surf-ex991

SURFACE ONCOLOGY REPORTS FINANCIAL RESULTS AND CORPORATE HIGHLIGHTS FOR SECOND QUARTER 2019

CAMBRIDGE, MA, August 7, 2019: Surface Oncology (NASDAQ:SURF), a clinical-stage immuno-oncology company developing next-generation immunotherapies that target the tumor microenvironment, today reported financial results and corporate highlights for the second quarter of 2019.

“We are pressing forward at Surface on our mission to Break Through for patients with cancer, and we are excited to be entering the second half of 2019 where you will begin to see some of the results of our hard work. SRF617 and SRF388 remain on track for IND filings later this year. Furthermore, we anticipate multiple poster presentations at SITC highlighting a number of our pipeline programs, as well as hosting our first ever research and development day in November where executives from Surface, as well as key opinion leaders, will discuss our programs,” said Jeff Goater, chief executive officer of Surface Oncology.

As of June 30, 2019, cash, cash equivalents and marketable securities were $126.3 million, compared to $140.2 million on March 31, 2019.

Research and development (R&D) expenses were $13.2 million for the second quarter ended June 30, 2019, compared to $15.1 million for the same period in 2018. The decrease in expenditures was primarily driven by a reduction of CMC related spend on SRF231 (CD47) program, which was partially offset by increased spend on SRF617. R&D expenses included $0.6 million in stock-based compensation expense for the second quarter of 2019.

General and administrative (G&A) expenses were $5.4 million for the second quarter ended June 30, 2019, compared to $3.9 million for the same period in 2018. The increase in G&A expenses is primarily due to increased personnel costs and professional fees associated with the growth of the Company and operating as a public company. G&A expenses included $0.9 million in stock-based compensation expense for the second quarter of 2019.

For the second quarter ended June 30, 2019, net loss was $17.8 million, or basic and diluted net loss per share attributable to common stockholders of $0.64. Net loss was $15.9 million for the same period in 2018 or diluted net income per share attributable to common stockholders of $0.73.

Based upon its current operating plan, which includes anticipated milestones from Novartis, Surface continues to have a projected cash runway through 2021.

Surface Oncology is an immuno-oncology company developing next-generation antibody therapies focused on the tumor microenvironment with lead programs targeting CD73, CD39, IL-27 and CD47. Surface’s novel 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. The Company has a pipeline of seven novel immunotherapies and a strategic collaboration with Novartis focused on NZV930 (CD73) and potentially one additional undisclosed program. For more information, please visit www.surfaceoncology.com.

Certain statements set forth in this press release constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by terms such as “believes,” “expects,” “plans,” “potential,” “would” or similar expressions and the negative of those terms. These forward-looking statements are based on Surface Oncology’s management’s current beliefs and assumptions about future events and on information currently available to management.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Surface Oncology’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to Surface Oncology’s ability to successfully develop SRF388, SRF617 and its other product candidates through current and future milestones or regulatory filings on the anticipated timeline, if at all, the therapeutic potential of Surface Oncology’s product candidates, the risk that results from preclinical studies or early clinical trials may not be representative of larger clinical trials, the risk that Surface Oncology’s product candidates, including SRF388 and SRF617, will not be successfully developed or commercialized and the risks related to Surface Oncology’s dependence on third parties in connection with its manufacturing, clinical trials and preclinical studies. Additional risks and uncertainties that could affect Surface Oncology’s future results are included in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2018, which is available on the Security and Exchange Commission’s website at www.sec.gov and Surface Oncology’s website at www.surfaceoncology.com.

Additional information on potential risks will be made available in other filings that Surface Oncology makes from time to time with the Securities and Exchange Commission. In addition, any forward-looking statements contained in this press release are based on assumptions that Surface Oncology believes to be reasonable as of this date. Except as required by law, Surface Oncology assumes no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

	Three months ended June 30,						Six months ended June 30,
Statement of Operations Items	2019			2018			2019			2018
Collaboration revenue – related party	$	143		$	2,428		$	14,577		$	47,923
Operating expenses:
Research and development		13,236			15,098			27,545			26,188
General and administrative		5,417			3,913			10,510			7,275
Total operating expenses		18,653			19,011			38,055			33,463
Income (loss) from operations		(18,510	)		(16,583	)		(23,478	)		14,460
Total other income, net		752			731			1,521			900
Net income (loss)		(17,758	)		(15,852	)		(21,957	)		15,360
Accretion of redeemable convertible preferred stock to redemption value		-			-			-			(11	)
Net income attributable to redeemable convertible preferred stockholders		-			-			-			(7,077	)
Net income (loss) attributable to common stockholders	$	(17,758	)	$	(15,852	)	$	(21,957	)	$	8,272
Net income (loss) per share attributable to common stockholders— basic	$	(0.64	)	$	(0.73	)	$	(0.79	)	$	0.68
Weighted average common shares outstanding— basic		27,845,136			21,595,586			27,835,471			12,213,717
Net income (loss) per share attributable to common stockholders— diluted	$	(0.64	)	$	(0.73	)	$	(0.79	)	$	0.60
Weighted average common shares outstanding— diluted		27,845,136			21,595,586			27,835,471			13,805,380

	June 30,		December 31,
Selected Balance Sheet Items:	2019		2018
Cash, cash equivalents and marketable securities	$	126,290	$	158,835
Total assets		154,848		174,065
Accounts payable and accrued expenses		9,994		12,215
Deferred revenue – related party		39,375		53,952
Total stockholders’ equity		84,322		102,862