Sutro Biopharma Reports Full Year 2023 Financial Results, Business Highlights and Select Anticipated Milestones
- Strong cash position of $333.7 million and investments in Vaxcyte common stock valued at $41.9 million provide a projected cash runway into the second half of 2025.
- Positive data presented at ASH 2023 showed compelling anti-leukemic activity of luvelta in pediatric patients with CBF/GLIS AML.
- Initiation of REFRαME-O1 trial for platinum-resistant ovarian cancer patients and plans for REFRαME-P1 trial for pediatric patients with CBF/GLIS AML in 2024.
- Expansion of pipeline with STRO-003 and STRO-004 ADCs, seeking IND submissions in 2024 and 2025, respectively.
- Collaboration with Vaxcyte for manufacturing rights agreement and potential revenue of up to $135 million based on milestones.
- Promotion of Jane Chung to President and COO to drive operational excellence and business success at Sutro.
- - Current market conditions pose a challenging financing environment for Sutro, prompting evaluation of programs and spending.
- - Total operating expenses for 2023 were $243.0 million, with significant research and development expenses of $180.4 million.
- - Unrealized gain of $9.9 million from the increase in value of Vaxcyte common stock contributed to non-operating income in 2023.
Insights
The financial results presented by Sutro Biopharma are indicative of a company in a robust position with a solid cash reserve and a sizeable non-operating gain from its Vaxcyte common stock investment. The increase in revenue from $67.8 million in the previous year to $153.7 million is noteworthy, reflecting successful monetization of collaborations and licensing agreements, particularly the Vaxcyte manufacturing rights agreement. The projected cash runway into the second half of 2025 suggests the company has sufficient funds to sustain its operations and invest in pipeline development without immediate need for additional financing, which is particularly advantageous given the current challenging financing environment.
However, the increase in operating expenses to $243.0 million, up from $196.7 million, should be monitored as it may impact future profitability. The company's strategy to evaluate programs and spending in light of market conditions is a prudent approach to ensure sustainability. The unrealized gain from Vaxcyte common stock is a positive, but it's important to note that such non-operating gains are subject to market fluctuations and are not indicative of operational performance.
Sutro Biopharma's focus on addressing unmet needs in multiple FolRα-expressing cancers through its ADC franchise is a strategic move in oncology therapeutics. The anti-leukemic activity data presented for luveltamab tazevibulin (luvelta) at ASH 2023, particularly the high complete remission rates in pediatric patients, is promising. Such data can be influential in obtaining regulatory approvals and can drive future revenue through sales or partnerships.
The initiation of the REFRαME-O1 and REFRαME-P1 trials for PROC and pediatric CBF/GLIS AML, respectively, represents significant progress in the clinical pipeline. The choice to pursue a registration-directed study indicates confidence in the drug's efficacy and a clear path toward commercialization. The IND submissions planned for STRO-003 and STRO-004 expand the pipeline's potential and diversify the company's portfolio, which is important for long-term growth.
Collaborations and licensing agreements, such as the manufacturing rights agreement with Vaxcyte, demonstrate Sutro's ability to leverage its proprietary cell-free platform. This not only provides non-dilutive capital but also validates the technology and could lead to more partnership opportunities.
The oncology drug development sector is highly competitive, with significant rewards for companies that bring innovative treatments to market. Sutro Biopharma's investment in luveltamab tazevibulin positions the company within a niche segment of cancer therapy targeting FolRα-expressing cancers. The market potential for ADCs is growing and Sutro's advancements could capture a significant share if clinical outcomes are positive and lead to regulatory approvals.
Investor confidence may be bolstered by the company's strong cash position and the strategic planning of cash runway into 2025. However, investor sentiment can also be affected by the high costs associated with the development of novel therapeutics. Sutro's ability to manage these costs while advancing its clinical programs will be a key factor in sustaining investor interest.
Additionally, the company's collaborations with industry partners such as Vaxcyte, Astellas and Merck are indicative of Sutro's strategic positioning and potential for future revenue streams. The success of these partnerships and the advancement of the pipeline will be critical in shaping the company's market valuation and attractiveness to potential investors.
- Sutro highlighted luveltamab tazevibulin (luvelta) in a January 2024 investor webcast, describing the broad opportunity to address unmet needs in multiple FolRα-expressing cancers -
- Compelling anti-leukemic activity of luvelta in pediatric patients with relapsed/refractory CBF2AT3-GLIS2 AML treated under Compassionate Use shown in data presented at ASH 2023 -
- Jane Chung promoted to President and Chief Operating Officer in November 2023 -
- As of year-end 2023, Sutro had cash and investments of
SOUTH SAN FRANCISCO, Calif., March 25, 2024 (GLOBE NEWSWIRE) -- Sutro Biopharma, Inc. (Sutro or the Company) (NASDAQ: STRO), a clinical-stage oncology company pioneering site-specific and novel-format antibody drug conjugates (ADCs), today reported its financial results for the full year 2023, its recent business highlights, and a preview of select anticipated milestones.
