Shattuck Labs Inc

Previous wording

We are an innovative clinical-stage biotechnology company pioneering the development of dual-sided fusion proteins as an entirely new class of biologic medicine. We have created a novel approach to immune modulation by designing biologics with structural characteristics that may not be achievable by existing therapeutic modalities, including monoclonal or bispecific antibodies. Our ARC® platform was designed to simultaneously inhibit checkpoint molecules and activate costimulatory molecules with a single therapeutic as a potential treatment for cancer. We also have at varying stages of preclinical development, dual-sided fusion proteins, distinct from our ARC platform, that have therapeutic potential in autoimmune and inflammatory diseases, among other therapeutic areas.

Current wording

We are an innovative clinical-stage biotechnology company pioneering the development of dual-sided fusion proteins as an entirely new class of biologic medicine. We have created a novel approach to immune modulation by designing biologics with structural characteristics that may not be achievable by existing therapeutic modalities, including monoclonal or bispecific antibodies. Our Agonist Redirected Checkpoint (“ARC®”) platform was designed to simultaneously inhibit checkpoint molecules and activate costimulatory molecules with a single therapeutic as a potential treatment for cancer. We also have at varying stages of preclinical development, dual-sided, multifunctional fusion proteins, distinct from our ARC platform, that have therapeutic potential in autoimmune, inflammatory, and cardiometabolic diseases, among other therapeutic areas.

Previous wording

Our lead product candidate, SL-172154, is designed to simultaneously inhibit the CD47/SIRPα macrophage checkpoint interaction and activate the CD40 costimulatory receptor to induce an antitumor immune response. Coupling CD40 activation with CD47 inhibition differentiates SL-172154 from all other clinical-stage CD47/SIRPα inhibitors in development, and in our published preclinical studies, SL-172154 resulted in superior antitumor immunity as compared to certain CD47/SIRPα inhibitors. We are pursuing a broad clinical development strategy in both solid and hematologic tumors, with multiple ongoing clinical trials. SL-172154 is in an ongoing Phase 1B clinical trial for the treatment of patients with ovarian cancer. We are also evaluating SL-172154 in an ongoing Phase 1B clinical trial for the treatment of patients with certain hematologic malignancies, including AML and HR-MDS. We believe our clinical development plan may provide both first-in-class and best-in-class development opportunities for SL-172154.

Current wording

Our lead product candidate, SL-172154, is designed to simultaneously inhibit the CD47/SIRPα macrophage checkpoint interaction and activate the CD40 costimulatory receptor to induce an antitumor immune response. Coupling CD40 activation with CD47 inhibition differentiates SL-172154 from all other clinical-stage CD47/SIRPα inhibitors in development, and in our published preclinical studies, SL-172154 resulted in superior antitumor immunity as compared to certain CD47/SIRPα inhibitors.

Previous wording

We believe that data shared to date in human cancer patients demonstrate that the unique protein engineering and physical properties of the ARC platform have led to a differentiated profile in terms of safety and on-target immune activation, demonstrated by unique pharmacodynamic findings, as compared to monoclonal or bispecific antibodies. Further, clinical data generated with our ARC platform has guided our preclinical research efforts to further expand our pipeline, and we are advancing certain potential product candidates through preclinical development. We expect to nominate one or more additional product candidates to our clinical pipeline in the future, potentially for indications outside of oncology, by selecting product candidates where there is an expectation of monotherapy efficacy and where our scientific and protein engineering expertise has led to a product candidate with advantages over current treatment modalities.

Current wording

Further, clinical data generated with our ARC platform has guided our preclinical research efforts to further expand our pipeline, and we are advancing certain potential product candidates through preclinical development. We expect to nominate one or more additional product candidates to our clinical pipeline in the future, potentially for indications outside of oncology, by selecting product candidates where there is an expectation of monotherapy efficacy and where our scientific and protein engineering expertise has led to a product candidate with advantages over current treatment modalities.

