Gossamer Bio, Inc. (GOSS) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Gossamer Bio Investor Day. [Operator Instructions] I would now like to hand the conference over to your speaker today, Faheem Hasnain. Please go ahead.

Good morning, everybody, and thanks so much for joining us today on the Gossamer Bio GB002 investor webcast. To introduce myself, my name is Faheem Hasnain. I'm the Co-Founder, Chairman and CEO of Gossamer Bio. We're a San Diego based company, focused on immunology, inflammation and oncology. We at Gossamer Bio are very excited to host this webcast and discuss our inhaled PDGFR inhibitor, GB002, which has entered a Phase II clinical trial for the treatment of pulmonary arterial hypertension. We put together an agenda for you today that we hope will be informative for everyone participating, including a discussion with 2 well-known PAH key opinion leaders. Our first key opinion leader is Dr. Lewis Rubin, an Emeritus Professor at UC San Diego School of Medicine. Dr. Rubin was also the former Director of the Division of Pulmonary and Critical Care Medicine at UCSD. He's been the principal investigator or a steering committee member for the clinical trials leading to approval of most currently approved medical therapies for PAH. And most recently, he was awarded the European Respiratory Society's ERS award for lifetime achievement in pulmonary arterial hypertension. So in addition to Dr. Rubin, we're also excited to welcome Dr. Vallerie McLaughlin, an Endowed Professor in Cardiovascular Medicine at University of Michigan. Dr. McLaughlin is also the Associate Chief Clinical Officer for cardiovascular services for the University of Michigan Medical Group and the Director of the pulmonary hypertension program. And she served as the Chair of the American Heart Association Women in Cardiology Committee and as the Chair of the American College of Cardiology, American Heart Association clinical expert consensus document on pulmonary hypertension. We're very appreciative that both Dr. Rubin and Dr. McLaughlin are here to join us today. And in addition to our KOLs, we'll have members of the Gossamer Bio team presenting including Dr. Roscigno and Dr. Zisman. Dr. Roscigno is leading our GB002 program. He has over 20 years of drug development experience in the PAH space, and he's been involved with multiple approved PAH therapies. Dr. Zisman is a clinical scientist with an extensive history of treating PAH patients and an established track record in translational research. A key opinion leader in his own right Dr. Zisman was the founder and CEO of Pulmokine, the company from which GB002 was acquired. We also have Mario Orlando, who's Gossamer's Vice President of Commercial and New Product Planning, and he'll be giving an update on the market. If we can go to the agenda. We'll begin today's presentation with Dr. Rubin and Dr. McLaughlin discussing PAH and the rationale for targeting new pathways in the space. After that, Larry will walk through GB002's preclinical development. And Rob will follow by discussing the Phase Ia in healthy volunteers and the Phase Ib in PAH patients before walking through the ongoing Phase II clinical trial. To round out the discussion, Mario will then discuss the PAH commercial landscape. And after the presentations, we've set aside some time for a question-and-answer session with Gossamer management and our PAH KOLs. But before we begin, we are happy to announce that GB002 is now called seralutinib. And with that, I will hand it over to Dr. Lewis Rubin. Dr. Rubin?

Thank you, and good morning, everyone. Could I have my first slide, please. I might be doing something wrong because I can't see my slide. Let me start at least, somebody can give me some guidance here. Today, we'll be talking about pulmonary arterial hypertension. Now pulmonary hypertension very simply means high blood pressure in the lungs. The normal blood pressure in the lungs is about 1/5 the pressure in the rest of the body. And when this pressure increases, that causes a strain on the right side of the heart, and that leads progressively to right-sided heart failure and ultimately death. There are many causes of pulmonary hypertension, and those are shown on the first slide. We use 5 categories to describe the conditions associated with pulmonary hypertension. We'll be focusing on Group 1, which is pulmonary arterial hypertension. These are conditions that directly affect the arterial side of the pulmonary circulation or predominantly. Group 2 is pulmonary hypertension due to left-sided heart disease. 3 is chronic lung disease. 4 is primarily blood clots. And 5 are conditions -- various conditions that cause pulmonary hypertension through a variety of mechanisms. So the focus here is pulmonary arterial hypertension, a group of conditions that primarily affects the arterial side, increasing the pressure in the lungs, making it harder for the right side of the heart to pump blood. Next slide, the characteristic finding of PAH, pulmonary arterial hypertension, is shown on the right-hand side, this is a cross-section, like slicing a salami, for example, and it shows a small to medium-sized pulmonary artery, about 100 microns in size. And it shows that there is excessive growth and proliferation of all the layers of the pulmonary vessel. Normally, this would be a very thin-walled vessel with a large open lumen to accept the entire blood flow with a very low pressure. But because of this successive proliferation, there's only a small slit seen towards the bottom of this vessel that can accommodate blood flow through the lungs that causes the pressure to rise and that's what causes the problem. It is the successive growth and proliferation that is characteristic of this disease and is, therefore, the important target for treatment. As the right ventricle develops problems pumping blood through the lungs, patients develop symptoms, typically indicative of the progressive impairment in cardiac blood flow through the lungs. This includes dyspnea, shortness of breath, fatigue, dizziness, chest pain. And as the right side of the heart fails as the pump fluid accumulates in the ankles, the legs and the abdomen and eventually cyanosis or bluish tinge, as deoxygenated blood is coursing through the body can occur. Pulmonary arterial hypertension, or PAH, on the left-hand side is a rare disease characterized as an orphan disease. As I said, it's characterized by high pressure, and that makes it hard for the heart to pump out into the lungs. When these vessels become narrowed and thickened, this is due to what we call vascular remodeling, which, as I showed you, is this growth and proliferation. This is a disease that is progressive and it is often fatal. Next slide. We currently target 3 pathways in the treatment of PAH. These are pathways that we know contribute to the pathogenesis of the disease abnormalities in these 3 important endothelial-dependent pathways. They are the endothelin pathway, the nitric oxide pathway, and the prostacyclin pathway. And there is dysfunction of these 3 pathways. Endothelin is a substance that's overproduced by the injured vascular endothelium in the lungs, and endothelin is an important promoter of vascular growth and proliferation. We target the successive production of endothelin in PAH using endothelin receptor antagonists, or ERAs and those include bosentan or Tracleer, ambrisentan or Letairis and macitentan. The nitric oxide pathway is normally important in regulating control of pulmonary vasomotor tone. Nitric oxide is produced by the vascular endothelium, and is both a vasodilator and antiproliferative agent. And in the setting of PAH, NO production by the pulmonary vascular endothelium is impaired. We target this impairment by augmenting the nitric oxide signal. We use PDE-5 inhibitors, phosphodiesterase type 5 inhibitors, specifically sildenafil and tadalafil that inhibit the breakdown of phosphodiesterase type 5 and thereby augment the cyclic GMP signal. We also use a soluble guanylate cyclase activator to directly activate cyclic GMP, and that drug is riociguat. So we have 2 drugs that target in slightly different ways the diminished NO signal by augmenting what's available. Final pathway, which is also a very important pathway is the prostacyclin pathway. And prostacyclin is produced by the normal vascular endothelium. It is a vasodilator. It's antiproliferative and it inhibits platelet aggregation and prostacyclin synthesis like nitric oxide is impaired in the pulmonary endothelium -- vascular endothelium in PAH. We target this deficiency by either giving prostacyclin or prostacyclin analog such as epoprostenol, treprostinil or iloprost, or by directly targeting the prostacyclin receptor with drugs like -- I'm sorry, like selexipag, which is a prostacyclin receptor agonist. [indiscernible] is another one undergoing investigation. So all of our current therapies target these 3 pathways that we know are important, but we know it's more complex than that, that there are other pathways that are important, and we'll address those shortly. The next slide shows how we assess risk or disease severity in PAH. We use a risk stratification system and all of the prognostic criteria shown on the left, essentially indirectly or directly assess the ability of the right ventricle to function. We use an assessment of functional class and that is what the patient is able to do in terms of physical activity. Patients who are Class I or II have either no symptoms or symptoms only on moderate exertion. For example, they can climb a flight of stairs. Patients who are Class III have symptoms on milder exertion. They have to stop to climb a flight of stairs because the right ventricle is unable to pump an adequate amount of blood to deal with the physical exertion. And patients who are in Class IV are the sickest patients, the highest risk, those patients have symptoms at rest. Exercise capacity is typically assessed by 6-minute walk test. Normal is over about 500, and you can see that as the risk increases, severity increases, the ability to walk a distance in 6 minutes is impaired. Biomarkers such as NT-proBNP or brain natriuretic peptide are markers of right ventricular stress. A low level implies that the right ventricle is handling the pressure and stress reasonably well, whereas elevated levels indicate right ventricular stress that is excess and poorly handled. By right heart catheterization, we can directly measure parameters, indices of right heart function and the right atrial pressure gives us an idea of the ability of the right ventricle to handle volume. And as the right ventricle fails, the right atrial pressure increases as volume backs up. Similarly, the cardiac index with the amount of blood that the right ventricle can pump through the lungs per minute decreases as right-sided heart failure progresses. And so this gives us an idea of disease severity and also the degree of aggressiveness with which we have to address treatment in patients and their overall survival. The next slide shows that despite our currently approved therapies, the morbidity and mortality of this disease remains unacceptably high. On the left, you can see the results of the European registry that show overall survival as a function of the risk assessment that I just showed you previously. You can see that there is a gradation from those with low risk to those with high risk in terms of overall survival, with high-risk patients having an overall 5-year survival of 40% or less. Those who are low risk do much better. But even in that group, there is an overall 75% survival or so for 5 years. So clearly, even though we are improving patients, there's work to be done, and there needs to be other targets that are identified and addressed that need to be looked at to enhance our overall armamentarium. Similarly, on the right-hand side, results of a French registry, and you can see that overall survival relates to the number of low-risk criteria achieved. It's quite good. If you have all parameters in the low-risk group, whereas it's quite poor when you have predominant parameters in the high-risk group. Next slide emphasizes that while we've made progress, we only target 3 pathways in this disease at present, and we need to look for new ones. The bottom shows that the final common pathway of this disease is vascular remodeling, the successive growth and proliferation. There are a number of factors that contribute to this and they are likely to interface with each other. So there's no magic bullet, but there are certainly interfacing complex contributions by mechanical strain, inflammation, low oxygen, genetic factors, altered gene regulation with a final common pathway of altering the balance between anti and proliferation, anti and proinflammatory stimuli and anti and profibrotic gene expression. So there's work to be done above and beyond where we currently are. And I'll pass it over to Dr. McLaughlin now, who will talk in more detail about some of these specific novel pathways as targets.

