Conference call today at 8:00 a.m.
ET
SELLAS Life Sciences Group, Inc. (Nasdaq:SLS) (“SELLAS” or the
“Company”), a clinical-stage biopharmaceutical company focused on
the development of novel cancer immunotherapies for a broad range
of cancer indications, today provided a business update and
reported financial results for the quarter ended September 30,
2018.
“Throughout the third quarter and in recent
weeks, we made significant progress advancing our clinical
development programs while also improving the Company's financial
standing. We strengthened our cash position with an equity offering
in July and the recent settlement with JGB removed all outstanding
debt while bringing an additional $6.6 million into the Company.
Our Phase 1/2 galinpepimut-S (GPS) basket study in collaboration
with Merck is progressing well and we are also further preparing
for our registrational Phase 3 GPS trial in acute myeloid leukemia
(AML) which we look forward to commencing in early 2019,” said
Angelos Stergiou, MD, ScD h.c., President and Chief Executive
Officer of SELLAS. “We also continue to be excited about our
nelipepimut-S (NPS, Neuvax™) program in triple negative breast
cancer (TNBC) patients as we review additional correlative data
from the positive Phase 2b study. We have submitted a robust
regulatory briefing to the FDA for review and hope to agree on the
most optimal development program for NPS in TNBC in December while
we continue our discussions with potential partners.”
Third Quarter 2018 and Recent Business
Highlights
- Clinical Pipeline
- During the third quarter, several clinical sites were activated
in the planned Phase 1/2 open label five-arm basket type trial of
galinpepimut-S (GPS) administered in combination with Merck &
Co.'s PD-1 inhibitor, pembrolizumab (Keytruda®), with patients
currently being screened.
- In October and November 2018, the Company reported on final
data for nelipepimut-S (NPS, Neuvax™). In October 2018, the
independent Data Safety Monitoring Board concluded that the final
positive data (median follow-up of more than 26 months) from the
Phase 2b study of trastuzumab (Herceptin®) +/- NPS in HER2 1+/2+
breast cancer patients confirmed the previously disclosed interim
positive data (median follow-up of less than 19 months) in triple
negative breast cancer (TNBC) patients. This positive final data
was presented at the European Society for Medical Oncology (ESMO)
2018 Annual Meeting. The final Phase 2b study data revealed a
clinically meaningful and statistically significant difference in
favor of the active arm, NPS plus trastuzumab (vs. trastuzumab
alone), in TNBC patients at 26 months with a p-value of 0.013 and a
75.2% relative risk reduction of relapse or death and showed no
imbalances in safety between the active arm and the control arm. In
November 2018, SELLAS announced additional data from a preplanned
secondary efficacy analysis of the Phase 2b study data showing
consistent clinical effect across HLA allele subgroups in TNBC
patients, including the HLA-A24+ subgroup which is highly prevalent
in the Asian population. This additional efficacy analysis showed a
clinically meaningful and statistically significant benefit in the
HLA-A24+ subgroup with a p-value of 0.003 and a 90.6% relative risk
reduction of relapse or death in favor of the active arm, NPS plus
trastuzumab. The Company is continuing to advance potential
partnering discussions for NeuVax.
- Regulatory
- A meeting with the U.S. Food and Drug Administration (FDA) to
discuss the most optimal regulatory pathway for further development
of NPS in TNBC patients is scheduled to take place in December
2018.
- In September 2018, SELLAS announced that the Committee for
Orphan Medicinal Products of the European Medicines Agency approved
orphan medicinal product designation for GPS for the treatment of
multiple myeloma (MM).
- In July 2018, SELLAS announced that the FDA granted Fast Track
designation to GPS for the treatment of MM.
