Shattuck Labs, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Unaudited. Shattuck is a clinical-stage biotechnology company developing dual-sided fusion proteins; it has no products approved for sale and no product-sale revenue.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Collaboration revenue | $1.1 million | $0.1 million |
| Research and development expense | $16.3 million | $16.7 million |
| General and administrative expense | $4.9 million | $5.1 million |
| Operating loss | $20.0 million | $21.7 million |
| Other income | $1.5 million | $0.9 million |
| Net loss | $18.5 million | $20.7 million |
| Net loss per share, basic and diluted | $0.37 | $0.49 |
| Operating cash used | $16.2 million | $26.5 million |
At March 31, cash and cash equivalents were $76.0 million and investments were $38.6 million, totaling $114.6 million. Current assets were $131.1 million, current liabilities $14.3 million, and stockholders’ equity $128.8 million. The filing reports no debt. Cash and cash equivalents fell $49.6 million during the quarter, while $33.3 million of net cash was used for investing, primarily reflecting purchases of investments; cash flow should be considered alongside the investment balance.
There is no meaningful product gross margin disclosed. The company reported an accumulated deficit of $324.8 million and expects continued losses and negative operating cash flows.
Material changes versus the prior-year quarter
- Revenue increased by $1.1 million, mainly from the new Ono collaboration and ongoing ImmunoGen-related activity.
- R&D expense declined 2.4%, primarily from lower clinical-material manufacturing costs, partly offset by higher SL-172154 clinical-trial costs. G&A declined 3.1%, mainly due to lower insurance costs.
- Net loss narrowed by $2.2 million; other income increased $0.6 million, principally reflecting income on cash and investments.
- Operating cash use decreased by $10.3 million compared with Q1 2023.
Business developments, outlook and risks
- Lead candidate SL-172154 is being evaluated in Phase 1B trials in ovarian cancer and certain hematologic malignancies, including AML and HR-MDS. The company also has preclinical programs.
- Under its February 2024 Ono agreement, Shattuck conducts research on selected compounds for autoimmune and inflammatory diseases. Ono pays research costs and may exercise an option for an exclusive license. Shattuck recognized $0.8 million of Ono revenue in Q1. The agreement includes a $5.4 million initial nonrefundable payment, up to $217.5 million in potential license and milestone payments if the option is exercised and milestones are achieved, and tiered royalties. Potential amounts are contingent, not assured revenue.
- ImmunoGen, acquired by AbbVie in February 2024, reimburses eligible costs for the SL-172154 ovarian-cancer combination study. Shattuck recognized $0.3 million under that agreement in Q1.
- Management expects significant R&D spending through 2024 and anticipates operating expenses could increase in coming years as programs advance. It does not expect significant product revenue for several years, if ever, and may need additional financing or collaborations; financing may be unavailable or dilutive.
- Runway statements differ: the liquidity note says cash and investments are expected to fund operations for at least 12 months from the filing date, while MD&A says they are expected to fund projected operations into 2026. The filing does not reconcile these statements.
- Key risks include clinical and regulatory uncertainty, trial enrollment, manufacturing and third-party CRO/CDMO dependence, intellectual-property protection, collaboration continuation, financing needs, and macroeconomic pressures. No material legal proceedings or material changes to previously disclosed risk factors were reported. Kopfkino may receive up to $20.5 million in development, regulatory, and commercial milestone payments plus other contingent payments and royalties; no liability was recorded because milestones were not considered probable.
Important facts for investors to verify
- Reconcile the stated cash runway and assess projected cash burn against the $114.6 million cash-and-investment balance.
- Track SL-172154 trial enrollment, safety, efficacy, and timing of data updates, as well as progress of preclinical programs.
- Confirm Ono’s research continuation and option decisions, and distinguish contingent milestones and royalties from recognized or received revenue.
- Monitor collaboration concentration and the effect of AbbVie’s acquisition of ImmunoGen on the ongoing agreement.
- Review potential dilution: 47.5 million common shares were outstanding at March 31; 7.5 million options and unvested RSUs were excluded from diluted loss per share as anti-dilutive, and 3.1 million pre-funded warrants remained outstanding.