Gossamer Bio Inc (GOSS) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. And welcome to the Gossamer Bio, Inc. Customer Q1 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Bryan Giraudo. Thank you. Please go ahead, sir.

Thank you, operator. And thank you all for joining us this afternoon. I am joined on today's call by Gossamer Bio's Co-Founder and Chief Executive Officer, Dr. Sheila Gujrathi. Earlier this afternoon, Gossamer Bio issued a press release announcing its financial results for the first quarter ended March 31, 2020, 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 in 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 timely initiation and completion of 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 undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

Now I'd like to turn it over to Sheila. Sheila?

Thank you, Bryan, and good day to everyone joining us on today's call. Earlier this afternoon, Gossamer Bio was pleased to announce its financial results from the first quarter 2020, in addition to several favorable updates to our pipeline of clinical product candidates. These include the completion of a prespecified interim analysis for our LEDA Phase IIb study of GB001 in moderate-to-severe eosinophilic asthma as well as the release of top line data from our completed Phase Ib study of GB004 in patients with active ulcerative colitis. Beyond those, we do have a number of other exciting updates to cover. So let's jump right in.

We will start with GB001, our once-a-day oral DP2 antagonist, which is currently being evaluated in 2 ongoing studies, the Phase IIb LEDA study in eosinophilic asthma and the Phase II TITAN study in chronic rhinosinusitis. We announced today that we have completed a prespecified interim analysis of the LEDA study, which was based on approximately the first 2/3 of patients who either completed or withdrew from the study. The Independent Data Monitoring Committee, or IDMC, reviewed results from the interim analysis and recommended the study continue as planned to its completion. As we have previously stated, given that this is an ongoing blinded study, we are unable to characterize the data further. We expect to report our top line data when the study is complete in the second half of this year. The final decision to proceed to Phase III will be determined on the totality of the final data as well as discussions with global regulatory authorities. Based on the results of the interim analysis and the IDMC recommendation, Gossamer has commenced initial Phase III planning in support of activities.

GB001 is also being studied in the Phase II TITAN study for the treatment of chronic rhinosinusitis, both with and without nasal polyps, which we had previously announced has completed its enrollment. We expect this proof-of-concept study will read out top line data in the second half of this year.

In both of our ongoing studies of GB001, we have implemented a number of mitigation plans to address potential challenges in study conduct due to COVID-19. These mitigations include virtual study visits, direct-to-patient drug supply and remote monitoring, whenever needed. We remain confident that our top line data time line for GB001 will not be affected by the pandemic.

We are also excited to announce that in April of this year, the United States Patent and Trademark Office issued a new patent protecting aspects of the key drug substance forms being studied in clinical development of GB001. These salt compound claims further enhance the intellectual property protection surrounding GB001 and are not due to expire prior to 2037. We remain enthusiastic about the potential of GB001 to be a first-in-class oral treatment with an effect on clinical outcomes in the high unmet medical need of difficult-to-treat patients with moderate-to-severe asthma and other allergic diseases. We look forward to sharing top line data from our 2 Phase II studies in asthma and chronic rhinosinusitis in the second half of the year.

Next, we are excited to announce promising results from the Phase Ib study of GB004 in patients with active ulcerative colitis, or UC. This Phase Ib was a 4-week study to assess the safety, tolerability and pharmacokinetics of GB004 in patients with mild-to-moderate UC. 34 patients with active disease despite 5-ASA therapy were randomized 2:1 to receive either a once-daily 120-milligram solution of GB004 or placebo. As a reminder, GB004 is a potential first-in-class gut-targeted oral HIF-1 alpha stabilizer for the treatment of IBD. Unlike immunosuppressants such as anti-TNF antibodies and JAK inhibitors, which focus on reducing inflammations with corresponding well-known safety liabilities, GB004 is designed to support the repair and healing of the disrupted epithelial lining of the gut. The stabilization of HIF-1 alpha needs the expression of a number of genes associated with barrier function and integrity.

