SCHEDULE: Redmile Group Boosts Shattuck Labs Stake, Director Resigns

Redmile Group, LLC increased its beneficial ownership in Shattuck Labs, Inc. to 9.9% following a private placement, while its managing director, Mike Lee, resigned from the board.

Summary

• Redmile Group, LLC and its affiliated funds, including Redmile Biopharma Investments II, L.P., increased their beneficial ownership in Shattuck Labs, Inc.
• The Redmile Funds acquired New Warrants (Pre-Funded and Common Warrants) in a private placement (PIPE) that closed on August 25, 2025.
• The aggregate investment by Redmile Funds in the PIPE was approximately $3,555,190.
• Redmile Group, LLC and Jeremy C. Green now beneficially own 6,379,095 shares, representing 9.9% of the outstanding Common Stock.
• Redmile Biopharma Investments II, L.P. beneficially owns 4,065,432 shares, representing 6.4% of the outstanding Common Stock.
• Mike Lee, a managing director of Redmile, resigned from Shattuck Labs' Board of Directors concurrent with the PIPE closing, stating no disagreements with the Issuer.
• The New Warrants include Pre-Funded Warrants exercisable at $0.0001 per share and Common Warrants exercisable at $1.0846 per share.
• A Beneficial Ownership Blocker limits warrant exercise to prevent ownership exceeding 9.99% of outstanding shares, though this limit can be changed with 61 days' notice.
• Redmile Funds entered into a Registration Rights Agreement, requiring Shattuck Labs to file a registration statement for the resale of Common Stock from the New Warrants within 30 calendar days.

Sentiment

Score: 7

Explanation: The filing indicates a significant investment by a specialized biopharma fund, which is generally positive for a clinical-stage company. The director's resignation is explicitly stated as non-contentious. The capital raise provides funding for ongoing operations and clinical development. The beneficial ownership blocker is a standard protective measure.

Positives

• Significant investment by Redmile Group, a specialized biopharma investor, through a private placement, indicating confidence in Shattuck Labs.
• The investment provides Shattuck Labs with additional capital for its operations and clinical development.
• The resignation of Mike Lee was explicitly stated not to be due to disagreements, which can mitigate concerns about internal conflicts.

Risks

• The Beneficial Ownership Blocker limits the immediate exercise of warrants to 9.99% of outstanding shares, potentially restricting Redmile's ability to fully convert its warrants without prior notice.
• The value and exercisability of the Common Warrants are tied to the announcement of Phase 1 clinical trial data for SL-325 and the design of Phase 2 trials, introducing clinical development risk.

Future Outlook

Shattuck Labs is expected to file a registration statement covering the resale of Common Stock issuable upon exercise of the New Warrants within 30 calendar days following the PIPE closing. The exercisability of Common Warrants is tied to the public announcement of data from the Issuer's Phase 1 clinical trial for SL-325 in healthy volunteers and the design of its Phase 2 clinical trials.

Management Comments

• Mike Lee's resignation is not due to any disagreements with the Issuer on any matters relating to its operations, policies or practices.

Industry Context

This filing indicates continued investment by specialized biopharma funds like Redmile Group into clinical-stage biotechnology companies such as Shattuck Labs. The structure of the investment, involving warrants and a beneficial ownership blocker, is common in the biotech sector to manage dilution and ownership thresholds while providing capital for drug development, particularly for companies with ongoing clinical trials like SL-325.

Comparison to Industry Standards

• The use of pre-funded and common warrants in a private placement is a standard financing mechanism in the biotechnology industry, often employed by companies like Shattuck Labs to raise capital while managing immediate dilution and providing investors with upside potential tied to clinical milestones.
• The 9.99% beneficial ownership blocker is a common provision in such agreements, designed to prevent an investor from triggering certain regulatory reporting requirements (e.g., Section 13D/G) or corporate governance implications (e.g., 'poison pill' provisions) that might arise from exceeding a 10% ownership threshold.
• The resignation of a director from an investment firm concurrent with a new investment is not uncommon, especially if the firm's strategy shifts or if the director's board seat was primarily to oversee an earlier investment stage. The explicit statement of no disagreements aligns with best practices for transparency in such transitions.

Management Changes

Corporate Governance

Related Party Transactions

• The acquisition of New Warrants by Redmile Funds (including RBI II) in the PIPE can be considered a related party transaction, as Mike Lee, a managing director of Redmile, was a member of Shattuck Labs' Board of Directors at the time of the PIPE's closing (though he resigned concurrently).
• Mike Lee holds 112,936 stock options as a nominee for Redmile, assigning all economic, pecuniary, and voting rights in respect of the stock options to Redmile.

Stakeholder Impact

• Shareholders: The PIPE and warrant issuance could lead to future dilution upon warrant exercise, but also provides capital for the company's operations. The significant investment by Redmile Group may be seen as a vote of confidence.
• Employees: Continued funding from the PIPE supports the company's ongoing operations and clinical development, potentially providing job security and stability.
• Creditors: The capital raise strengthens the company's financial position, potentially improving its creditworthiness.

Next Steps

• Shattuck Labs is to file a registration statement for the resale of Common Stock issuable upon exercise of the New Warrants within 30 calendar days of the PIPE closing.
• Public announcement of data from Shattuck Labs' Phase 1 clinical trial for SL-325 in healthy volunteers and the design of its Phase 2 clinical trials will trigger the end of the exercise period for Common Warrants (30 days after announcement).
• Redmile Group has the option to change the 9.99% Beneficial Ownership Limitation with 61 days' notice to the Issuer.

Key Dates

Recommendation

The filing details a significant capital infusion and increased ownership by a key institutional investor, Redmile Group, which is a positive signal. However, the investment is structured with warrants, and the full impact on valuation depends on future clinical trial results for SL-325. The director's resignation, while stated as non-contentious, still represents a change in board composition. Given the nature of a clinical-stage biopharma company, the stock remains speculative, and while the capital raise is beneficial, it doesn't fundamentally alter the underlying clinical risks. A 'hold' recommendation reflects the positive capital event balanced against ongoing development risks and the need for further clinical data.

Keywords

Shattuck Labs, Redmile Group, Schedule 13D, Beneficial Ownership, Private Placement, PIPE, Warrants, Common Stock, Biopharma Investment, Director Resignation, SL-325, Clinical Trials