Surface Oncology, Inc. (Nasdaq: SURF) (“Surface”), a clinical-stage
immuno-oncology company developing next-generation immunotherapies
that target the tumor microenvironment, today announced that both
Institutional Shareholder Services (“ISS”) and Glass, Lewis &
Co. (“Glass Lewis”) have recommended Surface stockholders vote
“FOR” the adoption of Surface’s merger agreement (the “merger
agreement”) with Coherus BioSciences, Inc. (Nasdaq: CHRS)
(“Coherus”).
ISS and Glass Lewis are the leading independent,
third-party proxy advisors to thousands of institutional investors
and pension funds. Both advisory firms believe the proposed
adoption of the merger agreement presents the greatest opportunity
for stockholders of Surface to realize value.
Proposed Merger of Surface Oncology
and Coherus BioSciencesAs announced on June 16, 2023, the
proposed mergers contemplated by the merger agreement will
strengthen Coherus’ pipeline with global rights to two innovative,
competitively positioned, clinical-stage assets: SRF388, the only
IL-27 targeted antibody in clinical development which has
demonstrated activity as a monotherapy and in combination with
checkpoint inhibitors; and SRF114, a high affinity, fully human
antibody demonstrated to specifically bind to CCR8.
SRF388 and SRF114 have potential as monotherapy and as combination
treatments with other immuno-oncology agents, including Coherus’
toripalimab.
Surface anticipates it will have net cash
of $20 million to $25 million at the closing of
the proposed mergers. Should Surface stockholders fail to approve
the adoption of merger agreement, Surface anticipates its remaining
cash and cash equivalents would provide runway through the end of
2023 and the board of directors of Surface (the “Surface board of
directors”) would pursue viable strategic alternatives, including
bankruptcy or dissolution proceedings.
“We believe the proposed merger offers a unique
and critical opportunity for Surface stockholders--the benefits are
clear,” commented Rob Ross, MD, President and Chief Executive
Officer. “The stock for stock transaction, valued at up to $65
million when announced, represents an approximate three-fold
premium over our anticipated net cash at closing. Shareholders will
also receive CVRs based on potential future payments for previously
partnered assets and for potential ex-US licensing.”
The Surface board of directors unanimously
recommends that all stockholders vote FOR the adoption of the
merger agreement.
Special Meeting of Surface
StockholdersSurface has scheduled a Special Meeting of
Stockholders (the “Special Meeting”) to approve the adoption of the
merger agreement on September 7, 2023, at 10:00 a.m., Eastern
Time.
Since approval of the adoption of the merger
agreement requires support by at least a majority of Surface’s
outstanding common stock, failure to vote will have the same effect
as a vote against the adoption of the merger agreement. Surface
stockholders seeking more information on how to vote may contact
Surface’s proxy solicitor, Innisfree M&A Incorporated, at +1
(877) 717-3904 (toll-free from the U.S. and Canada) or at +1
(412) 232-3651 (from other countries).
About SRF388SRF388 is a fully
human anti-IL-27 antibody designed to inhibit the activity of this
immunosuppressive cytokine. Surface has identified
particular tumor types, including liver and lung cancer, where
IL-27 appears to play an important role in the immunosuppressive
tumor microenvironment and may contribute to resistance to
treatment with checkpoint inhibitors. SRF388 targets the
rate-limiting p28 subunit of IL-27, and preclinical studies have
shown that treatment with SRF388 blocks the immunosuppressive
biologic effects of IL-27, resulting in immune cell activation in
combination with other cancer therapies including anti-PD-1
therapy, as well as potent anti-tumor effects as a monotherapy.
Furthermore, Surface has identified a potential biomarker
associated with IL-27 that may be useful in helping to identify
patients most likely to respond to SRF388. In November 2020,
Surface announced that SRF388 was granted Orphan Drug designation
and Fast Track designation for the treatment of refractory
hepatocellular carcinoma from the United States Food and Drug
Administration.
