Coherus BioSciences has inked a definitive merger agreement to acquire clinical-stage immuno-oncology (I-O) firm Surface Oncology in a transaction valued at up to $65m.

According to the terms of the agreement, Coherus will issue shares of its common stock at a price of $5.2831 per share to acquire all outstanding shares of Surface stock for $40m plus Surface’s net cash of between $20 and $25m at the closing of the transaction.

With the acquisition, Coherus will get access to Surface Oncology’s two differentiated clinical-stage assets, SRF388 and SFR114.

SRF388 is a novel IL-27-targeted antibody currently in Phase 2 clinical trials for the treatment of lung cancer and liver cancer. It is being assessed as monotherapy and in combination with checkpoint inhibitors.

The CCR8-targeted fully human IgG1 antibody SRF114 is currently being evaluated as a monotherapy in a Phase 1/2 trial of advanced solid tumour patients.

Coherus chairman and CEO Denny Lanfear said: “With the agreement to acquire Surface and the expected near-term approval of toripalimab, Coherus is positioned to become one of the very few I-O companies with demonstrated commercial expertise, significant product revenues, and unique, competitively positioned R&D programs addressing critical unmet medical needs.

“The addition of Surface’s IL-27 and CCR8 antibodies expands our next-generation I-O pipeline beyond checkpoint inhibition to agents targeting immune-suppressive mechanisms of the tumour microenvironment.”

Coherus BioSciences is planning to introduce its in-licensed anti-PD-1 antibody toripalimab for nasopharyngeal carcinoma, after receiving approval from the US Food and Drug Administration (FDA).

The company also intends to assess SRF388 and SRF114 as monotherapies and in combination with toripalimab to treat tumours, including head and neck cancer and lung cancer.

Surface president and CEO Rob Ross said: “This combination presents a rare opportunity for two complementary organisations to join together and forge something that is greater than the sum of its parts.

“By augmenting Coherus’ existing capabilities and infrastructure with Surface’s innovative pipeline and deep I-O expertise, Coherus is well positioned to develop important I-O medicines for patients which deliver real value for the shareholders of both companies.”

Approved by the boards of directors of both firms, the transaction is expected to complete by the third quarter of 2023.