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We came across a bullish thesis on Sellas Life Sciences Group Inc (SLS) on ValueInvestorsClub by ContraMundem. In this article we will summarize the bulls' thesis on SLS. Sellas Life Sciences shares were trading at $1.45 when this thesis was published, vs. closing price of $1.26 on Sep 17.
A laboratory technician researching a sample of cells in a biotechnology laboratory.
Sellas Life Sciences (SLS) is a biotech company making waves in the cancer treatment arena with its promising pipeline and unique approach to addressing acute myeloid leukemia (AML), an aggressive and challenging blood cancer. Sellas presents a compelling investment opportunity, particularly given its substantial upside potential, with a 1-year target price of approximately $43 per share.
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What sets Sellas apart in the crowded biotech space is its innovative approach to AML treatment through two key assets. Galinpepimut-S (GPS) is the company’s late-stage Phase 3 cancer immunotherapy or "cancer vaccine," designed to maintain remission in AML patients by preventing or delaying cancer recurrence. On the other hand, SLS009, a selective CDK9 inhibitor in Phase 2, aims to treat the active disease state by targeting and reducing the overproduction of white blood cells with precision, avoiding the severe toxicities associated with previous treatments.
Sellas’s approach is particularly noteworthy because, unlike many small biotech firms that bet everything on a single product, Sellas has a diversified pipeline addressing different stages of AML. This diversification mitigates risks associated with reliance on a single asset and enhances the company's overall investment appeal. Moreover, the company has flown under the radar, largely due to historical issues with its predecessor, Galena Biopharma, and the ongoing biotech bear market, which has obscured its potential in the eyes of many investors.
The excitement around Sellas is driven by the imminent results of its Phase 3 trial for GPS. The trial's design, which compares GPS to the Best Available Therapy (BAT), offers a robust framework for assessing the drug's effectiveness. The evidence to date suggests GPS is on track to meet or exceed expectations, with patients in early trials experiencing significantly longer overall survival compared to those receiving BAT. Additionally, key trial doctors and management's actions indicate strong confidence in the positive outcome of the trial, with potential for the trial to be halted early for efficacy based on preliminary results.