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

Good day, and thank you for standing by. Welcome to the Gossamer Bio Incorporated Update Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Bryan Giraudo, Chief Financial Officer and Chief Operating Officer. Sir, please go ahead.

Thank you, operator, and thank you all for joining us this morning. I'm joined today by Gossamer Bio's Co-Founder, Chairman and Chief Executive Officer, Faheem Hasnain; our Chief Medical Officer, Dr. Richard Aranda; Gossamer's Executive Director of Clinical Development and the Clinical Development Lead for the GB004 program, Dr. Barrett Levesque; as well as Gossamer's Vice President of Biostatistics and the Biostatistics Lead for the GB004 program, Kartik Raghupathi. Earlier this morning, Gossamer Bio issued a press release announcing the GB004 Phase II SHIFT-UC top line results. Please note that certain information discussed on the call today is covered under the safe harbor provision of the Private Securities Litigation Reform Act. We caution listeners that during this call, Gossamer management will be making forward-looking statements. Actual results may differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the statements contained in the Gossamer's news releases, SEC filings and including the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that may be accurate only for a limited period of time. Our ability to meet our guidance, especially that related to timely initiation and completion of clinical studies in addition to our ability to release results from our clinical trials in a timely mirror may be adversely affected by the ongoing COVID-19 pandemic. Gossamer Bio takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. Now I'd like to turn the call over to Faheem. Faheem?

Yes. Thanks, Bryan, and thank you to everyone joining us this morning. Earlier, we announced the 12-week top line results from the Phase II SHIFT-UC trial. The SHIFT-UC study enrolled 236 patients with mild-to-moderate active ulcerative colitis who had failed 5-ASA therapy. As our release this morning stated, unfortunately, neither GB004 dose group showed a meaningful or statistically significant difference from placebo at week 12. After looking at the 12-week data, we reviewed the breadth of the accumulated data, including the available 36-week data for approximately 2/3 of the patients on that study. Due to a lack of treatment benefit, we have decided to terminate the ongoing treat-through and open-label extension portions of the trial. Now concluding a clinical trial prematurely is not an action that we take lightly. Gossamer expects to complete all clinical trials it initiates. But given the lack of benefit to patients seen from the accumulated data and with the agreement of the study's Data Review Committee, which included 2 external expert gastroenterologists, we believe it's in the best interest of patients to wind down the SHIFT-UC study. The patients, caregivers, investigators and Gossamer employees who participated in this trial and who helped facilitate these results deserve our thanks and appreciation. We thank them for all that they've done. Now needless to say, we're very disappointed with these results. We were hopeful based on extensive preclinical literature on the HIF-1 alpha pathway in IBD and the promising Phase Ib results we have generated with GB004 that we were hopeful that we could advance a novel treatment of action to address the UC patient population with high unmet need. Unfortunately, those preclinical and early clinical results did not carry over into this study [ case ]. Importantly, while we're still in the early stages of our data analysis, we don't believe -- we do not believe that there were any baseline imbalances that impacted the results of the study. We enrolled a patient population consistent with our intention, with an overall average Mayo Score of 8 and an average endoscopic subscore of 2.4, both indicating generally moderate disease severity. The study was well balanced across all baseline Mayo subscores, baseline corticosteroid use and baseline histologic activity. Now while the placebo clinical remission rates exceeded our expectations, the consistency of the results across all key secondary endpoints, including the histological endpoints that intrigued us in the earlier Phase Ib study, reassure us that this negative result is not the product of an unusually high placebo response rate. And we've also been able to preliminarily assess gut tissue PK results from approximately 1/4 of the patient population. The results confirm that GB004 does indeed target the gut and concentrations achieved at both doses are consistently higher than those observed in the Phase Ib study and those predicted to be efficacious based on preclinical studies. I want to commend the SHIFT-UC study team for the tremendous execution. Your efforts led to the early delivery of a well-conducted study initiated in the midst of a pandemic and provided a definitive answer on GB004's utility in UC and contributed greatly to the understanding of the disease. Now with these results in hand, Gossamer will turn its focus towards its other 2 clinical stage product candidates, our inhaled PDGFR inhibitor, seralutinib for the treatment of PAH, and our oral BTK inhibitor, GB5121, for the treatment of primary CNS lymphoma. And we have never been more excited about the promise of seralutinib. And in our press release this morning, we announced that we have reached our target enrollment of 80 patients in the ongoing Phase II TORREY study in PAH patients. I'm pleased to finally remove the COVID asterisk we had in our -- on our data guidance for the program and confirm that we expect to announce top line results from this trial in the fourth quarter of this year. As a reminder, seralutinib is a molecule designed specifically for the treatment of PAH, building up the promising results seen with imatinib in the Phase III IMPRES study. We have tremendous momentum for seralutinib in the field and coming off 2 recent investigator meetings in Europe that centered on strengthening and expanding our coalition of PAH investigators for future clinical studies and looking ahead to seralutinib's place in the future treatment algorithm. And regarding 5121 -- GB5121, our CNS-penetrant BTK inhibitor, we expect to initiate our Phase Ib/II STAR CNS study in CNS lymphoma patients later this quarter. CNS lymphomas represent a small patient population, but one with tremendous unmet need, and a clear biological rationale for the role of BTK inhibition. Now given the lack of approved treatments in this orphan patient population and our discussions to date with regulators, we believe this trial has the potential to be registrational if data has support. We hope to be able to provide an update on our progress in the trial late this year or early next year. And finally, we remain well capitalized, ending the quarter dated March 31, 2022, with approximately $272 million of cash, cash equivalents and marketable securities. This cash position will allow us to deliver top line TORREY Phase II results for seralutinib, and we believe advance into the potentially registrational portion of our Phase Ib/II STAR CNS study of GB5121. Again, thank you for joining us today. I know many of you have been on this journey with us for the long haul. And I can assure you, notwithstanding this recent setback, I sincerely believe that Gossamer's best times are ahead of us. We appreciate your support and look forward to answering your questions today and over the coming months. Now operator, please go ahead and open the line for questions.

