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

Welcome to the second day of the Bank of America Healthcare Conference. I'm Geoff Meacham. I'm the senior biopharma analyst here, and we're thrilled to have Gossamer Bio, and on stage with me is Faheem Hasnain, who is Chairman and CEO; and Richard Aranda, who's not Chief Marketing Officer.

Although I think you would like that.

Yes, exactly.

It's an upgrade.

Exactly. Let's kick it off then Faheem with sort of a bigger picture. So when you guys founded Gossamer the idea was to have different therapeutic areas and differentiated drugs and drawing from your many years of experience knowing what constitutes that. You've had some derisking data sets and you've had some that are sort of mixed. So give yourself kind of where are we today with respect to the whole portfolio?

Right so Geoff, as you said, we started off the company with a number of different assets. We've had -- and I will call it, a clearing event on a couple of those assets where we've de-prioritized any further work. The most notable one was 004 for IBD so we didn't hit on the primary endpoint. So we made a pretty quick rapid decision to terminate that program. So what that's actually done now is it's given us the chance to elongate the runway which will allow us now to see a stronger data set for our brain-penetrant BTK in CNS lymphoma. So as a lineup, we've got seralutinib, which, of course, we're very excited about. We'll see that data at the end of the year. We completed enrollment. It's a novel mechanism, a mechanism that I think investigators and patients deeply need new mechanistic approaches in that disease. So we'll see that data at the end of the year. That's the TORREY study. And then we will see some level of data around ASH time for our CNS lymphoma program, but that's a dose-escalating trial I think the -- probably the clear inflection point will come a couple of quarters later, where we'll have a more robust data set at more relevant doses. And so that elongation of the runway really allows us to get to that second inflection point beyond seralutinib.

Perfect. Let's talk about the PAH space in general. So we've seen a lot of BD activity, I think, in the PAH field. There have been a lot of novel mechanisms. And it's been a lot of the same drugs in various combinations, but there still is a significant unmet need. So walk us through kind of the backdrop of how you view a PDGF as an add-on and what impact it could have when we get into some of the data?

Well, as you rightly said, this space is in need of new mechanistic approaches. So right now, it's really characterized by prostacyclins vasodilators and a new mechanistic approach is really much needed. So at this point now, there's 2 approaches that appear to be really promising. Sotatercept, which is Acceleron's program have got sold and then seralutinib. Our program, really the genesis of that was the imatinib data that was generated by Novartis in the IMPRESS study where we saw really impressive results in their Phase III -- consistent results through to Phase II and Phase III but the problem was that, that program was plagued with toxicities safety problems. So we came along a molecule that had been developed with the concept of targeting specifically the targets of interest. So in this case, PDGF, c-KIT, CSF1R and specifically designing this molecule to be inhaled. And that's really a critical component because that's the added safety wrapper to the program. So we're getting the drug to the site where it needs to be in the lung, designed it specifically to be an inhaled approach to the molecule is tailored for that and then hitting the mechanism, the targets of interest. So what we would expect is that what we saw early in the preclinical studies was some really interesting remodeling disease-modifying effects where we saw complete clearing of the lumen. Of course, that will be a little bit more hard to define in the human context but there is a notion out in the community already that these 2 programs, sotatercept and seralutinib appears to be -- or they're being viewed as disease-modifying or reverse modeling agents. So that means that not only will they be used in combination, but potentially earlier in the course of therapy.

Right. And presumably with a longer duration of therapy, too.

Right.

But let's talk a little bit about kind of the evolution of the PAH in terms of the endpoint. So it used to be a 6-minute walk, that sort of became the leading indicator for things like outcomes, transplantation, death, hospitalization, et cetera. But going before that though, things looking at things like PVR, right, vascular resistance is really, really key. So walk us through kind of what -- how predictive do you think some of the biomarkers you're looking at are going to ultimately be looking at a walk test or a real outcomes kind of trial?

So the Phase II TORREY study, our primary endpoint is PVR which arguably is a more objective measurement. We're not powered for 6-minute walk. But let me turn it over to Richard to kind of fill in the rest.

Yes. I think there still remains challenges in the field on what the endpoints and how they act as surrogates for predictive value in the future. So as we all know, PVR is an important Phase II endpoint. It's important to show hemodynamics. But the literature is rather mixed, and it's not very strong that it is predictive of 6-minute walk effects. Nonetheless, if you have a positive hemodynamics, you should improve your functionality at a patient level. But the issue is, are you able to demonstrate that at a population level as part of a clinical trial. So I think right now for a Phase III program, I think 6-minute walks remains an option, although folks are trying to think of ways to add something on to the 6-minute walk to, first of all, improve that sensitivity for detection because now as patients are getting better treated the ceiling effect is really becoming more prominent now. So is there a way that we could use heart rate monitoring or other biomarkers that really yet needs to be defined, but NT-proBNP could be one that you make some kind of composite.

Right. It seems to me, looking at some of the 6-minute walk test over the -- a lot of the pivotal studies over the past decade or so a lot of the success or failure depends on how the standard deviation and the baseline, there's a lot of subjectivity. There's a lot of variability, but PVR is a more natural. You're not really affected by baseline, right? I mean you're -- it's a more natural predictor sort of a -- or yes...

