In knock­out IPO of­fer­ings, Mor­phoSys and Sur­face On­col­o­gy haul com­bined $316M in up­sized deals

Two biotechs new to Nas­daq sparked more in­vestor in­ter­est than orig­i­nal­ly ex­pect­ed Wednes­day, haul­ing up­sized IPOs that are yet an­oth­er in­di­ca­tion of the in­dus­try’s rip-roar­ing state.

In one of the chunki­er IPOs this year, Ger­many’s Mor­phoSys $MOR raised up­wards of $207.8 mil­lion. That’s near­ly $58 mil­lion more than the com­pa­ny’s ear­ly ex­pec­ta­tions. The com­pa­ny, which is al­so list­ed on a Ger­man ex­change, says it’s gath­er­ing re­sources to sink $225 mil­lion in­to the de­vel­op­ment of its in­ves­ti­ga­tion­al an­ti-CD19 an­ti­body MOR208.

The com­pa­ny has plans to seize a quick OK of MOR208, a drug it’s de­vel­op­ing for dif­fuse large B cell lym­phoma (DL­B­CL) and a pop­u­lar dis­ease tar­get in on­col­o­gy. Af­ter its last batch of up­beat da­ta from a Phase II study, Mor­phoSys, which al­ready re­ceived break­through sta­tus for the drug, said it went straight to reg­u­la­tors hop­ing for ear­ly ap­proval.

Mor­phoSys, which brought in $83 mil­lion in rev­enue last year and al­ready had a good bit of cash in the bank pre-IPO, said it will spend an ad­di­tion­al $90 mil­lion to build out its com­mer­cial in­fra­struc­ture so it can han­dle MOR208’s launch.

Mor­phoSys was joined in IPO glo­ry by yet an­oth­er can­cer drug­mak­er, Sur­face On­col­o­gy. The start­up, found­ed in 2014, had filed an S-1 back in March sig­nal­ing a $75 mil­lion IPO was in the works. But when the com­pa­ny priced its of­fer­ing Wednes­day, that fig­ure leaped to $108 mil­lion. The com­pa­ny will list un­der the tick­er $SURF on the Nas­daq.

On top of the IPO pro­ceeds, Sur­face raised an ad­di­tion­al $11.5 mil­lion through the sale of 766,666 shares to No­var­tis In­sti­tutes for Bio­med­ical Re­search at the IPO price. No­var­tis has been in­volved with Sur­face since its ear­ly days and was among the in­vestors in the com­pa­ny’s Se­ries A round in 2015.

The Cam­bridge, MA-based biotech has at­tract­ed con­sid­er­able at­ten­tion for its work in the in­tense­ly com­pet­i­tive field of tu­mor mi­croen­vi­ron­ment en­gi­neer­ing. Sur­face is one of a myr­i­ad of star­tups look­ing to add some ad­di­tion­al fire­pow­er that can ei­ther take the brakes off of an im­mune as­sault or bring in ad­di­tion­al weapons to take down can­cer cells. In their case, the key fo­cus is on coun­ter­ing im­muno­sup­pres­sion.

In par­tic­u­lar, Sur­face de­vel­ops drugs to block an un­usu­al­ly abun­dant pro­tein on the sur­face of tu­mors called CD47, which helps tu­mors fight off at­tack from im­mune cells. In pre­clin­i­cal re­search, Sur­face re­port­ed that cer­tain im­mune cells showed greater tu­mor-killing pow­er in the drug’s pres­ence.

The com­pa­ny’s IPO pro­ceeds will fi­nance its Phase I drug pro­gram SRF231, which is be­ing test­ed in pa­tients with mul­ti­ple tu­mor types. Sur­face says in its S-1 fil­ing that it plans to test the drug as a so­lo ther­a­py and along with FDA-ap­proved can­cer drugs in a com­bo treat­ment.

The burst of in­vest­ment in im­muno-on­col­o­gy has left Sur­face with a long ros­ter of ri­vals. For CD47 alone, com­peti­tors in­clude Alexo Ther­a­peu­tics, Arch On­col­o­gy, Au­ri­gene, Blink Bio­med­ical, Cel­gene, Forty Sev­en, Novim­mune, OSE Im­munother­a­peu­tics, Sor­ren­to, Syn­thon Hold­ing and Tril­li­um Ther­a­peu­tics.

Sur­face ex­pects to re­port ini­tial re­sults from its Phase I study in the first half of next year.

Mer­ck is tak­ing the ax to its US op­er­a­tions, cut­ting 500 jobs in its lat­est re­or­ga­ni­za­tion

Merck is cutting 500 jobs in its US sales and headquarters commercial teams in its latest effort to find new ways to streamline the operation.

