Good afternoon, everyone, and welcome to Shattuck Labs Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. As a reminder, this conference is being recorded. I will now turn the call over to your host, Conor Richardson, Senior Director of Finance and 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 third quarter 2022 financial results and recent business updates. A press release reporting our financial results was issued after market close this afternoon and can be found on the Events & Presentations section of our website, shattucklabs.com. During this afternoon's call, the Shattuck leadership team will provide a business overview of the third quarter of 2022, including clinical development updates from 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 clinical activities, and then our Chief Financial Officer, Andrew Neill, will review our third quarter 2022 financial results and financial guidance. We will then open the call for questions after Dr. Schreiber makes some closing remarks. 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 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, 2021, 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, November 8, 2022. With that, I will now turn the call over to Dr. Schreiber, our Chief Executive Officer. Taylor?

Thank you, Conor. Good afternoon, everyone, and thank you for joining us today. 2022 has been an operationally focused year for Shattuck, and our clinical team has done an excellent job of advancing 154, our lead clinical stage agonist redirected checkpoint or ARC compound. As a reminder, 154 is a SIRP-alpha Fc CD40 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. As you will hear from Dr. Pandite in a moment, our clinical team has made excellent progress, and we completed enrollment in the monotherapy dose escalation portion of our Phase I trial for patients with advanced platinum-resistant ovarian cancer in the second quarter of this year. 154 reached a maximum administered dose of 10 milligrams per kilogram, which was the highest anticipated dose level in the study. In the third quarter, we began enrolling patients in the first chemotherapy combination cohort in ovarian cancer, and we have selected 3 milligrams per kilogram as the starting dose level for 154 in this combination cohort. As for the chemotherapy combination agent, we selected the combination with liposomal doxorubicin because preclinical studies demonstrated that ovarian cancer cells express prophagocytic or eat-me proteins on their surface following exposure to liposomal doxorubicin. These eat-me signals are essential to initiating an antitumor response in the setting of CD47 inhibition. In addition, several decades of clinical experience in the platinum-resistant ovarian cancer setting have established a single-agent response rate in the range of 10% to 12% for liposomal doxorubicin. Thus, this trial design allows us to decipher the contribution of components with a relatively small number of patients. In addition to our clinical development program in solid tumors, we began a clinical study for 154 for patients with acute myeloid leukemia and high-risk myelodysplastic syndrome in the second quarter of this year, and we expect to enroll patients in the first combination cohort with azacitidine in the fourth quarter of this year. Patients enrolled in the dose escalation cohorts will primarily have relapsed/refractory disease, and any complete responses in this patient population would differentiate 154 from other CD47 inhibitors in this patient population. The subsequent planned expansion cohorts will then enroll patients in the frontline setting where the activity of first-generation CD47 inhibitors has narrowed in recent updates and left significant room for improvement. We believe that 154 may differentiate with the addition of CD40 agonism to CD47 blockade, which may lead to improved response rates and increased durability. Our second clinical stage compound, 252, a PD-1-Fc-OX40 ligand bi-functional fusion protein is in Phase I development for patients with advanced solid tumors and lymphomas. We are continuing to enroll patients with primarily PD-L1 selected tumors at the top dose level of 24 milligrams per kilogram, and top-line data from the Phase I dose escalation trial are anticipated in the first quarter of 2023. As per Shattuck's preclinical pipeline, we've made tremendous progress over the past quarter with multiple publications on our preclinical ARC and GADLEN programs in The Journal of Immunology, which can be found on our website. 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. Our team has uncovered and published some of the key aspects of gamma delta T cell biology, which will guide our clinical strategy. And additional preclinical data will be presented at The Society for Immunotherapy of Cancer Annual Conference later this week in Boston. The GADLEN platform is highly modular and is amenable to monospecific, bispecific, and biparatopic design, and data from two separate product candidates, one targeting the CD20 antigen and another targeting the B7-H3 antigen, will be included in the SITC presentation. The CD20 GADLEN has completed a dose range finding toxicology study in non-human primates and is being considered as a non-Ig based B-cell depleting therapy for antibody-driven autoimmune diseases. The B7-H3 GADLEN is being considered for a variety of solid tumor indications where single-agent efficacy would be expected. We look forward to sharing more data as the gamma delta T cell therapy space continues to advance. With that, I will now turn the call over to Dr. Pandite, our Chief Medical Officer. Lini?

