Shattuck Labs, Inc. (STTK) Earnings Call Transcript & Summary

Good morning, and thank you for joining us today. My name is T.J. Tucker, and I'm an analyst in JPMorgan's Healthcare group. Before I introduce you to our presenters today, I would like to declare mention to the blue button on your screen. This is where you'll submit questions that will be addressed during Q&A. With that, I am pleased to introduce the Shattuck Labs team, including Taylor Schreiber, CEO and Co-Founder; Andrew Neill, CFO; and Conor Richardson, Senior Director of Finance and Investor Relations. With that, I know that they are very excited to tell you a little bit about their story. So I'll turn it over to their team.

Great. Well, thank you, T.J. It's my pleasure to be here to present to you on behalf of Shattuck Labs at the JPMorgan Healthcare Conference. These are my forward-looking statements. At Shattuck, we've developed a completely new class of biologic medicine that we referred to as the agonist redirected checkpoint or ARC platform. And we developed this platform to accomplish a few very specific goals. What we wanted to do is to build a biologic, which could block immune checkpoint targets that are relevant in immuno-oncology, including PD-1, CD47 TIGIT and others, while simultaneously activating an important class of co-stimulatory receptors in the immune system, known as tumor necrosis factor receptors, targets that you may be familiar with in this class include CD40, 4-1BB, OX40 and others. And the structure of an ARC therapeutic as shown in the cartoon on this slide here. And a few things to point out. These are hexamer fusion proteins. And one of the ways that these compounds differ from antibody-based therapeutics is that both of the functional domains, which are depicted in orange and blue in this cartoon, are derived from native human proteins and not from antibody-based target finding sequences. The reason that activating tumor necrosis factor receptors was an unmet medical need is really due to the fact that this class of receptor has a unique structure as compared to many of the receptors you might want to target with a monoclonal antibody therapeutic. And that structure is shown in panel A of the figure here on the slide. And what's important to recognize is that all TNF receptors have to assemble into trimers as shown in the cartoon here in order to signal. And when you think about what that means in the context of an antibody-based therapeutic you can realize that perhaps a bivalent antibody shown in green here may not be the right tool for the job. And the reason for that is that an antibody could always bind 2 subunits of a TNF receptor, but a single antibody in and of itself we'll never be able to bind all 3 and, therefore, to cluster a TNF receptor trimer together. Simply the wrong key for the lock, the wrong tool for the job. You can pick your favorite analogy, but this is the fundamental reason why the clinical trials to date using monoclonal antibodies against this class of target have yielded underwhelming results. And we wanted to get around this structural problem by building a therapeutic where the structure actually matched the structure of a TNF receptor target. And that's what led us to this arc platform, again with the hexamer structure shown in the cartoon. And one of the reasons why these compounds have unique activity, which I'll show you in a minute from cancer patients is that these compounds contain 2 preformed TNF ligand trimers. And so these are not conditionally active biologics. They will be able to bind and activate TNF receptors wherever they encounter them while simultaneously blocking immune checkpoint receptors. This slide provides a snapshot of our clinical stage pipeline and then a very small subset of our preclinical pipeline. We have 2 different molecules that are in a total of 4 Phase I clinical trials today. The first is what we call 172154, and I'll refer to it over the course of this morning's presentation just as 154. This is a SIRP alpha Fc CD40 ligand fusion protein. And so this molecule is a dual CD47 inhibitor and CD40 agonist. We have a trial ongoing for patients with advanced platinum-resistant ovarian cancer, and that's where we've recently shared clinical data that I will review with you today. We have a second clinical study ongoing for patients with cutaneous or head and neck squamous cell carcinoma. And then we have a third clinical study ongoing for patients with acute myeloid leukemia or high-risk myelodysplastic syndrome. The second clinical stage program is 279252, which I'll refer to today is just 252 for short. This molecule is a PD-1 Fc OX40 ligand fusion protein. And so you can think of this molecule as a dual PD-L1 inhibitor and OX40 agonist. Similarly, we've shared Phase I clinical data recently from this compound in patients with advanced solid tumors and lymphoma. And I will review that data as well today. We have an enormous preclinical pipeline. We've generated over 400 constructs from this ARC platform. One of the molecules that we've shared data on recently is a TIGIT Fc LIGHT construct. Unfortunately, in today's presentation, we won't have time to review that. However, I would direct you to our website where we have a presentation that was recently shared in December at the TIGIT Symposia, where we lay out the mechanism of action of this construct and the reason why we believe this construct will have activity in PD-1 resistant tumors where so far, other TIGIT blocking antibodies have not. And so the clinical data that we'll review in a few moments provides the first clinical evidence for the ARC platform in humans. And there's enormous utility in being able to look at data from 2 different compounds from this platform in humans at the same time in terms of being able to evaluate the safety of the platform as a whole, the ability of these molecules to bind and occupy their specific targets in a dose-dependent manner in the context of monotherapy dose escalation trials. And we also have evidence of the manner in which these compounds active receptors, including CD40 and OX40 in a manner that has not previously been seen with any