Previous wording

Since our inception in 2016, we have devoted substantially all of our resources to conducting research and development activities, including undertaking nonclinical studies of our product candidates, conducting clinical trials of our most advanced product candidates, manufacturing our product candidates, developing and perfecting our intellectual property rights, organizing and staffing our company, business planning, and raising capital. We do not have any products approved for sale, and we have not generated any revenue from product sales. We have funded our operations as of the filing date of this Quarterly Report on Form 10-Q through the net proceeds from the sale of our common stock and pre-funded warrants for approximately$261.7 million, the sale of redeemable convertible preferred stock for approximately$152.9 million, the issuance of convertible notes for approximately$10.5 million and payments received pursuant to our collaboration agreements for approximately$89.6 million.

Current wording

Since our inception in 2016, we have devoted substantially all of our resources to conducting research and development activities, including undertaking nonclinical studies of our product candidates, conducting clinical trials of our most advanced product candidates, manufacturing our product candidates, developing and perfecting our intellectual property rights, organizing and staffing our company, business planning and raising capital. We do not have any products approved for sale, and we have not generated any revenue from product sales. We have funded our operations as of the filing date of this Quarterly Report on Form 10-Q through the net proceeds from the sale of our common stock and pre-funded warrants for approximately$262.4 million, the sale of redeemable convertible preferred stock for approximately$152.9 million, the issuance of convertible notes for approximately$10.5 million and payments received pursuant to our collaboration agreements for approximately$89.6 million.

Previous wording

For the three months ended March 31, 2024 and 2023, our net loss was $18.5 million and $20.7 million, respectively. We have not been profitable since inception, and as of March 31, 2024, we had an accumulated deficit of $324.8 million and $114.6 million in cash and cash equivalents and investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:

Current wording

For the six months ended June 30, 2024 and 2023, our net loss was $40.1 million and $42.1 million, respectively. We have not been profitable since inception, and as of June 30, 2024, we had an accumulated deficit of $346.4 million and $105.3 million in cash and cash equivalents and investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:

Previous wording

We do not expect to generate significant product revenue unless and until we successfully complete development and obtain regulatory and marketing approval of, and begin to sell, one or more of our product candidates, if ever, which we expect will take several years. We expect to spend a significant amount in development and marketing costs prior to such time. We may never succeed in achieving regulatory and marketing approval for our product candidates. We may obtain unexpected results from our nonclinical studies and clinical trials. We may elect to discontinue, delay, or modify nonclinical studies and clinical trials of our product candidates. We may be adversely affected by inflationary pressures and the macroeconomic environment, which are beyond our control. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. Accordingly, until such time as we can generate significant product revenue, if ever, we expect to continue to seek private or public equity and debt financing, and/or additional collaborations with third-parties, to meet our capital requirements. There can be no assurance that such funding may be available to us on acceptable terms, or at all, or that we will be able to commercialize our product candidates. In addition, we may not be profitable even if we commercialize one or more of our product candidates.

Current wording

We do not expect to generate significant product revenue unless and until we successfully complete development and obtain regulatory and marketing approval of, and begin to sell, one or more of our product candidates, if ever, which we expect will take several years. We expect to spend a significant amount in development and marketing costs prior to such time. We may never succeed in achieving regulatory and marketing approval for our product candidates. We may obtain unexpected results from our nonclinical studies and clinical trials. We may elect to discontinue, delay, or modify nonclinical studies and clinical trials of our product candidates. We may be adversely affected by inflationary pressures and the macroeconomic environment, which are beyond our control. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. Accordingly, until such time as we can generate significant product revenue, if ever, we expect to continue to seek private or public equity and debt financing, and/or additional collaborations with third-parties, to meet our capital requirements. There can be no assurance that such funding may be available to us on acceptable terms, or at all, or that we will be able to commercialize our product candidates. In addition, we may not be profitable even if we commercialize any of our product candidates.

Previous wording

Under the terms of the Ono Agreement, we will receive an initial non-refundable payment of $5.4 million, consisting of a $2.0 million payment for the Option and an initial research funding payment of $3.4 million to cover the expected cost of the first six months of planned activities under the Research Plan. At the conclusion of the first six months, Ono may continue to reimburse nonclinical research activities under the Research Plan, and we may receive up to $7.0 million payable upon the achievement of certain milestones specified in the Research Plan. The Research Plan, which began in March 2024, is currently expected to take up to 18 months to complete, subject to the achievement of research milestones and Ono’s decision to continue reimbursement of our research activities.

