[Overview and Strategic Highlights](index=1&type=section&id=Overview%20and%20Strategic%20Highlights) Sutro advanced its ADC pipeline in Q2 2025, preparing for STRO-004 clinical trials and validating its dual-payload platform, supported by a strong cash position into early 2027 - On track to initiate a first-in-human (FIH) study for **STRO-004**, a potential best-in-class Tissue Factor ADC, in the **second half of 2025**[2](index=2&type=chunk) - Advancing **dual-payload ADCs**, with an IND-enabling toxicology study initiated for the first candidate under the **Astellas collaboration**, validating the platform's potential[2](index=2&type=chunk) - Appointed industry veteran **Greg Chow** as the new **Chief Financial Officer**[2](index=2&type=chunk)[9](index=9&type=chunk) - As of June 30, 2025, the company holds **$205.1 million** in cash, cash equivalents, and marketable securities, with a projected cash runway into **early 2027**[2](index=2&type=chunk)[7](index=7&type=chunk) [Pipeline and Collaboration Updates](index=1&type=section&id=Pipeline%20and%20Collaboration%20Updates) Sutro is advancing its wholly-owned pipeline, including STRO-004 and STRO-006, while progressing the Astellas collaboration and discontinuing the Ipsen partnership without financial impact [Wholly-Owned Pipeline](index=1&type=section&id=Wholly-Owned%20Pipeline) Sutro is advancing its wholly-owned ADC pipeline, with STRO-004 nearing clinical trials in H2 2025, STRO-006 planned for 2026, and a dual-payload IND filing anticipated in 2027 - **STRO-004**: IND preparations are underway for a first-in-human basket trial to begin in **H2 2025**, with a favorable preclinical safety profile in cynomolgus monkeys up to **50 mg/kg**[3](index=3&type=chunk) - **STRO-006**: A differentiated integrin beta-6 (ITGB6) ADC is expected to enter clinical development in **2026** for the treatment of multiple solid tumors[3](index=3&type=chunk) - **Dual-Payload Program**: The company's wholly-owned dual-payload ADC platform is progressing, with an IND filing anticipated in **2027**[3](index=3&type=chunk) [Next-Generation ADC Collaborations](index=1&type=section&id=Next-Generation%20ADC%20Collaborations) The Astellas collaboration advanced with a **$7.5 million** milestone payment, while Ipsen discontinued the STRO-003 program without impacting Sutro's cash runway - **Astellas collaboration**: A program for a dual-payload immunostimulatory ADC (iADC) entered an IND-enabling toxicology study, resulting in a **$7.5 million** milestone payment to Sutro[3](index=3&type=chunk)[4](index=4&type=chunk) - **Ipsen partnership**: Ipsen made a strategic decision not to advance the **STRO-003** program, a decision that does not impact Sutro's previously stated cash runway guidance[4](index=4&type=chunk) [Corporate and Scientific Updates](index=2&type=section&id=Corporate%20and%20Scientific%20Updates) Sutro appointed a new CFO, initiated an FDA research collaboration for ADC standards, and presented positive preclinical data for pipeline candidates at major conferences - Entered a research collaboration with the **U.S. FDA** in July to develop reference materials and enhance analytical methods for ADC drug development[9](index=9&type=chunk) - Presented positive preclinical data at several key conferences, including **World ADC Asia Summit** (dual-payload ADCs), **PEGS Boston Summit** (STRO-006), and **AACR Annual Meeting** (STRO-004 and dual-payload programs)[8](index=8&type=chunk) - Management will participate in the upcoming **Wells Fargo Healthcare Conference** from September 3-5, 2025[6](index=6&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Q2 2025 saw a significant revenue increase to **$63.7 million** and a narrowed net loss of **$11.5 million**, driven by collaboration revenue and a strong cash position extending into early 2027 [Financial Position and Liquidity](index=2&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2025, Sutro held **$205.1 million** in cash and equivalents, projecting a cash runway into