SUTRO BIOPHARMA, INC. Annual Report - How They Did This Year (Up to End of 2025)

Hey there! Let's look at Sutro Biopharma's past year (2025) and their plans. This helps you understand your investment. This report covers their activities and finances through December 31, 2025.

What's Sutro Biopharma All About?

Sutro Biopharma develops new cancer medicines. They focus on Antibody Drug Conjugates (ADCs). Their unique XpressCF® and XpressCF+® platforms create these specialized drugs.

Imagine their platforms as a super-efficient factory. This factory makes complex protein medicines. It allows them to:

• Quickly make many protein structures.
• Add unique building blocks to proteins.
• Speed up development significantly. They make proteins in under 24 hours. Traditional methods take 30-40 days.
• Efficiently test new drugs for safety and effectiveness.
• Easily increase production.

They aim to create various ADCs. These include standard ADCs and bispecific ADCs. Bispecific ADCs can target two things at once. They also develop immunostimulatory ADCs (iADCs). iADCs boost the immune system. And dual-payload ADCs (dpADCs). dpADCs carry two active drug components. Their goal: treat cancers with unmet needs.

Their iADC design is clever. It delivers two drugs directly to the tumor. One drug kills tumor cells. The other primes the immune system to fight cancer. It works almost like a personalized vaccine. For dpADCs like STRO-227, they attach two active drug components (payloads) to one cancer cell. They explore payload combinations. These include two cancer-killing agents. Or a cancer-killer with a "potentiating" molecule. This makes it even stronger. They believe dpADCs could be powerful, safe cancer treatments.

Business Performance & Key Partnerships (2024-2025)

Sutro had important collaborations in 2024 and 2025. These partnerships generate money and advance drug candidates:

• Astellas Agreement: This is a key iADC development partnership. Sutro provides R&D services and materials. Astellas chose not to pursue a third target in June 2024. The first iADC from this deal entered clinical development in early 2026. Preclinical work on a second target continues. Sutro received a $90.0 million upfront payment in 2022. They can also get up to $422.5 million per product candidate. These are for development, regulatory, and commercial milestones. Plus, they earn tiered royalties on sales. Sutro recognizes money coming in from upfront payments over time. This happens as they fulfill their obligations.
• Ipsen Pharma SAS: Sutro's agreement with Ipsen for STRO-003 ended in 2025.
• Vaxcyte Inc.: Sutro has a close relationship with Vaxcyte. Sutro co-funded Vaxcyte (formerly SutroVax) in 2013. Vaxcyte uses Sutro's platforms for vaccine candidates. These target infectious diseases like VAX-31 and VAX-24. Sutro provides technical support and materials.
  • In December 2022, Sutro received $10.0 million cash. They also got $7.5 million in Vaxcyte stock. This was for giving Vaxcyte an option to use Sutro's XtractCF®.
  • In October 2023, Sutro received another $5.0 million. This was after Vaxcyte agreed to exercise the option.
  • Vaxcyte exercised the option in November 2023. They paid Sutro $50.0 million as the first installment.
  • In May 2024, Vaxcyte paid Sutro another $25.0 million. This was the second installment for the option.
  • This partnership brings cash and validates Sutro's platform.
• Merck Sharp & Dohme, Celgene (now BMS), and Merck KGaA (EMD Serono): Sutro had deals with these pharma companies. Drug candidates entered clinical development. Each partner ended development after Phase 1 studies due to their own strategic reviews.
• Blackstone Life Sciences: Sutro has a royalty agreement. They could receive payments from product sales.
• Stanford University License: Sutro pays Stanford $75,000 annually. This covers the exclusive license for XpressCF® technology. It includes 7 U.S. and 11 international patents. They also pay small royalties on net sales of products. And share income from sublicensing. This is an ongoing cost for their core technology.

Total Collaboration Payments: Sutro received $1.016 billion by December 31, 2025. This includes about $79 million from stock investments. This shows their technology's value. Even with some terminated programs, it's significant.

These collaborations bring in money and help fund Sutro's drug development.

Major Changes & Future Plans

Sutro is making big internal changes. They are focusing their efforts.

