Earnings Flash: SELLAS Life Sciences (SLS) Posts Q1 $0.05 Per Share Loss, Beats FactSet Consensus Estimate of $0.06 Loss
Key keywords: SELLAS Life Sciences, SLS stock, Q1 2024 earnings report, FactSet consensus estimates, biotech earnings beat, quarterly net loss, clinical-stage oncology biopharma, galinpepimut-S, NASDAQ biotech earnings
May 15, 2024 – Clinical-stage oncology biopharmaceutical company SELLAS Life Sciences Group, Inc. (NASDAQ: SLS) reported its first quarter 2024 financial results after the U.S. market closed on Wednesday, posting a narrower-than-expected net loss that outperformed analyst consensus projections. The company reported a GAAP net loss of $0.05 per share for the three months ended March 31, 2024, compared to FactSet’s aggregated consensus analyst estimate of a $0.06 per share loss, representing a 16.7% positive surprise relative to broad market expectations. For the same quarter in 2023, SELLAS reported a net loss of $0.08 per share, marking a 37.5% year-over-year improvement in per-share loss metrics that underscores the company’s progress on operational efficiency targets.
Total revenue for Q1 2024 came in at $2.1 million, primarily driven by milestone payments from existing collaboration and licensing partnerships for the company’s lead pipeline candidate, galinpepimut-S (GPS), a novel immunotherapy targeted at treating acute myeloid leukemia (AML) and multiple myeloma. This revenue figure also beat analyst projections of $1.8 million for the quarter, marking a second top-and-bottom line beat for the company in its last four earnings releases.
SELLAS reported total operating expenses of $7.2 million for Q1 2024, down 12% from $8.2 million in Q1 2023, with the reduction driven by lower non-cash stock-based compensation costs and optimized spending on preclinical and clinical trial activities, as the company nears completion of its Phase 3 trial for GPS in relapsed or refractory AML. Management noted in the accompanying earnings call that the company’s cash, cash equivalents, and short-term investments totaled $43.5 million as of March 31, 2024, which is sufficient to fund planned operating expenses and capital expenditure requirements through the end of 2025, eliminating immediate concerns of a dilutive secondary share offering that had been priced into SLS stock by many analysts in recent months.
During the earnings call, SELLAS President and CEO Dr. Angelos Stergiou highlighted that the company remains on track to release top-line data from its pivotal Phase 3 trial of GPS in AML in the fourth quarter of 2024, with a planned Biologics License Application (BLA) submission to the U.S. Food and Drug Administration (FDA) scheduled for the first half of 2025 if the trial meets its primary endpoint. The narrower-than-expected Q1 loss has already driven a 3.2% uptick in SLS shares in after-hours trading as of press time, as investors react positively to the company’s operational discipline and clear near-term pipeline catalysts.
Featured Comments
As a small-cap biotech investor, I’m pleasantly surprised by SLS’s narrower Q1 loss. The 1-cent beat against consensus may seem small on the surface, but it signals management is executing well on cost controls while keeping their core clinical programs fully on track. I’m holding my full position ahead of the AML Phase 3 trial data readout in Q4, as this earnings result reduces near-term downside risk significantly.
I entered a small position in SLS last month on speculation of an earnings beat, and this print doesn’t disappoint at all. The fact that they’ve extended their cash runway to mid-2025 without needing to launch a secondary offering is a massive win for existing shareholders, and removes the biggest overhang that was weighing on the stock over the past two quarters.
It’s important to contextualize this earnings beat for SLS: clinical-stage biotech startups rarely beat EPS estimates, as unplanned R&D cost overruns are extremely common in the drug development space. This performance speaks to the rigor of SELLAS’s operational team, and gives me far more confidence in their ability to deliver on their pipeline milestones over the next 12 months without unexpected setbacks.
I traded out of SLS last week ahead of earnings because I was worried they would miss estimates and announce a secondary offering, so this result is a bit of a gut punch for me. I’ll likely look to re-enter a position on any dips over the next week, as the risk-reward profile looks much more favorable now that the earnings overhang is cleared.