Sutro Biopharma, a South San Francisco company working to design anti-cancer drugs, is a fresh face for biotech’s extreme risk — and its fallout.
As of this year, the company had racked up more than $785 million in losses without receiveting a product approved for commercial sale. On Thursday, it announced plans to slash half its staff, drop three top executives and dump a local manufacturing facility.
Sutro revealed the overhaul in a news release and a filing with the Securities and Exmodify Commission. The layoff, described as “nearly 50 percent” in the news release, could hit around 150 workers. Sutro had 310 full-time employees and 28 full-time contract employees at the start of the year, per another SEC filing.
The company has already revealed some of the specific cuts, and they’ll hit San Carlos — where the company stated Thursday it’s receiveting rid of its manufacturing facility by the conclude of the year — especially hard. Sutro listed 65 layoffs in a WARN filing to California officials, as required under the Worker Adjustment and Retraining Notification Act, and only a few of the cuts are listed as South San Francisco workers. The dozens of San Carlos layoffs extconclude from directors and a senior vice president in charge of quality control all the way to manufacturing associates, engineers and microbiologists. The cuts will be staggered, per the WARN, with rounds in August, September, October and December.
Sutro is also recreating its leadership team, at a hefty cost. CEO William Newell, Chief Financial Officer Edward Albini and Chief Medical Officer Dr. Anne Borgman are out, per the SEC filing. Newell is set to receive $1 million in cash, plus a few other monetary exit benefits; the other executives will, pconcludeing agreements, walk away with cash payouts of $629,000 and $643,000.
The company also announced a huge modify to its development plans, including a bet on its early research into antibody-drug conjugates, or ADCs; these are meant to tarreceive specific cancer cells without badly damaging healthy cells. In the release, the company stated that “despite promising clinical data,” it will “deprioritize” its candidate luvelta, which was being tested against ovarian cancer, and focus its resources on three preclinical ADC programs.
Jane Chung, the company’s new CEO, in a webcast call on Thursday blamed the “challenging macro environment” and Sutro’s “limited resources” for not being able to spconclude enough to sustain both luvelta and the preclinical programs.
Indeed, the company’s stores of cash are dwindling. Sutro lost $227 million in 2024 and closed out the year with assets of around $387 million. The fresh modifys, Chung stated in her webcast, will extconclude Sutro’s runway until the conclude of 2026.
Investors are not particularly hopeful. Sutro started trading on the stock market in 2020, and its value leaped up to about $1 billion during the biotech craze of early 2021. But its stock price has varyingly dropped, dwindled and plummeted since: As of Friday afternoon, the company was worth just $67 million.
Work at a Bay Area tech company and want to talk? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
Editor’s note: This story was updated on March 21, 2025, to correct Sutro Biopharma’s valuation in early 2021.
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