What's NeuVax? Wainwright Says Sellas' Cancer Vaccine Candidate Makes It A Buy

Sellas Life Sciences Group Inc SLS popped as much as 189 percent Monday after reporting “clinically meaningful activity” in interim data for its Phase 2b NeuVax trial.

H.C. Wainwright liked the stock before it peaked, though, and it considers NeuVax just a footnote in the bullish narrative.

The Rating

Analyst Joseph Pantginis initiated coverage on Sellas with a Buy rating and $11 price target.

The Thesis

Sellas became public in January in a reverse merger with Galena to advance its galinpepimut-S, a cancer vaccine seen to boast broad potential.

“Overall, since the company is a new entrant to the public markets, we believe a value disconnect currently exists between clinical data in hand and projected catalysts,” Pantginis said in a Monday note.

The analyst considers GPS well-positioned to take on the Wilms’ tumor 1 antigen, which has broad potential in immuno-oncology.

So far, GPS has generated “encouraging” clinical data for multiple tumor indications, with acute myeloid leukemia at the forefront. Sellas recently reported positive Phase 2 data in AML nearly tripling survival in one age group relative to current standards of care. A Phase 2 trial in mesothelioma also demonstrated life extension.

The candidate is currently in a Phase 1/2 study for multiple myeloma and is about to start an ovarian cancer combination study with Bristol-Myers Squibb Co BMY’s Opdivo.

“We believe SELLAS represents a new name for investors to get their arms around, especially based on the Phase 3 readiness of GPS, and firm footing in the immuno-oncology sandbox," Pantginis said. 

Upcoming catalysts include the launch of a pivotal Phase 3 study in AML and a combination study with Merck & Co., Inc. MRK’s Keytruda for multiple tumor types later this year.

Price Action

At the time of publication, Sellas was trading up 157 percent at $8.88. 

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