“The year 2023 was pivotal for Sutro, with the initiation of REFRαME-O1, our registration-directed study of luvelta for platinum-resistant ovarian cancer (PROC) patients, further validating our next-generation ADC capabilities. In addition, we advanced our earlier stage programs, strengthened our management team, and bolstered our already strong cash position with additional non-dilutive capital,” said Bill Newell, Sutro’s Chief Executive Officer. “We look forward to continuing the momentum in 2024, with the initiation of a second registration-directed trial with luvelta, REFRαME-P1, for pediatric patients with CBF/GLIS AML, and two additional planned INDs. I am delighted with the strides we are taking towards meaningfully impacting the lives of cancer patients in need.”
Recent Business Highlights and Select Anticipated Milestones
STRO-002, International Nonproprietary Name, “luveltamab tazevibulin,” abbreviated as “luvelta,” FolRα-Targeting ADC Franchise:
- In January 2024, Sutro hosted an investor webcast highlighting luvelta’s broad opportunity to address unmet needs in several FolRα-expressing cancers, including platinum-resistant ovarian cancer (PROC), endometrial cancer, CBFA2T3::GLIS2 (CBF/GLIS; RAM phenotype) acute myeloid leukemia (AML), and non-small cell lung cancer (NSCLC).
- The registration-directed trial, REFRαME-O1, for treatment of PROC is enrolling, with an anticipated ~140 sites in ~20 countries to be opened by the end of 2024. Enrollment of Part 1 of the trial is expected to be completed in the first half of 2024.
- In December 2023, data demonstrating anti-leukemic activity with luvelta, either as a single agent or in combination, in pediatric patients with CBF/GLIS AML, were presented at the 65th American Society of Hematology Annual Meeting and Exposition (ASH 2023), including complete remission in
42% of patients with CBF/GLIS AML with ≥5% blasts and in75% of pediatric patients with CBF/GLIS AML with <5% blasts. - Enrollment of REFRαME-P1, a registration-enabling trial for pediatric patients with CBF/GLIS AML, is expected to be initiated in the second half of 2024.
- An Investigational New Drug (IND) application submission is planned for treatment of non-small cell lung cancer (NSCLC) in the first half of 2024.
- Continued clinical development is planned in combination with bevacizumab for the treatment of ovarian cancer and in endometrial cancer, as resources permit.
Additional Pipeline Development and Collaboration Updates:
- Sutro plans to submit an IND for STRO-003, a ROR1-targeting ADC, in 2024.
- Sutro plans to submit an IND for STRO-004, a tissue factor-targeting ADC, in 2025.
- Sutro continues to seek to maximize the value of its proprietary cell-free platform by working with partners on programs in multiple disease spaces and geographies and has generated from collaborators an aggregate of approximately
$854 million in payments through December 31, 2023, including equity investments. - In November 2023, Vaxcyte exercised its option to enter into a manufacturing rights agreement with Sutro to obtain control over the development and manufacture of cell-free extract for use under its license agreement with Sutro, including for Vaxcyte’s pneumococcal conjugate vaccine (PCV) franchise, which includes VAX-24 and VAX-31. Upon exercising the option, Vaxcyte paid Sutro
$50 million and is obligated to pay Sutro an additional$25 million within six months. Upon the occurrence of certain regulatory milestones, Vaxcyte would be obligated to pay Sutro up to an additional$60 million .
Corporate Updates:
- Sutro continues to build a world-class leadership team through the promotion of Jane Chung to President and Chief Operating Officer, a newly created role in which she will be responsible for driving operational excellence, strategic growth, and overall business success at Sutro.