As we entered into our Phase Ib study, in addition to evaluating safety and tolerability, we were hoping to see initial signs that GB004 was modifying these pathways through evaluation of gene expression and clinical outcomes such as mucosal healing and histology. GB004 was well tolerated in the study. The most common adverse events for patients on drug were nausea and dysgeusia, all of which were mild in severity, aside from one case of moderate nausea. All patients completed the study, except for one patient who withdrew after he experienced a serious adverse event of worsening UC, which was deemed non-related to study drug by the investigator. GB004 was rapidly cleared from the plasma, had minimal systemic accumulation over the 4-week dosing period and was found in significantly higher concentrations in the gut compared to plasma after 8 hours of dosing. There was no impact on systemic EPO or VEGF levels. These findings are consistent with the gut-targeted profile.

We also observed evidence of target engagement in the gut. Microarray-based mRNA expression profiling of gut biopsies showed an increase in genes consistent with enhanced epithelial barrier functions, such as claudin-1 and tight junction protein 1, and other changes associated with HIF-1 alpha stabilization in the GB004 arm relative to the placebo arm. Initial immunohistochemistry data also showed a reduction in myeloperoxidase compared to placebo, suggesting a reduction in gut epithelial neutrophil activity. And although this 4-week first-in-patient study was neither designed nor powered for efficacy, we did observe favorable trends on the exploratory efficacy outcomes evaluated in the study. While no cases of mucosal healing or clinical remission were seen in the placebo group, we saw instances of both in the GB004 arm. 4 of 23 patients in the GB004 arm or 17% achieved mucosal healing, which in the study was defined as achieving both histologic remission and endoscopic improvement in either the sigmoid or rectum. Further, 10 of the 23 patients receiving GB004 or 43% achieved histological remission in either the rectum or the sigmoid as compared to 2 of 11 patients receiving placebo or 18%. These data on mucosal healing and histologic remission are particularly encouraging, as they suggest that GB004 is having a direct impact on gut epithelial healing at the cellular level after a short treatment period, which is consistent with the proposed mechanism of action.

We also observed favorable trends in our other traditional measures of efficacy in UC trials, such as clinical response, which was seen in 6 of 20 patients receiving GB004 or 30% compared to 2 of 11 patients receiving placebo or 18%. The rectal bleeding sub-score results also trended favorably, with 13 of 21 patients receiving GB004 showing improvement or 62% as compared to 5 of 11 receiving placebo or 45%. One patient in the GB004 arm achieved a high hurdle end point of clinical remission, while no patients in the placebo arm achieved clinical remission. We will present this full data from this study at a future medical conference.

In this study and all prior clinical studies of GB004, a liquid solution formulation of the drug was used. After in-licensing the compound, we immediately began developing a tablet formulation of the drug to be used in future studies. Part of the reason for this was that we knew that high levels of cyclodextrin in the solution formulation could cause tolerability issues, limiting our ability to increase doses in the clinic. In parallel to the study, we successfully completed a Phase I in healthy volunteers to support the selection of a tablet formulation. In that study, we were able to increase dose with favorable PK and without the tolerability concerns seen with the solution form.

Despite a short 4-week dosing duration and a potentially nonoptimized dose, these are promising early results, and our advisers have encouraged us to move into a robust Phase II study. We plan to commence a 12-week induction study evaluating higher doses with the tablet form of GB004 in patients with ulcerative colitis in the second half of the year, barring an unforeseen delay related to the ongoing COVID-19 pandemic.

We also announced this afternoon that we have amended our license agreement concerning GB004 with Aerpio Pharmaceuticals. Gossamer paid Aerpio $15 million upfront. And in exchange, Gossamer received more favorable downstream economic terms, including the lowering of remaining milestone obligations from $400 million to $90 million. Royalties on net sales also decreased from rates ranging in the high single digits to mid-teens to royalties ranging from low single to mid-single digits. This upfront investment reflects our enthusiasm for GB004 and its potential to emerge as a unique treatment option for patients with IBD.

