Shattuck Labs, Inc. (NASDAQ:STTK) Q4 2022 Earnings Call Transcript

Shattuck Labs, Inc. (NASDAQ:STTK) Q4 2022 Earnings Call Transcript February 26, 2023

Operator: Good afternoon, ladies and gentlemen. Welcome to the Shattuck Labs Fourth Quarter and Full Year 2022 Earnings Conference Call. As a reminder, this conference is being recorded. And I will now turn the call over to your host, Mr. Conor Richardson, Vice President of Investor Relations at Shattuck Labs. Conor, please go ahead.

Conor Richardson: Thank you, operator. Good afternoon, everyone and welcome to the Shattuck Labs conference call regarding our fourth quarter and full year 2022 financial results and recent business updates. The press release reporting our financial results was issued after market close this afternoon and can be found on the Investor Relations section of our website shattucklabs.com. During this afternoon’s call, the Shattuck leadership team will provide a business overview of the fourth quarter and full year of 2022, including clinical development updates for SL-172154, our lead program and SL-279252. We will refer to these as 154 and 252 throughout today’s earnings call. Speaking on today’s call will be our Chief Executive Officer and Scientific Co-Founder, Dr. Taylor Schreiber, who will review our pipeline progress and upcoming key milestones, followed by our Chief Medical Officer, Dr. Lini Pandite, who will provide an update on our ongoing clinical activities.

And then our Chief Financial Officer, Mr. Andrew Neill will review our fourth quarter and full-year 2022 financial results and financial guidance. Dr. Schreiber will return to make some closing remarks and we will then open the call for questions. Before we begin, I would like to remind you that today’s webcast contains forward-looking statements within the meaning of the 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 Annual Report on Form 10-K for the year ended December 31, 2022 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, February 23, 2023. With that, I will now turn the call over to Dr. Schreiber, our Chief Executive Officer. Taylor?

Taylor Schreiber: Thank you, Connor. Good afternoon everyone and thank you for joining us today. 2022 was an operationally focused year for Shattuck and our clinical team did an excellent job of advancing 154, our lead clinical-stage Agonist Redirected Checkpoint or ARC products candidate. As a reminder, 154 is a SIRPa-Fc-CD40L ligand bi-functional fusion protein, which serves to both block the macrophage checkpoint molecule known as CD47 and also activates an important immune stimulatory receptor known as CD40. Linking these two functions within a single therapeutic differentiates 154 from all other CD47 inhibitors in clinical development. We are very pleased to have completed the Phase 1a monotherapy dose escalation clinical trial of 154 in patients with platinum resistant ovarian cancer and achieved all of the primary goals of this first in human study including the selection of a dose of 154 to advance into our Phase 1b combination cohort, which I will describe in a moment.

From a pharmacodynamic perspective, we believe that the clinical data generated through the course of the Phase 1a trial has validated one of our central hypotheses and the design of the ARC platform and shown that 154 was able to safely activate CD40 in a dose-dependent manner, including doses which saturated the CD40 receptor. One of the primary pharmacodynamic effects we observed in-patients treated with 154 was a rapid induction of interleukin 12, achieving high serum concentrations of IL-12 in a number of other cytokines widely believed to be important to support anti-tumor immune responses. A variety of other pharmacodynamic findings were also observed in this trial and we are looking forward to sharing these data at a medical meeting toward the middle of this year.

In short, we are very pleased to have completed the goals of this study and to have select the 3 mg/kg dose to move into the combination cohorts. As a class, in order to see clinically meaningful efficacy, CD47 inhibitors rely upon combination regimens with another agent that provides a pro figures to signal such as a targeted antibody or ADC or with an agent that causes immunogenic cell death. For this reason, we are pleased to have moved into the combination studies, where objective responses are expected in both our ovarian cancer trial and our clinical trial for patients with acute myeloid leukemia and higher-risk myelodysplastic syndrome. There are two combination cohorts ongoing in our Phase 1b clinical trial in-patients with platinum-resistant ovarian cancer.