Current wording

Under the terms of the Ono Agreement, we have received an initial non-refundable payment of $5.4 million, consisting of a $2.0 million payment for the Option and an initial research funding payment of $3.4 million to cover the expected cost of the first six months of planned activities under the Research Plan. At the conclusion of the first six months, Ono may continue to reimburse nonclinical research activities under the Research Plan, and we may receive up to $7.0 million payable upon the achievement of certain milestones specified in the Research Plan. The Research Plan, which began in March 2024, is currently expected to take up to 18 months to complete, subject to the achievement of research milestones and Ono’s decision to continue reimbursement of our research activities.

Previous wording

The following table summarizes our research and development expenses by product candidate (in thousands):

Current wording

The following table summarizes our research and development expenses by product candidate:

Previous wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, including increased demand for clinical trial material. We expect to incur significant research and development expenses throughout 2024, including expenses associated with the conduct of the Research Plan pursuant to the Ono Agreement. While it is difficult for us to predict with certainty, we expect increasing year-over-year operating expense over the next several years in the event that we conduct additional nonclinical studies and clinical trials, which may include a material expansion of our existing clinical trials or the initiation of planned, later-stage clinical trials for our current and/or future product candidates, pursue regulatory approval of our product candidates, or advance additional product candidates from our preclinical pipeline.

Current wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, including increased demand for clinical trial material. We expect to incur significant research and development expenses throughout 2024 and beyond, including expenses associated with the conduct of the Research Plan pursuant to the Ono Agreement. The completion of our clinical trial in platinum resistant ovarian cancer (“PROC”) does not materially impact our anticipated operating expense or cash burn projections in 2024 as this trial was fully enrolled and we had not yet initiated additional clinical trials in this indication. Further, we are not currently planning to conduct additional clinical development in PROC, in part due to the evolving competitive landscape in this indication. We plan to focus all current later-stage clinical development efforts in AML and HR-MDS due to the strength of the emerging efficacy results in those patient populations, the favorable competitive landscape, and the potential for these indications to provide the fastest path to registration. While it is difficult for us to predict with certainty, we expect increasing year-over-year operating expense over the next several years in the event that we conduct additional nonclinical studies and clinical trials, which may include a material expansion of our existing clinical trials or the initiation of planned, later-stage clinical trials for our current and/or future product candidates, pursue regulatory approval of our product candidates, or advance additional product candidates from our preclinical pipeline.

Previous wording

We expect that our general and administrative expense may increase in the future to support our ongoing research and development activities and as a result of the costs of operating as a public company. These increases may include increased costs related to the retention of personnel and fees paid to outside consultants, lawyers, and accountants, among other expenses. Additionally, we anticipate that we will continue to incur significant costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of Nasdaq and the Securities and Exchange Commission, insurance, and investor relations costs. If any of our current or future product candidates advances to later-stage clinical development or obtains regulatory approval, we expect that we would incur significantly increased expenses associated with building the appropriate general and administrative support for our increased research and development activities, or building a sales and marketing team, respectively.

Current wording

We expect that our general and administrative expense may increase in the future to support our ongoing research and development activities and as a result of the costs of operating as a public company. These increases may include increased costs related to the retention of personnel and fees paid to outside consultants, lawyers, and accountants, among other expenses. Additionally, we anticipate that we will continue to incur significant costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of Nasdaq and the Securities and Exchange Commission ("SEC"), insurance, and investor relations costs. If any of our current or future product candidates advances to later-stage clinical development or obtains regulatory approval, we expect that we would incur significantly increased expenses associated with building the appropriate general and administrative support for our increased research and development activities, or building a sales and marketing team, respectively.

Previous wording

Other income consists of interest earned on our cash, cash equivalents and investments, which consists of amounts held in a money market fund and at various times in government and corporate obligations as well as investment fees and realized gain or losses on investments (if any).

