Shattuck Labs, Inc. annual report, FY2020

Shattuck Labs, Inc. — FY2020 Form 10-K

Reporting period: Fiscal year ended December 31, 2020; filed March 16, 2021. This is an annual report, not a standalone fourth-quarter report. Shattuck is a clinical-stage biotechnology company with no approved products or product-sale revenue.

Business context and pipeline

The company is developing dual-sided fusion proteins through its ARC and GADLEN platforms. Its clinical-stage candidates are SL-172154, which targets CD47/SIRPα and activates CD40, and SL-279252, which blocks PD-1 and activates OX40. SL-172154 is wholly owned; SL-279252 is subject to a collaboration and licensing option with Takeda. The company also reported a preclinical pipeline of more than 300 fusion proteins.

Financial results and liquidity

MetricFY2020FY2019
Collaboration revenue$9.9 million$9.9 million
Research and development expense$37.5 million$29.2 million
General and administrative expense$9.4 million$5.7 million
Loss from operations$36.9 million$25.1 million
Net loss$36.6 million$24.0 million
Net loss per share, basic and diluted$2.36$3.17
Net cash used in operating activities$33.7 million$21.0 million

Revenue was almost flat year over year (+0.5%), while R&D expense rose 28.3%, G&A expense rose 63.6%, and net loss increased 52.6%. The filing does not report product gross margins; reported revenue came from the Takeda collaboration.

At year-end, cash and cash equivalents were $157.9 million and short-term investments were $177.6 million, totaling $335.4 million. Current assets were $345.6 million and current liabilities were $16.8 million. Total liabilities were $39.1 million; the filing reports no debt balance. Management estimated that year-end cash and investments would fund operations through the end of 2024, based on assumptions that could prove inaccurate.

Operating cash use was $33.7 million. Investing cash use of $146.3 million largely reflected purchases of short-term investments, not solely operating investment. Financing provided $330.9 million, primarily from the IPO and preferred-stock sales. The October 2020 IPO generated $213.5 million net proceeds; 2020 Series B and B-1 preferred-stock financings generated approximately $117.0 million net. Preferred shares converted to common stock upon the IPO.

Changes, outlook, and material risks

  • R&D spending increased mainly with manufacturing and clinical costs for SL-172154 and SL-279252, along with personnel costs. G&A growth reflected higher staffing and public-company costs.
  • Both lead candidates remained in Phase 1. Management expected initial dose-escalation data for SL-172154 in ovarian cancer in the second half of 2021, and in CSCC/HNSCC in the first half of 2022; SL-279252 data were expected in the second half of 2021. These are forward-looking expectations, not reported outcomes.
  • As of February 3, 2021, SL-279252 had been observed to be well tolerated, with no dose-limiting toxicities reported and no maximum tolerated dose reached. As of March 16, 2021, the same was reported for SL-172154. These were early, limited clinical observations, not proof of efficacy or safety.
  • COVID-19 had delayed clinical trials, patient enrollment and treatment, vendor work, and access to manufacturing materials. The company also reported reliance on a single-source bulk drug substance manufacturer and no redundant supply arrangement in place.
  • Takeda had paid approximately $78.4 million in option payments, milestones, and expense reimbursements through year-end. It retains licensing options for clinical-stage programs, while potential future milestones and royalties depend on exercise of options and subsequent development and sales.
  • Key risks include clinical failure or unexpected immune-related adverse effects, regulatory delays, manufacturing scale-up and supply constraints, competition, intellectual-property challenges, and the need for future financing. The company had no approved products and expected continued losses. It reported no material legal proceedings.
  • The financial statements received an unqualified independent audit opinion. Management concluded disclosure controls were effective at the reasonable-assurance level; the filing did not include an internal-control-over-financial-reporting assessment or auditor attestation under the applicable transition exemption.

Important facts for investors to verify

  • Subsequent clinical-trial data, including efficacy, adverse events, dose selection, and whether the planned timelines were achieved.
  • Actual cash burn and changes to the stated end-of-2024 runway estimate as trials, manufacturing, and infrastructure spending expand.
  • Takeda’s decisions on licensing options, and the resulting economics, rights, and development responsibilities.
  • Progress toward qualifying additional manufacturers and establishing reliable, scalable supply for clinical programs.
  • Any material changes in intellectual-property rights, financing needs, or the company’s stated development plans and risks.