Surrozen, Inc. (“Surrozen” or the “Company”) (Nasdaq: SRZN), a
company pioneering targeted therapeutics that selectively activate
the Wnt pathway for tissue repair and regeneration, today provided
first quarter 2023 financial results and corporate and pipeline
updates.
“During the first quarter of 2023, following the
completion of dosing in multiple cohorts of healthy volunteers, we
enrolled the first patient in the Phase 1a clinical trial of
SZN-043 in chronic liver disease, and, recently, re-initiated
enrollment in the SZN-1326 Phase 1a clinical trial in healthy
volunteers,” said Craig Parker, President and Chief Executive
Officer of Surrozen. “We look forward to a productive 2023 as we
evaluate the initial safety results from SZN-043 and SZN-1326
clinical trials, advance our partnered program and continue to
focus on delivering high-value medicines and shareholder value
through our innovative technologies for Wnt pathway
modulation.“
Research and Development Pipeline
Updates
SZN-043
- Enrollment ongoing in the SZN-043 Phase 1a clinical trial in
people with chronic liver disease and healthy volunteers; the
company expects safety data by the end of 2023
- Anticipate initiation of Phase 1b clinical trial in alcoholic
hepatitis in 2024 with potential availability of proof-of-concept
data in the second half of 2024
SZN-1326
- Re-initiated the SZN-1326 Phase 1a clinical trial in healthy
volunteers during the second quarter of 2023; enrollment
ongoing
- Expect Phase 1a safety data in healthy volunteers by the end of
2023
- Anticipate potential proof-of-concept data in ulcerative
colitis (Phase 1b) in the second half of 2024
Corporate Updates
Results of Recent Corporate Prioritization
Activities
In January 2023, Surrozen implemented a
restructuring plan approved by the board of directors to prioritize
and focus resources on key clinical and discovery programs. The
plan included a reduction of the overall workforce by approximately
25%. The company completed the workforce reduction in the first
quarter of 2023.
Financial Results for the First Quarter
Ended March 31, 2023
Cash Position: Cash, cash
equivalents and marketable securities for the first quarter ended
March 31, 2023 were $61.7 million, compared to $75.8 million as of
December 31, 2022.
Research and Development Expenses:
Research and development expenses for the first quarter ended March
31, 2023 were $8.1 million, as compared to $9.4 million for the
same period in 2022. The decrease was primarily as a result of the
restructuring plan implemented in the first quarter of 2023 to
prioritize and focus our resources on key clinical and discovery
programs. Research and development expenses include non-cash
stock-based compensation expenses of $0.3 million for the first
quarter ended March 31, 2023 and the same period in 2022.
General and Administrative
Expenses: General and administrative expenses for the
first quarter ended March 31, 2023 were $5.3 million, as compared
to $5.1 million for the same period in 2022. The increase was
primarily related to employee-related expenses, including
stock-based compensation expenses. General and administrative
expenses include non-cash stock-based compensation expenses of $0.8
million for the first quarter ended March 31, 2023, as compared to
$0.6 million for the same period in 2022.
Restructuring: Restructuring
charges for the first quarter ended March 31, 2023 were $1.2
million, as compared to zero for the same period in 2022. The
increase was attributable to a workforce reduction implemented in
the first quarter of 2023.
Interest Income: Interest income
for the first quarter ended March 31, 2023 was $0.5 million, as
compared to $49,000 for the same period in 2022. The increase was
primarily related to the increase in interest rates on our money
market funds and marketable securities.
Other Income (Expense), Net: Other
income (expense), net for the first quarter ended March 31, 2023
was a net other expense of $0.3 million, as compared to a net other
income of $6.5 million for the same period in 2022. The variance
was primarily related to the change in fair value of warrant
liabilities.
Net Loss: Net loss for the first
quarter ended March 31, 2023 was $14.3 million, as compared to $7.9
million for the same period in 2022.
About SZN-1326 for Ulcerative
ColitisSZN-1326 is the first development candidate
designed using Surrozen’s SWAP™ technology and targets the
Wnt-signaling pathway in the intestinal epithelium. Surrozen is
initially developing SZN-1326 for moderate to severe ulcerative
colitis. Dosing of healthy volunteers in a Phase 1a clinical trial
began in May 2022 and was voluntarily paused in the fourth quarter
of 2022 to further understand the observed transaminase elevations.
Enrollment was re-initiated and is ongoing in the Phase 1a clinical
trial in healthy volunteers. Surrozen expects safety data from the
Phase 1a clinical trial in healthy volunteers by the end of 2023.
