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Wednesday, Oct 4, 2023

Analysts See Pluses in Gossamer Bio’s Six-Drug Pipeline, Stock

CEO: Sheila Gujrathi

Headquarters: San Diego

Funding: $276 million IPO, preceded by $330 million in two funding rounds

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Stock symbol and listing: GOSS on NASDAQ

Company Description: Gossamer has a six-drug pipeline that ranges from oncology to asthma to inflammatory bowel disease.

Two analyst teams who recently started covering Gossamer Bio see a promising future for the San Diego biotech.

In February, Gossamer raised $276 million through an initial public offering. Trading on Nasdaq comes with analyst scrutiny, which began March 5 as a post-IPO quiet period ended.

The biotech has a six-drug pipeline, three in clinical development and three in the pre-clinical stage, with a scope of asthma to oncology to inflammatory bowel disease.

“We see numerous potential catalysts for investors to realize value creation,” said Joseph Schwartz with SVB Leerink in an analyst note.

Gossamer’s stock closed at $20.51 a share March 5. Schwartz forecasts the stock will trade for $30 a share in 12 months.

The company’s lead drug candidate, GB001, is being tested in moderate to severe asthma, when airways are obstructed by fluid and mucous, making breathing difficult.

Schwartz was encouraged by signs of GB001’s potency, and the tablet’s oral formulation could give an edge over the standard of injected asthma treatments.

But in outlining risks, he said pharmaceutical Novartis AG has a competing drug candidate that could gain first-mover advantage.

Gossamer’s potential treatment is in a phase 2b clinical trial, with interim results expected in the first half of 2020.

A phase 2 trial showed improvements in asthma compared with a placebo, while a separate study comparing the drug to montelukast didn’t meet its goal. Gossamer chalked that up to poor study design and patient selection. It has expressed confidence in the drug.

After the phase 2b study finishes, Gossamer is planning to rapidly transition to phase 3 testing.

Peeking further into Gossamer’s pipeline, GB002 is aimed at pulmonary arterial hypertension, or PAH, a driver of high blood pressure in the lungs, which can be life-threatening.

Barclays analyst Geoff Meacham said current treatments only address PAH symptoms, while GB002 could be the first to improve arterial wall thickening, a factor underlying the disease.

For GB002, Gossamer is planning a phase 1b trial in the first half of the year, and a phase 2/3 study by year’s end.

Meacham set a 12-month stock price target of $27.

Gossamer’s third clinical program, GB004, targets irritable bowel disease. That’s a catch-all term to describe persistent inflammation in the digestive tract, including ulcerative colitis. The company expects to begin a phase 1b study in the first half of the year.

Schwartz called the program’s science intriguing, but cautioned that irritable bowel disease treatment is a competitive space.

The analysts highlighted Gossamer’s proven management team, led by ex-Receptos executives Sheila Gujrathi and Faheem Hasnain.

Besides the $276 million IPO, Gossamer last year raised $330 million in two funding rounds.

During the government shutdown earlier this year Gossamer captivated San Diego biotech watchers with a will-they-or-won’t-they story. The company moved to circumvent the shutdown’s pause on public offerings with a fixed-price IPO, before shelving the plans for a traditional IPO.


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