early 2027 due to this balance and cost reductions Cash, Cash Equivalents and Marketable Securities (in millions USD) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Cash, Cash Equivalents and Marketable Securities | $205.1 | $249.0 | - The company's expected cash runway extends into **early 2027**, excluding potential future milestones from existing collaborations[7](index=7&type=chunk) [Statement of Operations Analysis](index=2&type=section&id=Statement%20of%20Operations%20Analysis) Q2 2025 revenue surged to **$63.7 million** from collaborations, while total operating expenses decreased to **$67.1 million** despite **$18.4 million** in restructuring costs, resulting in a net loss of **$11.5 million** or **$0.14 per share** - Revenue growth was principally related to the **Astellas collaboration** and the recognition of previously deferred revenue from the **Ipsen partnership**[8](index=8&type=chunk)[10](index=10&type=chunk) - The company incurred **$18.4 million** in restructuring and related costs during the quarter, primarily for the deprioritization of the **luvelta program**[12](index=12&type=chunk) Statement of Operations (in thousands USD, except per share) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $63,745 | $25,706 | +148.0% | | R&D Expenses | $38,325 | $62,020 | -38.2% | | G&A Expenses | $10,343 | $12,371 | -16.4% | | Total Operating Expenses | $67,090 | $74,391 | -9.8% | | Net Loss | $(11,499) | $(48,018) | +76.1% (Improvement) | | Net Loss Per Share | $(0.14) | $(0.59) | +76.3% (Improvement) | [Balance Sheet Analysis](index=5&type=section&id=Balance%20Sheet%20Analysis) As of June 30, 2025, total assets were **$262.4 million**, total liabilities **$294.5 million**, and stockholders' deficit **$32.1 million**, a shift from year-end 2024 equity of **$44.6 million** due to changes in deferred revenue and royalty obligations Balance Sheet (in thousands USD) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $262,355 | $387,207 | | Deferred Revenue | $18,870 | $82,319 | | Total Liabilities | $294,466 | $342,606 | | Total Stockholders' (Deficit) Equity | $(32,111) | $44,601 |

Core Insights - Sutro Biopharma is advancing its pipeline of novel antibody-drug conjugates (ADCs), with plans to initiate a first-in-human trial for STRO-004 in the second half of 2025, targeting solid tumors [1][6] - The company has generated significant preclinical data supporting the potential of its ADC candidates, particularly in the dual-payload ADCs, which are seen as transformative for cancer treatment [2][6] - Sutro has entered a research collaboration with the FDA to enhance regulatory standards for ADCs, indicating a commitment to improving drug development processes [1][14] Financial Highlights - As of June 30, 2025, Sutro reported cash, cash equivalents, and marketable securities totaling $205.1 million, down from $249.0 million as of March 31, 2025, providing a cash runway into early 2027 [1][9] - Revenue for the second quarter of 2025 was $63.7 million, a significant increase from $25.7 million in the same quarter of 2024, primarily driven by the Astellas collaboration [10] - Total operating expenses for the quarter were $67.1 million, a decrease from $74.4 million in the prior year, with R&D expenses at $38.4 million and G&A expenses at $10.3 million [11][18] Pipeline Developments - STRO-004 is on track for a clinical trial initiation in the second half of 2025, with a favorable preclinical safety profile observed [6][7] - STRO-006, targeting integrin beta-6, is expected to enter clinical development in 2026 for multiple solid tumors [6] - The dual-payload ADC program is progressing, with an IND filing anticipated in 2027, and a collaboration with Astellas has led to a $7.5 million milestone payment [6][10] Corporate Updates - Greg Chow has been appointed as Chief Financial Officer, indicating a strengthening of the management team [1][14] - The company is focused on implementing operational efficiencies to extend its cash runway while prioritizing pipeline execution to enhance shareholder value [2]

