Business Overview

Shuttle Pharmaceuticals Holdings, Inc. (SHPH) is a discovery and development stage pharmaceutical company leveraging its proprietary technology to develop novel therapies designed to cure cancer. Founded by Georgetown University Medical School faculty members, the company's goal is to extend the benefits of cancer treatments by combining insights into cancer therapy with surgery, radiation therapy, chemotherapy, and immunotherapy.

Shuttle Pharmaceuticals was originally formed as Shuttle Pharmaceuticals, LLC in 2012. The company's primary focus is to develop and commercialize 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 HDAC platform is designed to target candidate molecules with potential roles in therapeutics beyond cancer, including autoimmune, inflammatory, metabolic, neurological, and infectious diseases.

Shuttle's lead product candidate, Ropidoxuridine, is used with radiation therapy to sensitize cancer cells. Ropidoxuridine was initially funded by a Small Business Innovation Research (SBIR) contract provided by the National Cancer Institute (NCI), a unit of the National Institutes of Health (NIH). The product has been further developed through the company's collaborations with scientists at the University of Virginia for use in combination with proton therapy to improve patient survival.

In addition to Ropidoxuridine, Shuttle has received SBIR contract funding from the NIH for projects focused on developing predictive biomarkers of radiation response and prostate cell lines for health disparities research. These projects have been completed, and the company is now following up on plans for clinical validation and potential commercialization.

Financials

For the full year 2023, Shuttle Pharmaceuticals reported an annual net loss of $6.6 million, with no revenue generated. The company's annual operating cash flow was negative $5.6 million, and its annual free cash flow was also negative $5.6 million.

In the first quarter of 2024, Shuttle Pharmaceuticals continued to report no revenue, with a net loss of $1.7 million. The company's operating cash flow for the quarter was negative $1.2 million, and its free cash flow was also negative $1.2 million.

The decrease in research and development (R&D) expenses from $0.9 million in Q1 2023 to $0.6 million in Q1 2024 was primarily related to the company having completed production of the drug product and waiting for the initiation of trials. General and administrative expenses increased by $0.1 million, or 27%, to $0.3 million in Q1 2024, primarily due to a restricted stock-based grant to an officer of the company.

Liquidity

As of March 31, 2024, Shuttle Pharmaceuticals had $1.4 million in cash and cash equivalents, $2.8 million in marketable securities, and $2.9 million in working capital. The company's condensed consolidated financial statements are prepared on a going concern basis, which raises substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued.

To address its liquidity concerns, Shuttle Pharmaceuticals completed a $10.0 million initial public offering in September 2022 and raised an additional $3.6 million through the sale of a convertible note and warrants in January 2023. However, the company's existing cash resources, marketable securities, and the cash received from these offerings are not expected to provide sufficient funds to carry out its operations and clinical trials through the next 12 months.

As a result, management is in the process of initiating a $4.5 million rights offering and has submitted an application for a Small Business Innovation Research (SBIR) grant for non-dilutive funding for pre-clinical projects through the National Institutes of Health (NIH). The company's ability to continue as a going concern is dependent upon its successful completion of these financing initiatives.

Clinical Development and Regulatory Milestones

Shuttle Pharmaceuticals has made significant progress in the clinical development of its lead product candidate, Ropidoxuridine. The company has completed the manufacturing campaign for the active pharmaceutical ingredient (API) of Ropidoxuridine and has also worked with the University of Iowa Pharmaceuticals to develop the formulation and produce the capsules, which have been shipped to the contract research organization (CRO) Theradex Oncology for distribution to clinical trial sites.

In addition, Shuttle Pharmaceuticals has received approval from the FDA to begin a Phase II clinical trial of Ropidoxuridine in combination with radiation therapy for the treatment of glioblastoma. The FDA recommended and the company agreed to an expansion of the clinical trial, which will require additional capital to complete.

The company believes it remains on track to commence its Phase II clinical study in the second quarter of 2024. Shuttle Pharmaceuticals has also completed the radiation biomarker project and the health disparities project, and is now following up on plans for clinical validation and potential commercialization of these initiatives.

Risks and Challenges

Shuttle Pharmaceuticals faces several risks and challenges in its pursuit of developing and commercializing novel cancer therapies. The production and marketing of the company's products, as well as its ongoing research and development activities, are subject to extensive regulation by numerous governmental authorities in the United States, including the FDA.

Prior to marketing in the United States, any products or combination of products developed by Shuttle Pharmaceuticals must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Food, Drug and Cosmetic Act. There can be no assurance that the company will not encounter problems in its clinical trials that will cause delays or suspensions of the trials.

Additionally, Shuttle Pharmaceuticals' success will depend in part on its ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and in other countries. There can be no assurance that patents issued to or licensed by the company will not be challenged, invalidated, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the company.

Outlook

Shuttle Pharmaceuticals is a promising biopharmaceutical company with a focus on developing novel cancer therapies that have the potential to improve outcomes for patients receiving radiation therapy. The company's lead product candidate, Ropidoxuridine, has shown promising results in preclinical and early-stage clinical studies, and the upcoming Phase II trial in glioblastoma patients is a significant milestone.

However, the company's financial position and ability to continue as a going concern remain a concern, as its existing cash resources are not expected to be sufficient to fund its operations and clinical trials through the next 12 months. The success of Shuttle Pharmaceuticals' planned rights offering and SBIR grant application will be crucial in determining the company's near-term future.

Conclusion

Despite the challenges, Shuttle Pharmaceuticals' innovative approach to cancer therapy and its pipeline of HDAC inhibitors for various indications suggest that the company has the potential to make meaningful contributions to the field of oncology. Investors should closely monitor the company's progress in its clinical trials, regulatory approvals, and financing initiatives in the coming quarters.