Gossamer Bio Inc (GOSS) 2021 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Gossamer Bio Q2 Earnings Call. (Operator Instructions)

And I would now like to turn the call over to your first speaker, Bryan Giraudo, Chief Financial Officer. You may begin your conference.

Thank you, operator, and thank you all for joining us this afternoon. I'm joined on today's call by Gossamer Bio's Chairman, Co-Founder and Chief Executive Officer, Faheem Hasnain; Richard Aranda, Gossamer Bio's Chief Medical Officer; as well as Laura Carter, Gossamer Bio's Chief Scientific Officer.

Earlier this afternoon, Gossamer Bio issued a press release announcing its financial results for the second quarter ended June 30, 2021, in addition to providing a corporate update.

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 Gossamer's news releases and 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. Our ability to meet our guidance, especially that related to the timely initiation and completion of our clinical studies, in addition to our ability to release results from our clinical trials in a timely manner, 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'll turn the call over to Faheem. Faheem?

Thanks, Bryan, and good afternoon to everyone who's joining us on today's call. We appreciate you tuning into this earnings and update call to discuss our efforts at Gossamer and the efforts that we've been making to develop new medicines to meet unmet needs across a variety of diseases.

I've granted 2021 as a year of execution for Gossamer, and our team has worked tirelessly to set the stage for 2022 to be a transformative year for our portfolio. Now I'm going to turn the call over to Richard in a minute to give you a more detailed update. But to start, the highlights are that we're on track to have 2 Phase II data readouts for our 2 lead clinical programs, seralutinib and GB004 in the first half of 2022, of course, subject to further developments in the pandemic.

Much of the focus on the call today will be on seralutinib. So I'm going to start with GB004 as I view this as an equally exciting part of Gossamer's portfolio. The SHIFT-UC study of GB004 is enrolling 195 patients with active ulcerative colitis despite treatment with 5-ASA and evaluating the induction of clinical remission at 12 weeks as its primary endpoint. We believe that GB004 has the potential to disrupt the treatment paradigm in UC and Crohn's disease as an oral nonimmunosuppressive product candidate that's meant to induce mucosal healing in patients with inflammatory bowel disease. We're looking to the results of the SHIFT-UC study in 2022.

Now moving on to seralutinib. The TORREY study is enrolling 80 patients with pulmonary arterial hypertension and evaluating change in PVR at 24 weeks at its primary endpoint. Seralutinib has a potential be a disease-modifying treatment for PAA patients for whom the only currently approved treatments are vasodilatory and do not affect the underlying disease pathogenesis.

Now we're also excited today to give you a glimpse of the open-label data generated with seralutinib. As a reminder, seralutinib is an inhaled PDGFR c-KIT and CSF1R kinase inhibitor, which is currently enrolling a Phase II study in PAH patients.

Now the pandemic allowed just 2 patients to complete the open label extension. So while the data set is limited, these case studies give us greater confidence that we're on track as we look forward to the readout next year from our 80-patient Phase II TORREY study.

Now without any further ado, I'd like to hand it over to Dr. Richard Aranda, Gossamer Bio's Chief Medical Officer, who will provide this update on the seralutinib program as well as an update on our other lead clinical program, GB004. Richard?

Thank you, Faheem. Today, I am very excited to give an update on the seralutinib program, including a look at the safety and tolerability, biomarker and clinical activity data we obtained in our Phase Ib open-label extension.

As you know, last year, we conducted a Phase Ib and WHO Group 1 functional Class II through IV PAH patients. The placebo-controlled randomized double-blind IIb treatment period was designed to evaluate the safety and tolerability of inhaled seralutinib as this was our first experience with seralutinib in patients with PAH.

Patients started off at a dose of 45 milligrams BID, and were dose escalated up to 90 milligrams BID at the investigator's discretion. In addition to safety and tolerability, we also were interested in evaluating the plasma PK and PD profile of seralutinib and the assessment of target engagement. This Phase Ib study included an open-label extension period in which patients could receive seralutinib for up to 6 months.

