SLS Stock’s Red-Hot Streak Draws Rising Short Bets — Retail Traders Are Now Betting On A Big Pharma Buyout

Short interest has risen about 15% since the December update on the Phase 3 Regal trial.

• The stock finished higher in 12 of the past 13 sessions as investors positioned ahead of key AML trial data.
• Quiver Quantitative data shows that about 40% of recent institutional activity involves new purchases.
• Retail investors are speculating that positive Regal data could attract interest from big pharma companies in a potential buyout.

Shares of Sellas Life Sciences Group, Inc. (SLS) jumped to a four-year high on Wednesday as investors positioned ahead of a key clinical catalyst, even as short sellers have stepped up their bets against the rally.

SLS stock rose over 4% on Wednesday to $5.54, and has finished higher in 12 of the past 13 trading sessions, reflecting growing anticipation around the company’s late-stage acute myeloid leukemia (AML) therapy.

Short Sellers Build Positions On SLS Rally

The buildup began after the Regal Phase 3 trial update in late December, when the company said the contract research organization managing the study had recorded 72 events as of Dec.26, bringing the trial closer to the 80-event threshold required to trigger final analysis. At that time, short interest was around 23.4% between Dec. 15 and Dec. 31.

Short positioning continued to climb into early January, reaching about 28.4% between Jan. 1 and Jan. 15, as investors positioned ahead of the expected data readout.

The rise accelerated after Jan. 14, when the company announced a collaboration with the Impact-AML European research network to evaluate SLS009, its selective CDK9 inhibitor, across clinical sites in Europe. Following the deal, short interest peaked at around 29% between Jan.16 and Jan.29, marking the highest level in a year.

Overall, short bets have increased about 15% since the December Regal update, even as the stock has more than doubled during the month.

Since the Regal trial is event-driven, the timing of the final readout depends on the time of the 80th event. Maxim noted that in survival-based studies, delays in reaching the trigger can sometimes indicate longer survival among patients, though the results remain blinded until the final readout.

Institutions Quietly Accumulate SLS

Despite rising short interest, institutional investors appear to be accumulating shares. Data from Quiver Quantitative shows that about 40% of recently tracked institutional activity involved new purchases, while roughly 75% of activity overall consisted of funds either buying, increasing, or holding positions in the stock.

SLS stock has skyrocketed 370% over the past year, far outperforming the U.S. benchmark indexes.

Large asset managers, including Vanguard Group, BlackRock, and State Street, are among the company’s largest institutional holders.

Retail Bets On Big Pharma Deal

The stock’s sharp rally has fueled speculation among retail traders that the company could become a takeover target if its Regal trial succeeds. On Stocktwits, retail sentiment for SLS has remained ‘extremely bullish’ over the past month amid a 116% surge in message volumes.

One trader said that the company’s technology and trial progress could lead to a “strategic acquisition,” while another suggested that partnerships with European research networks used by major drugmakers such as Pfizer and AbbVie could attract interest from large pharmaceutical companies.

Some users also noted the large short position, suggesting the setup resembles a “game of chicken” between bullish investors and short sellers ahead of potential trial updates.

Another trader said, “With New FDA Commissioner Marty Makary, both GPS and SLS009 qualify for National Priority Voucher (CNPV) pilot program. Delay is because Co. is being BO, Big pharmaceutical Buyer will conduct all future clinical trials.”

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