Current wording

Other income consists of interest earned on our cash, cash equivalents and investments, which consists of amounts held in a money market fund and government obligations as well as investment fees and realized gain or losses on investments (if any).

Previous wording

The following table sets forth our results of operations for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table sets forth our results of operations for the three months ended June 30, 2024 and 2023.

Previous wording

Collaboration revenue increased by $1.1 million, or 1,856.1%, to $1.1 million for the three months ended March 31, 2024 from $0.1 million for the three months ended March 31, 2023. The increase in collaboration revenue was attributable to an increase in research activities associated with the Ono Agreement and continued clinical activity associated with the ImmunoGen Agreement.

Current wording

Collaboration revenue increased by $1.4 million, or 704.5%, to $1.6 million for the three months ended June 30, 2024 from $0.2 million for the three months ended June 30, 2023. The increase in collaboration revenue was attributable to the research activities conducted pursuant to the Ono Agreement and continued clinical activities pursuant to the ImmunoGen Agreement. As of June 30, 2024 we have completed our obligations under the ImmunoGen Agreement and have recognized all revenue pursuant to that agreement.

Previous wording

Since our inception, our primary sources of liquidity have been generated by sales of common stock, pre-funded warrants, convertible preferred stock, and convertible notes and through our collaboration agreements. As of March 31, 2024, we had an accumulated deficit of $324.8 million and $114.6 million of cash and cash equivalents and investments.

Current wording

Since our inception, our primary sources of liquidity have been generated by sales of our common stock, pre-funded warrants, convertible preferred stock and convertible notes, and through our collaboration and research agreements with various third parties.

Previous wording

In July 2022, we entered into a sales agreement, or the Sales Agreement, with Leerink Partners LLC, (the "Sales Agent"), pursuant to which we may offer and sell up to $75.0 million of shares of our common stock from time to time in “at-the-market” offerings (the “ATM Facility”). The Sales Agent is generally entitled to compensation at a commission equal to 3.0% of the aggregate gross sales price per share sold under the Sales Agreement. As of March 31, 2024, there were no sales pursuant to the ATM Facility.

Current wording

In July 2022, we entered into a sales agreement ("the Sales Agreement") with Leerink Partners LLC (formerly known as SVB Securities LLC) (the "Sales Agent") pursuant to which we may offer and sell up to $75.0 million of shares of our common stock from time to time in an at-the-market facility (the "ATM Facility"). The Sales Agent is generally entitled to compensation at a commission equal to 3.0% of the aggregate gross sales price per share sold under the Sales Agreement. As of June 30, 2024, there were no sales pursuant to the ATM Facility.

Previous wording

Our primary uses of cash and cash equivalents and investments are to fund our operations, which consist primarily of research and development expenditures related to our programs, product development costs, research expenses, administrative support, capital expenditures related to bringing in-house certain process development and manufacturing capabilities, and working capital requirements. We anticipate continuing to incur additional net losses and negative cash flows from operations in the near future until such time, if ever, that we can generate significant sales of our product candidates currently in development. Our future funding requirements will depend on many factors, including:

Current wording

Our primary uses of cash and cash equivalents and investments are to fund our operations, which consist primarily of research and development expenditures related to our programs, product development costs, research expenses, administrative support, capital expenditures related to bringing in-house certain process development and manufacturing capabilities and working capital requirements. We anticipate incurring additional net losses and negative cash flows from operations in the near future until such time, if ever, that we can generate significant sales of our product candidates currently in development. Our future funding requirements will depend on many factors, including:

Previous wording

Until we obtain regulatory approval to market our product candidates, if ever, we cannot generate revenues from sales of our products. Even if we are able to sell our products, we may not generate a sufficient amount of product revenues to finance our cash requirements. Accordingly, it will be necessary for us to 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. There can be no assurance that such funding may be available to us on acceptable terms, or at all. The issuance of equity securities may result in dilution to stockholders and the issuance of debt securities may have rights, preferences and privileges senior to those of our common stock and the terms of any such debt securities could impose significant restrictions on our operations. The failure to raise funds as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. Additionally, if additional funding is not secured when required, we may need to delay or curtail our operations until such funding is received, which would have a material and adverse impact on our business prospects and results of operations.

