Shattuck Labs Inc (NASDAQ: STTK) stock plummeted on Tuesday after the biotech company revealed that it would be dropping its lead drug candidate and laying off 40 per cent of its workforce.
Shattuck’s now abandoned drug, SL-172154, was a leukemia treatment that showed unfavourable results in the company’s latest clinical studies.
Now, Shattuck has shifted its focus to SL-325, a drug used to treat inflammatory bowel disease. An investigational new drug application will be submitted to the FDA by the end of Q3 next year prior to additional studies.
“We thank our clinical team and investigators for conducting an excellent clinical study, yet we must accept this result as it stands and move on to other opportunities with a higher probability of success,” chief executive Taylor Schreiber said in an announcement on the matter.
As the Texas-based drug developer has approximately 75 employees, the layoffs are expected to impact about 30 workers.
🚨 LAYOFF ALERT – Austin, Texas 🇺🇸
Shattuck Labs, a clinical-stage biotechnology company is laying off about 40% of its workforce, approximately 30 employees, and discontinuing its clinical program. pic.twitter.com/LNX5OKnde1
— The Layoff Tracker 🚨 (@WhatLayoff) October 1, 2024
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Shattuck and Ono Pharma terminate licensing agreement
The two companies had been collaborating on the development of “certain compounds” since February, but have now mutually agreed to end their relationship. This will result in the loss of several payments to Shattuck worth up to US$227 million — another factor contributing to today’s sharp decline on the Nasdaq.
Ono Pharmaceutical Co Ltd (OTCMKTS: OPHLF) is one of Japan’s top pharmaceutical companies. It focuses on cancer treatments, immunity-boosting drugs and other therapies.
Despite today’s stock plunge, multiple analysts from three firms gave Shattuck a Buy rating earlier this year. Namely Needham & Company, Citigroup Inc (NYSE: C) and H.C. Wainwright & Co.
Shattuck was added to the Russell 3000 Index (INDEXRUSSELL: RUA) and Russell 2000 Index (INDEXRUSSELL: RUT) a couple months ago. Russell 3000 catalogues the performance of the 3,000 largest companies in the United States. The latter is a subset that tracks the 2,000 smallest in the index.
rowan@mugglehead.com
