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

Okay. Good afternoon and welcome to day 2 of the Barclays Global Healthcare Conference. My name is Carter Gould, senior biopharma analyst here at Barclays. Our next session is with Gossamer Bio. Representing the company, we got a full squad today, CEO, Faheem Hasnain; Richard Aranda, heading up Clinical; Bryan Giraudo from IR; and Jill Howe from the finance team. Everyone, welcome. Thank you for joining us today.

Thank you.

Happy to be here.

Great. Faheem, as we get started, I thought as you -- I was going to ask you to maybe just offer some comments and sort of set up the pipeline as you think about it now. But as we were talking before we got started, and we're coming up on sort of your 4-month anniversary since taking over as CEO, can you just -- as you kind of lay out the pipeline, maybe it'd be helpful to talk about what have really been sort of your priorities these first 4 months and how you think about the company at a high level at this point.

Sure, Carter. I mean, first off, for just a bit of context, I mean, the company was founded in 2018 and I started the company as CEO and then moved over to Chairman. So in many ways, me jumping back into the CEO slot isn't really a massive change. It's still a fair amount of continuity. But having said that, our clinical focus clearly is on our 2 programs that we called 002 or seralutinib for PAH and 004 for IBD. Those are the 2 priorities. Of course, we have 1275, which I think we'll get to as well in immuno-oncology. But really, the 2 key priorities are the PAH program and the IBD program. The asthma trial that we ran against our DP2, we played that out. We see some data and we've had it now and confirmed with the regulatory authorities that there certainly could be a path there forward, but Gossamer will not take that forward on our own. We will look to see if that is possible, if it's possible to find a partnership. But we will absolutely not move it forward on our own [ then ] as we go forward. And I've been telling investors really to take that out of the thesis, if that partnership occurs, it'd be an upside. So it's about execution, execution, execution on the 002 and 004 program.

Perfect. I think that clarity has been helpful. Why don't we just jump right into 004? An interesting asset here, a very differentiated mechanism of action relative to some of the assets and MOAs that we typically think of here. You had an Analyst Day recently. You went into quite a lot of depth there. But as we think about that profile, can you talk around this Phase II and how that's really been structured to sort of tease out some of those properties?

Yes. Richard, do you want to jump in and kick that one off and then I'll add in?

Yes, sure. Yes. Well, let me just say a few words about the study itself. It's a 12-week induction period followed by a 24-week treat-through and we have an open-label extension. Our primary end point is at 12 weeks. And we're leveraging that design, first of all, to look at clinical activity or clinical remission as our primary end point at week 12. And then we have a longer-term treat-through because we know many of us worked on ozanimod. And through various mechanisms, the effect tends to get better over time. So this will allow us to characterize that profile. Additionally, because the mechanism is around mucosal healing, it's gut-targeted but it also primarily affects the epithelial barrier repair and function. We're taking biopsies and we have a very strong biomarker both by tissue biopsies and the standard fecal analysis. Faheem, would you like to add?

Yes. So obviously, this is a -- as Richard said, it's a novel mechanism that could be quite important in the context of armamentarium for these patients. But also potentially, if the safety profile plays out as we hope it will and believe it will, the ultimate combinability of this could end up making this a backbone of therapy for IBD patients, UC certainly as a starting point.

And maybe Richard, this might be an appropriate question for you. As we think about sort of that typical UC patients that's facing the decision to maybe start on biologics for a number of decades, it does seem like having an oral non-immunosuppressant option would be a nice option to have there. I guess can you maybe just add some additional context there and think about maybe going to some depth on sort of a typical patient's journey?

Sure. You're absolutely right. There's a big need in ulcerative colitis, particularly after 5-ASA therapies because there's really not much available. There's steroids, which -- with its known side effects and even budesonide, which has perhaps less side effects, is not labeled for maintenance type of therapy. And then you have 6-MP and some of the other immunosuppressive therapies, which have been associated with significant safety issues. So absolutely, patients are hesitant to jump from 5-ASAs directly to biologics because there's a perception of safety concerns as well as the encumbrance of injections and things like that. So there's a big need for oral therapies. And I think just to echo what Faheem mentioned, 004 really has a good profile of not only being gut-targeted, it's not immunosuppressive, it's directed to the site of disease. And it can really be a backbone therapy in those patients that have failed 5-ASA treatment and continue to have symptoms.

And I guess, as we think about sort of the commercial and regulatory hurdle in this setting relative to the positioning and paradigm that I think a lot of people are familiar with, with the JAKs and the IL-23s, can you maybe address some of the nuances there that investors should keep in mind?

I mean, I think the more oral options we have in this space, I think, absolutely better for patients and certainly for physicians treating these patients. And to me, it's kind of akin to other areas of MS as an example, where after Tecfidera, a number of other orals came in. And the unfortunate part about this is that none of these are cures for patients. So patients are inevitably going to cycle through the different oral options. And just as Richard said, I think the commercial opportunity here post the 5 -- post 5-ASA failure is to be able to kind of lessen the reliance on steroids and put oral options in place that are prebiologic and kind of push out the need for biologics. So the obvious commercial opportunity here is oral compounds that patients can go to and maybe even cycle through over time to be able to kind of push out the need for biologics. And then the second obvious commercial opportunity here is if we can boost up remission rates through combination therapy, which might be the next paradigm here, that's pretty significant.