Thanks, Taylor, and good afternoon. I'm extremely pleased with the execution of our clinical programs and the progress we have made throughout the year. Let's turn first to 154, our differentiated CD47 inhibitor and CD40 agonist. Our first clinical trial of 154 is a multicenter, open-label, dose escalation trial intended to assess the safety, tolerability, pharmacokinetics, antitumor activity, and pharmacodynamic effects of intravenous administration of 154 as monotherapy in patients with platinum-resistant ovarian cancer. Initial clinical data from this trial presented at SITC 2021 demonstrated a favorable safety profile, high-target occupancy, and on-target pharmacodynamic activity driven by CD40 activation. As you will recall from the last quarter, we announced that we have completed enrollment in the maximum administered dose level of 10 milligrams per kilogram. To date, we have not observed any evidence of destructive anemia, which we attribute to the design of the Fc portion of 154 and the absence of binding to Fc gamma receptors. We believe that the current safety profile of 154 provides us with a therapeutic window in which we can potentially maximize the biology of CD40 while reaching near 100% target occupancy of CD47. We expect to report the full data from the dose escalation portion of this trial midyear 2023. Enabled by our progress in the Phase I trial, I'm pleased to say that in the third quarter of this year, we dosed our first patient in a Phase Ib clinical trial of 154 in combination with liposomal doxorubicin in patients with platinum-resistant ovarian cancer. This multicenter, open-label trial is intended to evaluate the safety, tolerability, pharmacokinetic, antitumor activity, and pharmacodynamics of 154 in combination with liposomal doxorubicin. We expect to report initial combination data from this trial midyear 2023. Now, let us turn our attention to our 154 clinical trial in hematologic malignancies, where I'd like to highlight the progress we have made in our Phase Ia/Ib clinical trial in AML and higher-risk MDS. In this trial, we are evaluating the safety, tolerability, pharmacokinetic, antitumor 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 heavily pretreated relapsed/refractory patient population, where few, if any, agents have consistently led to complete responses. As Taylor alluded to, this is an area where any complete responses could be a differentiating signal, particularly compared to other CD47 agents. I'm pleased to report that enrollment in the monotherapy cohort of this trial has progressed nicely. And as a result, enrollment in the azacitidine combination cohorts is expected to begin in the fourth quarter of 2022. Initial dose escalation data from the monotherapy and azacitidine combination are expected in the first half of 2023. Our second clinical candidate, 252, is a multicenter, open-label clinical trial evaluating the safety, tolerability, pharmacokinetics, antitumor activity, and pharmacodynamics of 252 in patients with advanced solid tumors and lymphoma. As you will recall, we have previously reported initial data through 6 milligrams per kilogram from the ongoing Phase I dose escalation clinical trial, demonstrating evidence of antitumor activity and dose-dependent pharmacodynamic activity. We have completed enrollment in the 12 milligrams per kilogram cohort and anticipate completing enrollment in the 24 milligrams per kilogram cohort in the fourth quarter of this year. As a result and to allow for response assessments in these patients, we expect to share top-line data from the additional cohorts in the first quarter of 2023. As we have discussed before, the PD-1 landscape has evolved in such a way that enrolling patients that are both PD-1 naive and at a high likelihood of responding to PD-1 inhibition is extremely difficult in nearly all geographies around the world. As such, the clinical part of 252 would first be in PD-1 relapsed/refractory patients. We would need to see a 20% or greater overall response rate in the additional patient cohorts to see a viable path forward for 252. With that, I will now turn the call over to Mr. Neill to discuss our financial update. Andrew?