We enrolled our first subject in the study in the first quarter of 2020. Unfortunately, the first wave of the COVID-19 virus caused site closures and did not allow the initial group of patients on the study to continue on to the open label extension. As sites began to reopen, we have 2 patients who enrolled and were able to complete the 6-month open label extension. We were very happy to get some initial experience with seralutinib in patients with PAH for up to 6 months, which, to our knowledge, is the first such data for an inhaled kinase inhibitor.

I'll share some of that data in a few slides. But first, on the next slide, I want to take you through how we arrived at the 45-milligram and 90-milligram BID doses we tested in the study. Several approaches were used to inform on dose selection. And we have been pleased, thus far, to see that the PK and target engagement data validate our thinking. To remind you, seralutinib was selected and formulated to be an inhaled therapy for PAH that achieves deposition in the deep lung, resulting in greater lung-to-plasma exposure and hence, potentially a more favorable safety profile.

With this intention, our dose levels were informed by a combination of animal model data, allometric and direct scaling and PK results from human studies. On the left panel, studies in rats indicate that the lung-to-plasma exposure ratio is, on average, 30x with a half-life that was approximately double in the lung consistent with seralutinib's intended profile, as mentioned previously.

In terms of allometric and direct scaling approaches, we use efficacy data from animal models of PAH. In the Sugen/hypoxia model, where seralutinib demonstrated an improvement in hemodynamics and an effect on remodeling, a dose level of 12.8 milligrams per kilogram approximates a 90-milligram BID dose in humans.

Finally, we utilized the systemic pharmacokinetic data we generated in our human studies for normal healthy volunteers. Based on the animal model exposure, scaling predictions and plasma exposures, we wanted to ensure adequate levels of drug would be in the lung over the dosing period. We were pleased to see that both our doses are projected to provide adequate free lung concentrations of seralutinib above both the biochemical and cell-based IC50 values for PDGFR-alpha, PDGFR-beta and c-KIT and the cell-based IC50 for CSF1R for a 24-hour period. We will further describe these predictions in the next slide as we discuss our PK and target engagement results from PAH patients.

One of the key objectives of the Phase Ib study was to ensure that there were no major PK differences in PAH patients compared to normal healthy volunteers. Our data indicated that the PK was similar between PAH patients in normal healthy volunteers. This panel shows the total drug PK profile of inhaled seralutinib at the 2 doses of 45 and 90 milligrams. The PK is characterized by a rapid Tmax of 5 to 6 minutes with approximately a 4-hour half life in the systemic circulation.

Because we believe that efficacy will be driven by free seralutinib concentrations in the lung, the next panel on the right shows the projected free drug concentrations in the lung. This slide also shows the observed plasma concentrations from the PH patients. Both are overlaid starting from the bottom left, onto the biochemical IC50s for PDGFR-alpha, PDGFR-beta, c-KIT and CSF1R. Using the 30x lung-to-plasma exposures we observed in our preclinical studies, the concentrations achieved in the lung with the 45- and 90-milligram doses are projected to be adequate to inhibit the targeted kinases.

More specifically, as you can see, the orange and green PK curves, again, representing the model lung concentrations of the 90- and 45-milligram doses, respectively, remain above the biochemical IC50s for both PDGFR receptors and c-KIT over the course of 12 hours and CSF1R partially over that time period. With BID dosing, we expect this would provide adequate target coverage in the lung over 24 hours, which may translate into efficacy in PAH.

Of note, the observed rapid clearance of seralutinib in the plasma is just as important as our extended coverage in the lungs. We believe this profile is essential to help avoid the tolerability and safety viability seen with orally administered kinase inhibitors such as imatinib in the Phase III IMPRESS trial in PAH.

One of the key measures of pharmacodynamic effect we employed in our Phase Ib study was a flow cytometry-based CSF1R target engagement assay in whole blood. This took advantage of the fact that seralutinib targets the CSF1 receptor and it could be used as a measure of drug effect to inhibiting receptor internalization.

