Newcomer recap of SLS (Sellas Life Sciences) and its Cancer Drug
Some friends & family wanted me to recount the story of this stock, but in an “explain like I’m five” way, or more accurately: “explain like I’m super busy because I have a 5-year old” way.
Didn't work AT ALL, still long AF, but it's an easy read!
Like in my professional life I’m just translating what science geeks try to share into more “accessible” language. I am not a financial advisor and I’m not giving financial advice.
Part 1) An immune booster of prestigious pedigree.
Any week now Sellas Life Sciences will publish trial results for “Galinpepimut-S” (or “GPS” for short) a vaccine which teaches the immune system how to find and deal with cancer cells which have the WT1 protein. That includes A LOT of types of cancer. However I don’t want to get peoples’ hopes up, because more tests may be done before the FDA clears it for other cancers (although the FDA gave it “fast track” status). Happily cytokine tests show that the drug does indeed foster the immune response against cancer that it is designed to, and amazingly it is almost side-effect free!
The drug was developed at the #2 rated cancer hospital in the USA then licensed to Sellas Life Sciences. Its core team and science advisory board combined spans 18 people (some from the #1 and #2 cancer hospitals in the U.S.). For more on that, google my reddit post: “list of global leaders on the SLS team.”
The final "Phase 3" trial will explore how much better it is than existing treatments, some of which are known to be quite rough on the body (my fellow nerds can google "dangers of myelotoxicity, Ven-Aza combination"). A doctor who I believe sees the largest contingent of patients in the phase 3 trial has so far said enthusiastic things about GPS.
As we see from the latest PR, so many of the patients are happily still alive. I will link some discussions in which super-nerds on Reddit (skilled in fields like, Biology, Quantitative Finance, and Statistics) have analyzed this unprecedented survival time, along with the company overall. They looked diligently for any way the drug could have come up short, and even found a couple uncommon ways such a seemingly clear victory for science might still fail to achieve statistical significance. You can see their overall confidence and enthusiasm in links like these:
A personal favorite, but very dense.
Part 2) a "biotech" stock is a different animal..
Now, biotech stocks are weird. Even at a late point in their life, their stocks can grow 200% (doubling in price), 600%, even 1000%. When they prove that their drugs work, they are quite happy to be be “bought out” by big pharmaceutical companies, who can speed up that jump in stock price to mere days. This further explains the hype surrounding SLS.
Why wouldn’t everyone invest in biotech then? Well, most biotech companies walk a financial tightrope while their existence depends on experimental science. It’s a meme how often biotech stocks can burn bright one minute only to burn to ash the next… In science we often say that we stand on the shoulders of giants, but we mustn't forgot the contributions made to research by all those who failed as well. (Nerd Note: kudos to the scientists who realized a lack of CD4 "immune helper cell" activation was to blame for the failure of many immune boosters similar to GPS. Some prrevious attempts could only sprint, not run a marathon. While the science is more beautifully nuanced than this, it is in some ways similar to an army advancing without supply lines!).
Sellas Life Sciences seems to be built specifically to be strong in every category that is usually weak or uncertain for biotech stocks - because it is expensive and unpredictable to take a drug through clinical trials. Turns out, having many more millions of dollars than most upcoming biotechs DOES help, along with having a drug developed at the 2nd best oncology hospital in America and scientific advisors from both of the top two. Their board members also include successful corporate strategists from big pharma who planned various large “corporate acquisitions” worth many billions of dollars each.
Part 3) But why does SLS stock look like a roller coaster all of a sudden?
Basically many people received "warrants" years ago, a sort of BOGO offer to buy stock. Warrants can be turned into new “shares”… but more "shares" of a company in existence makes the price of every share worth less.
It’s like when we cut more shares of a cake to share it with more people - doing so doesn’t magically make more cake! Someone with warrants asks the company to make more slices…
But in the stock world someone can also buy a “short” on a stock, which makes profit if the shareprice goes down. What if they also write an article or make comments online that convince people to sell their shares? That also makes the price of each share go down… you can see why someone might combine all those things at once!
However, if the price goes up dramatically, a “short” can also LOSE lots of money... LOTS of money. More than a month ago some users or bots on reddit claimed to have short positions while taunting various stock traders and cancer survivors on the SLS reddit. That was just before the stock price leapt from $5 to the $7-8 range. Then soon after it kept going again until it reached about $15. Around this time came a relentless stream of negative articles and often silly/unrealistic comments about the company... accompanied by an insane amount of warrant use. Each morning someone was fiercely cutting that cake into smaller and smaller slices while yelling that it wasn't any good anyways. (An old timer on the forums asked me to Google the following, and I see this subject is quite the deep dive: " SEC anson funds paid short publishers ").
Hopefully that explained a lot and was helpful to some of your friends and family. It’s a joy to share what’s looking by all indications to be another little moment of biomedical history (based on doctor testimony, released data for the survival timeline, and studies of other WT1-targeting drug successes recently).
I’m excited for the near-future of science and happy for all the people outside of the controlled studies who have been receiving GPS through the EAP (expanded access program). Please join me in giving gratitude for the continued survival of so many cancer patients both within the study and outside of it.
Let us pray for daring and decisive action, both on the part of the medical establishment and the pharmaceutical companies we know as household names. It may soon be up to them to show just how quickly one can change the world and rush to the aide of those in need. To everyone working the 9-5 (and then some) trying to keep everything from grinding to a standstill, whether you're at the desk all day or on the road doing outside sales, we salute you.
For convenience, here are some other commonly shared Reddit threads on the subject:
Remaining warrants discussion
Other uses of WT1 drug
A layperson’s take on SLS