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 third quarter of 2023, its recent
business highlights, and a preview of select anticipated
milestones.
“The last few months have been productive for Sutro, with the
recent presentation of encouraging early data for luvelta in
endometrial cancer, as well as the appointment of Dr. Hans-Peter
Gerber as our CSO. Dr. Gerber’s extensive experience in discovering
and developing novel ADCs further strengthens our position as a
scientific leader in this important therapeutic modality,” said
Bill Newell, Sutro’s Chief Executive Officer. “The recent
encouraging update with luvelta in endometrial cancer gave us
further confidence in the potential for luvelta to be a targeted
treatment for a range of indications with significant unmet need.
Additionally, we are pleased with the pace of enrollment of our
Phase 2/3 trial for luvelta in patients with platinum resistant
ovarian cancer, REFRaME-O1.”
“Sutro’s remarkable platform has the potential to yield best in
class product candidates from all of our ADC design concepts –
including ADCs, iADCs, and ADC2. The diversity of
product candidate attributes enabled by Sutro technology is what
originally attracted me to the company,” said Hans-Peter Gerber,
Sutro’s CSO. “After an in-depth review of the platform and programs
developed at Sutro, I am excited to combine our industry leading
technology with our established development capabilities to deliver
fit-for-purpose molecules that could transform the lives of cancer
patients with limited options.”
Recent Business
Highlights and
Select Anticipated
Milestones
STRO-002, International Nonproprietary Name, “luveltamab
tazevibulin,” abbreviated as “luvelta,” FolRα-Targeting
ADC: Luvelta is being studied in the clinic globally for
patients with ovarian and endometrial cancers.
|
• |
Initial results from the Phase 1 dose-expansion study for luvelta
in patients with endometrial cancer were presented in a mini oral
presentation at the 2023 European Society for Medical Oncology
(ESMO) Congress held in Madrid, Spain in October 2023. Luvelta
demonstrated encouraging preliminary anti-tumor activity in
FolRα-selected patients, defined by a Tumor Proportion Score (TPS)
of >25% FolRα expression, and the safety profile was consistent
with prior data in patients with platinum-resistant ovarian
cancer. |
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• |
Previous data from the Phase 1 dose-expansion study for luvelta in
ovarian cancer demonstrated meaningful clinical benefit in
FolRα-selected patients, defined by a TPS of >25%, irrespective
of staining intensity, in which the data collected has shown to
represent approximately 80% of the advanced ovarian cancer patient
population. |
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• |
In June 2023, Sutro announced the initiation of Part I of
REFRaME-O1, a Phase 2/3 registration-directed study for patients
with platinum-resistant ovarian cancer. The trial is well underway,
and sites have been activated globally. Sutro is also in
discussions with both the FDA and EMA to refine the trial design
for REFRaME-O1 to potentially support global registration of
luvelta. |
|
• |
Patients with CBFA2T3::GLIS2 (CBF/GLIS; RAM phenotype) AML, a
highly refractory and uniformly fatal subtype of acute myeloid
leukemia found exclusively in infants and young children, were
treated with luvelta under compassionate use. Preliminary results
from compassionate use of luvelta in this ultra rare indication
suggested that luvelta was well tolerated as a monotherapy agent
and in combination with standard cancer therapies. Soheil
Meshinchi, M.D., Ph.D., expects to present updated data from this
program in a poster at the 65th American Society of Hematology
Annual Meeting and Exposition (ASH 2023) to be held December 9-12,
2023 in San Diego, CA. |
|
|
Title: Anti-Leukemic Activity of Luveltamab
Tazevibulin (LT, STRO-002), a Novel Folate Receptor-α
(FR-α)-Targeting Antibody Drug Conjugate (ADC) in
Relapsed/Refractory CBFA2T3::GLIS2 AML |
|
|
Session: 616. Acute Myeloid Leukemias:
Investigational Therapies, Excluding Transplantation and Cellular
Immunotherapies: Poster III |
|
|
Date & Time: Monday, December 11, 2023, 6:00
PM - 8:00 PM PT |
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• |
Luvelta is also being studied in combination with bevacizumab for
patients with advanced ovarian cancer. |
|
• |
Translational work is ongoing to support an Investigational New
Drug (IND) application for the initiation of a study of luvelta for
patients with non-small cell lung cancer (NSCLC), for which the
protocol is under development. |
Additional Pipeline Development: STRO-003, a
ROR1-targeting ADC, and STRO-004, a tissue factor-targeting ADC,
have INDs planned for 2024 and 2025, respectively.
