Gossamer Bio Inc (GOSS) 2019 Q1 法說會逐字稿

Good morning and welcome to the Gossamer Bio First Quarter 2019 Earnings Call. Today's call will feature updates from Gossamer Bio management team followed by a question-and-answer session.

I will now turn the call over to Gossamer's Chief Financial Officer, Bryan Giraudo. Bryan?

Thank you, operator, and thank you all for joining us this morning. With me on today's call is Gossamer's Co-founder and Chief Executive Officer Dr. Sheila Gujrathi.

Earlier this morning, Gossamer issued a press release announcing its financial results for the first quarter ended March 31, 2019, and provided a corporate update. Please noted 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 Gossamer's news releases, SEC filings including the annual report on Form 10-K and subsequent filings.

This conference call also contains time-sensitive information that may be accurate for only a limited period of time. Gossamer Bio undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

Now with all of those wonderful remarks, I will turn over to Sheila. Sheila?

Thank you, Bryan, and good morning to everyone joining us on today's call. The recent months have been an exciting time for Gossamer and we have had exceptionally busy start to 2019. On today's call, I am going to walk you through updates and milestone achieved by our soon to be 4 clinical-stage programs and then I will hand it back over to Bryan to go over our financial results for the quarter.

Since our IPO which closed in February, we have rapidly moved towards our goal of becoming a leader in immunology, inflammation and oncology. We are setting the foundation this year for multiple data readouts expected in 2020.

Let us start with our most advanced clinical stage product candidate GB001, an oral DP2 antagonist, which is being developed for eosinophilic asthma and other allergic conditions, including chronic rhinositis (sic) [rhinosinusitis], both with and without nasal polyps, and chronic spontaneous urticaria.

As we had previously announced, our Phase IIb trial in moderate to severe eosinophilic asthma known as the LEDA study is currently enrolling patients and we remain on track to trigger an interim analysis in the first half of 2020. The LEDA study is testing 3 once daily doses of GB001, 20, 40 and 60 milligrams against placebo in a 24-week study.

All patients will remain on background therapy throughout the study and the primary endpoint is a composite measure known as asthma worsening.

If the interim analysis of the study in the first half of 2020 is positive, we plan to begin the first of 2 safety trials designed to support NDA registration with the FDA.

In February at this [AAAAI] meeting in San Francisco, Dr. Hector Ortega, who is leading the development of GB001 at Gossamer, presented results of a post hoc analysis of a GB001 study in patients with mild to moderate, partly controlled atopic asthma. Findings presented suggested that fractional exhaled nitric oxide, also known as FeNO, could serve as a useful prognostic marker for treatment response to GB001 in addition to elevated eosinophil, which is the marker we're currently using to unveil the LEDA study.

In the analysis, we found marked reductions in FeNO levels as well as greater numeric improvements in lung function and asthma control, where also to placebo in patients with high baseline FeNO as compared to patients with low baseline FeNO. We are excited about these results and the potential implications for future development of GB001.

We have also started to execute our strategy to develop GB001 in other allergic conditions driven by Type 2 cytokine biology, where the GB001 could potentially be first in class.

We are excited to inform you that we have begun treating patients in our Phase II proof-of-concept study in chronic rhinosinusitis, also known as the TITAN study. We expect to dose the first patient in the study later in the second quarter.

The TITAN study will involve patients both with and without nasal polyps, both of which represents populations of high unmet need where there is significant overlap with the asthma population, no lack of effective treatment options for patients failing to respond to intranasal steroids. We plan to enroll approximately 100 patients in the study, which is designed to measure the effect of GB001 on a sinonasal outcome test or SNOT-22 score after 16 weeks of treatment in patients who are refractory to intranasal steroids.

The SNOT-22 endpoint has relevance for both patients with and without nasal polyps and we also plan on accepting polyp-specific endpoint such as the nasal polyps score in a subset of patients with polyps as a key secondary endpoint. We expect this study to be done in 2020.

