SELLAS Life Sciences Group Announces $20 Million Registered Direct Offering and Concurrent Private Placement Priced At-the-Market Under Nasdaq Rules
SELLAS Life Sciences Group, Inc. (SLS) has announced a registered direct offering and private placement of common stock and warrants with institutional investors. The Offering includes 13,029,316 shares at $1.535 per share and warrants to purchase the same number of shares at $1.41 per share, expiring in 5.5 years.
From a financial perspective, the direct offering by SELLAS Life Sciences is a strategic move to raise capital, which could be indicative of the company's need for additional funds to progress its clinical trials or expand its operations. The offering price of $1.535 per share, coupled with the immediate exercisability of the warrants at $1.41, suggests a potentially dilutive event for current shareholders, which might lead to short-term bearish sentiment. However, the capital infusion could also be viewed positively if it accelerates the company's pipeline development, leading to long-term value creation.
The fact that the warrants are priced slightly below the offering price and are exercisable for over five years provides investors with a longer-term incentive to bet on the company's success. This could attract investors who are willing to take a risk on the company's future performance, potentially leading to increased stock volatility in the near term. It is imperative for investors to consider the company's burn rate and the milestones they aim to achieve with the raised funds.
Looking at the broader market, the biopharmaceutical sector is highly competitive and capital-intensive. Companies like SELLAS must continuously invest in research and development to stay relevant. The offering's timing and structure could reflect the company's strategic response to market conditions and investor appetite for risk in the biotech sector. The at-the-market pricing mechanism indicates a move to align with current market valuations, avoiding the potential discounting that often comes with larger capital raises.
Investors should assess the impact of this offering on SELLAS's market position, especially how the proceeds will be used to navigate the competitive landscape. If the funds are allocated efficiently towards advancing a promising drug candidate or expanding into new oncology indications, the company could emerge as a stronger player in the long run. However, if the market perceives the move as a sign of financial distress or a lack of better financing options, it could lead to a negative market reaction.
In the context of the biotech industry, the success of such a capital raise is often contingent upon the perceived potential of the company's drug pipeline. For SELLAS, the funds raised may enable them to reach critical milestones, such as completing late-stage clinical trials or preparing for regulatory submissions. The specific use of proceeds should be scrutinized to gauge the company's strategic priorities and the likelihood of achieving regulatory approval and market penetration.
Additionally, the exercise price of the warrants being close to the offering price suggests confidence in the company's valuation and prospects. The extended expiration period of the warrants provides a long-term horizon, which could be appealing to investors who believe in the future success of the company's therapies. It is essential to analyze the company's historical performance in managing its pipeline and bringing therapies to market to inform expectations about the potential return on this investment.
03/15/2024 - 09:00 AM
NEW YORK, March 15, 2024 (GLOBE NEWSWIRE) -- 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, today announced that it has entered into definitive agreements with two existing institutional investors for the purchase and sale of 13,029,316 shares of its common stock (or common stock equivalents in lieu thereof) in a registered direct offering and warrants to purchase up to an aggregate of 13,029,316 shares of common stock in a concurrent private placement (together with the registered direct offering, the "Offering") at a combined purchase price of $1.53 5 per share and accompanying warrant, priced at-the-market under Nasdaq rules. The warrants will have an exercise price of $1.41 per share, will be immediately exercisable upon issuance and will expire 5.5 years from issuance.
The closing of the Offering is expected to occur on or about March 19, 2024, subject to the satisfaction of customary closing conditions. The gross proceeds from the Offering are expected to be approximately $20 million , before deducting placement agent fees and other estimated offering expenses. The Company intends to use the net proceeds from the Offering for research and development activities, working capital and general corporate purposes.
A.G.P./Alliance Global Partners is acting as sole placement agent for the Offering.
The registered direct offering of the shares of common stock (or common stock equivalents in lieu thereof) is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-255318) previously filed with the U.S. Securities and Exchange Commission (the “SEC”). A prospectus supplement describing the terms of the proposed Offering will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained, when available, from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.
The private placement of the warrants will be made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and/or Regulation D thereunder. Accordingly, the securities issued in the concurrent private placement may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About SELLAS Life Sciences Group, Inc.
SELLAS is a late-stage clinical biopharmaceutical company focused on the development of novel therapeutics for a broad range of cancer indications. SELLAS’ lead product candidate, GPS, is licensed from Memorial Sloan Kettering Cancer Center and targets the WT1 protein, which is present in an array of tumor types. GPS has potential as a monotherapy and combination with other therapies to address a broad spectrum of hematologic malignancies and solid tumor indications. The Company is also developing SLS009 (formerly GFH009), a small molecule, highly selective CDK9 inhibitor, which is licensed from GenFleet Therapeutics (Shanghai), Inc., for all therapeutic and diagnostic uses in the world outside of Greater China. For more information on SELLAS, please visit www.sellaslifesciences.com .
Forward Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical facts are “forward-looking statements,” including those relating to future events. In some cases, forward-looking statements can be identified by terminology such as “plan,” “expect,” “anticipate,” “may,” “might,” “will,” “should,” “project,” “believe,” “estimate,” “predict,” “potential,” “intend,” or “continue” and other words or terms of similar meaning. These statements include, without limitation, statements related to our ability to close the offering and the gross proceeds from the offering. These forward-looking statements are based on current plans, objectives, estimates, expectations and intentions, and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties set forth under the caption “Risk Factors” in SELLAS’ Annual Report on Form 10-K filed on March 16, 2023 and in its other SEC filings. Other risks and uncertainties of which SELLAS is not currently aware may also affect SELLAS’ forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The forward-looking statements herein are made only as of the date hereof. SELLAS undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made.
Investor Contact
Bruce Mackle
Managing Director
LifeSci Advisors, LLC
SELLAS@lifesciadvisors.com
What type of offering did SELLAS Life Sciences Group, Inc. (SLS) announce?
SELLAS announced a registered direct offering and private placement of common stock and warrants.
How many shares are included in the Offering by SLS?
The Offering includes 13,029,316 shares of common stock.
What is the purchase price per share in the Offering by SLS?
The purchase price per share in the Offering is $1.535.
What is the exercise price of the warrants in the Offering by SLS?
The warrants have an exercise price of $1.41 per share.
When do the warrants in the Offering by SLS expire?
The warrants will expire 5.5 years from issuance.
