Sellas Life (SLS) Falls 13% as Firm Still Mum on ALM Drug Candidate

Sellas Life Sciences (SLS) experienced a 13.15% drop in its share price on Friday, closing at $13.21 as investors grew increasingly anxious over the company's lack of information regarding its treatment candidate for acute myeloid leukemia (AML). The decline was fueled by a report from a German news outlet claiming that the company had already lost its 80th patient—signifying a pre-specified event in its phase 3 clinical trial for Galinpepimut-S (GPS)—despite the company's refusal to comment on the report.

According to the latest update on August 11, the study had already reached its 78th patient death, suggesting the much-anticipated results could be imminent. Despite this setback, Sellas Life Sciences (SLS) reported a widening second-quarter net loss, expanding by 45.5% to $9.6 million from $6.6 million in the same period last year.

Operating expenses also rose by 54% to $10.6 million from $6.87 million year-on-year. The company, which is yet to generate revenue, sparked speculation of a potential takeover after amending employment and severance agreements with its executives, Angelos Stergiou, John Burns, and Dragan Cicic. The updated contracts granted lump-sum payments to Burns and Cicic, equivalent to 15 months of their base salary, a target bonus for the termination year, and immediate vesting of unvested shares, should they not remain with the company in the event of a change of control.

Although no sale plans were announced, investors interpreted these changes as an indication of a potential acquisition. Hedge funds maintained an optimistic outlook on Sellas Life Sciences Group Inc.'s long-term growth prospects, with data from Insider Monkey revealing that 13 hedge funds held positions in the company in the second quarter, up from none in the previous quarter.

Their combined holdings surged by 490% to $79.7 million from $13.49 million, indicating increased capital commitment from existing investors anticipating a breakthrough in its pipeline.