[Operator Instructions] Our first question comes from the line of Yasmeen Rahimi.

Thank you for sharing this news with us. I'm going to actually ask my questions into what lies in the future, which is the TORREY study rather than asking questions on SHIFT-UC. So team, congrats on the enrollment completion. It would be really great if you could just provide us with some commentary, if you've been able to look at the baseline demographics and specifically like the homogeneity of the study? Second, provide us some commentary of how many data safety monitoring committees have occurred? What you've been able to see on a blinded basis in terms of safety? I appreciate that if you could just provide us some -- a little bit more color beyond enrollment completion.

Yes. Thanks, Yasmeen, I'll just kick off and then maybe turn it over to Richard to give more detail. But suffice to say, we continue to be pleased with the enrollment into the open-label extension, a substantive number of patients have been enrolled. And we see on a -- across the board, a reasonable picture shaping up in terms of safety and tolerability and one that appears to be differentiated from imatinib experience. And of course, as I mentioned, we're really pleased to see the enthusiasm and the excitement amongst the investigators into this trial. We were just in Europe at an investigators meeting and the feedback that we were getting was really encouraging. So on all of those dimensions, I think there's a reason for enthusiasm and optimism on that. Richard, do you want to comment on some of the specifics that Yasmeen is mentioning?

Sure. Yasmeen, our demographics are consistent with our population that we targeted with a functional Class II and III with the appropriate level of background medications that we assumed as well as -- as you know, we required a PVR greater than our 400. So we're enrolling exactly the population that we're targeting. We've had 1 IDMC meeting, and we're going to have another one relatively soon.

Not to drill down, but are you able to comment on how many of the patients are in Class II versus Class III and maybe what the mean PVR are? Sorry for being annoying and so granular.

Sure, Yasmeen. At this time, we don't usually comment on details of that specificity on the baseline demographics.

Our next question is from the line of Joseph Schwartz.

Also a couple of questions on seralutinib. I was wondering whether you're still seeing a low rate of discontinuations and high rate of participation into the OLE for TORREY. And as patients are being treated for a longer period of time, are you able to discern at all whether there are any departures from natural history?

Richard, you go ahead and take them.

Sure. So what -- once again, what -- as Faheem has mentioned, we're seeing really good retention and transition from the double-blind period into the open-label period. Patients are -- appear to be tolerating the inhaled seralutinib quite well. And as Faheem mentioned, the safety profile in comparison to an oral imatinib that has been reported in the literature, still, we can say that it seems to be better. And I think it's too early to comment if we're actually -- I think your question was around changing the -- deviating from sort of, I think it's more of a natural history type of question. I think it's just too early to definitively comment on that. But I do think we're encouraged by the fact that patients are just staying in and then they're continuing into the open-label extension.

