Seelos Inks $9M Licensing Deal with iX Biopharma

Seelos Therapeutics (SEEL) has signed an exclusive license agreement with Singapore-based specialty pharmaceutical company iX Biopharma Ltd. With this move, Seelos has acquired a worldwide license (excluding China, Taiwan, Macau and Hong Kong) for the sublingual racemic ketamine wafer, Wafermine, and other sublingual ketamine wafers, delivered using a proprietary fast-dissolving wafer-based drug delivery platform technology known as WaferiX.

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The clinical-stage biopharmaceutical company has planned to evaluate sublingual ketamine, SLS-003, in pain indications, which includes chronic neuropathic pain and Complex Regional Pain Syndrome (CRPS), along with psychiatric disorders such as post-traumatic stress disorder (PTSD).

Notably, Wafermine has received Orphan Drug designation from the U.S. Food and Drug Administration (FDA) for the treatment of CRPS.

Terms of the agreement

As per the agreement, Seelos will pay a one-time, upfront fee of $9 million, which comprises $3.5 million cash and $5.5 million in restricted shares of Seelos’ common stock for the worldwide license for Wafermine™ (excluding China, Taiwan, Macau and Hong Kong), the worldwide license for WaferiX™ in other ketamine formulations, and clinical supplies.

The deal also involves future contingent milestone payments and a low double-digit royalty on future net sales of certain licensed products.

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CEO Comments

The CEO of Seelos, Raj Mehra, said, “The pharmacokinetic, pharmacodynamic and safety profiles of SLS-003 that have been demonstrated to date suggest a formulation with the potential of being prescribed with less restrictions than current formulations…We look forward to initiating studies with SLS-003 in 2022 and our recent capital raises have accounted for the expected development costs for initiating studies.” (See Seelos Therapeutics stock charts on TipRanks)

Wall Street’s Take

Considering the deal positive for the company, Benchmark Co. analyst Bruce Jackson maintained a Buy rating and a price target of $6 (219.2% upside potential) on the stock.

Consensus among analysts is a Strong Buy based on 4 unanimous Buys. The average Seelos Therapeutics price target of $11 implies 485.1% upside potential from current levels. Shares have gained 82.5% over the past year.

Risk Analysis

According to the new TipRanks’ Risk Factors tool, the Seelos Therapeutics stock is at risk mainly from three factors: Tech & Innovation, Finance & Corporate, and Legal & Regulatory, which contribute 34%, 28% and 20%, respectively, to the total 65 risks identified for the stock.