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.

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

Abortion-rights protesters regroup and protest following Supreme Court's decision to overturn Roe v. Wade. (AP Photo/Gemunu Amarasinghe)

Fol­low­ing SCO­TUS de­ci­sion to over­turn abor­tion pro­tec­tions, AG Gar­land says states can't ban the abor­tion pill

Following the Supreme Court’s historic decision on Friday to overturn Americans’ constitutional right to an abortion after almost 50 years, Attorney General Merrick Garland sought to somewhat reassure women that states will not be able to ban the prescription drug sometimes used for abortions.

Following the decision, the New England Journal of Medicine also published an editorial strongly condemning the reversal, saying it “serves American families poorly, putting their health, safety, finances, and futures at risk.”

Yong Dai, Frontera Therapeutics CEO

Scoop: Lit­tle-known Or­biMed-backed biotech clos­es $160M round to start gene ther­a­py tri­al

Frontera Therapeutics, a China and US biotech, has closed a $160 million Series B and received regulatory clearance to test its first gene therapy stateside, Endpoints News has learned.

Led by the largest shareholder, OrbiMed, the biotech has secured $195 million total since its September 2019 founding, according to an email reviewed by Endpoints. The lead AAV gene therapy program is for an undisclosed rare eye disease, according to the source.

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AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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DEM BioPharma CEO David Donabedian (L) and executive chair Jan Skvarka

Long­wood sets an­oth­er 'don't eat me' biotech in­to gear with help of for­mer Tril­li­um CEO Jan Skvar­ka

Jonathan Weissman and team are out with a cancer-fighting biotech riding the appetite for those so-called “don’t eat me” and “eat me” signals.

The scientific co-founder — alongside fellow Whitehead Institute colleague Kipp Weiskopf and Stanford biologist Michael Bassik — has launched DEM BioPharma with incubator Longwood Fund and a crop of other investors.

In all, the nascent, 10-employee biotech has $70 million to bankroll hematology- and solid tumor-based programs, including a lead asset that could enter human trials in two to three years, CEO David Donabedian told Endpoints News.

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Spanish Prime Minister Pédro Sanchez and European Commission President Ursula von der Leyen (AP Photo/Geert Vanden Wijngaert)

EU to launch vac­cine de­vel­op­ment and man­u­fac­tur­ing part­ner­ship with Latin Amer­i­can and Caribbean coun­tries

While European companies, including BioNTech, are focused on increasing vaccine access to African countries by setting up vaccine manufacturing facilities, the European Union is looking westward to Latin America and the Caribbean.

Speaking at a press conference with Spanish Prime Minister Pédro Sanchez, EU Commission president Ursula von der Leyen said that the EU is launching a new initiative for vaccines and medicines manufacturing in Latin America, to get drugs to Latin America and the Caribbean faster.

De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Joe Wiley, Amryt Pharma CEO

Am­ryt Phar­ma sub­mits a for­mal dis­pute res­o­lu­tion to the FDA over re­ject­ed skin dis­ease drug

The story of Amryt Pharma’s candidate for the genetic skin condition epidermolysis bullosa, or EB, will soon enter another chapter.

After the Irish drugmaker’s candidate, dubbed Oleogel-S10 and marketed as Filsuvez, was handed a CRL earlier this year, the company announced in a press release that it plans to submit a formal dispute resolution request for the company’s NDA for Oleogel-S10.

Kelly Martin, Radius Health CEO

VC firms take os­teo­poro­sis drug­mak­er Ra­dius Health pri­vate for al­most $900M

After attacks from activist investors and disappointing returns on share prices, Radius Health has now agreed to new ownership, a direction resulting in leaving the Nasdaq.

Radius Health, a biotech out of Massachusetts with one approved product in its arsenal, announced Thursday morning that it agreed to be acquired by two VC firms: Gurnet Point Capital and Patient Square Capital. The deal, worth around $890 million, will include debt assumption and the payout of $1 CVR per share for investors. And on top of that, OrbiMed is providing debt financing.