Additionally, we are on track to initiate another Phase II proof-of-concept study of GB001 in chronic spontaneous urticaria or CSU later this year. Patients with CSU have poor quality of life and little is available to those who do -- that don't respond to antihistamine with the injectable biologic Xolair as the only approved therapy. We also expect that trial to read out in 2020. We are very excited by the potential for GB001 to be the oral treatment of choice across multiple allergic indications and we look forward to 2020 as a data heavy rich year for the program.

Let us now move on to our second most advanced clinical phase product candidate, GB002, which is an Inhaled PDGFR inhibitor. We are developing for the treatment of pulmonary arterial hypertension also known as PAH. PAH is an orphan disease with high unmet medical need. While there are currently 3 classes of vasodilator therapies available to PAH patients, PAH remains a progressive and often fatal disease.

GB002 could potentially be the first drug in a new therapeutic class and we believe it could provide disease-modifying effects sufficient. GB002 was rationally designed after promising clinical results in PAH were observed with a multikinase imatinib, which is currently marketed in oncology indications under the brand name Gleevec.

Imatinib demonstrated very promising efficacy in the Phase III impressed study, but it was hampered by serious safety concerns and was ultimately not for the development of PAH. GB002 was designed to be potent and selective against both isoforms of the PDGF receptor, which we believe are important drivers of the aberrant overgrowth of the cells, lining the pulmonary arteries of PAH patients. GB002 also had activity against other kinases of potential for PAH, such as c-KIT, but does not have activity against BCR-ABL, which is the main target of imatinib.

To attempt to avoid the systemic toxicity seen in the imatinib studies, we are developing GB002 as an inhaled therapeutic delivered by a simple to use dry powder inhaler. We believe that the inhaled formulation provides the drug locally to blood vessels in the lungs, where the disease is present and spare the patient a systemic exposure on the toxicity.

We have completed dosing with GB002 in Phase I safety studies in normal healthy volunteers, in which GB002 was well-tolerated with no significant adverse events observed to date. We expect to begin site initiation and patient screening by our Phase Ib and PH patients later in the second quarter. The Phase Ib will be an exploratory translational 2-week study and up to 24 patients followed by open-label extension, which we plan to initiate later in the year. We hope to generate interesting target engagement and biomarker measures from this study and we anticipate a readout in the first half of 2020.

Moving right along to our third clinical stage asset GB004 is an Oral HIF-1 alpha Stabilizer for the treatment of inflammatory bowel disease, including ulcerative colitis or UC. IBD is a disease we know very well, given our team's experience the number of IBD therapeutics including ozanimod, and though it is an increasingly crowded space, long-term clinical remission and mucosal healing rates for IBD patients remain low and thus we believe there is still significant unmet need for these patients.

The clinicians we've spoken to in designing our clinical program have been very excited by GB004 oral [valid] administration and a novel differentiated mechanism of action we're pursuing. GB004 is a gut-targeted prolyl hydroxylase inhibitor designed to preferentially stabilize HIF-1 alpha. A transcription factor involved in the body's protective response to low oxygen levels. It has been demonstrated that lower than normal oxygen levels are present in the intestinal tissue of the IBD patient, which contributes to the destruction of the mucosal barrier and perpetuates the inflammatory process.

In preclinical IBD model, HIF-1 alpha stabilization is known to induce protective mechanism involved in promoting barrier function, epithelial reconstitution and reducing inflammation, ultimately resulting in healing of the mucosa. Well, we have also seen some potentially important immunomodulatory effects of GB004 in preclinical model, GB004's novel mechanism of action is a unique and that enhances epithelial barrier function and repair rather than act to purely immunosuppressive mechanism.

After running Phase I studies in healthy volunteers outside of the U.S., we now have an active IND and we're very pleased to announce that we have begun screening in a Phase Ib trial in patients of my mild -- active mild-to-moderate UC. We expect to dose our first patient in the study in the second quarter. We will begin dosing patients for 4 weeks and potentially increase the length of dosing to 8 weeks following the completion of preclinical studies.

The study designed to demonstrate activity and UC patients based on target engagement changes in gene expression and epithelial barrier restoration and potential UC symptom improvement. We anticipate that this trial will have an initial readout in the first half of 2012.

