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Why Sutro Biopharma Stock Is Losing Ground Today

By Cory Renauer – Jan 6, 2022 at 12:37PM

Key Points

  • Yesterday, Sutro Biopharma reported phase 1 trial results for its lead candidate, STRO-002.
  • Treatment with STRO-002 led to measurable tumor shrinkage early in the study but a dangerous side effect could keep it from advancing any further.

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Phase 1 data for its ovarian cancer candidate was a little disappointing.

What happened

Shares of Sutro Biopharma (STRO 3.70%), a clinical-stage biopharmaceutical company, are falling after the company reported clinical trial results for its lead candidate. Investors losing confidence in the STRO-002 program knocked the stock down 27.8% as of 12:20 p.m. ET on Thursday.

So what 

Sutro Biopharma stock is falling in response to results from a phase 1 trial with ovarian cancer patients and STRO-002. This is an antibody-drug conjugate (ADC) that targets folate receptor alpha and it isn't the only one in development. Mirvetuximab soravtansine from Immunogen failed to reduce ovarian cancer patients' risk of disease progression in a phase 3 trial back in 2019.

Scientist looking down into a microscope.

Image source: Getty Images.

Among the first 33 evaluable patients, treatment with STRO-002 shrank tumors for 11. That isn't bad considering this was a heavily pretreated population.

The stock is sliding today because it looks like STRO-002 wipes out too many white blood cells to have a compelling benefit-to-risk ratio. It's still early in the study and neutropenia linked to treatment already led to the death of one patient. As a result, the company may need to move forward with a dose that isn't quite effective enough to improve patients' chance of long-term survival.  

Now what

These interim trial results don't necessarily mean STRO-002 will fail to significantly reduce patients' risk of disease progression. Investors who remember Immunogen's troubles, though, aren't taking chances.

In addition to STRO-002, Sutro Biopharma is developing STRO-001, which has a completely different target. The company recently wrapped up the first stage of a proof-of-concept trial with STRO-001, but hasn't given investors a timeline for presenting efficacy data from this program.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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