Surrozen(SRZN) - 2024 Q3 - Quarterly Report

Financial Performance - Collaboration and license revenue increased by $10.0 million for the three months ended September 30, 2024, due to the recognition of a milestone achieved under the collaboration and licensing agreement in September 2024 [114]. - Total operating expenses decreased by 22$8.8 million for the three months ended September 30, 2024, compared to $11.2 million in the same period of 2023 [113]. - The net loss for the three months ended September 30, 2024, was$1.4 million, an improvement of 86% compared to a net loss of $10.4 million in the same period of 2023 [113]. - Loss from operations improved by$19.1 million, or 53%, to $(16.9) million for the nine months ended September 30, 2024, compared to$(36.1) million for the same period in 2023 [120]. - The net loss for the nine months ended September 30, 2024, was $(35.5) million, compared to$(34.1) million for the same period in 2023, representing an increase of $1.4 million, or 4$5.2 million for the three months ended September 30, 2024, compared to $6.1 million in the same period of 2023 [113]. - Research and development expenses for SZN-1326 decreased by$3.2 million, or 71%, to $1.3 million for the nine months ended September 30, 2024, due to workforce reductions and discontinuation of clinical development [122]. - The Phase 1a study of SZN-043 was completed in February 2024, demonstrating acceptable safety and tolerability, with plans to initiate enrollment in the Phase 1b study [102]. - Anticipated proof-of-concept data from the Phase 1b clinical trial of SZN-043 is expected in the first half of 2025 [102]. Cash and Capital - The company had an accumulated deficit of$257.2 million and cash and cash equivalents of $31.0 million as of September 30, 2024 [109]. - The company received approximately$16.0 million in net proceeds from a private placement in April 2024, with potential additional gross proceeds of approximately $175.5 million if warrants are exercised in full [130]. - The net cash used in operating activities for the nine months ended September 30, 2024, was$21.1 million, compared to $33.1 million for the same period in 2023 [137]. - Cash provided by financing activities for the nine months ended September 30, 2024, was$16.1 million, primarily from the issuance and sale of common stock [139]. - The company expects to require substantial additional capital to fund operations and product development in the foreseeable future [134]. Expenses and Cost Management - Total research and development expenses decreased by $0.9 million, or 15$5.2 million for the three months ended September 30, 2024, compared to $6.1 million for the same period in 2023 [115]. - General and administrative expenses decreased by$1.0 million, or 9%, to $11.2 million for the nine months ended September 30, 2024, compared to$12.2 million for the same period in 2023 [123]. - The company expects to incur increased expenses as it expands its pipeline and advances product candidates through clinical development [110]. Strategic Collaborations - A strategic research collaboration with TCGFB, Inc. was established in October 2024, with potential payments of up to $6.0 million for antibody discovery services [111]. - SZN-413, a bi-specific antibody for retinal vascular-associated diseases, received a$10.0 million milestone payment from Boehringer Ingelheim in September 2024 [105]. Future Outlook and Risks - The company anticipates continued net losses due to increased costs related to research and development activities and compliance with public company requirements [127]. - The company has not generated revenue from product sales and relies on partnerships and milestone payments for funding [134]. - The company anticipates that future financing through equity sales may lead to stockholder dilution [135]. - The company is subject to risks associated with obtaining regulatory approvals for product candidates, which may impact future funding requirements [134]. - Inflation is expected to increase costs related to labor, research, and clinical trials, potentially affecting the company's financial condition [144]. - The company remains classified as an emerging growth company, allowing it to take advantage of reduced reporting requirements under the JOBS Act [141].