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
an update on its research and development pipeline program
timelines and an overview of recent corporate priorities and
initiatives. The company’s prioritization activities are focused on
maximizing shareholder value by 1) aligning resources on R&D
investments for the two lead clinical development programs with a
focus on obtaining proof of concept data, 2) prioritizing
investment in the most advanced discovery/preclinical programs and
3) reducing operating expenses with the goal of maintaining a
strong balance sheet.
“We made significant progress during 2022 in our research and
development pipeline by advancing SZN-043 and SZN-1326 into
clinical development, nominating SZN-413 as a lead candidate and
licensing SZN-413 to Boehringer Ingelheim, in our first strategic
transaction,” said Craig Parker, President and Chief Executive
Officer of Surrozen. “We look forward to a productive 2023 with a
focus on progressing the clinical development program for SZN-043,
ultimately into our target indication of severe alcoholic
hepatitis, re-initiating a clinical trial for SZN-1326 in healthy
volunteers, continuing efforts with our partner, Boehringer
Ingelheim, to determine the lead candidate in retinopathies and
continuing prioritization of our key research and discovery
programs with a focus on delivering innovative, targeted and
high-value medicines.“
Research and Development Pipeline Updates
SZN-043
Surrozen is developing SZN-043 for severe liver disease with an
initial focus in severe alcoholic hepatitis.
Clinical Development Timelines/Milestones:
- Completed enrollment of the second
cohort of the Phase 1a clinical trial in healthy volunteers
- Enrolled first patient in the
SZN-043 Phase 1a clinical trial in chronic liver disease, and
expect data by the end of 2023
- Initiate Phase 1b clinical trial in
severe alcoholic hepatitis in 2024 with potential availability of
proof-of-concept data in the second half of 2024
SZN-1326
Surrozen is initially developing SZN-1326 for moderate to severe
ulcerative colitis.
- Expect to re-initiate a Phase 1a
clinical trial for SZN-1326 in healthy volunteers by mid-2023 with
a lower dose based on the Minimum Anticipated Biological Effect
Level (MABEL) following the evaluation of the clinical data and
further preclinical work
- Expect Phase 1a 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
Research/Discovery Pipeline
- Prioritized programs in lacrimal
gland and cornea
- Expect to nominate a fourth
development candidate by end of 2023 and/or potentially entering
into a strategic partnership
Corporate Updates
Results of Recent Corporate Prioritization Activities
Surrozen is focused on maintaining a strong balance sheet and
prioritizing investments. Following the corporate prioritization
and restructuring activities the company has an expected cash
runway into the second half of 2024 which allows investment in key
clinical and discovery programs. The company anticipates a
reduction in operating expenses, excluding non-cash and
non-recurring charges of approximately 15% in 2023 compared to
2022. Cash, cash equivalents and marketable securities were
approximately $75.8 million as of December 31, 2022.
Corporate Partnerships
Surrozen executed a partnership with Boehringer Ingelheim in the
fourth quarter of 2022 to develop a Wnt agonist, SZN-413, for the
treatment of people with retinal diseases. The company anticipates
the potential to identify the lead Fzd-4-targeted Wnt agonist
candidate by the end of 2023 which would trigger a $10 million
milestone payment.
Intellectual Property
Surrozen has filed or licensed over 20 patent families related
to key discoveries involving the WNT pathway and its modulation.
Surrozen recently received notices of allowance from the United
States Patent and Trademark Office (USPTO) for two patent families
assigned to Surrozen related to the SZN-1326 program.
Securities Purchase Agreement with Consonance
Entities
In the fourth quarter of 2022, Surrozen entered into a
securities purchase agreement with entities affiliated with
Consonance Capital Management LP (collectively Consonance). The
Company repurchased 5,382,499 shares of common stock and 1,310,496
warrants from Consonance for a purchase price of approximately $2.7
million. The shares of common stock were returned to authorized and
unissued status and the warrants were cancelled. Following the
repurchase, Consonance no longer holds any shares of Surrozen
common stock or warrants to purchase Surrozen common stock.
Sales Agreement Under an “At-The-Market" (ATM) Program with
Guggenheim Securities, LLC
In the fourth quarter of 2022, Surrozen entered into a sales
agreement relating to the sale of shares of the company’s common
stock. In accordance with the terms of the sales agreement, the
Company may offer and sell common stock from time to time under an
“at-the-market-program" with Guggenheim Securities, LLC acting as
its sales agent.
Financial Results for the Fourth Quarter and Full Year
Ended December 31, 2022
Cash Position: Cash, cash equivalents and
marketable securities were $75.8 million as of December 31, 2022,
compared to $123.5 million as of December 31, 2021.
Collaboration and License Revenue:
Collaboration and license revenue for the fourth quarter and year
ended December 31, 2022, was $12.5 million, as compared to zero for
the same periods in 2021. The increase was related to the
non-refundable upfront payment pertaining to the Collaboration and
License Agreement executed in October 2022.
Research and Development Expenses: Research and
development expenses for the fourth quarter and full year ended
December 31, 2022, were $9.4 million and $37.0 million,
respectively, as compared to $10.9 million and $40.2 million for
the same periods in 2021. The decreases were primarily due to the
completion of manufacturing drug substance for SZN-1326 and SZN-043
in 2021. Research and development expenses include non-cash
stock-based compensation expenses of $0.6 million and $1.6 million
for the fourth quarter and year ended December 31, 2022,
respectively as compared to $0.2 million and $0.7 million for the
same periods in 2021.
