AUSTIN, TX and DURHAM, NC - Shattuck Labs, Inc. (NASDAQ: STTK), a clinical-stage biotechnology company, announced today a significant shift in its clinical development strategy. The company will discontinue its SL-172154 clinical program, which targeted TP53 mutant (TP53m) acute myeloid leukemia (AML) and higher-risk myelodysplastic syndromes (HR-MDS), due to only modest improvements in median overall survival compared to benchmarks. Instead, Shattuck will concentrate on advancing SL-325, an antagonist antibody to DR3 for the treatment of inflammatory bowel disease (IBD).
The decision follows interim clinical data showing that the median overall survival for patients treated with SL-172154 in combination with azacitidine did not meet the significant improvement required for further development. The company noted that historically, efficacy tends to erode in larger, randomized trials compared to early-stage studies. Consequently, Shattuck has opted to reallocate resources to the SL-325 program, which they anticipate filing an Investigational New Drug (IND) application for in the third quarter of 2025.
Shattuck's Chief Executive Officer, Dr. Taylor Schreiber, expressed disappointment in the SL-172154 outcomes but emphasized the promise of SL-325, which has shown superior efficacy over TL1A antibodies in preclinical studies. The company is realigning its organizational structure, including a workforce reduction of approximately 40%, to support the strategic pivot.
Financially, Shattuck expects the restructuring to extend its cash runway into 2027, based on current operational plans. As of June 30, 2024, the company had cash and cash equivalents and investments totaling $105.3 million. The reduction in force is expected to be completed in the fourth quarter of 2024.
Shattuck has also mutually terminated a collaboration agreement with Ono Pharmaceutical Co., Ltd., which will not affect the development of SL-325. The company will host an investor call today at 8:00 AM Eastern Time to discuss these changes.
This article is based on a press release statement from Shattuck Labs, Inc.
In other recent news, Shattuck Labs has been making significant strides in its research and development activities. The company's therapeutic candidate SL-172154 has received an orphan drug designation from the U.S. Food and Drug Administration, a status that is expected to accelerate the drug's development. Shattuck Labs also reported encouraging interim data from a Phase 1B trial for SL-172154, indicating promising response rates in HR-MDS and TP53m AML patients.
The company has been added to the Russell 2000® and Russell 3000® Indexes, reflecting its progress in the biotechnology sector. Despite recent challenges affecting the CD47 pathway, the company's resilience has been noted by H.C. Wainwright, maintaining a Buy rating on Shattuck Labs' stock with a price target of $16.00. BTIG analysts, however, have maintained a Neutral rating, emphasizing the need for randomized trial data to fully ascertain the benefits of combining CD47 and CD40 targeting drugs.
These recent developments highlight Shattuck Labs' ongoing commitment to advancing its research and development efforts, despite the broader market's caution regarding CD47 therapies.
InvestingPro Insights
Shattuck Labs' strategic pivot comes at a critical time for the company, as reflected in recent InvestingPro data and tips. Despite the disappointing results from the SL-172154 program, there are some positive indicators for the company's future.
According to InvestingPro data, Shattuck Labs has seen impressive revenue growth, with a 704.5% increase in quarterly revenue as of Q2 2024. This substantial growth suggests that the company's other initiatives may be gaining traction. Additionally, an InvestingPro Tip highlights that Shattuck "holds more cash than debt on its balance sheet," which aligns with the company's statement about their cash position of $105.3 million as of June 30, 2024.
However, the company faces challenges. Another InvestingPro Tip notes that Shattuck is "quickly burning through cash," which explains the strategic decision to restructure and extend the cash runway into 2027. The tip indicating that "analysts do not anticipate the company will be profitable this year" further underscores the importance of this cost-cutting measure.
The volatility in Shattuck's stock price, as mentioned in an InvestingPro Tip, is evident in the reported 60.74% price decline over the past six months. This volatility likely reflects investor uncertainty surrounding the company's clinical programs and strategic direction.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into Shattuck Labs' financial health and market position.
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