Sutro Biopharma Announces Second Major Restructuring to Extend Cash Runway

Sutro Biopharma, a San Francisco-based biopharmaceutical company, has announced a significant restructuring effort aimed at extending its cash runway and focusing resources on key development programs. This marks the second major workforce reduction for the company in 2025, following a previous round of layoffs earlier in the year.

Workforce Reduction and Financial Strategy

The latest restructuring will see Sutro lay off approximately one-third of its remaining workforce. This follows a previous 50% staff reduction implemented in March 2025, which included the closure of a manufacturing-support facility in San Mateo, California. The company expects these combined measures to extend its financial runway into at least mid-2027.

Jane Chung, CEO of Sutro Biopharma, stated, "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."

While the exact number of employees affected by this new round of layoffs is unclear, estimates suggest that Sutro's workforce could be reduced to around 120 full-time staff members, down from 182 after the first round of cuts.

Focus on ADC Programs and Collaborations

The restructuring is designed to allow Sutro to concentrate its efforts on three antibody-drug conjugate (ADC) programs and maintain its research and development collaborations. Key milestones the company aims to reach include:

1. Announcing initial clinical data for STRO-004, an ADC targeting tissue factors in solid tumors.
2. Initiating clinical studies for at least one additional ADC program.

These objectives are now expected to be achievable with the extended cash runway resulting from the restructuring efforts.

Recent Setbacks and Ongoing Partnerships

Sutro's decision to implement further cost-cutting measures comes in the wake of recent setbacks. In August 2025, Ipsen terminated a collaboration deal worth up to $900 million, which had been signed in April 2024 for the development of STRO-003, an ADC targeting various solid tumors and hematological cancers.

Despite this setback, Sutro maintains a collaboration with Astellas, established in 2022. This partnership, which provided Sutro with an upfront payment of $90 million and the potential for $422.5 million in additional milestones, focuses on developing "immunostimulatory" ADCs for undisclosed cancer targets.

As Sutro Biopharma navigates these challenging times, the company's strategic focus on its ADC pipeline and key collaborations will be crucial in determining its future success in the competitive biopharmaceutical landscape.