Kezar Life Sciences Inc. (NASDAQ:KZR) shares jumped about 19% on Monday after Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) announced an agreement to acquire the company for $6.955 per share in cash plus a contingent value right (CVR).
Under the terms of the deal, the CVR could provide additional payments tied to the clinical development or potential sale of Kezar’s lead drug candidate zetomipzomib. The CVR may also include proceeds related to Kezar’s collaboration with Everest Medicines, the sale of its Sec61-based program to Enodia Therapeutics, and 100% of Kezar’s closing net cash above $50 million, after certain CVR-related expenses.
Zetomipzomib is Kezar’s lead asset and is described as a first-in-class immunoproteasome inhibitor currently being developed to treat autoimmune hepatitis, lupus nephritis, and systemic lupus erythematosus. The drug demonstrated durable, clinically meaningful steroid-sparing remissions in patients during the PORTOLA Phase 2 study in autoimmune hepatitis. Kezar also reported positive discussions with the U.S. Food and Drug Administration during a recent Type C meeting regarding the drug’s development pathway in AIH.
Kezar’s board of directors unanimously approved the acquisition following a strategic review conducted with management and external advisors.
Aurinia plans to launch a tender offer by April 13, 2026, to purchase all outstanding shares of Kezar. Completion of the transaction will depend on several conditions, including the tender of a majority of Kezar’s outstanding shares, the company maintaining more than $50 million in closing net cash, and other customary closing requirements.
Tang Capital Partners, which owns approximately 9% of Kezar’s outstanding shares, has signed a tender and support agreement committing to tender its holdings and back the transaction.
The acquisition is expected to close in the second quarter of 2026. TD Cowen served as Kezar’s exclusive financial advisor, while Cooley LLP acted as legal counsel for the company.