Next, let's move on to GB002, our inhaled PDGFR inhibitor for the treatment of pulmonary arterial hypertension, or PAH. GB002 was designed to improve upon prior success observed with kinase inhibition in PAH by delivering a potent PDGFR inhibitor directly to a site of disease for the convenient dry powder inhaler, all while avoiding high systemic exposures and improving the therapeutic index. GB002 is currently being studied in an ongoing dose-ranging Phase Ib trial in PAH patients. As a reminder, the objective of this 2-week study is to evaluate the safety and PK profile of GB002 in patients.

While we had an encouraging start to enrollment, given the ongoing COVID-19 pandemic, enrollment in this Phase Ib trial was temporarily paused. We are hearing from our investigators that there is potential to restart enrollment in late May. For that reason, we have decided to keep the trial open longer to see if we can gather additional data. We are, therefore, shifting our guidance for initial data from this study from Q2 to the second half of 2020. We have launched study start-up activities for our Phase II study of GB002 and anticipate beginning enrollment in the second half of this year, subject to further developments related to the COVID-19 pandemic. We have received excellent receptivity on our proposed Phase II plans from a number of investigators, and we believe there is tangible excitement building for its commencement. This 24-week Phase II study will enroll PAH functional Class II and III patients. Patients will stay on background therapy throughout the study, including prostacyclin. The primary end point will be a change from baseline in PVR at week 24, and the key secondary end point will be a change from baseline in 6-minute walk distance at week 24.

GB1275, our oral CD11b modulator being developed for the treatment of solid tumors, continues to advance through dose escalation in a Phase I/II KEYNOTE-A36 trial, where it is being studied as monotherapy as well as in combination with pembrolizumab or with chemotherapy in patients with select solid tumors. No dose-limiting toxicities have been observed to date in the study. And despite the challenges observed with COVID-19, the trial continues to be on track and to enroll new patients.

Later this month at the American Society of Clinical Oncology virtual meeting, we will present initial data in solid tumors from both monotherapy and combination therapy with pembrolizumab. The results consist of early safety, PK/PD and biomarker data, which are consistent with the GB1275 mechanism of action and its impact on myeloid derived suppressor cells. Please be on the lookout for that virtual poster during the ASCO 2020 Virtual Scientific Program from May 29 through May 31. When we are able to do so, we will make the poster available on our website at gossamerbio.com in the Poster and Publications section. In addition, we will present updated data from the study in the second half of the year.

Finally, we are happy to announce that GB1275 has now received orphan drug designation from both the EMA and the FDA for the treatment of pancreatic cancer.

We also have a corporate update to share. Dr. Jakob Dupont will be departing his position as Chief Medical Officer of Gossamer in June of this year to pursue opportunities in oncology closer to his home in the San Francisco Bay Area. We are thankful for his services and wish him the best of luck in his future endeavors. Dr. Dupont will remain a consultant for Gossamer and continue to support the clinical development of GB1275. Our Senior Vice Presidents, Dr. Richard Aranda, Caryn Peterson and Heather Smith; and Vice President, Matt Cravets, will join me in taking over Jakob's responsibilities.

Before we discuss our financial position, I want to quickly address the ongoing viral pandemic and how it relates to Gossamer. Gossamer takes the safety and health of its patients, partners and employees seriously. And to that end, we have put procedures in place to minimize risks. Despite the physical and practical limitations imposed by COVID-19, the majority of operations in Gossamer continue unabated, including the advancement of multiple research programs in our portfolio, which we are excited to discuss further at a future date. This progress is in large part due to our incredible employees who remain focused on our shared mission. Given the tireless efforts of our employees and our strong balance sheet, we believe Gossamer remains well positioned to navigate these challenging times.

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

Thank you, Sheila. We will now review the financial results for the first quarter of 2020. We ended the quarter with $346 million of cash and cash equivalents. We continue to anticipate our cash, cash equivalents and marketable securities, along with the access to our debt facility, will provide us sufficient capital resources to fund operations and capital expenditures until mid-2022.