General and Administrative Expenses: General
and administrative expenses for the fourth quarter and full year
ended December 31, 2022, were $5.2 million and $19.8 million,
respectively, as compared to $4.1 million and $14.2 million for the
same periods in 2021. The increases were primarily related to
employee-related expenses, including stock-based compensation
expenses, insurance costs and professional service fees, supporting
the growth in operations and costs associated with being a public
company. General and administrative expenses include non-cash
stock-based compensation expenses of $1.0 million and $2.9 million
for the fourth quarter and year ended December 31, 2022,
respectively, as compared to $0.5 million and $1.6 million for the
same periods in 2021.
Interest Income: Interest income for the fourth
quarter and year ended December 31, 2022, were $0.5 million and
$0.8 million, respectively, as compared to $42,000 and $0.1 million
for the same periods in 2021. The increases were primarily related
to the increase in interest rates on money market funds and
marketable securities.
Other Income (Expense), Net: Other income
(expense), net for the fourth quarter and year ended December 31,
2022, were a net other income of $0.9 million and $7.6 million,
respectively, as compared to a net other expense of $1,000 and $0.3
million for the same periods in 2021. The variances were primarily
related to the gain on the remeasurement of warrant liabilities and
transaction costs incurred in connection with the business
combination consummated in August 2021.
Net Loss: Net loss for the fourth quarter and
year ended December 31, 2022, were $0.8 million and $36.0 million,
respectively, as compared to $15.0 million and $54.6 million for
the same periods in 2021.Conference Call
DetailsSurrozen will host an investor conference call and
live audio webcast today at 4:30 PM ET to provide a corporate and
pipeline update.
Interested parties may register for the investor conference call
in advance via the Investors section of the Surrozen website (Click
HERE). To ensure a timely connection it is recommended that
participants register at least 15 minutes prior to the scheduled
webcast. A replay of the webcast will be available via the
Investors section of the Surrozen website (Click HERE).
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. Surrozen expects to re-initiate
the Phase 1a clinical trial in healthy volunteers by the middle of
2023. The clinical trial will use a lower dose following evaluation
of clinical and preclinical data and the determination to use the
minimum anticipated biologically effective level (MABEL). Surrozen
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. Surrozen
published in Cellular and Molecular Gastroenterology in
2022, findings demonstrating that SZN-1326 showed the most
rapid and robust repair of the injured colon epithelium of
evaluated molecules, without affecting normal epithelium and
without causing hyperplasia.
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. Surrozen expects
to initiate a Phase 1b clinical trial in severe 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 $586.5 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 2023. 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 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, 2021 and
Surrozen's quarterly report on Form 10-Q for the quarter ended
September 30, 2022 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.Consolidated Statements of Operations and
Comprehensive Loss(In thousands, except per share
amounts)
|
Year Ended December 31, |
|
|
2022 |
|
2021 |
|
Collaboration and license revenue |
$ |
12,500 |
|
$ |
— |
|
Operating expenses: |
|
|
|
|
Research and development |
|
37,013 |
|
|
40,177 |
|
General and administrative |
|
19,826 |
|
|
14,214 |
|
Total operating expenses |
|
56,839 |
|
|
54,391 |
|
Loss from operations |
|
(44,339 |
) |
|
(54,391 |
) |
Interest income |
|
781 |
|
|
72 |
|
Other income (expense),
net |
|
7,554 |
|
|
(329 |
) |
Net loss |
$ |
(36,004 |
) |
$ |
(54,648 |
) |
|
|
|
|
|
Net loss per share
attributable to common stockholders, basic and diluted |
$ |
(1.04 |
) |
$ |
(2.21 |
) |
|
|
|
|
|
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, basic and diluted |
|
34,722 |
|
|
24,689 |
|
SURROZEN,
INC.Consolidated Balance
Sheets(In thousands)
|
December 31, |
|
|
2022 |
|
2021 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
24,690 |
|
$ |
33,091 |
|
Accounts receivable |
|
1,978 |
|
|
— |
|
Short-term marketable securities |
|
51,148 |
|
|
68,760 |
|
Prepaid expenses and other current assets |
|
3,489 |
|
|
3,338 |
|
Total current assets |
|
81,305 |
|
|
105,189 |
|
|
|
|
|
|
Property and equipment, net |
|
3,630 |
|
|
4,794 |
|
Operating lease right-of-use
assets |
|
3,268 |
|
|
4,582 |
|
Long-term marketable
securities |
|
— |
|
|
21,655 |
|
Restricted cash |
|
405 |
|
|
405 |
|
Other assets |
|
827 |
|
|
549 |
|
Total assets |
$ |
89,435 |
|
$ |
137,174 |
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
658 |
|
$ |
2,718 |
|
Accrued and other liabilities |
|
6,848 |
|
|
8,662 |
|
Lease liabilities, current portion |
|
2,226 |
|
|
2,193 |
|
Total current liabilities |
|
9,732 |
|
|
13,573 |
|
|
|
|
|
|
Lease liabilities, noncurrent
portion |
|
3,376 |
|
|
5,600 |
|
Warrant liabilities |
|
326 |
|
|
8,301 |
|
Total liabilities |
|
13,434 |
|
|
27,474 |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Preferred stock |
|
— |
|
|
— |
|
Common stock |
|
3 |
|
|
4 |
|
Additional paid-in-capital |
|
254,892 |
|
|
252,464 |
|
Accumulated other comprehensive loss |
|
(241 |
) |
|
(119 |
) |
Accumulated deficit |
|
(178,653 |
) |
|
(142,649 |
) |
Total stockholders’ equity |
|
76,001 |
|
|
109,700 |
|
Total liabilities and
stockholders’ equity |
$ |
89,435 |
|
$ |
137,174 |
|
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