Well, great. Thank you. That was a wonderful summary, and I feel very privileged to have been involved in this field for well over a couple of decades now and working with you, Lewis. We've come a long way in treating PAH patients. And you have very nicely summarized the drugs that we've developed over the past 2 decades, and they fall into primarily 3 vasodilator pathways. If you'll go to the next slide. I'd like to highlight that over the past few years, it's really been exciting in that we've seen multiple novel targets that attempt to address the underlying proliferative fibrotic and inflammatory disease pathogenesis of PAH. And we're starting to enter later stages of research and even some success in the clinic with these therapies. So it's really wonderful to complement the 3 pathways that Lewis described with some novel mechanisms of action. And what I'm really excited about today is that we are highlighting a novel molecular entity that is addressing this pathogenesis in multiple potentially complementary ways, which are highlighted on this side. First, I'll focus on the rationale behind inhibiting certain growth factors, namely PDGF and c-KIT, which already have clinical proof of concept. Then we'll look at the role of macrophages, which excrete PDGF and express CSF1R in contributing to the vascular remodeling seen in PAH. The CSF1 receptor is a transmembrane receptor with a kinase domain that is closely related to the PDGF receptor. Finally, I'll briefly go into an interesting recent finding about potential crosstalk between the PDGF pathway and the BMPR2 signaling pathway, a pathway that recently saw proof-of-concept success in a Phase II study. So the next slide, talks -- refers a little bit to PDGF. PDGF was identified as a potential growth factor underlying PAH in the late 1990s, which led to translational work in the 2000s and eventually clinical proof-of-concept with the repurposed oncology tyrosine kinase inhibitor imatinib in the 2000s. The next slide highlights the body of research that has grown from these initial discoveries and have made very compelling -- a very compelling case for targeting PDGF in PAH. The PDGF pathway is markedly upregulated in pulmonary vascular lesions in PAH patients. Notably, the PDGF beta gene was recently found to have the most upward -- to be the most upregulated gene in idiopathic PAH. Animal models provide further evidence for PDGF receptor role in this disease. For instance, if you block PDGFR beta signaling, PAH cannot be induced in a hypoxia animal model of the disease. Furthermore, multiple preclinical animal studies have demonstrated that PDGFR inhibition could be effective. And in the clinical setting, imatinib demonstrated efficacy in a Phase III study with a robust effect on pulmonary vascular resistance and 6-minute hall walk, but it was limited by its safety and tolerability profile, and that was the IMPRES study. The next slide depicts at a high level how the PDGFR receptors contribute to the vascular remodeling underlying the disease. There are 2 major isoforms of the PDGF receptor, alpha and beta. And these 2 major isoforms mediate both overlapping and distinct signaling pathways within different cell types. The PDGF alpha and beta receptors play equally important roles in pulmonary arterial smooth muscle cell proliferation, whereas the beta isoform plays a more prominent role in the proliferation of fibroblast observed in PAH. If you go to the next slide, we'll now turn to c-KIT. c-KIT was also identified as an important growth factor involved in pulmonary vascular remodeling in the mid-2000s, particularly in the cells implicated in perivascular inflammation, something that we don't often pay enough attention to, the perivascular inflammation. If you'll go to the next slide, we'll go into more detail about c-KIT. Here, you can see that the immunohistochemistry in PAH lung samples has shown the presence of c-KIT positive cells, which is especially prominent in the perivascular inflammatory cells. An analysis of lung and pulmonary arterial samples has shown increased gene expression of c-KIT in idiopathic PAH. c-KIT-positive endothelial cells may also secrete PDGF, and perivascular c-KIT-positive mast cells have been shown to secrete pro-inflammatory cytokines and tryptase that further contribute to inflammatory processes in PAH. So this is nicely building the inflammatory and the proliferative pathway here, which is -- which are pathways that we haven't yet targeted. Now if you'll go to the next slide, we will highlight the growing appreciation of the role of macrophages. Macrophages have also been identified as one of the most important inflammatory cells in the development and exacerbation of PAH and really have not gotten due attention yet. On the next slide, we'll talk more about the macrophage-mediated inflammatory and immunologic response that contributes to vascular remodeling in PAH. Macrophages, which express CSF1 receptor, are now recognized to play an important role in PAH pathology. And there are several lines of evidence that support this hypothesis. First, activated CSF1R-positive macrophages accumulate around pulmonary arterials in PAH. This has been shown in vivo in PAH patients with positron emission tomography. Macrophage activity in PAH is associated with BMPR2 levels. The decrease in BMPR2, characteristics of PAH, result in induction of GM-CSF and macrophage recruitment. Notably in the BMPR2 knockout mouse, there is significant pulmonary inflammation due to activation of tissue macrophages. Furthermore, inflammatory macrophages secrete PDGF and stimulate pulmonary artery smooth muscle cell migration and proliferation, accelerating that feedback loop. Thus they are part of the vicious cycle of inflammation, hyperproliferation and fibrosis that characterize PAH. The next slide reviews some very interesting crosstalk between these pathways. I want to review some recent findings showing the evidence of overlap between the PDGFR and another antiproliferative pathway in PAH. The pathway depicted on this slide is the effect on the BMP/TGF beta signaling pathway. BMP/TGF beta signaling is unbalanced in patients with PAH, which further drives proliferation and vascular remodeling. Interestingly, it has been found that there is crosstalk between the PDGF pathway and the BMP/TGF beta signaling pathways. And in particular, activation of PDGF receptors was found to induce a micro RNA 376 that caused a decrease in BMPR2 expression. So by blocking PDGFR, you could also potentially increase the expression of BMPR2, complementing alternative recent approaches to inhibit TGF beta active in signaling balances. And as a spoiler alert, Dr. Zisman will be showing you the potential impact of seralutinib on BMPR2 in an animal model of PAH. So going to my last slide, I'd like to summarize at a high level, some of these concepts that we've discussed. I've gone through the 3 novel treatment approaches relevant to our discussion today. The first one, targeting growth factors, specifically PDGFR alpha and beta and c-KIT is supported by strong and extensive body of literature and has shown clinical proof of concept with imatinib. Imatinib, however, was not originally designed for PAH, and it has some significant limitations due to adverse effects. I also went over the role that macrophages play in secreting PDGF and driving perivascular inflammation, which plays a key role in the cycle of inflammation, hyperproliferation and fibrosis that characterize PAH, a cycle that we have not yet targeted in our therapies. And finally, I review the potential crosstalk between the PDGF and the BMP/TGF beta signaling pathways, whereby inhibition of PDGF could potentially lead to higher expression of BMPR2, which is excellent. The potential for our molecule and mode of administration that not only addresses the safety concern seen with imatinib, but also can regulate the activity of macrophages in the lungs via CSF1R and impact BMPR2 signaling and is very exciting to me. And with that, I would like to turn it over to Dr. Zisman from the Gossamer team to go over the characteristics and preclinical development of Gossamer's clinical product candidate, seralutinib. Dr. Zisman?