More of an objective.

Objective. Yes, that's exactly right. So -- but the other ones that you mentioned, though, ProBNP like what is sort of the field saying in terms of the validation of a lot of these other biomarkers and the totality of how that may ultimately get a patient on the study or convince physicians of the value of the drug?

Yes. I think it's another concept is around risk stratification right low to high risk where NT-proBNP and 6-minute walk and to some extent, PVR are components of that. So one could envision that composite, you could enroll a patient, perhaps that are high risk and you try to move them down to intermediate or low risk or their intermediate risk and you try to change them to low risk. And that you just need -- you need to move in 1 of those 3 parameters, if not more.

Right. And beyond PAH, though, if you see an effect on resistance, how do you think about other indications within cardio? There's actually a lot with respect to COPD, ILD, et cetera. What's the kind of capital consideration and investment consideration beyond PAH?

Well, I could go through the indication part I think the natural extension at this point would be some other groups of PAH like, for example, as group 3 PAH built that associated with ILD that's probably the more natural extension from a group 1.

Got you. Okay. And then when you think about the study readout coming out, is there sort of a clinically meaningful -- what would be sort of a I wouldn't say a bogey, but what would be, in your minds, ultimately predictive potentially of 6-minute walk and put you on the same track as, for example, like Acceleron was with their initial Phase I/II data.

Well, as it relates to the TORREY, I mean, obviously, we're mostly focused on the PVR and so being able to see kind of results that were in the range that we saw with ibrutinib and sotatercept that kind of 18% to 30% kind of delta is what we would hope to be able to see.

Got you. Okay. Let's switch gears to the rest of the portfolio beyond the BTK. So this is a -- it's interesting, there's been a lot of pretty significant investments in the BTK field of late. For many years, it was pretty much just ibrutinib, right? But now we know there are lots of CLL, a number of different liquid tumors, right, that we need -- patients are refractory. There are some that are not as responsive or sub-optimally so the brain penetrant component here, so help us with kind of how you first thought about this and looking forward to the differentiation? How do you see that shaking out?

Yes. So as you said, 5121 is a very interesting compound in that it has a really potent brain penetration abilities. And so when we compare it against all the other BTKs, I think we believe we've probably got a best-in-class in that context. As it relates to CNS lymphoma, it's just high unmet need, Geoff, it's -- these patients they're treated with high-dose methotrexate it doesn't work particularly well. But what's really interesting is that we have some level of -- some good level of validation with ibrutinib that is used in these patients, but actually at double the dose that you'd normally would dose ibrutinib. So of course, that comes along with some challenges and toxicities, but we do see good results. Ibrutinib is not approved for CNS lymphoma. So we have the potential to be a first-in-class in the context of approval for this at a -- with an agent that's more tailored to be able to cross the blood-brain barrier and make an impact for these patients. So that's the point of differentiation. And these patients really don't have a lot of options and survival is not great. So hopefully, we can make a difference in that context.

Got you. And how do you see when you look at some of the competitive landscape here, you have sort of covalent versus non-covalent, Faheem, you've seen a lot of different nuances in terms of the product profile. And that does matter to ultimately to patients in the marketplace. How do you see some of the other BTK potential products playing out as a potential competitor?

Well, right now, tolebrutinib, which is the Sanofi program is factored towards MS they don't appear to be going into these types of indications. We've got ibrutinib as well. I mean, both are covalent brain penetrant. But when we do our kind of side-by-side comparisons preclinically, again, I think we feel that we've got superior brand penetration capabilities. But we seem to be moving forward to CNS lymphoma where others aren't. Ono has a program that is approved in Japan for CNS lymphoma. Whether they kind of do some work here in the States, I think it still remains to be seen.

Got you. Okay. And just given the mechanism, I know CNS lymphoma as the primary indication, but how would you see the brain penetrant attributes like playing out with respect to other indications?

Yes. So we think there are a number of adjacencies that would also be appropriate to explore. And Richard, do you want to comment on that?

Yes. So obviously, a secondary CNS lymphoma that goes from peripheral lymphomas that go to the brain. There's vitreoretinal lymphomas that are part of the constellation of CNS lymphoma that BTKs are -- mechanistically have shown some promise. And in addition, there's even non-Hodgkin lymphomas where you could get reoccurrence in the brain. And if we even go to the solid tumor, there's some preclinical data coming out or has been out that glioblastomas seem to be -- have some BTK component to them. So I think beyond just the primary CNS lymphoma there as Faheem was mentioning, there are some other tumor type adjacencies.

Yes. I mean you can definitely cross the liquid solid tumor barrier with the mechanism as broad as that. Yes. And then switching gears to MS. So you guys have had -- you have earlier-stage asset on that. Just talk a little bit about where are we with that development, we can talk about differentiation.