Finally, GB1275 is oral CD11b modulator for the treatment of cancer. GB1275 is our first immuno-oncology product candidate, and we're very excited about the preclinical data it has generated in difficult to treat tumor models. Our strategy in immuno-oncology is a focus on tumor types that have either primary or secondary resistance to anti-PD1 immune checkpoint therapy.

A key factor in both forms of resistance are the innate immune cells, such as myeloid-derived suppressor cells or MDSCs and tumor-associated macrophages or TAM, recruited by the tumor to suppress the immune response. In preclinical studies, modulation of CD11b with GB1275 reduce trafficking of those immune cells into tumor and importantly also converted or re-polarized them from a suppressive state to a pro-inflammatory state.

We have recently submitted our IND to the FDA and sent it to the FDAs review. We plan to initiate a Phase I/II study in advance solid tumor indications in the second half of 2019. The Phase I/II study will investigate GB1275 in multiple tumor types, including pancreatic, gastric, colorectal, esophageal and triple negative breast. These are all tumor types where immunosuppressive biology and CD11b expression in cells is prevalent.

The Phase I portion of the study consists of dose escalation of GB1275 monotherapy followed by dose escalation combination with the anti-PD1 therapy or chemotherapy. When we reach our recommended Phase II dose, we plan to open in the same protocol 3 Phase II expansion cohorts with anti-PD1 therapy or chemotherapy in first line of metastatic pancreatic cancer, second line are greater micro satellite stable colorectal cancer and second line or greater PDL1 positive gastric or gastroesophageal cancer.

I'm very proud of the work our team has done to add GB1275 to our portfolio of clinical stage product candidate, and we look forward to bringing GB1275 into the clinic later this year. It has been a very busy few months and we are proud of the progress we have made in building out a diverse portfolio of asset, targeting indications with high unmet need. Before I turn the call back over to Bryan, I also want to highlight that we will be hosting a fireside chat this afternoon at 4:00 p.m. Eastern Time at the Bank of America Merrill Lynch Healthcare Conference and that event will be webcast live for all those who would like to join. Please see the Investor page on the Gossamer Bio Website for further detail.

With that, I would now like to turn the call back over to Bryan Giraudo for a financial update. Bryan.

Thanks, Sheila. I will give a brief summary of our financing activities over the past few months before going over the results for the quarter. As previously announced, in February we closed our initial public offering, in which we raised over $291 million in net proceeds. Following the close of our IPO, we announced $150 million debt facility led by Midcap financial. $30 million at that facility was taken down at the closing of the agreement and $120 million will be available to Gossamer subject to the achievement of certain clinical development milestones and other customary conditions. With these 2 financings, Gossamer is in a very strong cash position with our cash runway extending into the second half of 2021.

Now onto the financial results for the first quarter. We ended the quarter with $492.5 million of cash and cash equivalents, which also included a $11 million interest in securities receivable, which we received following the quarter end. This does not reflect initial proceeds we received at the signing for the Midcap facility.

Research and development expenses were approximately $25 million in the quarter, which reflects a ramp-up of expenses for GB001, GB002 and GB004. In process R&D expenses, which consist of costs related to the acquisition and licensing of our product candidates were approximately $1 million in the quarter. G&A expenses were at $8 million in the quarter with nearly $2 million of that in stock based compensation. Our net loss for the quarter was $32.6 million equating to $0.90 per share.

With that, I'll turn the call back over to Sheila to offer some closing comments before we open the line for questions and answers. Sheila.

Thank you, Bryan. At Gossamer Bio, we are thrilled with the moment when we have generated in developing our multiple product candidate that we believe has the potential to significantly better lives of patients and their families. We're also incredibly proud of our great team, who is realizing our vision at Gossamer Bio. Our strong financial position allows us to continue to advance our science for the benefit of patients, caregivers, physicians, employees and shareholders alike.

Thank you for taking the time to join us today and for your continued support. With that, I will now turn the call over to the operator to begin the question and answer session. Operator?

