Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) announced that it will acquire Kezar Life Sciences for $6.955 in cash per share, plus a contingent value right (CVR) that could increase the purchase price if Kezar meets certain milestones. The cash portion of the deal amounts to approximately $50.93 million, while the CVR provides potential upside tied to the development or sale of Kezar’s lead candidate, zetomipzomib, and proceeds from collaborations with Everest Medicines and Enodia Therapeutics. The transaction is expected to close in the second quarter of 2026, subject to customary regulatory approvals and shareholder consent.
The acquisition expands Aurinia’s portfolio beyond its flagship lupus therapy, LUPKYNIS, by adding a first‑in‑class immunoproteasome inhibitor, zetomipzomib, which is being developed for autoimmune hepatitis and other immune‑mediated diseases. Kezar’s strategic review, initiated in October 2025 after challenges in securing FDA approval for a registrational trial, positioned the company to seek a transaction. Aurinia’s strong cash position of $398 million and robust Q4 2025 results—$77.1 million in revenue and $210.8 million in net income—provide the financial foundation to pursue this expansion.
Kezar Life Sciences reported a net loss of $56.03 million for the full year ended December 31, 2025, and held $114.4 million in cash as of March 31, 2025. The company also reduced its workforce by roughly 70% in October 2025 as part of a restructuring effort. The acquisition offers Kezar shareholders immediate liquidity and an exit from a challenging standalone operating environment.
The CVR structure is designed to give Kezar shareholders additional upside beyond the cash consideration. Triggers include the successful development or sale of zetomipzomib, proceeds from collaborations with Everest Medicines and Enodia Therapeutics, and any closing net cash that exceeds $50 million. This mechanism aligns the interests of both parties and mitigates upfront risk for Aurinia while allowing Kezar shareholders to participate in future value creation.
Kezar’s shares experienced a positive market reaction following the announcement, reflecting investor confidence in the liquidity offered and the potential upside from the CVR. Aurinia’s shares also received a favorable response, consistent with the company’s strong financial performance and guidance for 2026.
Kezar CEO Chris Kirk stated that the deal “provides immediate liquidity to our shareholders and ongoing participation in the value of zetomipzomib.” Aurinia’s CEO Kevin Tang had previously expressed interest in Kezar’s assets, having pursued a lower offer in 2024 that was rejected by Kezar’s board.
The acquisition positions Aurinia to broaden its autoimmune pipeline, leveraging Kezar’s assets to complement its existing LUPKYNIS program. With a projected 2026 revenue range of $315 million to $325 million and continued growth in LUPKYNIS sales, the deal enhances Aurinia’s long‑term growth prospects and strengthens its competitive position in the autoimmune therapeutics market.
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