Sutro discards CEO, 50% of staff, sole clinical-stage ADC and manufacturing site to save cash

Sutro Biopharma has announced a major strategic restructuring, including significant workforce reductions, leadership changes, and a shift in its drug development focus. Here are the key details:

Leadership Changes

CEO Bill Newell has stepped down, effective immediately1 2.
Jane Chung, previously President and Chief Operating Officer, has been appointed as the new CEO and Board member1 2.

Workforce Reduction

Sutro is reducing its headcount by nearly 50%1 2 5.
The layoffs are expected to be substantially complete by the end of 20251.

Pipeline Changes

The company is deprioritizing further investment in its lead candidate luveltamab tazevibulin (luvelta), a FolRα-targeting antibody-drug conjugate (ADC)1 2 5.
Sutro will continue to explore global out-licensing opportunities for luvelta1.

- The company is shifting focus to its next-generation ADC pipeline, including three wholly-owned preclinical programs1 2:

* - STRO-004:*
An exatecan ADC targeting Tissue Factor, expected to enter the clinic in the second half of 2025.

* - STRO-006:*
An integrin beta-6 ADC aimed at multiple solid tumors, expected to enter clinical development in 2026.
- A dual-payload ADC with an IND anticipated to be filed in 2027.

Manufacturing Changes

Sutro plans to cease operations at its manufacturing facility in San Carlos, CA by the end of 20251 4.
The company will fully externalize its cell-free manufacturing capabilities1.

Financial Impact

As of December 31, 2024, Sutro had $316.9 million in cash, cash equivalents, and marketable securities1 5.
The restructuring is expected to result in cash payments of $40 to $45 million5.
The company anticipates its cash runway to extend into at least the fourth quarter of 2026, excluding potential milestone payments from existing collaborations1 5.

This strategic overhaul aims to reduce operating costs and refocus Sutro's efforts on developing its next-generation ADC pipeline while exploring partnership opportunities for its deprioritized lead candidate.

Sources:

1. https://www.globenewswire.com/news-release/2025/03/13/3042584/0/en/Sutro-Biopharma-Announces-Strategic-Portfolio-Review-Resulting-in-the-Prioritization-of-its-Next-Generation-ADC-Pipeline.html

2. https://www.finanznachrichten.de/nachrichten-2025-03/64823752-sutro-biopharma-inc-sutro-biopharma-announces-strategic-portfolio-review-resulting-in-the-prioritization-of-its-next-generation-adc-pipeline-399.htm

4. https://endpts.com/sutro-slashes-workforce-in-half-changes-ceo-and-closes-factory/

5. https://www.investing.com/news/analyst-ratings/oppenheimer-cuts-sutro-biopharma-stock-rating-to-perform-93CH-3930319