prior TNF receptor agonist. This data also includes the first monotherapy antitumor activity with the 252 compound in PD-1 refractory cancer. And together, these data helped to validate the ARC platform as a whole in demonstrating that these are not only well tolerated compounds but they really have unlocked the TNF receptor superfamily in a manner that the industry has attempted to do for well over 30 years, and I'll review that data over the next few minutes. So we'll start with data from the 154 compound. And again, just to remind you, the structure of this compound includes, in orange, the extracellular domain of the human SIRP alpha protein. And so this will bind and block CD47 similar to other CD47 inhibitors. The central domain of this molecule shown in gray contains an Fc gamma receptor silent core domain. And we selected this domain to avoid any of the cytopenias that have been seen with certain CD47 inhibitors. And where this compound differs from all other CD47 inhibitors in development, is that we include the CD40 ligand co-stimulatory domain, which leads to amplification of an adaptive immune response that is initiated by macrophage phagocytosis in tumor cells. Again, we've published on this preclinically and outlined the mechanism and the head-to-head performance of this molecule relative to CD47 inhibitory antibodies. And I would direct you again to our website if you'd like to review the preclinical data. The data that we've shared to date is from the monotherapy dose escalation portion of a clinical study in patients with advanced platinum-resistant ovarian cancer. The dosing schema that we've explored to date is shown on this slide. We began at a dose of 0.1 milligram per kilogram and have shared data to date through the 3 milligram per kilogram dose level, and the study has continued on to the 10 milligram per kilogram dose level. As you would expect in a Phase I study, these are heavily pretreated patients that have failed an average of 5 prior therapies. Patients eligible for the study included patients with ovarian, primary peritoneal or fallopian tube cancers. There have been no dose-limiting toxicities to date. No Grade 3 or greater treatment-related adverse events. Infusion-related reactions were common, but highly manageable with nonsteroid containing premedications and no patients had to discontinue the infusion due to these infusion reactions. Importantly, we have not seen any evidence of anemia, thrombocytopenia and cytokine release syndrome nor liver toxicity, which are the toxicities that have hindered the development of both prior CD47 inhibitors as well as prior CD40 agonists. There's been over 30 years of clinical data with CD40 agonists, and one of the first in the clinic was a CD40 agonist antibody first developed by Pfizer and referred to as CP-870,893. This compound could not be safely dose-escalated beyond 0.3 milligram per kilogram due to the observance of both cytokine release syndrome and hepatotoxicity in humans. And in a publication from Pfizer that cytokine release syndrome was associated with increases in both TNF alpha shown here as well as Interleukin-6 shown in this panel B over here. And so these were 2 cytokines that we were monitoring closely in this trial to make sure that we were not encountering the same sort of toxicities observed with these prior CD40 agonist antibodies. And what you can see here in this panel here looking at TNF alpha levels as well as this panel here looking at Interleukin-6 levels is that at doses of up to 3 milligrams per kilogram, which is now 10x the dose shown in this slide with the Pfizer antibody, we do not see any appreciable increases in TNF alpha or IL-6 and that correlates with the lack of any cytokine release syndrome or hepatotoxicity observed in these patients to date. Turning to the pharmacodynamics of this molecule. We were, again, looking in humans to make sure that the SIRP alpha domain was capable of binding and blocking CD47 and then also looking at the CD40 ligand domain of the molecule, which we'll get to in the next slide. What you can see here on the panel on the left is that we are measuring receptor occupancy on CD47 expressed by white blood cells. And even at the first dose level of 0.1 milligram per kilogram, there was a large distribution of the data, but we were already achieving high occupancy in some patients. And as we moved up in the dosing schema now by 3 milligram per kilogram, you can see that all of these patients have receptor occupancy that's approaching 80% or greater. And our expectation is that at the 10 milligram per kilogram dose level, we will achieve complete occupancy on leukocyte expressed CD47, and which is an important variable for this compound. Interestingly, at those same dose levels, we do not see significant occupancy on red blood cell CD47. And this is important both from a safety perspective as well as from an antigen sync perspective that may lead to unique dosing levels as compared to some of the CD47 inhibitors, which do bind red blood cells. Turning to the CD40 side of this molecule. We were also in panel A measuring receptor occupancy on CD40-expressing cells in the peripheral blood. And the dominant cell types that express CD40 in the blood include both B cells, which are almost uniformly CD40 positive as well as monocytes, which subset of which are CD40 positive. And in both of those cell types, we observed dose-dependent occupancy on CD40. And as you might expect from the prior slide, by the 3 milligram per kilogram dose level, we had nearly 100% receptor occupancy on CD40 positive cells in the peripheral blood. Now CD40 is an agonist receptor. And whereas with CD47, the only pharmacodynamic effect that other companies have reported is receptor occupancy. When you have an agonist target like CD40, you expect to see receptor occupancy, but then you expect to see downstream signals that, that target has led to immune activation. And we see that in multiple forms. One of the ways that you can see that is in panel B here, we're measuring the proportion of B cells in the peripheral blood pre-dose followed by 1 hour post dose, 24 hours post dose and then 7 