Business Overview
Shuttle Pharmaceuticals Holdings, Inc. (NASDAQ:SHPH) is a discovery and development stage specialty pharmaceutical company focused on improving outcomes for cancer patients treated with radiation therapy (RT). Founded in 2012 by faculty members of the Georgetown University Medical Center, Shuttle Pharma has developed a pipeline of proprietary products designed to address the limitations of current standard cancer therapies.
The company's origins trace back to 2012 when it was formed as Shuttle Pharmaceuticals, LLC in the state of Maryland. In 2016, the company converted from an LLC to a C corporation and changed its name to Shuttle Pharmaceuticals, Inc. During this conversion, the company issued 5.62 million shares of common stock in exchange for 100% of the outstanding membership interests. Then in 2018, Shuttle Pharmaceuticals, Inc. completed a reverse merger with Shuttle Pharmaceuticals Holdings, Inc., the current publicly-traded entity.
Product Pipeline
Shuttle Pharma's primary focus is the development of novel radiation sensitizers that can be used in combination with radiation therapy to enhance its efficacy and improve patient outcomes. The company's lead product candidate, Ropidoxuridine (IPdR), is being evaluated in a Phase 2 clinical trial for the treatment of glioblastoma, an aggressive and deadly form of brain cancer. Ropidoxuridine has received Orphan Drug Designation from the FDA, which could provide marketing exclusivity upon initial approval. Notably, 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).
In addition to Ropidoxuridine, Shuttle Pharma has an HDAC inhibitor pipeline that is being explored for various cancer and immunotherapy applications. The company's selective HDAC inhibitor, SP-1-303, has demonstrated the ability to activate the ATM protein and modulate estrogen receptor expression, resulting in significant growth inhibition of estrogen receptor positive breast cancer cells. The company has also been advancing HDAC6 inhibitor SP-2-225 in preclinical development.
Research Funding
Historically, Shuttle Pharma has obtained funding to develop its products through NIH grants. This includes projects to predict late effects of radiation with metabolite biomarkers and develop prostate cancer cell lines in health disparities research. The company has also received SBIR contract funding from the NIH for exploring new predictive biomarkers of radiation response.
Financials
Shuttle Pharma's financial position as of September 30, 2024 reflected a working capital deficit of $1.3 million, with $156,000 in cash and cash equivalents. The company has incurred net losses since inception, reporting a net loss of $7.55 million for the nine months ended September 30, 2024. Cash used in operating activities was $4.64 million for the same period.
For the most recent quarter, Shuttle Pharma reported no revenue, as the company remains in the development stage for its lead and pipeline candidates. The net loss for the quarter was $1,598,469, with operating cash flow and free cash flow both at negative $2,690,162. This decrease in financial metrics compared to the prior year quarter was primarily due to continued R&D expenses related to the development of Ropidoxuridine and other operating expenses as the company prepares to initiate the Phase 2 clinical trial.
Research and development expenses were $1.40 million and $2.63 million for the three and nine month periods ended September 30, 2024, respectively, reflecting the ramp-up of activities around the initiation of the Ropidoxuridine Phase II trial. General and administrative expenses also increased to $329,000 and $963,640 for the three and nine month periods, respectively, driven by higher costs associated with financial reporting and capital needs.
Liquidity
To address its funding needs, Shuttle Pharma has taken several actions in 2024. In September 2024, the company's CEO provided a $250,000 promissory note to the company. In October 2024, the company completed an offering of $790,000 in senior secured convertible bridge notes and a $3.9 million equity raise. Additionally, in October 2024, the company entered into a $4.5 million public offering.
As of September 30, 2024, Shuttle Pharma's debt-to-equity ratio stood at 1.65, with $156,660 in cash. The company's current ratio and quick ratio were both 1.44, indicating potential liquidity challenges. The ability to continue as a going concern is dependent on the company's success in raising additional equity or debt financing to fund ongoing operations and clinical development.
Clinical Progress
Despite the company's current financial challenges, Shuttle Pharma has made important progress on the clinical development of its lead candidate, Ropidoxuridine. In the third quarter of 2024, the company successfully dosed the first three patients in its Phase 2 clinical trial for glioblastoma and has finalized agreements with all six planned trial sites. The company also expanded its clinical trial footprint, entering into agreements with two additional site locations to administer the Ropidoxuridine trial.
Regulatory Challenges
Shuttle Pharma has also faced some regulatory hurdles, receiving a notice from Nasdaq in August 2024 regarding non-compliance with the minimum stockholders' equity requirement. The company submitted a plan to regain compliance, but there can be no assurance that Nasdaq will accept the plan or that the company will be able to maintain its Nasdaq listing.
Conclusion
Despite these challenges, Shuttle Pharma remains focused on advancing its pipeline of novel radiation sensitizers and HDAC inhibitors to improve the treatment of cancer patients. The company's extensive experience in radiation therapy and its proprietary technology platform position it to continue innovating in this important therapeutic area. Investors will need to closely monitor the company's progress in the Ropidoxuridine trial, its ability to secure additional funding, and its efforts to regain Nasdaq compliance in the coming quarters.