Research and development expense in the first quarter of 2020 were approximately $41.4 million as compared to R&D expenses of $25 million for the same period in 2019. This reflects -- this increase reflects a continued ramp-up of clinical expenses related to our clinical programs and increased expenses related to the development of our proprietary preclinical programs. In-process R&D expenses in the first quarter of 2020 were approximately $2.8 million as compared to $1 million for the same period in 2019.

G&A expenses were $10.7 million in the first quarter as compared to G&A expenses of $8 million for the same period in 2019. And our net loss for the quarter was $54.1 million, equating to $0.87 per share. For the same period in 2019, we reported a net loss of $32.6 million, which equated to $0.90 a share.

With that, I'll turn the call back over to Sheila to offer closing comments before we open the line for Q&A. Sheila?

Thank you, Bryan. As we close the scripted portion of this call, I would like to take a moment to personally thank those who have contributed so far to the success of Gossamer. From the patients in our clinical trials to our valued investigators advancing the field of medicine, to our investors who have bought into our shared mission and finally to our employees who are working diligently every day in the labs or virtually at home, your valiant efforts have enabled Gossamer to pursue its goal of enhancing and extending the lives of patients. Thank you all.

With that, I will now turn the call over to the operator for questions. Operator?

(Operator Instructions) Your first question comes from the line of Geoff Meacham from Bank of America.

This is Olivia Brayer on for Geoff. Congrats on all the progress today. Can you give us a little more insight into what went into that interim go/no-go decision for GB001? Was there a level of clinical reduction that was met that really ultimately drove that recommendation? And when you think about success in the Phase III, are you looking for a similar threshold versus what was met in that Phase II interim?

Thank you, Olivia. Yes. Well, the interim, just to be clear, was prespecified and planned as an administrative analysis in that we were basically looking at the totality of the data on the primary and some key secondary efficacy end points, safety and tolerability. It wasn't really designed to adjust anything significantly for the study. Having said that, of course, whenever you do an analysis, you do look at all the efficacy and safety. And the IDMC, which is a very seasoned group of really pulmonary and respiratory experts, take a look at that data and also make a determination. So we specifically looked at the clinical outcomes that we were measuring, and we were very pleased that we actually designed our Phase II study to really focus on those clinical outcomes that are most important and relevant for Phase III, including exacerbations. And so that's the totality of the data set that they were able to take a look at in the first 2/3 of patients, and we're again very pleased and encouraged that they recommended to continue on with the study to study completion. And so we're very much keeping that in mind about what is -- what is our Phase III end points we're going to be looking at and that Phase III decision. And I think this study puts us in a very good position to make that final decision.

Your next question comes from the line of Joseph Schwartz from SVB Leerink.

Congrats on the great news. I was wondering if you could talk a little bit about what else you'll look for in the totality of the data for 001 when making your final go/no-go decision? If you can characterize what more insight you'd like to gain from the data set, that would be helpful.

Sure. Well, it's really around continuation of the study and the maturity -- the continued evolving maturity of the data set with the total sample size that we're looking at, again, for the efficacy end points, secondary end points as well as, again, the safety and tolerability aspects. So it's really around looking at all of the data on the pool of 480 patients plus that we had enrolled into the study, which is the full sample size. So just continuing to make sure that all of these things are reading out. So it's, again, that evolution that you get from a full data set versus an interim data set. So that's really what we'll be continuing to look at and evaluate.

Okay. That makes sense. And then do you foresee any challenges to completing the evaluations for the last 1/3 of the patients enrolled in LEDA, given what's going on in the world?

Yes. Actually, no. We're actually -- we've put in so many risk mitigation plans, as I've mentioned. We're feeling very confident that we'll have not only a high rate of completion for those remaining patients but good quality as well in terms of the data collection and monitoring. So we're feeling very comfortable about being able to complete the study and actually be able to really see it through completion to the final analysis.

Your next question comes from the line of Ellie Merle from Cantor Fitzgerald.

