Shuttle Pharmaceuticals Holdings, Inc. (NASDAQ:SHPH) is a discovery and development stage specialty pharmaceutical company focused on leveraging its proprietary technology to develop novel therapies that aim to improve outcomes for cancer patients receiving radiation therapy (RT). Founded by Georgetown University Medical School faculty members in 2012, the company’s pipeline of product candidates is designed to address the limitations of current cancer treatment standards.
Business Overview and Company History
Shuttle Pharmaceuticals was originally formed as Shuttle Pharmaceuticals, LLC in the state of Maryland on December 18, 2012. In 2016, the company filed articles of conversion to convert from an LLC to a C corporation and changed its name to Shuttle Pharmaceuticals, Inc. In 2018, Shuttle Pharmaceuticals completed a reverse merger with Shuttle Pharma Acquisition Corp, a Delaware corporation, at which point Shuttle Pharmaceuticals became a wholly-owned subsidiary of the publicly-traded Shuttle Pharmaceuticals Holdings, Inc.
The company’s primary focus is the development and commercialization of unique drugs for the sensitization of cancers and protection of normal tissues, with the goal of improving outcomes for cancer patients receiving radiation therapy. Shuttle has deployed its proprietary technology to develop a pipeline of selective HDAC inhibitors for cancer and immunotherapy applications. The company’s Ropidoxuridine product, which is used with radiation therapy to sensitize cancer cells, was initially funded by a Small Business Innovation Research (SBIR) contract from the National Cancer Institute (NCI), a unit of the National Institutes of Health (NIH).
Ropidoxuridine has been further developed through Shuttle’s collaborations with scientists at the University of Virginia for use in combination with proton therapy to potentially improve patient survival. Historically, and prior to the company’s initial public offering in September 2022, Shuttle has obtained funding to develop products through NIH grants, including a product to predict late effects of radiation with metabolite biomarkers and develop prostate cancer cell lines in health disparities research.
In 2023, Shuttle Pharmaceuticals entered into a securities purchase agreement with Alto Opportunity Master Fund, SPC Segregated Master Portfolio B, pursuant to which the company sold a convertible note and warrant. During this period, the company also faced challenges, including the need to restate its 2023 and 2022 financial statements due to material weaknesses identified in its internal controls over financial reporting.
Financials
As of September 30, 2024, Shuttle Pharmaceuticals reported $156,660 in cash and cash equivalents, down significantly from $2.58 million at the end of 2023. The company’s working capital deficit widened to $1.30 million, compared to $4.55 million in working capital at the end of 2023. This decline was primarily due to the company’s ongoing cash burn from research and development programs, filing expenses, re-audits, and general operations.
For the nine months ended September 30, 2024, Shuttle Pharmaceuticals reported a net loss of $7.55 million, compared to a net loss of $4.95 million in the prior year period. The increase in net loss was largely attributable to higher research and development expenses, legal and professional fees, and interest expense related to the company’s convertible debt financing.
For the most recent fiscal year, Shuttle Pharmaceuticals reported: – Revenue: $0 – Net income: -$6,592,723 – Operating Cash Flow (OCF): -$5,581,147 – Free Cash Flow (FCF): -$5,600,193
For the most recent quarter, the company reported: – Revenue: $0 – Net income: -$3,784,082 – Operating Cash Flow (OCF): -$1,998,643 – Free Cash Flow (FCF): -$1,998,645
As Shuttle Pharmaceuticals has not generated any revenue, year-over-year growth metrics are not applicable.
Liquidity
Despite the challenging financial position, Shuttle Pharmaceuticals has taken steps to shore up its liquidity. In September 2024, the company’s CEO provided $250,000 in the form of a promissory note repayable over one year. Additionally, in October 2024, the company completed an offering of senior secured convertible bridge notes, raising $790,000 in cash. The company also raised $3.90 million in net proceeds from an equity offering in October 2024.
The company’s liquidity metrics as of the most recent quarter include: – Debt/Equity ratio: -0.19 – Cash: $156,660 – Available credit line: The company has a $1.3 million authorized financing senior secured convertible note facility, of which $790,000 has been drawn down. – Current ratio: 0.22 – Quick ratio: 0.22
While these recent financing activities have provided Shuttle Pharmaceuticals with additional runway, the company’s existing cash resources and the cash received from the equity offering and senior convertible note are not expected to provide sufficient funds to carry out the company’s operations and clinical trials through the next twelve months. The ability of Shuttle Pharmaceuticals to continue as a going concern is dependent upon its ability to successfully raise additional equity or debt financing to fund ongoing operations, conduct clinical trials, and ultimately bring a drug candidate to commercialization to generate revenues.
