Episode Details

SELLAS Life Sciences Group, Inc. (SLS) Q2 2026 — Q2 2026 (quarter ended June 30, 2026): no revenue. R&D $6.272M vs $3.871M; G&A $4.357M vs $3.002M; operating expenses $10.629M. Net loss $9.605M vs $6.601M, 46% worse. Loss per share $(0.05) vs a $(0.045) bar and $(0.07) a year ago, on 189,183,620 weighted shares vs 98,558,567. Cash $138.343M. AMC print Aug 11, so Aug 12 was the reaction: close $11.77, up 6.52%. SELLAS lost 5 cents a share against a 4.5-cent bar, better than the 7 cents a year ago, and the stock rose 6.52%. But the net loss did not shrink - it went from $6.601M to $9.605M, 46% worse. The whole per-share improvement is 90.6 million extra shares, every one from a warrant exercised at a $1.70 average while the stock traded $10-$15. There is no revenue line. This is a $2.38 billion bet on one Phase 3 trial, REGAL, whose readout is triggered by a death count, not a date. THE CALL: AVOID (4/5, A BINARY TRIAL PRICED LIKE A BUSINESS) — base-case value ~$6.4 vs ~$11.77 today. KEY METRICS: - CALL: AVOID, 4/5. Fair value ~$6.40 vs the $11.77 Aug 12 close, 45.6% below. No revenue and no free cash flow, so this is a two-state model, not a DCF. If REGAL wins: GPS at $650M peak sales ex-Greater China at 4.9x, plus SLS009 at 25%, plus $60M of China milestones, plus cash = $16.20. If REGAL misses: cash plus SLS009 at 12% = $1.15. At a 35% base rate that weights to $6.42. - THE DENOMINATOR DID THE WORK: net loss went $6.601M to $9.605M, worse by 46%. Loss per share went $(0.07) to $(0.05), better by 29%. Weighted shares went 98,558,567 to 189,183,620, up 92%. Divide this quarter's loss by last year's share count and it prints $(0.097) - a 45% deterioration, not a 29% improvement. - WHERE THE CASH CAME FROM: financing supplied $82.918M in the half; operations CONSUMED $16.434M. All $82.918M was warrant exercises - 48.77M warrants at a $1.70 weighted average strike while the stock traded $10-$15. Only 9.712M warrants survive, at $1.69, worth another $16.4M. Shares outstanding: 153.1M at Dec 31, 201.9M at Jun 30. - MARKET CAP IS NOT $2.19B: the feeds publish a float-only $2,190M. The 10-Q cover counts 201,945,709 shares at Aug 10; at $11.77 that is $2,377M, so the feeds are $187M short. No debt, so enterprise value is ~$2,239M against $138.3M of cash - about 17x cash and 17x the $137.7M of book equity. - THE CATALYST IS A DEATH COUNT: REGAL's final analysis triggers at 80 events (deaths). The interim triggered at 60 in Dec 2024 and the committee said continue. The 10-Q puts the CRO's pooled count at 78 as of May 11, 2026 - about 1.06 events a month, implying the 80th near early July. It had not been announced by mid-August. What to watch: UP: the 80th REGAL event announced and a significant survival benefit at the final analysis; a pre-readout GPS partnership. DOWN: REGAL missing, which takes GPS to zero; drawing the $150M ATM before the readout; SLS009 enrolment slipping past 28 of 80. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.