What happened Shares of Surface Oncology (NASDAQ: SURF) were down by 13.6% as of 3:32 p.m. EST on Thursday. The decline came after the company announced a deal with GlaxoSmithKline (NYSE: GSK) to license its preclinical program SRF813 for $85 million up front. Surface is also eligible to receive up to $730 million in milestone payments, plus tiered royalties on any sales of the product in the future. So what Ordinarily, a major licensing deal with a big pharmaceutical company would be seen as good news for a small drugmaker like Surface. So why did the biotech stock fall instead of climbing? Image source: Getty Images. It could be that some investors didn't think Surface received enough for what it gave up. An upfront payment of $85 million won't last too long: Surface lost nearly $16 million in its latest quarter. SRF813 also represents one-fifth of the company's pipeline. Surface arguably could be less attractive as a potential acquisition target in the wake of this deal. Still, the licensing agreement underscores the potential of its immuno-oncology platform. Surface Oncology CEO Jeff Goater described the transaction as a big plus for his company. He said that "the economics of the transaction position us well to continue to drive the development of our wholly owned clinical programs, SRF617 and SRF388, while also advancing SRF114, our CCR8 targeted program." Now what For clinical-stage biotechs like Surface, maintaining enough cash to fund clinical development is paramount. The company said in November that its cash stockpile of $102.5 million as of Sept. 30 was enough to carry it into 2022. The upfront payment from GSK should extend that cash runway out even further. 10 stocks we like better than Surface Oncology, IncWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Surface Oncology, Inc wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source