- Corporate
- In October 2018, the U.S. District Court for the Southern
District of New York entered an order granting in full the
Company's motion to dismiss the complaint brought by JGB (Cayman)
Newton, Ltd. (JGB) in connection with a senior secured debenture
entered into by SELLAS' predecessor while allowing SELLAS'
substantive counterclaims against JGB to remain. In November 2018,
the Company announced that it had reached a settlement with JGB
regarding the counterclaims. The Company received approximately
$6.6 million in the settlement and the debenture and all related
agreements, liens and security interests were terminated.
- In July 2018, SELLAS completed an underwritten public offering
of common stock and pre-funded warrants, together with accompanying
common stock warrants, for aggregate net proceeds of approximately
$21.6 million, after deducting underwriting discounts, commissions
and offering expenses.
- As of September 30, 2018, unrestricted cash and cash
equivalents were $10.0 million compared to $2.3 million as of
December 31, 2017.
Third Quarter 2018 Financial
Results
For accounting purposes, SELLAS Life Sciences
Group Ltd., a private Bermuda exempted company (SELLAS Ltd.), is
considered to have acquired the Company (which was formerly known
as Galena Biopharma, Inc. (Galena) in the business combination
between SELLAS Ltd. and Galena (the Merger); therefore, upon the
Merger, the financial statements of Galena became those of SELLAS
Ltd. and the results reported are those of SELLAS Ltd. reflecting
the acquisition of Galena as of December 29, 2017.
Cash Position: As of September
30, 2018, unrestricted cash and cash equivalents totaled $10.0
million which does not include a $6.6 million payment received by
the Company that was related to the settlement of litigation with
JGB in November 2018. Unrestricted cash and cash equivalents as of
December 31, 2017 totaled $2.3 million.
Net cash used in operating activities was $25.9
million for the nine months ended September 30, 2018, which
includes $4.3 million used to reduce payables related to the
Merger. During the third quarter SELLAS received a total of $21.6
million in net proceeds, after deducting fees and expenses, from an
underwritten public offering of common stock and pre-funded
warrants, together with accompanying common stock warrants that was
completed in July.
R&D Expenses: Research and
development expenses were $1.7 million for the third quarter of
2018, as compared to $1.1 million for the third quarter of 2017.
The increase was primarily due to the initiation of the Phase 1/2
clinical trial for GPS in combination with Keytruda and ongoing
costs incurred during the third quarter related to the Phase 2b
trial for NPS in combination with trastuzumab in breast cancer, as
well as increased licensing fees resulting from our expanded
clinical portfolio as a result of the Merger. This increase was
partially offset by a reduction in stock-based compensation during
the third quarter of 2018. Research and development expenses for
the nine months ended September 30, 2018 were $5.1 million and were
$5.1 million for the same period in 2017.
G&A Expense: General and
administrative expenses were $1.3 million for the third quarter of
2018, as compared to $3.2 million for the third quarter of 2017.
The decrease in the current period was primarily due to a reduction
in stock-based compensation and the accounting treatment for costs
related to litigation and other legal matters associated with the
settlement of the JGB litigation and resulting reimbursement of
legal fees. This decrease was partially offset by an increase in
personnel related expenses, insurance and other expenses. General
and administrative expenses for the first nine months of 2018 were
$10.1 million, as compared to $9.4 million for the nine months
ended September 30, 2017. The increase was primarily related to
costs associated with outside services, accounting and audit
expenses, insurance and public company costs, partially offset by a
reduction in stock-based compensation and a decrease in financing
and advisory fees associated with the Merger.
Net Loss: Net loss attributable
to common stockholders was $9.4 million for the third quarter of
2018, or a basic and diluted loss per share attributable to common
stockholders of $0.53, as compared to a net loss attributable to
common stockholders of $4.5 million for the third quarter of 2017,
or a basic and diluted loss per share attributable to common
stockholders of $2.27. The increase in net loss was driven
primarily by non-cash charges related to equity issuances during
2018.
