Coherus Acquiring Surface Oncology in $65M Stock Deal

Surface Oncology, a clinical-stage provider of immuno-oncology (I-O) treatments that target the tumor microenvironment, is set to be acquired by Coherus BioSciences through  a stock-for-stock transaction valued at up to $65 million. This transformative move will position Coherus as an I-O company, equipped with numerous next-generation immunotherapies undergoing clinical development and supported by increasing revenues. 

On June 16, Coherus BioSciences and Surface Oncology jointly announced the execution of an agreement for the acquisition of Surface Oncology. The boards of directors of both companies have unanimously approved the deal, and it is expected to be finalized in the third quarter of 2023. 

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Coherus Acquires Two Clinical Stage Assets as a Result of the Surface Oncology Deal

The acquisition of Surface Oncology by Coherus introduces two distinct clinical stage assets. These assets consist of SRF388, an innovative antibody that specifically targets IL-27. Currently, SRF388  is undergoing Phase 2 clinical trials for the treatment of lung cancer and liver cancer. Additionally, Coherus gains SFR114, an antibody that focuses on CCR8, which is currently being studied in a Phase ½ trial as a standalone therapy for patients with advanced solid tumors.

Denny Lanfear, Chairman and Chief Executive Officer of Coherus, emphasized that the timing of the transaction aligns perfectly with the rapid growth of their biosimilar revenues, which has been fueled by the successful launch of CIMERLI® and the forthcoming launch of YUSIMRY®. He further noted that with the agreement to acquire Surface and the anticipated near-term approval of toripalimab, Coherus is poised to become one of the select few I-O companies that possess proven commercial expertise, substantial product revenues, and distinctive, competitively positioned R&D programs that address crucial unmet medical needs. 

Unraveling the Details of the $65M Transaction 

According to the agreement, Coherus has agreed to acquire all outstanding shares of Surface stock by issuing its common stock at a price of $5.2831 per share. The total value of the deal will be $40 million, in addition to Surface’s net cash at the time of closing, which is expected to be between $20 and 25$ million. Surface shareholders will also be granted Contingent Value Rights (CVRs) representing a portion of the milestone and royalty-based value from programs with Novartis AG and GSK plc. Furthermore, they will also receive CVRs for upfront payments resulting from potential licensing agreements for SRF114 and SRF388 outside the US. The CVR amounts will be payable over a period of ten years following the completion of the transaction.

The boards of directors of both companies have unanimously approved the deal, which is expected to be completed in the third quarter of 2023. The completion of the deal is contingent upon meeting several conditions, including obtaining approval from Surface shareholders, ensuring the availability of at least $19.6 million in Surface’s cash reserves after accounting for liabilities, transaction costs, and other obligations, as well as fulfilling standard requirements. In conjunction with the acquisition announcement, Surface will be implementing a workforce reduction of approximately 50%.

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GeneOnline Team