Surrozen, Inc.

Surrozen did not report quarterly revenue or EPS on this corporate update call. It said cash, cash equivalents and marketable securities were approximately $76 million as of the end of 2022, and it expects cash runway into the second half of 2024. Management also said operating expenses, excluding noncash and nonrecurring charges, are expected to decline by approximately 15% in 2023 compared with 2022. On the development side, the company said SZN-043 enrolled its first patient in chronic liver disease, expects Phase I data by year-end 2023, and if safety is acceptable plans a Phase Ib severe alcoholic hepatitis study in 2024 with proof-of-concept data in the second half of 2024. For SZN-1326, it expects to resume dosing in the next few weeks, with UC proof-of-concept study initiation in 2024 and proof-of-concept data in the second half of 2024. The Boehringer Ingelheim partner program could trigger a $10 million milestone payment if a lead Frizzled4-targeted candidate is nominated by year-end 2023.

Craig Parker framed Surrozen as a platform company using Wnt biology to drive tissue regeneration in areas of high unmet need, especially severe alcoholic hepatitis and inflammatory bowel disease. His tone was optimistic but cautious: he repeatedly emphasized that the company is now prioritizing safety, using lower doses, and trying to understand the transaminase signal rather than forcing development ahead. He also pointed to a broader pipeline in ophthalmology and a strong patent position as evidence that the science platform still has multiple shots on goal.

Chuck Williams focused on capital discipline and balance-sheet management. He said the Q1 restructuring was intended to align resources with the two lead clinical programs, prioritize the most advanced discovery programs in lacrimal and cornea, and reduce spend; as a result, operating expenses excluding noncash and nonrecurring charges are expected to fall about 15% in 2023 versus 2022. He also highlighted the approximately $76 million cash balance at year-end 2022 and said the company expects runway into the second half of 2024. On capital allocation, he noted the repurchase of about 5.4 million common shares and about 1.3 million warrants from Continence for about $2.7 million, and said Boehringer Ingelheim’s year-end candidate nomination could trigger a $10 million milestone payment.

Analysts focused on the transaminase elevations and how Surrozen plans to dose around them. Management said 043’s next study is in chronic liver disease patients with lower FibroScan scores than frank cirrhosis, that there is no known co-administered mitigation strategy, and that the issue may come down to finding a dose where regenerative activity appears without hepatocellular injury. Questions also centered on 1326 half-life and dosing frequency; management said the primate half-life is about 5 days, but biological effects could last longer, so dosing could be every other week or even less frequent, though nothing is finalized. In response to questions on target engagement, management said 043 has confirmed ASGR1-related target engagement via ALP elevation, while 1326 lacks a target engagement assay and will rely on UC biopsies and Axin2 to confirm pathway activation.