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Surrozen, Inc./DE (SRZN)·Q1 2024 Earnings Summary

Executive Summary

  • Net loss narrowed materially on disciplined spend: Q1 2024 net loss was $8.8M vs $14.3M in Q1 2023 as operating expenses fell 37% YoY (R&D -35%, G&A -27%) following 2023 restructuring .
  • Cash runway extended: cash and equivalents were $27.3M at 3/31; pro forma cash would be $43.2M including April financing, and management believes funding suffices for at least the next 12 months from the 10-Q filing date .
  • Pipeline execution: Phase 1a for SZN-043 completed in Feb-2024 with acceptable safety and PD activity; Phase 1b enrollment expected to begin in Q2 2024, with proof-of-concept data targeted for 1H 2025 (timeline shifted from H2 2024) .
  • External catalyst: potential $10M milestone in 2024 from Boehringer Ingelheim upon SZN-413 lead candidate nomination, plus EASL presentation of Phase 1a data in Milan; these are near-term stock reaction catalysts .

What Went Well and What Went Wrong

What Went Well

  • Cost discipline reduced burn: Total operating expenses fell to $9.1M (from $14.6M), driving a 38% YoY improvement in net loss .
  • Clinical progress for SZN-043: “We are excited to have observed activation of Wnt signaling, target engagement and improvement in markers of liver function during the Phase 1a studies and are pleased to advance SZN-043 into the Phase 1b clinical trial in severe alcohol-associated hepatitis” — Craig Parker, CEO .
  • Strategic optionality via BI partnership: 2024 nomination could trigger $10.0M milestone; economics include up to $587.0M in milestones and mid-single to low-double-digit royalties .

What Went Wrong

  • Timeline push-out: Proof-of-concept for SZN-043 moved to 1H 2025 vs prior expectation of H2 2024, lengthening the catalyst window and potentially delaying value inflection .
  • Program rationalization: SZN-1326 for IBD discontinued after Phase 1 SAD due to safety at higher doses and strategic cost considerations, reducing pipeline breadth .
  • Funding dependency persists: Company expects significant ongoing expenses and will likely need incremental capital over time despite April financing and cost actions .

Financial Results

Metric ($USD Millions unless noted)Q1 2023Q3 2023Q1 2024
Revenue$0.0 $0.0 $0.0
Research & Development$8.086 $6.112 $5.247
General & Administrative$5.299 $3.572 $3.883
Restructuring$1.207 $1.505 $0.000
Total Operating Expenses$14.592 $11.189 $9.130
Interest Income$0.547 $0.661 $0.385
Other (Expense)/Income, net$(0.252) $0.083 $(0.085)
Net Loss$(14.297) $(10.445) $(8.830)
Net Loss per Share (Basic/Diluted)$(7.16) $(0.34) $(4.24)

Notes:

  • Prior quarter (Q4 2023) press release/transcript not found; latest quarter comparison uses Q3 2023 .

Segment breakdown: Surrozen operates a single segment; no segment financials provided .

KPIs

KPIQ1 2023Q1 2024
Cash and Equivalents ($M)$27.809 $27.290
Pro Forma Cash incl. Apr 2024 Financing ($M)N/A$43.2
Net Cash Used in Operating Activities ($M)$(14.170) $(8.746)
Accounts Receivable ($M)$1.978 $2.128
Total Stockholders’ Equity ($M)$63.037 $30.136

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SZN-043 Phase 1b enrollment start2024“Initiate Phase 1b in 2024” Enrollment expected to begin Q2 2024 Maintained (timing specified)
SZN-043 Proof-of-Concept data2024/2025H2 2024 1H 2025 Lowered (timing delayed)
EASL presentation of Phase 1a data2024Not previously specifiedPresenting at EASL 2024 (Milan) New detail
SZN-413 lead candidate nomination (BI)20242024 nomination; triggers $10M milestone 2024 nomination; $10M milestone potential Maintained
SZN-1326 (IBD)2024Phase 1b in 2024; POC H2 2024 Discontinued after Phase 1 SAD Lowered (program terminated)
Cash runwayNext 12 monthsInto 2025 (prior commentary) Sufficient for at least next 12 months from filing date (incl. April proceeds) Updated (clarified)

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was found; themes inferred from press releases and 10-Q.

TopicPrevious Mentions (Q-2: Q3 2023)Previous Mentions (Q-1: Q4 2023 period)Current Period (Q1 2024)Trend
R&D execution (SZN-043)Phase 1a ongoing; POC aimed H2 2024 Phase 1a enrollment complete; safety/PD data in Q1 2024 Phase 1a completed; Phase 1b enrollment Q2 2024; POC 1H 2025 Continued progress; timeline push
Pipeline prioritizationRestructuring to focus on clinical programs Discontinue SZN-1326 post Phase 1 SAD Focus on liver/eye; cornea/respiratory preclinical data presented/published Narrowed focus
Funding/liquidityCash $43.4M; runway into 2025 Indicated need for capital; continued expenses Cash $27.3M; pro forma $43.2M post April financing; 12+ months runway from filing Strengthened near term
BI partnership (SZN-413)2024 nomination; $10M milestone Reiterated BI economics and potential nomination 2024 nomination reiterated; milestone potential Maintained
Regulatory/legal riskGeneral risk disclosure Risk factors updated Expanded risk factors incl. transaminase elevations monitoring Heightened diligence

Management Commentary

  • “2024 is expected to be an important year focused on advancing the SZN-043 Phase 1b trial toward proof-of-concept data… Surrozen remains driven to transform the treatment of severe diseases of the liver and eye” — Craig Parker, CEO .
  • “We are excited to have observed activation of Wnt signaling, target engagement and improvement in markers of liver function… and are pleased to advance SZN-043 into the Phase 1b clinical trial in severe alcohol-associated hepatitis” — Craig Parker, CEO .
  • Company reiterated BI partnership terms and potential $10.0M milestone upon SZN-413 lead nomination in 2024 .

Q&A Highlights

  • No Q1 2024 earnings call transcript identified; therefore no Q&A highlights available. We searched Surrozen’s earnings-call-transcript but found none during the period [ListDocuments search returned 0].

Estimates Context

  • Wall Street consensus (S&P Global): Estimates were unavailable at the time of this analysis due to data access limitations; no revenue or EPS comparison to consensus can be provided for Q1 2024. Where applicable in future, comparisons will be anchored to S&P Global consensus.

Key Takeaways for Investors

  • Operating expense reductions are flowing through to narrower losses and lower cash burn; this provides incremental runway to key clinical catalysts .
  • The SZN-043 timeline shift to 1H 2025 for POC elongates the catalyst path; near-term visibility hinges on Phase 1b initiation and EASL data disclosure .
  • April financing and potential BI milestone de-risk 2024 funding needs, but management still anticipates future capital requirements to support development beyond the next 12 months .
  • Discontinuation of SZN-1326 tightens focus on liver/eye and may streamline execution, though reduces diversification of clinical assets .
  • Watch for BI’s SZN-413 candidate nomination and any 2024 milestone receipt as non-dilutive catalysts .
  • Near-term trading setup: EASL presentation and Phase 1b enrollment news flow are the next visibility events; probability of outsized move will be driven by safety/PD clarity and any BI milestone confirmation .

Sources: Q1 2024 8-K press release and Exhibit 99.1 ; Q1 2024 10-Q ; April 1, 2024 8-K and Exhibit 99.1/99.2 ; Q3 2023 8-K press release ; January 18, 2024 8-K (Other Events) .