Sutro Biopharma Announces Second Round of Layoffs Amid Strategic Realignment

Sutro Biopharma, a biotechnology company specializing in antibody-drug conjugates (ADCs), has announced a significant workforce reduction as part of its ongoing strategic restructuring. This marks the second round of layoffs for the company this year, reflecting the challenges faced by the ADC sector and Sutro's efforts to streamline operations and extend its financial runway.

Workforce Reduction and Pipeline Prioritization

Sutro Biopharma revealed plans to cut approximately one-third of its remaining workforce, following a previous round of layoffs in March that had already halved the company's headcount. CEO Jane Chung, who took the helm in March, stated, "After continued review of our business and pipeline priorities, we have identified and are implementing further operational efficiencies to focus our resources where they will have the greatest impact."

The company's strategic realignment involves deprioritizing certain programs, including luveltamab tazevibulin, a FolR α-targeting ADC that was being evaluated in multiple clinical trials. Instead, Sutro is focusing on its next-generation exatecan and dual-payload ADC programs, with STRO-004, a Tissue Factor-targeting exatecan ADC, now at the forefront of its pipeline.

Financial Outlook and Clinical Development Plans

Despite the setbacks, Sutro remains optimistic about its future prospects. The company ended June with $205.1 million in cash reserves, which it now expects to last into mid-2027, extending its previous projection of early 2027. This extended runway is crucial for Sutro's plans to advance STRO-004 into clinical trials later this year, with initial data expected in 2026.

Chung emphasized the company's commitment to its revised strategy, stating, "We remain on track to advance STRO-004 into the clinic this year, with initial data expected in 2026. Importantly, these changes extend our expected financial runway through critical milestones and strengthen our ability to create value for both patients and shareholders."

In addition to STRO-004, Sutro plans to continue work on two other preclinical ADCs, including an integrin beta-6 candidate. The company aims to initiate human trials for one of these programs by 2027, aligning with its extended cash runway.