Core Insights - Sutro Biopharma has entered a collaboration with the FDA to develop reference materials aimed at improving regulatory standards and analytical methods for antibody drug conjugates (ADCs) [1][2] - The collaboration will utilize Sutro's cell-free XpressCF technology to engineer ADCs with specific attributes, enhancing the FDA's analytical capabilities for ADC characterization [1][2] Company Overview - Sutro Biopharma focuses on the discovery and development of precisely designed cancer therapeutics, leveraging its cell-free XpressCF technology to improve patient outcomes [3] - The company is advancing a robust early-stage pipeline of novel exatecan and dual-payload ADCs, supported by high-value collaborations and industry partnerships [3]

Sutro Biopharma (STRO) Conference Call Summary Company Overview - **Company**: Sutro Biopharma (STRO) - **Industry**: Biotechnology, specifically focusing on Antibody-Drug Conjugates (ADCs) Key Points and Arguments Strategic Reprioritization - Sutro Biopharma is undergoing a strategic reprioritization to maximize the value of its unique ADC platform, emphasizing the optimization of all components from antibody to linker to payload [3][5][9] Technology and Product Differentiation - The company has made significant improvements in product design and manufacturing, particularly with a proprietary beta glucuronidase linker that cleaves more in tumors and less outside, reducing toxicities like neutropenia [6][9] - Sutro's platform allows for the combination of multiple payloads, enhancing the ability to target complex biological systems, which is referred to as "protein engineering on steroids" [7][8][9] Pipeline and Clinical Programs - Sutro plans to deliver three Investigational New Drug (IND) applications over the next three years, with a focus on: 1. Tissue Factor Program (DAR8 exatecan) 2. Integrin Beta-Six Program (DAR8 exatecan) 3. Dual Payload ADCs [12][14] - The Tissue Factor program is highlighted as the lead, showing a 50-fold increase in exposure compared to existing approved agents, with a high non-severe toxic dose (HNSTD) of 50 mg/kg [16][18] Safety and Efficacy - Sutro's ADCs are designed to avoid engaging Fc gamma receptors, which helps in reducing ocular toxicities associated with other ADCs [21][22] - The company aims to demonstrate clinical differentiation through higher dosing and improved safety profiles compared to existing therapies [18][41] Competitive Landscape - Sutro is positioning itself against competitors by focusing on the safety and efficacy of its ADCs, particularly in lung cancer, where it aims to avoid introducing lung toxicity [42][43] - The company is also exploring the potential of dual payload ADCs to overcome resistance seen in single payload therapies, which is a growing area of interest in the industry [50][55] Partnerships and Financial Outlook - Sutro has strategic collaborations with Ipsen and Astellas, which could provide up to $2 billion in potential milestones and royalties [71] - As of Q1, Sutro reported cash reserves of approximately $250 million, extending its runway into early 2027, not including anticipated milestones from collaborations [72] Future Directions - Sutro is committed to advancing its dual payload ADCs, with an IND expected in 2027, and is actively working on preclinical models to establish the safety and efficacy of these new therapies [61][64] Additional Important Information - The decision to deprioritize the Ryvelta program was based on strategic considerations rather than safety or data issues, indicating a shift towards next-generation products [67][68] - The company is focused on addressing unmet needs in oncology, particularly for patients unresponsive to current immunotherapies [60] This summary encapsulates the key insights from the conference call, highlighting Sutro Biopharma's strategic direction, technological advancements, clinical pipeline, competitive positioning, and financial outlook.

