Shattuck Labs Inc (STTK): Off the Radar, but Not Out of the (TL1A) Race - Initiate at Buy

We initiate coverage of Shattuck Labs (STTK) with a Buy rating and a $17 PT. Our work suggests STTK's lead asset, SL-325, may offer a meaningful advantage over first-generation TL1A antibodies by avoiding the anti-drug antibody (ADA) liabilities that could prove to be the Achilles' heel of the TL1A class. Despite lagging peers in IBD development, we believe STTK could overcome its late start if this advantage translates into superior efficacy and durability. Upcoming TL1A Phase 3 readouts could begin to test that thesis well before STTK reports its own Phase 2 efficacy data in 1H28. We model $2.9B in adjusted 2035 sales for SL-325 vs $1.2B for consensus. The recent addition of HS as a Ph 2 indication provides early evidence of the broader ex-IBD opportunity. We believe STTK's preclinical DR3 x IL-23 bispecific, SL-846, could ultimately represent the larger opportunity, and STTK does not appear meaningfully behind competing TL1A bispecific programs. Key catalysts: 1) MRK's tulisokibart