On Thursday, H.C. Wainwright adjusted its outlook on Shattuck Labs (NASDAQ:STTK) shares, reducing its price target to $16 from the previous $28 but maintaining a Buy rating on the stock.
The revision follows the presentation of additional data from Shattuck's Phase 1b dose expansion study of SL-172154 in combination with azacitidine for the treatment of TP53 acute myeloid leukemia (AML) or higher-risk myelodysplastic syndrome (HR-MDS) patients at the EHA '24.
The updated safety and efficacy results showcased at the European Hematology Association's annual meeting underlined Shattuck's competitive position in the CD47 space, a field that has recently seen setbacks due to unsuccessful clinical trials and safety concerns. Despite these industry challenges and the impact on Shattuck's shares, the firm believes the negative market reaction to the interim data readout is an overreaction.
The data presented indicated that the complete response (CR) rate for SL-172154 in TP53 mutant AML patients was 29%, surpassing the less than 11% CR rate observed with azacitidine monotherapy.
In HR-MDS patients, the CR rate reached 42%, doubling the 22% rate for azacitidine alone. These results, while preliminary, suggest a significant improvement over historical outcomes, although the sample size remains small.
As of the data cutoff, median duration of response (DoR) and overall survival (OS) were not reached, indicating the need for more time to fully assess the long-term benefits of the treatment.
The firm anticipates that forthcoming updates on the durability of the response will be key in differentiating Shattuck's therapy in the market. The continued development and study of these findings are expected to provide further clarity on the treatment's potential.
In other recent news, Shattuck Labs has reported interim trial results for its drug candidate SL-172154, showing promising response rates in HR-MDS and TP53m AML patients.
The clinical-stage biotechnology company also revealed that the U.S. Food and Drug Administration (FDA) has granted orphan drug designation for SL-172154, aimed at treating acute myeloid leukemia (AML). This status is expected to accelerate the drug's development, offering various incentives, including seven years of market exclusivity upon potential FDA approval.
The trial data indicated a 67% Objective Response Rate (ORR) in HR-MDS patients and a 43% ORR in TP53m AML patients. The drug demonstrated a manageable safety profile, with no grade 3 or higher infusion-related reactions when premedicated with dexamethasone. Adverse events related to SL-172154 were reported in 42% of HR-MDS patients and 33% of TP53m AML patients, but there were no deaths related to the treatment.
Shattuck Labs is now focusing on HR-MDS and TP53m AML, indications with high unmet medical need and limited treatment options. The company is set to concentrate its later-stage clinical development efforts on AML and HR-MDS, driven by the strength of the efficacy results and the potential for expedited approval paths. These are recent developments in the company's ongoing research and clinical trials.
InvestingPro Insights
Following the recent developments with Shattuck Labs, the InvestingPro data provides additional context to the company's financial health and market performance. Shattuck Labs holds a market cap of $218.26 million, with a notably high revenue growth in the last twelve months as of Q1 2024, at 282.93%. Despite this impressive growth, the company's gross profit margin remains deeply negative at -2611.12%, reflecting significant costs relative to revenue.
InvestingPro Tips suggest that the stock may be in oversold territory according to the RSI, while also highlighting that the stock has taken a substantial hit over the last week, with a 1-week price total return of -32.89%. Analysts have concerns about the company's profitability, noting that Shattuck is not expected to be profitable this year and has experienced a stock price decline over the last month and quarter. Additionally, Shattuck does not pay a dividend, which might be a consideration for income-focused investors.
For investors seeking a deeper analysis of Shattuck Labs, InvestingPro offers further tips on the company's financials and market position. There are 13 additional InvestingPro Tips available that could provide valuable insights for informed decision-making. To access these insights, consider subscribing to InvestingPro with an exclusive offer: use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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