Sutro Biopharma (STRO, Financials) shares fell 6.7% to $1.25 at market close on Thursday following the company's announcement of a major restructuring, which includes workforce reductions and a shift in focus toward next-generation antibody drug conjugates. In after-hours trading, the stock dropped an additional 5.60% to $1.18.

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Beginning with its exatecan ADC, STRO-004, aimed at Tissue Factor, the biotechnology company situated in South San Francisco will give three preclinical ADC initiatives top priority. For STRO-004, the investigational new medication application is scheduled in the second part of 2025. By 2026 Sutro also intends to progress its integrin beta-6 ADC, STRO-006, into clinical development and submit an IND for its first fully owned dual-payload ADC in 2027.By year-end, the firm will cut its workers by almost half and close its own manufacturing plant, moving to outside production. While still looking for out-licensing prospects, it is also deprioritizing further investment in luveltam tazevibulin, or luvelta.Bill Newell will stay in an advising capacity; Jane Chung has been named chief executive officer. The leadership shifts right away.As of Dec. 31, 2024, Sutro reported $316.9 million in cash, cash equivalents, and marketable securities; discounting expected milestone payments from current partnerships, she anticipates her financial runway to stretch through at least the fourth quarter of 2026. Cash expenses between $40 million and $45 million are expected from the reorganization.Apart from royalties, the corporation is keeping its contacts with Ipsen and Astellas, which might provide up to $2 billion in milestone payments.

This article first appeared on GuruFocus.