On April 16, 2018 SELLAS Life Sciences Group Inc. (Nasdaq: SLS) ("SELLAS"), a clinical-stage biopharmaceutical company focused on novel cancer immunotherapies for a broad range of cancer indications, reported financial results for the year ended December 31, 2017 and provided a business update (Press release, Galena Biopharma, APR 16, 2018, View Source [SID1234525344]).

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"In recent months, we have made meaningful progress advancing our business objectives, maturing SELLAS Life Sciences Group Ltd. into a publicly-traded company following the business combination and progressing our pipeline of cancer immunotherapies for patients with limited treatment options," said Angelos Stergiou, MD, ScD h.c., President & Chief Executive Officer of SELLAS. "We are particularly excited about our recent financing and the positive interim results from the Phase 2b NeuVax + Herceptin study announced earlier this month which we believe help position SELLAS for continued success throughout the remainder of 2018. We also look forward to commencing the Phase 1/2 clinical trial of galinpepimut-S in combination with Keytruda under our collaboration and supply agreement with Merck and our planned Phase 3 Acute Myeloid Leukemia program."
Recent Corporate and Pipeline Highlights

In April 2018, SELLAS announced positive interim data from the prospective, randomized, single-blinded, controlled Phase 2b independent investigator-sponsored clinical trial (IST) of trastuzumab (Herceptin) +/-nelipepimut-S (NeuVax) in HER 1+/2+ breast cancer patients in the adjuvant setting to prevent recurrences.

In March 2018, open label Phase 2 clinical and immunological data for SELLAS’ lead product candidate, galinpepimut-S (GPS) in patients with multiple myeloma (MM) was presented at the 2018 European Society for Blood and Marrow Transplantation (EBMT) 44th Annual Meeting in Lisbon, Portugal. Median progression-free survival (PFS) of 23.6 months was reported in the high-risk disease setting, compared to historically inferior outcomes while on an immunomodulatory drug (IMID) or proteasome inhibitor post-autologous stem cell transplant maintenance.

In March 2018, SELLAS appointed Barbara Wood as Executive Vice President, General Counsel and Corporate Secretary.

In March 2018, SELLAS entered into a definitive securities purchase agreement to issue up to 10,700 shares of its Series A convertible preferred stock and warrants to purchase 1,363,631 shares of its common stock in a private placement transaction to a select group of institutional investors, in Europe and the United States, for aggregate gross proceeds of $10.7 million. The closing of the first tranche for approximately $6.0 million took place on March 9, 2018. The closing of the second tranche for approximately $4.7 million is expected to occur by the end of April 2018 following stockholder approval.

In December 2017, SELLAS Life Sciences Group Ltd. ("SELLAS Ltd."), a privately-held Bermuda exempted company, completed a business combination (the "Merger") with Galena Biopharma, Inc. ("Galena"). Upon completion of the Merger, Galena was renamed "SELLAS Life Sciences Group, Inc.," began trading under a new ticker symbol "SLS" and the combined company now includes the late-stage pipelines of novel cancer immunotherapies for both hematologic and solid malignancies of SELLAS Ltd. and Galena.

In October 2017, SELLAS Ltd. entered into a clinical trial collaboration and supply agreement with Merck & Co. for a combination clinical trial targeting multiple cancer types, in which GPS will be administered in combination with Merck’s anti-PD-1 therapy KEYTRUDA (pembrolizumab) in a Phase 1/2 trial in five cancer indications, including both hematologic malignancies and solid tumors.

Year End 2017 Financial Results
For accounting purposes, SELLAS Ltd. is considered to have acquired Galena in the Merger; therefore, the financial statements of Galena became those of SELLAS Ltd. and the results reported are those of SELLAS Ltd.
Cash Position: As of December 31, 2017, cash and cash equivalents were $2.3 million, compared to $6.0 million as of December 31, 2016. Net cash used in operating activities was $11.0 million for the year ended December 31, 2017, compared to $11.9 million for the year ended December 31, 2016.
R&D Expenses: Research and development expenses were $6.1 million for the year ended December 31, 2017, as compared to $11.4 million for the year ended December 31, 2016. The $5.3 million decrease was primarily attributable to a decrease of $2.5 million in fees due under licensing and collaboration agreements, a decrease of $1.7 million in clinical trial expense, a $1.3 million decrease in manufacturing expenses, a $1.2 million decrease in consulting fees, and $0.2 million decrease in regulatory expenses. These decreases were partially offset by a $0.7 million increase in stock-based compensation and a $0.9 million increase in personnel related expenses. Overall, research and development expenses were reduced in 2017 as SELLAS Ltd. explored various strategic options.
G&A Expenses: General and administrative expenses were $15.1 million for the year ended December 31, 2017, as compared to $4.6 million for the year ended December 31, 2016. The $10.5 million increase was primarily due to $5.7 million of transaction costs related to the Merger and a $2.1 million increase in stock-based compensation from the acceleration of restricted stock units, and a $1.5 million increase in personnel related expenses due to an increase in headcount, $0.6 million increase in accounting and audit fees, and $0.6 million in outside consulting services. The $5.7 million of transactions costs consist of $2.9 million of banking fees, $1.6 million in legal fees, $1.0 million incentive fee payable through approximately $0.1 million in cash and the issuance of 119,672 shares of our common stock upon consummation, and $0.2 million in accounting and audit fees. The transaction costs incurred related to the Merger are non-recurring expenses for the year 2017.
Non-recurring Severance Costs: Severance costs incurred during the year ended December 31, 2017 include employee-related costs for severance of former Galena employees of $1.9 million.
Net Loss: Net loss was $23.8 million and loss attributable to common stockholders was $24.4 million for the year ended December 31, 2017, or a basic and diluted loss per share to common stockholders of $10.44, as compared to a net loss and loss attributable to common stockholders of $17.7 million for the year ended December 31, 2016, or a basic and diluted loss per share to common stock holders of $18.66.