty Fee Derivative Liability, see Note 3. Fair Value Measurements.

A summary of the revenue participation liability is as follows:

Classification on the condensed consolidated balance sheets is as follows:

2027 Term Loans

The Company entered into a loan agreement in January 2022 (as amended, the “2027 Loan Agreement”) with BioPharma Credit, PLC (“BioPharma”) and the 2027 Lenders that provided for a senior secured term loan facility, of which $250.0 million was funded.

On February 5, 2024, the Company entered into a Consent, Partial Release and Third Amendment to the 2027 Term Loans (the “Consent and Amendment”) with the Collateral Agent and the 2027 Lenders. Pursuant to the Consent and Amendment, among other things, the 2027 Lenders and the Collateral Agent required the Company to make a $175.0 million partial prepayment of the principal of the loans outstanding under the 2027 Loan Agreement upon consummation of the transactions contemplated by the CIMERLI Purchase Agreement. As a result of the CIMERLI Sale closing, the Company made the partial prepayment of $175.0 million of the total principal balance of $250.0 million of the 2027 Term Loans on April 1, 2024.

On May 8, 2024, in connection with entering into the 2029 Term Loan and the Revenue Purchase and Sale Agreement, the Company repaid in full all outstanding indebtedness and terminated all commitments under the 2027 Term Loans. The May 8, 2024 payoff amount of $79.6 million included principal repayment in full, accrued interest, a 3.0% prepayment premium fee of the principal amount, a make-whole interest payment and lender fees.

The following table summarizes interest expense for the 2027 Term Loans and the dates when principal was repaid:

1.5%** Convertible Senior Subordinated Notes due 2026**

In April 2020, the Company issued and sold $230.0 million aggregate principal amount of its 1.5% Convertible Senior Subordinated notes due 2026 (the “2026 Convertible Notes”). The 2026 Convertible Notes accrue interest at a rate of 1.5% per annum, payable semi-annually in arrears on April 15 and October 15 of each year and mature on April 15, 2026, unless earlier repurchased or converted.

The 2026 Convertible Notes have customary provisions relating to the occurrence of “events of default” (as defined in the Indenture for the 2026 Convertible Notes). As of March 31, 2025, the Company was in full compliance with these covenants, and there wereno events of default under the 2026 Convertible Notes.

On April 1, 2025, the Company announced that it had entered into privately negotiated transactions (the “Repurchases”) with certain holders of its 2026 Convertible Notes, pursuant to which the Company agreed to repurchase certain 2026 Convertible Notes from such holders at a cash repurchase price equal to 100% of their principal amount, together with the accrued and unpaid interest to, but excluding, the date of repurchase. The Repurchases were conditioned upon, among other things, the closing of the UDENYCA Sale. At the closing of the Repurchases on April 15, 2025, approximately $170 million aggregate principal amount of the 2026 Convertible Notes were repurchased. On April 16, 2025, the Company filed a Schedule TO with the SEC and sent a fundamental change notice to the holders of the remaining approximately $60 million aggregate principal amount of 2026 Convertible Notes offering to repurchase such remaining 2026 Convertible Notes on May 15, 2025 pursuant to the Fundamental Change Repurchase Right (as defined in the indenture, dated as of April 17, 2020 (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association (the “Trustee”), as trustee) at a cash repurchase price equal to 100% of their principal amount, together with the accrued and unpaid interest to, but excluding, the date of repurchase.

The annual effective interest rate is 2.1% for the 2026 Convertible Notes, and the following table presents the components of interest expense which is presented within discontinued operations:

If the Repurchases had not occurred and no future repurchases occur pursuant to the Fundamental Change Repurchase Right, and all the 2026 Convertible Notes remained outstanding until maturity, the future payments by year on the 2026 Convertible Notes as of March 31, 2025, would have been as follows:

9. Commitments and Contingencies

Purchase Commitments

The Company entered into agreements with certain vendors to secure raw materials and certain CMOs to manufacture its supply of product. As of March 31, 2025, the Company’s non-cancelable purchase commitments under the terms of its agreements are as follows:

The Company enters into contracts in the normal course of business with contract research organizations for preclinical studies and clinical trials and CMOs for the manufacture of clinical trial materials. The contracts are generally cancellable, with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would generally only be obligated for products or services that the Company had received as of the effective date of the termination and any applicable cancellation fees. In connection with the YUSIMRY Sale, HKF assumed YUSIMRY inventory purchase commitments totaling $17.0 million, which had not been settled as of December 31, 2024. As of December 31, 2024, if HKF were to default on its obligations under the YUSIMRY Purchase Agreement, the Company could become liable to pay any unpaid portion of these purchase commitments. As of March 31, 2025, HKF had resolved the purchase commitments without any payments required to be made by the Company. Subsequent to March 31, 2025,$49.1 million of these purchase commitments that are directly associated with the discontinued operations were transferred to Intas in April 2025 in conjunction with the UDENCYA Sale.

Guarantees and Indemnifications

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. The Company assesses the likelihood of any adverse judgments or related claims, as well as ranges of probable losses. In the cases where the Company believes that a reasonably possible or probable loss exists, it will disclose the facts and circumstances of the claims, including an estimate range, if possible.

