On November 9, 2023 SELLAS Life Sciences Group, Inc. (NASDAQ: SLS) ("SELLAS’’ or the "Company"), a late-stage clinical biopharmaceutical company focused on the development of novel therapies for a broad range of cancer indications, reported a business update and announced its financial results for the quarter ended September 30, 2023 (Press release, Sellas Life Sciences, NOV 9, 2023, View Source [SID1234637420]).

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"In the last several weeks, SELLAS has achieved several exciting milestones. We reported initial positive topline Phase 2a data at the 45 mg (safety) dose level demonstrating that SLS009 in combination with venetoclax and azacitidine (aza/ven) exhibited anti-leukemic effects with a favorable safety profile in AML patients resistant to venetoclax combination therapies. Importantly, as of the last follow-up, six of the seven patients enrolled to date were alive. The first patient enrolled in the study achieved a complete response and is in the sixth month of treatment and the second enrolled patient is in the fifth month of treatment, underscoring the potential benefit of adding CDK9 inhibition to the aza/ven regimen. We will share further topline data, including data of patients treated with the recommended Phase 2 dose level of 60 mg, by the end of the year. We also shared compelling topline results from the lymphoma group of patients in our Phase 1 trial of SLS009, showing anti-tumor activity and clinical responses with a tumor burden reduction of up to 68.9%," said Angelos Stergiou, MD, ScD h.c., President and Chief Executive Officer of SELLAS. "SLS009 continues to emerge as a promising treatment for hematologic malignancies and we are pleased by the FDA’s recognition of its potential by the grant of Fast Track Designation for PTCL and Orphan Drug Designation for AML. These designations position us to expedite SLS009 clinical development with the goal of delivering this groundbreaking treatment to patients in need."

Dr. Stergiou further stated "We are also on track to complete enrollment (other than 20-25 patients from China) of the Phase 3 registrational REGAL study of GPS in patients with AML this month and, while the interim and final analyses are event (death) driven and therefore not within our control, we expect interim data from the study by the end of this year or early next year based upon our assumptions in our statistical analysis plan. We also look forward to the upcoming meeting of the Independent Data Monitoring Committee for the REGAL study towards the end of the month. Last, but not least, we are planning to hold a corporate update call with our shareholders in December to provide an update on the REGAL study and the SLS009 clinical programs as well as our projected outlook for 2024."

Pipeline Update:

Galinpepimut-S (GPS): Wilms Tumor-1 (WT1) targeting immunotherapeutic

Phase 3 REGAL study in AML:

In August 2023, the Independent Data Monitoring Committee (IDMC) recommended that REGAL continue as planned, following a routine, prespecified risk-benefit assessment of unblinded data from the study. The next routine IDMC meeting is scheduled for the end of November 2023. The Company expects to complete enrollment in the REGAL study, other than the 20-25 patients to be enrolled in China, in November 2023 and anticipates that 3D Medicines Inc., its commercialization partner for GPS in Greater China, will begin enrolling patients in China in the fourth quarter of 2023, subject to any further delays as a result of supply chain or other operational reasons, which will trigger two development milestone payments totaling $13.0 million.

The interim analysis of the REGAL study is expected in late 2023 or early 2024; however, because these analyses are event-driven, they may occur at a different time than currently expected.

Phase 1/2 Study in combination with pembrolizumab (Keytruda) in ovarian cancer:

Final data were presented in November 2023 at the International Gynecologic Cancer Society Annual 2023 Annual Global Meeting. The topline data showed clinical benefit of GPS and anti-PD-1 pembrolizumab combination therapy in WT1-positive relapsed or refractory platinum-resistant advanced metastatic ovarian cancer patients with a 50% disease control rate and a median overall survival benefit of 18.4 months as compared to 13.8 months with pembrolizumab monotherapy in a similar patient population shown in the KEYNOTE-028 study and historical values in comparable patients of 11-14 months with standard of care chemotherapy.

SLS009: highly selective CDK9 inhibitor

Phase 1 clinical trial in relapsed/refractory (r/r) hematological malignancies completed:

In September, the Company reported positive topline data from the cohort of patients with lymphomas from the Phase 1 dose escalation clinical trial of SLS009 showing that the study met all the primary and secondary endpoints supporting its advancement to Phase 2. The maximum tolerated dose was not reached. A dose-limiting toxicity occurred in one out of five patients in the lymphoma cohort treated at the 100 mg dose level. No dose-limiting toxicities were observed at any other dose level, and there were no unexpected toxicities across the study. Among 34 evaluable r/r lymphoma patients, five (14.7%) achieved a clinical response with a reduction in tumor burden of up to 68.9%. An additional seven patients (20.6%) achieved stable disease (SD) resulting in an overall disease control rate of 35.3%. In the subgroup of PTCL patients, four out of 11 (36.4%) evaluable patients achieved a clinical response. Additionally, one patient achieved a complete response (CR) in late October 2023, and remains on the trial after 16 weeks of treatment. The recommended Phase 2 dose for patients with lymphoma was established at 100 mg.

