On Monday, Leerink Partners began coverage on Shattuck Labs (NASDAQ:STTK), a biotechnology company focused on developing therapies for cancer and inflammatory diseases. The firm assigned the stock an Outperform rating and set a price target of $4.00. According to InvestingPro data, the stock has seen significant volatility, falling over 86% in the past year, with shares currently trading at $1.19.
Leerink Partners sees Shattuck Labs’ shift towards inflammatory bowel disease (IBD) research as a significant yet undervalued venture. The company’s leading program, SL-325, which is a DR3 antagonist, is considered a unique, first-in-class approach that could potentially enhance the effectiveness of existing TL1A-targeted treatments that have already been clinically validated. InvestingPro analysis shows the company maintains a strong financial position with more cash than debt and a healthy current ratio of 7.96x, though it’s currently burning through cash rapidly.
SL-325 is anticipated to commence Phase 1 trials in the third quarter of 2025, with Leerink Partners highlighting the expected release of initial single-dose data by the end of 2025 and multiple-dose data in early 2026. These results are viewed as critical proof-of-concept milestones that may serve as a turning point for Shattuck Labs’ stock, as investors may become more confident in the company’s strategic redirection.
The research firm is optimistic about Shattuck Labs’ novel strategy in tackling IBD, citing a strong mechanistic rationale backed by encouraging preclinical data. Although the research is still in its early stages, Leerink Partners believes that SL-325 has a fair chance of success in the substantial yet highly competitive IBD market.
The new price target of $4.00 reflects Leerink Partners’ confidence in Shattuck Labs’ potential to make a meaningful impact in the field of IBD treatment and the possibility of the stock’s value increasing as the company progresses through its clinical development milestones. With three analysts recently revising earnings estimates upward and anticipated sales growth this year, InvestingPro offers additional valuable insights through its 12+ exclusive tips and comprehensive financial analysis tools for investors tracking this developing story.
In other recent news, Shattuck Labs has reported encouraging preclinical results for its drug candidate SL-325, aimed at treating inflammatory bowel disease (IBD). The preclinical study, which involved non-human primates, showed no evidence of toxicity or organ dysfunction, suggesting the potential for extended dosing intervals in humans. Shattuck Labs plans to initiate a Phase 1 clinical trial for SL-325 later in 2025, with an Investigational New Drug (IND) application expected in the third quarter. Financially, the company reported $90.1 million in cash and cash equivalents as of September 2024, which is projected to support operations into 2027. Additionally, Shattuck Labs is set to present its findings at the European Crohn’s and Colitis Organization Congress and the 43rd Annual J.P. Morgan Healthcare Conference. CEO Taylor Schreiber expressed confidence in SL-325’s ability to block the DR3/TL1A signaling pathway effectively. The company’s focus on the DR3/TL1A pathway aims to provide a more complete blockade than existing TL1A antibodies. These developments indicate a strategic push towards advancing SL-325 through clinical trials and engaging with the scientific community.
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