Surrozen also expects to initiate a Phase 1b clinical trial in
ulcerative colitis patients in 2024 and anticipates
proof-of-concept data will potentially be available in the second
half of 2024.
About SZN-043 for Severe Alcoholic
HepatitisSZN-043 is the first development candidate using
Surrozen’s SWEETS™ technology. Surrozen is developing SZN-043 for
severe liver diseases, initially focusing on severe alcoholic
hepatitis. The dosing of healthy volunteers in a Phase 1a clinical
trial began in June 2022. Following the completion of the second
cohort of the Phase 1a clinical trial, the company began enrollment
in patients with chronic liver disease with the first patient
enrolled in the first quarter of 2023. The Phase 1a clinical trial
is ongoing and the company expects safety data by the end of 2023.
Surrozen expects to initiate a Phase 1b clinical trial in alcoholic
patients in 2024 and anticipates proof of concept data will
potentially be available in the second half of 2024.
About SZN-413 for Retinal
DiseasesSZN-413 is a bi-specific antibody targeting
Fzd4-mediated Wnt signaling designed using Surrozen’s SWAP™
technology. It is currently being developed for the treatment of
retinal vascular-associated diseases. Data generated by Surrozen
with SZN-413 in preclinical models of retinopathy demonstrated that
SZN-413 could potently stimulate Wnt signaling in the eye, induce
normal retinal vessel regrowth, suppress pathological vessel growth
and reduce vascular leakage. This novel approach could thus
potentially allow for regeneration of healthy eye tissue, not only
halting retinopathy, but possibly allowing for a full reversal of
the patient’s disease.
In the fourth quarter of 2022, Surrozen entered
into a strategic partnership with Boehringer Ingelheim for the
research and development of SZN-413 for the treatment of retinal
diseases. Under the terms of the agreement, Boehringer Ingelheim
received an exclusive, worldwide license to develop SZN-413 and
other Fzd4-specific Wnt-modulating molecules for all purposes,
including as a treatment for retinal diseases, in exchange for an
upfront payment to Surrozen of $12.5 million. Surrozen will also be
eligible to receive up to $587.0 million in success-based
development, regulatory, and commercial milestone payments, in
addition to mid-single digit to low-double digit royalties on
sales. After an initial period of joint research, Boehringer
Ingelheim will assume all development and commercial
responsibilities.
About Wnt SignalingWnt signaling
plays key roles in the control of development, homeostasis, and
regeneration of many essential organs and tissues, including liver,
intestine, lung, kidney, retina, central nervous system, cochlea,
bone, and others. Modulation of Wnt signaling pathways has
potential for treatment of degenerative diseases and tissue
injuries. Surrozen’s platform and proprietary technologies have the
potential to overcome the limitations in pursuing the Wnt pathway
as a therapeutic strategy.
About SurrozenSurrozen is a
clinical stage biotechnology company discovering and developing
drug candidates to selectively modulate the Wnt pathway. Surrozen
is developing tissue-specific antibodies designed to engage the
body’s existing biological repair mechanisms with a current focus
on inflammatory bowel, severe liver and eye diseases. For more
information, please visit www.surrozen.com.
Forward Looking Statements
This press release contains certain forward-looking
statements within the meaning of the federal securities laws.