About SRF114SRF114 is a fully
human, afucosylated anti-CCR8 antibody designed to preferentially
deplete CCR8+ Treg cells within the tumor microenvironment. In
preclinical studies, Surface has shown that SRF114 induces
antibody-dependent cellular cytotoxicity (ADCC) and/or
antibody-dependent cellular phagocytosis (ADCP) pathways to deplete
intratumoral Treg cells. In addition, SRF114 reduced tumor growth
in murine models. These findings support the advancement of SRF114
as a therapeutic candidate that holds the potential to drive
anti-tumor immunity in patients.
About Surface OncologySurface
is an immuno-oncology company developing next-generation antibody
therapies focused on the tumor microenvironment. Its pipeline
includes two wholly-owned programs; SRF388, a Phase 2 program which
targets IL-27, and SRF114, a Phase 1 program, which selectively
depletes regulatory T cells in the tumor microenvironment via
targeting CCR8. In addition, Surface has two partnerships with
major pharmaceutical companies: a collaboration with Novartis
targeting CD73 (NZV930; Phase 1) and a collaboration with
GlaxoSmithKline targeting PVRIG (GSK4381562, formerly SRF813; Phase
1). Surface’s novel, investigational cancer immunotherapies are
designed to achieve a clinically meaningful and sustained
anti-tumor response and may be used alone or in combination with
other therapies. For more information, please visit
www.surfaceoncology.com.
Forward-Looking Statements This
communication relates to the proposed transaction pursuant to the
terms of the Agreement and Plan of Merger, dated June 15, 2023, by
and among Coherus, Crimson Merger Sub I, Inc. (“Merger Sub I”),
Crimson Merger Sub II, LLC (“Merger Sub II”), and Surface. This
communication includes includes express or implied forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended
about the proposed transaction between Coherus and Surface and the
operations of the combined company that involve risks and
uncertainties relating to future events and the future performance
of Surface and Coherus. Actual events or results may differ
materially from these forward-looking statements. Words such as
“will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “believe,” “estimate,” “predict,” “project,” “potential,”
“continue,” “future,” “opportunity,” “will likely result,”
“target,” variations of such words, and similar expressions or
negatives of these words are intended to identify such
forward-looking statements, although not all forward-looking
statements contain these identifying words. Examples of such
forward-looking statements include, but are not limited to, express
or implied statements regarding: the proposed transaction and
related matters, including, but not limited to, satisfaction of
closing conditions to the proposed transaction, prospective
performance and opportunities with respect to Surface, Coherus or
the combined company, post-closing operations and the outlook for
the companies’ businesses; prospective developments or results in
the pipelines of Coherus, Surface or the combined company and
expansion of Coherus’ I-O franchise; the prospects for approval of
toripalimab; Surface’s, Coherus’ or the combined company’s targets,
plans, objectives or goals for future operations, including those
related to Surface’s and Coherus’ product candidates, research and
development, product candidate introductions and product candidate
approvals as well as cooperation in relation thereto; projections
of or targets for revenues, costs, and other financial measures;
future economic performance and the assumptions underlying or
relating to such statements. These statements are based on
Surface’s and Coherus’ current plans, estimates and projections. By
their very nature, forward-looking statements involve inherent
risks and uncertainties, both general and specific. A number of
important factors, including those described in this communication,
could cause actual results to differ materially from those
contemplated in any forward-looking statements. Factors that may
affect future results and may cause these forward-looking
statements to be inaccurate include, without limitation:
uncertainties as to the timing for completion of the proposed
transaction; uncertainties as to Surface’s ability to obtain the
approval of Surface’s stockholders required to consummate the
proposed transaction; the occurrence of events that may give rise
to a right of one or both of Surface and Coherus to terminate the
merger agreement; the possibility that various closing conditions
for the proposed transaction may not be satisfied or waived on a
timely basis or at all, including the possibility that a
governmental entity or regulatory authority may prohibit, delay, or
refuse to grant approval, if required, for the consummation of the
proposed transaction (or only grant approval subject to adverse
conditions or limitations); the difficulty of predicting the timing
or outcome of consents or regulatory approvals or actions, if any;
the possibility that the proposed transaction may not be completed
in the time frame expected by Surface and Coherus, or at all; the
risk that Surface and Coherus may not realize the anticipated
benefits of the proposed transaction in the time frame expected, or
at all; the effects of the proposed transaction on relationships
with Surface’s or Coherus’ employees, business or collaboration
partners or governmental entities; the ability to retain and hire