Thank you, Dr. McLaughlin. Next slide, please. I would now like to introduce you all to seralutinib. Seralutinib was specifically designed and developed as a treatment for PAH and targets the 3 kinases discussed by Dr. McLaughlin, namely the PDGFR receptor kinases, CSF1R and c-KIT. Seralutinib is formulated as a dry powder for inhalation. The powder is engineered to have aerosol properties that achieve deep lung deposition. The program is now in Phase II and is being developed as a treatment for WHO Group 1 pulmonary hypertension. Patent protection extends to 2034, and we have orphan disease designation from the FDA and EMA. Seralutinib is a more potent inhibitor than imatinib of key signaling nodes associated with pathological remodeling in PAH. Seralutinib is tenfold more potent at inhibiting the PDGF receptor beta isoform than imatinib, several orders of magnitude more potent at inhibiting CSF1R compared to imatinib and tenfold more potent to c-KIT inhibitor. As Dr. McLaughlin pointed out, it is likely important to inhibit both of the major PDGF receptor isoforms, the alpha and beta isoforms, equally and potently. In proliferation assays, as shown in the bottom panel, seralutinib shifts the curve to the left, indicating that it is an order of magnitude more potent at inhibiting both pulmonary artery smooth muscle cell proliferation and fibroblast proliferation compared to imatinib. Next slide, please. In the development of seralutinib, consideration of safety has played as big a role as our potential efficacy profile. On this slide are shown kinases inhibited at greater than 70% at 1 micromolar by seralutinib other than our key targets in the cell-free assay. In our GLP respiratory, cardiovascular and chronic toxicology programs, we have not seen evidence for pulmonary or cardiovascular toxicity or any incidence of hypertension. Furthermore, we have not seen adverse events related to potential off-target kinase inhibition in our clinical program to date. We believe minimal systemic exposure of inhaled seralutinib reduces the risk of adverse events. To further address concerns related to potential off-target effects, we used an assay to examine the effect of kinase inhibitors on normal endothelial cell function as shown on the next slide. In the early development of seralutinib, we used an elegant and highly predictive transendothelial resistance assay to evaluate candidates for the desired profile. Because there have been case reports of drug-induced pulmonary hypertension caused by another kinase inhibitor used to treat cancer known as dasatinib, this assay was considered part of our critical path in designing an appropriate kinase inhibitor specifically for PAH. The assay examines electrical resistance across monolayer of human arterial endothelial cells. If the monolayer is intact and functioning normally, resistance is high. If there is a breakdown in the normal endothelial barrier, then resistance will drop. On this graph, the x-axis is time and the y-axis is normalized resistance. So a normal value is 1. Seralutinib showed no adverse effect on normal endothelial barrier function in this transendothelial resistance assay that used human pulmonary artery endothelial cells. In other words, its effect was no different than that of the vehicle DMSO. In contrast, dasatinib showed a dramatic and profound adverse effect on endothelial barrier function as shown by a severe loss of electrical resistance across the endothelial cell monolayer. Next slide. Okay, great. We examined the relationship between lung and systemic exposure after administration of inhaled seralutinib in rats. We found that lung exposure of inhaled seralutinib was about 30-fold higher than plasma levels. We also examined the effect of seralutinib on autophosphorylation of PDGF receptors in vivo in a rat. In these experiments, PDGF-BB was administered to rats by tracheal insufflation with or without prior inhaled treatment with seralutinib. At all doses of seralutinib study, this autophosphorylation was significantly decreased. The PK profile from human Phase I studies is similar to the systemic profile observed in the rat. Dr. Roscigno will be showing you some of this human PK data during his presentation. Based on the sustained concentration of seralutinib in the rat lung, twice a day dosing is justified. Extensive PK/PD modeling was used to select the doses we are using in the clinical program. Preclinical efficacy studies of inhaled seralutinib have been performed in several animal models of severe PAH that replicate key features of the human disease. The upper panel summarizes the results of the study performed in the well-accepted Sugen 5416/hypoxia rat model. The left upper figure shows the results of the telemetry study in which a telemetry catheter was implanted in the pulmonary artery of the rat, so that we could measure pulmonary artery pressures in ambulatory animals. At the start of treatment, the pulmonary artery pressure in these animals was about 100 millimeters mercury, indicating severe pulmonary hypertension. Over the course of 2 weeks of treatment with inhaled seralutinib, there was a highly significant decrease in the pulmonary artery pressure compared to the vehicle group. This corresponded to marked improvement in pulmonary vascular remodeling as depicted in the upper photomicrograph. We can quantify this improvement with the grading system, in which Grade 0 means there is no obstruction of the pulmonary arterial, Grade I means there is less than 50% obstruction and Grade II means there is greater than 50% obstruction of the pulmonary arterial due to abnormal neointimal cell proliferation. Seralutinib significantly decreased the number of Grade II lesions and increased the number of Grade 0 lesions. The lower panel summarizes the results of the study performed in the monocrotaline pneumonectomy rat model of PAH. This model is a more aggressive model of PAH compared to the monocrotaline only model. In the monocrotaline pneumonectomy model, we are able to observe significant new intimal lesions characterized by abnormal cell proliferation as is often observed in human PAH. In this study, as shown in the left lower figure, inhaled seralutinib significantly decreased right ventricular systolic pressure compared to vehicle, and correspondingly decreased right ventricular hypertrophy as quantified by the Fulton index. The lower photomicrograph shows a lesion of extensive neointimal proliferation with abnormal cells essentially occluding the vessel lumen in addition to severe perivascular inflammation. Treatment with inhaled seralutinib in the example shown essentially returned the lumen vessel to normal and decreased perivascular inflammation. Another way we can quantify this effect is by calculating the lumen to ratio. With reversal of abnormal remodeling, we should see an increase in the ratio of the open lumen area to the area of the vascular media. This improvement was achieved with seralutinib, as shown in the right lower figure. Next slide, please. We performed another study in the Sugen 5416/hypoxia model in which inhaled seralutinib was directly compared to gavage-administered imatinib. The left figure shows that inhaled seralutinib significantly improved right ventricular systolic pressure more so than the imatinib treated group as well as compared to the vehicle group. In addition, as shown in the middle figure, seralutinib significantly decreased NT-proBNP levels. And as Dr. Rubin explained, NT-proBNP is a biomarker of right heart function and is elevated in the setting of right heart failure that can occur in PAH. The right-hand figure examines lung BMPR2 levels. In the vehicle and imatinib treated groups, BMPR2 levels were decreased, but inhaled seralutinib returned lung BMPR2 levels to normal. Next slide, please. We have also seen additive effects of seralutinib on top of standard of care in a preclinical model of severe PAH. The model involved overexpression of PDGF in the lung and PAH induction with Sugen 5416/hypoxia. The PAH animals were treated with vehicle, combination of tadalafil and ambrisentan, which is the standard of care approach, seralutinib as monotherapy or seralutinib in combination with tadalafil and ambrisentan. As you can see on the left, seralutinib performed very similarly to combination tadalafil and ambrisentan on measures of right ventricular systolic pressure. Notably, when seralutinib, tadalafil and ambrisentan were used together, there was a highly significant additive improvement in RV systolic pressure. Furthermore, seralutinib alone and in combination with tadalafil and ambrisentan showed a greater improvement in pulmonary vascular remodeling than standard of care or vehicle. This is clearly shown in the photomicrograph, where vehicle is shown in the upper left panel; tadalafil and ambrisentan in the right upper panel; seralutinib treatment is shown in the left lower panel; and combination seralutinib, tadalafil plus ambrisentan is shown in the right lower panel. Seralutinib essentially returned the pulmonary arterial towards normal. Next slide. In summary, seralutinib was specifically designed as an inhaled treatment for PAH. It targets key kinases implicated in PAH, the PDGF alpha and beta receptor kinases, the CSF1 receptor kinase and c-KIT. Seralutinib is highly potent against these kinases in cell-based assays. And as I have shown you, more so than imatinib. Furthermore, this is borne out in proliferation assays wherein seralutinib shifts the curve to the left in pulmonary artery smooth muscle cells and human lung fibroblasts. Importantly, seralutinib did not have any adverse effects on normal endothelial cell function. The inhalation route of delivery targets our drug where it is needed. In our animal studies, we achieved approximately 30-fold higher lung concentrations compared to systemic exposure. Finally, in several animal models of severe PAH that replicate key aspects of the human disease, inhaled seralutinib was effective in decreasing pulmonary hypertension and reversing abnormal pulmonary vascular remodeling, decreasing NT-proBNP and increasing pulmonary BMPR2. Seralutinib is now in clinical development and I will hand it off now to my colleague, Dr. Roscigno, to tell you more about that program.

