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JPMorgan analyst Eric Joseph downgraded Surrozen to Underweight from Neutral without a price target. The analyst says clinical viability of the company's lead candidate programs are "very much uncertain from a tolerability standpoint." Alongside its Q3 results, Surrozen announced a voluntary enrollment pause of the SAD portion of the healthy volunteer Phase 1 study for Wnt mimetic SZN-1326 due to treatment-related adverse events, as well as similar albeit less severe events identified with SZN-043, Joseph tells investors in a research note. He now sees "formidable risks for the future of the company's pipeline and overall platform given the common focus on Wnt pathway activation."

Guggenheim analyst Yatin Suneja downgraded Surrozen to Neutral from Buy with no price target based on a lack of clarity on the future development of the company's Wnt agonists SZN-1326 for IBD and SZN-043 for SAH. The company announced that it is voluntarily pausing its Phase I SAD HV study for '1326 after observing Grade 3 asymptomatic liver enzyme elevations in three patients and that it needs to do further pre-clinical work to figure this issue out. It appears unlikely that '1326 would see robust uptake if these liver issues persist given the "crowded" IBD market with several promising late-stage assets, Suneja tells investors.

BofA analyst Tazeen Ahmad downgraded Surrozen to Underperform from Neutral with a price target of $1, down from $5. The analyst cites the company's disclosure along with Q3 results that it has voluntarily paused enrollment in the single ascending dose portion of its Phase 1 clinical trial evaluating SZN-1326 in healthy volunteers following the observation of treatment-related adverse events. Ahmad adds that she is surprised by the disclosure given that no adverse events were observed in preclinical and toxicology studies, stating that her Underperform stance is warranted until there is greater clarity on the path forward.