Congrats on all the progress. Just in terms of the UC data, can you help us think about what the next steps would be for GB004 in terms of thinking about the potential next study? And I guess, what data you would want to see to further derisk the asset before you'd be comfortable moving forward into a Phase III study?

And then secondly, on the UC program, I guess just in terms of your preclinical modeling or perhaps maybe from the initial clinical data, what does this suggest in terms of the length of time it would take to get to sort of the peak efficacy? So basically, I mean, do you think that like as you would move from, say, 4 weeks to 8 weeks or 12 weeks, in an induction study, I guess, when would you expect to get to that peak sort of level of efficacy?

Great. No, thanks for the questions. Yes. And so we're again very pleased with our Phase Ib data in that to look at the clinical efficacy outcomes that we're seeing already in 4 weeks gives us again that confidence to move forward into the Phase II. So now we're going to be doing a more robust Phase II induction study. This is going to be at 12 weeks to really give us again additional time to be able to assess the impact in induction. The fact that we're already seeing effects on histologic remission and mucosal healing is, again, very encouraging for us. And typically, we do see earlier effects on histology than you could see on some of the other clinical parameters. So it fits very nicely with the mechanism of action for GB004. And again, these are very meaningful end points. The unmet need in UC is really around mucosal healing and improvements in histology. That's really kind of what we're trying to address with this differentiated mechanism looking at epithelial barrier repair and healing and function. And so again, just to have this type of data already at 4 weeks, where we think we're probably at the lower range of the dose exposure we like to study, is very encouraging. So now we'll be going forward into that more robust Phase II. We'll be looking at additional outcome measures such as the clinical response remission and continue to look at mucosal healing and the effects on histology. And based on that, we'll be able to make a final Phase III decision. But I think we're in a very good position and are going into that trial with a good degree of confidence.

And then around the peak time, I mean, I think that's really where we think going for a 12-week induction study really gives us enough time to really evaluate induction effects. We're seeing good efficacy at 4 weeks. So I think that'll improve over time over the next 8 weeks that we're giving ourselves to continue to see good effects in that induction setting. So we feel pretty comfortable with that. And that does seem to correlate again well with all the data we're seeing preclinically in terms of our impact on gene expression profiles as well as what we're seeing in terms of the gut mucosal lining. So I think, if anything, I think we're giving ourselves more time to really make sure we have a good effect. So I feel comfortable with the 12-week induction period.

Yes. Very (inaudible). And then also, the detail on the program, can you elaborate a little bit more on the biology and why pancreatic cancer is the focus? Is there anything particular to the target and sort of that tumor type and biology there?

Yes. And just to be clear, so yes, this is a really interesting mechanism that goes after more immunosuppressive mechanisms within oncology, and it's a great combination approach with checkpoint inhibition. So we're really affecting the myeloid suppressor cell types such as the tumor-associated macrophages and other MDSC cells, both granulocytic and monocytic, all of which really contribute to the immunosuppressive phenotype for -- especially for select tumor types, where you have primary and secondary resistance to checkpoint inhibitors. And we impact not only the trafficking of these cells from the periphery into tumors themselves, but we also skew the polarization to a more immunostimulatory phenotype away from that immunosuppressive M2 phenotype for macrophages. So again, there's kind of potentially several mechanisms at play for this mechanism. And to that regard, we are studying a number of other tumor types outside of pancreatic cancer. So while we have gotten orphan drug designation for pancreatic cancer, we actually are studying a number of other areas such as prostate cancer, colorectal cancer, triple-negative breast cancer, other areas where, again, we see gastric cancer, maybe low rates of checkpoint response as well as, again, a lot of mechanism of resistance, which we think are very related to the myeloid biology I've spoken to. So we are -- have a number of different tumors that we're studying in the Phase I dose-escalation period through both combination cohorts, monotherapy cohorts as well as that cohort with chemotherapy. So with that, Luisa, do you have anything else to add on the mechanism and thoughts about tumor types?