key personnel; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed transaction; significant or unexpected costs, charges or
expenses resulting from the proposed transaction; the potential
impact of unforeseen liabilities, future capital expenditures,
revenues, costs, expenses, earnings, synergies, economic
performance, indebtedness, financial condition and losses on the
future prospects, business and management strategies for the
management, expansion and growth of the combined business after the
consummation of the proposed transaction; potential negative
effects related to this announcement or the consummation of the
proposed transaction on the market price of Surface’s or Coherus’
common stock and/or Surface’s or Coherus’ operating or financial
results; the difficulty of predicting the timing or outcome of
regulatory approvals or actions; the risks that holders of the
contingent value rights (“CVRs”) will not receive payments in
respect of the CVRs; uncertainties as to the long-term value of
Coherus’ common stock, including the dilution caused by Coherus’
issuance of additional shares of common stock in connection with
the proposed transaction; unknown liabilities related to Surface or
Coherus; the nature, cost and outcome of any litigation and other
legal proceedings involving Surface, Coherus or their respective
directors, including any legal proceedings related to the proposed
transaction; risks related to global as well as local political and
economic conditions, including interest rate and currency exchange
rate fluctuations; potential delays or failures related to research
and/or development of Surface’s or Coherus’ programs or product
candidates; risks related to any loss of Surface’s or Coherus’
patents or other intellectual property rights; any interruptions of
the supply chain for raw materials or manufacturing for Surface’s
or Coherus’ product candidates, the nature, timing, cost and
possible success and therapeutic applications of product candidates
being developed by Surface, Coherus and/or their respective
collaborators or licensees; the extent to which the results from
the research and development programs conducted by Surface,
Coherus, and/or their respective collaborators or licensees may be
replicated in other studies and/or lead to advancement of product
candidates to clinical trials, therapeutic applications, or
regulatory approval; uncertainty of the utilization, market
acceptance, and commercial success of Surface’s or Coherus’ product
candidates, and the impact of studies (whether conducted by
Surface, Coherus or others and whether mandated or voluntary) on
any of the foregoing; unexpected breaches or terminations with
respect to Surface’s or Coherus’ material contracts or
arrangements; risks related to competition for Surface’s or
Coherus’ product candidates; Surface’s or Coherus’ ability to
successfully develop or commercialize Surface’s or Coherus’ product
candidates; Surface’s, Coherus’, and their collaborators’ abilities
to continue to conduct current and future developmental,
preclinical and clinical programs; potential exposure to legal
proceedings and investigations; risks related to changes in
governmental laws and related interpretation thereof, including on
reimbursement, intellectual property protection and regulatory
controls on testing, approval, manufacturing, development or
commercialization of any of Surface’s or Coherus’ product
candidates; unexpected increases in costs and expenses with respect
to the potential transaction or Surface’s or Coherus’ business or
operations; and risks and uncertainties related to epidemics,
pandemics or other public health crises and their impact on
Surface’s and Coherus’ respective businesses, operations, supply
chain, patient enrollment and retention, preclinical and clinical
trials, strategy, goals and anticipated milestones. While the
foregoing list of factors presented here is considered
representative, no list should be considered to be a complete
statement of all potential risks and uncertainties. There can be no
assurance that the mergers or any other transaction described above
will in fact be consummated in the manner described or at all. A
more complete description of these and other material risks can be
found in Surface’s and Coherus’ respective filings with the SEC,
including each of their Annual Reports on Form 10-K for
the year ended December 31, 2022, subsequent Quarterly Reports
on Form 10-Q and other documents that may be filed from
time to time with the SEC, as well as the Registration Statement
on Form S-4, as amended, which includes the proxy
statement of Surface that also constitutes the prospectus of
Coherus, which proxy statement/prospectus was mailed to Surface’s
stockholders on or about July 26, 2023. Surface and Coherus also
plan to file other relevant documents with the SEC regarding the
proposed transaction. Any forward-looking statements speak only as
of the date of this communication and are made based on the current
beliefs and judgments of Surface’s and Coherus’ management, and the
reader is cautioned not to rely on any forward-looking statements
made by Surface or Coherus. Unless required by law, neither Surface
nor Coherus is under any duty and undertakes no obligation to
update or revise any forward-looking statement after the
distribution of this document, including without limitation any
financial projection or guidance, whether as a result of new
information, future events or otherwise.
