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Sutro Biopharma (STRO) Rises 9% in the Past Week: Here's Why

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Sutro Biopharma (STRO - Free Report) , a clinical-stage company, is focused on developing novel antibody drug conjugates or ADC candidates using its proprietary drug development platforms to treat several oncology indications. The company’s pipeline comprises only one candidate, luveltamab tazevibulin or luvelta (formerly known as STRO-002), which is being developed for various FRα-expressing cancers.

Sutro Biopharma’s shares gained 8.9% in the past week after the company announced that it has begun enrollment in its global phase II REFRαME-L1 study of luvelta for patients with non-small cell lung cancer (NSCLC) whose tumor expresses FRα.

Management claims that luvelta is differentiated from currently available treatment options for the above indication due to its precise design, wide therapeutic window and ability to treat patients with lower FRα expression profiles, offering patients a chance for targeted therapy. 

Year to date, shares of Sutro Biopharma have gained 16.8% compared with the industry’s 1.4% growth.

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The planned REFRαME-L1 study will evaluate the safety and efficacy of luvelta in adult patients with previously treated advanced or metastatic NSCLC with FRα expression ≥25% Tumor Proportion Score. The expected dosing regimen in the study will be 4.3 mg/kg of luvelta every three weeks. Top-line results from the lung cancer study are anticipated in the first half of 2025.

Lung cancer is the primary cause of cancer-related deaths globally. Most advanced NSCLC patients face a very poor prognosis. Despite various treatment approaches, the majority of these patients eventually develop resistance to treatments, leading to fewer available options as the disease progresses to later stages. Per Sutro Biopharma, approximately 30% of patients with adenocarcinoma NSCLC have FRα expression.

Please note that luvelta is primarily being developed for a broad range of patients with ovarian cancer, including those with lower FRα-expression who are not eligible for approved treatment options targeting FRα. An ongoing mid to late-stage, registration-directed, study is currently evaluating luvelta for patients with platinum-resistant ovarian cancer. A separate mid-stage study is also underway, evaluating luvelta in combination with bevacizumab for the same indication.

Apart from the NSCLC indication, Sutro Biopharma is also evaluating the candidate in additional ongoing studies to treat patients with endometrial cancer and leukemia. The company anticipates initiating the phase II/III REFRαME-P1 registration-directed study on luvelta for patients with CBF/GLIS2 acute myeloid leukemia (AML), a rare subtype of pediatric cancer, in the second half of 2024.

Please note that Sutro Biopharma’s luvelta enjoys the Fast Track designation for ovarian cancer and Orphan Drug and Rare Pediatric Disease designations for CBF/GLIS2 Pediatric AML indications in the United States.

Zacks Rank & Key Picks

Sutro Biopharma currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the overall healthcare sector include Arcturus Therapeutics (ARCT - Free Report) , Bioventus (BVS - Free Report) and Fulcrum Therapeutics (FULC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, the consensus estimate for Arcturus Therapeutics’ 2024 loss per share has narrowed from $4.39 to $2.60. The estimate for 2025 is currently pegged at an earnings of 21 cents per share. Year to date, shares of Arcturus Therapeutics have lost 30.3%.

Earnings of Arcturus Therapeutics beat estimates in each of the last four quarters. ARCT delivered a four-quarter average earnings surprise of 56.73%.

In the past 60 days, the consensus estimate for Bioventus’ 2024 earnings per share has risen from 27 cents to 40 cents. The estimate for 2025 has increased from 43 cents to 45 cents during the same period. Year to date, shares of Bioventus have surged 88.2%.

BVS beat estimates in three of the last four quarters and missed the mark on one occasion, delivering an average earnings surprise of 102.86%.

In the past 60 days, the consensus estimate for Fulcrum Therapeutics’ 2024 loss per share has narrowed from $1.24 to 48 cents. The loss estimate for 2025 has narrowed from $1.71 to $1.51 during the same period. Year to date, shares of Fulcrum Therapeutics have jumped 35.9%.

FULC beat estimates in each of the last four quarters, delivering an average earnings surprise of 393.18%.

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