Sutro Biopharma maintained its Buy rating from TD Cowen

On Wednesday, Sutro Biopharma (NASDAQ:STRO) maintained its Buy rating from TD Cowen, following the completion of the first part of a significant clinical trial. The firm's analyst highlighted the progress in the Phase II/III REFRaME-O1 trial for luvelta, a product candidate by Sutro Biopharma, with the second part of the trial already in progress.

The analyst noted that the Phase Ib combination data with bev in earlier treatment lines showed an initial promise, demonstrating a 35% objective response rate (ORR) in all participants. An update on this data is anticipated at the upcoming European Society for Medical Oncology (ESMO) meeting. Additionally, a Phase II update is expected in the first half of 2025.

Sutro Biopharma is also preparing to initiate two more clinical trials for luvelta within the current year. These trials include the pivotal REFRaME-P1 trial in pediatric Acute Myeloid Leukemia (AML) and a Phase II trial in Non-Small Cell Lung Cancer (NSCLC). These developments indicate a significant advancement in the company's clinical programs.

The company's progress in these trials is a critical step in the development of luvelta, as it moves through the clinical phases required for potential regulatory approval and commercialization. The updates expected at ESMO and in the first half of 2025 will provide further insights into the efficacy and safety of the treatment.

Investors and stakeholders in Sutro Biopharma are likely to watch closely as the company advances its clinical trials and seeks to expand the potential applications of luvelta in treating various forms of cancer. The continuation of the Phase II/III REFRaME-O1 trial and the initiation of new trials underscore the company's commitment to advancing its pipeline and addressing unmet medical needs.

In other recent news, Sutro Biopharma has been making significant strides in its clinical trials and financial performance. Piper Sandler maintains its Overweight rating on Sutro Biopharma, highlighting the firm's strong financial position with $376 million in cash reserves. Sutro reported first-quarter 2024 earnings, with Wedbush maintaining an 'outperform' rating and an $8.00 price target. However, Deutsche Bank revised its price target to $10 from the previous $12, citing concerns about cash burn and competitive pressures, but maintains a 'buy' rating.

Sutro has enrolled 50 women with FolRα+ platinum-resistant ovarian cancer in the Phase II segment of the REFRaME-O1 trial for its drug candidate luvelta. The trial has now expanded to enroll around 516 patients, with an interim analysis expected that could lead to accelerated approval. The company is also set to present Phase Ib data on the combination of luvelta and Avastin for ovarian cancer.

In other developments, Sutro Biopharma has appointed Sukhi Jagpal as a new board director and Audit Committee member. The company is also advancing a phase 2 study combining luvelta with bevacizumab, and a phase 2 study of luvelta for non-small cell lung cancer is anticipated to start in the second half of 2024.

InvestingPro Insights

As Sutro Biopharma (NASDAQ:STRO) forges ahead with its clinical trials, real-time data from InvestingPro provides a snapshot of the company's financial health and market sentiment. Sutro Biopharma holds a market capitalization of approximately $288.73 million, reflecting investor valuation of the company's potential. Despite the promising clinical progress, the company's revenue growth over the last twelve months as of Q1 2024 stands at a notable 106.66%, a metric that investors may view as a positive indicator of the company's growth trajectory.

However, it's important to note the company's P/E ratio is -1.89, signaling that the company is currently not profitable. This aligns with an InvestingPro Tip that analysts do not anticipate the company will be profitable this year, which may be a point of consideration for investors. Furthermore, based on the last twelve months as of Q1 2024, the company’s gross profit margin was -28.45%, indicating challenges in maintaining profitability on its revenues.

For those looking to delve deeper into Sutro Biopharma's financials and future prospects, InvestingPro offers additional insights. There are over 10 InvestingPro Tips available, including an analysis of the company's cash position, shareholder yield, and expectations for net income. For comprehensive and up-to-date financial analysis, visit https://www.investing.com/pro/STRO.

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