- Shares of Gossamer Bio fell more than 30% Tuesday as the San Diego-based biotech disclosed its most advanced experimental drug failed two studies in asthma and chronic sinus inflammation.
- The first of those studies evaluated whether adding Gossamer's GB001 to standard-of-care therapy could help keep asthma from worsening in a severe, relatively uncommon form of the breathing condition. Gossamer's drug didn't significantly outperform placebo on that measure, though the company noted numerically reduced the odds of asthma worsening versus placebo in all groups of patients who received GB001.
- Gossamer's CEO Sheila Gujrathi said these results are useful for designing a late-stage study for GB001 in severe asthma, and that the company plans to speak with regulators to "inform our thinking around potential partnerships or strategic alternatives for this program." Gossamer doesn't have any future plans for GB001 in chronic sinus inflammation, however.
For a young biotech, Gossamer has been on a fast trajectory. In 2018, at just a few years old, the company raised $100 million from early-stage investors, including Omega Funds and the powerful venture capital firm Arch Partners. And by 2019, following a better-than-expected entrance to the public market, its value had surpassed $1 billion.
In backing Gossamer, investors have bet the company might be a redux of Receptos, another San Diego-based biotech that Celgene paid $7 billion to acquire in 2015. Gossamer was founded by former executives of Receptos, and similarly has worked on treatments for inflammation and immune diseases, though cancer is also part of its focus.
Gossamer's founders, among them CEO Gujrathi, oversaw the development of ozanimod, a drug that regulates white blood cell activity. The drug was both the centerpiece of the Celgene deal and a crucial asset when Bristol Myers Squibb later acquired Celgene for $74 billion. Ozanimod was cleared in March as a treatment for multiple sclerosis and is now sold under the brand name Zeposia.
While Zeposia ultimately secured approval, it first had to overcome a regulatory setback that slowed its path to market. Now, Gossamer is contending with a setback of its own — though the company still seems to see a path forward for GB001.
Results posted Tuesday show that, though the drug didn't perform significantly better than placebo in the asthma study, patients who took it still had numerically lower odds of asthma worsening as compared to placebo. Gossamer said the reductions ranged from 32% to 35% depending on the dose of GB001.
The study also looked at what's known as annualized severe exacerbation rate, or AER, a measure of the number of asthma attacks patients experience. Gossamer found greater AER reductions in patients given GB001 as opposed to placebo, and noted AER is the expected endpoint for a late-stage, registrational study.
"Hence, we believe today's stock reaction is excessively pessimistic, given it appears that [Gossamer] achieved what they set out to," wrote SVB Leerink analyst Joseph Schwartz. Shares fell about 33% in early trading on Tuesday, to about $9 apiece.
Indeed, Gossamer is betting that finding will portend future success. The biotech aims to find a strategic partner to help run a late-stage study in asthma, and said discussions are ongoing.