Thank you, Lini. Good afternoon, everyone. As Conor mentioned at the outset of our call, the full financial results for the third quarter of 2022 are available in our earnings press release and in our forthcoming 10-Q. Today, I would like to focus on a few key points from our disclosures. We continue to be well positioned financially. As of September 30, 2022, we have cash and cash equivalents and investments of approximately $185.1 million. In the third quarter of 2022, our research and development expenses were $18.9 million compared to $15.1 million for the third quarter of 2021. In the third quarter of 2022, our general and administrative expenses were $6.6 million compared to $4.3 million for the third quarter of 2021. Our net loss for the third quarter of 2022 was $24.6 million, or a loss of $0.58 per basic and diluted share, compared to a net loss of $17.4 million for the third quarter of 2021, or $0.41 per basic and diluted share. Based on our current operating and development plans, we reiterate our financial guidance for 2022 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 continue to operate with strong financial discipline across our entire company, including in our ongoing clinical programs. And given our projected rate of cash burn, we are in a healthy position as it relates to our balance sheet and expected clinical data readouts for our 154 and 252 clinical trials. With that, I'll hand the call back to Dr. Schreiber for final comments. Taylor?

Thank you, Andrew. As you have just heard, 2022 has been a year in which we have kept our heads down to focus both on clinical execution with the ARC platform and further broadening our pipeline with the GADLEN platform. Both of those opportunities are now ripening quickly, 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 study in platinum-resistant ovarian cancer patients and initial data in combination with liposomal doxorubicin, also in ovarian cancer patients, are expected midyear 2023. Additionally, initial data from our study in patients with relapsed/refractory AML and higher-risk MDS are expected in the first half of 2023. I want to thank everyone for participating in today's call. We believe the combination of our experienced team, 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. 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?

Our first question comes from Marc Frahm with Cowen.

Thank you for taking my question. During the last earnings call, you mentioned that the 3 milligram dose was being advanced into the doxo combo trial, and it seemed unlikely that the 10 milligram dose, while still being pursued in the monotherapy, would need to be reported again. Do you now have enough data from that cohort in the monotherapy to confirm if you will or will not be using the 10 milligram dose in the combo?

Marc, thanks for the question. Let me ask Lini to take that.

Marc, all our PK/PD analyses support the 3 milligram per kilogram dose being evaluated in the combination. Our protocol allows us to go up on the dose, but the 3 milligrams is a very solid dose for evaluation in combination.

Okay. That's helpful. And then also in the early experience with monotherapy, there were some infusion reactions and you've extended the dosing time to help with that. Can you update us on kind of how that's continued to evolve? And then can you confirm, are you using the longer infusion time in the combo trials?

Yes. We are using longer infusion time, which is two hours, over two hours instead of over one hour.

Thanks, Marc.

Our next question comes from Jon Miller with Evercore ISI. Mr. Miller your line is live.

Hi, this is Eric here, asking on for Jon Miller. On SL-154, looking at the monotherapy trial in platinum-resistant ovarian cancer…

This is Taylor. You trailed off there. Could you repeat the question? Operator, maybe we can go to the next question and come back to Evercore?

Absolutely. Our next question comes from Gil Blum with Needham & Company.

Hi, good afternoon everyone. Just a quick question on the 10 mg per kg dose, was there any sign of toxicity at that dose or purely this is a decision based on PK/PD?

Hey Gil, I'll turn that over to Lini as well.

Yes, the decision is based on pharmacokinetics and pharmacodynamics. We analyzed the entire dose range, and the 3 milligrams per kilogram dose achieves full receptor occupancy and demonstrates on-target pharmacodynamic activity, making it a strong candidate for further development. Increasing to 10 milligrams does not provide significant benefits.

Okay. That's very helpful. And may be a speculative one, do you guys have any view on kind of the abstracts that were published for magrolimab ahead of ASH? I mean, I'm sure you guys looked at it. It doesn't looks like there's not much more benefit for CD47 in the high-risk MDS. I would appreciate any thoughts you guys have.