Conference Call and Webcast
Information
SELLAS will host a conference call and live
audio webcast today at 8:00 a.m. ET to discuss these financial
results and provide a business update. To participate in the
conference call, please dial (866) 416-7995 (domestic) or (409)
217-8225 (international) and refer to conference ID 7038536. A live
webcast of the call can be accessed under “Events &
Presentations” in the Investors section of the Company’s website
at www.sellaslifesciences.com. An archived webcast recording
will be available on the SELLAS website beginning approximately two
hours after the call.
About SELLAS Life Sciences Group,
Inc.
SELLAS is a clinical-stage biopharmaceutical
company focused on novel cancer immunotherapeutics for a broad
range of cancer indications. SELLAS’ lead product candidate,
galinpepimut-S (GPS), is licensed from Memorial Sloan Kettering
Cancer Center and targets the Wilms Tumor 1 (WT1) protein, which is
present in an array of tumor types. GPS has potential as a
monotherapy or in combination to address a broad spectrum of
hematologic malignancies and solid tumor indications. SELLAS has
Phase 3 clinical trials planned (pending funding availability) for
GPS in two indications, acute myeloid leukemia (AML) and malignant
pleural mesothelioma (MPM) and is also developing GPS as a
potential treatment for multiple myeloma (MM) and ovarian cancer.
SELLAS plans to study GPS in up to four additional indications.
SELLAS has received Orphan Drug designations for GPS from the U.S.
Food & Drug Administration (FDA) and the European Medicines
Agency (EMA) for AML, MPM, and MM; GPS has also received Fast Track
designation for AML, MPM and MM from the FDA. SELLAS’ second
product candidate, nelipepimut-S (NeuVax™, NPS), is a HER2-directed
cancer immunotherapy being investigated for the prevention of the
recurrence of breast cancer after standard of care treatment in the
adjuvant setting. NPS has received Fast Track status designation by
FDA for the treatment of patients with early stage breast cancer
with low to intermediate HER2 expression, otherwise known as HER2
1+ or 2+, which includes TNBC patients, following standard of
care.
For more information on SELLAS, please visit
www.sellaslifesciences.com.
Forward-Looking Statements
This press release contains forward-looking
statements. All statements other than statements of historical
facts are “forward-looking statements,” including those relating to
future events. In some cases, forward-looking statements can be
identified by terminology such as “plan,” “expect,” “anticipate,”
“may,” “might,” “will,” “should,” “project,” “believe,” “estimate,”
“predict,” “potential,” “intend,” or “continue” and other words or
terms of similar meaning. These statements include, without
limitation, statements related to the timing and results of
clinical studies and as to further development of and regulatory
matters relating to NPS and GPS for a broad range of cancer
indications. These forward-looking statements are based on current
plans, objectives, estimates, expectations and intentions, and
inherently involve significant risks and uncertainties. Actual
results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of these
risks and uncertainties, which risks include, without limitation,
risks and uncertainties associated with immune-oncology product
development and clinical success thereof, risks and uncertainties
related to the timing of clinical trials, the uncertainty of
regulatory approval, the uncertainty of partnering its clinical
assets, and other risks and uncertainties affecting SELLAS and its
development programs as set forth under the caption “Risk Factors”
in Exhibit 99.1 in its Current Report on Form 8-K filed on July 18,
2018 and in its other SEC filings. Other risks and uncertainties of
which SELLAS is not currently aware may also affect SELLAS’
forward-looking statements and may cause actual results and the
timing of events to differ materially from those anticipated. The
forward-looking statements herein are made only as of the date
hereof. SELLAS undertakes no obligation to update or supplement any
forward-looking statements to reflect actual results, new
information, future events, changes in its expectations or other
circumstances that exist after the date as of which the
forward-looking statements were made.
Investor Contacts:Will
O’ConnorStern Investor Relations,
Inc.212-362-1200ir@sellaslife.com
David Moser, JDSELLAS Life Sciences Group,
Inc.813-864-2571info@sellaslife.com
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