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• |
STRO-003, a novel, next-generation ADC that has been designed to
target ROR1, features eight precisely placed
β-Glucuronidase-cleavable linkers attached to next-generation
exatecan warheads, which, when released, inhibit topoisomerase-1
(TOPO-1) and cause DNA disruption. |
|
• |
STRO-003 has demonstrated, in NSCLC and breast cancer
patient-derived xenograft models, strong cell-killing activity in
low and heterogeneous ROR1-expressing tumors. STRO-003 has also
exhibited promising tolerability in preclinical studies involving
rodents and non-human primates, with potentially reduced lung
toxicity relative to other TOPO-1 inhibiting ADCs. |
Collaboration Updates: 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 $785 million in payments through September 30, 2023,
including equity investments.
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• |
In June 2023, Sutro announced a royalty monetization agreement with
Blackstone Life Sciences, an affiliate of Blackstone, under which
Sutro received $140 million upfront and is eligible to receive up
to an additional $250 million in future milestone payments in
exchange for the 4% royalty, or revenue interest, in potential
future sales of Vaxcyte’s products. This transaction with
Blackstone provides non-dilutive capital to Sutro for continued
pipeline advancement. Sutro retains the right to discover and
develop vaccines for the treatment or prophylaxis of any disease
that is not caused by an infectious pathogen, including
cancer. |
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• |
In December 2022, Sutro and Vaxcyte expanded upon a nearly
decade-long relationship through a new agreement, under which
Vaxcyte acquired an option to access expanded rights to develop and
manufacture cell-free extract, among other rights, and includes a
$22.5 million upfront payment and, upon exercise of the option, up
to an additional $135 million in option exercise and contingent
payments. |
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• |
Sutro’s collaboration with Astellas on the discovery of
immunostimulatory antibody-drug conjugates (iADCs) for three
targets is ongoing, for which Sutro receives financial support for
its research efforts, potential milestone payments and royalties,
and has an option to co-develop and co-commercialize product
candidates in the U.S. |
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• |
Sutro is manufacturing initial drug supply for its partners
including for Merck’s MK-1484, currently in Phase 1 as monotherapy
and in combination with pembrolizumab in advanced or metastatic
solid tumors. Sutro is providing clinical drug supply to BioNova
for clinical studies for BN301 (STRO-001) in Greater China. Sutro
is currently supporting Tasly Biopharmaceuticals (Tasly), which
recently received its first IND clearance by the National Medical
Products Administration, or NMPA, for their initiation of clinical
development activities in Greater China for STRO-002 and will
provide initial drug supply for their Phase 1 study. |
Corporate Updates: Sutro strengthened and
continues to build a world-class leadership team through the
appointment of a new Chief Scientific Officer.
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Hans-Peter Gerber, Ph.D., joined Sutro as Chief Scientific Officer
in September 2023, overseeing the research and early discovery
functions, with a focus on the design and discovery of new
molecules to rapidly progress into the clinic, in addition to being
a member of Sutro’s Senior Management Team. |
Upcoming Events: Sutro plans to participate in
two upcoming investor conferences. Webcasts of the presentations
will be accessible through the News & Events page of the
Investor Relations section of the company’s website at
www.sutrobio.com. Archived replays will be available for at least
30 days after the events.
