Seelos Therapeutics SEEL Stock News

Seelos Therapeutics Inc (NASDAQ: SEEL) is having a rough start to the trading session, down by around 15% in the premarket. At first glance, you may be surprised. The company issued a press release announcing a positive update with regard to its clinical developments.

However, in an SEC filing, the company said that it would be raising funds. Of course, this is leading to fears of dilution and sending the stock tumbling. Here’s what’s happening:

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SEEL Stock Tumbles On Coming Offering

As mentioned above, Seelos Therapeutics issued an SEC filing this morning, announcing that it plans on raising funds soon. In fact, according to the S-1 filed by the company, it plans on raising $13.8 million in a coming offering.

The company didn’t give any information with regard to the price on the offering. Nonetheless, there are concerns among investors. After all, when new shares are issued and sold, it dilutes the value of shares that are already out there. So, it’s not surprising to see that SEEL is tumbling.

Positive News Shines A Silver Lining

While there is fear surrounding dilution ahead, there is some positive news that was released today. In a press release, the company attempted to stop the bleeding by announcing an update with regard to SLS-005.

The company is currently taking part in clinical programs surrounding the treatment in both Europe and the United States. In the update, the company said that it has a scheduled meeting with the EMA in March of 2020.

During the meeting the discussion will surround scientific advice and protocol assistance for a European clinical study of SLS-005  in patients with Sanfillipo syndrome type A and B.

Moreover, SEEL said that it has submitted protocol for its planned expanded access study for Sanfilipo syndrome type C and D patients as well as type A and B patients who did not meet the Phase IIb/III trial entry criteria to the United States FDA.

The company also said that it is continuing to develop SLS-005 in oculopharyngeal muscular dystrophy. To that end, the company is evaluating other potential indications. In a statement, Raj Mehra, Ph.D., Chairman and CEO at SEEL, had the following to offer:

We are truly excited to be working with the EMA to formulate the Sanfilippo study in the EU. There are currently no approved therapies in the EU for this devastating neurological condition.

What To Make Of All Of This

Sure, the coming offering is concerning. After all, dilution is never fund. However, it is often a necessary evil in the world of biotechnology. The truth of the matter is that developing new drugs is a very expensive process.

On the other hand, should the offering go well, the company will have plenty of funding in order to move forward with continued clinical activity, giving it a stronger opportunity to bring SLS-005 to market.

So, while there is a dark cloud over SEEL today, there’s a silver lining and the long-term picture looks like a potential opportunity as the company continues to work to address Sanfalippo syndrome and other rare conditions!

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