What Shattuck Labs Stock Topped the Market on Monday
Key Points
One of them initiated coverage.
The company has a very promising lead drug candidate.
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Not one, but two, analysts published new takes on Shattuck Labs (NASDAQ: STTK) in the past few days. Since both prognosticators were optimistic about the clinical-stage biotech's future, investors were cheered enough to buy into its stock. On Monday, this helped propel it to a nearly 5% gain that trading session.
A high potential drug in development
Over the weekend, TD Cowen's Stacy Ku assumed coverage of Shattuck, flagging it as a buy. Two days later, Martin Auster of Raymond James initiated coverage of the biotech and had a more positive view -- he rated it a strong buy at a price target of $18 per share. This is over twice its most recent closing price of $7.90.
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In what hardly qualifies as a surprise, Auster's take was focused on the company's SL-325. This is an autoimmune and inflammatory disease-fighting drug with first-in-class potential that's currently being developed to target two forms of inflammatory bowel disease (IBD).
According to reports, the analyst believes that its novel mechanism (the drug targets a specific receptor) could set it apart from rival medications currently on the market. If that were to occur, Shattuck's medication could capture a significant share of what he estimates is at least a $20 billion total addressable market.
Moving along the pipeline
SL-325, which has performed well in the laboratory, is making indisputable progress; it recently advanced to Phase 2b clinical testing.
Although drug development in this country is a long road and no medication is guaranteed to succeed with it, SL-325 so far looks as if it has an excellent chance. It also has quite a shot of making a name for itself if and when it's ultimately approved. This makes Shattuck quite a company and stock to watch.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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