Company Overview - Sutro Biopharma, Inc. is focused on the discovery and development of precisely designed cancer therapeutics, particularly antibody drug conjugates (ADCs) [7] - The company is advancing a robust early-stage pipeline of novel exatecan-based and dual-payload ADCs, supported by high-value collaborations and industry partnerships [7] Leadership Appointment - Greg Chow has been appointed as Chief Financial Officer (CFO) effective June 2, 2025, bringing over 25 years of executive leadership experience in corporate finance, capital markets, and drug development operations [1][2] - Chow's previous roles include Chief Financial and Business Officer at NodThera, CFO at Freenome Holdings, and CFO at Frontier Medicines, where he successfully executed significant financing rounds [2][3] Financial Strategy and Goals - The leadership of Greg Chow is expected to enhance financial discipline, operational efficiency, and capital strategy, positioning the company to achieve key clinical milestones [2] - Chow expressed enthusiasm about joining Sutro, highlighting the company's unique position in ADC innovation and its powerful cell-free technology platform for drug discovery [2] Inducement Grants - Sutro has granted Greg Chow a restricted stock unit award for 100,000 shares and a non-qualified option to purchase 275,000 shares under the 2021 Equity Inducement Plan [4][5] - The option will have an exercise price equal to the closing price of Sutro's common stock on the appointment date, with vesting schedules for both the restricted stock and option awards [6]

Sutro Biopharma (STRO) FY Conference Summary Company Overview - **Company**: Sutro Biopharma - **Event**: TD Cowen's Sixth Annual Oncology Innovation Summit - **Date**: May 28, 2025 Key Points Strategic Changes - Sutro Biopharma conducted a strategic review to enhance shareholder value, leading to a focus on advancing their second and third generation Antibody-Drug Conjugates (ADCs) pipeline [3][4] - The development of Lavelta has been deprioritized, but insights gained will inform future product design and clinical strategies [4][5] ADC Pipeline Differentiation - Sutro claims to have one of the most powerful ADC technologies, optimizing every component from antibody to linker to payload [8] - The next generation ADCs are designed to target complex biological targets, utilizing both single and dual payloads [8][9] - Dual payload ADCs are expected to overcome resistance seen in single payload ADCs, providing targeted chemotherapy and combination therapy [9][10] Safety and Efficacy - Sutro's platform allows for higher dosing compared to competitors, with a therapeutic index that can be optimized for safety [10][12] - The company has seen significant preclinical data indicating a two to threefold higher pharmacokinetics (PK) compared to competitors, which may translate into better patient outcomes [24][25] - The manufacturing process in cell-free extracts avoids glycosylation, reducing potential toxicity [17][20] STRO-four Development - STRO-four is a tissue factor ADC with a DAR-eight exotecan and proprietary beta glue linker, designed to minimize on-target liabilities [39][40] - Sutro aims to file an Investigational New Drug (IND) application in the second half of 2025, with first-in-human studies expected by year-end [47] - The ADC is anticipated to have 50-fold higher exposure compared to the approved competitor, Tisotumab vedotin, which could lead to improved patient benefits [49][50] Future Programs - STRO-six, another ADC program, targets integrin beta-six and is expected to have a significant commercial opportunity, particularly in lung cancer [53] - The platform's ability to avoid interstitial lung disease (ILD) is highlighted as a critical factor for success in lung cancer treatments [55] Additional Insights - Sutro's approach to selecting payloads and linkers is data-driven, focusing on combinations that enhance therapeutic index while minimizing safety risks [35][36] - The company is exploring the potential for three payload combinations to further enhance treatment efficacy against resistant tumors [34] Conclusion - Sutro Biopharma is positioning itself as a leader in the ADC space with innovative technologies and a focus on safety and efficacy, aiming to address unmet needs in oncology treatments. The upcoming IND filings and clinical trials are critical milestones for the company.