In the first combination cohort, 154 is being combined with a chemotherapy agent known as pegylated liposomal doxorubicin or PLD for short. We selected PLD in combination with 154 for several reasons. First, PLD causes immunogenic cell death of ovarian cancer cells and was shown to enhance antitumor activity when combined with 154 in preclinical studies. Second, PLD is a standard-of-care in the platinum-resistant setting and is well-known that patients treated with PLD have an objective response rate in the range of 10% to 12% from multiple Phase 3 clinical trials. Thus, this was a mechanistically driven combination strategy where we do not expect difficulty determining the contribution of 154 and the regimen due to the known low response rates of PLD as monotherapy.

The second combination cohort in ovarian cancer is the result of collaboration between Shattuck and ImmunoGen. ImmunoGen received accelerated approval for an antibody-drug conjugate known as mirvetuximab soravtansine, which targets an ovarian cancer antigen called fully receptor alpha or FR alpha for short. The initial approval of mirvetuximab is for a biomarker selected subset of platinum-resistant ovarian cancer patients, whose tumors express high levels of FR alpha and the objective response rate is 31.7% for those patients. In preclinical studies, we demonstrated that combining 154 with mirvetuximab, potentiated anti-tumor activity not just for ovarian cancer cells that express high levels of FR alpha, but also for tumor cells that express medium and low levels of FR alpha.

Thus, this is a mechanistically driven combination where the contribution of 154 is expected to be observed both in terms of improving overall response rates and response duration across the spectrum of FR alpha expression. If successful, this could more than double the proportion of patients who benefit from mirvetuximab. While we are excited about the opportunity in ovarian cancer for 154, we are also pleased to be well underway in our clinical trial of 154 in-patients with AML and high-risk MDS. As many listeners will be aware, AML and high-risk MDS are among the indications where CD47 blocking antibodies first demonstrated clinical activity and were the first approvals based on overall survival may soon occur. Over the second half of last year, our clinical team initiated both the monotherapy dose escalation and azacitidine combination dose-escalation cohorts and we remain on track for our clinical data milestones in the first half of this year.

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Although we acknowledge that the objective response rates for the first generation of CD47 inhibitors has contracted in this patient population over the past couple of years, we are excited about the opportunity that opens for agents like 154, which provides the important component of CD40 activation, in addition to CD47 blockade and which improved antitumor immunity in preclinical tumor models and published head-to-head studies in comparison to CD47 blocking antibodies. Let us now turn to our SL-279252 program, a PD1-Fc-OX40L ligand bi-functional fusion protein. We have completed the multicenter open-label clinical trial evaluating the safety, tolerability, pharmacokinetics, antitumor activity and pharmacodynamics of 252 in patients with advanced solid tumors and lymphoma.

After enrolling PD1 inhibitor experienced patients to the 12 and 24 mg/kg cohorts, we did not observe an overall response rate of 20% or greater, which was our target to justify further clinical development. And thus, we have made the decision to discontinue the SL-279252 program. The clinical data generated from patients treated with SL-279252 suggest that OX40 stimulation in the setting was insufficient to overcome the resistance mechanisms in-place in-patients who have already failed a PD1 inhibitor. I would like to take this opportunity to thank the patients and their families for participating in our study. As always, we remain focused on delivering novel therapeutics which will benefit patients experiencing cancer with high unmet medical need and look forward to the combination data in our ongoing clinical trials with SL-172154 in the coming quarters.

With that, I will now turn the call over to Dr. Pandite, our Chief Medical Officer, who will provide you with more detail on each of these studies, the emerging data illustrating how 154 is a differentiated CD47 inhibitor and will also provide you with guidance to the various clinical milestones that are coming over the course of 2023. Lini?

Lini Pandite: Thanks, Taylor and good afternoon. 2022 was a year of high operational focus and I am pleased with the execution of our clinical programs and the continued progress we have made. Our clinical focus is on the advancement of 154, our differentiated CD47 inhibitor and CD40 agonist with clinical data coming to see us on each of three different clinical studies. As Taylor mentioned, we have now completed our multi-center, open-label, dose-escalation Phase 1a clinical trial intended to assess the safety, tolerability, pharmacokinetics, anti-tumor activity and pharmacodynamic effects of intravenous administration of 154 as monotherapy in-patients with platinum-resistant ovarian cancer. As a reminder in this trial, we reached a maximum administered dose of 10 mg per kilogram and we did not reach a maximum tolerated dose.

