What Shattuck Labs Stock Topped the Market on Monday

Not one, but two, analysts published new takes on Shattuck Labs (STTK +4.91%) 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.

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.