Kezar Life Sciences Inc. (NASDAQ:KZR) saw its shares climb 19.2% on Monday after Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) unveiled an agreement to acquire the company for $6.955 in cash per share, plus a contingent value right - or CVR - that could deliver additional payments under specified circumstances.
The terms of the transaction specify that the CVR will potentially pay amounts related to several items: the clinical development or disposition of Kezar's lead candidate zetomipzomib; proceeds arising from Kezar's collaboration with Everest Medicines and from the sale of its Sec61-based program to Enodia Therapeutics; and 100% of Kezar's closing net cash in excess of $50.0 million, after accounting for certain post-closing CVR-related expenses.
Zetomipzomib is described in the agreement as a first-in-class immunoproteasome inhibitor being developed for autoimmune hepatitis, lupus nephritis and systemic lupus erythematosus. The drug produced clinically meaningful and durable steroid-sparing remissions in the PORTOLA Phase 2 autoimmune hepatitis study. Kezar also reported that it had constructive interactions with the FDA during a recent Type C meeting focused on accelerating the development of zetomipzomib in autoimmune hepatitis.
The Kezar board of directors unanimously approved the sale after completing a strategic review with management and outside advisors. Under the timeline in the agreement, Aurinia will commence a tender offer by April 13, 2026, seeking to acquire all outstanding shares of Kezar. The closing of the transaction is conditioned on a number of items, including the tender of shares representing at least a majority of outstanding Kezar shares, Kezar having closing net cash in excess of $50.0 million, and other customary closing conditions.
Tang Capital Partners, which holds approximately 9.0% of Kezar's outstanding common stock, has entered into a tender and support agreement to tender its shares in the offer and support the transaction. The parties expect the transaction to close in the second quarter of 2026, subject to the stated conditions.
Advisors on the deal included TD Cowen, which served as exclusive financial advisor to Kezar, and Cooley LLP, which acted as legal counsel to Kezar.
Market and sector context
The announced acquisition and the CVR structure directly affect stakeholders in the biopharmaceutical and biotechnology sectors, as well as investors in the capital markets who hold either Kezar or Aurinia stock. The CVR links future payments to clinical development outcomes and monetization events, tying part of the purchase economics to the progression and disposition of clinical assets and collaborations.
Transaction mechanics and next steps
Key mechanical elements to watch include the tender offer process to be launched by April 13, 2026, the attainment of the majority tender threshold, and verification of Kezar's closing net cash balance relative to the $50.0 million threshold. If those conditions and other customary closing requirements are met, the companies anticipate completing the deal in the second quarter of 2026.