No Offer
or SolicitationThis communication
is not intended to and shall not constitute an offer to subscribe
for, buy or sell or the solicitation of an offer to subscribe for,
buy or sell any securities, or a solicitation of any vote or
approval, nor shall there be any sale of, or offer to sell or buy,
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. This communication is
for informational purposes only. No offering of securities shall be
made, except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act, and otherwise in accordance
with applicable law.
Additional
Information and
Where to Find
ItIn connection with the proposed transaction,
Coherus and Surface filed a Registration Statement on
Form S-4 with the SEC on July 7, 2023 (the “Initial
Registration Statement”), as amended by Amendment No. 1 to the
Initial Registration Statement filed on July 24, 2023 (together
with the Initial Registration Statement, the “Registration
Statement”). The Registration Statement was declared effective by
the SEC on July 26, 2023. The Registration Statement includes a
document that serves as a prospectus of Coherus and a proxy
statement/prospectus of Surface, and each party may also file other
documents regarding the proposed transaction with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
CAREFULLY THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN, IN
THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION, RELATED MATTERS AND THE PARTIES TO THE PROPOSED
TRANSACTION.
You may obtain a free copy of the Registration
Statement, proxy statement/prospectus and other relevant
documents (if and when they become available) that are or will be
filed with the SEC for free at the SEC’s website at www.sec.gov.
Copies of the documents filed with the SEC by Surface will be
available free of charge on Surface’s website
at https://www.investors.surfaceoncology.com/financial-information/sec-filings or
by contacting Surface’s Investor Relations Department at
IR@surfaceoncology.com. Copies of the documents filed with the SEC
by Coherus will be available free of charge on Coherus’ website
at https://investors.coherus.com/financial-information/sec-filings or
by contacting Coherus’ Investor Relations Department at
IR@coherus.com.
Participants
in the
SolicitationCoherus, Surface and certain of their
respective directors and executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of Coherus,
including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth in Coherus’ proxy
statement for its 2023 Annual General Meeting, which was filed with
the SEC on April 17, 2023, the Annual Report on Form
10-K for the year ended December 31, 2022, which
was filed with the SEC on March 6, 2023,
subsequent Quarterly Reports on Form 10-Q and other documents that
may be filed from time to time with the SEC. Information about
the directors and executive officers of Surface, including a
description of their direct or indirect interests, by security
holdings or otherwise, is set forth in Surface’s Annual Report on
Form 10-K for the year ended December 31, 2022, which
was filed with the SEC on March 9,
2023 and amended on May 1, 2023, subsequent Quarterly
Reports on Form 10-Q and other documents that may be filed from
time to time with the SEC. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
is contained in the proxy statement/prospectus included in the
Registration Statement, and other relevant materials to be filed
with the SEC regarding the proposed transaction when such
materials become available. Security holders, potential investors
and other readers should read the proxy statement/prospectus,
included in the Registration Statement, carefully before making any
voting or investment decision. You may obtain free copies of these
documents from Surface or Coherus using the sources indicated
above.
ContactJessica FeesChief Financial
Officerjfees@surfaceoncology.com
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