Blackstone injects $140M cash into Sutro Biopharma for Vaxcyte royalties

Investor Blackstone Life Sciences is paying Sutro Biopharma $140 million cash and throwing in another potential $250 million in biobucks in exchange for royalties on possible future sales of Vaxcyte’s products.

Vaxcyte is a next-gen vaccine company formed around Sutro’s platform technology. Now, the company is the center of a royalty financing pact between Blackstone and Sutro, which holds a 4% royalty in the potential future sales of Vaxcyte’s products.

Vaxcyte’s aiming to pry open Pfizer’s tight grip on the pneumococcal market with lead candidate VAX-24, a phase 3-ready pneumococcal conjugate vaccine built around Sutro’s cell-free protein synthesis tech.

In April, Vaxcyte shared phase 2 data that found its asset showed non-inferiority against 90% of the serotypes covered by Pfizer’s Prevnar 20 among adults 65 and older and was superior against the four serotypes unique to Vaxcyte’s candidate. Vaxcyte said its vaccine has a similar tolerability profile to Prevnar 20 across all patients 18 and older, with most local and system reactions classed as mild to moderate.   

Vaxcyte is still a few years away from a possible market entry for VAX-24 but said it will speak to regulators about phase 3 plans and expects a readout in 2025. It’s a similar timeline for the vaccine in infants, an indication where Vaxcyte will have to battle against both Merck and Pfizer if it gains approval.  

The freshly inked deal will allow Sutro to advance its own pipeline, specifically an antibody-drug conjugate called luveltamab tazevibulin, Sutro CEO Bill Newell said in a June 26 release. The company recently launched a late-stage study evaluating the asset in patients with platinum-resistant ovarian cancer. Sutro will also focus on its other wholly owned ADC, the CD74-targeting STRO-001 currently being evaluated in clinical studies for B-cell malignancies.