Surrozen(SRZN) - 2025 Q2 - Quarterly Results

Company Overview and Q2 2025 Highlights Company Profile and Strategic Focus Surrozen is a biotechnology company focused on tissue repair and regeneration through selective Wnt pathway modulation, currently concentrating on severe ophthalmic diseases and leveraging its Wnt biology expertise and antibody technology to develop novel therapies - Surrozen is a biotechnology company dedicated to tissue repair and regeneration by selectively modulating the Wnt pathway, primarily focusing on severe ophthalmic diseases[1][16] - The company leverages its Wnt biology expertise and antibody technology to develop novel therapies for severe ophthalmic diseases[2] Second Quarter 2025 Business Highlights Surrozen achieved significant business progress in Q2 2025, including advancing its ophthalmic pipeline (SZN-8141 and SZN-8143), securing a key patent for SWAP™ technology, and strengthening its leadership team and expert guidance through a VP appointment and clinical advisory board formation - Ophthalmic pipeline progress: SZN-8141 and SZN-8143 continue to advance, with the IND application for SZN-8141 expected in 2026[3] - Patent approval: In May 2025, the company was granted U.S. Patent No. 12,297,278, covering its SWAP™ technology for creating multi-specific Wnt mimetic molecules, enhancing intellectual property support for SZN-8141 and SZN-8143[3] - Key leadership appointment: In July 2025, Dr. Daniel Chao was appointed Vice President and Head of Clinical Development, bringing over 15 years of ophthalmic research and drug development experience to the company[3] - Clinical Advisory Board formed: Composed of leading ophthalmologists and retina specialists, aiming to guide the clinical development of the ophthalmic pipeline[8] - Scientific presentations: Preclinical data for SZN-8141 and SZN-8143 were presented at the 2025 ARVO Annual Meeting and Clinical Trials at the Summit, highlighting their ability to stimulate Wnt signaling to promote normal retinal vascular regeneration and inhibit pathological angiogenesis[8] Second Quarter 2025 Financial Highlights Surrozen achieved $39.7 million in net income in Q2 2025, a significant improvement from a net loss in Q2 2024, primarily due to gains from fair value changes in tranche liability and increased other income, with cash and cash equivalents at $90.4 million as of June 30, 2025 Key Financial Highlights for Q2 2025 | Metric | Q2 2025 | Q1 2025 (Cash) | Q2 2024 | YoY Change (Q2) | | :-------------------------------- | :---------- | :--------------- | :---------- | :---------------- | | Cash and Cash Equivalents | $90.4 million | $101.6 million | N/A | QoQ decrease of $11.2 million | | Related Party Research Services Revenue | $1.0 million | N/A | $0 | YoY increase of $1.0 million | | Net Income (Loss) | $39.7 million | N/A | ($25.3 million) | YoY increase of $65.0 million | | Net Income (Loss) Per Share | $2.55 | N/A | ($7.99) | YoY increase of $10.54 | Ophthalmology Pipeline and Strategic Developments Ophthalmology Portfolio Overview Surrozen's ophthalmic portfolio includes SZN-8141, SZN-8143, and SZN-413, all designed to modulate the Wnt pathway for retinal diseases, aiming to offer differentiated benefits over existing anti-VEGF monotherapies by promoting normal vascular regeneration and inhibiting pathological angiogenesis - The product portfolio includes SZN-8141, SZN-8143, and SZN-413, all targeting retinal diseases by modulating the Wnt pathway[11][14][15] - Aims to provide differentiated benefits over existing anti-VEGF monotherapies by promoting normal vascular regeneration and inhibiting pathological angiogenesis[11][14] About SZN-8141 for Retinal Diseases SZN-8141 is a dual-action candidate combining Frizzled 4 (Fzd4) agonism and vascular endothelial growth factor (VEGF) antagonism, designed to treat diabetic macular edema (DME) and neovascular age-related macular degeneration (wet AMD), with preclinical data showing it stimulates Wnt signaling, induces normal retinal vascular regeneration, and inhibits pathological angiogenesis - SZN-8141 combines Fzd4 agonism and VEGF antagonism, potentially offering benefits superior to monotherapy for DME and wet AMD[11] - Preclinical data indicate SZN-8141 stimulates Wnt signaling, induces normal retinal vascular regeneration, and inhibits pathological angiogenesis[13] About SZN-8143 for Retinal Diseases SZN-8143 is a triple-action candidate combining Fzd4 agonism, VEGF antagonism, and interleukin-6 (IL-6) antagonism, potentially beneficial for DME, wet AMD, and uveitic macular edema (UME), with preclinical studies showing it stimulates Wnt signaling, promotes normal retinal vascular regeneration, and inhibits pathological angiogenesis - SZN-8143 combines Fzd4 agonism, VEGF antagonism, and IL-6 antagonism, potentially benefiting the treatment of DME, wet AMD, and UME[14] - Preclinical data indicate SZN-8143 stimulates Wnt signaling, induces normal retinal vascular regeneration, and inhibits pathological angiogenesis[14] About SZN-413 for Retinal Diseases SZN-413 is a bispecific antibody designed using Surrozen's SWAP™ technology, targeting Fzd4-mediated Wnt signaling for retinal vascular diseases, with preclinical data showing it effectively stimulates ocular Wnt signaling, induces normal retinal vascular regeneration, inhibits pathological angiogenesis, and reduces vascular leakage, potentially leading to healthy ocular tissue regeneration and disease reversal - SZN-413 is a bispecific antibody designed using SWAP™ technology, targeting Fzd4-mediated Wnt signaling for retinal vascular diseases[15] - Preclinical data show SZN-413 effectively stimulates Wnt signaling, induces normal retinal vascular regeneration, inhibits pathological angiogenesis, and reduces vascular leakage[15] - This novel approach may enable healthy ocular tissue regeneration, not only halting retinal pathology but potentially fully reversing patients' diseases[15] Strategic Business Developments Surrozen solidified its strategic position by securing key patents, appointing crucial leadership, forming a clinical advisory board, and presenting preclinical data at major scientific conferences, accelerating the clinical development of its ophthalmic pipeline Patent Issuance In May 2025, Surrozen was granted U.S. Patent No. 12,297,278, covering its SWAP™ technology for creating multi-specific Wnt mimetic molecules, thereby strengthening intellectual property support for SZN-8141 and SZN-8143 - In May 2025, the company was granted U.S. Patent No. 12,297,278, covering its SWAP™ technology[3] - This patent is for creating multi-specific Wnt mimetic molecules and strengthens intellectual property support for SZN-8141 and SZN-8143[3] Key Leadership Appointment In July 2025, Dr. Daniel Chao was appointed Vice President and Head of Clinical Development; he is an experienced retina specialist and physician-scientist with over 15 years of ophthalmic research and drug development experience, having previously served at ADARx Pharmaceuticals and Johnson and Johnson - Dr. Daniel Chao was appointed Vice President and Head of Clinical Development in July 2025[3] - He is an experienced retina specialist and physician-scientist with over 15 years of ophthalmic research and drug development experience[3] - Previously held leadership roles at ADARx Pharmaceuticals and Johnson and Johnson[3] Clinical Advisory Board Formation Surrozen established a Clinical Advisory Board comprising leading ophthalmologists and retina specialists, including Dr. Jeffrey Heier, Dr. Arshad Khanani, Dr. Carl Regillo, and Dr. Charles Wykoff, to provide expert guidance for the clinical development of the company's ophthalmic pipeline - The company formed a Clinical Advisory Board consisting of leading ophthalmologists and retina specialists[8] - Board members include Dr. Jeffrey Heier, Dr. Arshad Khanani, Dr. Carl Regillo, and Dr. Charles Wykoff[8] - The board's expertise is expected to accelerate the progression of Surrozen's drug candidates into clinical trials[8] Scientific Presentations Surrozen presented preclinical data for SZN-8141 and SZN-8143 at the 2025 ARVO Annual Meeting and Clinical Trials at the Summit, highlighting these candidates' ability to promote normal retinal vascular regeneration and inhibit pathological angiogenesis through Wnt signaling stimulation - Preclinical data for SZN-8141 and SZN-8143 were presented at the 2025 ARVO Annual Meeting and Clinical Trials at the Summit[8] - The presentations highlighted the candidates' ability to promote normal retinal vascular regeneration and inhibit pathological angiogenesis through Wnt signaling stimulation[8] Detailed Financial Performance Unaudited Condensed Consolidated Statements of Operations In Q2 2025, Surrozen achieved $39.7 million in net income, a significant improvement from a $25.3 million net loss in Q2 2024, primarily driven by a $31.5 million gain from fair value changes in tranche liability and increased other income; R&D and G&A expenses both grew, while related party research services revenue increased from zero to $0.983 million Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (thousand