Investors reacted forcefully Tuesday after Gossamer Bio Inc.'s (GOSS, Financial) drug designated GB001 failed to achieve the hoped-for outcome in a study of patients with asthma and chronic sinus inflammation. Shares of the San Diego-based biotech fell more than 25% to $10.09. Since its initial public offering in February 2019, Gossamer has traded as high as $27.
That GB001 fell short of expectations shouldn't have been all that surprising. After all, Amgen Inc. (AMGN, Financial), AstraZeneca (AZN, Financial) and Novartis (NVS, Financial) were unable to prove their drugs of the same type—DP2 inhibitors— activated a receptor that drives allergy and inflammation, according to FierceMedtech.
Gossamer does see a thin ray of light peeking through the clouds. The first of their studies evaluated whether adding GB001 to standard-of-care therapy could help keep asthma from worsening in a severe, relatively uncommon form of the breathing condition, reported BioPharma Dive. While Gossamer's drug didn't significantly outperform placebo on that measure, it did reduce the odds of asthma worsening versus placebo in all groups of patients who received GB001.
CEO Sheila Gujrathi said that piece of data is something to build on. She stated these results are useful for designing a late-stage study for GB001 in severe asthma, adding that the company plans to talk with regulators to "inform our thinking around potential partnerships or strategic alternatives for this program." The company won't be pursuing the drug in chronic sinus inflammation.
At least one investment professional thought Tuesday's stock market reaction was overly pessimistic. " SVB Leerink analyst Joseph Schwartz wrote that "it appears that [Gossamer] achieved what they set out to."
According to BioSpace, Bruce Levy, M.D., chief, division of pulmonary and critical care medicine at Brigham and Women's Hospital and professor of medicine at Harvard Medical School, called the results of the study meaningful and promotes understanding of the DP2 pathway in asthma. "I believe GB001 as an oral treatment has the potential to serve the high unmet need of patients with uncontrolled severe asthma," he said.
Gossamer has three other treatments in various stages of testing—for pulmonary-arterial hypertension, ulcerative colitis and solid tumors.
In the second quarter, the company suffered a net loss of $66.9 million, or $1 per share, compared to a net loss of $44.5 million, or 74 cents per share, for the same period in 2019.
At that time, Gossamer said the combination of current cash, cash equivalents and marketable securities, as well as access to debt will be enough to fund its operating and capital expenditures into 2024.
Disclosure: The author holds a position in Gossamer and Amgen.
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