10-Q: Shattuck Labs Reports Q1 2025 Financial Results, Highlights SL-325 Development

Sentiment:

Quarterly Report 1 May 2025 4:28 PM

Shattuck Labs announces its Q1 2025 financial results, focusing on the advancement of its SL-325 program for inflammatory and immune-mediated diseases.

Capital raiseThe company may seek to raise additional capital through equity offerings and/or debt financings or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of our development programs or patent portfolios.The company is currently evaluating its options related to the advancement of its platform of mRNA/LNP administered multifunctional GLP-1 constructs and its TRIM7 program, which may include the independent financing of a subsidiary or spun-out entity.The company is now subject to General Instruction I.B.6 of Form S-3, which limits the amount that it may sell under our current ATM Facility.After giving effect to these limitations and the current public float of our common stock, we currently may offer and sell from and after the filing date of the Annual Report on Form 10-K, which was March 27, 2025, shares of our common stock having an aggregate offering price of up to $24,474,604 under the Sales Agreement.

Worse than expectedThe company reported a net loss of $13.7 million for the three months ended March 31, 2025.The company had no collaboration revenue in Q1 2025, compared to $1.1 million in Q1 2024.

Summary

Shattuck Labs reported a net loss of $13.7 million for the three months ended March 31, 2025, compared to a net loss of $18.5 million for the same period in 2024.
The company's cash and cash equivalents totaled $60.9 million as of March 31, 2025.
Management believes that the current cash and cash equivalents are sufficient to fund projected operations into 2027.
Research and development expenses decreased to $9.9 million from $16.3 million year-over-year, primarily due to the discontinuation of the SL-172154 program.
The company is focused on advancing SL-325, a potential first-in-class DR3 antagonist antibody, with an IND application expected in the third quarter of 2025 and Phase 1 clinical trial enrollment completion anticipated in the second quarter of 2026.
General and administrative expenses decreased slightly to $4.5 million from $4.9 million year-over-year.
The company had no collaboration revenue in Q1 2025, compared to $1.1 million in Q1 2024, due to the completion of obligations under previous agreements.
Shattuck Labs is also developing DR3 bispecific antibodies and expects to nominate a lead bispecific candidate in 2025.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is still operating at a loss, there are positive developments such as the focus on SL-325 and sufficient cash to fund operations into 2027. However, the need for additional funding and the risks associated with drug development temper the overall outlook.

Positives

The company's net loss decreased year-over-year, indicating improved financial performance.
Shattuck Labs has sufficient cash to fund operations into 2027, providing a stable financial runway.
The focus on SL-325 and DR3 bispecific antibodies represents a strategic shift towards promising therapeutic candidates.
Research and development expenses decreased due to the discontinuation of a program, potentially freeing up resources for more promising candidates.

Negatives

Shattuck Labs continues to operate at a loss, with a net loss of $13.7 million for Q1 2025.
The company had no collaboration revenue in Q1 2025, indicating a reliance on internal funding.
The company has an accumulated deficit of $395.4 million as of March 31, 2025.
The company is highly dependent on its ability to find additional sources of funding in the form of licensing of its technology, collaboration agreements and/or public and private debt and equity financings.

Risks

The company's future success is highly dependent on the successful development and commercialization of its product candidates.
Economic downturns, inflation, and other macroeconomic conditions could adversely affect the company's operations and financial condition.
The company may require additional funding to complete development and commercialization of its products, and such funding may not be available on acceptable terms, or at all.
The company is subject to General Instruction I.B.6 of Form S-3, which limits the amount that it may sell under the ATM Facility.
The company is unable to quantify the potential effects of economic instability on its future operations.

Future Outlook

Shattuck Labs plans to file an IND application for SL-325 in the third quarter of 2025 and expects to complete enrollment in the full Phase 1 clinical trial in the second quarter of 2026; future clinical trials may explore the efficacy of SL-325 in other inflammatory and immune-mediated diseases where the DR3/TL1A axis is implicated.

Management Comments

Management believes that the company's cash and cash equivalents of $60.9 million as of March 31, 2025 are sufficient to fund projected operations of the Company for at least the next twelve months.
We are planning initial clinical development of SL-325 for patients with IBD, including UC and CD.
Nomination of a lead bispecific candidate from our preclinical pipeline is expected in 2025.

Industry Context

The focus on SL-325, a DR3 antagonist antibody, aligns with the industry's interest in novel treatments for inflammatory bowel disease (IBD). The development of DR3 bispecific antibodies also reflects a broader trend towards multi-target therapies in immunology.

Comparison to Industry Standards

Several companies are developing TL1A blocking antibodies for IBD, including Prometheus Biosciences (acquired by Merck) and Roivant Sciences.
Shattuck Labs believes that targeting DR3 may be more efficacious than targeting TL1A in patients with IBD.
The company's approach to DR3 bispecific antibodies aims to avoid the immunogenicity issues encountered by AMG966, a TL1A and TNF blocking antibody developed by Amgen.
The company's RO and pharmacokinetic (PK) profile of SL-325 suggests extended dosing intervals, which we intend to further characterize in our upcoming Phase 1 clinical trial.

Stakeholder Impact

Shareholders: The company's financial performance and progress in drug development will impact shareholder value.
Employees: The company's strategic decisions and financial stability will affect job security and opportunities.
Patients: The development of SL-325 and other product candidates could provide new treatment options for inflammatory and immune-mediated diseases.
Collaborators: The company's ability to secure collaborations and partnerships will impact its research and development efforts.

Next Steps

File an Investigational New Drug (IND) application for SL-325 in the third quarter of 2025.
Complete enrollment in the full Phase 1 clinical trial for SL-325 in the second quarter of 2026.
Nominate a lead bispecific candidate from the preclinical pipeline in 2025.
Explore the efficacy of SL-325 in other inflammatory and immune-mediated diseases where the DR3/TL1A axis is implicated.

Key Dates

Date	Description
2016	Shattuck Labs, Inc. was incorporated in the State of Delaware.
September 2020	The Company adopted the 2020 Stock Incentive Plan (the 2020 Plan) which, as of the adoption date, replaced the 2016 Stock Incentive Plan.
October 2020	The 2020 Employee Stock Purchase Plan (the 2020 ESPP) became effective.
July 2022	The Company entered into a sales agreement (the Sales Agreement) with Leerink Partners LLC (the Sales Agent) pursuant to which it may offer and sell up to $75 million of shares of its common stock from time to time (the ATM Facility).
December 2023	The Company sold 4,651,163 shares of common stock through an underwritten public offering, and concurrently completed a private placement of 3,100,823 pre-funded warrants.
February 2024	The Company entered into a collaboration and license agreement (the Ono Agreement) with Ono Pharmaceutical Co., Ltd (Ono).
September 30, 2024	The Company and Ono mutually agreed to terminate the Ono Agreement.
October 2024	The Company discontinued clinical development of its SL-172154 product candidate that was subject to the Kopfkino License Agreement.
March 31, 2025	End of the reporting period for the Q1 2025 results.
March 27, 2025	The company determined that it currently may offer and sell from and after March 27, 2025 shares of the Company's common stock having an aggregate offering price of up to $24.5 million under the Sales Agreement.
Q3 2025	Expected filing of Investigational New Drug (IND) application for SL-325.
Q2 2026	Expected completion of enrollment in the full Phase 1 clinical trial for SL-325.

Keywords

SL-325, DR3 antagonist, Inflammatory bowel disease, IBD, Clinical trials, Biotechnology, Shattuck Labs, Financial results, Research and development, Antibodies

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