On May 15, 2019 SELLAS Life Sciences Group, Inc. (Nasdaq:SLS) ("SELLAS" or the "Company"), a clinical-stage biopharmaceutical company focused on the development of novel cancer immunotherapies for a broad range of cancer indications, reported financial results for the quarter ended March 31, 2019 (Press release, Sellas Life Sciences, MAY 15, 2019, View Source [SID1234536326]).

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"Throughout 2019, as we have been progressing the review of strategic alternatives, we also have been continuing to advance our novel cancer immunotherapy clinical pipeline and are excited to be presenting data on one of our clinical candidates, nelipepimut-S (NPS), at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting," said Angelos Stergiou, MD, ScD h.c., President and Chief Executive Officer of SELLAS

American Society of Clinical Oncology 2019 Annual Meeting

Sellas will present immunologic response data from the NPS/Trastuzumab Study will be presented at the upcoming ASCO (Free ASCO Whitepaper) Annual Meeting being held May 31 – June 4, 2019 in Chicago, IL. Details for the presentation are as follows:

Title: Immunologic responses in triple-negative breast cancer patients in a randomized phase IIb trial of nelipepimut-S plus trastuzumab versus trastuzumab alone to prevent recurrence
Presenter: Jessica Campf, MD, San Antonio Military Medical Center
Abstract Number: 556
Poster Session: "Breast Cancer – Local/Regional/Adjuvant"
Date and Time: June 2, 2019, 8:00 am – 11:00 am CDT
Location: Hall A, McCormack Place, Chicago, IL

First Quarter 2019 and Recent Highlights

Galinpeptimut-S (GPS)
— In February 2019, the Company announced that Richard Maziarz, M.D., Medical Director of the Adult Blood and Marrow Stem Cell Transplant & Cellular Therapy Program at the Knight Cancer Institute and Professor of Medicine at Oregon Health and Science University (OHSU), and Roisin O’Cearbhaill, M.D., Assistant Attending Physician in Gynecologic Medical Oncology Service at Memorial Sloan Kettering Cancer Center (MSKCC), will serve as co-principal investigators of the Company’s Phase 1/2 open-label, non-comparative, multicenter, multi-arm study of GPS in combination with Merck’s anti-PD-1 therapy KEYTRUDA (pembrolizumab) in patients with selected WT1-positive advanced cancers, including both hematologic malignancies and solid tumors. The study is assessing the efficacy and safety of the combination, with exploratory long-term follow-up for overall survival and safety.
— In April 2019, the Company announced an agreement with MSKCC to conduct an investigator-sponsored clinical trial of GPS in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab, in patients with malignant pleural mesothelioma (MPM). The Phase 1 open-label clinical study will enroll patients with MPM who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy with study drug provided by both SELLAS and Bristol-Myers Squibb.
Nelipepimut-S (NPS)
— In February 2019, the Company announced preliminary immune response data from an analysis of the patterns of induction of NPS-specific T-cell responses over time in a subgroup of patients with triple-negative breast cancer (TNBC) from the prospective, randomized, single-blinded, controlled Phase 2b independent investigator-sponsored clinical study of the combination of trastuzumab (Herceptin) +/- NPS targeting HER2 low-expressing breast cancer patient cohorts (the NPS/Trastuzumab Study). CD8+ cytotoxic T-lymphocytes (CTLs) from peripheral blood samples from study patients with TNBC were measured using specifically designed NPS-specific dextramers in a flow cytometry-based assay in duplicate. In 64 evaluable TNBC patients (39 in the NPS plus trastuzumab arm; 25 in the trastuzumab alone arm) across a median of four time-points (including baseline), NPS + trastuzumab administration generated up to 3-fold higher frequencies of NPS-specific CTLs compared to trastuzumab alone. CTL frequencies were higher among non-recurrent patients compared with those who recurred, on either arm
— In March 2019, SELLAS announced previously unreported disease free survival (DFS) data from the NPS/Trastuzumab Study. In the 97-patient TNBC cohort, the DFS landmark rate at 24 months for patients treated with NPS plus trastuzumab (n=53) was 92.6% compared to 70.2% for those treated with trastuzumab alone (n=44), a clinically and statistically significant improvement. In the intent-to-treat (ITT) population (all HER2 low-expressing breast cancer patients; n=275), and over the 24-month post-randomization follow-up period, the DFS landmark rate was in favor of the combination arm (89.8%) versus trastuzumab alone (83.8%).
Corporate
— In February 2019, the Company announced that it engaged Cantor Fitzgerald & Co. to act as its strategic and financial advisor in conducting a review of strategic options. This strategic review is ongoing and there can be no assurance that this process will result in a transaction.
— In the first quarter and early in the second quarter of 2019, the Company received aggregate gross proceeds of $3.5 million from the exercise of warrants from a holder pursuant to a Warrant Exercise Agreement which reduced the exercise price of certain outstanding warrants from $2.10 to $1.10 and provided for the issuance to the holder of new warrants on a share-for-share basis in an amount equal to the number of existing warrants that are cash exercised by the holder prior to May 31, 2019.

First Quarter 2019 Financial Results

R&D Expenses: Research and development expenses were $1.9 million for the first quarter of 2019, as compared to $1.8 million for the first quarter of 2018. The $0.1 million increase was primarily attributable to a $0.4 million increase in outsourced clinical and regulatory consulting related to our ongoing discussions with the U.S. Food and Drug Administration for further development of the combination of NPS plus trastuzumab in TNBC and a $0.2 million increase in licensing fees. These increases were partially offset by a $0.3 million decrease in clinical expenses due to the completion of the Phase 2b trial of NPS in combination with trastuzumab in 2018 and a $0.2 million decrease in personnel related expenses due to reduced headcount.

G&A Expense: General and administrative expenses were $2.5 million for the first quarter of 2019, as compared to $3.9 million for the first quarter of 2018. The $1.4 million decrease was due to a $0.6 million decrease in legal fees, a $0.2 million decrease in accounting and audit fees, a $0.2 million decrease in outsourced consulting, a $0.2 million decrease in public company costs and a $0.2 million decrease in other expenses. These decreases were driven by our focus on reducing expenses as we explore a wide range of strategic alternatives.

Net Loss: Net loss attributable to common stockholders was $5.0 million for the first quarter of 2019, or a basic and diluted loss per share attributable to common stockholders of $0.22, as compared to a net loss attributable to common stockholders of $10.0 million for the first quarter of 2018, or a basic and diluted loss per share attributable to common stockholders of $1.67.

Cash Position: As of March 31, 2019, cash and cash equivalents totaled approximately $2.6 million. Cash and cash equivalents as of March 31, 2018 totaled approximately $5.4 million. Net cash used in operating activities for the quarter was $5.0 million, compared to $5.4 million for the quarter ended March 31, 2018. During the first quarter, SELLAS received net proceeds of $2.2 million from the exercise of certain warrants. SELLAS received an additional $1.1 million from the exercise of warrants subsequent to March 31, 2019.

Keytruda and Herceptin are registered trademarks of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, N.J., USA, and Genentech, Inc., respectively, and are not trademarks of SELLAS. The manufacturers of these brands are not affiliated with and do not endorse SELLAS or its products.