USD) | Q2 2025 | Q2 2024 | Year-over-Year Change | | :------------------------------------------------ | :------ | :------ | :--------- | | Related Party Research Services Revenue | $983 | $0 | +$983 | | Research and Development Expenses | $6,042 | $5,335 | +$707 | | General and Administrative Expenses | $3,958 | $3,714 | +$244 | | Total Operating Expenses | $10,000 | $9,049 | +$951 | | Operating Loss | ($9,017) | ($9,049) | +$32 | | Interest Income | $1,025 | $490 | +$535 | | Loss on Issuance of 2024 PIPE Common Stock, Prepaid Warrants and Warrants | $0 | ($20,397) | +$20,397 | | Gain from Fair Value Change of Tranche Liability | $31,520 | $0 | +$31,520 | | Other Income, Net | $16,218 | $3,695 | +$12,523 | | Net Income (Loss) | $39,746 | ($25,261) | +$65,007 | | Net Income (Loss) Per Share | $2.55 | ($7.99) | +$10.54 | | Weighted Average Shares Outstanding | 8,541 | 3,162 | +5,379 | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric (thousand USD) | H1 2025 | H1 2024 | Year-over-Year Change | | :------------------------------------------------ | :------ | :------ | :--------- | | Related Party Research Services Revenue | $1,966 | $0 | +$1,966 | | Research and Development Expenses | $12,600 | $10,582 | +$2,018 | | General and Administrative Expenses | $7,934 | $7,597 | +$337 | | Total Operating Expenses | $20,534 | $18,179 | +$2,355 | | Operating Loss | ($18,568) | ($18,179) | -$389 | | Interest Income | $1,321 | $875 | +$446 | | Loss on Issuance of 2024 PIPE Common Stock, Prepaid Warrants and Warrants | $0 | ($20,397) | +$20,397 | | Loss on 2025 PIPE Execution | ($71,084) | $0 | -$71,084 | | Gain from Fair Value Change of Tranche Liability | $47,860 | $0 | +$47,860 | | Other Income, Net | $54,203 | $3,610 | +$50,593 | | Net Income (Loss) | $12,776 | ($34,091) | +$46,867 | | Net Income (Loss) Per Share | $0.85 | ($13.00) | +$13.85 | | Weighted Average Shares Outstanding | 6,098 | 2,622 | +3,476 | Condensed Consolidated Balance Sheets As of June 30, 2025, Surrozen's total assets significantly increased to $102.7 million from $48.5 million on December 31, 2024, primarily due to cash and cash equivalents rising to $90.4 million; total liabilities decreased to $55.6 million, while stockholders' equity shifted from a $21.4 million deficit to a positive $47.1 million Condensed Consolidated Balance Sheets (As of June 30, 2025 vs. December 31, 2024) | Metric (thousand USD) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :------- | | Cash and Cash Equivalents | $90,390 | $34,565 | +$55,825 | | Total Current Assets | $94,235 | $38,932 | +$55,303 | | Total Assets | $102,696 | $48,467 | +$54,229 | | Total Current Liabilities | $5,743 | $7,315 | -$1,572 | | Tranche Liability | $10,903 | $0 | +$10,903 | | Warrant Liability | $32,620 | $55,892 | -$23,272 | | Total Liabilities | $55,582 | $69,847 | -$14,265 | | Total Stockholders' Equity (Deficit) | $47,114 | ($21,380) | +$68,494 | Forward-Looking Statements This section outlines the uncertainties and risks inherent in Surrozen's forward-looking statements, which cover product candidate plans, clinical development timelines, and potential market benefits; actual results may differ significantly due to factors like R&D costs, financing capabilities, regulatory conditions, and risks detailed in SEC filings, and Surrozen undertakes no obligation to update these statements unless legally required - Forward-looking statements cover Surrozen's discovery and R&D activities, particularly its product candidate development plans, including anticipated clinical development plans and timelines, data availability, the potential of such product candidates to treat human diseases or address unmet needs in severe ophthalmic conditions, and their potential benefits and differentiation from existing therapies[17] - These statements are based on various assumptions and management's current expectations, are not predictions of actual performance, and should not be considered guarantees or definitive statements of fact[18] - Forward-looking statements are subject to various risks and uncertainties, including the initiation, cost, timing, progress, and results of R&D activities, and the company's ability to fund clinical trials and development efforts[18] - Unless required by law, Surrozen expressly disclaims any obligation to update these forward-looking statements in the future[18] Investor/Media Contact This section provides contact information for investor and media inquiries, directing to the company's dedicated email address - Investor/Media Contact Email: Investorinfo@surrozen.com[19]