Yes. So that's also a brain-penetrant BTK a separate molecule, it's called 7208. We actually have hit the pause button until we see the TORREY study. And largely, that's back to the notion of expanding the runway to make sure we've got a robust data set around 5121. And when we turn over that, those data cards will still have a year of cash in the bank. But having said that, moving forward with 7208 would likely be in the MS space, but unlikely to be a straight run of the mill run into relapsing MS, we are really exploring differentiated paths into MS. And you think of secondary progressive MS, PPMS, subsets of MS. And the main reason for that is that we've got other BTKs, as you've already mentioned, Geoff, that are ahead of us. And so we're going to look to try to leapfrog through some other points of clinical differentiation.

Got you. Yes. I mean when you look at MS and when you consider it to be a potential inflammation disease, right, I mean you can hit a lot of forms of MS, but also other CNS-related indications. So how fast do you think you could restart or re-sort-of allocate capital this program when you get the derisking of it?

Yes, pretty quickly. I mean the program was slated to do a healthy volunteer study back half of this year. So we're poised, ready to go. For us, it was just a decision of prioritization around the best use of our capital and making sure we get to inflection points that the Street kind of cares about.

Right. Right, right. I mean MS is a pretty large investment in terms of the market opportunity is there, obviously, but it's -- Phase I, Phase II studies are fairly capital intensive. What about the -- could you evolve the model a little bit to go after more rare kind of orphan diseases that have maybe a BTK in neuro itself, that BTK kind of implication?

Yes, it's interesting. We're exploring. Do you want to comment on it?

Yes. There's -- I guess, the way we conceptualize it is there's other indications where B-cell targeted therapies, not necessarily BTK per se, but B-cell-targeted therapies like NMO, neuromyelitis optica or anti MOGAT, another one of those antibody-driven diseases that primarily affect the brain. And then there's even there's emerging data that microglia signal through BTK, and that seems to drive a lot of the neuro degeneration that's actually seen in MS as well as other diseases such as Parkinson's. So that's the other angle our scientists have been looking at researching on is, can we leverage that to do something other than MS.

Yes. Yes. I know that the TORREY study is sort of is the gating factor here, but Faheem, what about bringing in other assets from a capital perspective? Is there -- what sources of non-dilutive capital could you leverage? And is there an appetite to kind of expand it along the same line of thinking with respect to CNS and BTK as a mechanism?

Well, at the moment, as we sit here today, all of our capital is really laser focused on getting these next 2 programs over the finish line, as you can imagine. In the event that we see positive TORREY data, we'll be able to reevaluate we're going to be getting ready to move that right into Phase III. So the capital allocation will be pushing that forward as fast as we can. And then, of course, expanding the opportunities with 5121 into the adjacent indications. Whether we get back to the business in-licensing a play, I'm not sure. We do have a research pipeline where we've got some really interesting programs that we'd be filing for IND next year. So at this point in time, I think the programs that we've got in place are the ones we're most excited about.

Got you. Okay. And then with respect to the TORREY study, maybe give us a sense for the size and scope of a PAH Phase III. What are the lessons learned from some more recent ones that maybe you could have an expedited sort of trial?

Richard?

Yes. I think sotatercept has a pretty broad program. They have 1 in what I call early PAH 1 in their standard repetition of their Phase II and then they have 1 in really later-stage PAH we're trying rescue patients, think to be competitive. We probably need to have a broad vision and a broad scope as well and even consider that assuming sotatercept makes it on the market ahead of seralutinib that it could be used in combination in some way or at least the field may be interested in that. So I think that's the breadth. And then obviously, we'll -- we do want to focus on what I would call the registrational trial itself. Which, as I mentioned -- as we sort of discussed earlier, likely 6-minute walk or 6-minute plus will be the end point, and we would try to execute upon that as quick as possible to get the drug to patients.

Right. If you look at some of the more recent, for example, United had the success of Tyvaso in interstitial lung disease, PAH associated with ILD. Is there sort of an adjacent -- if you were to go into a pivotal, are there indications that you think you wouldn't have to quite go back and do a Phase I, but you could do maybe a registration Phase II. Is that reasonable? Or is PAH just going to be the sole focus of the investment?

No. I think there is an opportunity like that to supercharge a Phase II and another group, for example, Group 3 as we discussed. We'll have to have discussions with the regulators and then look at the strength of our data.

Right. And hopefully, by then, we'll -- we haven't seen much of a COVID impact on so far, I think things in development in the cardio field, but have you guys seen anything over the development of the program that sort of would be a delay or would be impactful?

Well, we -- I mean, this program, the TORREY study, I mean, we did -- we absolutely dealt with delays as it related to COVID. And the team persisted and we're incredibly resilient, and we're able to get the trial enrolled as we've now announced that we're fully enrolled. But there's no question that COVID was a bit of a challenge because a lot of the treaters were the ones that were being required to go into the ICUs and treat COVID patients during kind of the height of delta. And so that's always going to be a concern as we go forward now in terms of whether or not it creates a delay. The Omicron variant, it wasn't as much of a delay because we're not seeing as much hospitalization. So hopefully, we're through the really difficult spots now.

Yes. Perfect. Okay. Well, with that guys, thank you very much.

Yes. Thanks. Appreciate it.

Okay.