Shattuck Labs, Inc. — FY2023 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2023. Shattuck is a clinical-stage biotechnology company developing dual-sided fusion proteins. Its lead candidate, SL-172154, is in Phase 1 trials for ovarian cancer and for acute myeloid leukemia (AML) and higher-risk myelodysplastic syndromes (HR-MDS). The company had no products approved for sale and no product-sales revenue.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Collaboration revenue | $1.7 million | $0.7 million |
| Research and development expense | $74.3 million | $82.9 million |
| General and administrative expense | $19.3 million | $21.1 million |
| Operating loss | $92.0 million | $103.3 million |
| Net loss | $87.3 million | $101.9 million |
| Net loss per share, basic and diluted | $2.05 | $2.41 |
| Cash used in operating activities | $81.2 million | $94.5 million |
At December 31, 2023, cash and cash equivalents were $125.6 million and investments were $5.0 million, totaling $130.6 million, versus $161.3 million a year earlier. Current assets were $143.2 million and current liabilities $11.5 million. Total liabilities were $14.9 million, including operating lease liabilities; the filing reports no outstanding debt. Accumulated deficit was $306.3 million.
Operating cash use declined year over year. Investing activities provided $110.9 million, largely from investment maturities net of purchases, and financing activities provided $48.6 million, mainly from a December stock offering and pre-funded warrants. In that financing, Shattuck received $47.6 million net from sales of 4.65 million common shares and 3.10 million pre-funded warrants. Potential dilution includes those warrants and outstanding equity awards. No dividends are anticipated.
Revenue is not a meaningful basis for assessing commercial performance at this stage, and the filing does not provide product margins. Interest income was $4.7 million, up from $1.6 million in 2022.
Material changes and business developments
- Revenue increased by $1.0 million, primarily reflecting activity under the ImmunoGen clinical-trial collaboration. R&D expense declined $8.6 million, mainly because of lower clinical-material manufacturing costs, partly offset by higher clinical-trial and facility costs. G&A expense declined $1.8 million, including the absence of the prior-year litigation-settlement expense.
- In December 2023, Shattuck completed the public offering and private placement described above. At year-end, all 3.10 million pre-funded warrants remained unexercised.
- In February 2024, Shattuck entered a research and preclinical-development collaboration with Ono Pharmaceutical for selected fusion-protein compounds targeting autoimmune and inflammatory diseases. Ono has an option to obtain an exclusive worldwide license; subsequent development and commercialization would be Ono’s responsibility if it exercises the option.
- The filing describes Ono consideration in different ways: up to $9 million for research-plan payments plus up to $217.5 million in potential license and milestone payments in the business discussion, while the financial-statement note describes a $5.4 million initial payment and up to $224.5 million in aggregate license fees and milestone payments. Investors should verify the agreement’s definitive terms.
Clinical update, outlook, and risks
- AML and HR-MDS: In initial Phase 1B combination cohorts with azacitidine, as of December 1, 2023, five of 14 evaluable frontline HR-MDS patients achieved complete response (CR) and four achieved marrow CR. In frontline TP53-mutant AML, two of 11 evaluable patients achieved CR and one achieved CR with incomplete hematologic recovery and proceeded to transplant. These are preliminary, small-cohort results; the trials are ongoing and open-label. The company planned to expand both cohorts and expected additional data mid-2024.
- Ovarian cancer: In the Phase 1B SL-172154 plus pegylated liposomal doxorubicin cohort, one confirmed and two unconfirmed partial responses were observed among 11 evaluable patients as of October 31, 2023. Shattuck expected additional combination data, including initial data with mirvetuximab, mid-2024.
- Safety: The filing describes an acceptable safety and tolerability profile at the 3 mg/kg dose in the cited combination cohorts. Infusion-related reactions were common. Grade 3 or 4 treatment-related adverse events were reported in both hematologic cohorts; one Grade 5 cardiac-arrest event occurred in the TP53-mutant AML cohort, in a patient with reported cardiac history and other clinical factors. The filing also reports Grade 3 or 4 related events in six patients treated with the ovarian cancer combination, with no Grade 5 events in that cohort. Early safety findings do not establish safety in larger or later-stage trials.
- Management estimates existing cash and investments will fund operations into 2026, but notes the estimate depends on assumptions and that additional financing may be needed. The liquidity note separately states funds are sufficient for at least the next 12 months. The filing does not reconcile these runway statements. Shattuck expects significant operating losses and negative operating cash flow to continue; R&D spending may rise as trials expand, programs advance, and manufacturing is scaled.
- Manufacturing scale-up remains a key execution risk. Shattuck relies on third-party manufacturers for clinical drug substance and had not yet completed a cGMP batch using its improved process intended for later-stage trials. The company also identifies clinical efficacy and safety uncertainty, patient enrollment, competition, regulatory delays, intellectual-property challenges, and dependence on CROs, CDMOs, and suppliers as material risks.
- The $1.4 million securities class-action settlement was paid in 2023, and the case was dismissed with prejudice. No other material legal proceedings were reported. KPMG issued an unqualified audit opinion on the financial statements; management reported effective disclosure controls and internal control over financial reporting. The auditor did not provide an internal-control attestation.
Key investor verification points
- Reconcile the stated cash runway into 2026 with the financial-statement note’s “at least the next twelve months” statement, and assess the assumptions behind both.
- Confirm the Ono agreement’s initial/research payments and maximum potential license and milestone consideration; the filing presents differing totals.
- Track updated, fully evaluated clinical response, durability, and safety data against the preliminary Phase 1 results, including the cardiac-arrest event and the impact of small, open-label cohorts.
- Monitor cash burn, future financing needs, share issuance, and potential dilution from pre-funded warrants and equity awards.
- Verify progress and timing for process transfer, cGMP manufacturing, and supply sufficient for later-stage trials.