As you will recall from the last quarter, we did not see any evidence of distress deepening which we attribute to the design of the Fc portion of 154 and the absence of binding to Fc gamma receptors. We expect to report the full data from this dose-escalation portion clinical trial mid-2023. Following the completion of Phase 1a dose escalation clinical trial and selecting a dose, we advanced to enrolling patients in our Phase 1b clinical trial of 154 in combination with liposomal doxorubicin in patients with platinum-resistant ovarian cancer. This multi-center, open-label trial is intended to evaluate the safety, tolerability, pharmacokinetics antitumor activity and pharmacodynamics of 154 in combination with liposomal doxorubicin. We expect to report initial combination data from this trial mid-2023.

I am also very excited to share details about our new collaboration with ImmunoGen. We have initiated enrollment in a Phase 1b trial to evaluate the safety, efficacy and pharmacokinetic of SL-172154 in combination with mirvetuximab soravtansine in patients with platinum-resistant ovarian cancer. As Taylor mentioned, we believe that 172154 may broaden the activity of mirvetuximab beyond just folate receptor alpha high expresses and thus we intend to enroll patients across a broader range of folate receptor alpha expression, including those with high folate receptor alpha expression defined as 75% or greater media folate receptor alpha expression, defined as less than 75%, but greater than or equal to 50% and low folate receptor alpha expression, defined as less than 50%, but greater than or equal to 25% expression of folate receptor alpha.

We expect to report initial combination data from this trial in the second half of 2023. Now, let us turn our attention to the progress we have made in our Phase 1a/1b clinical trial in patients with AML and high-risk MDS. In this trial, we are evaluating the safety, tolerability, pharmacokinetics anti-tumor activity and pharmacodynamic effects of 154 as both monotherapy and in combination with azacitidine. As a reminder, the first part of this trial is a parallel staggered monotherapy and combination dose-escalation in which we expect to enroll a heavily pretreated, relapsed-refractory patient population. Enrollment in the monotherapy cohort of this trial has progressed consistently and as planned and importantly we dosed the first patient in the azacitidine combination cohort in the fourth quarter of 2022.

Initial data from the dose escalation portion of this trial as both monotherapy and in combination with azacitidine are expected in the first half of 2023. After we complete the dose escalation portion of this clinical trial, we intend to evaluate 154 in a frontline patient population setting TP53 mutant AML and frontline high-risk MDS. 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 afternoon, everyone. As Conor mentioned at the outset of the call, the full financial results for the fourth quarter and full-year ended December 31, 2022 are available in our earnings press release and in our Annual Report on Form 10-K. Today, I would like to focus on a few key points from our disclosures. We continue to be well positioned financially. As of December 31, 2022, we had cash, cash equivalents and investments of approximately $161.3 million. In the fourth quarter of 2022, our research and development expenses were $21.9 million, compared to $16.2 million for the fourth quarter of 2021. For the year ended December 31, 2022, our research and development expenses were $82.9 million as compared to $56.6 million for the year ended December 31, 2021.

In the fourth quarter of 2022, our general and administrative expenses were $4.8 million compared to $4.6 million for the fourth quarter of 2021. For the year ended December 31, 2022, general and administrative expenses were $21.1 million as compared to $18.7 million for the year ended December 31, 2021. Our net loss for the fourth quarter of 2022 was $25.4 million or a loss of $0.60 per basic and diluted share, compared to a net income of $7.8 million for the fourth quarter of 2021 or $0.19 per basic share and $0.18 per diluted share. Our net loss for the year ended December 31, 2022 was $101.9 million or $2.41 per basic and diluted share as compared to $45 million or $1.07 per basic and diluted share for the year ended December 31, 2021. Based on our current operating and development plans, we reiterate our financial guidance for 2023 and beyond.

We expect our existing cash and cash equivalents and investments to be sufficient to fund our planned operations into the second half of 2024. We remain committed to operating strong financial discipline, including in our ongoing clinical programs and given our projected rate of cash burn, we believe we are in a healthy position as it relates to our balance sheet and expected clinical data readouts for our 154 clinical trial in 2023. With that, I will now hand the call back to Dr. Taylor Schreiber for final comments. Taylor?