days later, which is immediately prior to the next pre-dose time point. And so what these peaks and troughs are telling you is that pre-dose, there are a large number of CD40-positive cells in the peripheral blood. Within an hour of infusion, most of those cells rapidly leave the blood and accumulate in other tissues, including tumors as I'll show you in a minute. And then those cells slowly return to the blood 7 days later and this phenomenon repeats cyclically with every dose. Another outcome that you expect if you are activating CD40 is that these cells that express CD40 will upregulate other activation markers on their cell surface and 2 of these markers include CD86 as well as CD95. And what we're showing you in this figure here is that there's a two- to threefold increase in the density of CD86 and CD95 expression on the surface of these immune cells at doses of 1 or 3 milligram per kilogram. One of the factors we were most excited to see was an increase in multiple anti-tumor cytokines following infusion of 154. What we're showing you in this slide are the serum concentrations of Interleukin-12, which is a potent antitumor cytokine and the valleys here are showing you the pre-dose time point, and then the peaks are showing you the 2-hour post-dose time point. And so you can see there's a rapid increase in the concentration of circulating Interleukin-12 in these patients that comes down at 24 hours, but not quite down to baseline, especially at the higher doses that then returns to baseline by the subsequent pre-dose time point. And again, just like the cyclical movement of CD40-positive cells in and out of the central compartment. We see cyclical increases in Interleukin-12 following every infusion. And by the 3 milligram per kilogram dose level, this is roughly a tenfold increase in Interleukin-12 concentration as compared to pre-dose. Other cytokines that we see increase include CT-2, 3,4 and CTL-22 as well as some other. And to put this in context some of you may be familiar with efforts in the past where recombinant IL-12 therapeutics have been developed and administered to cancer patients. And the concentrations that we're achieving here with this compound approach the Cmax that was reported with some of those recombinant IL-12 therapeutics. However, we are not seeing the sorts of toxicities that limited development of those agents. It was important to look within these patient tumor biopsies, both predose and then on treatment to see whether 154 was altering the immune microenvironment within patient tumors. Here, we're looking at a pretreatment biopsy from one of our ovarian cancer patients. And you can see in the magenta staining pretreatment, there are a number of macrophages present in this patient's tumor pretreatment. However, 3 weeks after the first infusion, you can see that there's a large increase in the proportion of macrophages within this patient's tumor. And furthermore, the macrophages, which are present have upregulated both MHC Class II, which is involved in antigen presentation as well as CD40, which is involved in activation and co-stimulatory pathways. This is a compound that we show preclinically was able to bridge and innate to an adaptive immune response. And in the same patient, same biopsy locations we were able to look predose at the proportion of lymphocytes in this case, CD8+ T cells that were present in the tumor. And one of the characteristics of ovarian cancer broadly is that it tends to be an immune neglected tumor, at least from a T cell perspective. And you see very few T cells in this patient's pretreatment biopsy. Three weeks later, you can see that there's an enormous infiltrate of CD8+ T cells that are both proliferating and expressing cytolytic markers, including granzyme-B. And the presence of this T cell subset suggests that there has been an inflammatory response, which might include interferon gamma expression. And one of the sequela interferon gamma is upregulation of PD-L1. And we are indeed able to see that in the tumor microenvironment, specifically expressed by the tumor infiltrating immune cells. And so overall, this compound has been very well tolerated. We've bridged the gap well above where prior CD40 agonists could be safely dosed while saturating both CD47 and CD40. We've seen a number of signs of both receptor engagement on CD47 and CD40 as well as signs of immune activation downstream of CD40, which, of course, have not been repeated observed with any of the other CD47 inhibitors. The best response that we've observed to date is stable disease in the first 14 patients. And this is expected because this compound contains no intrinsic prophagocytic activity which is essential for antitumor activity with all CD47 inhibitors. This is the reason why all CD47 inhibitors are not being developed as monotherapies, but instead are being developed in combination either with certain chemotherapies that cause immunogenic cell death or with targeted antibodies that contain ADCP active apcetomains. And so given the levels of immune activation, we've already observed, we have initiated the combination strategy for this compound and that includes initiation of a trial in ovarian cancer actually an extension of the ongoing trial, where we will be enrolling patients in combination with liposomal doxorubicin. And we've shown preclinically that liposomal doxorubicin is capable of upregulating the prophagocytic signals on tumor cells that potentiate the CD47 mechanism. In addition, we have initiated a Phase I trial for patients in both acute myeloid leukemia as well as higher risk myelodysplastic syndrome. This is the area where CD47 inhibitors have been clinically validated. And we will be enrolling patients this year in both combinations with azacitidine as well as azacitidine plus venetoclax. And so we're excited to see the data come in over the course of the year from these combinations and see what this unique pharmacodynamic profile translates to as compared to any other CD47 inhibitor from an overall response and response duration standpoint. Turning to the second clinical stage molecule 252 This, again, is a hexameric fusion protein with a