Thank you, Larry, and hello, everyone. Before I dive into the clinical program for seralutinib, as this is my first major investor event with Gossamer, I wanted to briefly introduce myself. I joined Gossamer earlier this year in August and have over 20 years' experience developing pulmonary hypertension drugs. Starting with Remodulin when I was at United Therapeutics and more recently, inhaled therapeutics like Tyvaso and [indiscernible] dry powder inhaler prostacyclin. I am pleased to be sharing our progress with the seralutinib clinical development program with all of you today, and I am personally very excited to be part of this development team and program. Dr. Rubin and Dr. McLaughlin have both said, despite a number of approved drugs, there is still significant unmet need for those suffering from pulmonary arterial hypertension. As you have heard, there is a strong rationale for this agent. I am confident it has the potential to significantly impact this disease. Next slide. Thank you. Today, I will briefly review the seralutinib formulation and delivery system that is designed for targeted delivery to the lung using a discrete and uncomplicated dry powder inhaler or DPI, with a convenient BID twice daily dosing regimen. Next, I will present the data from the Phase I program, where we have evaluated the safety and tolerability of seralutinib in both healthy volunteers and in subjects with pulmonary arterial hypertension, characterized the PK profile and demonstrated target pathway engagement. Finally, I will review Gossamer's Phase II program plan and share some of the details of the ongoing TORREY study in subjects with PAH. Next slide, please. As Dr. Zisman described earlier, seralutinib is a small molecule, platelet-derived growth factor receptor inhibitor. This compound is a new molecular entity and has been -- that has been specifically designed to treat several of the underlying pathways involved in the pathogenesis of PAH. Seralutinib is designed for targeted delivery to lung, maximizing target engagement at the site of the disease and minimizing systemic exposure, which, we believe, will translate into systemic tolerability and robust treatment effect. So in order to achieve a deep lung delivery and low systemic exposure, both the drug particle and delivery system needs to be optimized. It starts with the drug particle size range of 1 to 5 micrometers, resulting in a fine particle fraction or dose delivered to the lung of greater than 50%. This is a standard for good aerosolization and well within the respirable range for inhaled therapies. We have combined this formulation with an approved DPI, the Plastiape RS01, that is both FDA approved, CE Marked, easy for patients to use and has a long performance track record. Next slide, please. So now we'll talk about some of the -- how seralutinib formulation is engineered for deep lung deposition. The particle characteristics are carefully controlled during the manufacturing process to optimize deep lung deposition. And we've looked at this deposition was modeled using computational fluid dynamic simulations. So here we use the calculations from the drug particle characteristics to make 3D reconstructions of the airways obtained from CT scans in human subjects. This modeling can tell us how much of the drug is deposited in central airways versus peripheral airways or the deep lung. As shown here, the red signal indicates deep lung deposition of seralutinib particles. Next slide, please. Let's move into our Phase Ia studies. So as we discussed earlier, seralutinib is a new molecular entity and Gossamer has completed 2 Phase I studies, one in healthy volunteers and one in subjects with pulmonary arterial hypertension. The objectives of the Phase Ia study were to evaluate the safety and tolerability of single and multiple inhaled doses of seralutinib in healthy volunteers as well as to characterize the PK profile of the drug. This was a randomized, placebo-controlled Phase Ia study in which we administered seralutinib to 62 healthy adult subjects in doses of a -- single doses of 3.75 milligrams to 90 milligrams and multiple doses of 18 milligrams to 90 milligrams twice daily for 7 days. The Phase I healthy volunteer dosing schedule is shown on the left panel of this slide. And as a reminder, the dose range of interest and the dose regimen has been derived from preclinical target engagement and modeling is 45 milligrams to 90 milligrams BID. Next slide, please. So let's first start with the Phase Ia pharmacokinetic results that are summarized in this slide. So following -- first off, seralutinib was dose proportional and well tolerated in all doses tested. And following single and multiple inhalations, the drug was rapidly absorbed into the systemic circulation with a time -- median time to maximum concentration or T-max, the range between 3 to 5 minutes post dose. Seralutinib plasma concentrations declined rapidly with the mean terminal elimination half-life that range between 3.1 to 5.8 hours. The figure at the bottom half of this slide shows the seralutinib plasma concentration versus time for the 90 milligram BID dose at days 1 and 7. The y-axis is drug concentration and the x-axis is time. Importantly, this PK profile that we see here is consistent with other data showing seralutinib has low systemic plasma levels even at doses up to 90 milligram BID, the highest dose tested, and also this dose is at the high end of the range for target engagement coverage based on our preclinical work. The rapid clearance we're seeing here is exactly what we want to see to help us avoid the systemic toxicities associated with a kinase inhibition. As you'll recall from Dr. Zisman's presentation, the sustained lung exposure observed in our animal models gives us confidence that a BID dosing regimen will ensure adequate target coverage in the lung for 24 hours. Next slide, please. So now moving on to the healthy volunteer safety data. There were no serious adverse events reported in this study, no reported adverse events that led to study drug discontinuation. There were no dose-limiting toxicities. The most common adverse events that we observed were throat irritation and cough, which were mild in severity, similar to the incidence in the placebo group. And importantly, there were no clinically significant abnormal values. Next slide, please. So to summarize the Phase Ia single ascending dose and multiple ascending dose conclusions following both single and multiple oral inhalation, seralutinib was rapidly absorbed and cleared from the systemic circulation. The dose increased -- exposure increased in a dose proportional manner following single and multiple dose administration. And after C-max, seralutinib plasma concentrations declined rapidly. On the safety side, there were no SAEs or withdrawals due to treatment-emergent adverse events reported for the study. And importantly, seralutinib was observed to be well tolerated at doses of up to 90 milligrams with only mild treatment-emergent adverse events. This gives us confidence to move into our next study, which is the Phase Ib study in patients with pulmonary arterial hypertension. Next slide, please. So now we'll discuss the initial preliminary results from the ongoing 2-week Phase Ib clinical trial in PAH patients. The study objectives and study design are described on the right panel of this slide. And I want to put this study in context with -- in the larger context of Phase I and our overall clinical program. Specifically in this study, we are asking if the PK profile in PAH patients is similar to what we observed in healthy volunteers? Do we see a similar adverse event profile in patients? And also confirmation of target engagement and the absence of any prolonged systemic pharmacodynamic effects. This study also allows us, for the first time, to obtain some open-label chronic data on seralutinib. On the left panel is the study schema. This is a randomized, blinded, multicenter trial. After screening period, subjects are randomized to either drug or placebo in a blinded fashion. It's a 2-week evaluation, and that's followed by an optional open-label extension. So as you may recall, this study was initiated enrollment earlier in 2020, and enrollment of this study was challenging as it coincided with the start of the coronavirus pandemic. Out of an abundance of caution and the reprioritization of COVID research at many of our investigative sites, the study was actually interrupted for several months despite good enrollment. We are pleased to say that in collaboration with our sites, COVID mitigation protocols and procedures were put into place, allowing enrollment to safely restart in Q3 of this year. We have been able to mitigate the pandemic push forward through it and now have completed enrollment of the study. Next slide, please. I want to spend a moment describing the patient demographics and baseline characteristics of the subjects that enrolled in the Ib study. This slide summarizes that information. So the patient demographics are consistent with what we would expect to see and representative of the target population for seralutinib. I want to point out on the background PAH medicines, that many of these subjects were either on double or triple combination therapy, and importantly, a majority of the subjects were also on a prostacyclin or IP receptor agonist, which highlights Dr. Rubin and Dr. McLaughlin's earlier messages that there's still unmet need in this disease. Next slide, please. So let's start reviewing the results. We'll start with the safety and pharmacokinetics. Seralutinib was well tolerated, and there were no dose-limiting toxicities observed at doses up to 90 milligrams BID for 2 weeks, which was the length of the blinded period of this study at the highest dose tested, which was 90 milligrams. None of the AEs reported resulted in dose reduction, interruption or discontinuation of the study drug. The PK results are displayed in the figure on the right. A seralutinib plasma concentration versus time profile on day 14. The y-axis is drug concentration and the x-axis is time. Doses of 45 milligram and 90 milligram BID are shown here. The clearance and systemic exposure are similar in healthy volunteers and in subjects with PAH. Importantly, this profile is also consistent with other data showing seralutinib has low systemic plasma levels even at these high doses of 90 milligram BID, the high end of the range for our target engagement coverage. I want to spend a few minutes talking about another important piece of data from this study. Within the same dose range of 45 to 90 milligrams BID, we were able to look at a peripheral blood target engagement marker, CSF1R which we talked about earlier today, and this indicated a targeted pharmacologic effect. I'll review this in detail on the next slide. So if you recall from Dr. Zisman's review and Dr. McLaughlin's review, CSF1R is one of the targets for seralutinib. While we can't directly measure pharmacodynamic activity in the lung, we can measure CSF1R activity in systemic circulation as an indicator that seralutinib is engaging one of its targets. The panel on the left depicts how we look at seralutinib engaging the CSF1R pathway in PAH patients. So we cannot assay target pulmonary -- we cannot assay pulmonary target engagement directly in humans, but can do so indirectly through inhibiting CSF1R internalization or update. Specifically, we're looking for seralutinib to prevent the loss of the CSF1R signal, which indicates it is blocking the CSF1R uptake. The figure on the right shows this dramatic effect. This is data from the first 7 subjects in the Phase Ib study. On the left-hand side of the figure, CSF1R uptake is blocked in the seralutinib group as compared to placebo. This occurs quickly, 5 minutes after seralutinib administration, coinciding with its C-max. On the right-hand side of the figure, we also see a lack of prolonged systemic pharmacodynamic activity of seralutinib at 120 minutes. This is consistent with the low systemic drug levels and rapid clearance of the drug. Recall earlier, based on our pharmacokinetic and pharmacodynamic modeling in animal studies, we know that seralutinib levels in the lung are about 30-fold higher than in circulating plasma over time. Based on this evidence, we believe that even though the systemic target engagement is short-lived, the target engagement of seralutinib in the lung will be relatively long-lived in a manner sufficient to justify twice a day dosing. Next slide, please. So to summarize the Phase Ib study, we're thrilled and really pleased to share these Phase Ib preliminary results with you today. The drug was well tolerated in PAH patients. The PK profile in PAH patients is consistent with the Phase I healthy volunteer results and also consistent with an inhaled therapy. Importantly, seralutinib has -- is now showing that we can maximize target engagement at the site of disease and minimize systemic exposure, which we believe will translate into systemic tolerability with a robust -- and a robust treatment effect. In this 2-week study, these key questions were answered, and this data is supportive to progress seralutinib into Phase II development. So now I want to turn our attention to our Phase II program and share some of the details of the ongoing TORREY study in subjects with PAH. I first want to announce, though, that we are pleased to say that as of Monday, the first subject has been randomized and enrolled into this study. In our Phase II program, we need to evaluate chronic safety and tolerability and importantly assess the clinical effects of seralutinib in subjects with PAH. We have designed this Phase II study with input from our steering committee to address these key questions. The primary endpoint of this 24-week study is change in pulmonary vascular resistance, or PVR, which is considered to be the gold standard for PAH investigational drugs at this stage of development. We'll get into more detail on all the endpoints being studied on the next slide. And one final note about the study name. In case you were wondering, Gossamer's study team came up with TORREY as a nod to the company's San Diego heritage. Next slide, please. So this slide depicts the TORREY study objectives as well as the major endpoints we are studying. In addition to the statistically powered primary endpoint of PVR change, a secondary endpoint of exercise capacity, safety as well as a comprehensive set of exploratory endpoints listed here will be evaluated to fully define the treatment effect of seralutinib. We are looking to demonstrate a statistically significant improvement in PVR as well as show strong directionality with these other endpoints in the context of good safety and tolerability profile to provide us with the data to advance seralutinib to Phase III. Next slide, please. So briefly, I wanted to review some of the eligibility criteria for this study. As you can see here, I also want to provide you -- there's a clinicaltrials.gov reference to go through at your convenience to review these. In brief, we're basically studying WHO Group 1 PAH functional class II and III and importantly allowing treatment with standard of care approved PAH background meds, including prostacyclins. Next slide, please. As far as a key exclusion criteria, we are excluding WHO Groups 2 through 5. Also, we are excluding inhaled prostanoids. And again, the full -- a more complete list is available on clinicaltrials.gov. Next slide, please. I wanted to briefly cover some operational considerations for this study as well. So the anticipated enrollment is 80 subjects will have 40 per treatment arm. And again, we'll be focusing on in this study WHO Group I pulmonary arterial hypertension functional class II, III. And as you can see here, we have a large number of investigational sites, approximately 70. This was upsized to give us optionality to, if you will, outmaneuver and mitigate the ongoing pandemic to minimize its impact on enrollment. During the past several months, we've learned a lot about how to mitigate the coronavirus pandemic with our investigative sites, and we're going to continue to work collaboratively to enroll this study. As such, we have built several COVID-19 contingencies into the protocol that you can see on this slide, and we are confident we'll be able to manage our enrollment through the current environment. Next slide, please. I wanted to wrap up by providing a brief overview of 2 interesting sub-studies that are part of the TORREY study that may provide additional insight how seralutinib may be impacting PAH beyond the traditional measures we typically study in clinical trials. The first is a respiratory functional imaging study using high-resolution CT scanning information from our sites and newer technology from a company Fluidda. The information in the standard CT scan will be used by Fluidda to reconstruct the pulmonary vasculature in 3 dimensions. This exploratory sub-study will look at the change in pulmonary arterial blood volume in this subpopulation of blood vessels as well as others to quantify the effect of seralutinib on pulmonary vascular remodeling at week 24. The second sub-study -- next slide, please. The second sub-study I wanted to highlight is a heart rate expenditure sub-study that will be done during the conventional 6-minute walk test. This sub-study may detect differences in cardiac exertion that may not be reflected in the standard 6-minute walk test. With that, I want to thank you for your attention. And now I would like to introduce Mario Orlando, Gossamer's Vice President of Commercial and New Product Planning.

