Sutro Biopharma, Inc. (NASDAQ: STRO), a clinical-stage drug discovery, growth, and manufacturing company focused on the application of precise protein engineering and rational design to create next-generation oncology therapeutics, recently stated its financial results for the year finished December 31, 2K18.
“This last year was a landmark one for Sutro. Our initial clinical trial for our first internal program, STRO-001 for the treatment of patients with multiple myeloma and non-Hodgkin’s lymphoma, begind in April 2K18.
Importantly, we also advanced our second clinical program, STRO-002 for the treatment of ovarian and endometrial cancers, to its clinical trial initiation in March 2K19. On the business front, we entered a remarkable partnership with Merck and accomplished our IPO in the second half of 2K18,” said Bill Newell, Sutro’s CEO. “In 2K19, we look forward to the continued advancement of our internal programs, while working with our partners on progressing the partnership product candidates.”
Recent Business Highlights and Growths
STRO-001 Clinical Program
- Potential first-in-class and best-in-class antibody-drug conjugate (ADC) directed against CD74, which is highly expressed in many B cell malignancies
- Phase 1 dose-escalation, with dose expansion, clinical trial enrolling patients with multiple myeloma and non-Hodgkin’s lymphoma, with initial safety data expected to be presented at the European Hematology Association Congress in June 2K19 and initial efficacy data expected by year-end 2K19
- STRO-001 granted Orphan Drug Designation by the U.S. Food and Drug Administration (FDA) for the treatment of multiple myeloma
STRO-002 Clinical Program
- Potential best-in-class ADC directed against folate receptor-alpha, which is highly expressed in ovarian cancer
- Phase 1 dose-escalation, with dose expansion, clinical trial enrolling women with advanced ovarian and endometrial cancers, with initial safety data expected by year-end 2K19
- The partnership and licensing agreement with Merck signed in July 2K18 to discover and develop novel immune-modulating therapies for cancer and autoimmune disorders
- Initial public offering (IPO) that closed on October 1, 2K18, offered Sutro with gross proceeds of $85.0M, before deducting underwriting discounts and commissions and offering costs. In Addition To, Sutro received proceeds of $10.0M from Merck in a private placement of common stock concurrent with the IPO
Full Year 2K18 Financial Highlights
Cash, Cash Equivalents and Marketable Securities
As of December 31, 2K18, Sutro had cash, cash equivalents and marketable securities of $204.5M.
Revenue was $38.4M for the year finished December 31, 2K18, which included partnership revenue of $32.4Mrecognized mainly from Celgene, Merck and EMD Serono, in addition to other revenue of $6.0M. Throughout the 3rd and 4th quarters of 2K18, Sutro began recording revenue from Merck, mainly from the $60.0M upfront payment received by Sutro under the July 2K18 partnership and licensing agreement, which revenue will be recognized over multiple years. Future partnership revenue from Celgene, Merck and EMD Serono, and from any future partnership partners, will fluctuate as a result of the amount and timing of revenue recognition of upfront, milestones and other partnership agreement payments.
Wholeoperating costs for the year finished December 31, 2K18, were $75.6M contrast with $71.0M for the same period in 2K17, counting non-cash stock-based compensation of $2.9M and $1.4M, and depreciation and amortization cost of $4.5M and $5.0M, in the year 2K18 and 2K17, respectively.
Whole operating costs for the year 2K18 were comprised of research and growth costs of $54.3M and general and administrative costs of $21.4M, with both cost types expected to raise in 2K19 as Sutro’s internal product candidates advance in clinical growth and additional general and administrative costs are incurred as a public company following its IPO that closed on October 1, 2K18.
Net Loss Per Share Calculation
Sutro financial statements following September 30, 2K18, counting share and per share amounts, give effect to common stock shares issued in the IPO and the Merck concurrent private placement, and common stock from the conversions of Sutro’s formerly outstanding redeemable convertible preferred stock, as these transactions were accomplished on October 1, 2K18.