As shown in the bar graph on the left, 5 minutes following inhalation of seralutinib, there is inhibition of CSF1R internalization, which recovers towards baseline at the 2-hour time point. We interpret this data as showing, first, seralutinib is inhibiting the pathway of one of its targets, which appears to be consistent with the observed plasma PK curves, showing initial exposure of protein and then going below the IC50 of CSF1R. And second, it reflects the intended profile of seralutinib, that is rapid clearance from the systemic circulation, lowering the chances for the occurrence of systemic adverse events.

Overall, it's encouraging to us that these PK and PD data support the pharmacologic activity of our dose predictions.

Next, we would like to turn to the results from our Phase Ib study in PAH patients. We had 8 subjects who completed the 2 weeks in the way seralutinib was generally well tolerated. The most frequent reported adverse events were mild to moderate cough associated with inhalation and mild headache. There were no clinically significant change in labs, electrocardiograms, pulmonary function tests or vital signs.

New additions to this slide from versions we have shown in the past are data from the open label extension. As a reminder, given COVID-related site closures during the first wave of the pandemic, we were limited to 2 patients who enrolled in the fall of 2020 with extended open-label experience. This small end requires caution when interpreting results from the experience, but we found the data encouraging and wanted to share it with all of you.

As background, both subjects were classified as functional class II and came into the study on 3 background therapies, including oral prostacyclins. We were reassured to see that seralutinib was tolerated when combined with standard of care therapies in these subjects. No serious adverse events occur, and no safety concerns were identified during treatment.

On the right side of the slide, our biomarker and 6-minute walk data that were collected over the course of the full 6-month experience for these 2 patients. The graph on the left shows the change in NT-proBNP, which is a biomarker of right heart strain and is used in the risk score calculations of PAH patients. Decreases in NT-proBNP were observed in both patients.

The graph to the right depicts changes in the 6-minute walk test, which is a potential registrational clinical endpoint. Both patients increased their 6-minute walk distance over the course of the study.

As mentioned previously, we want to be careful not to over-interpret data from just 2 patients. But we are encouraged to see that both patients tolerated 90 milligrams BID of seralutinib over 6 months on top of 3 background therapies and experienced decreases in NT-proBNP and increases in 6-minute walk distance, which are 2 important measures we are tracking in the TORREY study.

The next slide highlights that we have a new poster presentation at the upcoming virtual European Respiratory Society Meeting on September 5 on further biomarker analysis from the 2-week treatment period, including data gathered on gene expression changes and evidence of pathway modulation.

I will close the seralutinib update with a quick overview of the Phase II TORREY study design and endpoints. We are enrolling up to 80 subjects randomized 1:1 to seralutinib and placebo. We will be testing the same doses in this trial as those study in Phase Ib with patients being uptitrated to 90 milligrams twice a day. The primary endpoint of the study is change in pulmonary vascular resistance, or PVR, at week 24. This study is powered for a change in PVR, and we're hoping to see an 18% to 30% placebo-corrected improvement which was included in the same ballpark as the imatinib Phase II and Phase III trials, in addition to the more recent sotatercept Phase II results. We will also be looking at 6-minute walk test as a key secondary, though the study is not powered to show a significant treatment effect on this endpoint.

Just as a reminder, while imatinib in its Phase II study and the high dose in the sotatercept PULSAR Phase II study both showed 6-minute walk distance improvements of 21 to 22 meters, neither were statistically significant results. So while we're hoping to see a similar improvement effort endpoints with a high degree of variance like 6-minute walk distance typically require larger studies to reach statistical significance. We will also be looking at changes in biomarkers like NT-proBNP.

Before I turn the call back over to Faheem, I also wanted to give a quick update on the GB004 program, our HIF-1 alpha stabilizer for the treatment of IBD, including ulcerative colitis. Enrollment in the SHIFT-UC study of GB004 is continuing, and we expect to read out top line results for the primary endpoint of clinical remission at 12 weeks in the first half of 2022, pending developments in the COVID-19 pandemic.

After that 12-week period, patients who have not worsened are checked on their sign therapy for an additional 24 weeks to evaluate maintenance grew in the total of 36 weeks.