Well, thank you, Rob. It is indeed a pleasure to be with you all today to share some of our thinking regarding the commercial opportunity for seralutinib in PAH. Next slide, please. In 2019, the worldwide PAH market generated $5.2 billion in revenue. It's important to note that the ERA class dominates with a 44% share and the -- with the total prostacyclin pathway therapies that are close second at 42% share. This is consistent and certainly not surprising given the utilization of various combination therapies to treat PAH. Therapeutic choice in PAH although has been somewhat limited to the product classes that are listed on the slide, primarily PDE-5 alpha inhibitors, ERAs and prostacyclin pathway therapies that are primarily focused on vasodilation pathway. But that's about to change significantly with the introduction of new agents with novel MOAs. It is noteworthy to mention that this accepted treatment approach of utilizing combination therapy bodes well and serves as an excellent platform to drive the growth of these new agents in development, which physicians have indicated they would use in combination with currently available therapies. Next slide, please. So pursuing this line of thinking, results from a survey conducted with PAH physicians reveal that: one, a significant majority of physicians felt that PAH is a multicomponent disease, which should be treated with combination therapy. Therefore, it's likely that -- it's likely to be expected the combination therapy will be an accepted approach to treating PAH at the time that new agents potentially enter the market. Physicians also felt that current treatments fall a little short at controlling the disease, which presents an opportunity to address an unmet need for new therapeutic approaches. This was also exemplified in Dr. Rubin's presentation that despite available therapies, registry data continues to report high morbidity and mortality. Next slide, please. Speaking of new treatments -- one moment. Recently, PAH physicians were asked to share their thoughts about new products in development. The current landscape, which has been relatively stagnant, is about to glide forward with the potential introduction of 2 new forms of prostacyclin therapy: dry powder inhaled treprostinil and once-daily oral prostacyclin receptor agonist, ralinepag, which will compete directly with [ post data -- trial data ]. Although physicians thought that both products could potentially help to improve prostacyclin therapy, they did not consider these new product introductions to be significant game changers. Next slide, please. However, things start to get -- not next slide, sorry -- yes, things start to get exciting as we slide down the waterfall. Physicians were very excited and highly anticipated the availability of new agents with novel to potentially treat the underlying pathology of PAH. Physicians felt that, if approved, these agents would be combined with currently available therapies, causing a shift in the treatment landscape. Surveyed physicians also mentioned that patients and doctors would continue to desire more convenient, hassle-free therapies with unique MOAs. Given that sentiment, we feel confident that seralutinib may potentially be well positioned to enter the PAH market. Next slide, please. The seralutinib value story. Well, a significant unmet need as expressed by physicians is that current standard of care in PAH does not fully address underlying pathological mechanisms of disease and represents an unmet need. As has been previously stated by my medical colleagues, seralutinib has an innovative selectivity profile targeting several pathways, including the PDGFR alpha and beta, c-KIT, CSF1R and also modulating the BMPR2. It is proposed that targeting these pathways will address underlying fibrotic, inflammatory and proliferative pathologies that characterize PAH. Importantly, the twice-daily inhaled delivery of seralutinib via a proven device will provide convenient patient self-administration and maximize targeted drug delivery to the lung. In conclusion, seralutinib has the potential to be an important addition to current standard of care, extending efficacy beyond what is currently attainable with maximal combination therapy today. We at Gossamer are particularly excited about this opportunity for a number of reasons. But first and foremost, it's because physicians are excited. And why are physicians excited? They tell us it's because they anticipate the potential approval of new agents to address their unmet medical needs, whether it's reducing symptoms, improving quality of life for their patients or potentially addressing the underlying pathology of PAH, including vascular remodeling. Physicians are anticipating the opportunity to potentially improve the lives of their patients. This is an exciting time to be developing new and novel therapies for PAH, and I share in Dr. Roscigno's excitement. I'm especially excited about seralutinib since it offers a novel, multi-faceted approach to treating PAH, which potentially differentiates it from the competitive landscape and, if approved, will be afforded the opportunity to be combined with background therapy, as depicted on the slide, and potentially extend efficacy beyond what is currently attainable today across a broad spectrum of patients. Thank you. Over to you, Rob.

