EX-99.1
Published on August 10, 2023
Exhibit 99.1
Sutro Biopharma Reports Second Quarter 2023 Financial Results, Business Highlights and Select Anticipated Milestones
- Enrollment is underway for REFRaME-O1, the Phase 2/3 pivotal study of luveltamab tazevibulin, or luvelta, for patients with platinum-resistant ovarian cancer -
- Sutro will present data from the Phase 1 dose expansion for luvelta for patients with endometrial cancers as a Mini Oral Session at ESMO 2023 -
- Sutro announced a royalty monetization agreement with Blackstone Life Sciences in June 2023, under which Sutro received an upfront payment of $140 million, and is eligible to receive up to an additional $250 million in milestone payments upon the achievement of certain return thresholds -
- As of June 30, 2023, Sutro had cash and investments of $358.3 million and shares of Vaxcyte common stock valued at $33.3 million, which together provide a projected cash runway into the first half of 2025 -
SOUTH SAN FRANCISCO, Calif., August 10, 2023 – 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 second quarter of 2023, its recent business highlights, and a preview of select anticipated milestones.
“We are delighted with the initiation of the REFRaME study, a pivotal Phase 2/3 trial for patients with platinum-resistant ovarian cancer. The oral presentation at ASCO has generated significant interest of luvelta within the medical community, providing momentum for patient enrollment into REFRaME across our global sites," said Bill Newell, Sutro’s Chief Executive Officer. “Our financial position has been bolstered by the Blackstone royalty agreement, which helps to extend our cash runway into the first half of 2025. We remain committed to our pipeline progress and eagerly anticipate sharing updated data from the Phase 1 STRO-002-GM1 study in the second half of this year for ovarian and endometrial cancers."
Recent Business Highlights and Select Anticipated Milestones
STRO-002, International Nonproprietary Name, “luveltamab tazevibulin,” abbreviated as “luvelta”, FolRα-Targeting ADC: Luveltamab tazevibulin (luvelta) is being studied in the clinic globally for patients with ovarian and endometrial cancers.
Title: Luveltamab Tazevibulin (STRO-002), an anti-Folate Receptor Alpha (FolRα) Antibody Drug Conjugate (ADC), Demonstrates Clinical Activity in Recurrent/Progressive Epithelial Endometrial Cancer (EEC): STRO-002-GM1 Phase 1 Dose Expansion
Session: Mini Oral Session 1 - Gynecological cancers
Date & Time: Sunday, October 22, 2023, 10:15am-11:45am CEST
STRO-001, CD74-Targeting ADC: The Phase 1 study for patients with B‑cell malignancies has been completed in global sites ex-Greater China and clinical studies in Greater China have been initiated.
Additional Pipeline Development: STRO-003, a ROR1-targeting ADC and STRO-004, a tissue factor-targeting ADC have INDs planned for Q1 2024 and Q1 2025, respectively.
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 $772 million in payments through June 30, 2023, including equity investments.
Corporate Updates: Sutro continues to strengthen its Research team.
Second Quarter 2023 Financial Highlights
Cash, Cash Equivalents and Marketable Securities
As of June 30, 2023, Sutro had cash, cash equivalents and marketable securities of $358.3 million, as compared to $251.5 million as of March 31, 2023, and approximately 0.7 million shares of Vaxcyte common stock with a fair value of $33.3 million, which together provide a projected cash runway into the first half of 2025, based on current business plans and assumptions.
Unrealized Gain from Increase in Value of Vaxcyte Common Stock
The non-operating, unrealized gain of $8.3 million in the quarter ended June 30, 2023 was due to the
increase since March 31, 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 $10.4 million for the quarter ended June 30, 2023, as compared to $28.1 million for the same period in 2022, with the 2023 amount related principally to the Astellas, Merck and BMS collaborations. 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 June 30, 2023 were $56.6 million, as compared to $47.5 million for the same period in 2022. The second quarter 2023 amount includes non-cash expenses for stock-based compensation of $6.7 million and depreciation and amortization of $1.7 million, as compared to $6.7 million and $1.4 million, respectively, in the comparable 2022 period. Total operating expenses for the quarter ended June 30, 2023 were comprised of research and development expenses of $41.6 million and general and administrative expenses of $15.0 million, which are expected to increase in the remainder of 2023 as Sutro’s internal product candidates advance in clinical development and additional general and administrative expenses are incurred as a public company.