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Alice Shaw, Lung Cancer Foundation of America

Top ALK ex­pert and can­cer drug re­searcher Al­ice Shaw bids adieu to acad­e­mia, hel­lo to No­var­tis

Jay Bradner has recruited a marquee oncology drug researcher into the ranks of the Novartis Institutes for BioMedical Research. Alice Shaw is jumping from prestigious posts intertwined through Mass General, Harvard and Dana-Farber to take the lead of NIBR’s translational clinical oncology group.

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Mi­rati preps its first look at their KRAS G12C con­tender, and they have to clear a high bar for suc­cess

If you’re a big KRAS G12C fan, mark your calendars for October 28 at 4:20 pm EDT.

That’s when Mirati $MRTX will unveil its first peek at the early clinical data available on MRTX849 in presentations at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston.

Mirati has been experiencing the full effect of a rival’s initial success at targeting the G12C pocket found on KRAS, offering the biotech some support on the concept they’re after — and biotech fans a race to the top. Amgen made a big splash with its first positive snapshot on lung cancer, but deflated sky-high expectations as it proved harder to find similar benefits in other types of cancers.

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The FDA will hus­tle up an ex­pe­dit­ed re­view for As­traZeneca’s next shot at a block­buster can­cer drug fran­chise

AstraZeneca paid a hefty price to partner with Daiichi Sankyo on their experimental antibody drug conjugate for HER2 positive breast cancer. And they’ve been rewarded with a fast ride through the FDA, with a straight shot at creating another blockbuster oncology franchise.

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Hal Barron, GSK's president of R&D and CSO, speaks to Endpoints News founder and editor John Carroll in London at Endpoints' #UKBIO19 summit on October 8, 2019

[Video] Cel­e­brat­ing tri­al fail­ures, chang­ing the cul­ture and al­ly­ing with Cal­i­for­nia dream­ers: R&D chief Hal Bar­ron talks about a new era at GSK

Last week I had a chance to sit down with Hal Barron at Endpoints’ #UKBIO19 summit to discuss his views on R&D at GSK, a topic that has been central to his life since he took the top research post close to 2 years ago. During the conversation, Barron talked about changing the culture at GSK, a move that involves several new approaches — one of which involves celebrating their setbacks as they shift resources to the most promising programs in the pipeline. Barron also discussed his new alliances in the Bay Area — including his collaboration pact with Lyell, which we covered here — frankly assesses the pluses and minuses of the UK drug development scene, and talks about his plans for making GSK a much more effective drug developer.

This is one discussion you won’t want to miss. Insider and Enterprise subscribers can log-in to watch the video.

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Flu Virus (Source: CDC)

FDA ex­pands Xofluza ap­proval as Roche strug­gles to catch loom­ing flu mar­ket

As a potentially powerful flu season looms, so does a big test for Roche and its new flu drug, Xofluza. The Swiss giant just got a small boost in advance of that test as the FDA expanded Xofluza’s indication to include patients at high risk of developing flu-related complications.

Xofluza (baloxavir marboxil) was approved last October in the US, the first landmark flu drug approval in 20 years and a much-needed green light for a company that had watched its leading flu drug Tamiflu get eaten alive by generics. Like its predecessor, the pill offered a reduction in flu symptoms but not a cure.

EMA backs sev­en ther­a­pies, in­clud­ing Mer­ck­'s Ebo­la vac­cine

The first-ever Ebola vaccine is on the precipice of approval after the European Medicine’s Agency (EMA) backed the Merck product in this week’s roster of recommendations.

The drugmaker $MRK began developing the vaccine, christened Ervebo, during the West African outbreak that occurred between 2014 and 2016, killing more than 11,000.

The current outbreak in the Democratic Republic of Congo (DRC) has shown case fatality rates of approximately 67%, the agency estimated. Earlier this year, the WHO declared the outbreak — which so far has infected more than 3,000 people — a public health emergency of international concern.

Ronald Herb­st fol­lows Med­Im­mune ex­o­dus to Pyx­is CSO post; Jeff God­dard to suc­ceed CEO of AIT Bio­science

→ The outflow of top execs from MedImmune continues to fill the leadership ranks of smaller biotechs. The latest to take off is Ronald Herbst, the head of oncology research, who’s assuming the CSO post at Pyxis Oncology.  

Herbst was part of the old MedImmune organization AstraZeneca CEO Pascal Soriot restructured earlier this year, reorganizing the company and eliminating the storied subsidiary as a separate organization.

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UP­DAT­ED: J&J's Xarel­to, Amar­in's Vas­cepa are cost-ef­fec­tive, not bud­get friend­ly — ICER

ICER, an increasingly influential cost-effectiveness watchdog in the United States, has concluded in its review of treatments for cardiovascular disease that while the cost of J&J’s Xarelto and Amarin’s Vascepa meet its benchmark for value pricing — the two treatments will not likely treat as many patients as hoped without surpassing the annual budget threshold calculated by ICER for each therapy.