That's a great point, something I wanted to touch on because you do have a lot of option -- like if you could pass this Phase II, you do have a lot of optionality as you think about potential combination strategies. And look, I get it, we're going to have to see -- look, the data is going to have to be what it is. But as you think about that and Faheem, you've gone through this, you've been in this game a while so you understand sort of the strategic elements here, I guess. Are you guys going to approach that sort of agnostically and sort of whoever wants to partner with you, that you're kind of open to obtain those options? Or are there -- I guess, will the biology drive you down in certain avenues and we should keep that in mind?

Yes, it's a great question, Carter. I mean, first off, absolutely, the biology will be kind of the thing that drives us, and we will look for rational combinations that make sense that seem to be steeped in, as you said, in kind of evidence associated with the biology. So that's always going to drive us. Having said that, I think we will absolutely be agnostic. If I could kind of wave a magic wand, I'd say you would want this therapy to be the backbone that just about any other rational combination could exist with any of the other orals or maybe even biologics. So much to be explored on that front. We've got a lot of work. Obviously, the first step is getting through this Phase II, which will hopefully demonstrate single-agent efficacy. But for the most part, we'll be looking for rational combinations that's driven by the science.

Okay. And I guess just to put a final point on 004 here. Data first half of next year?

Yes. First half next year, we should have our top line data on the Phase II.

Okay, perfect. Maybe let's move on to seralutinib next in PAH. The story really sort of evolved over the course of 2020 as you guys were able to more fully kind of characterize the asset. Can you just kind of walk us through that process and now how we should think about it relative to, say, imatinib?

Well, obviously, the whole starting point was the imatinib IMPRESS study and looking at that data and coming across the company, Pulmokine, where we actually acquired this program from -- and Larry Zisman, who actually started that company now also works with us. He was the founder of that and one who really defined the opportunity to create a different molecule that targeted CSF1R, PDGF and c-KIT and put it into an inhaled format to kind of give it an added safety [ wrapper ]. So our understanding -- clearly, our understanding of this space has evolved and evolved to an even greater point as we've done our Phase Ib and now looked at the commensurate results. Richard, I'll turn that over to you to just comment on that data.

Yes, sure. So we did a nice study in PAH patients. We had all this data in normal healthy volunteers. The drug was well tolerated. But we really wanted to verify that in PAH patients because they are sicker than healthy folks. So we did a Phase Ib trial with 2 weeks of treatment with a short open-label extension. We enrolled a total of 8 patients and really got a great deal of reassuring information. First, we demonstrated that the drug was tolerated and safe in PAH patients. They did have reports of cough, but that's expected with a dry powder inhaler. Second, we were able to verify that the PK profile in PAH patients was similar to what was observed in normal healthy volunteers. And third, we had evidence, by using a target engagement biomarker, that the doses we studied inhibited the pathway. And given that the exposures that we would expect to see in the lung would be associated with efficacy and hence, allowed us to proceed with our Phase II study.

So you're going to get the easiest question of the afternoon, Richard, and that is, can you maybe just contrast that safety profile with what we've seen historically with imatinib in PAH?

Well, first of all, I want to be clear, the Phase Ib trial was a short duration. But having said that, we know from the imatinib studies, the main issues are periorbital and peripheral edema. There's also GI distress and some diarrhea. And lastly, they saw a lot more subdural hematomas on the active arm versus placebo. So interesting that if you look really closely at the imatinib data, most of those AEs, except for the subdural hematomas, occurred early during the first 8 weeks of treatment. We have not seen any of those GI or edema type of adverse events. And in fact, we have limited exposure in a few patients out to already about 4.5 months, which we continue to have a very good safety profile. So we're really encouraged that seralutinib is going to differentiate.

Perfect. And with this Phase II, look, I mean, there's plenty of unmet need in PAH still. But when you think about this setting, what would you need to show in terms of efficacy, PVR, 6-minute walk distance, you focus on the metric you want to have confidence that you have a product that will meet the -- how physicians think about the bar for commercial relevance?

Sure.

Yes. I think -- well, I mean, I think at a high level, that it should be in the range of what was seen with the IMPRESS data on both PVR and 6-minute walk distance. So we would hope to see data that is reasonably consistent with what we've seen in that Phase III.

Okay. That's helpful to put some color on it. Okay. And then as we think about these 2 -- I think about these 2 programs sort of racing head-to-head, both reading out next year. At this point, any sense which one will read out first or it's still too early in enrollment and it's just going to -- we'll have to see how that plays out?

Yes, definitely. It's still too early to be able to kind of point to that at this point. But again, we stay -- we're continuing on with our guidance in the first half '22 for both of those. And then beyond that, we would -- not beyond that, but probably before that, we'll have some 1275 data to look at. And then next quarter, just in terms of milestones for the company, we'll actually be outlining our next program into the clinic. So we'll be disclosing that target and a little bit more about that next program that...

