Shares of SELLAS Life Sciences Group Inc (NASDAQ:SLS) experienced a significant uptick in trading Thursday afternoon, climbing 12.6% to $10.33 on volume exceeding 12 million shares. The stock opened at $9.21 and reached a high of $11.05 before settling at $10.33 by mid-afternoon. This rally follows the company's filing of an 8-K document detailing amendments to executive severance and change-of-control provisions, rather than any new clinical data release.
Based on the company's updated share count of 196.6 million shares as of June 2, which reflects approximately $28.7 million raised through warrant exercises in April and May, the current stock price implies an equity valuation of roughly $2.03 billion. The intraday trading range of $8.98 to $11.06 translates to a potential swing in implied equity value of about $409 million, nearly three times the company's combined cash position of $135.8 million as of March 31 plus the recent warrant proceeds.
The 8-K filing, submitted on June 24, outlines modifications to the employment contracts of CEO Angelos Stergiou, CFO John Burns, and development lead Dragan Cicic. Under the revised terms, if Burns or Cicic are terminated in connection with a change of control, they are entitled to 15 months of salary, their target bonus, COBRA coverage for up to 18 months, and full acceleration of all unvested stock awards. These changes are seen as a move to secure key leadership during a critical period for the company.
Investor focus remains squarely on the upcoming data readout from the pivotal Phase 3 REGAL trial, which is evaluating galinpepimut-S (GPS) in acute myeloid leukemia (AML). As of May 11, 78 of the required 80 death events had been recorded, positioning the final analysis to occur after the 80th event. CEO Stergiou has indicated that the company is actively preparing for the anticipated results, which are expected to be a major catalyst for the stock.
In addition to the REGAL trial, SELLAS is advancing its Phase 2 study of SLS009 in newly diagnosed AML, which began enrolling patients in May. This trial aims to enroll 80 patients, with topline results anticipated in the fourth quarter. For the first quarter, the company reported a net loss of $8.4 million and held $107.1 million in cash and cash equivalents as of March 31.
Short interest remains elevated, with MarketWatch reporting approximately 61 million shares short as of May 29, representing 33.19% of the float. Average daily volume stands at around 7.49 million shares. Thursday's volume of 12.2 million shares accounted for about 20% of the total short interest, suggesting significant trading activity from both buyers and short sellers.
The stock's rally pushed it above the average 12-month price target of $10, as compiled by Google Finance, with analysts Jason McCarthy of Maxim Group and James Molloy of Alliance Global Partners maintaining Buy ratings and $10 targets. The company also has a $150 million at-the-market equity program through TD Cowen, which it has not yet utilized, but the higher stock price makes this financing option more attractive to investors wary of potential dilution from exercised warrants.