Sutro Biopharma (STRO) 2025 Conference Summary Company Overview - Sutro Biopharma is focused on advancing its next-generation antibody-drug conjugates (ADCs) technology, aiming to differentiate from conventional ADCs and enhance commercial viability [3][4][5] Key Points and Arguments 1. **Strategic Reprioritization**: The company has deprioritized its late-stage program for loveltomab tazavibulin, focusing instead on a new pipeline strategy that emphasizes innovative ADCs [3][4] 2. **Next-Generation ADCs**: Sutro is developing ADCs targeting hard-to-reach targets, which are more complex and widely expressed across solid tumors, ensuring better commercial viability [4][5] 3. **Clinical Development Plans**: Sutro aims to deliver three Investigational New Drug (IND) applications over the next three years, starting with STRO-four in the second half of 2025, followed by STRO-six in 2026 and a dual payload ADC in 2027 [4][6] 4. **Innovative Technology**: The company claims to have one of the most powerful ADC technologies, optimizing every component of the ADC to achieve a wider therapeutic index [3][9] 5. **Dual Payload ADCs**: Sutro is focusing on dual payload ADCs, which have the potential to overcome resistance seen in single payload ADCs, providing a competitive edge in the market [6][24][25] 6. **Clinical Efficacy**: Preliminary data suggests that STRO-four has significantly higher exposure and antitumor activity compared to conventional ADCs, with a 17-fold increase in Cmax and a 50-fold increase in exposure at HNSCD [14][20] 7. **Target Selection**: The company emphasizes the importance of selecting patients based on target antigen expression, which enhances the likelihood of positive clinical outcomes [21] Additional Important Content 1. **Collaboration and Partnerships**: Sutro is collaborating with Astellas on dual payload ADCs, which is advancing rapidly and is seen as a significant opportunity for the company [26][29] 2. **Manufacturing Capabilities**: Sutro has developed a robust external CDMO network to improve cost efficiency and speed in ADC manufacturing, which supports its early pipeline [4][7] 3. **Competitive Landscape**: The ADC market is becoming congested, particularly with common targets like FR alpha, which may affect commercial viability; Sutro's focus on unique targets aims to mitigate this risk [5][6] 4. **Regulatory Simplicity**: The development of dual payload ADCs is seen as advantageous due to regulatory simplicity compared to combining multiple compounds [25][30] 5. **Pipeline Execution**: Sutro's leadership team, with extensive ADC oncology experience, is focused on executing the innovative pipeline and achieving key deliverables [31][32]

Company Performance - Sutro Biopharma, Inc. reported a quarterly loss of $0.91 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.63, representing an earnings surprise of -44.44% [1] - The company posted revenues of $17.4 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 25.83%, compared to revenues of $13.01 million in the same quarter last year [2] - Over the last four quarters, Sutro Biopharma has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Sutro Biopharma shares have declined approximately 46% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] - The company's current consensus EPS estimate for the upcoming quarter is -$0.53 on revenues of $13.6 million, and for the current fiscal year, it is -$2.06 on revenues of $53.34 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which Sutro Biopharma belongs, is currently in the top 33% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Sutro Biopharma's stock performance [5][6]

Core Insights - Sutro Biopharma is shifting its focus from luvelta to its pipeline of novel exatecan and dual-payload ADCs, with STRO-004 being prioritized as the lead clinical candidate due to strong preclinical data indicating its best-in-class potential [2][3][6] - The company aims to deliver three new INDs over the next three years, starting with STRO-004 expected to enter clinical studies in the second half of 2025 [2][6][7] - Sutro's financial results for Q1 2025 show revenue of $17.4 million, an increase from $13.0 million in Q1 2024, primarily driven by the Astellas collaboration [13][19] - As of March 31, 2025, Sutro had cash, cash equivalents, and marketable securities totaling $249.0 million, down from $316.9 million at the end of 2024, with a cash runway expected into early 2027 [12][21] Corporate and Program Updates - The company completed a strategic portfolio review in March, leading to the prioritization of wholly-owned next-generation ADC programs while deprioritizing the development of luvelta [3][6] - Sutro is currently conducting an IND-enabling toxicology study for a dual-payload ADC program in collaboration with Astellas, which has triggered a $7.5 million milestone payment [6][8] - The restructuring plan includes a nearly 50% reduction in organizational headcount and the decommissioning of its manufacturing