And finally, in October, at UEGW, Silvio Danese, a former President of ECCO and a preeminent IBD KOL, at Humanitas University, will present a post-hoc analysis of our completed Phase Ib study of GB004 in patients with active UC. The analysis focuses composite endpoints, combining clinical, endoscopic, histologic and molecular readout. GB004 outperform placebo across several composite endpoints, demonstrating the breadth and depth of improvement some patients experience on the study while being treated with GB004.

Use of composite endpoints may decrease placebo response and enhanced signal detection. And we are excited to be pushing the field of IBD research forward alongside Dr. Danese and our other closed advisers.

With that, I will turn the call back over to Faheem, but I'm happy to answer any questions on the seralutinib or the GB004 programs during the question-and-answer session. Faheem?

Thanks, Richard. Now before I hand it over to Bryan, I just want to address the future of the GB1275 program. As was stated in our earnings release, Gossamer is in the process of discontinuing clinical activities related to GB1275, which is an oral CD11b modulator for the treatment of solid tumors. And while we've generated some encouraging biomarker data and still believe that addressing the immunosuppressive cell types in the tumor microenvironment holds promise for patients, the next step in clinical development would require a sizable Phase II program, which is not an investment Gossamer will make given our excitement for the Phase II seralutinib and GB004 programs, in addition to the programs in our preclinical pipeline.

We want to thank all of the patients, investigators and caregivers who've contributed to this program. Your efforts are immensely appreciated by the Gossamer team.

And with that, I'll hand it over to Gossamer Bio's Chief Financial Officer, Bryan Giraudo, for a financial update. Bryan?

Thank you, Faheem. We will now review the financial results for the second quarter of 2020 -- 2021.

We ended this quarter with $405.9 million of cash and cash equivalents. We anticipate our cash and cash equivalents and marketable securities, along with access to our debt facility, will provide us sufficient capital resource to fund operation and capital expenditures until second half of 2023. Research and development expenses in the second quarter of 2021 were approximately $44.3 million as compared to R&D expenses of $38.7 million in the same period in 2020.

G&A expenses were $11.3 million in the second quarter as compared to G&A spending of $11.7 million in the same period of 2020. Our net loss for the quarter was $59.8 million, equating to $0.80 per share. For the same period in 2020, we incurred a net loss of $66.9 million, which equated to $1 a share.

With that, I will turn the call back over to Faheem to offer some closing remarks before we open the line for Q&A. Faheem?

Thanks, Bryan. Again, we appreciate everyone listening in today, and we look forward to answering any questions you may have.

Operator, please go ahead and open the line to questions.

(Operator Instructions) And your first question will come from the line of Joseph Schwartz.

I was wondering if you could characterize the current status and maybe pace of enrollment in TORREY and SHIFT-UC. I appreciate it's very challenging to project when these extensive undertakings will wrap up beyond your window of first half of '21, but it would be helpful for us to be able to visualize how far you still need to go, given the current state of world affairs.

Yes. Joe, we have kind of made a point of not commenting on specific enrollment data, and I think we'll stick to that view. But instead, continuing to be consistent with our guidance of when you can expect top line data, which again, just to reiterate, could be first half 2022. So that's obviously got a COVID caveat to that as most companies do. But nonetheless, we feel comfortable and confident in continuing to point to that guidance.

Okay. Great. And then maybe a question on GB004 then. A lot of IBD KOLs we speak with will lament that payers frequently restrict the use of novel agents they'd like to use for earlier-stage patients, or they'd like earlier-stage patients that come to them to have the opportunity to use. And so disease activity often becomes moderate to severe in a lot of patients that might not otherwise progress to the same extent.

So I'd love to get your thoughts on what will it take for an agent like GB004 to break in where other new agents have had a hard time getting payers to grant broad access? Is it just pivotal data in earlier-stage patients? Or do you think there'll be some other important things that have to fall into place?

Yes, Joe. It's a great question. And I think there's a number of dimensions here on this program. I mean, the profile of the program, I think, lends itself really well to what potentially could be exceptional positioning in the treatment paradigm for IBD patients. And that is that given that it's got -- it's kind of a non-immunosuppressive approach, we can actually push off and delay the utilization potentially of more immunosuppressive agent and certainly biologics. And I think that, in itself, has the potential to be attractive attribute. There's all kinds of, as we know, knock on potential concerns with agents around safety and the like.

