BTIG starts Sutro Biopharma at buy; PT $19

BTIG initiated coverage of Sutro Biopharma (NASDAQ:STRO) with a “buy” rating and $19 price target. The stock closed at $8.43 on Oct. 4.

Sutro exploits rapid DNA-to-protein cycle times of cell free biosynthesis to produce better-optimized therapeutics, shaving nine-to-15 months of pre-clinical development times. “This approach has already resulted in $350-million in partnership funding with up to $2.5-billion to come,” writes analyst Thomas Shrader. 

Internally, he said company is focused on developing antibody-drug conjugates (ADCs), cytokine-based therapies, and checkpoint inhibitors. 

The company currently has two independent programs in the clinic: SRTO-001 and STRO-002. 

Mr. Shrader said STRO-001 is an ADC against a novel target that the company is evaluating for multiple myeloma (MM) and non-Hodgkin’s lymphoma. Sutro’s other asset, SRTO-002, is being assessed for ovarian and endometrial cancer. 

Partnered programs include a B-cell maturation antigen-ADCwith Celgene designed for reduced ocular toxicity and a precision cytokine pegylation program with Merck, he added.