Shattuck Labs, Inc. (NASDAQ:STTK) Q3 2023 Earnings Call Transcript

Shattuck Labs, Inc. (NASDAQ:STTK) Q3 2023 Earnings Call Transcript November 10, 2023

Operator: Good morning and welcome to the Shattuck Labs Third Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the call over to your host, Conor Richardson, Vice President of Investor Relations at Shattuck Labs. Conor, please go ahead.

Conor Richardson: Thank you, operator. Good morning, everyone, and welcome to the Shattuck Labs conference call regarding our third quarter 2023 financial results and recent business updates. The press release reporting our financial results was issued pre-market this morning and can be found on the Investor Relations section of our website, shattucklabs.com. During this morning’s call, the Shattuck leadership team will provide a business overview of the third quarter 2023, including clinical development updates. Speaking on today’s call will be our Chief Executive Officer and Scientific Co-Founder, Dr. Taylor Schreiber; our Chief Medical Officer, Dr. Lini Pandite; and our Chief Financial Officer, Mr. Andrew Neill. We will then open the call for questions following our prepared remarks.

Before we begin, I would like to remind you that today’s webcast contains forward-looking statements within the meaning of Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements represent management’s judgment as of today and may involve certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on these risks and uncertainties, please refer to our most recent quarterly report on Form 10-Q for the quarter ended September 30, 2023, and our other filings with the SEC, which are available from the SEC’s website or on our corporate website, shattucklabs.com. Any forward-looking statements represent our views as of today, November 9, 2023.

With that, I will now turn the call over to Dr. Schreiber, our Chief Executive Officer. Taylor?

Taylor Schreiber: Thank you, Conor. Good morning, everyone, and thank you for joining us today. We are very pleased that our lead clinical stage product candidate, SL-172154, has advanced to a stage where we are able to begin sharing clinical data from both our hematologic and solid tumor programs. Importantly, we are also pleased to have observed our first responses and efficacy data across our clinical trials, including our Phase 1B clinical trial in platinum-resistant ovarian cancer and our Phase 1A/B clinical trial in acute myeloid leukemia or high-risk myelodysplastic syndromes. We look forward to providing more details throughout the call. For the rest of the call, we will refer to SL-172154 as 154. This morning. We will discuss interim data from our Phase 1B clinical trial of SL-172154 in combination with pegylated liposomal doxorubicin in patients with platinum-resistant ovarian cancer.

In addition, we will discuss the encouraging data from our ongoing Phase 1A/B clinical trial in acute myeloid leukemia or high-risk myelodysplastic syndromes that was described in an abstract released last week and will be presented at the American Society of Hematology Annual Meeting in early December. These data include dose escalation data for SL-172154 as monotherapy and in combination with azacitidine in primarily relapsed refractory AML and higher-risk MDS patients. As a reminder, SL-172154 is a dual-sided fusion protein. It inhibits the CD47 checkpoint receptor and also directly activates immune cells by CD40 engagement. The CD47 landscape has evolved significantly over the past 18 months. Several advanced programs have encountered significant challenges with toxicity, including destructive anemia.

These safety issues and the related clinical challenges have led to significant skepticism regarding the potential clinical utility of the CD47 pathway. We believe, however, that these safety issues are the result of the design of some CD47 targeted agents and are not inherent to the CD47 target itself. We believe that conclusions currently being drawn regarding CD47 as a pathway should be confined only to specific individual agents. We designed SL-172154 to not engage Fc gamma receptors in order to avoid the anemias and other cytopenias that have plagued other agents in the class. Earlier this year at ASCO, we shared clinical data from our Phase 1A dose escalation clinical trial in platinum-resistant ovarian cancer or PROC patients. That data demonstrated that SL-172154 does not cause destructive anemia, and this observation remains true today.

We remain encouraged by the safety and tolerability profile of SL-172154 to date. SL-172154 also differentiates from all other CD47 inhibitors through its CD40 agonist domain. This attribute of SL-172154 has already led to a differentiated pharmacodynamic profile and dose escalation studies and may contribute to improved response rates, accelerated kinetics of response and durability of responses in our [Technical Difficulty] Dr. Lini Pandite, our Chief Medical Officer, will expand [Technical Difficulty]. At a high level, our confidence is bolstered by the interim results of SL-172154 in combination with pegylated liposomal doxorubicin, which we will call PLD in patients with PROC. As of October 31, 2023, we have observed an overall response rate of 27%, which if it holds, would exceed the PLD monotherapy benchmark response rate of 4% in the Pfizer sponsored JAVELIN Ovarian 200 trial.

