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Investing.com -- Shattuck Labs Inc (NASDAQ:STTK) stock surged 40% after the biotechnology company announced a private placement financing expected to generate gross proceeds of up to approximately $103 million.
The private placement was led by OrbiMed with participation from both new and existing investors, including a large healthcare-dedicated fund, Coastlands Capital, Prosight Capital, Adage Capital, Redmile Group, and NextBio Capital. The financing will support the development of SL-325, a potentially first-in-class DR3 blocking antibody intended for treatment of Crohn’s disease, ulcerative colitis, and other autoimmune and inflammatory diseases.
The company expects initial gross proceeds of approximately $46 million, with potential for an additional $57 million if accompanying common stock warrants are fully exercised. The private placement includes 15,225,158 shares of common stock and pre-funded warrants to purchase 37,410,188 shares, along with warrants to purchase 52,635,346 shares of common stock.
"SL-325 is a potentially first-in-class DR3 blocking antibody intended for development in Crohn’s disease, ulcerative colitis, and a range of other autoimmune and inflammatory diseases," said Taylor Schreiber, Chief Executive Officer of Shattuck. "Enrollment in our Phase 1 clinical trial for SL-325 is expected to begin this quarter, subject to regulatory alignment."
The closing of the private placement is contingent upon Investigational New Drug Application clearance for SL-325 and other customary closing conditions. Shattuck plans to use the proceeds for clinical development of SL-325, including multiple Phase 2 clinical trials in inflammatory bowel disease and other autoimmune conditions, as well as for SL-425 development and general corporate purposes.
The company expects the total proceeds, combined with current cash reserves, to fund operations into 2029. Wedbush & Co., LLC is acting as the sole placement agent for the transaction.
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