Sunday , 2 April 2023

Seelos: 4 Analysts Forecast A 697% Increase Within Next 12 Months

The progress Seelos Therapeutics, Inc. (Nasdaq: SEEL)  is achieving in its multi-faceted clinical trials has investors taking a long hard look at what Seelos is all about. This article does just that, looking at what the company is focused on, its clinical trial progress to date, its latest quarterly financials, its management and the investment risks associated with it.

An original article by Lorimer Wilson, Managing Editor of munKNEE.com, Your KEY To Making Money!

About Seelos Therapeutics

Seelos Therapeutics, Inc. is a company focused on developing products that address significant unmet needs in rare psychiatric and movement disorders. In particular, Seelos is:

  • advancing clinical studies in multiple indications with large market opportunities and orphan indications such as:
    • Acute Suicidal Ideation and Behavior (ASIB) in Major Depressive Disorder (MDD) as well as developing additional programs in
    • Amyotrophic Lateral Sclerosis (ALS),
    • Spinocerebellar Ataxia (SCA) and
    • Alzheimer’s Disease (AD), as well as
  • advancing gene therapy programs in Parkinson’s Disease (PD).
  • Go here for a description of some of the diseases mentioned above.

Seelos Pipeline Going Forward

Seelos

  • is progressing with its SLS-004 and SLS-007 preclinical Phase 1 gene therapy programs on Parkinson’s Disease,
  • has completed its SLS-005 Pivotal Phase II/III enrollment phase related to Amyotrophic Lateral Sclerosis (ALS), or Lou Gehrig’s disease on the Healey ALS Platform Trial,
  • has commenced a double-blind, randomized placebo-controlled SLS-005 Pivotal Phase II/III study on Spinocerebellar Ataxia (SCA) to assess safety and efficacy of SLS-005 for the treatment of adults with SCA with encouraging SCA type 3 Phase IIa open-label data and
  • has planned early stage programs (SLS-003, SLS-006, SLS-008, SLS-010, SLS-012) for the treatment of Huntington’s Disease (HD), and Alzheimer’s Disease (AD). Initial animal data in Huntington’s Disease looks very promising according to Marciano.

3Q 2022 Financial Results

Seelos Therapeutics has a current market capitalization of $63M. It is still in the product research and development phase of novel compounds and, as such, has no products and no revenue and requires a great deal of money to fund its R&D expenses. Seelos Therapeutics earnings data for Q3 reported a loss of ($0.18) earnings per share but the consensus among analysts (see here) is that earnings will grow in the coming year to $(0.60), from ($0.65) per share. For a detailed look at all the financial metrics related to Seelos in the last quarter and for every year going back to 2018 go here.

Stock Price History 

Seelos’ stock price declined 60% in 2022 which was less than the 70% decline experienced overall by the 6 clinical-stage psychedelic stocks I follow in the munKNEE Psychedelic Drug Stocks Index.

Analyst Forecasts

  • The current consensus among 4 stock analysts (see here) forecast a  12-month stock price of from $3.00 to $12.00 (see here) with a median target of $5.50 which represents an average increase of 697% from its current price.
  • Another analyst (see here) is slightly less bullish projecting a price of $4.00/share by the end of 2023, which represents a price increase of “only” 480% from its current price.

Investment Risks

The potential downsides in Seelos Therapeutics’ future are:

  • if it runs out of money to continue its research – but Marciano has communicated that the company has an ATM for $50mm filed with Jefferies which they could potentially use to raise money; and the Company has just announced (see here) that it is in the process of raising ~$11.24M in gross proceeds via a registered direct offering of its common stock and warrants.
  • if one of its senior managers, especially the CEO or Chief Medical Officer, were to depart, that might cause the company to lose focus and slow down progress in its research and development,
  • if another clinical-stage company were successful in developing any of the treatments that Seelos is working on (and Seelos currently has no competition); that would most likely cause negative investor sentiment towards its stock price and, even more so, if such a competitor were to take the treatment for one of those diseases to market and, finally if the stock market were to experience a major correction which would cause the Seelos stock to weaken considerably given its fragile investor sentiment.

Conclusions

The current consensus among 10 investment analysts on Seelos is a “buy” with its stock price increasing by 912% to $6.38 from its current price of $0.63. That bullish projection, coupled with the above analysis suggests that Seelos would make a great buy-and-hold investment. In addition to that, were the Company to bring any one of its products directly to market itself, or be acquired by a major pharmaceutical company, its stock price should go up dramatically.

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