Legal Proceedings and Other Claims

The Company is a party to various legal proceedings and claims that arise in the ordinary, routine course of business and that have not been fully resolved. The outcome of such legal proceedings and claims is inherently uncertain. Accruals are recognized for such legal proceedings and claims to the extent that a loss is both probable and reasonably estimable. The best estimate of a loss within a range is accrued; however, if no estimate in the range is better than any other, then the minimum amount in the range is accrued. If it is determined that a material loss is reasonably possible and the loss or range of loss can be estimated, the possible loss is disclosed. Sometimes it is not possible to determine the outcome of these matters or, unless otherwise noted, the outcome (including in excess of any accrual) is not expected to be material, and the maximum potential exposure or the range of possible loss cannot be reasonably estimated. As of March 31, 2025 and December 31, 2024, the Company had an accrual of $6.4 million, related to such matters that was included in accrued rebates, fees and reserves on the condensed consolidated balance sheets.

In late April of 2022, the Company received a demand letter from Zinc Health Services, LLC (“Zinc”) asserting that Zinc was entitled to approximately $14.0 million from the Company for claims related to certain sales of UDENYCA from October 2020 through December 2021. No legal proceeding has been filed in connection with the claims in the letter and based on currently available information the final resolution of the matter is uncertain. The Company intends to defend any legal proceeding that may be filed. The Company has an accrual established as of March 31, 2024 that represented its estimated liability to resolve the matter. Loss contingencies are inherently unpredictable, the assessment is highly subjective and requires judgments about future events and unfavorable developments or resolutions can occur. The Company regularly reviews litigation matters to determine whether its accrual is adequate. The amount of ultimate loss may differ materially from the amount accrued to date.

Other than the matter in connection with the demand letter described in this Note 9. Commitments and Contingencies, there are no pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party, or that any of the Company or its subsidiaries' property is subject.

10. Stockholders’ Deficit

ATM Offering

The following table summarizes information regarding settlements under the at-the-market offering (“ATM Offering”) for the three months ended March 31, 2025 and 2024:

As of March 31, 2025, the Company had approximately $64.9 million of its common stock remaining available for sales of common stock from time to time through or to Cowen and Company, LLC as the Company’s sales agent or principal in the ATM Offering.

11. Stock-Based Compensation

The following table summarizes the classification of stock-based compensation expense in the Company’s condensed consolidated statements of operations related to employees and nonemployees:

(1) Stock-based compensation capitalized into inventory is recognized as cost of goods sold when the related product is sold.

12. Net Income (Loss) Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive common shares. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period, without consideration for any potential dilutive common share equivalents as their effect would be antidilutive.

The following table sets forth the computation of the basic and diluted net income (loss) per share:

The following outstanding dilutive potential shares were excluded from the calculation of diluted net income (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.

13. Subsequent Events

On December 2, 2024, the Company and Intas entered into the UDENYCA Purchase Agreement, pursuant to which, and upon the terms and subject to the conditions thereof, the Company agreed to divest the UDENYCA Business to Intas. On the UDENYCA Closing Date, the Company completed the divestiture of the UDENYCA Business to Intas for upfront, all-cash consideration of $483.4 million, inclusive of $118.4 million for UDENYCA product inventory. Such consideration is subject to certain adjustments that will be finalized following the closing pursuant to the UDENYCA Purchase Agreement. In addition, the Company is also eligible to receive the Earnout Payments. The first such payment is payable by Intas to the Company if Net Sales of UDENYCA for four consecutive fiscal quarters from July 1, 2025 through September 30, 2026 are equal to or greater than $300 million, and the second such payment is payable by Intas to the Company if Net Sales of UDENYCA for four consecutive fiscal quarters from July 1, 2025 through March 31, 2027 are equal to or greater than $350 million.

On April 15, 2025, the Company paid $47.7 million to buy out the Purchaser Group’s right to receive the portion of the Revenue Payments with respect to UDENYCA in accordance with the Revenue Purchase and Sale Agreement.

On April 1, 2025, the Company announced that it had entered into the Repurchases with certain holders of its 2026 Convertible Notes, pursuant to which the Company agreed to repurchase certain 2026 Convertible Notes from such

holders at a cash repurchase price equal to 100% of their principal amount, together with the accrued and unpaid interest to, but excluding, the date of repurchase. The Repurchases were conditioned upon, among other things, the closing of the UDENYCA Sale. At the closing of the Repurchases on April 15, 2025, approximately $170 million aggregate principal amount of the 2026 Convertible Notes were repurchased and approximately $60 million aggregate principal amount of 2026 Convertible Notes remained outstanding. On April 16, 2025, the Company filed a Schedule TO with the SEC and sent a fundamental change notice to the holders of the remaining approximately $60 million aggregate principal amount of 2026 Convertible Notes offering to repurchase such remaining 2026 Convertible Notes on May 15, 2025 pursuant to the Fundamental Change Repurchase Right (as defined in the Indenture) at a cash repurchase price equal to 100% of their principal amount, together with the accrued and unpaid interest to, but excluding, the date of repurchase.