facility by the end of 2025 [11] Pipeline Developments - STRO-004, a next-generation Tissue Factor-targeting ADC, is set to enter clinical studies in the second half of 2025, focusing on solid tumors [7] - STRO-006, an integrin beta-6 ADC, is expected to enter clinical development in 2026 [7] - Sutro anticipates filing an IND for its first wholly-owned dual-payload ADC in 2027 [7] Financial Highlights - Total operating expenses for Q1 2025 were $85.9 million, compared to $69.6 million in Q1 2024, with R&D expenses at $51.6 million and G&A expenses at $13.3 million [14][20] - The net loss for Q1 2025 was $75.97 million, compared to a net loss of $58.21 million in Q1 2024, with a net loss per share of $0.91 [20][19] - Restructuring costs for Q1 2025 amounted to $21.0 million, with expectations for continued recognition of these costs in future periods [16]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited statements for Q1 2025 show increased revenue and a higher net loss due to restructuring costs [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) The balance sheet shows decreased total assets and a shift to a stockholders' deficit as of March 31, 2025 Condensed Balance Sheet Data (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $106,229 | $190,304 | | Total current assets | $287,409 | $343,310 | | **Total assets** | **$321,430** | **$387,207** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $133,046 | $131,893 | | Deferred royalty obligation | $190,301 | $180,809 | | **Total liabilities** | **$347,241** | **$342,606** | | **Total stockholders' (deficit) equity** | **($25,811)** | **$44,601** | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Q1 2025 operations show a 34% revenue increase but a higher net loss of $76.0 million due to restructuring Condensed Statement of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | **$17,399** | **$13,008** | | Research and development | $51,597 | $56,878 | | General and administrative | $13,273 | $12,721 | | Restructuring and related costs | $21,043 | $ - | | **Total operating expenses** | **$85,913** | **$69,599** | | Loss from operations | ($68,514) | ($56,591) | | **Net loss** | **($75,968)** | **($58,213)** | | **Net loss per share, basic and diluted** | **($0.91)** | **($0.95)** | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Operating activities used $67.9 million in cash, contributing to a net cash decrease of $84.1 million in Q1 2025 Condensed Statement of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($67,883) | ($64,741) | | Net cash (used in) provided by investing activities | ($16,258) | $64,105 | | Net cash provided by (used in) financing activities | $66 | ($3,429) | | **Net decrease in cash, cash equivalents and restricted cash** | **($84,075)** | **($4,065)** | | Cash, cash equivalents and restricted cash at end of period | $107,087 | $66,075 | [Notes to Unaudited Interim Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Financial%20Statements) Notes detail the March 2025 restructuring, revenue sources, and management's assessment of cash sufficiency - In March 2025, the company initiated a restructuring plan to prioritize its preclinical ADC pipeline, including STRO-004, **deprioritizing the luvelta program** and **reducing its workforce by approximately 50%**[26](index=26&type=chunk) - As of March 31, 2025, the company had **$249.0 million in unrestricted cash, cash equivalents, and marketable securities**, which management believes is sufficient to fund operations for at least 12 months[29](index=29&type=chunk)[30](index=30&type=chunk) - In March 2025, the company earned a **$7.5 million contingent payment from Astellas** for the initiation of the first IND-enabling toxicology study[74](index=74&type=chunk) Revenue by Collaborator (in thousands) | Collaborator | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Astellas Pharma Inc. | $16,879 | $11,385 | | Tasly Biopharmaceuticals Co., Ltd. | $9 | $970 | | Vaxcyte, Inc. | $223 | $647 | | Ipsen Pharma SAS | $288 | $ - | | **Total revenue** | **$17,399** | **$13,008** | Restructuring Costs for Q1 2025 (in thousands) | Cost Category | Amount | | :--- | :--- | | Clinical trial & other costs for luvelta deprioritization | $4,255 | | Severance and benefits expense | $8,510 | | Contract termination and other restructuring costs | $8,278 | | **Total** | **$21,043** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses increased Q1 revenue, a higher net loss from restructuring, and a strategic shift to preclinical programs [Overview](index=31&type=section&id=Overview) The company is prioritizing its preclinical ADC pipeline following a March 2025 restructuring and deprioritization of luvelta - The company's most advanced preclinical programs are **STRO-004 and STRO-006**, with an IND for STRO-004 anticipated in the second half of 2025[136](index=136&type=chunk) - A March 2025 restructuring plan was approved to **reduce operating costs and extend the cash runway**, refocusing on the preclinical