Sellas LIfe Sciences (SLS) Stock Soars On Q2 Results

Sellas Life Sciences SLS Stock News

Sellas Life Sciences Group Inc (NASDAQ: SLS) is making a run for the top in the market today after the company announced its results for the second quarter. The report showed a strong financial position and positive movement with regard to clinical development, sending the stock up more than 20% in premarket trading hours. Here’s the scoop:

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SLS Reports Q2 Results

In a press release issued early this morning, Sellas Life Sciences announced its financial and operational results for the second quarter. Here’s what we saw:

Financial Update

  • Cash And Highly Liquid Assets – As of the close of the second quarter, SLS said that it had $12.8 million in cash and cash equivalents. This figure was bulstered by the company’s recent $13.4 million underwritten public offering.
  • R&D Costs – During the quarter, the company spent $1.4 million on research and development. This figure declined from $1.6 million in Q2 of 2018. The reduction had to do with a decrease in personnel related expenses due to a reduced headcount.
  • General And Administrative Costs – General and administrative costs came to $2.6 million in the quarter, a sharp decline from $4.9 million year over year. The reduction had to do with a reduced cost of legal fees, public company expenses, reduced workforce and other expenses.
  • Net Loss – Finally, the company’s net loss came to $4.1 million. Based on the cash position and current rate of loss, SLS has plenty of funded runway to get the company through several catalysts ahead.

Talking About Catalysts

In the release, the company also provided an update with regard to its progress in the clinical setting. Here’s what’s going on:

Galinpeptimut-S (GPS) Program 

Sellas Lifesciences said that it has a planned Phase 3 registrational randomized, open-label study comparing GPS in the maintenance setting to investigators’ choise of best available treatment in adult AML patients who have achieved heatologic complete remission. This trial is expected to be initiated in the fourth quarter of 2019

A separate Phase 1/2 clinical trial is taking place surrounding GPS in combination with pembrolizumab in patients with selected WT1-positive advanced cancers. These include both solid and hematologic malignancies. SLS said that it is expecting to report initial clinical data from this trial in the first quarter of 2020.

There is also a Phase 1 clinical study surrounding this asset that is enrolling patients with MPM who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy.

Finally, the company said that it was granted its first licensed patent in China surrounding the drug in April of this year. The patent covers additional analog peptides of the Wilms’ tumor oncogene protein (WT1). These assets have been shown to induce enhanced T cell responses.

Nelipepimut-S (NPS) Program

SLS said that in August of 2019, it completed the enrollment of a Phase 2 investigator-sponsored trial of NPS in combination with GM-CSF in women with DCIS of the breast. Initial data from this trial is expected to be released by the end of the year.

In June, data from a preplanned analysis in a specific cohort of the study showed highly clinically indicative increases in immune responses in the NPS plus trastuzumab in patients when compared to trastuzumab alone.

All of these clinical studies are likely to lead to catalysts ahead. This opens the door to several potential opportunities in the near term.

Management Commentary

In a statement, Angelos Stergiou, MD, Scd h.c., President and CEO at SLS, had the following to offer:

In recent months, we have made clinical advancements across our pipeline of novel cancer peptide vaccines, particularly with our program for galinpepimut-S (GPS) in combination with anti-PD-1 therapies where we believe these treatments may be synergistic. As we look forward, we anticipate the following key milestones during the remainder of the year: (i) initiation of our Phase 3 registrational study of GPS in patients with acute myeloid leukemia (AML), (ii) first patient dosed in the investigator-sponsored study of GPS in combination with nivolumab in patients with malignant pleural mesothelioma (MPM), and (iii) initial clinical data from our Phase 2 trial of nelipepimut-S (NPS) in ductal carcinoma in situ (DCIS). Additionally, in the first quarter of 2020, initial clinical data is expected from our Phase 1/2 basket study of GPS in combination with KEYTRUDA® (pembrolizumab).

Importantly, with our recent follow-on offering, we strengthened our balance sheet in order to support our clinical development programs through what we believe will be value-creating inflection points. We look forward to hosting our first R&D Investor Day in November where we will present our GPS immunotherapy programs in greater detail, particularly the Phase 3 AML study, and key opinion leaders will discuss the current treatments of solid tumors and hematologic malignancies and the potential role of GPS in treating these devastating diseases.

The Bottom Line

The bottom line here is a simple one. From a financial setting, Sellas Life Sciences is doing well. The company has enough money to keep it running through several catalystic events and costs are decreasing.

From an operational setting, we see more of the same. The company is firing on all cylinders when it comes to clinical development, with a Phase 3 trial and multiple trials of other phases planned, enrolling or ongoing.

At the same time, short sellers have held the stock down, delivering pain to the buy and hold investors. Nonetheless, as more positive news is released, we could see a short squeeze, only expanding the opportunity offered by the stock.

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