An arbitrator recently dismissed Sellas’ claims against 3D Medicines and ordered about $1 million in legal-cost payments.
- Sellas' Phase 3 Regal AML trial is just two events away from triggering its final analysis.
- Retail bulls are still buying weakness, holding for a potential buyout and watching for the 80th REGAL event.
- Sellas estimated $138.3 million in cash as of June 30 after recent warrant exercises.
Shares of Sellas Life Sciences (SLS) are sliding toward their worst month in over two years, but retail bulls are still buying weakness and holding out for a potential buyout as the company nears a key acute myeloid leukemia (AML) readout.
SLS stock SLS stock has fallen 31% so far in July after extending its recent losing streak to three sessions, including a 7% decline on Tuesday.
SLS Phase 3 AML Trial Nears Final Trigger
Sellas’ main near-term catalyst is its Phase 3 Regal trial of Galinpepimut-S (GPS) in AML. The study has reached 78 of the 80 events required to trigger final analysis, leaving it two events short of a pivotal readout. CEO Angelos Stergiou has called the slower event accumulation encouraging, as the trial’s primary endpoint is overall survival. Sellas has said Regal would be successful if GPS extends median survival to 12.6 months from eight months under standard treatment.
However, Sellas is also digesting a legal setback after an arbitrator dismissed its claims against its China partner 3D Medicines and ordered the company to pay about $1 million toward the Chinese biotech’s legal fees and costs.
Retail Bulls Buy Weakness, Hold For Buyout
On Stocktwits, retail sentiment for SLS was ‘bearish’ amid ‘normal’ message volume.
One trader said they shelved plans to spend $5,000 on LASIK eye surgery and instead put the money toward SLS, hoping to “multiply it” in a future buyout. Another said they were “holding till buyout,” calling the recent dips “boringly predictable” and predicting the stock’s next leg could take it to $29. A third investor said they added 1,000 shares at an average price of $9.66, hoping the stock had found a bottom and that “great news” would arrive soon.
Others are focused on the Regal trigger. One trader urged shareholders to “hold with conviction” as the trial approaches the 80th event, while another speculated that an update at that milestone could lead to a trading halt and a sharp move in the shares.
Some traders have also pointed to upcoming earnings from AbbVie, Pfizer and Merck while speculating about the timing of a possible acquisition.
Sellas’ Cash Rises As Buyout Chatter Builds
Sellas’ legal dispute with 3D is based on $13 million in milestone payments for GPS. The company had argued that the payments became due after the program entered Phase 3 and accused 3D Medicines of underinvesting in development across Greater China. The broader partnership remains intact, with 3D Medicines continuing to develop and commercialize GPS in the region and $191.5 million in potential future milestone payments still remaining under the agreement, including the disputed $13 million.
At the same time, Sellas estimated it had $138.3 million in cash and cash equivalents as of June 30, up from $107.1 million at the end of the first quarter after raising another $28.7 million through warrant exercises in April and May.
Retail investors have also zeroed in on updated change-of-control provisions for senior executives as possible takeover clues. Stergiou’s amended agreement shifts certain severance payments to a lump sum, while other executives are eligible for salary, bonus, health-benefit reimbursement and accelerated equity under qualifying change-of-control terminations.
Stergiou also added to the speculation in a LinkedIn post thanking “strategic partners” and shareholders while saying he was “incredibly optimistic about the future.”
SLS stock has surged 467% over the past year.
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