Thank you, Mario. And at this point, our presentation is complete. And operator, we'd like to open the line up for questions.

[Operator Instructions] We have our first question coming from the line of Carter Gould.

I guess, first, to start off for Drs. McLaughlin and Rubin. I think it's -- given sort of the context here of the history with imatinib, it'd be helpful, I guess, to get first your understanding sort of the mechanistic explanation or explanation around the patient population for the subdural hemorrhages we've previously seen with imatinib and the timing of those events. And I guess, have you seen enough data -- clinical data here to suggest that -- to give you confidence that there is differentiation on sort of the safety? And then for Dr. McLaughlin, I guess, acknowledging the unmet need in PAH and even if sotatercept ultimately goes on to be approved, how do you think about what you need to see in TORREY to suggest clinical meaningfulness either on 6-minute walk distance or PVR?

Val, why don't you start? And then we'll go to Lew on the first question regarding imatinib.

Okay. So regarding the second question, I think, Robert, Dr. Roscigno really nicely outlined a Phase II study that is really standard in Group 1 PAH studies. You want to understand the mechanism of this drug on the true important factors of the disease. So what it does to PVR is really critically important. And while we know that PVR is not something that the FDA approves drugs on, it is something that we look for in a Phase II trial to understand whether or not the therapy is really targeting the underlying pathophysiology of the disease. So I think it's really important to look at that in addition to other factors like hall walk and biomarkers and all the others that Robert outlined so nicely, including these 2 very interesting sub-studies that they are doing. Remember, this is going to be a patient population that is highly prevalent and most likely will come in highly treated with a good amount of patients on double and triple therapy. And that's okay because the mechanism of action of this drug is different than those current therapies that are primarily vasodilators. And we would expect this therapy to have improvements in PVR, exercise tolerance and the like on top of a highly treated background population. So what we're looking for is a clinically important and statistically significant change in the primary endpoint of pulmonary vascular resistance with the secondaries, some of which this study may or may not be powered for, but with the secondaries all going in the right direction and a good safety profile. And I think that should give the information needed at the end of the study to understand what the likely effects and outlook for this therapy will be in Group I PAH.

Thank you, Val.

And then were you going to turn to Lew for the question about the subdurals?

Yes. Lew, if you can cover that briefly as that's a different drug, and we're -- the focus of our call is really seralutinib.

Sure. I think the studies with imatinib thus far show some safety concerns but also the balance of safety, efficacy has not been yet in favor of the drug. There seems to be an association with intracranial bleed that was also observed in the study of imatinib in pulmonary fibrosis. But there was also a minimal -- no effect in pulmonary fibrosis. And the treatment effect in PAH really doesn't outweigh the potential risk. We're willing to accept risks for our patients in severe PAH. And a good example of that is epoprostenol, which is a very complex drug -- complex delivery with a good deal of potential serious complications. But we recognize that the benefits there outweigh the potential risks, and the risks can be mitigated through a number of means that potentially could be the case as well with imatinib, but treatment effect there doesn't justify its development at this point in the way that it was developed. So I think the important message with the imatinib studies is that they provide some evidence that there is a treatment effect targeting this pathway that the studies were not optimal in terms of demonstrating the optimal risk/benefit ratio. And that clearly drugs that can target this pathway with reduced risk and potential greater efficacy through a multiple targeting approach have appeal. And I think that there'll be reasonable signals from a Phase II to provide confidence regarding safety to move forward to Phase III development.

Thank you, Dr. Rubin. Larry Zisman, can you add a comment, please?

Yes. I just wanted to supplement some of that information. Thanks so much, Lew. And I'll -- just to mention, in the imatinib study, the subdurals only occurred in patients who were on anticoagulation. So that's an important point to remember. As far as seralutinib goes, the clinical program is excluding patients on anti-coagulation. So that's out of an abundance of caution. However, we would like to mention that we have not seen any adverse effects or any effects on coagulation parameters or platelet function in our GLP tox program or in our clinical program thus far.

We have our next question coming from the line of Joseph Schwartz.

It's great to see this program gaining so much momentum. I know the main Phase Ib was pretty short at 2 weeks, but did you happen to look for any changes in echo or NT-proBNP levels in the main study or its extension? And could you talk a little bit about how many patients have elected to move into the extension and what data you're collecting there and when we might be able to see it?

Sure. Thanks, Joe. It's nice to be talking to you again. I remember talking to you years ago when I was at United. With the Ib results, echo -- we use echo both for safety and also for looking at changes in the right ventricle. With the 2-week data, there was nothing significant in terms of changes. We do have an open-label study ongoing, and we will be looking at those parameters longitudinally. With regards to the number of patients in open-label, this is an ongoing study. There were several that elected to move forward in the open-label during the reopening of the study, if you will, during the first part of the year. Out of an abundance of caution, although we had patients willing to go into open-label, due to the pandemic and concern about their access to the clinic, those patients did not continue. As we move forward, over time, we do plan to report out results of the open-label study as that data comes in. It's still being evaluated, so I can't really comment on it in too much detail. But we do have some exploratory endpoints in there that would be of the type you were asking about, that would perhaps give us a sense of directionality changes in either some of these other endpoints, such as BNP, walk and such. So stay tuned.

Right. Okay. That's great. And then maybe one more for me. What data are you evaluating in order to determine the right dose or doses of seralutinib to develop in TORREY? I might have missed it, but if you could just talk a little bit more about that, that would be great.

Sure. So if you think about how we look at doses to study, there's the preclinical and modeling aspect, which I'll defer to my colleague, Larry Zisman, on. And then there's, if you will, the doses that would be covered in clinical studies from pharmacokinetics. And as you can tell, we're focusing on the 45 to 90 milligram dose range. Larry, can you add a little color on the rationale for some of that from some of our preclinical work?

Yes, sure. Thanks, Rob. So we actually did extensive PK/PD modeling done by our biology and clinical pharmacology groups. And this included considerations, looking at estimated free concentrations in the lung as well as our target to achieve greater than IC -- sustained inhibition over the IC50 for phosphorylation of PDGF receptors in the lung. And I did show you some of that data indicating that we really shut down autophosphorylation of the PDGF receptor at all of the preclinical doses studied. So that information was used in an extensive modeling program to allow us to arrive at the selected doses.

We have our next question coming from the line of Tyler Van Buren.

Just a couple. The first one is a follow-up on the PK/PD discussion. It looks like you guys are reaching Cmax very quickly, and it's being cleared from the plasma very quickly. But can you just remind us what gives you confidence that, that 30x lung-to-plasma exposure ratio that you saw in rats is going to hold up in humans and that the kinetics are going to be the same? And if you look at the 90-milligram Cmax in the plasma, it's double the dose, but it looks almost 3x higher. So is it possible that you guys are saturating the lung, and that's why you're seeing kind of more drugs enter the plasma quickly at the higher dose? And then the second question is related to potential impacts on fibrosis. It's clear that that's possible based upon the mechanism. So can you discuss how you plan to measure potential impacts on fibrosis or ECM deposition long term? Is that potentially through the high res CT sub-study? Or are you looking at it some other way?