• Restructuring (2024-2025): The company incurred costs from "deprioritized programs." They stopped or scaled back some projects. Restructuring plans in March and September 2025 included employee severance. This suggests streamlining operations. They focus resources on promising areas. This can be tough but improves efficiency. It also helps long-term financial health.
• STRO-002 (Luvelta) Stopped: Sutro ended STRO-002 development in March 2025. This followed a strategic review. This was a significant program. They had a licensing deal with Tasly for Greater China. This shows a clear shift to other drug candidates.
• Outsourcing Manufacturing (2025): Sutro decided to stop in-house manufacturing. They will no longer make cell-free extract and reagents. They transferred this technology to contract manufacturers (CMOs). Now they rely on external partners for these drug components. They expect to leave their San Carlos facility in 2026. This could save money and boost R&D focus. However, it increases reliance on outside suppliers.
• Drug Manufacturing: Sutro uses CMOs for drug candidates. CMOs produce antibodies, other elements, and final ADCs. Their XpressCF+® platform enables efficient manufacturing. This works even with complex ingredients.
• New Drug Candidates & Progress:
  • STRO-004: This is their top priority. It's an ADC for solid tumors, targeting tissue factor (TF). They filed for human trial approval (IND). Clearance came in October 2025. A Phase 1 trial started in November 2025. This first stage tests safety and early effectiveness. They expect initial data in mid-2026. The trial studies various advanced TF-expressing solid tumors. These include lung, head & neck, and cervical cancers. Also colorectal, pancreatic, endometrial, and bladder cancers. They dosed patients in the first two levels. The third level began in February 2026.
  • STRO-006: This preclinical ADC targets ITGB6. It was nominated for development in 2025. It targets ITGB6-expressing solid tumors. These include NSCLC and head and neck cancer. Sutro believes it offers an improved therapeutic index. This means better effectiveness with fewer side effects. It compares well to competitors like sigvotatug vedotin (SV). SV is already in Phase 3 trials. Preclinical studies showed no neutropenia, eye, or lung toxicity. This was true even at high doses in nonhuman primates. They are preparing studies for an IND filing. A potential IND filing is in 2026.
  • STRO-227: This is their first wholly-owned dpADC. It targets PTK7. Preclinical models suggest better performance and stability. It also shows better tumor specificity and tolerability. It kills tumor cells powerfully. It has 'bystander activity,' killing nearby cancer cells. And 'immunogenic cell death,' activating the immune system. Other single-payload PTK7 ADCs are in Phase 1 trials. Sutro believes STRO-227 has "best-in-class potential." They started manufacturing activities. They expect an IND filing in late 2026 or early 2027.
• New Discoveries: Sutro researches new ADCs and dpADCs. They aim for maximum benefits, minimum side effects. Their platform quickly tests many drug candidates. This helps find the best ones to advance.
• Facility Investments: They invest in physical infrastructure. This includes "construction in progress" and equipment. They also invest in leasehold improvements. This shows R&D growth or modernization.
• Future Strategy: Sutro plans to advance STRO-004. They will seek more strategic partnerships. This includes co-development and co-commercialization. They will build a diverse pipeline of cancer drugs. They also plan to broaden XpressCF® platform reach. This may involve nonexclusive access for other companies.

Financial Health Snapshot (End of 2025)

Sutro Biopharma is a clinical-stage company. They typically operate at a loss. They invest heavily in R&D. Collaboration payments and capital raises support their finances. Here's a look at their size and finances at year-end 2025:

• Company Size: Sutro is a "Non-accelerated filer." They are also a "Smaller reporting company." This means a smaller market value and fewer reporting rules. They are no longer an "Emerging growth company." This suggests they passed an initial growth phase.
• Market Value: Their stock held by regular investors was $60.0 million. This was as of June 30, 2025. Their stock traded around $7.10 per share.
• Shares Outstanding: About 16.6 million shares existed on March 16, 2026.
• Cash & Investments: Sutro holds cash and marketable securities. They invest in US government securities, corporate debt, and more. This includes commercial paper and asset-backed securities. They actively manage their cash. Vaxcyte payments ($90 million cash plus stock) boost their cash.
• Employee Compensation: Employee stock options, RSUs, and ESPP are a big cost. These are part of G&A and R&D expenses. This helps attract and keep talent. But it can increase the number of shares over time.
• Equity: "Additional Paid-In Capital" and "Retained Earnings" are key. Biopharma companies often have an accumulated deficit. These are parts of shareholder equity.

What Could Go Wrong? (Risks for Investors)

All investments have risks, and Sutro is no exception. Here are key things to remember:

• History of Losses: The company consistently loses money. It might not become profitable.
• Need for More Funding: They will likely need much more money. This is for developing their medicines. Bad funding terms could slow or stop programs. They might even cancel some drug programs.
• Early Stage Products: Their main drugs are still in development. They could fail, face competition, or get delayed. This would hurt their ability to earn money.
• Reliance on Specific Drugs & New Tech: Future success depends on specific drugs and platforms. These are XpressCF® and XpressCF+®. If they fail, it's a big problem. Their technology is new and unproven.
• Development Delays: Missed targets could delay product launch. This could cause the stock price to drop.
• Cybersecurity & IT Issues: They rely heavily on computer systems. Failures, cyber-attacks, or data loss could harm business. This could also damage their reputation and lead to legal issues.
• Collaboration Challenges: Success depends on strong partnerships. Failed or absent collaborations limit technology use. Partners might not honor agreements. This could lead to costly legal disputes.
• More Reliance on Outside Manufacturing: Sutro now relies more on CMOs. They outsourced cell-free extract and reagent production. CMOs provide key components and final drug products. Poor production or supply chain issues could hurt them. This impacts their ability to develop and sell medicines.
• Intense Competition: Cancer treatment is highly competitive. Sutro faces big challenges:
  • Larger, Better-Funded Competitors: Many rivals are bigger and richer. They have more money, tech, and resources. This includes manufacturing, marketing, and sales. They might approve drugs faster and wider. This could make Sutro's treatments less competitive.
  • Existing Approved Drugs: STRO-004 faces TIVDAK®. TIVDAK® is an approved ADC for cervical cancer. Other companies develop similar TF-targeted ADCs.
  • Competitors in Clinical Trials: Many ADCs target ITGB6 and PTK7. These are already in clinical development. Sigvotatug vedotin is in Phase 3 for ITGB6.
  • Chinese Competition: Chinese biotechs offer growing competition. Some are state-backed. They develop drugs quickly and cheaply. This is due to their regulatory environment. Many big pharma companies invest heavily in China.
  • Industry Consolidation: Biotech mergers could concentrate resources. This means fewer, more powerful competitors.
• Intellectual Property (IP) Issues: This is huge for a biotech company. Sutro protects its tech and drugs with patents.
  • Stanford License Expiration: Key Stanford patents expire soon. These are for XpressCF® and XpressCF+® platforms. Expiration is between June 2026 and January 2028. After this, core methods could become public. This could increase competition. Sutro needs strong own patents to counter this. They also have ongoing license costs.
  • Sutro's Own Patents: Sutro pursues its own patents. These protect drug compositions and methods. Issued patents expire between 2033 and 2040. Pending patents could last until 2033 to 2045. They aim to extend these terms, especially for FDA-approved drugs.
  • Uncertainty and Competition: Patents are complex and uncertain. If Sutro can't protect patents, competitors could copy them. This would harm their business. Cancer treatment patents are very competitive and changing.
• Regulatory Hurdles: Drug approval is long, complex, and uncertain. It's a huge hurdle for any biotech company. Before human testing, they file an IND with the FDA. The FDA has 30 days to review it. They can place a "clinical hold" on the trial. If not, Sutro can start testing.

Trials have several phases:

• Phase 1: A small group gets the drug first. This includes healthy volunteers or patients. The goal is safety, body handling, and dosage. For cancer drugs, they also check for early effectiveness.
• Phase 2: If Phase 1 is good, a larger group gets the drug. They check if it works for a condition. They also fine-tune dosage and find side effects.
• Phase 3: This is the largest phase. Many patients get the drug across locations. It confirms effectiveness, safety, and compares to existing treatments. This data helps the FDA decide on approval.

The FDA can stop a trial anytime. Reasons include incorrect running or patient risk. Local review boards (IRBs) also approve and can halt trials. Approval delays or failures would harm their business. Regulation changes could also hurt their strategies.

• Nasdaq Delisting Risk: Not meeting Nasdaq rules could delist stock. This makes buying/selling shares harder. It could also hurt the stock price.

What This Means for You, the Investor

Sutro Biopharma has many key partnerships. These provide R&D services, materials, and potential royalties. They brought in over $1 billion from collaborations. This includes big cash payments from Vaxcyte (2022-2024). This is a big achievement for their size. They pay Stanford an annual fee for their core technology license. This shows its foundational importance.

However, partners ended several programs after Phase 1. Sutro also stopped STRO-002 (Luvelta) development. This shows early-stage programs face high hurdles. Sutro now focuses on its own drugs. STRO-004 entered Phase 1 trials in late 2025. Initial data is expected mid-2026. This is a critical milestone. Its success will drive the company.

New details excite about other drugs. STRO-006 (targeting ITGB6) was nominated in 2025. It shows promising preclinical safety and effectiveness. It compares well to competitors. An IND filing is eyed for 2026. STRO-227 (their first dpADC targeting PTK7) also has strong preclinical data. It suggests "best-in-class potential." An IND filing is expected late 2026 or early 2027. These details clarify their chosen drugs. They show why Sutro believes they are different. Their iADC and dpADC platforms show innovative cancer treatment.

A big change: they outsourced manufacturing of cell-free extract. They will also leave their San Carlos facility in 2026. This could save money and boost R&D focus. But it increases reliance on outside partners, a risk.

Sutro is a smaller public company. Its publicly traded shares were worth $60 million mid-2025. This gives you a sense of its size. Like many biopharmas, it's still developing. It likely spends more than it earns and faces big risks. Competition is fierce. Larger, richer companies and approved drugs target similar areas. STRO-006 and STRO-227 have encouraging preclinical data. But these drugs face a long clinical trial path. They also face stiff competition.

A new, important risk is intellectual property. Sutro has own patents protecting drugs until 2033-2045. However, foundational Stanford patents expire soon. This is between June 2026 and January 2028. Core methods could become accessible to competitors. This makes Sutro's own patent strategy even more critical.

Finally, understand the clinical trial process. Sutro's drugs are just starting Phase 1 trials. This is the start of a long, expensive, uncertain journey. Phase 1 tests safety and initial dosage. Phase 2 checks effectiveness in a small group. Phase 3 confirms effectiveness and safety on a large scale. The FDA and review boards can halt trials anytime. This adds another layer of risk.

To know if Sutro is a good investment, check their financials. Look at money coming in, money going out, profit/loss, and cash flow. Also check drug success rates and market conditions. Key risks include expiring patents and fierce competition. The long, uncertain clinical trial path is also important. Consider these given their development stage.