We will also highlight recent data from our Phase 1A/B clinical trial evaluating SL-172154 both as monotherapy and in combination with azacitidine in patients with relapsed refractory higher-risk MDS and AML. We completed the dose escalation portion of this study in the second quarter of 2023. And these data will be presented at the upcoming ASH Annual Meeting in December. We have initiated two different frontline dose expansion cohorts, where SL-172154 is being combined with azacitidine in patients with previously untreated higher-risk MDS or TP53 mutant AML. We are very pleased with the momentum in this trial. And enrollment has proceeded very quickly, which we attribute to the high unmet need for these patients and our investigators’ enthusiasm regarding the differentiated profile of SL-172154.

We look forward to sharing an interim update from the frontline dose expansion cohorts in conjunction with ASH next month. With that, I will now turn the call over to Lini, who will dive into our clinical programs and provide an update on recent clinical data and activities.

Lini Pandite: Thanks, Taylor, and good morning, everyone. 2023 continues to be a year of focused operational execution. I’m grateful for the relentless efforts of our team, our participating investigators and most importantly, the patients themselves that have enabled this progress. As Taylor outlined, I will first provide an update from our Phase 1B trial investigating SL-172154 in combination with PLD in patients with platinum-resistant ovarian cancer and then provide some color on the data in last week’s ASH abstract from our Phase 1A/B trial investigating SL-172154 in combination with azacitidine in patients with AML and higher-risk MDS. Let’s start with our ongoing Phase 1B combination clinical trial of SL-172154 in patients with platinum-resistant ovarian cancer.

As of the data cutoff date of October 31, 2023, 16 patients with platinum-resistant ovarian cancer have been enrolled into this study. These patients have a median of 1.5 prior lines of systemic therapy. SL-172154 plus PLD had an acceptable safety profile, which was consistent with the safety profile of the individual agents. So SL-172154, the most common drug-related adverse event was infusion-related reaction, mostly Grade 1 or Grade 2. As of the data cutoff date of October 31, 2023, 11 patients were evaluable for efficacy. We offset three partial responses. One confirmed partial response and two, unconfirmed partial responses. As of November 9, 2023, both patients with unconfirmed partial responses are still on study and have not reached the date of confirmatory response assessment.

Four patients had a best response of stable disease, and four patients had progressive disease. As of the data cutoff date of October 31, 2023, the disease characteristics of the patients enrolled in this trial are similar to the characteristics of the patients enrolled in the Pfizer sponsored JAVELIN Ovarian 200 trial, which is a recently published randomized trial that included a PLD controlled arm. In the JAVELIN trial, the overall response rate for patients treated with PLD monotherapy was 4%. Additionally, to date, a higher proportion of patients enrolled in our trial have bulky disease measuring over 5 cm in diameter and pre-treatment with bevacizumab, both of which are poor prognostic factors. We expect to complete enrollment of the expansion cohorts this quarter and to provide additional response and response durability data from the full cohort by mid-year 2024.

A scientist holding a vial of the cancer-fighting drug developed by the biotechnology company.

Overall, we are encouraged by the emerging data from this combination cohort and look forward to update with more patients and longer follow-up. We are also continuing enrollment in our Phase 1B trial of SL-172154 in combination with mirvetuximab soravtansine in platinum-resistant ovarian cancer. Enrollment and dosing are progressing quickly. We expect to report initial combination data from this trial mid-year 2024. Let us now turn to the progress we have made in our Phase 1A/B clinical trial in AML and higher-risk MDS. In this trial, we are evaluating the safety, tolerability pharmacokinetics, anti-tumor activity and pharmacodynamic effects of SL-172154 as both monotherapy and in combination with azacitidine, the current standard of care.

