Sutro Biopharma's Lead Ovarian Cancer Candidate Is A Game Changer, Analyst Sees Huge Upside

Oppenheimer initiated coverage on Sutro Biopharma Inc STRO, representing around 200% potential upside. 

The analysts Jay Olson and Matthew Hershenhorn view Sutro as a unique clinical-stage company pioneering the development of next-generation antibody-drug conjugates (ADCs), a growing area of strategic interest. 

Lead asset luveltamab tazivibulin (luvelta) is a FolRα-targeting ADC for platinum-resistant ovarian cancer (PROC), competing against ImmunoGen Inc's IMGN Elahere.

The analysts initiate with an Outperform rating and a price target of $10.

Luvelta represents a promising ADC (Antibody-Drug Conjugate) aimed at targeting folate receptor alpha (FolRα) and potentially gaining a competitive edge over IMGN's Elahere in prostate-resistant ovarian cancer patients. 

Luvelta leverages the advantages of site-specific conjugation of a toxic payload, made possible by STRO's proprietary XpressCF platform. This approach enhances the efficient delivery of the payload to tumor cells, potentially resulting in more predictable pharmacokinetics (PK) and stability.

Phase 1 data for Luvelta demonstrates its competitive efficacy in high-FolRα PROC patients when compared to Elahere's Phase 1 data. 

Luvelta shows a 40% objective response rate (ORR) and a median duration of response (mDOR) of 5.5 months, while Elahere records a 39% ORR and an mDOR of 4.9 months. 

Moreover, in low/mid-FolRα patient subgroups, Luvelta exhibits superior performance with a higher ORR than Elahere. Luvelta boasts a more favorable safety profile, notably lacking the ocular toxicity associated with Elahere. Additionally, using prophylaxis with Luvelta results in an 85% reduction in neutropenia.

Price Action: STRO shares are up 9.17% at $3.69 on the last check Friday.