Full Year 2023 Financial Highlights
Cash, Cash Equivalents and Marketable Securities
As of December 31, 2023, Sutro had cash, cash equivalents and marketable securities of
Unrealized Gain from Increase in Value of Vaxcyte Common Stock
The non-operating, unrealized gain of
Revenue
Revenue was
Operating Expenses
Total operating expenses for the year ended December 31, 2023 were
About Sutro Biopharma
Sutro Biopharma, Inc., is a clinical-stage company relentlessly focused on the discovery and development of precisely designed cancer therapeutics, to transform what science can do for patients. Sutro’s fit-for-purpose technology, including cell-free XpressCF®, provides the opportunity for broader patient benefit and an improved patient experience. Sutro has multiple clinical stage candidates, including luveltamab tazevibulin, or luvelta, a registrational-stage folate receptor alpha (FolRα)-targeting ADC in clinical studies. A robust pipeline, coupled with high-value collaborations and industry partnerships, validates Sutro’s continuous product innovation. Sutro is headquartered in South San Francisco. For more information, follow Sutro on social media @Sutrobio, or visit www.sutrobio.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, anticipated preclinical and clinical development activities, including enrollment and site activation; timing of announcements of clinical results, trial initiation, and regulatory filings; outcome of regulatory decisions; potential benefits of luvelta and the Company’s other product candidates and platform; potential expansion into other indications and combinations, including the timing and development activities related to such expansion; potential market opportunities for luvelta and the Company’s other product candidates; and the Company’s expected cash runway;. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company cannot guarantee future events, results, actions, levels of activity, performance or achievements, and the timing and results of biotechnology development and potential regulatory approval is inherently uncertain. Forward-looking statements are subject to risks and uncertainties that may cause the Company’s actual activities or results to differ significantly from those expressed in any forward-looking statement, including risks and uncertainties related to the Company’s ability to advance its product candidates, the receipt and timing of potential regulatory designations, approvals and commercialization of product candidates and the Company’s ability to successfully leverage Fast Track designation, the market size for the Company’s product candidates to be smaller than anticipated, clinical trial sites, supply chain and manufacturing facilities, the Company’s ability to maintain and recognize the benefits of certain designations received by product candidates, the timing and results of preclinical and clinical trials, the Company’s ability to fund development activities and achieve development goals, the Company’s ability to protect intellectual property, the value of the Company’s holdings of Vaxcyte common stock, and the Company’s commercial collaborations with third parties and other risks and uncertainties described under the heading “Risk Factors” in documents the Company files from time to time with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this press release, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
Contact
Emily White
Sutro Biopharma
(650) 823-7681
ewhite@sutrobio.com
| Sutro Biopharma, Inc. Selected Statements of Operations Financial Data (Unaudited) (In thousands, except share and per share amounts) | |||||||||||
| For the year ended December 31 | |||||||||||
| 2023 | 2022 | 2021 | |||||||||
| Revenues | $ | 153,731 | $ | 67,772 | $ | 61,880 | |||||
| Operating expenses | |||||||||||
| Research and development | 180,425 | 137,171 | 104,400 | ||||||||
| General and administrative | 62,584 | 59,544 | 56,004 | ||||||||
| Total operating expenses | 243,009 | 196,715 | 160,404 | ||||||||
| Loss from operations | (89,278 | ) | (128,943 | ) | (98,524 | ) | |||||
| Interest income | 14,510 | 3,455 | 577 | ||||||||
| Unrealized gain (loss) on equity securities | 9,917 | 12,130 | (4,454 | ) | |||||||
| Non-cash interest expense related to the sale of future royalties | (12,570 | ) | - | - | |||||||
| Interest and other income (expense), net | (11,180 | ) | (3,346 | ) | (3,137 | ) | |||||
| Loss before provision for income taxes | (88,601 | ) | (116,704 | ) | (105,538 | ) | |||||
| Provision for income taxes | 18,192 | 2,500 | - | ||||||||
| Net loss | $ | (106,793 | ) | $ | (119,204 | ) | $ | (105,538 | ) | ||
| Net loss per share, basic and diluted | $ | (1.78 | ) | $ | (2.35 | ) | $ | (2.29 | ) | ||
| Weighted-average shares used in computing basic and diluted loss per share | 60,163,542 | 50,739,185 | 46,119,089 | ||||||||
| Sutro Biopharma, Inc. Selected Balance Sheets Financial Data (Unaudited) (In thousands) | |||||||
| December 31, | |||||||
| 2023(1) | 2022(2) | ||||||
| Assets | |||||||
| Cash, cash equivalents and marketable securities | $ | 333,681 | $ | 302,344 | |||
| Investment in equity securities | 41,937 | 32,020 | |||||
| Accounts receivable | 36,078 | 7,122 | |||||
| Property and equipment, net | 21,940 | 24,621 | |||||
| Operating lease right-of-use assets | 22,815 | 26,443 | |||||
| Other assets | 14,285 | 14,394 | |||||
| Total Assets | $ | 470,736 | $ | 406,944 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Accounts payable, accrued expenses and other liabilities | $ | 64,293 | $ | 32,822 | |||
| Deferred revenue | 74,045 | 106,644 | |||||
| Operating lease liability | 29,574 | 34,159 | |||||
| Debt | 4,061 | 16,271 | |||||
| Deferred royalty obligation related to the sale of future royalties | 149,114 | - | |||||
| Total liabilities | 321,087 | 189,896 | |||||
| Total stockholders’ equity | 149,649 | 217,048 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 470,736 | $ | 406,944 | |||
| (1) | The condensed balance sheet as of December 31, 2023 was derived from the unaudited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 25, 2024. |
| (2) | The condensed balance sheet as of December 31, 2022 was derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 30, 2023. |
FAQ
What is Sutro's cash position as of year-end 2023?
What data was presented at ASH 2023 regarding luvelta?
What trials are planned for luvelta in 2024?
What new ADCs are Sutro planning to develop?
What collaboration did Sutro engage in with Vaxcyte?
Who was promoted to President and COO at Sutro?
