Executive Summary

Surrozen recognized $10.0M of collaboration and license revenue from Boehringer Ingelheim (BI) in Q3 (milestone for advancing SZN-413), yielding positive operating income of $1.2M and a sharply narrower net loss of $1.4M; cash was $31.0M at quarter-end, with the $10M milestone payment received in October 2024 .
SZN-043 Phase 1b in severe alcohol-associated hepatitis (sAH) progressed: Cohort 1 (n=6; 0.5 mg/kg) completed dosing and 30-day follow-up with no drug-related SAEs, no deaths at day 30, and signals of clinical benefit (reductions in bilirubin and MELD; majority improved AST/ALT); proof-of-concept data expected 1H 2025 .
BI elected to further develop SZN-413 toward clinical testing, triggering the $10M milestone (payment received in October); Surrozen also nominated a new wholly owned preclinical ophthalmology portfolio and announced a TCGFB research collaboration (up to $6M over up to two years plus a warrant) .
Near-term stock catalysts: continued SZN-043 Phase 1b readouts into 1H 2025 and potential additional partner updates in ophthalmology; offsetting risks include non-cash volatility from warrant liabilities (Q3 other expense of $3.1M) and the non-recurring nature of milestone revenue .

What Went Well and What Went Wrong

What Went Well
- $10.0M milestone revenue recognized from BI (SZN-413), driving an operating profit of $1.2M and a much smaller net loss (-$1.4M) in Q3 .
- SZN-043 Phase 1b Cohort 1 completed with favorable early signals: “No drug related serious adverse events… There were no patient deaths at day 30… potential clinical benefit based on reductions in bilirubin and MELD… majority… improvements in AST and ALT” .
- Management highlighted pipeline momentum and external validation: “received notification that Boehringer planned to further develop SZN-413… and nominated a portfolio of novel preclinical ophthalmology candidates” .
What Went Wrong
- Non-cash fair value swings in warrant liabilities drove Q3 net other expense of $3.1M, partially offsetting operating strength .
- Cash declined to $31.0M from $37.8M in Q2 (before the $10M milestone cash receipt in October), reinforcing sensitivity to financing and milestone timing .
- Revenue quality is non-recurring (milestone-based), and there is no traditional product revenue; Q3 2023 revenue was $0 and earlier 2024 quarters reported no revenue lines, highlighting dependence on partners and financing .

Financial Results

Metric	Q3 2023	Q1 2024	Q2 2024	Q3 2024
Collaboration & License Revenue ($M)	$0.0	$0.0	$0.0	$10.0
Income (Loss) from Operations ($M)	$(11.189)	$(9.130)	$(9.049)	$1.232
Net Loss ($M)	$(10.445)	$(8.830)	$(25.261)	$(1.434)
Net Loss per Share ($)	$(5.14)	$(4.24)	$(7.99)	$(0.44)
R&D Expense ($M)	$6.112	$5.247	$5.335	$5.200
G&A Expense ($M)	$3.572	$3.883	$3.714	$3.568
Interest Income ($M)	$0.661	$0.385	$0.490	$0.431
Other (Expense) Income, Net ($M)	$0.083	$(0.085)	$3.695	$(3.097)
Restructuring ($M)	$1.505	$0.000	$0.000	$0.000
Cash & Cash Equivalents (Period End, $M)	—	$27.290	$37.765	$31.012

Notes:

Q2 and Q1 2024 revenue implied $0.0 as loss from operations equals total operating expenses, and no revenue line was presented in the statements of operations .
EBIT margin (% of revenue): Q3 2024 = 12.3% (1.232/10.0); Q1 and Q2 2024 not meaningful (no revenue) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
SZN-043 Phase 1b proof-of-concept timing	Clinical (sAH)	“1H 2025” (Q1 and Q2 2024)	“1H 2025”	Maintained
SZN-413 ophthalmology milestone	Preclinical → Clinical-readiness	“Potential to nominate lead Fzd4 agonist in 2024 (would trigger $10M)”	BI elected to further develop SZN-413; $10M milestone achieved; cash received Oct 2024	Achieved
Financial guidance (revenue, margins, OpEx, OI&E, tax, dividends)	FY/Q4	Not provided in prior updates	Not provided in Q3 update	N/A

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript was available in the company document set; themes reflect company press releases and 8-K disclosures .

