On Monday, BTIG maintained a Neutral rating on Shattuck Labs (NASDAQ:STTK), following an update at the recent European Hematology Association (EHA) 2024 conference.
The biotechnology company, known for its innovative approaches to immunotherapy, has been under scrutiny for its CD47 and CD40 targeting drugs, particularly SL-172154, which is being evaluated for the treatment of myelodysplastic syndromes (MDS) and acute myeloid leukemia (AML).
The analyst from BTIG noted that the data presented at the EHA conference indicated promising efficacy of SL-172154, which might lead to a significant improvement in patient survival. However, the necessity for randomized trial data was emphasized to truly ascertain the benefits of combining CD47 and CD40 targeting drugs with azacitidine monotherapy. This stance comes in light of comparable response rates observed with similar treatments from other companies.
SL-172154's overall response rate (ORR) and complete response (CR) rates for first-line treatment of TP53 mutant AML and high-risk MDS appear similar to those reported for Gilead (NASDAQ:GILD)'s magrolimab, according to data from the American Society of Clinical Oncology (ASCO) meeting in 2022.
Moreover, the Enhance trial results presented at EHA 2024 showed a CR rate of 33% for azacitidine monotherapy versus 43% for the combination of SL-172154 and azacitidine. In comparison, ALX Oncology's recent data revealed a CR rate of 15.4% with their drug evorpacept in combination with azacitidine, against a monotherapy CR rate of 22%.
Despite these comparisons, the reliability of cross-trial comparisons in AML and HR-MDS treatments has been questioned. Shattuck Labs' management pointed out that their trial included a majority of patients with multi-hit TP53 mutations, who generally have a poorer prognosis than those with single-hit TP53 mutations or wild-type TP53.
For context, a Nature Medicine study published in 2020 showed a median overall survival (OS) of only 8.7 months for patients with multi-hit TP53 mutations. This contrasts with the 16.3 months median OS observed in magrolimab's phase 1b study for TP53 mutant MDS patients, though the specific allelic status of these TP53 mutations was not disclosed.
The analyst concluded that the differences in patient populations could be significant in distinguishing SL-172154 from competitors and highlighted the potential for Shattuck Labs' treatment to offer a meaningful benefit to patients with AML and HR-MDS.
In other recent news, Shattuck Labs has made significant strides in its research and development activities. The company's therapeutic candidate SL-172154, currently under evaluation in multiple Phase 1 trials, received an orphan drug designation from the U.S. Food and Drug Administration (FDA). This status is anticipated to accelerate the drug's development, potentially offering Shattuck Labs seven years of market exclusivity upon FDA approval.
The company also reported encouraging interim data from a Phase 1B trial for SL-172154, showing a 67% Objective Response Rate (ORR) in HR-MDS patients and a 43% ORR in TP53m AML patients. In other developments, Shattuck Labs was added to the Russell 2000® and Russell 3000® Indexes, reflecting its progress in the biotechnology sector.
H.C. Wainwright has revised its outlook on Shattuck Labs, reducing its price target while maintaining a Buy rating. These recent developments highlight Shattuck Labs' ongoing commitment to advancing its research and development efforts.
InvestingPro Insights
In light of Shattuck Labs' (NASDAQ:STTK) recent data presented at the EHA conference, investors may find additional insights through InvestingPro's real-time data and tips. The company holds a market capitalization of $190.2 million and, notably, has more cash than debt on its balance sheet, which may provide some financial flexibility in its operational activities.
Despite a significant revenue growth reported over the last twelve months, with an increase of 282.93%, analysts are concerned about the company's cash burn rate and anticipate a sales decline in the current year. Additionally, the stock's price has experienced considerable volatility, decreasing by 47.7% over the last month, and is currently trading at a high revenue valuation multiple.
InvestingPro Tips suggest that Shattuck Labs' stock is in oversold territory according to the RSI, which might interest contrarian investors looking for potential recovery plays. Still, it is important to consider that analysts do not expect the company to be profitable this year, and the stock has notably suffered over the last six months. For investors seeking a deeper analysis, there are over 10 additional InvestingPro Tips available, which can be accessed by visiting the InvestingPro platform. To enhance your investment research, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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