Shattuck Labs, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed March 15, 2022. Shattuck is a clinical-stage biotechnology company developing dual-sided fusion proteins. It has no approved products and generated no product-sale revenue.
Financial results and position
| Metric | FY2021 | FY2020 |
|---|---|---|
| Collaboration revenue | $30.0 million | $9.9 million |
| Research and development expense | $56.6 million | $37.5 million |
| General and administrative expense | $18.7 million | $9.4 million |
| Loss from operations | $45.3 million | $36.9 million |
| Net loss | $45.0 million | $36.6 million |
| Net cash used in operating activities | $57.1 million | $33.7 million |
- Revenue was entirely collaboration revenue from Takeda, not product sales. The 2021 increase principally reflected recognition of the remaining deferred revenue after the collaboration was terminated.
- Operating expenses rose as the company expanded clinical development, manufacturing, research, and public-company operations. The company reported no meaningful product gross margin; commercial sales have not begun.
- At year-end, cash and cash equivalents were $92.3 million and short-term investments were $176.5 million, totaling $268.8 million. Current assets were $288.3 million and current liabilities $24.6 million. The filing reports no debt balance.
- Total assets were $298.6 million, total liabilities $26.8 million, and stockholders’ equity $271.8 million. Accumulated deficit was $117.1 million.
- Cash and cash equivalents decreased by $65.6 million in 2021. Investing cash outflow was $10.4 million, including $7.9 million of property and equipment purchases and net purchases of short-term investments.
- Management estimated existing cash and investments would fund operations into the second half of 2024, based on assumptions that may prove incorrect. It also stated funding would be needed if development and commercialization progress beyond current resources.
- Contractual operating lease obligations totaled $7.2 million. Potential Heat license milestone payments of up to $20.6 million, plus royalties, were contingent and not recorded as liabilities.
Material changes and operating developments
- Takeda and Shattuck mutually terminated their collaboration in November 2021. Shattuck has no remaining performance obligations under it and will receive no future Takeda milestones or royalties; all Takeda options and rights of first negotiation ended. The remaining deferred revenue was recognized in Q4.
- FY2021 collaboration revenue rose 202.2%, while R&D expense increased 50.9% and G&A expense increased 99.6%. Net loss widened 22.9% year over year.
- R&D expense increased by $19.1 million, including higher personnel, manufacturing and clinical costs. G&A increased by $9.3 million, including public-company costs.
- The company expanded its workforce to 85 full-time employees and invested in laboratory, facility, and process-development capacity. It continued to depend on external manufacturers and was working to qualify additional supply.
Pipeline, outlook, and key risks
- SL-172154: In Phase 1 development for ovarian cancer and hematologic malignancies, including AML and higher-risk MDS. In 15 ovarian-cancer patients across four dose cohorts, the company reported tolerability through 3 mg/kg, with no treatment-related Grade 3 or higher adverse events at the reported cutoff. Among 14 patients evaluable at eight weeks, four had stable disease and nine progressive disease. These are early, limited data and do not establish efficacy.
- The company planned a Phase 1B SL-172154 combination study with liposomal doxorubicin in ovarian cancer and reported plans for combination evaluation in AML/MDS. It expected further ovarian monotherapy and initial combination data in the first half of 2023.
- The intratumoral SL-172154 trial in cutaneous and head-and-neck squamous cell cancers stopped enrollment as the company prioritized intravenous development; data were expected in the first half of 2022.
- SL-279252: In a Phase 1 trial for advanced solid tumors. The company reported one confirmed partial response and stable disease in 12 additional patients in the available early data; dose escalation was ongoing. Further data were expected in the second half of 2022.
- Management planned to nominate another clinical candidate in 2022 and expected expenses and operating losses to increase as trials, manufacturing, and platform development advanced. There was no revenue or earnings guidance.
- COVID-19 caused or contributed to clinical-trial, patient-enrollment, vendor, manufacturing, and raw-material delays. The company expected some disruptions could continue. It also cited single-source bulk drug substance dependence, complex biologic manufacturing, competition, clinical and regulatory uncertainty, potential need for further financing and dilution, and intellectual-property risks.
- Two putative securities class actions filed in January and February 2022 alleged misleading statements concerning the Takeda collaboration and sought unspecified damages and fees. The company and named individuals denied wrongdoing and said they would defend the claims.
- KPMG issued an unqualified opinion on the financial statements. Management reported effective disclosure controls and internal control over financial reporting; the filing did not include an auditor attestation on internal controls.
Important facts for investors to verify
- Whether the stated cash runway into the second half of 2024 remains supportable given actual quarterly cash burn, trial costs, and manufacturing spending.
- Updated clinical results for both candidates, including patient counts, follow-up, adverse events, response durability, and whether preliminary signals are confirmed in larger studies.
- Progress on clinical supply, qualification of additional manufacturers, raw-material availability, and the effect of any delays on trial timelines.
- Financial and operational consequences of ending the Takeda collaboration, including the loss of potential future payments and any ongoing obligations or disputes.
- Developments and potential exposure from the securities litigation, and any material changes to the company’s financing needs, license commitments, or intellectual-property position.