Surrozen, Inc./DE (SRZN)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 was execution-heavy: first patient dosed in the SZN‑043 Phase 1b trial, first‑in‑human Phase 1a data presented at EASL, and new SWEETS/TPD platform publications; cash rose to $37.8M from $27.3M on financing proceeds .
• Net loss widened to $25.3M versus $9.4M YoY and $8.8M QoQ, driven by a $20.4M non‑operating “loss on issuance of common stock, pre‑funded warrants and warrants” from the April private placement, and warrant liability fair value marks within other income .
• Clinical timelines were maintained: SZN‑043 proof‑of‑concept data expected 1H 2025; BI partnership milestone ($10M) was anticipated in 2024 and subsequently achieved post‑quarter on Sept 24, 2024, strengthening liquidity and external validation .
• No earnings call transcript was available; investor communication came via press releases and the 8‑K Item 2.02 exhibit .

What Went Well and What Went Wrong

What Went Well

• Enrollment initiated and ongoing in SZN‑043 Phase 1b; management reiterated “proof‑of‑concept data is anticipated in the first half of 2025” .
• Positive first‑in‑human Phase 1a readouts: “safe and well tolerated,” evidence of Wnt‑mediated pharmacodynamic activity (ALP, methacetin breath test, HepQuant HFR) .
• Platform momentum: publication of SWEETS bispecific antibodies demonstrating robust, cell‑specific Wnt activation via targeted protein degradation; expanded opportunity set in liver diseases .

Management quotes:

• “We made significant progress in the second quarter… dosing the first patient in the SZN‑043 Phase 1b trial… and publishing new information regarding the promise of our proprietary SWEETS platform.” – Craig Parker, CEO .
• “The Phase 1a study demonstrated activation of Wnt signaling, target engagement in the liver… and that the drug was safe and well tolerated.” – Craig Parker, CEO .

What Went Wrong

• Large non‑operating accounting charge: $20.4M “loss on issuance” tied to private placement structure, materially widening the quarterly net loss and EPS despite lower OpEx .
• Other income was volatile, driven by $4.8M non‑cash change in fair value of warrant liabilities offset by $1.5M transaction costs, highlighting sensitivity to financing/warrant accounting .
• No revenue and limited visibility on near‑term monetization beyond partner milestones; company remains dependent on external funding and milestone timing .

Financial Results

Notes:

• Cash increased QoQ on April financing; Q1 press release also cited pro forma cash of $43.2M including April financing proceeds .
• The widening net loss/EPS in Q2 largely reflects financing-related accounting items rather than core OpEx trends .

No segment revenue breakdown applies; Surrozen reported no revenue in the period (press materials provide only OpEx and below-the-line items) .

Clinical KPIs

Guidance Changes

No OpEx/revenue margin guidance was provided in the quarter; communications focused on clinical milestones and partnership timing .

Earnings Call Themes & Trends

No earnings call transcript was available; themes below reflect Company press releases and 8‑K exhibits.

Management Commentary

• “Surrozen is focused on transforming the treatment of severe diseases of the liver and eye, and we look forward to proof‑of‑concept data from the SZN‑043 Phase 1b clinical trial in the first half of 2025.” – Craig Parker, CEO (Q2 press release) .
• “We are excited to begin enrollment in our Phase 1b clinical trial… we anticipate that proof‑of‑concept data may be available in the first half of 2025.” – Craig Parker, CEO (Phase 1b initiation) .
• “Wnt modulation in hepatocytes is a promising new mechanism for supporting regeneration in injured livers.” – Craig Parker, CEO (Phase 1a EASL commentary) .

Q&A Highlights

No Q2 2024 earnings call transcript was found; no Q&A content available in Company filings or press releases .

Estimates Context

• Wall Street consensus (S&P Global) for Q2 2024 EPS and revenue was unavailable due to data access limits; Surrozen’s micro‑cap, pre‑revenue profile and warrant accounting make comparisons to EPS consensus less informative this quarter (S&P Global consensus data unavailable; SPGI request limit error).
• Given the lack of revenue and the large non‑operating “loss on issuance,” we expect analysts to adjust models for financing structure and non‑cash warrant effects rather than change core OpEx run‑rate assumptions .

Key Takeaways for Investors

• Core OpEx trended down YoY (R&D/G&A lower), but reported EPS/Net Loss were distorted by financing‑related accounting (loss on issuance and warrant liabilities FV); expect normalization as these items roll off or become less volatile .
• Liquidity improved: cash rose to $37.8M QoQ; subsequent $10M BI milestone post‑Q2 further supports near‑term funding of clinical programs .
• Clinical momentum is the primary stock driver: Phase 1b readout (MELD/Lille/survival) in 1H 2025 is the key catalyst; interim enrollment updates could de‑risk trajectory .
• Positive Phase 1a pharmacodynamic signals and acceptable safety increase confidence in mechanism; continued biomarker‑driven updates can support valuation into POC .
• Partnered retina program (SZN‑413) progressing at Boehringer improves optionality and external validation without Surrozen bearing development costs .
• Near‑term trading: expect sensitivity to financing/warrant headlines and milestone news flow; mid‑term thesis hinges on clinical efficacy signals in severe alcohol‑associated hepatitis and additional SWEETS/TPD platform validation .

Sources: Q2 2024 press release and 8‑K (Item 2.02 Exhibit 99.1); Q1 2024 8‑K; June 2024 program press releases; Sept 24, 2024 milestone press release. All citations inline above.