similar structure to 154, but with different functional domains. And in orange, we use the extracellular domain of the human PD-1 protein. And so this domain will bind and inhibit PD-L1 or PD-L2. Again, we selected an Fc gamma receptor silent core domain in the middle of this construct. And in blue, we include an OX40 ligand domain, which will bind and activate OX40 expressed by CD4-positive T cells. The data that we've shared to date is from the monotherapy dose escalation portion of our trial. We have shared data through the 6 milligram per kilogram dose level and have continued to treat patients at 12 and then 24 milligram per kilogram. These are heavily pretreated patients, the majority of which are both PD-1 refractory and PD-L1 non-low or non-expressers. The predominant cell types or tumor types that have been enrolled to date include ocular melanoma, adeno non-small cell lung cancer and gastric adenocarcinoma. This compound has also been very well tolerated with no dose-limiting toxicities to date. The most common treatment-related adverse events included maculopapular rash and low-grade infusion reactions. The dominant pharmacodynamic signal that we've observed in patients treated with 252 to date, includes the rapid margination of OX40 positive CD4+ T cells from the peripheral blood within an hour of infusion. And this is showing you the proportion of CD4-positive OX40 positive cells that leave the blood post following the first infusion or following the first infusion on the second cycle. And the proportion is corresponding here to the measured concentration of 252 post infusion. And what you can see from both of these graphs is that following the first and second cycle, the magnitude of margination of CD4-positive OX40 positive cells continues to escalate. And this tells us that we have not yet maximized the pharmacodynamic effects driven by OX40 and is part of the rationale for continued dose escalation. We have also collected both pre- and on-treatment biopsies from the patients enrolled in this study. And this is an example observed in many patients where there are low levels of CD8+ T cells and NK cells in the pretreatment biopsy. And we're 3 weeks later in the on-treatment biopsy, we see heavy infiltration of this tumor by both CD8+ cells that are expressing the cytolytic marker granzyme-B as well as natural killer cells. We have observed initial antitumor activity in patients that were enrolled at the higher doses with this construct. This includes a confirmed partial response in a patient with ocular melanoma who had previously failed both PD-1 and CTLA-4 inhibitors, which lasted greater than 1 year. And we also had stable disease in 12 subjects, including 5 subjects for greater than 24 weeks and also an unconfirmed partial response in another patient with vulvar melanoma. This was another patient who had previously failed both PD-1 and CTLA-4 inhibitors where the target lesion ultimately regressed completely when, unfortunately, this patient developed a brain met, which is the reason it's considered an unconfirmed partial response. To put the dosing levels into context with where PD-L1 inhibitors are approved, including drugs like atezolizumab, the data we've shared to date is through 6 milligram per kilogram. PD-L1 inhibitors are approved at doses of between 10 and 15 milligram per kilogram. And so the 12 milligram per kilogram dose, which is currently enrolling, is the first dose, which is roughly dose equivalent to the approved PD-L1 inhibitors, and we are interested to see what happens at that dose level and whether we've maximized the pharmacodynamic effects driven by OX40 at that dose level. And so again, 252 similar to 154 has been very well tolerated. We've seen linear PK through doses of 3 milligram per kilogram and the nonlinear PK at 6 milligram per kilogram, yet another reason to continue on. We've seen dose-dependent receptor occupancy and engagement of OX40 and initial antitumor activity in PD-1 refractory cancer patients. So in summary, we've now shared clinical data from the first 2 different ARC constructs in patients. And it's important for any new platform to demonstrate safety, and it's especially important in our view to show that for multiple molecules from a new platform and for you to be able to compare and contrast the immune effects of activating OX40 versus CD40 with these 2 different compounds. We've seen that these molecules have saturated their targets in a predictable, dose-dependent manner and have led to pharmacodynamic effects driven by OX40 and CD40, which have not been reported with prior TNF receptor agonists in the past. We see that there's evidence not just of immune activation in the periphery, but also within on-treatment tumor biopsies and dose escalation is continuing with both of these molecules to reach a recommended Phase II dose. And so we believe that these data as a whole helped to validate the hypothesis which drove generation of the ARC platform in the first place. We've been able to activate TNF receptors in a unique manner, and that opens up a number of additional opportunities with other arcs for our platform. We talked a bit about our TIGIT LIGHT construct. We also have a number of 4-1BB ligand containing constructs in development and are closely monitoring some of the other 4-1BB agonists that are being developed today. Over the course of 2022, we will expand clinical development, both in terms of other arcs as well as expanding the footprint of our existing trials and I've alluded to some of the ways we have already planned to do that with the 154 molecule. And this will create multiple shots on goal from both our existing molecules and new ones entering the clinic. And Shattuck is in an extremely good position to continue executing on this plan. with roughly $290 million in cash and cash equivalents on the balance sheet as of the end of the third quarter of last year, which funds operations and these clinical plans into the second half of 2024. So I'd like to thank you for your interest in listening to this presentation, and we certainly look forward to continued engagement with all of you in 2022. Thanks very much.

