Sutro Biopharma is undergoing a seismic shake-up—jettisoning its CEO, half of its workforce, its lead candidate and its manufacturing facility in a major bid to save cash.
The almost 50% layoffs are tied to the biotech’s move to deprioritize luveltamab tazevibulin, or luvelta for short, a FolRα-targeting antibody-drug conjugate 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.
As recently as December, Sutro was unveiling a 32% objective response rate in evaluable patients who received the 5.2-mg/kg starting dose of luvelta in the first part of the phase 2/3 ovarian cancer study.
The biotech announced the results along with a statement from a cancer specialist describing the data as “compelling evidence that luvelta has the potential to be both first in class and best in class for patients who have low to medium expression of FRα.”
But it's three months later, and Sutro said a “strategic portfolio review” had determined the “best path forward” is to instead prioritize the company’s next-gen exatecan and dual-payload ADC programs, despite none of them having yet made it into the clinic. The company will continue to explore “global out-licensing opportunities” for luvelta, it said.
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“This shift in focus will result in considerable reduction of operating costs and allow us to chart a new future for Sutro,” newly promoted CEO Jane Chung explained in a postmarket release March 14.
“We believe the programs we selected are high-value, potentially best-in-class candidates that harness our unique ability to address the most complex biology,” Chung added. “Over the next three years, we plan to file three INDs for our wholly-owned programs.”
Those programs include an exatecan tissue factor ADC, which will become Sutro’s new lead asset. The therapy is being aimed at solid tumors initially, with an IND submission expected in the second half of this year.
Behind it are an integrin beta-6 ADC expected to enter the clinic next year and a dual-payload ADC likely to see an IND submission in 2027.
The shift away from luvelta is bad news for Sutro’s workforce, with head count set to be reduced by nearly half. This will likely set the biotech back around $40 million to $45 million in redundancy-related payments, it said in a release.
The most high-profile departure is the company’s chief Bill Newell, who had “mutually agreed” with the company’s board that yesterday was “the right time to transition leadership.”
Newell is being replaced by Chung, who, until Thursday, March 13, served as Sutro’s president and chief operating officer.
The changes even extend to Sutro’s manufacturing capabilities. Sutro is now looking to leave its drug substance manufacturing facility in San Carlos, California, by the end of the year, citing the company’s significant progress in building up external capacity to manufacture its next-gen ADC portfolio.
Having entered the new year with $316.9 million to hand, Sutro said yesterday’s scale-back across various areas is set to extend the company’s cash runway into the fourth quarter of 2026. This estimate excludes possible milestone payments from the biotech’s existing collaborations with the likes of Ipsen and Astellas, which together have the potential to deliver up to $2 billion in milestones down the line.