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Roth reiterates Buy rating on Seelos Therapeutics as study of SLS-002 advances

Results from a Phase 1 study of Seelos' intranasal ketamine depression drug, SLS-002, expected next year "will be a significant stock-moving event"

ROTH Capital Partners - Roth reiterates Buy rating on Seelos Therapeutics as study of SLS-002 advances
Roth noted that SLS-002, which is expected to hit the US market in 2024, could reach $1.68 billion in peak sales

Roth Capital Partners reiterated its Buy rating with a $8 price target on Seelos Therapeutics Inc (NASDAQ:SEEL), saying results from a Phase 1 study of the company’s intranasal ketamine depression drug, SLS-002, expected next year “will be a significant stock-moving event.”

The SLS-002 study, which is aimed at patients with post-traumatic stress disorder (PTSD) and major depressive disorder (MDD) at risk of committing suicide, is expected to be released in the first quarter of 2020. 

It is being conducted in healthy volunteers and will evaluate SLS-02's pharmacokinetics (PK), pharmacodynamics (PD), and drug-drug interactions (DDI).

READ: Seelos Therapeutics plans to study SLS-002 in patients at risk of suicide

Seelos is expected to then conduct a Phase 2 Proof of Concept study in patients with MDD at imminent risk of suicide. 

“SEEL has made a strategic decision to pursue suicidality in major depressive disorder (MDD), significantly expanding the market opportunity beyond PTSD, which it still plans to target in the future,” Rothy analyst Yasmeen Rahimi said in a note to clients.

“In our view, this has both clinical dev. implications (quicker enrollment) and broadens the commercial potential for SLS-002. Accordingly, on October 21 SEEL announced an amendment to its Vyera Pharma agreement from 2018, allowing it to initially pursue SLS-002 in a Ph2 POC trial,” he added.

The analyst also noted that Seelos “is ready to take off” with another drug in its pipeline, SLS-005, which treats Sanfilippo Syndrome. The affiliation is a rare genetic condition in which the body doesn’t have certain enzymes to break down long chains of sugar molecules and it can cause fatal brain damage.

SLS-005 is currently under an open-label Phase 2B study, fully funded by the Team Sanfilippo Foundation.

Rahimi pointed out that “the doors are open for SLS-005 to enter a planned combined Ph2b/3 trial.”  

The analyst noted that Roth estimates that SLS-002, which is expected to hit the US market in 2024, could reach $1.68 billion in peak sales.

As for SLS-005, Rahimi said his firm estimates $423 million in peak sales after the drug hits the US market in 2022. 

Shares Seelos were up 1.4% to $0.83 in morning trade in New York.

Contact the author: [email protected]

Follow him on Twitter @PatrickMGraham

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