As described in our ASH abstract, 37 adult patients with primarily relapsed refractory AML or higher-risk MDS have received SL-172154 as monotherapy or in combination with azacitidine. These patients had a median of two prior lines of therapy. There are 19 patients in the monotherapy cohort and 18 patients in the combination cohort as of the data cutoff date of May 25, 2023. In this trial, SL-172154 had an acceptable safety profile as a monotherapy and in combination. For SL-172154, the most common drug-related adverse events was infusion-related reactions, mostly Grade 1 or 2. Monotherapy responses have not been reported with CD47 targeted agents in heavily pre-treated relapsed refractory AML patients. Consequently, we were particularly encouraged by a monotherapy response in a heavily pre-treated relapsed refractory TP53 mutant AML patient.

This patient had a rapid response to SL-172154 monotherapy, achieved a morphologic leukemia-free state and was subsequently taken to allogeneic transplant and remains leukemia free. Additionally, in other patients, we also observed anti-leukemic activity in the form of blast count reductions. We also enrolled several previously untreated TP53 mutant higher-risk MDS patients in the dose escalation portion of our trial. These data included in the ASH abstract. As of the data cutoff date of July 10, 2023, anti-tumor activity was observed in combination with azacitidine in two of four response-evaluable patients with previously untreated TP53 mutant higher-risk MDS. We observed one complete response in a treatment-related TP53 mutant higher-risk MDS patient who remains on study and one marrow complete response in a patient who has taken to bone marrow transplant.

Two patients had best response of stable disease. One of whom was taken to transplant. Overall, we are encouraged by the growing body of data that validates the unique mechanism of action of SL-172154 and its therapeutic potential to address the unmet needs of patients with AML and higher-risk MDS. Our data continue to show evidence of CD40-driven pharmacodynamic activity, both in peripheral blood and bone marrow. We believe that CD40 activation and the resulting involvement of the adaptive immune system is important in the heme indications and may provide significant improvement to CD47 blockade in terms of both improved response rates and durability of response. We look forward to presenting the complete data of the dose escalation portion of the trial in relapse refractory patients at the ASH meeting.

And sharing initial data from the frontline expansion cohorts during a company-sponsored event around the time of ASH next month. With that, I will now turn the call over to Mr. Neill to discuss our financial update. Andrew?

Andrew Neill: Thank you, Lini, and good morning, everyone. As Conor mentioned at the onset of the call, the full financial results for the third quarter 2023 are available in our 10-Q and earnings press release filed premarket this morning. I would like to focus on a few key points from our disclosures. We continue to be well positioned financially. As of September 30, 2023, our cash and cash equivalents and investments were $101.1 million. In the third quarter of 2023, our research and development expenses were $24.2 million as compared to $18.9 million for the third quarter of 2022. In the third quarter of 2023, our general and administrative expenses were $5.1 million as compared to $6.6 million for the third quarter of 2022.

Our net loss for the third quarter of 2023 was $27.5 million or $0.65 per basic and diluted share, as compared to a net loss of $24.6 million or $0.58 per basic and diluted share for the third quarter of 2022. Based on our current operating and development plans, we reiterate our financial guidance. Shattuck believes its cash and cash equivalents and investments will be sufficient to fund its operations through year-end 2024, beyond results from its Phase 1 clinical trials of SL-172154. This cash runway guidance is based on our company’s current operational plans and excludes any capital that may be received, proceeds from any business development transactions and/or additional costs associated with clinical development activities that may be undertaken.

With that, I’ll hand the call back to Dr. Schreiber for final comments. Taylor?

Taylor Schreiber: Thank you, Andrew. In the third quarter of 2023, we made excellent progress across the four different ongoing expansion cohorts in our PROC, AML and higher-risk MDS trials. We expect several additional milestones and clinical updates through the end of this year. For data updates, we expect to first present complete data from the dose escalation portion of our Phase 1A/B clinical trial of SL-172154 in relapsed refractory AML and higher-risk MDS patients at the 65 ASH annual meeting. We also plan to present initial data from the frontline TP53 mutant AML dose expansion cohort and the frontline higher-risk MDS dose expansion cohort combining SL-172154 with azacitidine in the fourth quarter of this year during a company-sponsored event following ASH.