Current wording

Until we obtain regulatory approval to market our product candidates, if ever, we cannot generate revenues from sales of our products. Even if we are able to sell our products, we may not generate a sufficient amount of product revenues to finance our cash requirements. Accordingly, it will be necessary for us to 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. Additionally, we are currently evaluating our options related to the advancement of our platform of mRNA/LNP administered multifunctional GLP-1 constructs, which may include the independent financing of a subsidiary or spun-out entity. There can be no assurance that such funding may be available to us on acceptable terms, or at all. The issuance of equity securities may result in dilution to stockholders and the issuance of debt securities may have rights, preferences and privileges senior to those of our common stock and the terms of any such debt securities could impose significant restrictions on our operations. The failure to raise funds as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. Additionally, if additional funding is not secured when required, we may need to delay or curtail our operations until such funding is received, which would have a material and adverse impact on our business prospects and results of operations.

Previous wording

The following table shows a summary of our cash flows for the periods indicated (in thousands):

Current wording

The following table shows a summary of our cash flows for the periods indicated:

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities was $16.2 million and primarily reflected our net loss of $18.5 million and an $0.8 million net change in our operating assets and liabilities, $0.4 million of amortization of investments offset by noncash charges of $2.5 million in stock-based compensation and $1.1 million in depreciation expense and non-cash operating lease expense. We expect to continue to use cash in our operating activities as we conduct our clinical trials and nonclinical studies, incur costs of manufacturing clinical trial and nonclinical study materials and continue process development activities to optimize our manufacturing processes.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $27.1 million and primarily reflected our net loss of $40.1 million, offset by $6.7 million in net changes to our operating assets and liabilities, and net noncash operating charges of $6.3 million for stock-based compensation, depreciation expense, accretion of investments and non-cash operating lease expense. We expect to continue to use cash in our operating activities as we conduct our clinical trials and nonclinical studies, incur costs of manufacturing clinical trial and nonclinical study materials and continue process development activities to optimize our manufacturing processes.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities was $26.5 million and primarily reflected our net loss of $20.7 million and an $8.3 million net change in our operating assets and liabilities, offset by noncash charges of $1.7 million in stock-based compensation and $1.0 million in depreciation expense, amortization of investments and non-cash operating lease expense.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities was $45.1 million and primarily reflected our net loss of $42.1 million and an $8.3 million net change in our operating assets and liabilities, offset by noncash charges of $5.2 million in stock-based compensation, depreciation expense, amortization of investments and operating lease expense.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $33.3 million, and is the net change in investments.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $38.7 million, as a result of the net change in investments of $38.7 million.

Previous wording

During the three months ended March 31, 2023, net cash provided by investing activities was $45.1 million, and is primarily due to the net change in investments.

Current wording

During the six months ended June 30, 2023, net cash provided by investing activities was $69.6 million, of which $69.9 million was the net change in investments, offset by $0.4 million in purchases of property and equipment.

Previous wording

During the three months ended March 31, 2024, net cash used in financing activities was $0.2 million and was primarily from the exercise of stock options and purchases pursuant to our employee stock purchase plan offset by $0.4 million of offering cost accrued in 2023 and paid in 2024.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities was $0.8 million and was primarily from $1.3 million in cash received for the exercise of stock options and purchases pursuant to our employee stock purchase plan offset by taxes paid related to net share settlement of equity awards of $0.4 million.

Previous wording

We have evaluated the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation exemptions to the requirements for (1) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the completion of our IPO, (ii) in which we have total annual gross revenues of at least $1.235 billion or (iii) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Current wording

We have evaluated the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation exemptions to the requirements for (1) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (2) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the completion of our initial public offering, (ii) in which we have total annual gross revenues of at least $1.235 billion or (iii) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Previous wording

We are also a “smaller reporting company” as defined under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). We will continue to be a smaller reporting company so long as (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Current wording

We are also a “smaller reporting company” as defined under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.