8-K: Surrozen Announces $175 Million Private Placement to Focus on Ophthalmology Therapeutics

Sentiment:

Press Release 24 March 2025 4:11 PM

Surrozen secures $175 million in private placement to advance its ophthalmology pipeline, discontinuing its SZN-043 program for severe alcohol-associated hepatitis.

Capital raiseSurrozen has entered into a securities purchase agreement with certain institutional and accredited investors to purchase shares of common stock, or pre-funded warrants in lieu thereof, and accompanying warrants to purchase shares of common stock.The private placement was priced at-the-market under the rules and regulations of The Nasdaq Stock Market LLC.At the initial closing, expected on or about March 26, 2025 the Company will issue to the investors 6,034,494 units, each consisting of one share of common stock, or pre-funded warrant in lieu thereof, and one half of a common stock warrant, at a purchase price of $11.60 for gross proceeds of approximately $70 million, before deducting placement agent fees and other expenses payable by the Company.At the second closing, investors have committed to purchase an additional 9,051,742 units, each consisting of one share of common stock, or pre-funded warrant in lieu thereof, and one half of a common stock warrant, at a purchase price of $11.60 for gross proceeds of approximately $105 million, before deducting placement agent fees and other expenses payable by the Company.The second closing is subject to the receipt of clearance from the FDA of the Companys Investigational New Drug Application for SZN-8141, expected in 2026.

Summary

Surrozen, Inc. is prioritizing its ophthalmology pipeline programs.
The company announced an oversubscribed private placement of securities for gross proceeds of $175 million.
The funds will support multiple ophthalmology programs through Phase 1 studies.
Surrozen will discontinue clinical development of SZN-043 in severe alcohol-associated hepatitis.
The company's lead candidates for retinopathies include SZN-8141 (Fzd4/VEGF) and SZN-8143 (Fzd4/VEGF/IL-6).
The initial closing of the private placement is expected around March 26, 2025, with approximately $70 million in gross proceeds.
The second closing, subject to FDA clearance of the Investigational New Drug Application for SZN-8141 expected in 2026, will bring in an additional $105 million.
Tim Kutzkey, Ph.D., will join Surrozen's Board of Directors in connection with the financing.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the successful private placement and strategic focus on ophthalmology, but tempered by the discontinuation of the SZN-043 program and the contingent nature of the second closing.

Positives

The $175 million private placement provides substantial funding for the ophthalmology pipeline.
Focusing on ophthalmology allows Surrozen to concentrate resources on promising programs.
SZN-8141 and SZN-8143 have the potential to treat multiple retinopathy indications.
The collaboration with Boehringer Ingelheim to advance SZN-413 into development is ongoing.
Preclinical data suggests SZN-8141 and SZN-8143 stimulate Wnt signaling and induce normal retinal vessel regrowth while suppressing pathological vessel growth.
The financing includes participation from new and existing investors.

Negatives

Discontinuation of SZN-043 development means foregoing potential treatment for severe alcohol-associated hepatitis.
The second closing of the private placement is contingent on FDA clearance for SZN-8141, introducing uncertainty.

Risks

The success of ophthalmology programs depends on positive Phase 1 study results.
FDA clearance for SZN-8141 is required for the second closing of the private placement.
Clinical development is subject to risks and uncertainties, including potential delays and setbacks.
The company's ability to fund its preclinical and clinical trials and development efforts, whether with existing funds or through additional fundraising.

Future Outlook

Surrozen anticipates advancing its proprietary ophthalmology candidates to the clinic, including its collaboration with Boehringer Ingelheim to advance SZN-413 into development. The company expects the second closing of its private placement in 2026, contingent on FDA clearance for SZN-8141.

Management Comments

Craig Parker, President and Chief Executive Officer of Surrozen, stated that the company has decided to focus on its robust ophthalmology pipeline.
Craig Parker noted that the retinal ophthalmology programs represent novel combinations of clinically validated targets for treating a broad spectrum of serious eye diseases.

Industry Context

The focus on ophthalmology and Wnt signaling aligns with increasing strategic interest in this area, as evidenced by Merck's acquisition of EyeBio and Roche's acquisition of AntlerA. Surrozen's proprietary antibody platforms and patent estate, including FZD4/LRP antibodies, position it as a key player in the field.

Comparison to Industry Standards

Merck's acquisition of EyeBio for $1.2 billion highlights the value placed on FZD4/LRP5 targeting for DME and nvAMD, similar to Surrozen's approach.
Roche's acquisition of AntlerA, a Wnt mimetic library, further validates the therapeutic relevance of Wnt signal activation.
Surrozen's SZN-413 program, licensed to Boehringer Ingelheim, aims to reduce leakage and VEGF production, a novel mechanism for treating retinopathies.
The current standard of care for diabetic retinopathy (including DME), retinal vein occlusion and wet AMD is intravitreal administration of anti-VEGF monotherapies, Surrozen believes SZN-8141 and SZN-8143 have the potential to treat multiple retinopathy indications and be differentiated from existing therapies.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Board of Directors		Tim Kutzkey, Ph.D.	N/A	In connection with the financing

Stakeholder Impact

Shareholders will be impacted by the dilution from the private placement.
Employees in the SZN-043 program may be affected by the discontinuation of the program.
Patients with severe eye diseases may benefit from the development of new ophthalmology therapeutics.
Investors benefit from the potential upside of the ophthalmology programs.

Next Steps

Complete the initial closing of the private placement, expected around March 26, 2025.
Seek FDA clearance for the Investigational New Drug Application for SZN-8141.
Advance ophthalmology candidates SZN-8141 and SZN-8143 into Phase 1 studies.
Continue collaboration with Boehringer Ingelheim to advance SZN-413 into development.

Key Dates

Date	Description
October 2022	Surrozen entered into a strategic partnership with Boehringer Ingelheim for the research and development of SZN-413 for the treatment of retinal diseases.
December 31, 2023	Date of Surrozen's Annual Report on Form 10-K.
September 30, 2024	Date of Surrozen's Quarterly Report on Form 10-Q.
March 24, 2025	Date of the press release announcing the private placement and strategic shift.
March 26, 2025	Expected date of the initial closing of the private placement.
2026	Expected year for FDA clearance of the Investigational New Drug Application for SZN-8141.

Keywords

ophthalmology, Wnt pathway, private placement, retinopathy, SZN-8141, SZN-8143, SZN-043, Fzd4, VEGF, IL-6, clinical trials, Boehringer Ingelheim, retinal diseases, SZN-413

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