With ma­jor fund­ing from No­var­tis, Sur­face On­col­o­gy launch­es a CD47 tri­al amid a swarm of ri­vals and files for $75M IPO

With a lead can­cer drug now in the clin­ic in pur­suit of a trendy tar­get, biotech start­up Sur­face On­col­o­gy is mak­ing a bid for IPO glo­ry, boast­ing of a heavy­weight al­ly that’s been pro­vid­ing much of the op­er­at­ing cash.

Jeff Goater, CEO

The biotech filed its S-1 late Fri­day, pen­cil­ing in $75 mil­lion as the goal while out­lin­ing close to $200 mil­lion in back­ing — the li­on’s share com­ing from its close part­ner No­var­tis.

The Cam­bridge, MA-based biotech at­tract­ed con­sid­er­able ear­ly at­ten­tion for its work jump­ing in­to the in­tense­ly com­pet­i­tive field of tu­mor mi­croen­vi­ron­ment en­gi­neer­ing work. With the CT­LA-4/PD-/L1 check­points mak­ing im­pres­sive in­roads for some seg­ments of can­cer pa­tients, Sur­face is one of a myr­i­ad of star­tups look­ing to add some ad­di­tion­al fire­pow­er with add-ons 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.

No­var­tis has a PD-1 in late-stage de­vel­op­ment, but ex­ecs tend to down­play its im­por­tance, con­cen­trat­ing on their strate­gic mis­sion to have their own check­point to use in com­bos rather than as a ri­val to the 5 PD-1/L1s cur­rent­ly on the mar­ket, with Re­gen­eron/Sanofi and many more crowd­ing in. Their work with Sur­face has brought them in on one pre­clin­i­cal al­liance on CD73, with an IL-27 part­ner­ship hang­ing in the bal­ance.

So far, ac­cord­ing to the S-1, No­var­tis has front­ed their work with $163.5 mil­lion in cash, in­clud­ing a $70 mil­lion up­front, $80 mil­lion for op­tions and mile­stones and $13.5 mil­lion in stock. That in­cludes a $45 mil­lion pay­ment last month fol­low­ing “re­ceipt of the first fi­nal au­dit­ed GLP tox­i­col­o­gy study re­port for SRF373.” Four VCs — At­las, F-Prime, Lil­ly Ven­tures and NEA — split up $28 mil­lion in shares, with each adding $7 mil­lion. At­las owns the largest chunk shares, with 23%.

Their deal with No­var­tis al­so orig­i­nal­ly in­clud­ed $1.17 bil­lion in mile­stones, which wasn’t dis­closed at the sign­ing time, though the phar­ma gi­ant al­so dropped two of the four po­ten­tial op­tions it had signed up for. No­var­tis will al­so help out with the IPO, pur­chas­ing $11.5 mil­lion more in stock.

Sur­face had burned through $74 mil­lion of its cash by the end of last year, with 56 staffers.

Ini­tial­ly fo­cused on CD47, a “don’t-eat-me” tar­get that has whipped up a line­up of con­tenders, No­var­tis ul­ti­mate­ly passed on that pro­gram and left world­wide rights to the Phase I as­set to Sur­face. Sur­face al­so owns the CD-39 pro­gram.

Sur­face has some im­pres­sive back­ers, in­clud­ing for­mer Bris­tol-My­ers R&D chief El­liott Si­gal, who owns some stock and sits on the board.

“As we dis­cussed last year, it is crit­i­cal in the im­mune-on­col­o­gy field to ‘skate to where the puck will be’, that is, to ad­dress the ques­tion of what is be­yond PD-1 and oth­er T-cell, check­point in­hibitors,” Si­gal not­ed to me back in ear­ly 2016, when No­var­tis signed on. But they’re by no means the on­ly biotech with the same ap­proach.

Com­pet­i­tive? The burst of in­vest­ment in im­muno-on­col­o­gy has left Sur­face with a long ros­ter of ri­vals. Their list in­cludes the fol­low­ing ex­am­ples:

For CD47 alone: Alexo Ther­a­peu­tics, Arch On­col­o­gy, Au­ri­gene, Blink Bio­med­ical, Cel­gene, Forty Sev­en, Novim­mune, OSE Im­munother­a­peu­tics, Sor­ren­to, Syn­thon Hold­ing and Tril­li­um Ther­a­peu­tics.

For the rest of the tu­mor mi­croen­vi­ron­ment: Ar­cus Bio­sciences, As­traZeneca, Bris­tol-My­ers Squibb, Corvus Phar­ma­ceu­ti­cals, In­nate Phar­ma and Palo­bio­far­ma, to name a few.

Not every­thing has gone com­plete­ly ac­cord­ing to plan at Sur­face. Found­ing CEO Dnetlev Bin­iszkiewicz re­signed with­out ex­pla­na­tion last fall, re­placed by the CBO, Jeff Goater. Goater now is in line for a $465,000 an­nu­al salary plus op­tions, which brought his com­pen­sa­tion pack­age last year to $1.4 mil­lion.

Gold­man Sachs, Cowen and Ever­core ISI are do­ing the hon­ors on the un­der­writ­ing.

