Sutro Biopharma Announces Second Major Restructuring in 2025

Sutro Biopharma, a San Francisco-based biopharmaceutical company, has announced a significant restructuring effort aimed at extending its financial runway and focusing resources on key pipeline programs. This marks the second major workforce reduction for the company in 2025, following a previous cut of 50% of its employees earlier this year.

Restructuring Details and Financial Impact

The latest restructuring will see Sutro laying off an additional third of its remaining workforce. While the exact number of affected employees is unclear due to the ongoing nature of the previous layoffs, estimates suggest that approximately 60 employees could be impacted, potentially reducing Sutro's headcount to around 120.

Jane Chung, CEO of Sutro Biopharma, 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 expects that this restructuring, combined with anticipated near-term milestone payments, will extend its financial runway into at least mid-2027. This extension is crucial for Sutro as it aims to reach key inflection points in its drug development programs.

Focus on Antibody-Drug Conjugate Programs

Sutro's restructuring efforts are geared towards concentrating resources on three antibody-drug conjugate (ADC) programs and maintaining its research and development collaborations. The company has highlighted STRO-004, an ADC targeting tissue factors in solid tumors, as a key program. Sutro anticipates announcing initial clinical data for STRO-004 by mid-2027.

Additionally, the company plans to initiate clinical studies for at least one of its other ADC programs within the same timeframe, though specific details were not provided.

Recent Setbacks and Ongoing Partnerships

The restructuring comes in the wake of recent challenges for Sutro. In August 2025, the company faced a setback when Ipsen terminated a collaboration deal worth up to $900 million, which was initially signed in April 2024 for the development of STRO-003, an ADC targeting various solid tumors and hematological cancers.

Despite this setback, Sutro maintains a significant partnership with Astellas, established in 2022. This collaboration, which provided Sutro with an upfront payment of $90 million and the potential for $422.5 million in additional milestones, focuses on developing "immunostimulatory" ADCs for undisclosed cancer targets.