So it remains to be seen exactly how payers will treat it. And of course, we'll need to be thinking about a pricing strategy that fits well with its physician in treatment. But both the potential to bring in and introduce a safer agent post-5-ASA failure, prebiologic, pre-immunosuppressive, I think is pretty attractive.

We've had a lot of great feedback from KOLs on this profile. There's definitely a market need, and this is a pretty unique niche in the context of where this has the opportunity to be slated. And then, of course, the opportunity, assuming that the safety profile continues to play out as we hope it will, the potential for it to be a backbone of therapy to take remission rates to a new level, I think, is a very interesting premise and potential for this agent as well.

So I think long story short, we've got an agent that has the potential to slot into a really important slot, which I believe we'd be able to convince payers of. I think the KOLs already are seeing potential promise for this in the context and treatment. And I think we'll have a lot of wiggle room in the context of how we want to think about our pricing strategies down the road to ensure that there's uptake from a payer perspective.

And your next question will come from Jeff Meacham.

It's Olivia Brayer on for Jeff. Congrats on the update. I know COVID was obviously a big factor in why it only included 2 patients. But when we think about the open label portion for the TORREY study, were there any things outside of the pandemic-related issues that you guys saw in the Phase I that you can do to help increase the conversion rate just for the Phase II, given the importance of that longer-term data, especially from a regulatory perspective? And then I have one follow-up question.

Richard, do you want to take that?

Yes. I think that -- first of all, there's a great deal of interest in the TORREY study by both our sites and thought leaders and by patients. Obviously, the TORREY study is going to be much longer than the whole experience that we're going to have with our Phase Ib. And so we've learned a lot during the pandemic, first of all. We've tried to make our study user friendly, if you will, while not sacrificing quality. So we've embedded all of our learnings into our execution of our TORREY study and made sure that patients are aware that if they are having benefit in the short term and even those that are on placebo that they should continue in the open-label extension.

Olivia, don't underestimate the time, the challenge of an emerging pandemic in a 2-week study to convince you will say on for 6 months. It's a very different conversation with patients and caregivers while you're talking about a large (inaudible).

Okay. Perfect. And then, Faheem, when you think about your pipeline priorities like in the next year, is oncology still a focus and an area that you're willing to heavily in? I know you haven't disclosed what preclinical assets you might move forward with yet. But are there some internal opportunities specifically within oncology that you think would make sense to take forward on your own?

Yes. Yes. We do -- in our preclinical pipeline, we do have a number of agents that will be vectored towards indications in oncology, and certainly more to come on that as we progress those programs through our pipeline. But yes, oncology continues to be one of the areas of pursuit and interest for Gossamer.

And your next question will come from Carter Gould.

This is Justin on for Carter. Looking more broadly at IBD, sort of the recurring questions and uncertainty over the JAK class in any way change how you're thinking about 004? I mean, clearly, there's a lot of attractiveness about a non-immunosuppressive profile, but not sort of given the lingering CV issues there. Does that just reinforce your previous view? Or has there been any further evolution on how you think about the hurdle for clinical meaningfulness there?

Yes. I think without a doubt, it actually gives us even greater conviction on GB004 because it continues to stress the need for novel approaches, novel agents and ideally non-immunosuppressive approaches. So to me, it really, as I was saying earlier, you've kind of put some spotlight on this program given its potential and promise and mechanism of action. So without a doubt, it just continues to increase our confidence and proceed to this program.

Richard, do you want to add anything else?

No, I think that's right on. And patients are really looking for something that potentially could be safer than what's out there. And as Faheem mentioned earlier, that could precede the use of biologics.

And your next question will come from Patrick Trucchio.

Just a follow-up on the seralutinib program and the OLE data. The understanding this is data from just the 2 patients. Regarding the improvements in NT-proBNP and 6-minute walk distance from baseline, I'm wondering if you can frame for us the clinical relevance of those improvements that we're seeing in the 2 patients, and how those could, if at all, read through to an end point such as PVR change?