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
R&D execution (SZN-043, sAH)	Q1: Phase 1a completed; Phase 1b to initiate; POC 1H25 . Q2: Phase 1b enrollment initiated; POC 1H25 .	Cohort 1 (n=6) completed with no drug-related SAEs, no deaths at day 30; early clinical signals; POC 1H25 reiterated .	Improving
Ophthalmology pipeline	Q1/Q2: SZN-413 partnership; lead candidate nomination anticipated in 2024 .	BI elected to further develop SZN-413; $10M milestone achieved; new wholly owned preclinical portfolio (SZN-8141/8143/SZN-113) nominated .	Accelerating
Partnerships/monetization	Q2: Anticipated BI milestone upon nomination in 2024 .	BI $10M milestone recognized; TCGFB collaboration up to $6M over two years plus warrant .	Positive
Financial profile	Q1/Q2: No revenue lines; losses driven by OpEx and mark-to-market items .	$10M milestone revenue; operating profit; other expense ($3.1M) from warrant liability .	Mixed (operationally stronger; non-cash volatility)

Management Commentary

“In the third quarter, we made substantial progress on enrolling patients in the SZN-043 Phase 1b trial, received notification that Boehringer planned to further develop SZN-413 to advance the compound and prepare it for clinical testing and nominated a portfolio of novel preclinical ophthalmology candidates.” — Craig Parker, CEO .
“We are encouraged to see that SZN-043 is safe at the first dose level in the study and showing signs of providing a clinical benefit to patients… SZN-043’s mechanism of stimulating hepatocyte specific regeneration… translates to beneficial changes in liver function and potentially clinical benefit.” — Craig Parker, CEO .

Q&A Highlights

No Q3 2024 earnings call transcript was posted in the available company documents; therefore, there are no Q&A highlights to report for the period .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2024 revenue and EPS was unavailable at query time due to data access limits. As a result, we cannot provide vs-consensus comparisons for this quarter. When available, we default to S&P Global consensus for estimates.

Key Takeaways for Investors

One-time $10M milestone recognition transformed the quarterly P&L: $10.0M revenue, $1.2M operating income, and sharply reduced net loss (-$1.4M) .
Early clinical signals in sAH de-risk SZN-043 on safety and potential efficacy markers; POC data remains the pivotal 1H 2025 catalyst .
Ophthalmology optionality: BI’s decision to further develop SZN-413 (and pay $10M) plus new wholly owned preclinical assets broaden the mid-term pipeline .
Cash was $31.0M at quarter-end, with $10M milestone cash received in October; runway remains sensitive to milestones and financing cadence .
Watch non-cash P&L volatility: warrant liability remeasurement drove $3.1M of other expense in Q3 and can obscure underlying operating trends .
No financial guidance; modeling should assume milestone-driven revenue variability and continued disciplined OpEx following 2023 restructuring .
Trading setup: near-term biotech catalyst path (SZN-043 POC) with partner validation in ophthalmology; shares may react to clinical updates, partnership news, and financing signals .

Appendix: Additional Context and KPIs

Program KPIs (current quarter)
- SZN-043 Phase 1b: Cohort 1 (n=6) completed; 9 sites across 5 countries; no drug-related SAEs; no deaths at day 30; bilirubin and MELD reductions; majority AST/ALT improvements .
- SZN-413 (ophthalmology): BI milestone achieved; $10M payment received Oct 2024 .
- TCGFB collaboration: up to $6M over up to two years plus a warrant for up to 3,380,000 shares (exercise price $0.0001), tied to vesting conditions .
Operating drivers (YoY)
- R&D down to $5.2M vs $6.1M (reflecting 2023 restructuring and program prioritization) .
- G&A flat at $3.6M; interest income lower ($0.4M vs $0.7M) on lower cash balances; other expense swung negative due to warrant liabilities .
Balance sheet snapshot
- Cash & cash equivalents: $31.0M at 9/30/24; plus $10M received in October .
- Warrant liabilities increased to $36.2M as of 9/30/24 (vs $0.115M at 12/31/23), explaining non-cash P&L volatility .

Sources: Company press release and Form 8-K for Q3 2024, prior quarter press releases, and related company announcements .

Surrozen, Inc./DE (SRZN)·Q3 2024 Earnings Summary