Okay. Great. And then in terms of corporate strategy, I'm just wondering how you're thinking about the pipeline construction following the discontinuation of 004? Do you plan on bringing in another program to replace it? Or are you content with the programs that you have for the time being?

Yes. I think at this point, our focus is on clearly on seralutinib and then GB5121 for CNS lymphoma in context of the 2 clinical programs. We do have a number of preclinical programs that we're continuing to advance. And so we will bring those to a point in which we will make decisions about advancing those into the clinic based on the data generated. But in terms of in-licensing at this point, we would not be doing that. We've got -- we're solely focused on making sure that our cash runway is in place to get to these inflection points as outlined.

The next one, we have the line of Geoff Meacham.

This is Jason on for Jeff. Thank you so much for taking our question and for the color on GB004. Obviously, I think the postmortem is still underway, but I was hoping you might be able to comment on the MOA based on what you've seen is a HIF-1 alpha stabilizer. Maybe -- was that mechanism of action just not able to deliver? Or was it the molecule itself in terms of that stabilization function? Was that the issue? And then kind of to connect the dots earlier on one of your earlier comments, does this change your appetite in terms of looking at either UC or Crohn's disease moving forward? Is IBD still a potential therapeutic area that you were interested in pursuing?

Yes. I'll take the last part of that question first and then turn the first part over to Richard. As it relates to IBD, look, we continue to see IBD as an area that where while there are a number of treatment options, we still have this glass ceiling in terms of remission rates. And so the opportunity to really adjust those remission rates to a new level, potentially either through combination or through new mechanistic approaches, I think, is something that is needed. And I think the rate in which we enrolled the study, which was faster than expected, I think speaks a little bit to the type of profile that would be attractive to IBD treaters. So I think it continues to be an area where there is unmet need and a need for even better therapeutics. Richard, do you want to comment on the first part?

Sure. As you mentioned, we're still early in our analysis. And I think foundationally, look that we ran a well-powered, well-designed experiment in the clinical trial. So that in itself gives us the confidence that we did the right experiment. Second, as Faheem mentioned, we got a preliminary look at our PK and tissue concentrations. So we know we're getting substantial drug at the site of disease. And third, I think that given the results that we observed across our primary and secondary endpoints, while there were some numeric maybe differences in the high dose compared to the low dose, it was -- I think the totality of the data not hitting any primary secondary endpoints tells us that the mechanism is just not adequate enough to be sufficient to treat a disease, such as ulcerative colitis.

Our next question is from the line of Ellie Merle.

Maybe just first on 5121, just for the registrational Phase II component in primary CNS lymphoma. I guess what do you expect the size of this cohort of Phase II to be? And any sort of hurdle in terms of approval from, I guess, any [ official agency ]? And then, I guess, as you sort of start the Phase Ib portion, what are your thoughts on sort of next steps or indications beyond the primary CNS lymphoma for the program?

Faheem, I could take that question. So the 5121 program is designed, first of all, as a dose escalation and then an expansion phase of 30 patients in each of those arms. And then we have a Phase II portion with the recommended Phase II dose is about 68, 70-ish patients that would start after our dose escalation phase. We are -- as part of our dose escalation, we're looking at secondary CNS as well that also gets into the brain. And we're looking at a population of patients that have vitreoretinal lymphoma as well. There's a great unmet medical need in that population. So we've had our discussions with the regulators. So we feel very confident in the overall program and that with success with the Phase II portion that it could potentially lead to an accelerated approval.

I think the other thing, Ellie, is that certainly, while its early days, our discussions with the KOL community are very excited about the prospect of, again, a very elegant BTK inhibitor that is as brain penetrative as it is. And certainly, we are receiving lots of inquiries and discussions for indications even beyond what Richard talked about. Obviously, with STAR CNS, we're focused on that execution in front of us, but we do think there's an opportunity for a number of indications beyond once we get the CNS lymphoma program up and running.

The next one, we have the line of Mr. Patrick Trucchio.

Just a follow-up on GB5121 and STAR CNS. And just in terms of the timing of the anticipated data from the Phase Ib portion, if you could give us a sense of when you would expect that? And what at that time would you be reporting? And just what would you need to see to give confidence to move forward to that Phase II portion? And then secondly, just if you could talk about the expected cash burn rate going forward or the runway of the $272 million cited in today's release in terms of cash and investments?

