A recommendation upgrade from an analyst at the beginning of December set the tone for Shattuck Labs (STTK +10.55%) stock in 2025's final month. The clinical-stage biotech's share price rose by almost 74% as a result.
Good for what ails you
The person responsible for that influential move was H.C. Wainwright's Joseph Pantginis, who on Dec. 1 shifted his recommendation on Shattuck to buy from his previous neutral. He set his new price target at $6 per share, which at the time was nearly three times the stock's level.
Image source: Getty Images.
According to reports, Pantginis's new take on Shattuck revolves around SL-325, an investigational drug being developed by the healthcare company. The medication is a first-in-class antagonist antibody that targets inflammatory and immune-mediated disorders, and is currently being evaluated in the treatment of irritable bowel syndrome (IBS).
The analyst wrote in his update that SL-325 has the potential to be efficacious for multiple indications, not just IBS. Additionally, he wrote that he was encouraged by the company's overall pipeline program.
NASDAQ: STTK
Key Data Points
Early stage trial underway
In December, Shattuck had considerable momentum behind SL-325. In August, the U.S. Food and Drug Administration (FDA) cleared its Investigational New Drug (IND) application for the treatment, and the first participants in a Phase 1 trial were dosed around that time.
Also in August, management disclosed that it had closed a private funding round, which raised as much as $103 million in fresh capital. It stated that this should help fund its operations through 2029. Since financing is a major concern of clinical-stage biotechs (as they are typically pre-revenue, or like Shattuck have a modest top line), this alone was a reason to be bullish on the company's future.
Meanwhile, Shattuck's recent performance indicates the company is becoming more disciplined. In the third quarter, it trimmed its net loss according to generally accepted accounting principles (GAAP); this narrowed to slightly more than $10 million, against the nearly $17 million deficit in the same period of 2024. Its general and administrative expenses fell by 11% year-over-year to slightly over $4 million.
I'd agree with Pantginis's optimistic new take on this stock. Shattuck is in fairly good shape for an early stage biotech, especially with the bulk of that recently raised capital in its coffers. SL-325 is now out of the starting gate, and if its potential for securing regulatory approval for multiple indications is realized, it could be a sturdy revenue earner all by itself for the company.
