After parting with 50% of its employees earlier this year, Sutro Biopharma will lay another third of its staff in a restructuring effort geared toward reaching key inflection points.
Sutro Biopharma is letting go of one third of its workforce in a bid to save money and keep the lights on. The San Francisco–based company will use the money saved to focus on three antibody-drug conjugate programs, as well as its research and development collaborations.
“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,” Sutro CEO Jane Chung said in a statement on Monday.
This is the second large-scale layoff for Sutro this year. In March, the company terminated 50% of its employees and closed a manufacturing-support facility in San Mateo, California. That series of maneuvers is expected to finish by the end of 2025.
Because of that still-in-progress round of layoffs, it’s unclear how many more employees will be affected by this new workforce reduction. In a June SEC filing, Sutro said that after the first round of firings, the company would have 182 full-time staffers. If one third of that figure were let go in this new round, that would equal about 60 employees lost, bringing Sutro’s headcount down to around 120.
“The restructuring, along with certain expected near-term milestone payments, is expected to extend the Company’s runway into at least mid-2027,” according to the company’s statement. By that date, Sutro expects to announce initial clinical data for STRO-004, an antibody-drug conjugate (ADC) targeting tissue factors in solid tumors, as well as the initiation of clinical studies for “at least one” of its additional ADC programs, though the company did not specify which one.
Sutro has had a rough go of things in general recently. In April 2024, the company signed an up to $900 million deal with Ipsen to collaborate on STRO-003, an ADC targeting a handful of solid tumors and hematological cancers. In August, however, Ipsen handed the asset back, halting its development altogether and terminating the deal.
That leaves Sutro with one remaining partnered source of income, a collaboration with Astellas. Signed back in 2022, that deal gave Sutro $90 million upfront, with the potential for $422.5 million more in developmental, regulatory and commercial milestones, on a project to develop “immunostimulatory” ADCs for undisclosed cancer targets.
