Aurinia Pharmaceuticals Inc. 8-K

What Happened
Aurinia Pharmaceuticals (through its U.S. subsidiary Aurinia Pharma U.S., Inc.) announced on March 30, 2026 that it entered into an Agreement and Plan of Merger to acquire Kezar Life Sciences, Inc. The transaction contemplates a tender offer for Kezar common stock at an offer price of $6.955 in cash per share plus one contingent value right (CVR) per share, followed by a merger in which Kezar will become a wholly owned subsidiary. The Merger Agreement was signed March 30, 2026; Aurinia must commence the Offer by no later than April 13, 2026, the Offer will remain open for 20 business days (subject to extensions), and the closing of the Merger is expected in the second quarter of 2026.

Key Details

• Purchase price: $6.955 cash per Kezar share plus one CVR (payable without interest; subject to withholding).
• Closing conditions include: valid tendering of >50% of outstanding shares (counting Aurinia’s holdings), accuracy of Kezar’s reps/warranties, covenant compliance, and a Closing Net Cash of at least $50.0 million. The deal is not subject to a financing condition.
• Equity treatment: In‑the‑money options will vest and be cashed out for (Cash Amount − exercise price) × shares plus one CVR per underlying share; out‑of‑the‑money options will be cancelled with no consideration; outstanding unvested RSUs will vest and be converted to shares no later than 5 business days before the merger effective time.
• CVR terms: CVRs are contractual, non‑voting, generally non‑transferable rights to contingent cash payments (examples: 100% of Closing Net Cash over $50M; percentages of Net Proceeds from specified third‑party agreements; up to $88M in clinical/regulatory/sales milestones and 3% royalties on Legacy Assets under certain conditions). CVR payments are uncertain and not guaranteed.
• Supporting stockholder: Tang Capital Partners, LP agreed to irrevocably tender ~9.0% of outstanding Kezar shares.
• Termination/fees: customary termination rights; if terminated under specified circumstances (including certain Superior Proposals), Kezar may owe Aurinia a $1.2 million termination fee. Also a outside date and other customary termination mechanics (e.g., June 28, 2026 deadline for consummation).

Why It Matters
For Kezar shareholders, the transaction offers immediate cash consideration plus a CVR that could provide additional future cash depending on Kezar’s closing cash and proceeds/milestones tied to certain assets and collaborations. The required minimum Closing Net Cash ($50.0M) and the CVR structure mean part of shareholder recovery depends on post‑closing cash and future monetization of specific assets, so the ultimate value is partially contingent. The agreement includes a supportive holder representing ~9% of shares and no financing condition (reducing financing risk), but the Offer still requires >50% tender and satisfaction of other closing conditions before the merger is completed. Investors should review the forthcoming Offer materials (Schedule TO) and Kezar’s Schedule 14D‑9 when filed for full transaction terms and risks.