Sellas Life Sciences Group (NASDAQ: SLS) has seen a significant price surge in the past months. Before explaining why, first a quick breakdown of the company:
Sellas is a late-stage biopharmaceutical company with two core assets in the oncology field.
1. Galinpepimut-S (GPS): An immunotherapeutic peptide vaccine aimed at treating Acute Myeloid Leukemia (AML) patients who are in their second complete remission (CR2).
What is a peptide?
While I'm sure you've heard of proteins, and maybe even amino acids, peptides are the new kid on the block. A handful of amino acids linked together are called a peptide, and a chain of several hundred peptides grouped together make a protein. Because peptides are smaller than proteins, they can slip easily into cells, acting as precise chemical messengers. Synthetic peptides can stimulate a targeted response in the body by targeting specific receptors.
Major Medical Uses
1. Metabolic Diseases and Weight Loss (GLP-1) \- Think Ozempic/Mounjaro. These peptides mimic natural gut hormones to regulate blood sugar, slow digestion and curb hunger.
2. Hormone Replacement and Regulation - Insulin and growth hormones. Synthetic versions of these peptides can correct deficiencies or regulate bodily cycles.
3. Oncology - While no peptide based cancer vaccines have been approved to date, GPS uses the same approach as the former. GPS is a tumor-associated peptide (targeting WT1 receptors). The immune system recognizes these cancer-looking chains, and creates T-cells to fight them, tracking down any cancers cells that look similar.
While the Phase 3 Regal trial for GPS is currently targeting AML (CR2), the WT1 Receptor is implicated in dozens of cancers including Ovarian Cancer, Lung Cancer, Breast Cancer, Pancreatic Cancer and more.
Value of GPS
Let's first consider the market of AML (CR2) alone. Based on conservative estimates, we are sitting at a roughly 900M per year. In a buyout scenario, premiums can be anywhere from 4-10x yearly TAM. Using the low-end, this would give GPS a buyout value of $3.6B if it passes Phase 3 trials (\~$19.50/share).
If GPS can be expanded with off-label uses for CR1, we bump up to $2.6B TAM estimate. At the same BO multiples, we are now looking at a $10.4B estimate (\~$56/share).
If GPS can be expanded to the range of other cancers that express WT1, the TAM could reach upwards of $5-10B. At the same BO multiples, we are now looking at $20-40B (\~$108-216B/share).
Recent Developments
Hopefully, this made at least a bit of sense and we can get back to why SLS has 579% in the TTM.
Feb 2021 (\~$9/share) - Phase 3 Regal Trial Initiated \- Targeting AML (CR2) patients against Best Available Therapy (BAT). BAT survival rate was estimated to be anywhere from 5.4-12 months at the onset of the study. IMPORTANT NOTE: This may have improved slightly with general enhancements in supportive care, including advanced antibiotics, better management of cytopenias (low blood counts), etc.
Apr 2024 (\~$1/share) - Enrollment Complete \- 126 patients enrolled into control arm and treatment arm in a double-blinded study. Trial endpoint is 80-patient events (deaths).
Jan 2025 (\~$1.50/share - Positive Interim Analysis - At the pre-specified checkpoint of 60 events, the IDMC (organization overseeing the study) reviewed the unblinded data and gave it the recommendation to proceed as planned.
Dec 2025 (\~$4/share) - 72 events reached.
May 2026 (\~$8/share) - 78 Events reached.
June 24, 2026 (\~$9/share) - 8k Filing - Sellas makes big changes to the Change of Control (CoC) Termination Clauses for CEO, CFO and CDO. They included amendments that pay out 15 months of salary and unearned stock awards in the event that they are acquired and terminated by the new parent company.
[GPS Timeline](https://preview.redd.it/an0o9ruvw9ah1.png?width=1890&format=png&auto=webp&s=1f4d632065