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• |
Jefferies London Healthcare Conference in London, Wednesday,
November 14-16, 2023 |
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Piper Sandler 35th Annual Healthcare Conference in New York,
November 28-30, 2023 |
Third Quarter 2023 Financial
Highlights
Cash, Cash Equivalents and Marketable SecuritiesAs of September
30, 2023, Sutro had cash, cash equivalents and marketable
securities of $321.1 million, as compared to $358.3 million as of
June 30, 2023, and approximately 0.7 million shares of Vaxcyte
common stock with a fair value of $34.0 million, which together
provide a projected cash runway into the first half of 2025, based
on current business plans and assumptions. Current market
conditions provide a challenging financing environment. In this
context, Sutro is evaluating its programs and spending as it fully
develops its 2024 goals and financial plan.
Unrealized Gain from Increase in Value of Vaxcyte Common
Stock
The non-operating, unrealized gain of $0.7 million in the
quarter ended September 30, 2023 was due to the increase since June
30, 2023 in the estimated fair value of Sutro’s holdings of Vaxcyte
common stock. Vaxcyte common stock held by Sutro will be remeasured
at fair value based on the closing price of Vaxcyte’s common stock
on the last trading day of each reporting period, with any
non-operating, unrealized gains and losses recorded in Sutro’s
statements of operations.
Revenue
Revenue was $16.9 million for the quarter ended September 30,
2023, as compared to $25.1 million for the same period in 2022,
with the 2023 amount related principally to the Astellas
collaboration and the recognition of a contingent payment from
Tasly. Future collaboration and license revenue under existing
agreements, and from any additional collaboration and license
partners, will fluctuate as a result of the amount and timing of
revenue recognition of upfront, milestones, and other agreement
payments.
Operating Expenses
Total operating expenses for the quarter ended September 30,
2023 were $60.9 million, as compared to $46.4 million for the same
period in 2022. The third quarter of 2023 includes non-cash
expenses for stock-based compensation of $6.0 million and
depreciation and amortization of $1.7 million, as compared to $6.8
million and $1.4 million, respectively, in the comparable 2022
period. Total operating expenses for the quarter ended September
30, 2023 were comprised of research and development expenses of
$45.7 million and general and administrative expenses of $15.3
million.
Royalty Monetization Agreement
As related to the royalty monetization agreement between Sutro
and an affiliate of Blackstone Life Sciences, Sutro received in
June 2023 a $140.0 million upfront payment and is
eligible to receive up to an additional $250.0 million in future
milestone payments. Sutro recorded the $140.0 million
upfront payment from Blackstone as a deferred royalty obligation
related to the sale of future royalties on the Company’s condensed
Balance Sheets as of June 30, 2023. Due to the Company’s
ongoing manufacturing obligations, the Company accounted for the
proceeds as imputed debt and will recognize future non-cash royalty
revenues. Non-cash interest expense will be recognized over the
estimated life of the royalty term arrangement using the effective
interest method based on the imputed interest rate derived from
estimated amounts and timing of future royalty payments to be
received from Vaxcyte. As part of the sale, Sutro incurred
approximately $3.8 million in transaction costs, which are being
amortized over the estimated life of the royalty term arrangement
using the effective interest method. As future royalties are earned
from Vaxcyte by Blackstone, the balance of the deferred royalty
obligation will be amortized over the estimated life of the royalty
term arrangement.
About Sutro
Biopharma Sutro Biopharma, Inc., is a
clinical-stage company relentlessly focused on the discovery and
development of precisely designed cancer therapeutics, transforming
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, timing of announcements of clinical results, trial
initiation, and regulatory filings, potential benefits of luvelta
and the Company’s other product candidates and platform, potential
future milestone and royalty payments, the Company’s expectations
about its cash runway, and potential market opportunities for
luvelta and the Company’s other product candidates. 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.