Yes. I’ll begin, and Lini might want to add some remarks. Recently, we've noted updated abstracts from ALX regarding magrolimab heading into ASH. However, I want to emphasize that there isn't enough detail in these abstracts for a comprehensive evaluation of the patients studied in each trial and what the findings truly imply. Additionally, I believe the trends suggesting that CD47 inhibitors, particularly single-acting ones, show the most promise in the TP53 mutant AML population indicate where the field is headed. For azacitidine alone in the non-TP53-mutant high-risk MDS patients and the combination of AZA and len in the non-TP53-mutant AML, the data we have seen thus far suggest that the potential added benefit of a single-acting CD47 inhibitor may not significantly exceed expectations based on the chemotherapy-only approach.

All right, I appreciate the color and I'll step back in the queue. Thank you.

Thanks Gil.

Our next question comes from Yigal Nochomovitz with Citi.

Hi, this is Carly on for Yigal. Thanks so much for taking our questions. I just have one on the 154 update for AML and MDS in the first half of next year. I guess, can you comment at this point on roughly how many patients we should expect for both the monotherapy and the combination cohort? And I know you mentioned in the prepared remarks that sort of like any complete responses in this population would be meaningful. But can you elaborate a bit on sort of what you're looking to see with the azacitidine combo specifically on efficacy?

Great. I'll ask Lini to take that also.

Yes. The dose escalation includes both monotherapy and a combination with azacitidine. We expect to have between 10 and 20 patients participating in the dose escalation. Regarding complete remissions, it is uncommon to observe them in the relapsed/refractory patient population. Therefore, if we do see any complete remissions, it would be significant for this agent.

Okay. That's helpful. And then we just had one quick clarification question also. I think previously, you were also planning to do a combination with venetoclax, with azacitidine, but it looks like now you might be just doing azacitidine. Could you just clarify if there was a change and what the reason was?

Yes. So the dose escalation is with azacitidine. Once we get to a dose of azacitidine and 154, then there is an expansion cohort in combination with azacitidine, SL and venetoclax. So there is a safety running, followed by an expansion. It's a safety running followed by an expansion.

Okay great, thank you very much.

Thank you.

Our next question comes from Kaveri Pohlman with BTIG.

Yes. Good afternoon. Thank you for the updates. For 154, can you talk about how the approach is different from ILT4 targeting, which also repolarizes macrophages? I believe Merck has expanded its efforts into this space with multiple tumor types, including ovarian cancer.

Sure. The CD47 axis focuses on a specific part of macrophage biology, allowing macrophages to consume or phagocytose nearby tumor cells. This activity is not something that an ILT4 specific agent directly addresses. There are various ways to influence macrophage polarization; some macrophages can inhibit the immune response, while others can stimulate it. ILT4 has a role in this decision-making process. Interestingly, CD40 also plays a role. When CD40 is stimulated in a macrophage, it helps steer that cell towards the immune-stimulating M1 phenotype. I believe that an agent like 154 targets a similar aspect of macrophage biology on the CD40 side as some ILT4 agents do, while the CD47 inhibitory part is specifically related to promoting phagocytosis.

That's very helpful. Thank you. And for AML, any thoughts on combining it with cytarabine because based on the ovarian cancer data, the safety profile looks benign enough? Or is cytarabine too immunosuppressive?

So the dose of cytarabine matters also. It is immunosuppressive, just as you said. So, you could actually deplete the cells that you're trying to activate.

Got it. And maybe last one on GADLEN. So, you have multiple programs for ARC asset. And for GADLEN, a target like B7-H3 could be used for several indications. I guess my question is, is GADLEN a potential partnering opportunity? Or do you ultimately have aspirations to really independently develop both ARC and GADLEN assets?