Thank you. So Larry, maybe you can start with the concentration in the lung ratio as well as maybe talk a little bit about our deep lung delivery.

Right. So it's excellent question. Thank you. Yes. There's a certain number of assumptions that we use in going from an animal to a human, but they're based in our understanding of the anatomy of the lung and the distribution pattern in the lung. So we've done extensive investigations of where the particle needs to go to achieve an effect. And we think we're at the correct particle size distribution and aerosol properties. We've modeled inhalation profiles from human PAH patients and use that in benchtop testing to show that we maintain the necessary aerosol properties. So we do believe we're getting the lung -- the drug where it needs to go. And then we have a certain understanding about the hydrophobicity of the drug and its retention in the lung. In terms of that peak effect at the dose, that's a good point, but we do not have any evidence for accumulation of the drug, which would be a potential concern. We see similar PK profiles on day 1 and day 14. So there's -- we do seem to achieve a steady state. And so we're not really concerned about accumulation in that regard. With regard to fibrosis, so we didn't get into all the detail, but the Fluidda CT imaging can quantify fibrosis, more so than is possible with standard CT. So we have the potential to look at that as well.

We have our next question coming from the line of Geoff Meacham.

I had 2 quick ones. One, on the mechanism, for Dr. Rubin or McLaughlin. Are there differences in PDGF expression or, let's say, utilization of the pathway when you compare between heavily treated or even rapidly progressing PAH patients versus those that are well maintained? I'm just trying to assess the kind of the PDGF role and the correlation to clinical events. And then I have one follow-up.

That's a great question. I don't know that there has been a correlation made in that situation. There is one study that has shown a correlation between circulating endothelin levels and PAH severity. But to my knowledge, that's not been demonstrated with PDGF. Val?

No, I'm not aware of any literature about that, not just that it's not been demonstrated. I'm not even sure if it's ever been studied.

And again, of course, circulating levels would not necessarily be expressive of what's going on within the lung milieu, but it's an interesting question.

Yes. And I think the only way to really get at that, as I just think about mechanistically how one do it -- would do it, it would really be looking at explanted tissue. And so that would be a highly selective patient population.

Although the sickest ones would certainly be the most likely source of explanted tissue.

Right. That's the point. It's a biased population, yes.

Yes. And then...

Do you have a follow-up, Geoff?

The follow-up is just on seralutinib. Obviously, we'll get the derisking data, or we'll get a good sense for the data in PAH. But there are a lot of other peripheral indications where PDGF may play a role. So I just wanted to get you guys' view of that. At some point, what would you be looking for in the PAH studies to expand the program, not just into larger-scale trials but maybe to other related indications?

Well, I'll start that answer. And obviously, as Dr. Rubin showed on his first slide, there are multiple forms of pulmonary hypertension. And when we do study drugs for PAH, we are always thinking about potential use outside of WHO Group I. And certainly, if there's antifibrotic effect of the compound that could be correlated with the treatment benefit, that would certainly be of great interest to us. Beyond pulmonary hypertension, obviously there's potential in other forms of chronic lung disease. And I'll turn it over to Val or Lew if there's other potential indications here that could come to mind with an agent such as seralutinib.

The obvious one...

So I -- no. Go ahead, Lew.

Sorry. I mean the obvious one would be interstitial lung disease for which our current treatments are sorely lacking. That certainly is a disease of proliferation of the interstitial space, often with inflammation as a component, but not always. As with PAH, the animal models are not ideal, but at least in the bleomycin fibrosis model, which is a fairly commonly used model of interstitial fibrosis induced by the drug bleomycin, imatinib was very effective in preventing and even, to some extent, treating the fibrotic process. Although the clinical trial was negative. But nevertheless, that would be a pulmonary disease in need of novel approaches with proliferation as a key feature, and it would be reasonable to think that targeting PDGF might be a benefit there.

Obviously, we want to focus our current efforts on PAH. But we'll keep an eye out for these other opportunities.

We have our next question coming from the line of Emma Nealon.

So as it relates to the 2 sub-studies you mentioned in TORREY, could you just expand on the rationale for each and how those data might inform development or potentially be used for patient selection or enrichment or faster approval pathways?

So the sub-studies I mentioned won't be used with patient selection. We do have biomarkers that we look at and also our learnings as we go through this development program that may inform us of populations to potentially enrich on as we move the development of the compound further along. I want to give an opportunity here to Larry Zisman, if you wanted to talk a little bit about perhaps a little more color on the heart rate sub-study and maybe a little bit more on the Fluidda sub-study briefly.

Sure. I think as many of you know that there are some limitations to the 6-minute walk distance. There's this idea that in patients who are already on double or triple therapy, demonstrating a benefit for that can be more challenging. But the concept of looking at heart rate expenditure is really trying to get a measure of right heart function. So for example, if a patient has a failing right ventricle, then it won't be able to pump as effectively per heartbeat. So the stroke volume will decrease. And to compensate, the heart rate may increase to maintain cardiac output. And so we want to look at the potential effect in the 6-minute walk distance on that indirect measure of right heart function. So that would mean that if a therapy is effective, the number of heartbeats needed for walking a given distance would decrease. So it's an indirect measure basically of cardiac work. If someone is getting better, they would hopefully need to exert less cardiac work to achieve that walk distance. So that's the idea behind that. That was -- that idea was developed by Jim White's group at the University of Rochester, and we're going to look at it and see if it pans out. With regard to the Fluidda sub-study, so this -- the company we're working with has developed a very elegant technology, where they can take information from a standard CT and reconstruct the pulmonary vasculature in 3 dimensions, and they can separate the arterial side from the venous side, and they can look at all the different generations of the pulmonary vasculature, which, as you know, is like a tree with multiple branches. So they can look at the particular blood volume subtended by the very small pulmonary arteries. And that seems to be where the disease occurs. So we can focus in on that population of blood vessels and look at a change in blood volume of that particular population of blood vessels. And so we would like to look at the effect of seralutinib on potential changes in the pulmonary vascular volume of those smaller blood vessels which we can dissect out from this type of study.

And I think I want to just kind of cap that point. We're very excited about having these additional, if you will, endpoints in the study -- exploratory endpoints in the study because Phase II is a place for learning. And not only are we learning about the safety, tolerability and also treatment effects of seralutinib in terms of what we would call clinical outcomes of -- and physiological function. But really, anything we can learn from other modalities may give us a more holistic assessment of what this drug can do both in the near term and perhaps beyond the near term as well. So we look forward to enrolling these sub-studies and seeing what the data tells us. Next question, operator?

We have our next question coming from the line of Patrick Trucchio.

Just first for Dr. Rubin or McLaughlin. Given what you've seen on seralutinib and with the understanding these are still early days, I'm wondering what potential impact you would expect seralutinib could have on survival outcomes. And how would [ you expect seralutinib ] to alter the survival curves that were shown earlier in the presentation in a potential Phase III trial?

Well, maybe I'll start, and Val, feel free to kick in. I think it's very difficult, if not impossible, to see a survival benefit in treatment for pulmonary hypertension for a variety of reasons. One is that the studies tend to be fairly small and short-lived. Two is that there are treatment options available so that you can't randomize patients to only receive your treatment if they're deteriorating. And those more aggressive treatment options would be, for example, intravenous epoprostenol or lung transplantation. So it will be very hard to demonstrate in a clinical trial a survival benefit in the number of patients. Even in the time-to-event clinical trials that have been done in the last couple of years for registration have not shown a survival benefit of effective treatments even with an overall risk reduction of serious outcomes of 50%. I think time will tell when you look at surrogates, for example, like changing the risk profile of individuals with -- and additional effective treatment such as potentially seralutinib, if the risk profile has improved with treatment with the drug, then you will see an improvement in overall survival long term, in long-term data collection, such as registries, compared to patients who maintain a poor risk profile. So a surrogate would be to look at -- particularly in the large registration trials, to look at the percentage of patients whose risk profile is improved from intermediate and high to low. That would be an indication that you're doing something that could translate into a survival benefit, but I wouldn't -- I mean, I'd be delighted to see a survival benefit in the clinical trial, but I suspect that would be very difficult.

