SOUTH SAN FRANCISCO - Sutro Biopharma , Inc. (NASDAQ: NASDAQ:STRO), a clinical-stage company focused on developing cancer therapeutics, announced today the commencement of a global Phase 2 clinical trial, named REFRαME-L1, for its drug luveltamab tazevibulin (luvelta). The study targets non-small cell lung cancer (NSCLC) patients with tumors expressing Folate Receptor-α (FRα), a condition present in approximately 30% of patients with adenocarcinoma NSCLC.
The trial is set to evaluate the safety and efficacy of luvelta in adult patients with previously treated advanced or metastatic NSCLC. According to Sutro's Chief Medical Officer, Anne Borgman, M.D., preclinical evidence suggests that luvelta, due to its precise design and wide therapeutic window, could provide a significant new treatment option for NSCLC, especially for patients with lower FRα expression profiles who have limited treatment options.
NSCLC is a major health concern as it is the leading cause of cancer-related deaths globally. Many patients are diagnosed with metastatic disease, which has a notably low 5-year survival rate. Luvelta is designed to target FRα, which is commonly found in various cancer types including NSCLC but has limited expression in normal tissues.
Luveltamab tazevibulin is an antibody-drug conjugate (ADC) developed using Sutro's proprietary cell-free XpressCF® platform. This technology allows for the creation of homogeneous ADCs that aim to deliver cytotoxins to tumors efficiently while maintaining stability in the bloodstream.
In addition to the REFRαME-L1 trial, Sutro has ongoing clinical trials for luvelta in ovarian and endometrial cancers and plans to initiate a Phase 2/3 study for pediatric acute myeloid leukemia in the latter half of 2024. The U.S. Food and Drug Administration has granted luvelta Fast Track designation for ovarian cancer treatment and Orphan and Rare Pediatric Disease designations for a subtype of pediatric AML.
The company expects to release initial data from the REFRαME-L1 study in the first half of 2025. This announcement is based on a press release statement from Sutro Biopharma.
In other recent news, Sutro Biopharma has experienced significant developments. Truist Securities has revised Sutro Biopharma's stock price target to $15.00 from the previous $18.00, while maintaining a Buy rating. The firm's analyst cited upcoming clinical trials updates as potential catalysts for the company's shares. These include updates on the Luvelta+Bev combination, initial data for Luvelta in lung cancer, and disclosures from the ReFRαME study in ovarian cancer, all expected in the first half of 2025.
Simultaneously, TD Cowen has maintained its Buy rating for Sutro Biopharma following the completion of the first part of a significant clinical trial. Piper Sandler also confirmed its Overweight rating with a consistent price target of $11.00, noting Sutro's strong financial position with $376 million in cash reserves.
Deutsche Bank (ETR:DBKGn) and Wedbush have also maintained their 'buy' and 'outperform' ratings respectively, despite lowering their price targets due to concerns about cash burn and competitive pressures. Finally, Sutro Biopharma recently appointed Sukhi Jagpal as a new board director and Audit Committee member. These are significant recent developments for Sutro Biopharma, and investors will likely be following the company's progress closely.
InvestingPro Insights
As Sutro Biopharma (NASDAQ: STRO) embarks on the Phase 2 trial for luveltamab tazevibulin, a deeper look at the company's financial health and market performance offers insights for investors monitoring the biopharmaceutical sector. Sutro's market capitalization stands at $373.75 million, reflecting the company's valuation in the competitive landscape of cancer therapeutic development.
InvestingPro Tips reveal that Sutro holds more cash than debt on its balance sheet, which may provide some financial flexibility as they fund ongoing clinical trials. However, analysts have raised concerns, noting that the company is quickly burning through cash, which is not uncommon for clinical-stage biopharmaceutical companies. The anticipation of a sales decline in the current year and expectations for net income to drop highlight the risks associated with the high costs of research and development inherent in the industry. For investors seeking a more comprehensive analysis, there are 11 additional InvestingPro Tips available, offering a multifaceted view of Sutro's financial and market prospects.
On the market performance front, Sutro has experienced a significant return over the last week, with a 12.87% price total return, and an even stronger return over the last month at 14.29%. These figures suggest investor optimism in the short term, potentially buoyed by recent developments and the commencement of the REFRαME-L1 trial. It is important to note that the company does not pay a dividend, which is typical for companies in the growth phase that prefer to reinvest earnings back into research and development.
To gain further insights into Sutro Biopharma's financial metrics and market performance, including real-time data and additional InvestingPro Tips, interested readers can explore the detailed analysis on InvestingPro.
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