Sutro Biopharma, Inc. (NASDAQ:STRO) is a biopharmaceutical company that focuses on the development of protein therapeutics for cancer and autoimmune disorders. The company uses a proprietary platform to design and develop novel therapeutics.
In the competitive landscape, Sutro faces peers like Scholar Rock Holding Corporation, Replimune Group, Y-mAbs Therapeutics, Crinetics Pharmaceuticals, and Kezar Life Sciences.
In evaluating Sutro's financial efficiency, the Return on Invested Capital (ROIC) is a critical metric. Sutro's ROIC stands at -105.71%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 43.02%. This results in a ROIC to WACC ratio of -2.46, indicating that the company is not generating returns above its cost of capital.
Comparatively, Scholar Rock Holding Corporation has an even lower ROIC of -109.48% against a WACC of 6.12%, resulting in a ROIC to WACC ratio of -17.89. This suggests that Scholar Rock is less efficient in using its capital compared to Sutro. Replimune Group also shows a negative ROIC of -71.09% with a WACC of 7.51%, leading to a ROIC to WACC ratio of -9.47. Y-mAbs Therapeutics, with a ROIC of -27.64% and a WACC of 6.51%, has the highest ROIC to WACC ratio among the peers at -4.25. Although still negative, this ratio indicates that Y-mAbs is relatively closer to generating returns above its cost of capital. Crinetics Pharmaceuticals and Kezar Life Sciences also show negative ROIC to WACC ratios of -6.40 and -10.31, respectively, highlighting the challenges in the industry.