pipeline[141](index=141&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Revenue rose 34% in Q1 2025, while operating loss widened 21% due to a $21.0 million restructuring charge - The increase in revenue was primarily driven by a **$5.5 million increase from Astellas**, which included a $5.7 million cumulative catch-up in revenue recognition[161](index=161&type=chunk) - **R&D expenses decreased by $5.3 million (9%)** mainly due to lower outside services and personnel-related costs following program reprioritization[162](index=162&type=chunk) Comparison of Operations (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$17,399** | **$13,008** | **$4,391** | **34%** | | Research and development | $51,597 | $56,878 | ($5,281) | (9)% | | General and administrative | $13,273 | $12,721 | $552 | 4% | | Restructuring and related costs | $21,043 | $ - | $21,043 | * | | **Loss from operations** | **($68,514)** | **($56,591)** | **($11,923)** | **21%** | | **Net loss** | **($75,968)** | **($58,213)** | **($17,755)** | **31%** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $249.0 million in capital, deemed sufficient for the next twelve months despite ongoing cash burn - As of March 31, 2025, the company had **cash, cash equivalents and marketable securities of $249.0 million** and an accumulated deficit of $862.8 million[169](index=169&type=chunk) - Management believes **existing capital resources will fund operations** through at least the next twelve months from the filing date[174](index=174&type=chunk) Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($67,883) | ($64,741) | | Net cash (used in) provided by investing activities | ($16,258) | $64,105 | | Net cash provided by (used in) financing activities | $66 | ($3,429) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity on its investment portfolio, which is managed conservatively - The company's primary market risk is **interest rate sensitivity** on its cash, cash equivalents, and marketable securities, which totaled **$249.0 million** as of March 31, 2025[188](index=188&type=chunk)[189](index=189&type=chunk) - The company does not engage in trading or speculative investments and a **10% change in interest rates is not expected to have a material impact**[190](index=190&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter's end - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective** at a reasonable assurance level[193](index=193&type=chunk) - **No material changes in internal control** over financial reporting occurred during the quarter ended March 31, 2025[194](index=194&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently party to any material legal proceedings - Sutro is **not presently a party to any legal proceedings** that, in management's opinion, would materially and adversely affect the business[197](index=197&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) Key business risks include a history of losses, funding needs, and dependence on unproven technology and collaborators - The company has a **history of significant losses** ($862.8 million accumulated deficit) and may never achieve or maintain profitability[200](index=200&type=chunk)[202](index=202&type=chunk) - The business is dependent on the success of product candidates based on **novel and unproven ADC technologies** (XpressCF® and XpressCF+®)[200](index=200&type=chunk)[214](index=214&type=chunk)[222](index=222&type=chunk) - The company will need **substantial additional funds** and may have difficulty accessing capital, which could force program delays or termination[200](index=200&type=chunk)[205](index=205&type=chunk) - The company faces risks from its **reliance on third-party collaborators** and an external manufacturing strategy[203](index=203&type=chunk)[235](index=235&type=chunk)[252](index=252&type=chunk) - There are significant risks related to **intellectual property**, including the ability to obtain and enforce patents for novel technologies[203](index=203&type=chunk)[311](index=311&type=chunk)[335](index=335&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=100&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered sales of equity securities or related activities occurred during the period - None[452](index=452&type=chunk) [Item 5. Other Information](index=101&type=section&id=Item%205.%20Other%20Information) No other material information was required to be reported during the period - None[454](index=454&type=chunk) [Item 6. Exhibits](index=102&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including executive transition agreements and required officer certifications - Exhibits filed include **transition and separation agreements** for William J. Newell, Edward C. Albini, and Anne Borgman, and an offer letter for Jane Chung[456](index=456&type=chunk) - Standard **certifications by the Principal Executive Officer and Principal Financial Officer** pursuant to Sarbanes-Oxley Act Sections 302 and 906 are included as exhibits[456](index=456&type=chunk)