The layoffs aren’t letting up at Sutro Biopharma. After halving the antibody-drug conjugate (ADC) biotech’s head count in the spring, the company is waving goodbye to a third of its remaining workforce in the fall.
The first wave of layoffs in March were tied to Sutro’s move to deprioritize luveltamab tazevibulin, a FolRα-targeting ADC that Sutro has been evaluating in a phase 2/3 trial for platinum-resistant ovarian cancer, as well as a phase 2 study in non-small cell lung cancer and a registration-enabling trial for pediatric patients with a type of acute myeloid leukemia.
At the time, Sutro said a “strategic portfolio review” had determined the “best path forward” was to prioritize the company’s next-gen exatecan and dual-payload ADC programs, despite none of them having yet made it into the clinic.
Last month brought bad news via Ipsen’s decision to back out of an $875 million deal for Sutro’s ROR1-directed ADC, citing the “review of new data and developments in the ROR1 landscape.” Sutro told Fierce that the company had no plans to develop the drug internally.
Since then, the primary focus has been on STRO-004, a Tissue Factor-targeting exatecan ADC that is still anticipated to enter the clinic later this year. Sutro will also continue to work on two other preclinical ADCs, including an integrin beta-6 candidate, and referenced plans to take one of these into human trials by 2027.
“After continued review of our business and pipeline priorities, we have identified and are implementing further operational efficiencies to focus our resources where they will have the greatest impact,” said CEO Jane Chung, who took over from previous CEO Bill Newell in March.
“We remain on track to advance STRO-004 into the clinic this year, with initial data expected in 2026,” added Chung. “Importantly, these changes extend our expected financial runway through critical milestones and strengthen our ability to create value for both patients and shareholders.”
The company ended June with $205.1 million to hand, which Sutro had previously expected to last into “early 2027.” The additional reorganization outlined yesterday should eke out this cash into the middle of that year, allowing for an initial readout from the planned phase 1 study of STRO-004 as well as the launch of a trial for one of its other two ADCs.