Shattuck Labs Nabs $118M for Cancer Drugs Like Keytruda, But Better

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EMD Serono on the German company’s clinical-stage drug bintrafusp alfa. The EMD Serono drug is designed to target the same checkpoint pathway that pembrolizumab blocks. But the fusion protein also targets another pathway that tumors use to evade detection by the immune system. One of the bintrafusp alfa clinical trials is testing it head-to-head against pembrolizumab.

Meanwhile, Alpine Immune Sciences (NASDAQ: ALPN) is developing a drug that blocks checkpoint proteins and also stimulates CD28, which is intended to increase the activation of T cells. The Seattle company has said this approach could address the tumors of patients who don’t respond to a checkpoint inhibitor alone. The Alpine drug, ALPN-202, is currently in Phase 1 testing.

Schreiber says Shattuck’s new cash will support continued development of two clinical-stage programs, which are expected to report preliminary data in mid-2021. The company will also advance two more programs to human testing, one with Takeda and the other wholly owned by Shattuck. The goal is to start those clinical trials in 2021.

“Now that the first compound is moving through the clinic and we’ve discharged a lot of the risks that come with a new biologics platform, the opportunity we think that is open to us as a company has broadened significantly,” Schreiber says.

That opportunity includes autoimmune diseases. Some of the currently available autoimmune medicines target TNF. Schreiber notes that one of them, the Amgen (NASDAQ: AMGN) drug etanercept (Enbrel), is a single-sided fusion protein.

“There’s many things you’d want to stick to the other side to extend its function,” he says, before clarifying that Shattuck intends to work only with drugs that come from its technology platform. Through that platform the company’s researchers have discovered more than 300 molecules, for potential applications in both cancer and autoimmune disorders. But in the near term, Shattuck will focus on developing cancer drugs.

The technology that forms the basis of Shattuck’s protein fusion research was licensed from Durham, NC-based Heat Biologics (NASDAQ: HTBX). In 2016, Shattuck paid Heat a $50,000 licensing fee, according to Heat’s securities filings. Schreiber says that at the time of the deal, the Heat technology was a patent application and the vast majority of Shattuck’s intellectual property was developed in-house. But if Shattuck is able to successfully develop and commercialize new drugs, it would owe Heat milestone payments and royalties from sales.

Besides Redmile Group, other new investors participating in Shattuck’s latest financing include Janus Henderson Investors, Fidelity Management & Research Company, EcoR1 Capital, Hatteras Venture Partners, hedge fund Avidity Partners, Partner Fund Management, Laurene Powell Jobs’s Emerson Collective, and Piper Sandler (NYSE: PIPR). Some of these firms are so-called crossover investors, firms that invest in both private and public companies. Crossover investment is viewed as an indicator that a company is preparing for an IPO.

Asked whether Shattuck is readying to tap the public markets, Schreiber says that many biotechs looking ahead to mid-stage clinical trials often consider doing so, “and that is certainly something on the roadmap.” He adds that the company is gratified to be backed by investors who provide capital today and offer “the ability to participate in an IPO when that’s appropriate.”

Image: iStock/Dennis Ludlow

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