Item 8.01 Other Events.
On March 22, 2023, Surrozen, Inc. issued a press release providing a business
update regarding our research pipeline and key developmental goals for 2023.
Research and Development Pipeline Updates
SZN-043
Surrozen is developing SZN-043 for severe liver disease with an initial focus in
severe alcoholic hepatitis. Clinical Development Timelines/Milestones:
•
Completed enrollment of the second cohort of the Phase 1a clinical trial in
healthy volunteers
•
Enrolled first patient in the SZN-043 Phase 1a clinical trial in chronic liver
disease, and expect data by the end of 2023
•
Initiate Phase 1b clinical trial in severe alcoholic hepatitis in 2024 with
potential availability of proof-of-concept data in the second half of 2024
SZN-1326
Surrozen is initially developing SZN-1326 for moderate to severe ulcerative
colitis.
•
Expect to re-initiate a Phase 1a clinical trial for SZN-1326 in healthy
volunteers by mid-2023 with a lower dose based on the Minimum Anticipated
Biological Effect Level (MABEL) following the evaluation of the clinical data
and further preclinical work
•
Expect Phase 1a data in healthy volunteers by the end of 2023
•
Anticipate potential proof-of-concept data in ulcerative colitis (Phase 1b) in
the second half of 2024
Research/Discovery Pipeline
•
Prioritized programs in lacrimal gland and cornea
•
Expect to nominate a fourth development candidate by end of 2023 and/or
potentially entering into a strategic partnership
Corporate Updates
Results of Recent Corporate Prioritization Activities
Surrozen is focused on maintaining a strong balance sheet and prioritizing
investments. Following the corporate prioritization and restructuring activities
the company has an expected cash runway into the second half of 2024 which
allows investment in key clinical and discovery programs. Cash, cash equivalents
and marketable securities were approximately $75.8 million as of December 31,
2022.
Corporate Partnerships
Surrozen executed a partnership with Boehringer Ingelheim in the fourth quarter
of 2022 to develop a Wnt agonist, SZN-413, for the treatment of people with
retinal diseases. The company anticipates the potential to identify the lead
Fzd-4-targeted Wnt agonist candidate by the end of 2023 which would trigger a
$10 million milestone payment.
Intellectual Property
Surrozen has filed or licensed over 20 patent families related to key
discoveries involving the WNT pathway and its modulation. Surrozen recently
received notices of allowance from the United States Patent and Trademark Office
(USPTO) for two patent families assigned to Surrozen related to the SZN-1326
program.
Financial Results for the Fourth Quarter and Full Year Ended December 31, 2022
The following are estimated unaudited preliminary financial results for the year
ended December 31, 2022. Investors are advised to review those risk factors
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2021, and the Company's most recent Quarterly Report on Form 10-Q
for the period ended September 30, 2022 under the heading "Risk Factors".
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Our independent registered public accounting firm has not audited these
preliminary financial results. Actual results may differ materially from these
preliminary results as a result of the completion of closing procedures, final
adjustments, and other developments arising between now and the time that our
financial results are finalized.
Cash Position: Cash, cash equivalents and marketable securities were $75.8
million as of December 31, 2022, compared to $123.5 million as of December 31,
2021.
Collaboration and License Revenue: Collaboration and license revenue for the
fourth quarter and year ended December 31, 2022, was $12.5 million, as compared
to zero for the same periods in 2021. The increase was related to the
non-refundable upfront payment pertaining to the Collaboration and License
Agreement executed in October 2022.
Research and Development Expenses: Research and development expenses for the
fourth quarter and full year ended December 31, 2022, were $9.4 million and
$37.0 million, respectively, as compared to $10.9 million and $40.2 million for
the same periods in 2021. The decreases were primarily due to the completion of
manufacturing drug substance for SZN-1326 and SZN-043 in 2021. Research and
development expenses include non-cash stock-based compensation expenses of $0.6
million and $1.6 million for the fourth quarter and year ended December 31,
2022, respectively as compared to $0.2 million and $0.7 million for the same
periods in 2021.