No. I think you covered most of it, Sheila. I mean, one of the things we have seen as well is in mechanisms of secondary resistance, that a lot -- not only you have the immunosuppressive effects, you also have, as you know, some fibrotic effects in stromal. And we believe this mechanism could actually address this as well. So as Sheila mentioned, we believe in secondary resistance, there is an opportunity in quite a wide range of tumors as well. And we're definitely looking for the biomarkers in this study that will help us then really focus on the right patients for subsequent studies.

Your next question comes from the line of Carter Gould from Barclays.

Congrats on all the progress. Just a couple, I guess, to start with on 001 first. Can you maybe just talk now, as you think about that sort of go/no-go decision in going to the -- potentially into a Phase III, just kind of where you're sort of setting the internal bar from a high level in light of the, obviously, Novartis data late last year? And I guess to follow up on that question as well, maybe just kind of clarify then around when we get the top line data, it sounds like we may not get a go/no-go decision at that point. Is that kind of where the -- our expectation should be set? I guess, reading the PR, it sounded like you would still kind of meet with regulators at that point. So I'm just trying to, I guess, level set expectations there.

Yes. So great questions. And I think I'd like to remind everyone about the intention of this program, again, is to be an oral treatment for patients with moderate-to-severe asthma, where there's so much high unmet need. There's at least 50% of patients who are not controlled today with moderate-to-severe asthma that are really on high-dose or medium-dose inhaled corticosteroids, plus 1 or even 2 other controller medications. And that's the population that we enrolled into our clinical trials. So what we're really looking to see is a good impact on clinical exacerbations, which is the approvable Phase III end point. So from that regard, we've done a lot to talk about what we think our efficacy could be for these types of oral mechanisms and what would be very acceptable to patients, providers and payers. And again, that's really the range that we have been talking about. And in prior discussions, we've talked about anywhere between 20% to 30% of exacerbation reduction is something that we were looking for and targeting. As you recall, Novartis has mentioned information in that regard as well, and they did have that in the LUSTER-2 data that they reported out. So it's a very interesting, evolving area which is something we will continue to monitor and measure in our clinical trials as well as -- as we continue the maturation of the study.

In addition to that, I think it is important that we do our homework around understanding of the totality of the Novartis data when it is released. As you probably heard, the American Thoracic Society is now going through a virtual meeting presentation. So we'll see what additional data we get on the fevipiprant program either through publications or through presentations to see how much we can learn from that program as well as, again, our own interactions with global regulatory authorities, in addition to looking at the top line and final data coming out of the LEDA trial to really make a very well-informed decision. Since we have more time now to really make sure that we're vetting all of the information so that we can design the most robust Phase III program moving forward, we could take all this information to really make sure we have a very well-thought through program and plan for Phase III, informed by health authority interactions as well as a lot of learnings looking at these very important clinical end points and being able to really design our studies correctly using the correct assumptions from a statistical perspective. So I think that there's a lot of very interesting developments that are occurring that we can really capitalize on and make sure that we're making the best decision for the Phase III decision.

Great. And then maybe just one follow-up on 004 going into the dose escalation. I guess, maybe based on your preclinical models, do you have a sense sort of on the target dose? Or maybe another way of asking that, when you think about sort of the level which you could push the dose up to, any insights from the preclinical models there? I'm just trying to get a sense for maybe the number of doses you might evaluate in the Phase II study.

Yes. And that's a great question. So I think we're in a really good position for the next study. We have a very good preclinical colitis model that we've done. This is really under Luisa's and her research team's leadership and expertise, as she is a true expert in really any animal models, especially these IBD colitis models, to sing her praises. And we have some very good data that kind of helps guide our dosing based on the exposure that we're achieving for efficacy in those animal models. We have a lot of information from our Phase I normal healthy volunteer studies with both the solution and the tablet formulation that we recently completed in normal healthy volunteers, which is not only looking at systemic concentrations or colonic concentrations in both, again, the solution and the tablet formulation study because we did actually sigmoidoscopies. And we're able to get colonic biopsies to really measure tissue concentration there, which is very helpful to really show that we had a greater colonic concentration than the peripheral exposure that also helps guide our decisions as well as, of course, the Phase Ib 28-day study now with not only a biomarker data but also that clinical data that we discussed. So we have a really nice set of data to guide what we want to do moving forward in terms of dose exposure, dose levels as well as the formulation that we want to take forward. So we can make decisions based on those target levels, and we can come back and discuss all of that at a future date after we're finished analyzing the data. But I think we're in a really good position to help us select the doses for the Phase II.

