Analyst Derek Archila of Wells Fargo maintained a Hold rating on Sutro Biopharma (STRO – Research Report), with a price target of $8.00.
Derek Archila has given his Hold rating due to a combination of factors, including Sutro Biopharma’s current pipeline execution and the anticipation of few significant data catalysts within the year. Management’s effective advancement of the pipeline is acknowledged, yet the potential for near-term impactful data seems limited. The ongoing REFRaME-01 study for Luvelta is progressing well with a fast enrollment pace, and the company is expanding its trial sites globally, which allows for a diverse patient population. However, with the uncertainty surrounding the depth of data disclosure from the trial’s first part, there is a level of reservation about the immediate future.
Moreover, Archila notes opportunities for Luvelta in smaller markets such as RAM AML, which could expedite regulatory processes for future opportunities, and NSCLC, where a late-line setting showing a 20-25% ORR would be considered positive. The excitement around the STRO-003 ROR1 ADC program is clear due to market validation and the potential in solid tumors, with a strategy focused on high unmet need areas like CRC. The company’s financial health appears robust, with sufficient cash runway into the second half of 2025 and a strategy reliant on collaborations. However, more funding is likely to be necessary for the continued support of the REFRaME-01 study. Archila’s Hold rating reflects a cautious optimism, balanced by the need for further evidence of progress and potential market success.
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Sutro Biopharma (STRO) Company Description:
Sutro Biopharma Inc. engages in the drug discovery, development and manufacturing of pharmaceutical products. Its products technologies include XpressCF, anti-body drug conjugates, bispecifics & engineered antibodies and cGMP facility. The company was founded by James R. Swartz and Sutanto Widjaja in June 2003 and is headquartered in South San Francisco, CA.
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