Empery Alleges Critical Clinical Trial Misrepresentations by Seelos Therapeutics
Empery Asset Management, LP ("Empery") wishes to inform shareholders of Seelos Therapeutics, Inc (the "Company" or "Seelos") that Empery transmitted a letter to management and the board of directors of Seelos alleging material misrepresentations that the Company's CEO made regarding the SLS-002 Phase II Study in Adults with Major Depressive Disorder at Imminent Risk of Suicide (the "Trial"). The Company made public disclosures about the intended size of the Trial to both Empery and the market when it knew, or should have known, that those statements were false.
The Company represented to Empery that its March 2023 financing would be sufficient to complete the Trial as publicly disclosed. This representation was false. Empery believes that Seelos knew in May when they "notified their trial sites that enrollment will conclude by the end of June 2023" that the Trial would not enroll the approximately 175 patients that the Company had publicly disclosed. Seelos inappropriately prioritized the conclusion of the Trial by the end of June 2023 rather than completing the publicly disclosed enrollment target of approximately 175 patients. Seelos had numerous opportunities to inform the public that the Trial would not enroll the disclosed target number of patients yet they continued to hide this material information from the market hoping they would have a successful trial. Empery believes that the Trial was doomed because the Company did not seek the appropriate funds to run a properly powered Trial.
Funds managed by Empery were significant shareholders at the time the Trial data was disclosed to the public. Empery firmly believes that the Seelos ketamine product is an asset that if properly funded and managed represents an investable opportunity. With appropriate funding and a new management team, Empery would be supportive of the Company. Currently, Empery believes that management's and the board's misconduct have significantly damaged Empery, and it is seeking recovery from Seelos. Empery reserves all of its rights and waives none
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