Sutro Biopharma(STRO) - 2025 Q2 - Quarterly Results

Overview and Strategic Highlights Sutro advanced its ADC pipeline in Q2 2025, preparing for STRO-004 clinical trials and validating its dual-payload platform, supported by a strong cash position into early 2027 - On track to initiate a first-in-human (FIH) study for STRO-004, a potential best-in-class Tissue Factor ADC, in the second half of 2025[2] - Advancing dual-payload ADCs, with an IND-enabling toxicology study initiated for the first candidate under the Astellas collaboration, validating the platform's potential[2] - Appointed industry veteran Greg Chow as the new Chief Financial Officer[2][9] - As of June 30, 2025, the company holds $205.1 million in cash, cash equivalents, and marketable securities, with a projected cash runway into early 2027[2][7] Pipeline and Collaboration Updates Sutro is advancing its wholly-owned pipeline, including STRO-004 and STRO-006, while progressing the Astellas collaboration and discontinuing the Ipsen partnership without financial impact Wholly-Owned Pipeline Sutro is advancing its wholly-owned ADC pipeline, with STRO-004 nearing clinical trials in H2 2025, STRO-006 planned for 2026, and a dual-payload IND filing anticipated in 2027 - STRO-004: IND preparations are underway for a first-in-human basket trial to begin in H2 2025, with a favorable preclinical safety profile in cynomolgus monkeys up to 50 mg/kg[3] - STRO-006: A differentiated integrin beta-6 (ITGB6) ADC is expected to enter clinical development in 2026 for the treatment of multiple solid tumors[3] - Dual-Payload Program: The company's wholly-owned dual-payload ADC platform is progressing, with an IND filing anticipated in 2027[3] Next-Generation ADC Collaborations The Astellas collaboration advanced with a $7.5 million milestone payment, while Ipsen discontinued the STRO-003 program without impacting Sutro's cash runway - Astellas collaboration: A program for a dual-payload immunostimulatory ADC (iADC) entered an IND-enabling toxicology study, resulting in a $7.5 million milestone payment to Sutro[3][4] - Ipsen partnership: Ipsen made a strategic decision not to advance the STRO-003 program, a decision that does not impact Sutro's previously stated cash runway guidance[4] Corporate and Scientific Updates Sutro appointed a new CFO, initiated an FDA research collaboration for ADC standards, and presented positive preclinical data for pipeline candidates at major conferences - Entered a research collaboration with the U.S. FDA in July to develop reference materials and enhance analytical methods for ADC drug development[9] - Presented positive preclinical data at several key conferences, including World ADC Asia Summit (dual-payload ADCs), PEGS Boston Summit (STRO-006), and AACR Annual Meeting (STRO-004 and dual-payload programs)[8] - Management will participate in the upcoming Wells Fargo Healthcare Conference from September 3-5, 2025[6] Second Quarter 2025 Financial Results Q2 2025 saw a significant revenue increase to $63.7 million and a narrowed net loss of $11.5 million, driven by collaboration revenue and a strong cash position extending into early 2027 Financial Position and Liquidity As of June 30, 2025, Sutro held $205.1 million in cash and equivalents, projecting a cash runway into early 2027 due to this balance and cost reductions Cash, Cash Equivalents and Marketable Securities (in millions USD) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Cash, Cash Equivalents and Marketable Securities | $205.1 | $249.0 | - The company's expected cash runway extends into early 2027, excluding potential future milestones from existing collaborations[7] Statement of Operations Analysis Q2 2025 revenue surged to $63.7 million from collaborations, while total operating expenses decreased to $67.1 million despite $18.4 million in restructuring costs, resulting in a net loss of $11.5 million or $0.14 per share - Revenue growth was principally related to the Astellas collaboration and the recognition of previously deferred revenue from the Ipsen partnership[8][10] - The company incurred $18.4 million in restructuring and related costs during the quarter, primarily for the deprioritization of the luvelta program[12] Statement of Operations (in thousands USD, except per share) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $63,745 | $25,706 | +148.0% | | R&D Expenses | $38,325 | $62,020 | -38.2% | | G&A Expenses | $10,343 | $12,371 | -16.4% | | Total Operating Expenses | $67,090 | $74,391 | -9.8% | | Net Loss | $(11,499) | $(48,018) | +76.1% (Improvement) | | Net Loss Per Share | $(0.14) | $(0.59) | +76.3% (Improvement) | Balance Sheet Analysis As of June 30, 2025, total assets were $262.4 million, total liabilities $294.5 million, and stockholders' deficit $32.1 million, a shift from year-end 2024 equity of $44.6 million due to changes in deferred revenue and royalty obligations Balance Sheet (in thousands USD) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $262,355 | $387,207 | | Deferred Revenue | $18,870 | $82,319 | | Total Liabilities | $294,466 | $342,606 | | Total Stockholders' (Deficit) Equity | $(32,111) | $44,601 |