Financial Liabilities

9 Months Ended

Sep. 30, 2025

8. Financial Liabilities

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


	At September 30, 2025
(in thousands)	Principal Amount			Unamortized Debt Discount and Debt Issuance Costs	Net Carrying Value		Estimated Fair Value		Level
Financial Liabilities:
2029 Term Loan	$	38,660	$	(1,703)	$	36,957	$	36,957	Level 2*
2026 Convertible Notes	$	121	$	—	$	121	$	119	Level 2**

	At December 31, 2024
(in thousands)	Principal Amount		Unamortized Debt Discount and Debt Issuance Costs		Net Carrying Value		Estimated Fair Value		Level
Financial Liabilities:
2029 Term Loan	$	38,660	$	(1,962)	$	36,698	$	36,698	Level 2*
2026 Convertible Notes	$	230,000	$	(1,771)	$	228,229	$	223,100	Level 2**

*	The principal amounts outstanding are subject to variable interest rates based on three-month SOFR plus fixed percentages. Therefore, the Company believes the carrying amounts of these obligations approximate their fair values.

The fair value is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices observed in market trading. Since the market for trading of the 2026 Convertible Notes is not considered to be an active market, the estimated fair value is based on Level 2 inputs.

2029 Term Loan

On May 8, 2024, the Company entered into a senior secured term loan facility for 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%, plus a three-month SOFR rate per annum. 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 with no events of default as of September 30, 2025.

Interest expense on the 2029 Term Loan was $1.3 million and $3.9 million for the three and nine months ended September 30, 2025, respectively, and $1.4 million and $2.2 million for the three and nine months ended September 30, 2024, respectively, and 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 (“UDENYCA Buy-out”).

The Revenue Purchase and Sale Agreement contains certain covenants, and the Company was in full compliance with the agreement as of September 30, 2025.

The Revenue Purchase and Sale Agreement contains an embedded derivative that meets the criteria to be bifurcated and accounted for as a freestanding 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 at inception. 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. In connection with the UDENYCA Buy-out, the unamortized portion of the discount and issuance costs related to UDENYCA was derecognized. For the three and nine months ended September 30, 2025, there was $1.0 million and $4.8 million, respectively, of interest expense related to the Revenue Purchase and Sale Agreement, of which $1.9 million related to UDENYCA for the nine months ended September 30, 2025 and has been presented within discontinued operations. For the three and nine months ended September 30, 2024, interest expense, inclusive of the amortization of discount and issuance costs, was $2.7 million and $4.4 million, respectively, of which $2.5 million related to UDENYCA and has been presented within discontinued operations for the nine months ended September 30, 2024. For details on the Royalty Fee Derivative Liability, see Note 3. Fair Value Measurements.

A summary of the revenue participation liability is as follows:


(in thousands)	September 30, 2025		December 31, 2024
Revenue participation liability	$	16,291	$	37,994
Less: unamortized discount and issuance costs		(2,665)		(9,251)
Net carrying value	$	13,626	$	28,743

The following table summarizes the activity within the revenue participation liability:


(in thousands)
Proceeds from sale of future royalties on May 8, 2024	$	37,500
Portion of proceeds allocated to the embedded derivative		(9,202)
Issuance costs		(1,391)
Royalty payments		(5,334)
Interest expense recognized		7,170
Revenue participation liability at December 31, 2024		28,743
Royalty payments		(2,675)
Interest expense recognized		4,841
Portion derecognized in connection with the UDENYCA Buy-out		(17,283)
Revenue participation liability at September 30, 2025	$	13,626

Classification on the condensed consolidated balance sheets is as follows:


(in thousands)	Balance Sheet Classification	September 30, 2025		December 31, 2024
Revenue participation liability, current	Accrued and other current liabilities	$	—	$	1,148
Revenue participation liability, non-current	Other liabilities, non-current		13,626		27,595
Net carrying value		$	13,626	$	28,743

2027 Term Loans

The Company entered into a loan agreement in January 2022 (as amended, the “2027 Loan Agreement”) with BioPharma Credit, PLC 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:


	Interest Expense
(in thousands)	Three Months Ended		Nine Months Ended		Principal		Date Principal
Statement of Operations Classification	September 30, 2024		September 30, 2024		Amount Repaid		was Repaid
Discontinued Operations	$	—	$	6,878	$	175,000	April 1, 2024
Continuing Operations	$	—	$	4,315	$	75,000	May 8, 2024

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 September 30, 2025, the Company was in full compliance with these covenants, and there were no events of default under the 2026 Convertible Notes.

On April 15, 2025, the Company paid $170.0 million in cash to repurchase $170.0 million aggregate principal amount of the 2026 Convertible Notes in privately negotiated transactions. 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), the Company repurchased $59.9 million aggregate principal amount of the 2026 Convertible Notes, at a cash repurchase price of $59.9

million, which amount was equivalent to 100% of the principal amount of the repurchased notes, together with the accrued and unpaid interest. As of September 30, 2025, the outstanding principal amount of the 2026 Convertible Notes was $0.1 million and consisted of the remaining notes that were not tendered for repurchase. In connection with the repurchases, the Company recorded a $4.7 million loss on debt extinguishment which is classified within discontinued operations in the condensed consolidated statements of operations. The charge in the nine months ended September 30, 2025, included the write-off of the remaining debt discount and debt issuance costs and related transaction fees.

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2025		2024		2025		2024
Stated coupon interest	$	—	$	863	$	1,072	$	2,588
Amortization of debt discount and debt issuance costs		—		336		423		1,003
Total interest expense	$	—	$	1,199	$	1,495	$	3,591

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Coherus Oncology, Inc. 10-Q