Shares of the company stock plunged in premarket trading after Surface Oncology announced it was scaling back its lead program.
Shares of Cambridge, Mass.-based Surface Oncology are down more than 19 percent in premarket trading after the company announced it planned to reduce the amount of money it was investing in its lead program – eight months after it secured more than $100 million in an IPO to advance the drug.
Citing safety concerns related to its lead product SRF231, late Tuesday, Surface Oncology announced “the significant reduction of the investment in and scope of” that asset. The company said that during its open-label Phase I dosing trial, two of 18 patients who have been treated with a low dose of the experimental medication developed blood toxicities. The safety issues were resolved, the company said, but added that it does not plan to open expansion cohorts in the Phase I study.
Instead of the strong focus on SRF231, the company said it will shift its focus to two preclinical programs, SRF617 and SRF388. The company intends to move those programs into clinical studies. Additionally, Surface said Phase I work for its CD73 program NZV930, which is being developed in partnership with Novartis, is ongoing. The company said it anticipates the SRF388 program will accelerate and be ready for an Investigational New Drug filing before the end of 2019. An IND filing for SRF617 remains on track for the fourth quarter of 2019.
SRF231 is a fully human monoclonal antibody therapeutic designed to target CD47, a protein overexpressed on many cancer cells. The Phase I trial was assessing the safety and efficacy of the drug at various doses in patients with advanced solid tumors and hematologic malignancies. Preclinical data showed that SRF231 has potent anti-tumor activity in several different tumor models. During those preclinical studies, SRF231 did not induce hemagglutination, a clumping of red blood cells. The first patient was dosed in March.
Despite that stronger preclinical profile, Chief Medical Officer Rob Ross said that what the company observed since the dosing of that first patient “does not meet our standard for pursuing additional clinical expansions at this time.” Ross said that over the next few months, the company plans to evaluate a potential dose and schedule, “while exploring key insights about SRF231.” This outlined activity may support business development opportunities for SRF231, the company said. Surface Oncology executives anticipate presenting additional SRF231 data in the second half of 2019.
Jeff Goater, Surface Oncology’s chief executive officer, said the company wanted to take a disciplined approach to its drug development and portfolio prioritization as it approaches the development of oncology treatments.
By reprioritizing the company’s focus, Surface said it will extend its projected cash runway through 2021 based upon its current operating plan. That plan includes taking those two other preclinical assets into the clinic. Cash and cash equivalents at year-end 2018 are projected to be approximately $160 million, the company said.
“The decision to significantly reduce the scope of our SRF231 program was driven by initial data from our ongoing phase 1 trial, the CD47 competitive landscape, as well as the continued emergence and prioritization of our CD39 and IL-27 programs,” Goater said in a statement issued late Tuesday.
Shares of Surface Oncology closed at $7.41 on Tuesday. The stock is down to $5.99 in premarket trading.