(Operator Instructions) And our first question comes from Ying Huang with Bank of America Merrill Lynch.

Congrats on all your progress. So maybe 2 quick ones for Sheila. First one is, all investors are looking forward to the results from Novartis on the first batch of clinical data from Phase III trials for fevipiprant. So can you talk about the read-through? If it's positive, what does that mean for GB001, which is obvious I guess? And then, which is negative, how should we think about any comparative advantage your compound GB001 may have against fevipiprant here?

And then secondly, you completed the Phase I trials for GB002 in healthy volunteers. Can you talk about the findings in terms of the PK dose response and PD, besides the fact that there's no [assaying] from the trial? And then quickly for Bryan, can you talk about why you took that -- I guess financing capacity from Midcap? Is it because you need additional cash to support ongoing development or not?

Thanks, Ying. Great questions. Yes. So let's start with the Novartis study [fevipiprant] program. We are also very much looking forward to their Phase III data readouts. Just to remind everyone, they have a large Phase III program actually consisting of 6 Phase III trials within asthma. 4 of those safety trials are reading out later this year.

In terms of their recent guidance, that is still on track and so we are anticipating they have 2 exacerbation trials that will be reading out in September and December time frame and then 2 FEV1 or lung function trials reading out in around November. So these are LUSTER and the ZEAL trials that will be reading out.

And so if that -- those trials are positive in the moderate-to-severe asthmatic population including a subgroup eosinophils high patients, with that, it is a very much a validation of the mechanism of DP2 antagonism and so I think that will be positive to read through to our program because of a similar mechanism of action that we -- both the program share. So we are very much looking forward to that.

[Now they're] going into a broad moderate to severe eosinophilic asthma population, but their primary endpoint is on the subgroup of high eosinophils or Th2 high subgroups. And we do know that they have stated that, that is their base case in terms of where they think they would see positive data, which is very consistent with the way we view the biologic relevance and activity both DP2 antagonism and for GB001.

Now we do have some points of differentiation to fevipiprant. We have a very potent selective molecule which is GB001 and that we have high binding affinity to the DP2 receptor. We also have prolonged receptor residence time, which is greater than what has been observed with fevipiprant. We have about an 18- to 20-minute receptor residence time, but Novartis publishes around 12 minutes and we do think that's very important for the mechanism of action here as we inhibit PGD2 internalization of the DP2 receptor in a very effective manner.

And also very importantly, we have, we say, greater PK characteristics for GB001 and that is different. It has to go up to 150 and 450 milligrams to really reach their exposure that they think are clinically efficacious. And we are able to achieve that with much lower dosing and we think actually better coverage over a 24-hour period than those dose levels. So there is a potential that we could show really potentially better efficacy in the clinic in the case that fevipiprant doesn't meet their mark.

So those are very important characteristics for us for GB001. We will be watching closely to see what the clinical efficacy and safety profile is coming out of the fevipiprant Phase III trials and of course we are greatly anticipating seeing our interim data in the first half of 2020 followed by the full data readouts later that year.

So that's the first question. With that, I'm going to move on to the second question, unless you have any other further follow-up.

The Phase I for GB002, yes, that was a very exciting trial for us because that we obviously took the inhaled formulation of GB002 into normal healthy volunteers with a single setting dose cohort and multiple setting dose cohorts. And we are again very pleased with that PK profile that we're seeing coming out of that study. We are seeing absorption rapidly into systemic circulation but with fast clearance, so we have a short half-life. We also do not see dose accumulation upon multiple dosing, which is it was important for us to make sure that we were ruling that out.

So the profile of really having increased lung exposure compared to systemic exposure is being confirmed in the clinic and we're looking forward to taking this -- the dose regimen into now PAH patients in the Phase Ib trial to confirm that PK characteristics that we're seeing in the normal healthy volunteers.

And again, just to remind you, we expect to have several fold higher exposure in the lungs compared to the systemic exposure, which is really the crux of the differentiation that we want to maximize efficacy and minimize systemic toxicity. And then the safety and tolerability profile were very robust, in that we do not see any significant adverse events and the inhaled formulation was very well tolerated in normal healthy volunteers. So again very -- that's very nice data for us and confirming that the dry powder inhaler and the formulation is being well tolerated.

