SLS Catalyst Tracking — Binary Biotech Framework

Template from: resources/binary-biotech-portfolio.md, Section 7.1 Bet #1 in the binary biotech portfolio

Pre-Catalyst Record

Ticker:                    SLS (Sellas Life Sciences Group)
Catalyst:                  REGAL Phase 3 final OS analysis (80th event)
Expected catalyst date:    Q1 2026 (72/80 events as of Dec 26, 2025 — imminent)
NCT:                       NCT04229979

Base rate P(success):      50% (Phase 3 oncology → approval)
Adjusted P(success):       38% (after Bayesian adjustments, before model risk)
Final P(success):          ~40% (after model risk correction)

Adjustment rationale:
  -15%  Peptide cancer vaccine class (near-zero historical Phase 3 approval rate)
  -5%   Open-label design (weaker than double-blind, though OS endpoint mitigates)
  -3%   Small sample size (n=126)
  -2%   Heterogeneous comparator arm (BAT with 4 options)
  +5%   Phase 2 effect size (16.3 vs 5.4 mo OS) — discounted for n=22 and historical controls
  +3%   IDMC didn't stop at interim (60 events) — low bar but mildly positive
  +3%   <50% deceased at 13.5mo median follow-up — suggests pooled median OS > 6mo historical
  +2%   80% immune response in GPS arm — mechanism engagement confirmed

Confidence level:          Low (novel mechanism class with near-zero historical success,
                           Phase 2 data from n=22 single-arm trial, open-label design)

Expected move on success:  +70% (to ~$7.65, analyst mean $6.83, potential overshoot on
                           first-ever peptide vaccine approval)
Expected move on failure:  -70% (to ~$1.35, SLS009 pipeline provides some floor value)

Kelly calculation:
  b = 0.70 / 0.70 = 1.0
  f* = (0.40 × 1.0 - 0.60) / 1.0 = -0.20 = NEGATIVE EDGE
  Go/no-go:                NO GO (negative EV at current price)

Position size (EUR):       750
Position size (% of Y1 bankroll): 25% (above 20% hard cap)

Correlation check:         N/A — first and only active bet

Entry date:                Pre-framework (position predates framework)
Entry price:               Unknown (pre-framework, approximate ~$4.15 per original research)
Current price at eval:     $4.50 (2026-02-24)

Framework Compliance

Verdict: Would NOT enter under framework. Holding through catalyst as learning position (bet #1).

Key risks to monitor before catalyst

1. Additional dilution — shares went from 125M to 170M post-Q3. Further offerings into the rally would signal management selling into hype.
2. IDMC emergency meeting — any unscheduled IDMC meeting before 80 events could signal safety concerns or early futility.
3. Cash raise announcement — a new equity offering before catalyst would be bearish (management insuring against failure).
4. Event accrual slowing — if the 80th event takes much longer than expected, it could mean lower-than-expected mortality in both arms (which paradoxically could mean GPS is working, or both arms are doing better than expected).

Context: Why this is a learning position

This bet was entered before the binary biotech framework existed. It serves as:

1. Calibration data point — was pre-framework intuition accurate?
2. Emotional dry run — experience the catalyst event psychology firsthand
3. Framework validation — did the red flags and Kelly calculation predict the outcome?

Regardless of outcome, fill in the post-catalyst section below within 24 hours of data readout.

Post-Catalyst Record

Outcome:                   [success / failure / ambiguous]
Catalyst date:
Actual price move:         ____%
P/L (EUR):
P/L (%):

Was base rate reasonable?  [Y/N]
Was payoff estimate right? [Y/N — compare estimated vs actual move]
What signal was most informative?
What signal was least informative?
Would framework have been right to skip? [Y/N]

Update to playbook: