Good afternoon, ladies and gentlemen. Welcome to the Shattuck Labs Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions] 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..

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?.

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.

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?.

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?.

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?.

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?.

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

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?.

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..

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..

Makes sense. Thanks so much. I will back in queue..

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

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..

Great. Thanks, Marc. Lini can handle it for us..

Yes, with the Doxil we are expecting something in the order of 10 to 20 patients by the middle of the year. So based – we would be sharing data both on the safety, as well as the efficacy. It will be a mixture of that data, depending on the enrollment.

And we expect that we would provide some guidance closer to the time as to what to expect by the middle of the year. But to answer your question in the Doxil it will be in the order of 10 to 20 patients.

With the mirve, looking at the mirve data, so yes, I mean, with mirve approved in the high expresser group, 75% of weight and here we are enrolling patients with 25% or greater. So we will be looking at the response by subgroup in those subset.

But at this stage, what we are doing with ImmunoGen is that we are partnering with ImmunoGen to see what would be an interesting response rate and durability of response based on their database, we will definitely be working with them to benchmark the data that we see against the datasets that they have.

And by the end of the year, we would hope to have or expect to have about 40 patients of worth of data..

Thank you, very helpful..

Thank you. We go next now to Yigal Nochomovitz at Citi..

Hi, thanks. I’m just trying to get a feeling for expectations for the combo study with 154 in aza both in the relapsed/refractory setting, as well as in the frontline setting.

What do you generally believe is the efficacy bar for aza by itself and with the addition of 154 in both relapsed/refractory AML and MDS as well as in the frontline setting in TP53 mutant, what might you expect to see with the combo above aza?.

Thanks, Yigal. As Lini said in the initial portion of the trial, we’re enrolling primarily venetoclax to an HMA experienced subject. So any activity in that relapsed/refractory setting, I think would be helpful and perhaps provide some guidance toward what you might expect in the frontline setting.

The first two cohorts that we expect to have data from in the second half of this year in the frontline setting are number one in the TP53 mutant AML patients. There we believe that the expected effect in terms of complete responses for azacitidine alone, are in the range of 22%.

And so we’re looking for a combination complete response rate in the neighborhood of 40% or so. And in the high-risk MDS cohort, this is where there continues to be a bit of blurriness, honestly, in the field as to what the expected effect size of azacitidine alone is.

Some of the older studies place that complete response rate in the high teens, the more recent Takeda study with Pevonedistat suggest that it could be as high as the low 30s. And so we think it’s best to cite the higher response rate as the benchmark.

And so we’re looking for a combination response rate somewhere in the neighborhood of 50% for complete responses..

Okay, and then I’m not sure if you mentioned it in the prepared remarks, but just can you just kind of go through again the choice of the 3 mg/kg for 154 in combo with the liposomal doxorubicin.

What was driving that decision?.

So it was driven by a few factors. First of all, on both the CD40 and CD47 binding sides of the molecule, we were looking to find a dose where full receptor occupancy and receptor saturation was achieved.

And that was achieved by that 3 mg/kilogram dose and that was visible both in terms of the receptor occupancy data and observation of non-linearity in the PK profile. Beyond that, we were looking for a dose that led to maximal induction of the pharmacodynamic effects driven by CD40.

So many folks are aware that with others – with CD47 inhibitors, the only pharmacodynamic effect you see in a study like this is receptor occupancy. So the observation of rapid margination of CD40 expressing cells from the peripheral blood post dose is a unique effect for 154 relative to any other agent in the space.

That was maximal by the 3 mg/kg dose and maintained that maximal plateau up through the 10 mg per kg dose. The other primary pharmacodynamic effects were rapid induction of multiple cytokines, including interleukin-12, IP-10, CCL2, CCL4, CCL22 and a number of others.

And those cytokines also achieved a – what appear to be a maximal plateau by that 3 mg/kg dose, which did not escalate appreciably by the 10 mg/kg dose, but also importantly didn’t decline.

And so on all of those markers, 154 was differentiated both from single-acting CD47 inhibitors and lacked any of the toxicity or bell-shaped dose response effects that characterize prior CD40 agonist and so all of that gave us confidence about this being the right dose to bring in the combos..

