Shattuck Labs, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This filing reports annual results, not standalone fourth-quarter results. Shattuck is a clinical-stage biotechnology company with no approved products and no product-sales revenue.
Business context
The company’s lead candidate, SL-172154, is in Phase 1 development for platinum-resistant ovarian cancer and certain hematologic malignancies, including AML and higher-risk MDS. It is designed to block CD47/SIRPα and activate CD40. Shattuck also has preclinical programs using its ARC and GADLEN platforms.
Financial results and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Collaboration revenue | $0.7 million | $30.0 million |
| Research and development expense | $82.9 million | $56.6 million |
| General and administrative expense | $21.1 million | $18.7 million |
| Loss from operations | $103.3 million | $45.3 million |
| Net loss | $101.9 million | $45.0 million |
| Net loss per share, basic and diluted | $2.41 | $1.07 |
| Net cash used in operating activities | $94.5 million | $57.1 million |
Revenue fell 97.8%, mainly because the Takeda collaboration had ended and its remaining revenue was recognized in 2021. R&D spending rose 46.6%, reflecting higher clinical-material manufacturing, hiring, facilities, and clinical-trial costs. The company recorded a $1.4 million litigation settlement expense in 2022. Product margins are not meaningful because the company has no commercial product sales.
At December 31, 2022, cash and cash equivalents were $47.4 million and investments were $113.9 million, totaling $161.3 million. Current assets were $184.6 million and current liabilities were $25.0 million. The balance sheet reports no debt. Investing activities provided $49.4 million, largely due to net investment maturities and sales; this was not operating cash generation. Property and equipment purchases were $11.6 million. Management estimated available cash and investments would fund projected operations into the second half of 2024; the estimate depends on assumptions and may change.
The company had an accumulated deficit of $219.0 million and continues to expect significant losses. It may need additional equity, debt, collaboration, or licensing funding. A $75 million at-the-market equity facility was available, but no shares had been sold under it by year-end.
Material changes and developments
- Collaboration revenue declined sharply following the mutual termination of the Takeda agreement in 2021. A separate third-party research collaboration generated $0.7 million in 2022.
- Shattuck completed Phase 1A monotherapy dose escalation of SL-172154 in ovarian cancer: the maximum administered dose was 10 mg/kg, a maximum tolerated dose was not reached, and a single dose-limiting liver-enzyme toxicity was reported. Infusion-related reactions were observed; the company reported no dose-limiting hemolytic anemia or thrombocytopenia to date.
- The company began Phase 1B ovarian-cancer combination cohorts with liposomal doxorubicin and mirvetuximab soravtansine, and a Phase 1A/B program in AML and HR-MDS.
- In February 2023, after the fiscal year-end, Shattuck discontinued clinical development of SL-279252, citing insufficient response to justify continued development in the studied patient population.
- The company adopted lease accounting standard ASC 842 on January 1, 2022; prior-year amounts were not adjusted. KPMG issued an unqualified opinion on the financial statements.
Outlook, risks, and contingencies
Management expected to report additional SL-172154 monotherapy and liposomal-doxorubicin combination data around mid-2023, initial hematologic-malignancy dose-escalation data in the first half of 2023, and initial mirvetuximab combination data in the second half of 2023. These are forward-looking expectations, not assured outcomes. The company also planned to provide more information on GADLEN in 2023.
Management reported COVID-era and continuing operational delays involving clinical-trial vendors, manufacturers, raw-material procurement, and staffing at trial sites. Other principal risks include clinical efficacy and safety uncertainty, patient enrollment, reliance on third-party manufacturers and CROs, manufacturing scale-up, competition, intellectual-property challenges, and the need for additional capital. The company cautions that early or interim clinical findings may change and may not predict clinical benefit.
A putative securities class action relating to alleged omissions about clinical results and the Takeda collaboration reached a $1.4 million settlement in principle. The amount was accrued at year-end; court approval remained pending as of February 22, 2023. Management stated that disclosure controls and internal control over financial reporting were effective at year-end; the auditor did not provide an internal-control attestation.
Most important facts for investors to verify
- Whether later SL-172154 data demonstrate meaningful and durable clinical responses, and how the safety profile develops in larger patient groups and combination cohorts.
- Whether trial enrollment, manufacturing capacity, and raw-material supply meet expected timelines, given reported delays and dependence on external providers.
- Whether cash use remains consistent with management’s runway estimate into the second half of 2024, and what financing may be required afterward.
- Whether the class-action settlement receives final court approval and whether the ATM facility or other financing results in material dilution.
- Whether planned 2023 clinical and GADLEN updates occurred; confirm the status of discontinued SL-279252 and other pipeline prioritization.