Coherus BioSciences announced and priced a public offering of common stock. The company will issue 11,764 million shares at $4.25 apiece to raise $50 million in gross proceeds. As is customary, the company will make an additional 15% available (1.764 million shares) at the same price, which could increase the total value of the capital raise to $57.5 million in gross proceeds.

This isn't unexpected, although a tumbling share price in recent days makes the amount of dilution a little more painful than expected.

Brighter days are ahead.

The offering values Coherus BioSciences at $400 million. Solt DB Invest expects the business to have full-year 2024 revenue of at least $450 million and profitable operations. The average Wall Street estimate assumes full-year 2024 revenue of $582 million.

There are a lot of moving parts due to one ramping product (Cimerli), three expected product launches (Udenyca AI, Yusimry, and toripalimab), and one maybe-launching product (Udenyca OBI). But the company's low valuation is simply not sustainable.

Solt DB Invest is increasing its suggested allocation range to up to 10%, joining AVITA Medical, Certara, Exact Sciences, and Relay Therapeutics in the double-digit club.

Margin of Safety & Allocation

(Updated share count)

Coherus BioSciences is considered a Growth (Speculative) position. The current Margin of Safety range for the company based on our 2023 model is below:

• Current Price (market close May 15):  $4.89 per share
• Likely Undervalued:         <$7.60 per share
• Midpoint:                            $11.02 per share
• Likely Overvalued:           >$14.45 per share
• Allocation Range:              Up to 10%

Coherus BioSciences reported 80.554 million shares outstanding as of April 30, 2023. Solt DB Invest is counting the additional 13.529 million shares from the public offering of common stock expected to be completed in May 2023. The Margin of Safety range above assumes 94.083 million shares outstanding at the end of May, plus an additional 5% dilution.

Further Reading

• May 2023 press release announcing pricing of public offering
• May 2023 research note analyzing first-quarter 2023 operating results