Sutro Biopharma double downgraded at BofA after luvelta deprioritized

BofA downgraded Sutro Biopharma (STRO) to Underperform from Buy with a price target of $1, down from $11, following the company’s announcement to deprioritize the development of luvelta. Management said the decision was largely based on their current cash position and highlighted ongoing discussions with other companies regarding luvelta out-licensing opportunities, but it is remains unclear the status of these discussions and the expected timing of a partnership announcement, notes the analyst, who removes all value for luvelta from the firm’s model and notes that luvelta was the primary driver of the firm’s prior Buy thesis.