Okay. I want to come back to 1275 in a second, but maybe one more on seralutinib. So there's clearly a near-term focus on PAH. But I guess when you then think about obvious or logical kind of next places to go, has there been any sort of preclinical work done on group 2 diseases or group 3? How do you think about the potential or the applicability in those settings? I don't -- I can't recall if imatinib was ever explored in those settings.

Yes. I mean, obviously, our sole focus at this point is on PAH on the Phase II trial. And as I said, it was execution, execution, execution. But there certainly may be some possibility going into other areas. Richard?

Yes. Obviously, the team is thinking through those options. One of the tough things that come to mind as group 3 PAH, that there's a big need there. So -- but as Faheem said, we're really focused on the group 1. Right now, we want to execute and deliver the results.

Okay, perfect. You sort of teed it up before, Faheem, around 1275, and it's an asset that doesn't really get as much attention given the focus on 001 and then 002 and 004. You mentioned there's going to be some data. We've already seen some data towards the end of last year. Can you maybe just set the stage for this forthcoming readout and how you think then about how you might develop this agent? Clearly, it could have a broad applicability, but sort of set the stage for that forthcoming readout.

Yes. So we've narrowed -- as you said, there could be broad applicability, but in the context of clinical development, we are trying not to boil the ocean all at once and so really narrowing our focus to the colorectal cohort and gastric cancer and esophageal cancer as kind of the cohort -- the 2 cohorts that we're looking at in the context of the expansion. So we'll be looking at readouts on those 2. And recall, we saw PR with the colorectal -- in the colorectal space and stable -- evidence of stable disease in gastric. So really trying to kind of take those signals and look a little bit more narrowly at that patient type.

Okay. And any numbers you can put around in terms of either number of patients or how many months follow-up we might be -- just some context to think about how robust the data set might be.

Richard?

Well, for the expansion cohort, we'll have at least 4 months of data before we obviously make any conclusions from that data set. But we're actually following patients as long as they're responding or continue to have stable disease. As Faheem said, as one of -- from the dose escalation cohort, we still have that 1 patient with stable -- with PR with colorectal cancer. And we still have that other patient with the gastric cancer still responding in the trial.

And then are there other -- clearly, you guys have looked at combinations with PD-1 before. Are there other kind of logical combinations you guys think about or broader testing with other checkpoints?

Yes, Faheem, I could -- I mean, I think one of the thoughts, if you look at the preclinical data around this mechanism, is really around pancreatic, which is a very tough disease. And so one thought is actually quadruple therapy, right, with our drug, PD-1 and chemotherapy. But other than that, there hasn't been any extensive thoughts about initiating any other cohort or other combos at this time.

Okay. And Faheem teed up naming another drug candidate. Will that also be in oncology and any sense on the timing of that?

More to come on that. We'll be announcing next quarter kind of what that next target is. We have a broad -- a fairly broad preclinical pipeline, so a number of really interesting opportunities. But this next one, certainly, we're pretty excited about bringing it forward into the clinic. It represents a target that -- it's a target that represents some optionality, which is kind of the place we like, that best-in-class with multiple indication opportunities, think ozanimod-type profiles. We've got a number of programs like that in our preclinical pipeline. So more to come on that. We don't want to jump ahead, but you'll be hearing all about it next quarter.

Okay. And then in a scenario where both of these Phase II readouts for 002 and 004 read out positively or supportive of further development, is that under that -- that's a good problem to have. Is that something where you would proceed with both of them? Or do you have the capacity and resources to do that? Or would you have to choose one and look to [ part ] with the other? I recognize it's early and the data is going to be the data. But just from starting principles, can the -- could the company continue on with managing both sort of mid- to late-stage programs?

Yes. So the quick answer is, yes, we can. It'd be a great, great challenge to have, right, to be initiating Phase IIIs from both UC and PAH. We'll be turning over those data cards next year with over $250 million of cash. And so a significant amount of cash, obviously, on the back of great data. I'm sure we'll be able to access even more. So it would be our intention to continue to not miss a beat and to be moving forward on the back of the data, as we're hoping to see it, jumping into both not only designing but implementing those Phase IIIs.

Okay. And you may have said it earlier and I may have missed it, but -- so clearly, this year is very much focused on execution. I think that's been driven home to most people. When we think about with seralutinib though, you do -- as I recall, you do have the open-label extension piece. Will there be readouts of that over the course of this year? Or we've kind of seen the data we're going to see on that, and we've got to just wait for the Phase II?

Yes. I think it's about waiting for the Phase II next year [indiscernible]

Perfect. Well, like I said, the message is clear, focus on execution, and we'll also see what happens with 1275. But really looking forward to seeing the story evolve, 2 exciting mid-stage programs. I appreciate your guys' time today.

Yes. Thank you, Carter. Really appreciate speaking with you today.

Take care.

All right.

Thanks, Carter.