With that, I'll have Bryan to answer the third question.

Thank you, Ying, on the question with regards to the Midcap debt. We put that in place purely as a means to ensure that the runway was very, very sufficient well into 2021, as I said with 7 milestones next year. We want to make sure that we could deliver the news and those milestones to our investors and still be able to communicate robustness of the balance sheet to trigger the next level of clinical work that would be on the comp. So it was really a means to ensure long-term runway and access to capital.

And our next question comes from Joseph Schwartz with SVB Leerink.

I was wondering if you could talk about the signals that you've been looking for to see if GB001 has activity in some of the newer areas you've outlined going into, such as chronic rhinosinusitis with and without nasal polyps and chronic spontaneous urticaria. It seems like development in some of these spaces has been heating up more across pharma too. So has the increased activity made execution a challenge in any way?

Yes. Thanks, Joe. Well again, we're excited about these additional indications we're going after. And it is actually more white space than that. We are the only oral, that's really moving forward into both chronic rhinosinusitis with or without polyps and chronic urticaria disease area. So I'll start with chronic rhinosinusitis, again with or without polyps and here the study is really designed to involve patients in both populations.

Now the primary endpoint is looking at the SNOT-22 clinical outcomes measure, which is a 22-outcome point questionnaire and we're going to be basically looking for what we consider clinically meaningful improvement looking at those outcome measures and that's very relevant for patients either with or without polyps because they get a lot of nasal symptoms that these patients have including nasal obstruction, congestion, loss of a sense of smell and other symptoms that are very pertinent and really debilitating for these patients.

In addition as I mentioned, we will be looking at the nasal polyps score and this is a validated endpoint that actually is being brought forward with dupilumab in their Phase III trials. Dupilumab has applied to the FDA as a supplemental BLA that application has been accepted and is under priority review at this time.

And so they have looked at the endpoint of nasal obstruction and congestion as well as looking at the reduction in nasal polyps for. And so that is something also that we're very keen to understand in the subgroup of patients that have nasal polyps. So we are looking again for what we consider clinically meaningful improvement or reduction in that nasal polyps score as well.

So we have a number of other outcome measures that are exploratory but very exciting. We're looking at CT scan outcomes, so we're looking at the reduction of pacification of the sinuses with CT. We're also looking at the quality of life question coming out of this area and really looking at aspects of chronic rhinosinusitis in terms of chronic rhinosinusitis exacerbation, requiring oral steroids or an emergency room visits and things of that nature which is similar to how we think about severe exacerbations in asthma.

So again robust study from our perspective and that is to study 2 different populations and between all the different endpoints we're going to be looking at, we think we'll get a nice read on what is our activity level here, and there's a significant amount of Th2 biology that's really driving both of these populations. So we think that makes sense.

Now the second indication of Chronic urticaria and just a -- you asked about the enrollment challenges, with chronic rhinosinusitis we're pretty excited. We don't know of any really significant competitors out there right now, again especially with the oral. So we think we can enroll that trial and say in our time line. So we don't have any significant concerns at that point. And again have begun screening patients here and are very excited to enroll the patient later in the quarter.

For chronic urticaria again well valued the pathway -- development pathway, we have Xolair approved there. Ligelizumab, the next-generation anti-IgE antibodies coming forward from Novartis and 2 large Phase III trials and there are other biologics that are doing some exploratory work within urticaria.

So here we are looking at the urticaria activity score 7 and the urticaria control test. And so we have a pretty good idea of what would be a clinically significant or relevant improvement in urticaria symptoms. And we don't have to do a very large study and sample size to actually get a pretty good read on clinical activity and efficacy. And here again, while Ligelizumab is going forward in a very large Phase III program, we do think there's a lot of excitement around in oral, so we're excited.