For clinical program milestones, we expect to complete enrollment in the frontline higher-risk MDS cohort in the fourth quarter of 2023. We also plan to complete enrollment of our Phase 1B dose expansion cohort of SL-172154 in combination with PLD and PROC in the fourth quarter of this year. Should the initial results gathered in our heme and solid tumor studies hold as the size and maturity of these cohorts increase, SL-172154 would have first-to-market potential among CD47 agents and PROC, as well as both AML and higher-risk MDS. These are all areas of significant unmet medical need with multiple opportunities for accelerated development and subsequent registration directed studies. Taken together, I believe the combination of our experienced team, transformational science and protein engineering, as well as financial resources, puts us in a strong position to move beyond our next set of milestones and into 2024.

Before we conclude today’s call, I would once again like to thank our patients and their families, the entire Shattuck team, our investors and the many people who have been supportive along the way. With that, we are happy to take questions. Operator?

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Q&A Session

Operator: Thank you. [Operator Instructions] Your first question comes from the line of Jonathan Miller of Evercore ISI. Your line is open.

Jonathan Miller: Thank you so much for taking the question, guys, and congrats on getting to some real clinical data here. I’d love to start on the PROC study and ask a little bit more detail about the baseline characteristics of these patients. Obviously, these are platinum resistant, but can you give a little bit more granularity on what other variety of agents these patients have seen in their prior lines of therapy? And then maybe a little bit more open ended, as we think about comping this program to other CD47 programs, which obviously have – well, had not been gathering the excitement that they once did, what is your expectation for being able to demonstrate in these patients that are responding the impact of CD40 ligand side of the molecule on the efficacy that you’re seeing?

Taylor Schreiber: Great. Well, good morning, Jon. Thank you and thanks for the questions. Lini, why don’t you go ahead and answer Jon’s first question around the baseline characteristics of these patients and how they compare to JAVELIN and then I’ll follow you with the second part.

Lini Pandite: Thank you, Jon, for the question. Yes, these patients compare very well to the patients who were enrolled in the JAVELIN study. The majority of these patients and that’s 88% of these patients, had failed the frontline platinum-containing regimen and were resistant to frontline platinum. So 100% of these patients had received platinum, 56% of these patients had also received bevacizumab. These patients have also received PARP inhibitors. That number isn’t in the slide deck, but patients have received PARP as well.

Taylor Schreiber: Great. Thanks Lini. And, pardon me, with regard to how SL-172154 needs to show in these patients and how that compares to what’s evolved in the AML and higher-risk MDS space with other CD47 inhibitors, as most of the audience probably knows, this has been an evolving space over the last three years and certain agents might have been discontinued in the AML and higher-risk MDS space early on purely for competitive reasons under the assumption that magrolimab would be first-to-market and therefore, the commercial opportunity might have dwindled. Clearly, that’s changed, and we certainly look forward to Gilead sharing more data around exactly what happened with ENHANCE and ENHANCE-2 to as part of their new commitment to increase transparency.

It seems, however, as though many of these patients enrolled to the magrolimab arms, may have discontinued earlier or may have had dose interruptions in a way that could have impacted the top line readouts of that study. And hopefully, we’ll learn more about that. Regardless, SL-172154 has to stand on its own two feet in syndication, and clearly we’re encouraged by the differentiated safety profile, the lack of destructive anemia. And in pre-clinical models, the activity of CD40 agonism translated to both improved response rates and improved response durability. And clearly in patients like this, improved CR rates, not just over the expectations of azacitidine alone, but over prior benchmarks with AZA plus, drugs like magrolimab are important to exceed.

And if and only if you exceed those CR rates, you then have an opportunity of seeing an improved duration of response and improved overall survival. And so that’s what we’ll be looking to see and certainly share the first glimpse of that in proximity to ASH in December. And in the higher-risk MDS population, we’re looking to exceed the azacitidine benchmark in terms of complete response, which comes from the Apria [ph] Study of about 22% by at least double. And in terms of the TP53 mutant AML cohort, where azacitidine alone delivers complete response rates in the low-single-digits. And the combination of AZA-Magro, we’ll get more data I hope soon, but seems to deliver CR rates in the low-30%s. And again, we’ll look to exceed that by a substantial margin.

So these are things that we have to show on our own as the field, hopefully learns more about the other agents that have been discontinued.

Operator: Thank you. Your next question comes from the line of Joe Pantginis of H.C. Wainwright. Your line is open and everybody.