Sutro Biopharma, Inc. (NASDAQ:STRO) is a clinical-stage oncology company developing site-specific and novel-format antibody drug conjugates (ADCs), immunostimulatory ADCs (iADCs), and other innovative therapeutic modalities enabled by its proprietary XpressCF® and XpressCF+® platforms. With a focus on addressing unmet needs in oncology, Sutro Biopharma is making strides in advancing its pipeline of product candidates, led by its most advanced asset, luvelta.
Business Overview
Sutro Biopharma was founded in 2003 and is headquartered in South San Francisco, California. The company's mission is to transform the lives of patients by creating medicines with improved therapeutic profiles for areas of unmet need. Sutro Biopharma's XpressCF® and XpressCF+® platforms allow for the rapid and systematic evaluation of protein structure-activity relationships, enabling the company to accelerate the discovery and development of potential first-in-class and/or best-in-class molecules.
Sutro Biopharma's lead product candidate, luvelta, is an ADC directed against folate receptor-alpha (FolRα) for the treatment of FolRα-expressing cancers, including ovarian cancer. The company is currently evaluating luvelta in a Phase 2/3 pivotal trial, the REFRαME-O1 study, for the treatment of platinum-resistant ovarian cancer. Additionally, Sutro Biopharma is exploring the potential of luvelta in other indications, such as endometrial cancer and pediatric acute myeloid leukemia (AML).
Financials
For the fiscal year ended December 31, 2023, Sutro Biopharma reported annual revenue of $153,731,000 and a net loss of $106,793,000. The company's annual operating cash flow was -$111,616,000, and its annual free cash flow was -$115,931,000.
In the first quarter of 2024, Sutro Biopharma generated revenue of $13,008,000, a 3% increase compared to the same period in the prior year. The company's net loss for the quarter was $58,213,000, with an operating cash flow of -$64,741,000 and free cash flow of -$64,741,000.
Sutro Biopharma's balance sheet remains strong, with $267,602,000 in cash, cash equivalents, and marketable securities as of March 31, 2024. The company believes this cash position will enable it to fund its operations through at least the next 12 months.
Luvelta: Sutro Biopharma's Lead Asset
Luvelta, Sutro Biopharma's most advanced product candidate, is an ADC directed against FolRα, a target expressed in various cancers, including ovarian and endometrial cancers. The company has designed luvelta using its proprietary XpressCF+® platform, which allows for the precise placement of linker-warheads within the antibody, aiming to improve the therapeutic index.
Sutro Biopharma is currently evaluating luvelta in the REFRαME-O1 study, a Phase 2/3 pivotal trial for the treatment of platinum-resistant ovarian cancer. The study is designed to assess the safety, tolerability, and preliminary efficacy of luvelta in this patient population. The company has also initiated additional clinical studies to explore the potential of luvelta in endometrial cancer and pediatric AML.
In January 2024, Sutro Biopharma presented an aggregated data set from its Phase 1 trials of luvelta, which included data from 99 ovarian cancer patients treated with luvelta as a monotherapy. The data showed a manageable safety profile, with the predominant treatment-emergent adverse event being neutropenia. The observed overall response rate in the subset of 43 platinum-resistant ovarian cancer patients with FolRα tumor proportion score (TPS) ≥25% was 28%, with a median duration of response of 5.7 months and a median progression-free survival of 5.8 months.
Based on these results, Sutro Biopharma has selected a FolRα TPS ≥25% as the target eligibility cutoff for the REFRαME-O1 study, as the company estimates that approximately 80% of platinum-resistant ovarian cancer patients would be eligible for luvelta treatment using this threshold.
Collaboration Agreements and Partnerships
Sutro Biopharma has established several collaboration and licensing agreements with leading pharmaceutical and biotechnology companies, leveraging its XpressCF® and XpressCF+® platforms. These partnerships include:
1. Astellas Pharma Inc.: In 2022, Sutro Biopharma entered into a collaboration with Astellas for the development of immunostimulatory ADCs (iADCs) targeting up to three biological targets.
2. Ipsen: In 2024, Sutro Biopharma licensed the exclusive rights to develop, manufacture, and commercialize its product candidate STRO-003 to Ipsen.
3. Merck: Sutro Biopharma has a collaboration with Merck focused on the development of cytokine derivatives for cancer and autoimmune disorders.
4. Vaxcyte: Sutro Biopharma's XpressCF® and XpressCF+® platforms have supported Vaxcyte's discovery and development of vaccines for the treatment and prophylaxis of infectious diseases, including Vaxcyte's lead programs, VAX-24 and VAX-31.
In June 2023, Sutro Biopharma entered into a purchase agreement with Blackstone, in which Blackstone acquired the rights to the company's 4% revenue interest in Vaxcyte's future products, including its pneumococcal conjugate vaccine (PCV) products.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Sutro Biopharma faces several risks and challenges, including:
- Successful development and regulatory approval of its product candidates, particularly luvelta, which is the company's most advanced asset.
- Ability to maintain and expand its collaboration agreements and partnerships, which are a significant source of revenue and funding.
- Potential manufacturing and supply chain disruptions, as the company relies on its own facilities and third-party contract manufacturers.
- Competition from other companies developing novel treatments and technologies in the oncology space.
- Ability to attract and retain key personnel to support the company's research, development, and commercialization efforts.
Outlook
Sutro Biopharma is well-positioned to continue its progress in the oncology space, leveraging its innovative XpressCF® and XpressCF+® platforms to advance its pipeline of product candidates. The company's lead asset, luvelta, has demonstrated promising results in its Phase 1 trials, and the ongoing REFRαME-O1 study is expected to provide further insights into the potential of this ADC in the treatment of platinum-resistant ovarian cancer.
Sutro Biopharma's collaborations with industry leaders, such as Astellas, Ipsen, Merck, and Vaxcyte, further validate the company's technology and provide additional resources and expertise to support the development and commercialization of its product candidates.
Conclusion
While Sutro Biopharma faces the typical risks and challenges associated with a clinical-stage biopharmaceutical company, the company's strong financial position, innovative platforms, and promising pipeline of product candidates position it well for continued growth and value creation for its shareholders.