Phase 2a clinical trial in AML:

In October 2023, SELLAS announced positive, initial results from the Phase 2a study of SLS009 combination treatment with aza/ven in r/r AML patients who did not respond or stopped responding to venetoclax-based therapies. The Phase 2a clinical trial is an open-label, single-arm, multi-center study that is designed to evaluate safety, tolerability, and efficacy at two dose levels of SLS009. Six of the seven patients enrolled are still alive as of the latest follow-up, five remain on treatment and the first enrolled patientachieved a complete response and is in the sixth month of treatment while the second enrolled patient is in the fifth month of treatment. Anti-leukemic effects have been observed in all patients without any significant safety issues to date. Patients with AML who fail venetoclax-based therapies have limited treatment options and a poor prognosis with a median overall survival of approximately 2.5 months.

Phase 1b/2 clinical trial in r/r peripheral T-cell lymphomas:

The Company announced in October 2023 that the first patient was dosed in the Phase 1b/2 trial evaluating SLS009 in r/r PTCL. The open-label, single-arm trial will enroll up to 95 patients to evaluate safety and efficacy and, based on the results, may serve as a registrational study. This initial PTCL study is fully funded by GenFleet Therapeutics (Shanghai), Inc., and is being conducted in China.

Regulatory matters:

In October 2023, the FDA granted Orphan Drug Designation (ODD) for SLS009 for the treatment of AML.

In October 2023, the FDA granted Fast Track Designation to SLS009 for the treatment of r/r PTCL. The Fast Track Designation is intended to facilitate the development and review of drugs.

Financial Results for the Third Quarter 2023:

Research and Development Expenses: Research and development expenses for the third quarter of 2023 were $5.8 million, compared to $4.3 million for the same period in 2022. The increase was primarily due to an increase in clinical trial expenses related to the ongoing Phase 3 REGAL clinical trial of GPS in AML patients and the Phase 2a and Phase 1 clinical trials of SLS009 in hematological malignancies, an increase in manufacturing costs related to clinical drug supply purchases, and an increase in clinical and regulatory consulting. Research and development expenses were $18.9 million for the first nine months of 2023, compared to $14.4 million for the same period in 2022. The increase was primarily due to an increase in clinical trial expenses, an increase in clinical and regulatory consulting, and an increase in personnel related expenses due to increased headcount.

General and Administrative Expenses: General and administrative expenses for the third quarter of 2023 were $3.5 million, as compared to $2.9 million for the same period in 2022. The increase was primarily due to an increase in outside services and public company costs and an increase in legal and intellectual property fees. General and administrative expenses were $10.8 million for the first nine months of 2023, compared to $9.0 million for the same period in 2022. The increase was primarily due to personnel-related expenses due to increased headcount, an increase in legal and intellectual property fees, and an increase in outside services and public company costs.

Acquired In-Process Research and Development: There was no acquired in-process research and development in the third quarter of 2023 or the third quarter of 2022. There was no acquired in-process research and development in the first nine months of 2023, compared to $10.0 million for the same period in 2022, resulting from the in-licensing of SLS009.

Net Loss: Net loss was $9.3 million for the third quarter of 2023, or a basic and diluted loss per share of $0.33, compared to a net loss of $7.0 million for the same period in 2022, or a basic and diluted loss per share of $0.34. Net loss was $29.2 million for the first nine months of 2023, or a basic and diluted loss per share of $1.09, compared to a net loss of $32.2 million for the same period in 2022, or a basic and diluted net loss per share of $1.70.

Cash Position: As of September 30, 2023, cash and cash equivalents totaled approximately $4.0 million. Following the end of the quarter, on November 2, 2023, the Company received gross proceeds of approximately $4.0 million from a registered direct offering at-the-market of shares of common stock, pre-funded warrants to acquire shares of common stock, and warrants to acquire shares of common stock with a single, healthcare-focused investor. Additionally, the Company is anticipating $13.0 million in milestone payments from 3D Medicines, Inc. upon patients enrolling in China in the REGAL study which the Company expects to be triggered in the fourth quarter of 2023, subject to any further delays as a result of supply chain or other operational reasons.