Yes. So we're hoping to have some data on some of our dose escalation cohorts, maybe a first couple of escalation cohorts. Obviously, we would like to see some initial responses as well as we'll have the opportunity, hopefully, in patients to look at CNS levels of 5121 as well. Assuming all goes well, we may have some preliminary data at ASCO towards the end of the year.

ASH.

ASH, sorry.

And on the cash runway, Patrick, the $270-plus million really gets us into late into 2023 into the first quarter of 2024. It certainly will enable us to deliver the Phase II TORREY results and really be able to underwrite substantial momentum in 5121.

We have Timur Ivannikov.

Yes. So first question about UC. So the doses you tested in Phase II 480 milligrams QD, BID, they seemed quite a bit higher than what you tested in Phase Ib. Can you just talk about why you went to this level of dosing? And then did you see any evidence of UC worsening -- being worse in the treatment arms, especially in the BID arm?

I'm going to let the team lead, Dr. Barrett Levesque, address that question.

Thank you for the question. We took the approach going into Phase II of a maximum tolerated dose strategy, and that led us to the choice of the 480 qDay and 480 BID tablets. We're still digging into the totality of the data. Overall, there weren't significant trends or [ transit ], for example, UC worsening, being greater than that highest dose arm that we've seen to this point.

Okay. And then just a couple of questions for PAH. So first of all, for your Phase II study, can you talk about the screen failure rates in the TORREY study due to patients being on active anticoagulation therapy?

No. We've excluded those patients. So no patients have screen failed, since that's been an exclusion.

And again, I think as we've talked in the past, the use of anticoagulation is something that, again, was very present during the IMPRESS study 14 or 15 years ago. But certainly in the United States and Western Europe, there has been a marked decrease in the use of anticoagulation. Certainly, in current treatment paradigms. I think as Faheem had mentioned, we have just completed a series of investigator meetings in Europe. And when we talked about that question, a number of our investigators had said new patients that come into other practices, they are not using anticoagulation today. So really, I think that's an artifact of what happened with IMPRESS and imatinib 14, 15 years ago.

Okay. And then maybe just -- I'm not sure if you can answer this one, but in terms of the coughing side effect, it's a common side effect with inhaled formulations. I'm not sure if you could talk about what you've been seeing in the open label portion with respect to coughing, if that's been an issue for you?

I can say that we do see cough, but it hasn't been an issue for patients to take inhaled seralutinib.

The next one, we have the line of David Hoang.

Just I had a couple, first on the -- just one additional point for the UC trial. You mentioned that you don't believe the placebo response rate, the remission rate there impacted the study. Can you just remind us as to what your expectations were around placebo response for this mild, moderate population?

Yes. Our assumptions going into the trial was about the 10% to 12%. And as we reported out, we saw a placebo rate of 17.9%. Looking at some more contemporary studies and talking to our advisers, our folks feel that, that placebo rate is consistent with what you would expect to see, in fact, with a biologic-naive population. And the 2 examples that come to mind is the LUCENT 1 trial with mirikizumab looking at the bio naive as well as the tofacitinib [ opted ] trial.

Okay. Great. Really helpful. And then just in terms of the cash runway you mentioned getting you to potentially late 2023 or Q1 of 2024. Is that just cash on hand? Or does that factor in any pulling from any credit or debt facility?

It's cash on hand, David.

The next one, we have the line of Gavin Clark-Gartner.

Just had one on seralutinib and TORREY. So hypothetically, if the PVR and other biomarker and hemodynamic data looks strong, but the 6-minute walk endpoint is a bit noisier. Are there any other registrational endpoints that you'd consider for the Phase III trial?

It's a great question, Gavin. Yes, we're obviously looking forward to our data on TORREY and having conversations with regulators about what those Phase III endpoints should be. As we've spoken about in the past, we know there is a dialogue with both other sponsors as well as KOLs with the agency on ways to optimize 6-minute walk. I think we're a passive participant in those discussions. I think more to come once we get on the other side of the TORREY study.

We don't have any further questions at this time. Presenters, please continue.

All right. Well, thank you very much. Thank you all for participating in this call. And again, I just would like to thank the SHIFT-UC study team for tremendous execution and to the patients that participated in this trial and the investigators that worked with us to execute on this trial. Again, we're -- not the results we were looking for, but we remain incredibly optimistic and excited about delivering on seralutinib, TORREY study and GB5121 for CNS lymphoma. Again, thank you very much for participating. And please call us if you have other questions.

This concludes today's conference call. Thank you for participating. You may now disconnect.