Thanks so much, Taylor. I really appreciate the presentation and very excited, obviously, about the prospects for Shattuck [indiscernible]. We'll go ahead and turn it over to Q&A for the questions that we received from the audience. The first one being, you recently shared data at the SITC 2021 conference. What do you believe is the most compelling data from your recent data disclosures for SL-172154 and SL-279252? And whether that be the data in total or just individual pieces of that data or whatever you find it as compelling.

Sure. So I think as I tried to allude to in the presentation, our industry has attempted to target TNF receptors using antibody-based therapeutics, be they monoclonal, IgG-based or even bispecifics for over 30 years. And this has been an elusive goal where the clinical data has underwhelmed and where development of these agents has been hampered by a combination of toxicity as well as this atypical bell-shaped dose response curve, which has made it hard to try to hone in on this goldilocks zone of picking a dose that you could bring into future development. And we believe that by targeting TNF receptors with a drug, which match the structure of those targets, that we would be able to dose escalate and maximize the biology of these targets in a way that antibodies have not been able to do and hopefully to do so safely. The safety sequela of some of these agents is not fully understood, but has been associated with the need for antibodies to have Fc gamma receptor binding domains on them. We believed in that hypothesis and certainly the data to-date indirectly support that may have been one contributor to why those agents encountered tox. So I truly believe that these data suggest that hexameric drugs like ARCs can unlock this important class of immune co-stimulatory receptor in a way that we've tried to do for a long time and which has led to phenomenal antitumor activity in many preclinical models. It just hasn't been able to translate. That's important for OX40 and CD40, but it's important more broadly for the platform because there's another 17 or so TNF ligands that tickle immune responses in different ways that might be worth exploring.