Your next question comes from the line of Tyler Van Buren from Piper Sandler.

Great to see the progress. Had some on 004. I guess in the release, you mentioned multi-fold higher gut concentrations. Is it possible to quantify the difference or the increase in the gut concentration there? And then on -- with respect to the clinical observations, there's clearly some activity here. But as we've looked at other effective agents, for example, Theravance's topical JAK, you're seeing, I guess, similar numbers. So is there, I guess, anything as you look at the data that stands out as kind of more clearly differentiated maybe with respect to the histology? Or are we going to have to wait for the Phase II 12-week induction study? And then just finally, as we think about clinical development, it sounds like you're describing a fairly traditional Phase II UC study. So is it possible to differentiate the program from a clinical development standpoint moving forward just given the unique mechanism here?

Yes. No. I think we can talk about all 3 of those questions. And I'll actually ask Richard Aranda, who's on the call with us today, who is a gastroenterologist who's been involved with many IB development programs, including ozanimod with me at Receptos to talk a little bit about the exposures in the colon versus the periphery, so he can address that.

In terms of the other 2, I'll take those. And again, Richard can bolster that or Luisa. Yes, we are really compelled with the Ib data. And when you look at the Theravance data that they published in the Journal of Crohn's and Colitis, the JCC, in the March time frame, they had a really nice robust publication, evaluating a lot of the similar outcomes that we've been evaluating. And we do seem to be in line with what the -- what they've shown in their 1-month gut-targeted JAK program, which again is very exciting from our perspective. I think the one area of difference that, again, we're focused on here is because we have a differentiated mechanism, looking at the epithelial barrier repair and function, we do seem to have again more mucosal healing and histologic remission. That's the potential. Now they did measure histology in their program. And so they did not report mucosal healing from this traditional definition, that's the regulatory definition of endoscopic improvement and histologic remission, or patients who've met the criteria of histologic remission. So we don't know for certain, but that wasn't reported out in their publication. So that may be just a distinction that we have in terms of targeting JAK versus really going after this differentiated mechanism. Potentially, it could be a complementary mechanism as well. So I think we're pretty excited not only as a monotherapy but potential ways to add in a complementary fashion, given that we're a nonimmunosuppressant-type mechanism and potentially could combine safely with other mechanisms. So more to come on that front, but we are seeing already potential differentiation with our mechanism versus potentially some of the other immunosuppressants. So that's something that we thought was notable. And I think our clinical data seems to be in line with what we've seen with that 4-week study as well as other programs where we've looked at 4- to 8-week induction periods, where we're seeing, again, some things that are in line, especially at that 4-week time period.

And then for clinical development, I think, yes, we are very focused on getting to the definitive proof of concept. I think one area that we are excited about differentiating for is really looking at the patient population. So given basically that this is a differentiated gut epithelial type-directed mechanism, and we're hoping to have continued good safety and tolerability, we're very interested in moving this up into earlier lines of treatment. So we're focused on continuing to study this mechanism in the mild-to-moderate setting, which would really differentiate it from other immunosuppressants, including the other orals that are being developed or recently been approved where, because of safety liabilities, they had been relegated to more moderate-to-severe disease. So this is an area where we think we can truly differentiate from the clinical development program. And then we'll be assessing and looking at a lot of the similar end points from that regard. But this will be a differentiated program than other moderate-to-severe ulcerative colitis programs.

With that, Richard, do you want to add some other information, especially on the colonic exposure?