There is a BTK inhibitor that is being studied in urticaria as well. But there is a lot of excitement around the DP2 receptor biology, especially when it comes to the inhibition of basophil and mast cell function, which are the key cell types within urticaria. So we're getting very good receptivity from the KOLs and investigators in the space, and we don't anticipate a significant challenge in recruiting this trial.

And if I could ask one on GB001 and asthma. For the interim analysis that I think is guided for the first half of 2020 what data will you evaluate for the interim analysis versus the final analysis? And is there any opportunity to adjust course in between the 2 analysis?

Yes, I feel we have pretty robust data read out. This is a substantially sized study. So we'll have about 320 patients. So we'll have 24 weeks' worth of data and of course, we'll have even more patients that will have additional data of varying duration, less than 24 weeks. And the interim analysis, which was really designed to look at efficacy across a number of endpoints, so our primary endpoint is looking at asthma worsening. So that's a clinical composite outcome measure, very similar to what we study in [patients.] Phase II trials has been set in other clinical trials where you really look at different measures of rescue medication use, of course, exacerbation, worsening in lung function and the like.

So we'll look at the totality of the outcome measures in terms of asthma worsening reduction as well as each subcomponent of that composite measure. And of course, we'll look at lung function as measured by FEV1 as well as peak flow and then we'll look at a number of other safety, tolerability, PK exposure. And so I think we're pretty excited about the robust type of data readout we'll get from that trial.

Now the full data readout will be of course all 480 patients with 24 weeks’ worth of data and this analysis is not really designed to change the design or the conduct of the Phase IIb trial, it's really actually more of administrative analysis that helps us with Phase III planning and the Phase III initiation that we may want to pursue. If the data is positive, that really allows for operational efficiency and allows us to quickly go into a Phase III program and continue to capitalize on the recruitment. And the robust recruitment we're seeing right now in the Phase IIb LEDA trial.

And our next question comes from Geoff Meacham with Barclays.

This is [Scott] on for Geoff. Just wondering, as you get closer to commercializing 001 asset in asthma, have you thought about how you're going to define the moderate persistent market for physicians and integrate yourself before the biologics that are in the severe persisting category? And maybe what percentage of the intermittent or moderate patients can you capture before they move directly to that severe persistent category?

Thanks, Scott. Really great questions. We are spending actually quite a bit of time understanding this aspect of the market very -- in a much more robust manner and including looking at claims database analysis and really getting that type of insight, to your point.

And we do think this is really where a lot of the market opportunity exists for GB001, in that there is a substantial amount of patients that are considered moderate, [GINA 4 or 5,] that is really containing to have active symptomatology despite being on inhaled corticosteroid and one other controller medication that we think is not being addressed by the biologic therapies that are available and approved and on the market today, but are -- we think there are high unmet need, they do not have adequate asthma control, and they frankly don't want to go onto a biologic. They're not very adherent to their ICS. We're looking at even adherence rates with inhaled corticoid steroids and it's pretty poor.

As you know, there's actually a 50% rate with what we call non-adherence or non-compliance. And understanding who are the physicians who take care of these patients as well and we do see a mix of allergists, pulmonologists and really a subgroup of primary care physicians who we think we could also target with an oral treatment.

And so it is around that positioning of our profile, where we will have we think really robust efficacy similar to biologics, safety and tolerability that will be improved and that oral, once a day convenient administration that does not require injectable or infusion, is not administered in the office and again is really greatly anticipated and needed by patients and their prescribing physicians.

So we think we have a -- we're getting a better idea of how to target that moderate persistent category before the more severe persistent asthma comes on and that's a significant market potential in terms of numbers of patients.

And our next question comes from Josh Schimmer with Evercore.

First, on the 002, can you elaborate on the specific relevant biomarkers or disease outcome measures that you're looking for in terms of the magnitude of effect of the signal in the Phase II trial for advancing the program? The same question for 004, with the addition of the gene expression markers. And then the third question, how are you thinking about your capacity and optimal timing for additional biz dev efforts considering that over the next year or so, you're going to have a number of data points that will really inflect the direction that the company is heading?

