viewSeelos Therapeutics

Seelos has catalysts for its ketamine depression drug, multiple shots on goal with a strong pipeline


The New York clinical-stage biopharmaceutical company has several drugs in the pipeline capable of generating hefty revenue

A woman with severe depression

Quick facts: Seelos Therapeutics

Price: 1.61 USD

Market: NASDAQ
Market Cap: $87.58 m
  • The company focuses on central nervous system, neurological and psychiatric disorders
  • SLS-002 intranasal ketamine depression drug aimed at patients with PTSD and major depressive disorder at risk of committing suicide
  • The company has late-stage pipeline products like SLS-005 which target rare orphan diseases  

What Seelos Therapeutics does:

Seelos Therapeutics Inc (NASDAQ:SEEL) is focused on central nervous system, neurological and psychiatric disorders.

Last January, the New York biopharmaceutical company became Nasdaq-listed by completing a reverse merger with Apricus Biosciences.

At the helm is scientifically trained Raj Mehra who founded Seelos in 2016. He has five degrees, including a Ph.D and MBA from Columbia University. Mehra developed a sixth sense for biotech over three decades of investing, by building a robust portfolio of companies and turning risk into profit. He worked nine years at Auriga USA as a managing director focused on equity investments in health care companies. He has also managed a large hedge fund.

Once dismissed as a "party drug" for its hallucinogenic effects, ketamine is emerging as a novel alternative treatment for depression. The approval of Johnson & Johnson’s (NYSE:JNJ) ketamine-derived depression treatment shines a light on Seelos which is advancing its own medication for depression.

Wall Street is bullish that Seelos’ SLS-002 intranasal ketamine depression drug under development is safe and will reach millions of patients with post-traumatic stress disorder (PTSD) and major depressive disorder (MDD) at risk of committing suicide.

J&J’s nasal spray SPRAVATO and Seelos’ SLS-002 nasal spray both have formulations of ketamine, with subtle differences. J&J’s nasal spray contains the esketamine compound, which is one half of the ketamine compound. However, Seelos’ nasal form of racemic ketamine is made of two mirror-image molecules and is likely to be given at a lower dose because it’s far more potent

How is it doing:

On February 13, Seelos closed a $4.3 million financing to advance its drugs.

Seelos recently shared promising interim data from a Phase 1 study of its ketamine-based depression treatment. The study showed 60 milligrams of SLS-002 to be safe and well-tolerated when given as a monotherapy or in combo with an oral antidepressant. The open-label study enrolled 42 healthy volunteers and over two weeks, they received SLS-002 and either venlafaxine ER or sertraline. 

Meanwhile, the company said it will seek guidance in March from the FDA for an adaptive Phase III trial of SLS-002 for Acute Suicidal Ideation and Behavior (ASIB) in patients with major depressive disorder. 

In November, the FDA granted SLS-002 fast track designation for the development of the drug for the treatment of ASIB in patients with MDD.

The company has strong late-stage pipeline drugs, like SLS-005, or trehalose, a protein stabilizer, which targets rare orphan diseases. Seelos has a meeting in March with the European Medicines Agency to seek advice for a clinical study in Europe of SLS-OO5 for treating patients with Type A and B versions of Sanfilippo syndrome, a childhood disorder that triggers fatal brain damage.

Trehalose is promising as it reduces the aggregation of misfolded proteins. Diseases connected by protein aggregations include Sanfilippo syndrome, Oculopharyngeal Muscular Dystrophy (OPMD), Spinocrebellar Ataxia (SCA3), Parkinson’s Disease, Amyotrophic Lateral Sclerosis (ALS), Alzheimer’s, Huntington’s disease and Friedrich Ataxia.

Seelos has a US patent to treat Friedrich Ataxia, which triggers faulty muscle coordination, with trehalose.

Importantly, the FDA has accepted an IND for SLS-005 for treating Sanfilippo syndrome, a rare genetic condition which can cause fatal brain damage.

In addition, SLS-005 has safe and effective data in other disorders such as OPMD, which is a type of muscular dystrophy, and SCA3, a condition characterized by progressive problems with movement, which the company may pursue after Sanfilippo.

Separately, Seelos has exclusively in-licensed the rights to a potential disease-modifying Parkinson’s disease therapy created by researchers at the University of California, Los Angeles. As a result, it has the rights to a family of peptide inhibitors that target the aggregation of alpha-synuclein. Seelos has a SLS-007 program with an initial focus on Parkinson's. 

In November, Seelos began spadework for another IND, this time for SLS-008, a treatment it plans for pediatric esophagitis, which affects fewer than 200,000 people nationwide.

The market for the SLS-002 depression drug is substantial, more than 900,000 people were admitted to the ER for suicidality last year. On the other hand, SLS-005 is aimed at OPMD, a type of muscular dystrophy, which has 20,000 patients worldwide. Again, SLS-007 has a more sizable addressable market as there are six million patients worldwide with Parkinson’s.

Seelos completed a capital raise in conjunction with the Apricus Biosciences reverse merger, so it has $18 million in cash and investments.

Inflection points:

During the first quarter, Seelos will share pivotal data readouts from Phase I studies of SLS-002 to evaluate the pharmacokinetics, pharmacodynamics, and drug-drug interactions.  

SLS-005 will begin a pivotal trial in Sanfilippo Syndrome, fully funded by the Team Sanfilippo Foundation, a non-profit medical research foundation started by parents of children with Sanfilippo. A Phase 2b/3 study will evaluate patients with Sanfilippo syndrome types A and B. The grant will also be used for an expanded access study for patients with types C and D as well as patients with types A and B who didn’t qualify for the original study.

Seelos is gaining traction from the FDA fast track designation for SLS-002 for the treatment of Acute Suicidal Ideation and Behavior in MDD. This allows for more frequent communication with the FDA and potential for Accelerated Approval or Priority Review, which could expedite SLS-002's path to approval.

What the boss says:

Seelos CEO Raj Mehra said: “For a small company, Seelos has multiple assets in development with massive potential. Success in any one program justifies the investment at this time."

“Having three strong candidates is almost like having three companies under one roof. It gives us multiple shots on goal.”

What the broker says:

Broker Roth Capital hailed Seelos’ recent shift towards using SLS-002 to treat major depressive disorder rather than PTSD. Roth views MDD as a "more substantial commercial opportunity" and potential for quicker trial enrollment. The broker reiterated a 'Buy' rating for the stock.

Roth said Seelos was quick to execute by dosing the first patients last November in its Phase I drug-drug interaction study to show the drug can be safely administered with two commonly prescribed antidepressants over 14 days.

Roth reiterated a $8 share target on the stock, which currently trades around $1.07 in New York.

Contact the author Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter: @UttaraProactive 


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