Sure. Richard, you can take that?

Yes. So first of all, I just want to emphasize that we don't want to over interpret the results from 2 patients. But having said that, if you look at the directionality of -- in both patients that you see a reduction in NT-proBNP and 6-minute walk, we find that encouraging because it's going in the same direction.

As we mentioned, the 6-minute walk has -- is encumbered by a lot of variability. But I think we're intrigued by the NT-proBNP in particular, because it's a pretty good reduction. And once again, it's directional for us. But I think if you look at other studies, the NT-proBNP levels tend to be flat or even go up. And the literature -- once again, don't want to over interpret, but the literature is fairly clear that NT-proBNP is associated with the parameters such as right atrial pressure, PVR and hemodynamics. So once again, as we're trying to point out, it's encouraging.

Yes. And I'm wondering if the 2 patients were more severe than those that would typically be enrolled in the TORREY trial, given that they were on the 3 treatments at baseline? Or if instead, would they be more representative of, I guess, the typical baseline -- or patients with those baseline characteristics for those being enrolled in the TORREY trial?

No, I think they're going to be quite similar to what we would enroll in the TORREY trial. We anticipate to enroll those with at least 3 -- 2 of the 3 background medications. We do require a PVR requirement of 400 [dimes] but the baseline NT-proBNP levels are just right on par with what we would expect.

And our next question will come from [Anna Neelan].

Just a follow-up on the OLE here. And again, with the caveat that it's only 2 patients, but curious if there was anything you saw over the longer 6-month treatment period in terms of time course of the cost?

Yes. The cost was predominantly seen in the double-blind first 2 weeks of treatment. It was very mild, as indicated by the patient and the investigator when they reported it. And it didn't occur necessarily with every single inhalation. Patients, once they got used to inhaling the drug, got used to it. And it wasn't a progressive at all. And no patients discontinued or had to reduce their inhalation of drug due to the cost.

Great. That's helpful. And then maybe just one for Bryan. How should we think about the impact on expenses of winding down the 1275 program here?

They are very minimal. It was a very limited study that we did. And really, I think, as Faheem aptly said in the beginning, it's really the avoidance of more expensive Phase II studies, which is where they're going to allow us to focus on delivering 002 and 004 in the time frame we talked about and if we are successful to have a robust balance sheet to enable strategic optionality for both those programs.

(Operator Instructions) Your next question will come from [David Wong].

This is Tom for David. Just to get a sense of which trial will have the top line data first, TORREY or SHIFT-UC the next year? And do you know if the Phase II trial, 002 or 004, I mean both -- if both like read out in a positive way, do you plan to advance both simultaneous into Phase III? Just to get a sense of the plan going forward?

Yes. At this point, we're not providing that guidance in terms of which program will read out first. We'll -- again, I'll just reiterate. We continue to stick with our guidance of both programs to read out first half 2022. We may give a little bit more specificity down the road. But at this point, we -- that's kind of how we'll be describing things.

As it relates to the scenario around 2 positive readouts on the Phase IIs, we will be progressing both of those programs to the next stage of development and really trying not to miss a beat and trying to minimize any time gaps between the top line readout of the Phase II and an initiation of our registrational studies.

And that concludes our question-and-answer session. I would now like to turn the call over to Faheem Hasnain for closing remarks.

Yes, thank you very much. And I appreciate the questions, I appreciate all of you spending time with us today. We are excited about our programs and looking forward to next year's readouts.

I would just like to thank the Gossamer team for incredible efforts, continued incredible efforts, working through extraordinary times, extraordinary circumstances through what has been arguably a challenging year for everybody in the context of the pandemic. But this is a company that has an incredibly dedicated group of professionals, and that gets defined every single day as we make our progress on these studies, as we make progress on the enrollment and look forward to making a tremendous difference for patients.

So thank you, everybody. Thank you very much for spending time with us today, and thanks for your questions.

And that concludes our conference call. Thank you for participating. You may now disconnect.