Sure. Sure. No, I think that's a great point. In addition, I guess, in how you were talking more broadly about the platform, as you kind of continue to advance in the clinic, how do you think about business development opportunities for the ARC platform maybe domestically and potentially internationally?

Sure. So this is a broad platform, and we will never be able to develop the 400 or so compounds we have in our preclinical pipeline and some of those targets may be of interest to other parties. Of course, this is a show-me world. And I think leveraging those sorts of partnerships to other molecules requires the sort of data that we've now shown that the platform is well tolerated and actually unlocks these targets in the way they were designed to do. So I think there are pieces of the platform that we don't yet have in our visible pipeline that could be interesting to other parties. We intend on retaining value of our lead clinical constructs, and that includes commercial rights to those advanced commercial constructs. That being said, there may be ways of augmenting or accelerating clinical development through collaborations with larger companies, especially as we get into registration-directed studies with another molecule we didn't talk much about is the TIGIT Fc LIGHT construct. That's a molecule that will be codeveloped with PD-1 or L1 inhibitors. And so there might be similar collaborations that are worth considering with that construct as we move into the clinic. And we also actually have another top form, which we haven't even discussed, which is a gamma delta T cell engager platform, where early-stage partnerships with some of these constructs are possible. Partnerships take time and resources. We'll do it selectively. And fortunately, we're in a position where partnerships are attractive from the value they bring in clinical development more so than the capital due to our existing balance sheet.

That's perfect. And I'm glad you mentioned kind of this internal pipeline. However, many targets that you do kind of have in your back pocket. Are we going to see any additional ARCs in the clinic in 2022? Or if so, are the ones that you highlighted in the presentation, is there anything that you're particularly excited about for clinical development in 2022?

So the answer is yes. You will see another comp down in the clinic. I think there's not a very low-risk bet on what that might be. And -- but there's a number of targets that we're excited about. And I alluded to the fact that early-stage partnerships might be unlocked by some of the clinical data we've seen to date. But our strategy as a company, up to this point has been to move compounds into the clinic toward validated I-O targets with at least one side of the molecule. But we've always said that perhaps we'd be willing to take more risk with a novel compound, especially novel TNF ligand once we saw that the construct performed in humans as it was designed to do. So I think the breadth of opportunities we have in front of us is only expanding based on what we've seen to date.

That's great to hear. And just one final question. You did say your cash standing and cash runway. Are there any kind of factors that could cause the cash runway to like deviate?

Andrew, you want to take that one?

Yes. Sure. I mean, of course. As Taylor said, we have a tremendous breadth of opportunities in front of us then. So of course, we're always evaluating levers on both the cash in and cash out. And so we could for example, expand clinical development activities in 154 beyond what we've currently described that may or may not impact the cash runway, but we would only do so in ways that made good sense. As it relates to 279252, I think we've set a pretty high bar for success for that program. And currently, we're not budgeting to take that molecule beyond the dose escalation portion of 12mg and 24 mg per kg. And we would expect to see and hope to see a 20% overall response rate in order to advance that program. And I think if we do, that's a huge win for Shattuck, but is not currently baked into the cash runway scenarios, which would be very easy for us to fund in other ways.

Awesome. Well, I think that we are running up on time here, but we really appreciate you all being here today. Very excited about the prospects with the company and hope that you guys get to enjoy the rest of the conference.

Great. Well, thank you all very much for tuning in and happy '22.

Thank you for having us.

Thank you.