Yes. I would echo what Lewis said and just add a few more things. When we look at patients that we enroll into a Phase III clinical trial, as you know, there are many inclusion and exclusion criteria. And these patients are being chosen because they are somewhat "stable". We certainly need to give this drug time to work. And so we don't want patients who are living totally on the edge. So the inclusion/exclusion criteria tend to help select out a more stable population. As I mentioned earlier, particularly in the current environment, it's very likely that a large proportion of these patients are going to be heavily pretreated, very prevalent patients. And we know from the natural history of this disease that the greatest risk is early on in the incident patients. So in many respects, the patients that get enrolled into this trial are going to be sort of selected for being the survivors. Maybe they're not doing great, maybe they're still functional Class III. But there's going to be that bias to the population. So I think that's a more challenging population to demonstrate a survival benefit in, just to start out with. I think the comments that Lew made about the number of patients in our trial, like none of these are powered for survival. I don't think we can enroll a trial that's powered for survival. And then for the subject protection, there are always these criteria for worsening. And if you worsen, if you meet that endpoint, then something else happens, right? So we have these time to worsening events that happened before someone dies. And whether that is escalating their therapy to a parenteral prostacyclin or whether that's letting them meet this endpoint and enroll into an open-label extension, those things tend to happen before death happens. So statistically, it gets very difficult to have a mortality benefit in the context of a randomized controlled trial.

Got it. That's helpful. And then just...

I was just going to say, with regards to the survival question, given that this is a unique and new mechanism of action, we don't know the clinical potential for it. So we're hoping we will learn more about our mechanism of action and how it translates into a clinical benefit, but it's too early to speculate.

Yes. That makes sense. And then just one follow-up from me. So many of the standard of care compounds are there to have generic competition in the coming years. And understanding the unmet need is still significant, I'm wondering from a commercial payer perspective what you believe is necessary to demonstrate in a Phase II and III trial to enable premium pricing in the PAH market.

Mario, I'll pass back to you. As a drug developer, I try to not think about such issues but more trying to get the data from our compound to bring it to a regulatory approval.

That's exactly what I was going to say. I think with respect to payers, respecting and certainly observing the data, I would say the product performance would carry the day as regards to any negotiations with payers. So obviously, meeting the endpoints of the registrational trials would be key with respect to being able to offer the value proposition that would enable us to get the premium pricing.

We do envision though seralutinib to be a drug that can be, if you will, administered on top of most standard of care therapies. As seen from our background meds that we showed you for our Ib and what we're allowing into our Phase II, we do want to test the drug in that environment.

And certainly, at this point in time, payers have been quite amenable to the various combination therapies that have been initiated, including quadruple therapy. So certainly, there doesn't seem to be a whole lot of reluctance by payers or physicians with regards to the use of combination therapies.

And one could make the argument that genericization could actually be positive as the background therapies would get less expensive for the public health care system.

We have our last question coming from the line of David Hoang.

So I just had 2. The first one is with seralutinib and some of the other drugs here, where you noted that there's a novel mechanism that could be disease-modifying. Does the -- if that pans out, does the disease-modifying aspect make you think about using these therapies earlier in the treatment paradigm, perhaps potentially even upfront for treatment-naive patients? And then my second question is in some of the later programs in late-stage registrational trials, we're seeing cardiopulmonary exercise testing, CPET, measuring VO2 max, being incorporated. And so having the exercise testing data, how would that inform your usage of new products? And if benefits are shown there, does that change how you might incorporate the drug?

So in terms of what we're doing on the study, our Phase II study is going to be informative where we could get endpoints individually or as potentially composite to get, if you will, a more holistic signal. Until we get that data, it's hard to speculate if we want to go in a different direction. Like you said, with cardiopulmonary exercise testing, I think that's a very interesting endpoint. There are some limitations as with all endpoints. But really, at this point, we're trying to get the signal from seralutinib to start us down that path. I would ask, Val or Lew, if you had any thoughts about that from your other experiences.

Sure. Well, I think the term disease-modifying is not a very useful term because current treatments are disease-modifying, too. They alter the course of the disease. And so I think a treatment should be disease-modifying, and hopefully this and other ones will be, in terms of altering the natural history of the disease. It doesn't give -- it doesn't imply that you're modifying the -- a specific pathogenesis. So I think what's true for all diseases really is you want to modify the natural history, and hopefully this will by targeting novel pathway as opposed to the existing pathways that are targeted. As far as VO2 max, it's failed as a valid primary endpoint in 2 clinical trials in PAH. The problem is that it's physiologically elegant, but practically, it's not done the same way in all centers, in all patients, and the meaningfulness of changes is unclear. So it is thus far at least a correlate and not a surrogate of disease activity. Nevertheless, there have been studies that have shown the impairment in VO2 max does correlate with the limitation in 6-minute walk test. So I think it can be viewed as an alternative to -- an alternative form of exercise assessment compared to 6-minute walk test. But I don't think it's any -- it's not demonstrated to be superior, and it is more complex than counting on a watch for 6 minutes how far you walk back and forth in a simple hallway. From the agency standpoint, they think 6-minute walk is an acceptable assessment of exercise as would VO2 max, but not at this point for parameters such as the slope of VE and VO2 max, which is an element of the CPET study that some have suggested could be more sensitive to abnormalities in the pulmonary circulation. And also recognizing, as was mentioned before, that patients who are treatment naive are more likely to show clinically meaningful changes in 6-minute walk, particularly the placebo arm that deteriorates compared with patients who are on background therapy who tend not to deteriorate when giving a placebo on top of background therapy. And so the magnitude of treatment effect in the current environment of studying drugs on background therapy is more limited, whether that's the case with VO2 with CPET is not clear. It could be more sensitive in that situation. But I don't believe that's been looked at.

Thank you, Lew. And just to bring this back to -- go ahead, Val. I'm sorry.

Yes. No. I just wanted to add a little bit to the first comment, the whole disease-modifying comment. And I think Lew highlighted that really, we, don't have a consensus on what's the definition of disease-modifying. And I think the agency would say you have to withdraw the drug and see if the effects maintain. And of course, many investigators are afraid of doing that. I think there was also a part of the question that had to do with, is there a potential to use this earlier. And obviously, the reason that the Phase II and III trials will be designed the way they are is just because you have to protect the patients. And you -- this has to be added to standard of care for the patients. You can't take naive patients and randomize them to placebo. But I would opine that if the treatment effects are very impressive in Phase II and potentially even in Phase III, then really scientifically, the question is, what is it -- is there potential to use it earlier and what trials need to be done to look at that and whether that's an upfront triple versus double therapy trial, whether that is a take recently diagnosed patients less than a certain period of time who still have high-risk features on current standard of therapy and randomize them. I think that as a treating physician, as a clinical trialist and as a scientist, I would like to be able to answer your question with a study, not just do I think people will start using this earlier, but what can we gain from instituting effective therapy and a novel mechanism earlier in the course of the disease. So scientists will hopefully be able to come up with trials that will help answer that question.

I agree completely. And I think what would be appealing either as a -- either a separate study subsequent to the Phase III or even as a component to the Phase III would be treatment-naive patients who are randomized to receive either conventional therapy with a PDE-5 ERA as the AMBITION study did alone versus seralutinib plus PDE-5 plus ERA versus 2 upfront combination study. And even in a subgroup, the Phase III effect showed signals that would be very useful for the treating community and for the FDA.

Thank you, both. And what I wanted to say about seralutinib from a development perspective, because it's inhaled and if we show a good safety and tolerability profile and a low treatment burden to the subject -- to the patients, if you will, in terms of the BID dosing, it could be utilized by earlier-stage patients. Bringing this all back, if you think about what we presented today, we've looked at the data supporting, if you will, the various pathways seralutinib affects. And what we presented as far as our development program is that we're addressing, if you will, structural, physiological and clinical outcomes in the disease now in our Phase II program. As we learn more about this data, this will give us a true sense of how effective a therapy this is and its true potential in treating pulmonary arterial hypertension and perhaps more. So we're really excited to be where we are today to share our data, to be in Phase II, and we look forward to providing updates as we progress our program. Operator, back to you.

Thank you. There are no further questions at this time. I will now turn the call back over to Faheem Hasnain for closing remarks.

Thank you very much. And thanks for all of you for participating in this morning's conference call. We at Gossamer are very excited about the prospects for seralutinib, in that it's a unique MOA, and we're targeting an area of significant high unmet need where patients really need new solutions. So we, of course, have kicked off the Phase II, and we've started to enroll patients, and we look forward to sharing those results with you in the future. So again, thank you to all for participating in this call. Thank you to our presenters. And we look forward to an ongoing, continuing dialogue around this exciting program. Thanks, everybody.

This concludes today's conference call. You may now disconnect.