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

Fresh off Fer­Gene's melt­down, David Meek takes over at Mi­rati with lead KRAS drug rac­ing to an ap­proval

In the insular world of biotech, a spectacular failure can sometimes stay on any executive’s record for a long time. But for David Meek, the man at the helm of FerGene’s recent implosion, two questionable exits made way for what could be an excellent rebound.

Meek, most recently FerGene’s CEO and a past head at Ipsen, has become CEO at Mirati Therapeutics, taking the reins from founding CEO Charles Baum, who will step over into the role of president and head of R&D, according to a release.

Who are the women su­per­charg­ing bio­phar­ma R&D? Nom­i­nate them for this year's spe­cial re­port

The biotech industry has faced repeated calls to diversify its workforce — and in the last year, those calls got a lot louder. Though women account for just under half of all biotech employees around the world, they occupy very few places in C-suites, and even fewer make it to the helm.

Some companies are listening, according to a recent BIO survey which showed that this year’s companies were 2.5 times more likely to have a diversity and inclusion program compared to last year’s sample. But we still have a long way to go. Women represent just 31% of biotech executives, BIO reported. And those numbers are even more stark for women of color.

Af­ter sell­ing to Genen­tech, the old Je­cure team is back at an RNA-fo­cused start­up — and more en­thu­si­as­tic than ever

When Genentech swooped in to buy NASH-focused Jecure Therapeutics back in 2018, a handful of the startup’s executives weren’t quite ready to disperse.

It had been just three years since Jecure launched with a preclinical portfolio of NLRP3 inhibitors — and the takeover came sooner than anyone, including CEO Jeff Stafford, had expected. So he got talking with James Veal and Gretchen Bain, two serial entrepreneurs in charge of Jecure’s R&D.

Jacob Van Naarden (Eli Lilly)

Ex­clu­sives: Eli Lil­ly out to crash the megablock­buster PD-(L)1 par­ty with 'dis­rup­tive' pric­ing; re­veals can­cer biotech buy­out

It’s taken 7 years, but Eli Lilly is promising to finally start hammering the small and affluent PD-(L)1 club with a “disruptive” pricing strategy for their checkpoint therapy allied with China’s Innovent.

Lilly in-licensed global rights to sintilimab a year ago, building on the China alliance they have with Innovent. That cost the pharma giant $200 million in cash upfront, which they plan to capitalize on now with a long-awaited plan to bust up the high-price market in lung cancer and other cancers that have created a market worth tens of billions of dollars.

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When ef­fi­ca­cy is bor­der­line: FDA needs to get more con­sis­tent on close-call drug ap­provals, agency-fund­ed re­search finds

In the exceedingly rare instances in which clinical efficacy is the only barrier to a new drug’s approval, new FDA-funded research from FDA and Stanford found that the agency does not have a consistent standard for defining “substantial evidence” when flexible criteria are used for an approval.

The research comes as the FDA is at a crossroads with its expedited-review pathways. The accelerated approval pathway is under fire as the agency recently signed off on a controversial new Alzheimer’s drug, with little precedent to explain its decision. Meanwhile, top officials like Rick Pazdur have called for a major push to simplify and clarify all of the various expedited pathways, which have grown to be must-haves for sponsors of nearly every newly approved drug.

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Rafaèle Tordjman (Jeito Capital)

Con­ti­nu­ity and di­ver­si­ty: Rafaèle Tord­j­man's women-led VC firm tops out first fund at $630M

For a first-time fund, Jeito Capital talks a lot about continuity.

Rafaèle Tordjman had spotlighted that concept ever since she started building the firm in 2018, promising to go the extra mile(s) with biotech entrepreneurs while pushing them to reach patients faster.

Coincidentally, the lack of continuity was one of the sore spots listed in a report about the European healthcare sector published that same year by the European Investment Bank — whose fund is one of the LPs, alongside the American pension fund Teacher Retirement System of Texas and Singapore’s Temasek, to help Jeito close its first fund at $630 million (€534 million). As previously reported, Sanofi had chimed in €50 million, marking its first investment in a French life sciences fund.

Jay Bradner (Jeff Rumans for Endpoints News)

Div­ing deep­er in­to in­her­it­ed reti­nal dis­or­ders, No­var­tis gob­bles up an­oth­er bite-sized op­to­ge­net­ics biotech

Right about a year ago, a Novartis team led by Jay Bradner and Cynthia Grosskreutz at NIBR swooped in to scoop up a Cambridge, MA-based opthalmology gene therapy company called Vedere. Their focus was on a specific market niche: inherited retinal dystrophies that include a wide range of genetic retinal disorders marked by the loss of photoreceptor cells and progressive vision loss.

But that was just the first deal that whet their appetite.

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FDA hands ac­cel­er­at­ed nod to Seagen, Gen­mab's so­lo ADC in cer­vi­cal can­cer, but com­bo stud­ies look even more promis­ing

Biopharma’s resident antibody-drug conjugate expert Seagen has scored a clutch of oncology approvals in recent years, finding gold in what are known as “third-gen” ADCs. Now, another of their partnered conjugates is ready for prime time.

The FDA on Monday handed an accelerated approval to Seagen and Genmab’s Tivdak (tisotumab vedotin-tftv, or “TV”) in second-line patients with recurrent or metastatic cervical cancer who previously progressed after chemotherapy rather than PD-(L)1 systemic therapy, the companies said in a release.