ContactEmily WhiteSutro 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) |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenues |
$ |
16,924 |
|
|
$ |
25,147 |
|
|
$ |
40,010 |
|
|
$ |
59,140 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
45,669 |
|
|
|
31,714 |
|
|
|
126,660 |
|
|
|
94,036 |
|
General and administrative |
|
15,269 |
|
|
|
14,643 |
|
|
|
45,780 |
|
|
|
44,825 |
|
Total operating expenses |
|
60,938 |
|
|
|
46,357 |
|
|
|
172,440 |
|
|
|
138,861 |
|
Loss from operations |
|
(44,014 |
) |
|
|
(21,210 |
) |
|
|
(132,430 |
) |
|
|
(79,721 |
) |
Interest income |
|
4,550 |
|
|
|
1,014 |
|
|
|
9,952 |
|
|
|
1,327 |
|
Unrealized gain on equity
securities |
|
694 |
|
|
|
3,496 |
|
|
|
2,023 |
|
|
|
323 |
|
Non-cash interest expense
related to the sale of future royalties |
|
(5,936 |
) |
|
|
- |
|
|
|
(6,378 |
) |
|
|
- |
|
Interest and other income
(expense), net |
|
(2,739 |
) |
|
|
(2,788 |
) |
|
|
(8,640 |
) |
|
|
(4,039 |
) |
Loss before provision for
income taxes |
|
(47,445 |
) |
|
|
(19,488 |
) |
|
|
(135,473 |
) |
|
|
(82,110 |
) |
Provision for income
taxes |
|
1,839 |
|
|
|
- |
|
|
|
2,385 |
|
|
|
2,500 |
|
Net loss |
$ |
(49,284 |
) |
|
$ |
(19,488 |
) |
|
$ |
(137,858 |
) |
|
$ |
(84,610 |
) |
Net loss per share, basic and
diluted |
$ |
(0.81 |
) |
|
$ |
(0.37 |
) |
|
$ |
(2.30 |
) |
|
$ |
(1.74 |
) |
Weighted-average shares used
in computing basic and diluted loss per share |
|
60,599,025 |
|
|
|
52,345,732 |
|
|
|
59,894,181 |
|
|
|
48,622,258 |
|
Sutro Biopharma, Inc. |
Selected Balance Sheets Financial Data |
(Unaudited) |
(In thousands) |
|
|
September
30,2023(1) |
|
|
December
31,2022(2) |
|
Assets |
|
|
|
|
|
|
|
Cash, cash equivalents and marketable securities |
$ |
321,108 |
|
|
$ |
302,344 |
|
Investment in equity securities |
|
34,043 |
|
|
|
32,020 |
|
Accounts receivable |
|
16,627 |
|
|
|
7,122 |
|
Property and equipment, net |
|
22,344 |
|
|
|
24,621 |
|
Operating lease right-of-use assets |
|
23,996 |
|
|
|
26,443 |
|
Other assets |
|
13,616 |
|
|
|
14,394 |
|
Total
Assets |
$ |
431,734 |
|
|
$ |
406,944 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
$ |
36,312 |
|
|
$ |
32,822 |
|
Deferred revenue |
|
102,137 |
|
|
|
106,644 |
|
Operating lease liability |
|
31,038 |
|
|
|
34,159 |
|
Debt |
|
7,137 |
|
|
|
16,271 |
|
Deferred royalty obligation related to the sale of future
royalties |
|
142,763 |
|
|
|
- |
|
Total liabilities |
|
319,387 |
|
|
|
189,896 |
|
Total stockholders’
equity |
|
112,347 |
|
|
|
217,048 |
|
Total Liabilities and
Stockholders’ Equity |
$ |
431,734 |
|
|
$ |
406,944 |
|
(1) |
The condensed balance sheet as of September 30, 2023 was derived
from the unaudited financial statements included in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2023, filed with the Securities and Exchange Commission on November
13, 2023. |
(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. |
|
|
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