Why Surface Oncology's Stock Is Surging Higher

Shares of micro-cap biopharma Surface Oncology Inc SURF are advancing strongly Wednesday following an oncology partnership the company announced with Merck & Co., Inc. MRK.

The Merck-Surface Oncology Partnership: Massachusetts-based Surface Oncology said it has entered into a clinical trial collaboration with Merck to evaluate the safety and efficacy of a combo therapy consisting of the former's investigational antibody SRF617 that targets CD39 and Merck's anti-PD-1 therapy Keytruda.

The combo therapy will be studied in a Phase 1/1b study, focused on patients with gastric cancer and those who have developed resistance to checkpoint inhibition, Surface Oncology said. Both these areas have high unmet need.

How The Combo Therapy Works: Surface Oncology said research has supported a role for CD39 in allowing cancer to evade immune responses. The company clarified that in gastric cancer, immune cells within the tumor often express high levels of CD39, which may impair an overall anti-cancer immune response even in the presence of an anti-PD-1 antibody.

The combination of SRF617 and KEYTRUDA, the company said, has the potential to overcome this barrier to immune system activation and promote anti-tumor immunity.

"This collaboration with Merck will add an important dimension to our clinical program for SRF617, and allow us to more rapidly assess its potential," said Robert Ross, chief medical officer at Surface Oncology.

Surface Oncology shares were jumping 39% to $3.70 at time of publication.