Sellas Life Sciences SLS Stock News

Sellas Life Sciences Group Inc (NASDAQ: SLS) is up more than 8% early in the trading session this morning after the company announced that it has closed a public offering. The offering drives much needed funds into the company, exciting investors about the financial foundation being laid. Here’s what’s happening:

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SLS Stock Rises On Closing Of Offering

In a press release issued early this morning, Sellas Life Sciences announced that it has completed the closing of its underwritten public offering. The offering included the following:

  • 26,367,200 shares of common stock together with warrants to purchase an equal amount of share of common stock.
  • 73,632,800 pre-funded warrants. These warrants are exercisable for one share of common stock as well as warrants to purchase one share of common stock each.
  • All warrants included in the deal have an exercise price of $0.50 and will expire 5 years from the date of issuance.

As a result of the closing of the transaction, SLS brought in net proceeds of about $13.5 million. Of course, this figure represents the funds brought in after deducting underwriting discounts and commissions as well as estimated offering expenses.

Use Of Funds

In the release, Sellas Life Sciences said that it plans on using the funds to move forward with a pivotal Phase 3 trial for galinpepimut-S, also referred to as GPS. GPS is a monotherapy that is being developed for the treatment of acute myeloid leukemia (AML) following second complete remission.

The funds will also be used to continue a Phase 1/2 basket type trial of GPS. In this trial, GPS is being combined with pembrolizumab as a potential option in oncology.

Of course, the remainder of funds received will be used for general corporate purposes and for the funding of its working capital needs.

Why Investors Are So Excited

There are a couple of reasons for the excitement here. First and foremost, the company’s balance sheet just wasn’t looking great before this injection of $13.5 million. So, the funds received will clean that up a bit.

Another reason for the excitement here is that investors have been looking forward to the initiation of the pivotal trial of GPS in AML patients. Unfortunately, funds were needed in order for this initiation to take place. Now, with funds in hand, the company can move forward with the trial that could lead to a regulatory approval, sending the company into commercial stages.

Finally, much of the dilution involved in this deal will take place if and when warrants are exercised. With an exercise price of $0.50 per share, this dilution will not take place unless current investors see substantial growth.

Final Thoughts

Public offerings are never a great thing, but in the world of clinical-stage biotechnology, they are often a requirement. At the end of the day, it takes millions of dollars to push a drug candidate through multiple phases of clinical trials and to approval, and offerings are often the vehicle used to access these funds.

Nonetheless, following the closing of the offering, SLS is well-positioned to continue one trial while moving forward with a pivotal one. Should the pivotal trial go well, it could result in a transition from clinical stage to commercial stage, opening the door to revenue. All in all, the news today was incredibly positive.

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What Are Your Thoughts?

Where do you think SLS stock is headed moving forward? Join the discussion in the comments below!

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