Surrozen(SRZN) - 2025 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2025, total revenue decreased by $9.0 million, or 90%, to $0.983 million compared to $10.0 million in the same period of 2024[119] - The net loss for the three months ended September 30, 2025, was $71.6 million, compared to a net loss of $1.4 million in the same period of 2024, representing a decrease of $70.2 million[119] - Collaboration and license revenue dropped by $10.0 million, or 100%, for the three months ended September 30, 2025, due to the recognition of a milestone achieved in September 2024[120] - Total revenue for the nine months ended September 30, 2025, was $2.949 million, a decrease of $7.051 million, or 71%, from $10.0 million in 2024[127] - Net loss for the nine months ended September 30, 2025, was $58.867 million, an increase of $23.342 million, or 66%, compared to a net loss of $35.525 million in 2024[127] Expenses - Research and development expenses increased by $2.6 million, or 50%, to $7.8 million for the three months ended September 30, 2025, primarily due to increased manufacturing costs and lab expenses[122] - General and administrative expenses rose by $0.5 million, or 15%, to $4.1 million for the three months ended September 30, 2025, mainly due to higher professional service fees[123] - Research and development expenses increased by $4.6 million, or 29%, for the nine months ended September 30, 2025, primarily due to increased manufacturing costs and consulting fees[130] - General and administrative expenses rose by $0.9 million, or 8%, for the nine months ended September 30, 2025, mainly due to higher professional service fees[131] Cash and Financing Activities - As of September 30, 2025, the accumulated deficit was $344.1 million, with cash and cash equivalents of $81.3 million[115] - Cash used in operating activities was $24.432 million for the nine months ended September 30, 2025, compared to $21.109 million in 2024[148] - Cash provided by financing activities was $71.3 million for the nine months ended September 30, 2025, primarily from the issuance and sale of common stock, pre-funded warrants, and warrants in the 2025 PIPE[151] - The company entered into a sales agreement to issue and sell up to $50.0 million of shares of common stock under the 2025 ATM program, with no shares sold as of September 30, 2025[140] Future Outlook and Strategic Initiatives - The company expects to incur increased expenses as it expands its pipeline and advances product candidates through clinical development[116] - SZN-8141 and SZN-8143 were nominated as development candidates for retinal diseases, with clinical studies expected to commence in 2026[106][108] - The Research Collaboration Agreement with TCGFB, Inc. is set to terminate effective November 13, 2025, following TCGFB's notice of termination[141] Economic and Regulatory Considerations - Inflation is expected to continue increasing, potentially leading to higher labor and research costs, which may adversely affect the company's financial condition[157] - The company is currently evaluating the potential impact of tariffs imposed on imports, particularly as its contract manufacturing organization is located in the United Kingdom[158] - The company intends to rely on exemptions and reduced reporting requirements provided by the JOBS Act, which may affect the comparability of its financial statements[154] - The company remains an emerging growth company under the JOBS Act until the earliest of the last day of the fiscal year 2025 or when total annual gross revenue reaches at least $1.235 billion[155] Accounting and Compliance - The company is assessing the impact of recent accounting pronouncements on its financial statements[156] - Contractual obligations as of September 30, 2025, have not materially changed since December 31, 2024[152] Intellectual Property - The company is focused on maintaining and expanding its intellectual property portfolio, which includes costs associated with licensing and patent enforcement[150] Other Income and Expenses - Interest income increased by $0.5 million, or 111%, to $0.911 million for the three months ended September 30, 2025, attributed to a rise in cash and cash equivalents[124] - Other expense, net increased by $17.8 million for the three months ended September 30, 2025, primarily due to the noncash change in fair value of warrant liabilities[126] - Interest income increased by $1.9 million, or 71%, for the nine months ended September 30, 2025, attributed to a rise in cash and cash equivalents[132]