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.

Im­ple­ment­ing re­silience in the clin­i­cal tri­al sup­ply chain

Since January 2020, the clinical trials ecosystem has quickly evolved to manage roadblocks impeding clinical trial integrity, and patient care and safety amid a global pandemic. Closed borders, reduced air traffic and delayed or canceled flights disrupted global distribution, revealing how flexible logistics and supply chains can secure the timely delivery of clinical drug products and therapies to sites and patients.

Pascal Soriot (AP Images)

UP­DAT­ED: As­traZeneca, Ox­ford on the de­fen­sive as skep­tics dis­miss 70% av­er­age ef­fi­ca­cy for Covid-19 vac­cine

On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

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Vas Narasimhan, Novartis CEO (Jason Alden/Bloomberg via Getty Images)

Vas Narasimhan's 'Wild Card' drugs: No­var­tis CEO high­lights po­ten­tial jack­pots, as well as late-stage stars, in R&D pre­sen­ta­tion

Novartis is always one of the industry’s biggest R&D spenders. As they often do toward the end of each year, company execs are highlighting the drugs they expect will most likely be winners in 2021.

And they’re also dreaming about some potential big-time lottery tickets.

As part of its annual investor presentation Tuesday, where the company allows investors and analysts to virtually schmooze with the bigwigs, Novartis CEO Vas Narasimhan will outline what he thinks are the pharma’s “Wild Cards.” The slate of five experimental drugs are those that Novartis hopes can be high-risk, high-reward entrants into the market over the next half-decade or so, and cover a wide range of indications.

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Bob Nelsen (Photo by Michael Kovac/Getty Images)

Bob Nelsen rais­es $800M and re­cruits a star-stud­ded board to build the 'Fox­con­n' of biotech

Bob Nelsen spent his pandemic spring in his Seattle home, talking on the phone with Luciana Borio, the scientist who used to run pandemic preparedness on the National Security Council, and fuming with her about the dire state of American manufacturing.

Companies were rushing to develop vaccines and antibodies for the new virus, but even if they succeeded, there was no immediate supply chain or infrastructure to mass-produce them in a way that could make a dent in the outbreak.

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Carl Hansen, AbCellera CEO (University of British Columbia)

From a pair of Air Jor­dans to a $200M-plus IPO, Carl Hansen is craft­ing an overnight R&D for­tune fu­eled by Covid-19

Back in the summer of 2019, Carl Hansen left his post as a professor at the University of British Columbia to go full time as the CEO at a low-profile antibody shop he had founded called AbCellera.

As biotech CEOs go, even after a fundraise Hansen wasn’t paid a whole heck of a lot. He ended up earning right at $250,000 for the year. His compensation package included a loan — which he later paid back — and a pair of Air Jordan tennis shoes. His newly-hired CFO, Andrew Booth, got a sweeter pay packet than that — which included his own pair of Air Jordans.

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Feng Tian, Ambrx CEO (Ambrx)

Af­ter 5 qui­et years, a for­mer Scripps spin­out rais­es $200M and an­nounces plans to try again at an IPO

The first time San Diego biotech Ambrx tried to go public in 2014, they failed and the company’s board switched to a radically different strategy: They sold themselves for an undisclosed amount to a syndicate of Chinese investors and pharma companies.

Now, after 5 quiet years, that syndicate has raised a mountain of cash and indicated they’ll soon make another bid to go public.

Earlier this month, Ambrx raised $200 million in what they billed as a crossover round financed by Fidelity, BlackRock, Cormorant Asset Management, HBM Healthcare Investments, Invus, Adage Capital Partners and Suvretta Capital Management. It’s the largest amount they’ve ever raised and, according to Crunchbase figures, more than doubles the total amount of VC capital collected since their launch 17 years ago.

Overnight for­tunes are be­ing made in biotech these days — and it's both en­cour­ag­ing and more than a lit­tle bit scary

Just to complete the last leg of a running story I’ve been tracking for a few weeks, Olema $OLMA has come through its IPO from the Thursday night pricing at $19 a share with a market cap just north of $2 billion.

That leaves newly-named CEO Sean Bohen holding a batch of 1,110,896 shares with a strike price of $4.82. As of Tuesday morning, the stock is now trading at $53.40, giving him a portfolio value of $53.4 million. Not bad for someone who was hired in September.

The ad­u­canum­ab co­nun­drum: The PhI­II failed a clear reg­u­la­to­ry stan­dard, but no one is cer­tain what that means any­more at the FDA

Eighteen days ago, virtually all of the outside experts on an FDA adcomm got together to mug the agency’s Billy Dunn and the Biogen team when they presented their upbeat assessment on aducanumab. But here we are, more than 2 weeks later, and the ongoing debate over that Alzheimer’s drug’s fate continues unabated.

Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

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Pur­due Phar­ma pleads guilty in fed­er­al Oxy­Con­tin probe, for­mal­ly rec­og­niz­ing it played a part in the opi­oid cri­sis

Purdue Pharma, the producer of the prescription painkiller OxyContin, admitted Tuesday that, yes, it did contribute to America’s opioid epidemic.

The drugmaker formally pleaded guilty to three criminal charges, the AP reported, including getting in the way of the DEA’s efforts to combat the crisis, failing to prevent the painkillers from ending up on the black market and encouraging doctors to write more painkiller prescriptions through two methods: paying them in a speakers program and directing a medical records company to send them certain patient information. Purdue’s plea deal calls for $8.3 billion in criminal fines and penalties, but the company is only liable for a fraction of that total — $225 million.