General and Administrative Expenses: General and administrative expenses for the
fourth quarter and full year ended December 31, 2022, were $5.2 million and
$19.8 million, respectively, as compared to $4.1 million and $14.2 million for
the same periods in 2021. The increases were primarily related to
employee-related expenses, including stock-based compensation expenses,
insurance costs and professional service fees, supporting the growth in
operations and costs associated with being a public company. General and
administrative expenses include non-cash stock-based compensation expenses of
$1.0 million and $2.9 million for the fourth quarter and year ended December 31,
2022, respectively, as compared to $0.5 million and $1.6 million for the same
periods in 2021.
Interest Income: Interest income for the fourth quarter and year ended December
31, 2022, were $0.5 million and $0.8 million, respectively, as compared to
$42,000 and $0.1 million for the same periods in 2021. The increases were
primarily related to the increase in interest rates on money market funds and
marketable securities.
Other Income (Expense), Net: Other income (expense), net for the fourth quarter
and year ended December 31, 2022, were a net other income of $0.9 million and
$7.6 million, respectively, as compared to a net other expense of $1,000 and
$0.3 million for the same periods in 2021. The variances were primarily related
to the gain on the remeasurement of warrant liabilities and transaction costs
incurred in connection with the business combination consummated in August 2021.
Net Loss: Net loss for the fourth quarter and year ended December 31, 2022, were
$0.8 million and $36.0 million, respectively, as compared to $15.0 million and
$54.6 million for the same periods in 2021.
Forward Looking Statements
This current report contains certain forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements generally are
accompanied by words such as "will," "plan," "intend," "potential," "expect,"
"could," or the negative of these words and similar expressions that predict or
indicate future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not limited to,
statements regarding Surrozen's discovery, research and development activities,
in particular its development plans for its product candidates SZN-1326,
SZN-043, and SZN-413, including anticipated clinical development timelines and
the availability of data, the potential for such product candidates to be used
to treat human disease, the Company's expectation that it will nominate a fourth
product candidate by the end of 2023, the Company's anticipated reduction in
operating expenses in 2023 and expected cash runway into the second half of
2023. These statements are based on various assumptions, whether or not
identified in this current report, and on the current expectations of the
management of Surrozen and are not predictions of actual performance. These
forward-looking statements are provided for illustrative purposes only and are
not intended to serve as, and must not be relied on as, a guarantee, an
assurance, a prediction, or a definitive statement of fact or probability.
Actual events and circumstances are difficult or impossible to predict and will
differ from assumptions. Many actual events and circumstances are beyond the
control of Surrozen. These forward-looking statements are subject to a number of
risks and uncertainties, including the initiation, cost, timing, progress and
results of research and development activities, preclinical or and clinical
trials with respect to SZN-1326, SZN-043, SZN-413 and potential future drug
candidates; the Company's ability to fund clinical trials and development
efforts, whether with existing funds or through additional fundraising;
Surrozen's ability to identify, develop and commercialize drug candidates;
Surrozen's ability to successfully complete preclinical and clinical studies for
SZN-1326, SZN-043, SZN-413, or other future product candidates; the effects that
arise from volatility in global economic, political, regulatory and market
conditions; and all other factors discussed in Surrozen's Annual Report on Form
10-K for the year ended December 31, 2021 and Surrozen's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2022 under the heading "Risk
Factors," and other documents Surrozen has filed, or will file, with the
Securities and Exchange Commission. If any of these risks materialize or our
assumptions prove incorrect, actual results could differ materially from the
results implied by these forward-looking statements. There
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may be additional risks that Surrozen presently does not know, or that Surrozen
currently believes are immaterial, that could also cause actual results to
differ from those contained in the forward-looking statements. In addition,
forward-looking statements reflect Surrozen's expectations, plans, or forecasts
of future events and views as of the date of this current report. Surrozen
anticipates that subsequent events and developments will cause its assessments
to change. However, while Surrozen may elect to update these forward-looking
statements at some point in the future, Surrozen specifically disclaims any
obligation to do so, except as required by law. These forward-looking statements
should not be relied upon as representing Surrozen's assessments of any date
after the date of this current report. Accordingly, undue reliance should not be
placed upon the forward-looking statements.
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