Nasdaq Compliance and Remediation Efforts
In September 2024, Shuttle Pharmaceuticals received a notification from Nasdaq informing the company that it no longer met the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. The company has 45 calendar days, until October 25, 2024, to submit a plan to regain compliance with the minimum stockholders’ equity standard.
To address this issue, Shuttle Pharmaceuticals has taken several steps, including hiring a new Chief Financial Officer with additional technical accounting and financial reporting experience, and engaging a third-party consulting firm to assist with SEC reporting and other technical accounting matters. The company will continue to review and improve its internal controls over financial reporting to address the underlying causes of material weaknesses and control deficiencies identified in 2023 and 2024, which resulted in the restatement of its 2023 and 2022 financial statements.
While Shuttle Pharmaceuticals is committed to maintaining a strong internal control environment and remediating the identified issues, there can be no assurance that the company’s plan to regain compliance will be accepted by Nasdaq or that, if accepted, the company will be able to regain compliance and maintain its listing on the Nasdaq Capital Market.
Clinical and Regulatory Progress
Shuttle Pharmaceuticals’ lead candidate, Ropidoxuridine, is being developed for use in combination with radiation therapy to treat glioblastoma, a deadly form of brain cancer. In 2024, the company announced that it had finalized agreements with all six of the planned site enrollment locations to administer the Phase 2 clinical trial of Ropidoxuridine, and that the first three patients had been successfully dosed.
The Phase 2 trial will consist of 40 patients randomized into two different dose groups (20 at 1,200 mg/day and 20 at 960 mg/day) to determine an optimal dosing regimen. Ropidoxuridine has been granted Orphan Drug Designation by the FDA, which provides the potential for marketing exclusivity upon first FDA approval for the treatment of glioblastoma.
The clinical development of Ropidoxuridine has shown favorable drug bioavailability, and a maximum tolerated dose has been established for use in the company’s upcoming Phase II clinical trials. SHPH has received FDA approval to begin the Phase II clinical study of Ropidoxuridine in brain cancer patients undergoing radiation therapy. The FDA has also recommended expanding the clinical trial, which will require additional capital to complete.
In addition to the Ropidoxuridine program, Shuttle Pharmaceuticals has a pipeline of selective HDAC inhibitors for cancer and immunotherapy applications. The company’s HDAC platform is designed to target candidate molecules with potential roles in therapeutics beyond cancer, including autoimmune, inflammatory, metabolic, neurological, and infectious diseases. The company’s lead HDAC inhibitor candidate is SP-2-225, which is currently in preclinical development.
Shuttle Pharmaceuticals has also completed research projects funded by SBIR contracts from the National Institutes of Health (NIH). These projects focused on developing predictive biomarkers of radiation response and prostate cancer cell lines for health disparities research. The company is now pursuing plans for clinical validation and potential commercialization of the results from these projects.
Risks and Challenges
Shuttle Pharmaceuticals faces several key risks and challenges as a discovery-stage pharmaceutical company, including:
Clinical Development and Regulatory Approval: There is no assurance that Ropidoxuridine or any of Shuttle’s other product candidates will successfully complete clinical trials or obtain regulatory approval. Failure to do so would severely impact the company’s prospects.
Competitive Landscape: Shuttle operates in a highly competitive pharmaceutical industry, and its products may face competition from other radiation sensitizers, immunotherapies, or alternative treatment approaches.
Reliance on Collaborations and Partnerships: The company’s success is partially dependent on its ability to form and maintain successful collaborations and partnerships to advance its product pipeline.
Intellectual Property Risks: Shuttle’s ability to protect its proprietary technology and intellectual property is crucial to its success, and any challenges to its patents or other IP could significantly impact the company.
Nasdaq Listing Compliance: As previously mentioned, Shuttle’s ability to maintain its Nasdaq listing is an ongoing concern that requires careful management.
Outlook and Conclusion
Shuttle Pharmaceuticals is a discovery-stage pharmaceutical company with a unique focus on leveraging its proprietary technology to develop novel therapies aimed at improving outcomes for cancer patients receiving radiation therapy. While the company faces significant financial and operational challenges, its recent financing activities have provided additional runway as it continues to advance its lead candidate, Ropidoxuridine, through clinical development.
The successful dosing of the first three patients in the Phase 2 trial of Ropidoxuridine for glioblastoma represents an important milestone for the company. However, Shuttle Pharmaceuticals must continue to navigate the complexities of clinical development, regulatory approval, and commercialization in order to ultimately bring its products to market and generate revenue.
Shareholders will also be closely monitoring the company’s efforts to regain compliance with Nasdaq’s minimum stockholders’ equity requirement, as the potential delisting of Shuttle’s shares would pose a significant risk to the business. Overall, Shuttle Pharmaceuticals remains a high-risk, high-reward proposition for investors, with the company’s ability to execute on its development pipeline and secure sufficient financing serving as key determinants of its future success.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.