I mean it certainly could. The GADLEN platform is quite broad and B7-H3 is just one of the agents that we have in our pipeline these days. And we think it's a compelling one. B7-H3 is a tumor antigen that's widely expressed. Daiichi Sankyo has recently shown some interesting data with one of their programs targeting B7-H3. And I think a gamma delta engager could offer something that's distinct from what an antibody drug conjugate type molecule can offer in a number of tumor types. So two tumors that are interesting from a B7-H3 expression standpoint where gamma delta T cells are also relatively abundant, include tumors like melanoma, non-small cell lung cancer, bladder cancer, a number of others. And so for now, we're proceeding along with the development of this agent toward IND. And so I'll just leave it at that for now.

Makes sense. Thanks for taking my questions.

Thanks, Kaveri.

And our last question comes from Zhiqiang Shu with Berenberg.

Thank you for taking my questions. I have a few. First, can you provide more details about the 3 mg per kg dose and the 10 mg per kg dose, specifically regarding the APD dynamics? A lot has changed since your call last year, so I’d like to know if you can share more information at this time.

Sure. I'll start and then Lini can add any details I might miss. You might recall from our previous discussions that during the monotherapy dose escalation study, we aimed to find a dose where 154 was well tolerated, where CD47 and CD40 were fully saturated, and where we observed the maximum pharmacodynamic effects linked to CD40 biology. We revealed some of this data in the SITC presentation. Notable effects from CD40 binding include the quick movement of CD40-expressing B cells and monocytes from the blood within an hour or two of infusion, as well as significant increases in various CD40-driven cytokines in the peripheral blood. When we increased the dose from 3 milligrams to 10 milligrams per kilogram, we confirmed saturation of CD40 and CD47 and began to see substantial spikes in those cytokines and near maximum margination of CD40-expressing cells at the 3 mg per kg dose. Essentially, we are investigating whether moving to 10 mg will enhance those pharmacodynamic effects, stabilize them at a maximal level, or diminish some of those effects. Many of you may know that other CD40 agents exhibit a peculiar bell-shaped dose-response curve, suggesting that it might be challenging to optimally activate the pathway. From our observations, moving from 3 milligrams to 10 milligrams maintained all these pharmacodynamic effects at a maximal level. Therefore, as Lini mentioned earlier, there was no significant benefit based on those endpoints to proceed with the 10 mg per kg dose.

Great. That's helpful. And then second question is around the combination with folate receptor ADC, I think it was disclosed last time, was posted on clinicaltrials.gov. Given your update today, I was wondering if you're willing to discuss the plans there?

We are eagerly anticipating accelerated approval for mirvetuximab by ImmunoGen soon. This presents an exciting opportunity for patients with platinum-resistant ovarian cancer who have not had access to new therapies for a considerable time. Notably, the label is expected to initially focus on patients with very high levels of folate receptor alpha on their tumors, specifically at 75% or greater. However, ImmunoGen has observed tumor shrinkage in about 80% of patients with lower folate receptor alpha levels, starting from around 25%. This raises an intriguing question about whether the initial tumor shrinkage could lead to greater durability if combined with a treatment that enhances the tumor-killing effect that mirvetuximab produces. This highlights the potential for a drug like 154. I’ll hold off on further details until we have news regarding the accelerated approval, and we look forward to continuing the discussion then.

Great. And if I can, just final question on 252. You're still dose escalating the drug and will provide an update in first quarter of '23. So I wonder, should we still operate under the assumption that if you are not seeing 20%, this program will wind down?

Yes, that should be your operating assumption.

Okay, thanks very much.

Thanks, Zhi.

That concludes the question-and-answer session. I'll turn the call back over to Taylor Schreiber, the Chief Executive Officer of Shattuck Labs.

Thank you. This concludes the Q&A session of the call. Thank you, operator. Thank you all for joining Shattuck Labs Third Quarter Financial Results and Business Updates Conference Call. We appreciate your continued interest in Shattuck, and we look forward to updating you on our milestones throughout the remainder of 2022. Thank you.