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 developing next-generation cancer therapeutics, principally antibody-drug conjugates (ADCs), designed for greater potency, tolerability and improved safety. Sutro’s cell-free technology, XpressCF®, enables the design and manufacture of homogeneous product candidates with precise and empirically-demonstrated positioning of linker-payloads and consistent drug antibody ratio (DAR). Sutro’s platform has produced six clinical stage candidates to date, including two wholly-owned ADCs—luveltamab tazevibulin, or luvelta, a folate receptor alpha (FolRα)-targeting ADC in clinical studies for ovarian and endometrial cancers, as well as STRO-001, a CD74-targeting ADC in clinical studies for B-cell malignancies. In addition, the Company has a robust pipeline of preclinical and discovery stage candidates including STRO-003, a ROR1-targeting ADC, and STRO-004, a tissue factor-targeting ADC. Sutro has also entered into high-value collaborations with industry partners, including Astellas and Merck (MSD outside of the United States and Canada); and Sutro’s platform
technology enabled the formation of Vaxcyte. Sutro is headquartered in South San Francisco. For more information, follow Sutro on Twitter, @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, 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, the impact of the COVID-19 pandemic on the Company’s business, 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.
Investor & Media Contact
Annie J. Chang
Sutro Biopharma
(650) 801-5728
ajchang@sutrobio.com
Sutro Biopharma, Inc.
Selected Statements of Operations Financial Data
(Unaudited)
(In thousands, except share and per share amounts)
|
|
Three Months Ended |
Six Months Ended |
|
||||||||||||
|
|
June 30, |
June 30, |
|
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenues |
|
$ |
10,412 |
|
|
$ |
28,096 |
|
|
$ |
23,086 |
|
|
$ |
33,993 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
41,592 |
|
|
|
32,332 |
|
|
|
80,991 |
|
|
|
62,322 |
|
General and administrative |
|
|
14,999 |
|
|
|
15,143 |
|
|
|
30,511 |
|
|
|
30,182 |
|
Total operating expenses |
|
|
56,591 |
|
|
|
47,475 |
|
|
|
111,502 |
|
|
|
92,504 |
|
Loss from operations |
|
|
(46,179 |
) |
|
|
(19,379 |
) |
|
|
(88,416 |
) |
|
|
(58,511 |
) |
Interest income |
|
|
2,842 |
|
|
|
197 |
|
|
|
5,402 |
|
|
|
313 |
|
Unrealized gain (loss) on equity securities |
|
|
8,321 |
|
|
|
(3,736 |
) |
|
|
1,329 |
|
|
|
(3,173 |
) |
|
Non-cash interest expense related to the sale of future royalties |
|
|
(442 |
) |
|
|
- |
|
|
|
(442 |
) |
|
|
- |
|
Interest and other income (expense), net |
|
|
(2,915 |
) |
|
|
(594 |
) |
|
|
(5,901 |
) |
|
|
(1,251 |
) |
Loss before provision for income taxes |
|
|
(38,373 |
) |
|
|
(23,512 |
) |
|
|
(88,028 |
) |
|
|
(62,622 |
) |
Provision for income taxes |
|
|
151 |
|
|
|
2,500 |
|
|
|
546 |
|
|
|
2,500 |
|
Net loss |
|
$ |
(38,524 |
) |
|
$ |
(26,012 |
) |
|
$ |
(88,574 |
) |
|
$ |
(65,122 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.64 |
) |
|
$ |
(0.55 |
) |
|
$ |
(1.49 |
) |
|
$ |
(1.39 |
) |
Weighted-average shares used in computing |
|
|
60,339,475 |
|
|
|
46,957,196 |
|
|
|
59,535,918 |
|
|
|
46,729,663 |
|
Sutro Biopharma, Inc.
Selected Balance Sheets Financial Data
(Unaudited)
(In thousands)
|
|
June 30, 2023(1) |
|
|
December 31, 2022(2) |
|
||
Assets |
|
|
|
|
|
|
|
|
Cash, cash equivalents and marketable securities |
|
$ |
358,293 |
|
|
$ |
302,344 |
|
Investment in equity securities |
|
|
33,349 |
|
|
|
32,020 |
|
Accounts receivable |
|
|
9,999 |
|
|
|
7,122 |
|
Property and equipment, net |
|
|
23,636 |
|
|
|
24,621 |
|
Operating lease right-of-use assets |
|
|
25,138 |
|
|
|
26,443 |
|
Other assets |
|
|
14,484 |
|
|
|
14,394 |
|
Total Assets |
|
$ |
464,899 |
|
|
$ |
406,944 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
$ |
32,958 |
|
|
$ |
32,822 |
|
Deferred revenue |
|
|
97,916 |
|
|
|
106,644 |
|
Operating lease liability |
|
|
32,460 |
|
|
|
34,159 |
|
Debt |
|
|
10,197 |
|
|
|
16,271 |
|
Deferred royalty obligation related to the sale of future royalties |
|
|
136,653 |
|
|
|
- |
|
Total liabilities |
|
|
310,184 |
|
|
|
189,896 |
|
Total stockholders’ equity |
|
|
154,715 |
|
|
|
217,048 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
464,899 |
|
|
$ |
406,944 |
|
(1) The condensed balance sheet as of June 30, 2023 was derived from the unaudited financial statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed with the Securities and Exchange Commission on August 10, 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.