Great. Thank you..

Thank you. We will take our last question today from Zhiqiang Shu of Berenberg..

Good afternoon. Thanks for taking the questions. My question is related to your 252 program.

Obviously, it’s not surprising to see the discontinuation there, but I was wondering if you can talk about the learnings from this program, particularly around the PK/PD aspect to 154, what the PK/PD from 252 is consistent with what you are observing in 154? Thanks very much..

Sure, thank you. Zhi. So the trial cross comparisons here are, I think, quite valuable. And with the 252 program, we completed dose escalation through that 24 mg/kg dose compound continued to be extremely well tolerated.

And across that dose escalation, we saw dose dependent binding to CD4 cells expressing OX40 and migration of those cells out of the peripheral blood post dose.

And so again, from a TNF receptor agonist perspective, the tolerability and lack of any evidence of a bell-shaped dose response curve and the pharmacodynamic effects with both 252 and 154 are helpful in terms of validating one of the central hypotheses of the ARC platform that if you engage TNF receptors with a hexameric drug, you will not observe some of the toxicities and pharmacodynamic – abnormal pharmacodynamic effects that prior antibody-based regimens have seen.

So that’s an important finding from a platform expansion standpoint, again both from the safety and the pharmacodynamic side. And we’re also learning some important lessons I think in terms of what OX40 and what CD40 stimulation achieve in human cancer patients.

And when you look at the 252 data and you note that there really are – there were no appreciable serum cytokine changes. The only cells that were migrating were the specific CD4 positive, OX40 positive cells.

It was a much more immunologically quiet molecule, so to speak, in this patient population, whereas the CD40 agonist clearly all across the dose escalation led to very clear escalations in a number of cytokines, infusion-related reactions have been much more common with that agent.

And so the differentiation in biology between the two constructs paints a very clear picture that this is target-mediated activity that we’re seeing here. So always hard to close down a program like this, but I think we’ve learned what we needed to learn from this molecule and those learnings will benefit other compounds moving forward..

Great. Thanks. And then maybe just quickly on GADLEN platform, you disclosed, I think consistent with last time that you have two preclinical assay.

Can you talk about sort of the prioritization there and when we can see more data or more development from those two programs?.

So the B7-H3 molecule is the one we’re considering for development in oncology and the CD20 is the one that we’re considering for development in antibody-mediated autoimmune disease.

And what we’re seeking to achieve with the initial clinical study with the GADLEN platform is to select an indication where we believe it will be most likely that a GADLEN molecule will differentiate from CD3-based T cell engagers, antigen-specific antibody molecules and we’ve learned a lot about what Gamma Delta T Cells rely upon to be fully activated.

And just like alpha beta T cells, they require a T cell receptor stimulus, which comes from the GADLEN molecule itself and the butyrophilin heterodimer. And they also require a co-stimulatory ligands to be expressed by their target cell.

And so a part of the exercise that is guiding the effort is looking at tumors that express B7-H3 and trying to assure that patients that we might enroll early in a Phase 1 dose escalation study are likely to express those signal to ligands on their tumor.

And that’s on the tumor side and on the autoimmune side, you can have certainty actually that any B-cell, which expresses CD20 will also express a signal to ligand in the form of CD80 or 86.

And so those are some of the design principles that we have in mind for that Phase 1 trial and we will be providing more specific guidance as to exactly what that study is going to look like in the short-term this year..

Great. Thanks, Taylor..

Thank you..

Thank you. This concludes the Q&A session of the call. At this time, I would like to turn the call back over to Taylor Schreiber, Chief Executive Officer of Shattuck Labs for closing remarks..

Thank you, operator and thank you all for joining the Shattuck fourth quarter and full year 2022 financial results and business update conference call. We appreciate your continued interest in Shattuck and we look forward to updating you on our milestones throughout the remainder of what we hope to be an exciting 2023. Thank you..

Thank you. Again, ladies and gentlemen, that will conclude today’s conference call. We just like to thank you all so much for joining us and wish you all a great remainder of your day. Bye-bye..