Thanks, Josh. Yes, I'm happy to examine that a little bit further. So for 002, we actually had a number of very interesting biomarkers that we can study in the Phase Ib translational study. And where we -- we've also seen good efficacy or activity with imatinib. So there's actually some precedent there in terms of characterization of effect on these markers.

So a very important marker in the space is what we call the NT-proBNP, a level which is the brain natriuretic peptide, which is a real marker of right heart strain in this patient population. And so that's a key biomarker that we're excited about studying.

Again, imatinib did show some nice reductions in proBNP levels and preclinically in our own animal models, we've seen a very nice reduction in proBNP and actually greater than what we've seen with imatinib. So that's a key market for us.

In addition, as you probably know in PAH, imaging can be very relevant and very helpful in understanding the efficacy. And actually, there’s a lot of movement to imaging as a non-invasive measure to look at effects on especially right heart function strain and muscle mass. And so cardiac MRIs and cardiac -- echocardiograms are important for us and so I think we're leaning more toward the MRI field and that is, again, more robust outcome measures. But that's another key imaging measure that we're going to be looking at, especially with continued treatment of these patients.

And then we'll be looking at PDGF gene expression profiles. We actually are looking at some other target engagement assays, which get at some of the other kinases that we may hit just to give us an idea of, again, target engagement. So I think a pretty nice group of biomarker results that we'll be looking at to see and assess the clinical activity especially with the high lung exposure we think we'll be achieving in the clinic. That's 002.

I'll jump to 004. And again here some really exciting target engagement data looking at HIF-1 alpha levels as well as the HIF-1 alpha gene expression signature that we've been looking at pre-clinically. And we have seen some nice data on this even looking at Phase I normal healthy volunteers, where we did colonic biopsies. We actually saw some target engagement there in that population and so that's something that we think we'll continue to study in the ulcerative colitis population.

But there -- because we're enrolling patients who have active histology and we're looking at a histopathology index that's been developed by Robarts to see what is the impact on that histology over time. The patients can only get into the study if they have active histology on screening. So that will be again a nice measure of clinical activity.

And then because we're doing endoscopy, either colonoscopies or flex sigmoidoscopies, we'll be looking at the mucosa directly and will be able to really to assess the Mayo score.

With 4 or 8 weeks of treatment, that's really the induction time frame of where we could start seeing on some clinical improvement. So a lot of data will be coming out of that Phase Ib trial. So again both pretty exciting studies from our perspective when we think we should get some nice data readouts by the first half of 2020.

And then lastly on business development, we are continuing to do active business development. You are right, we are executing on a number of clinical programs and so that's really where our focus has been, and we are very focused on execution right now, to make sure we meet our milestones and we are generating clinical data, not only on GB001 across those 3 indications that's really on our pipeline as well for 002, 004 and 1275 and that we will have data read out that will be meaningful coming out of these programs in that same time frame as of 001 data readout. So that's obviously top of mind for us, but we do have a very active business development effort. We get a lot of inquiries, and we see a lot of programs that we are interested in.

What we've guided to right now is that we are primarily looking at programs in the late stage research arena and those are programs that relate back to our research portfolio and pipeline and will be coming into the clinic in that 2021 and '22 time frame. So I think that's really where most of our business developments efforts have been, looking at programs that we're excited by about either because of the target biology that is known to us that we think could really be differentiated or a novel biology that we think would be truly innovative. So we're hoping to continue to pursue those efforts and announce those as we conclude some of the [BD] deals.

And there are no other questions in the queue, I'd like to turn the call back to Sheila for any further remarks.

Well, thank you so much, everyone, for joining us on today's call. We are very excited that this is Gossamer Bio's first earnings call and we look forward to really getting together with you on a quarterly basis to show you all the progress that we're making and our ability to execute on our clinical programs.

As we've always said this is what we're trying to build and innovate research and development engine that can really do a lot, but in a very nimble and entrepreneurial way with high quality. And along those lines, I'd like to thank the Gossamer Bio team for pulling together really all this amazing material and continuing to really support our efforts here as well as the folks on the call.

So thanks, everyone, and have a great day.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.