Forward-looking statements generally are accompanied by words such
as “will,” “plan,” “intend,” “potential,” “expect,” “could,” or the
negative of these words and similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. These forward-looking statements include, but
are not limited to, statements regarding Surrozen’s discovery,
research and development activities, in particular its development
plans for its product candidates SZN-1326, SZN-043, and SZN-413,
including anticipated clinical development timelines and the
availability of data, the potential for such product candidates to
be used to treat human disease, the Company’s expectation that it
will nominate a fourth product candidate by the end of 2023, the
Company’s anticipated reduction in operating expenses in 2023 and
expected cash runway into the second half of 2024. These statements
are based on various assumptions, whether or not identified in this
press release, and on the current expectations of the management of
Surrozen and are not predictions of actual performance. These
forward-looking statements are provided for illustrative purposes
only and are not intended to serve as, and must not be relied on
as, a guarantee, an assurance, a prediction, or a definitive
statement of fact or probability. Actual events and circumstances
are difficult or impossible to predict and will differ from
assumptions. Many actual events and circumstances are beyond the
control of Surrozen. These forward-looking statements are subject
to a number of risks and uncertainties, including the initiation,
cost, timing, progress and results of research and development
activities, preclinical or and clinical trials with respect to
SZN-1326, SZN-043, SZN-413 and potential future drug candidates;
the Company’s ability to fund its preclinical and clinical trials
and development efforts, whether with existing funds or through
additional fundraising; Surrozen’s ability to identify, develop and
commercialize drug candidates; Surrozen’s ability to successfully
complete preclinical and clinical studies for SZN-1326, SZN-043,
SZN-413, or other future product candidates; the effects that arise
from volatility in global economic, political, regulatory and
market conditions; and all other factors discussed in Surrozen’s
Annual Report on Form 10-K for the year ended December 31, 2022 and
Surrozen’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2023 under the heading “Risk Factors,” and other
documents Surrozen has filed, or will file, with the Securities and
Exchange Commission. If any of these risks materialize or our
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks that Surrozen presently does not know, or
that Surrozen currently believes are immaterial, that could also
cause actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect Surrozen’s expectations, plans, or forecasts of future
events and views as of the date of this press release. Surrozen
anticipates that subsequent events and developments will cause its
assessments to change. However, while Surrozen may elect to update
these forward-looking statements at some point in the future,
Surrozen specifically disclaims any obligation to do so, except as
required by law. These forward-looking statements should not be
relied upon as representing Surrozen’s assessments of any date
after the date of this press release. Accordingly, undue reliance
should not be placed upon the forward-looking statements.
Investor
Contact:Investorinfo@surrozen.com
SURROZEN, INC.Condensed
Consolidated Statements of Operations(In
thousands, except per share
amounts)(Unaudited)
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Operating expenses: |
|
|
|
|
|
Research and development |
$ |
8,086 |
|
|
$ |
9,371 |
|
General and administrative |
|
5,299 |
|
|
|
5,122 |
|
Restructuring |
|
1,207 |
|
|
|
— |
|
Total operating expenses |
|
14,592 |
|
|
|
14,493 |
|
Loss from operations |
|
(14,592 |
) |
|
|
(14,493 |
) |
Interest income |
|
547 |
|
|
|
49 |
|
Other income (expense),
net |
|
(252 |
) |
|
|
6,497 |
|
Net loss |
$ |
(14,297 |
) |
|
$ |
(7,947 |
) |
|
|
|
|
|
|
Net loss per share
attributable to common stockholders, basic and diluted |
$ |
(0.48 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, basic and diluted |
|
29,971 |
|
|
|
34,863 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SURROZEN, INC.Condensed
Consolidated Balance Sheets(In thousands, except
per share amounts)
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022(1) |
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
27,809 |
|
|
$ |
24,690 |
|
Accounts receivable |
|
1,978 |
|
|
|
1,978 |
|
Short-term marketable securities |
|
33,937 |
|
|
|
51,148 |
|
Prepaid expenses and other current assets |
|
3,310 |
|
|
|
3,489 |
|
Total current assets |
|
67,034 |
|
|
|
81,305 |
|
|
|
|
|
|
|
Property and equipment, net |
|
3,378 |
|
|
|
3,630 |
|
Operating lease right-of-use
assets |
|
2,967 |
|
|
|
3,268 |
|
Restricted cash |
|
405 |
|
|
|
405 |
|
Other assets |
|
416 |
|
|
|
827 |
|
Total assets |
$ |
74,200 |
|
|
$ |
89,435 |
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
171 |
|
|
$ |
658 |
|
Accrued and other liabilities |
|
5,324 |
|
|
|
6,848 |
|
Lease liabilities, current portion |
|
2,294 |
|
|
|
2,226 |
|
Total current liabilities |
|
7,789 |
|
|
|
9,732 |
|
|
|
|
|
|
|
Lease liabilities, noncurrent
portion |
|
2,783 |
|
|
|
3,376 |
|
Warrant liabilities |
|
591 |
|
|
|
326 |
|
Total liabilities |
|
11,163 |
|
|
|
13,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
3 |
|
|
|
3 |
|
Additional paid-in-capital |
|
256,034 |
|
|
|
254,892 |
|
Accumulated other comprehensive loss |
|
(50 |
) |
|
|
(241 |
) |
Accumulated deficit |
|
(192,950 |
) |
|
|
(178,653 |
) |
Total stockholders’ equity |
|
63,037 |
|
|
|
76,001 |
|
Total liabilities and
stockholders’ equity |
$ |
74,200 |
|
|
$ |
89,435 |
|
(1) Derived from the audited financial statements,
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2022.
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