Taylor Schreiber: Thank you, Andrew. As you’ve just heard, 2022 was a year in which we are intensely focused on the execution of our clinical programs and we are pleased to be approaching key clinical data in 2023. As you heard from Lini, clinical updates from the 154 program including complete data from the monotherapy dose-escalation trial in platinum-resistant ovarian cancer patients and initial data in combination with liposomal doxorubicin also in ovarian cancer patients are expected mid-year 2023. Additionally, initial data from our trial in-patients with AML and high-risk MDS are expected in the first-half of 2023. As you can see, we expect 2023 to be a data-rich year and we look forward to sharing those data with you.

One of the cornerstones of Shattuck has always been the expertise of our preclinical development and research and development teams. I must highlight the team’s tremendous progress in 2022, leading to the promotion of doctors Fromm and de Silva as Chief Scientific Officers to head the ARC and GADLEN platform research and development efforts, respectively. Interest in harnessing the activity of Gamma Delta T Cells in cancer has continued to build and we believe our GADLEN platform is truly distinct from all other approaches currently in development due to its unique design features. During the fourth quarter of 2022, we highlighted two preclinical compounds from the GADLEN platform, one targeting the CD20 antigen that we are evaluating for development in autoimmune disease and a second targeting the B7-H3 antigen for which we are evaluating for development in certain solid tumors.

We look forward to providing further guidance on the GADLEN program as it continues to advance later this year. In addition to our progress in the clinic and in our discovery efforts, I would like to underscore that our financial position remain strong and we continue to investigate other opportunities to monetize our portfolio to increase shareholder value. I want to thank everyone for participating in today’s call. We believe that the combination of our experienced team and transformational science and protein engineering, as well as financial resources puts us in an incredibly strong position to move beyond our next set of milestones in 2023. We will keep you apprised of our progress as we continue to execute our strategic and corporate objectives.

With that, we would now like to open the call for your questions. Operator?

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Q&A Session

Operator: Thank you, Dr. Schreiber. We will take our first question this afternoon from Jonathan Miller of Evercore ISI.

Jonathan Miller: Hi, guys. Thanks so much for taking the question. I’d love to start with the 154 program. I know you were seeing some liver tox at higher doses. I’m wondering how that seems to be filling out as you move forward. Have you seen any Grade 3 or any of high grade, I should say, liver tox in the 3 mg combo cohort? And just to build off of that, how many patients in combo do you expect to be available in the initial release, especially in AML and MDS, is it enough that we should expect to be getting a good ORR comp relative to other CD47’s in these releases this half?

Taylor Schreiber: Hey, Jon, thanks for the question. So I’ll €“ Lini can provide you guidance on patient numbers coming up in all the cohorts. With regard to tox, the profile that we’re seeing in all of the combination studies is similar to what we’ve seen in the monotherapy dose escalation. So with regard to the specific liver toxicity question, we’re not seeing any evidence of any cumulative tox between the molecules and 3 mg/kg was well tolerated as monotherapy in that monotherapy dose escalation study as well. So looking good so far from that perspective, also consistent profile from what we saw in the monotherapy dose escalation with regard to no evidence of cytokine release syndrome or destructive anemias.

Lini Pandite: Then on the combination, Jon, with the AML, MDS cohort, the patients that we’re enrolling in the dose escalation are patients who have relapsed refractory disease. We expect in excess of 20 patients a custom monotherapy and the pump cohorts by the middle of the year. The €“ just to put this in context, the CD47 targeted agents, they have a benchmark in the frontline setting in treatment-naive patients. These patients are relapsed/refractory patients. We will be starting those expansion cohorts in the frontline setting as soon as we complete the dose escalation.

Jonathan Miller: Makes sense. Thanks so much. I will back in queue.

Operator: Thank you. We go next now to Marc Frahm at Cowen.

Marc Frahm: Thanks for taking my questions. Maybe I’ll ask similar questions and but we will go to the Doxil combo because that’s the prep test. May be Lini, if you can give an update on kind of the scope of that presentation or likely to see. And then related to that, as we get towards the mirve dataset, just in your prepared remarks, Taylor, you mentioned the kind of approved response rate that mirvetuximab has in the bio micro selected population, but of course, the trial is going to enroll a broader population. So, how should we think about kind of interpreting that data as we get it given that you will include patients who aren’t approved for monotherapy plus some of your proposed benefit is really on durability not so not as much on the response rate.

Taylor Schreiber: Great. Thanks, Marc. Lini can handle it for us.