Surface Oncology, a cancer drug developer that counts pharmaceutical companies Eli Lilly, Amgen and Novartis as investors, raised $108m in its initial public offering on Friday.
The offering consisted of 7.2 million shares priced at the top of its $13 to $15 range. Novartis Institutes for Biomedical Research, a subsidiary of Novartis, invested another $11.5m in the company through a concurrent private placement.
Surface Oncology is developing immuno-oncology therapies that will focus on the biological pathways that are important to the immunosuppressive tumour microenvironment.
The company will put $50m of the IPO proceeds into pushing its lead product candidate, SRF231, through a phase 1 clinical study it instituted in February this year.
A further $35m will fund more general research and development, including studies for two more candidates, SRF617 and SRF388, for which Surface intends to file for investigational new drug applications.
Venture capital firm Atlas Venture provided an undisclosed amount of seed capital for Surface and co-led its $35m series A round in 2015 with Lilly Ventures, an investment vehicle for Eli Lilly; F-Prime Capital Partners, a subsidiary of financial services group Fidelity; and New Enterprise Associates (NEA).
Novartis Institutes for Biomedical Research and Amgen Ventures, a corporate venturing subsidiary of Amgen, and angel investor Elliott Sigal also participated in the series A round.
Surface received $13.5m in equity funding from Novartis as part of an early 2016 strategic collaboration deal that included the provision for private placement financing in the event of an IPO.
Novartis Institutes for Biomedical Research, Lilly Ventures and NEA each held a 16.2% stake pre-IPO. The latter two had their stakes diluted to 11.5% but Novartis will come out with a 14.3% share.
The stake owned by Atlas Venture, Surface’s largest shareholder, was cut from 23.2% to 16.5%, while F-Prime Capital Partners’ share was reduced from 9.6% to 6.8%.
Goldman Sachs, Evercore Group and Cowen and Company are joint book-running managers for the IPO. They have a 30-day option to buy another 1.08 million shares, which would boost the size of the offering to $124m.
The company’s stock closed at $13.81 on Friday, its first day of trading, giving it a market capitalisation of approximately $365m.