Coherus continues to scratch the Surface of life outside of biosimilars with $65M buy

Coherus is doubling down on its immuno-oncology pipeline with a $65 million deal to buy Surface Oncology.

The acquisition takes Coherus’ clinical-stage immuno-oncology assets from two to four, tacking on Surface’s IL-27-targeted antibody, SRF388, and CCR8-targeted antibody, SRF114. Friday’s deal marks a concerted effort by Coherus to expand beyond the biosimilars business that has so far been its bread and butter. 

Coherus is relinquishing some of its stock to pay for the deal, which includes $40 million of Surface’s outstanding shares plus the biotech’s existing cash, which sits somewhere between $20 million and $25 million. Surface shareholders will be entitled to 70% of milestone and royalty-based value from existing partnerships with Novartis and GSK, 25% of upfront payments for any ex-U.S. rights to SRF114 and 50% for upfront payments for ex-U.S. rights to SRF388. 

The deal was unanimously approved by the boards of both companies and is expected to close in the third quarter of 2022. 

What Coherus is leaving behind, however, is half of Surface’s existing team. Half of the biotech's staff will be let go, the second round of cuts in eight months. Surface previously laid off a fifth of workers in November after ending the development of CD39-targeting antibody, SRF617. 

The addition of Surface’s I-O meds comes as Coherus is nearing the FDA finish line with PD-1 inhibitor toripalimab, which could be the company’s first approved, non-biosimilar product. The med was licensed from Junshi and has nabbed approval in China. Coherus is also developing anti-TIGIT CHS-006, another Junshi product that’s in phase 1/2 trials. 

The addition of Surface’s assets is a concerted effort by Coherus to keep the clinical momentum going, a relatively newfound desire after the Junshi pact was inked in 2021. The company has largely been known for its biosimilars business, which includes rivals to Amgen’s Neulasta and Genentech’s Lucentis. 

But Coherus’ latest foray into the Humira biosimilars competition has already stirred up drama. AbbVie said earlier this week that it was suing the company, contending that Coherus breached a licensing agreement at the core of the biosimilars agreement by partnering with Mark Cuban’s drug firm. Coherus and Cuban planned to sell two autoinjectors for $569.27, compared to the $6,922 that AbbVie charges.