Sure. So what I can add to Sheila's comments is that I just want to remind you that we obtained biopsies at 8 hours after the dose. And at that time point, the systemic levels of 004 is quite low, in the single-digit nanogram concentration. And I also want to remind you that in tissue biopsies of looking at drug concentrations, there's a lot of variability. Nonetheless, in that setting, we consistently see significantly greater concentrations that are far above the single digits in -- from a nanogram per ml perspective that we see in the circulation. And just to add to that, the concentrations we've seen -- we see are also consistent to what is achieved in some of the animal models that have been conducted with our compound by our research group. And those concentrations are associated with efficacy.

(Operator Instructions) Your next question comes from the line of David Hoang from SMBC.

Congrats on getting the green light to move forward with the LEDA study. I had a few questions on GB002. So I know recently, I think earlier this year, Acceleron had some positive data with their compound sotatercept. And I know that was a Phase II study where they looked at PVR and 6-minute walk distance. I think they also have another study where they're looking at oxygen consumption, so VO2 or VO2 max. So I guess my question is, do you think you need to look at anything else besides PVR and 6-minute walk distance in terms of secondary or exploratory end points to help ensure a competitive profile for 002 in PAH?

Yes. I'll start that, and I'll also ask Richard to provide some comments. So I think, clearly, this is also another area of very high unmet need. We're going after patients who are having significant disease of functional Class II, III and IV that -- so they're very significantly -- with significant disease severity and symptomatology, despite being on 2 or 3 classes of vasodilator therapies, so really all the available therapies that are available to them today, so the ERA, the PDE-5 class and the prostacyclin class, particularly. And we have data, obviously, with imatinib here in that same group of patients. 50% of the IMPRESS trial patients were on prostacyclins and IV prostacyclins at the time, where we saw this really improved clinical benefit looking at PVR reduction and 6-minute walk distance. So in and of itself, to look at those clinical functional outcomes of an improvement in 6-minute walk distance as well as the effective end point of PVR reduction, these are really critical end points in the setting of PAH. And these are all -- obviously, you know the 6-minute walk distance is the approvable end point or one of the approval end points for PAH. So those are really the ones that we're very focused on, as we've stated, for our Phase II design. And we have the hope and the thinking that this could be a disease-modifying therapy. We have a lot of great preclinical data that really supports that, and we have a lot of cross-talk with actually the sotatercept mechanism that Richard and Luisa can speak to. This really gets to, again, the underlying biology improvement that we're seeing preclinically definitively within our animal models and what we think we could show clinically and -- including we've seen increase in BMPR2 signaling in our preclinical models as well. So I think those are what's critical.

In addition, we have a number of other biomarkers that we're looking at. And we're going to be looking at echocardiographic imaging and looking at the right ventricular function and looking at proBNP levels ourselves as a measure of right heart strain to kind of get at really how we're affecting right ventricular function. And then we have some exploratory measures that we'll be looking at that really could get at this potential for disease remodeling. So with that, maybe I'll ask Richard to say a few words, and maybe Luisa can comment on some of the biology that we're so excited about with our mechanism.

Sure. I'll say a few words just to add to Sheila's comments. So as you may know, CPET or cardiopulmonary exercise testing is not yet validated as an end point for PAH. As Sheila mentioned, the key sort of end points required for approval still remain 6-minute walk as well as evidence of a reduction in pulmonary vascular resistance. CPET is being used and explored to see if there could be other noninvasive methodologies to determine, first of all, a diagnosis of pulmonary arterial hypertension but also could it be used as a measure to determine therapeutic benefit. So I still think it's a little bit too early to say that CPET can be used in the absence of the other end points. However, it can be considered as sort of supplemental if some of the data that's coming out on its use in some other programs seem to be suggestive that it can add some additional information.

Got it. That was really helpful. And then I think I just have one follow-up. In terms of the Phase Ib data for PAH, when we eventually get that, I know that it's a -- I think it's just a 2-week study you have there, and you do have some exploratory end points. So maybe just to help kind of set expectations in terms of BNP and ejection fraction over a 2-week period, should we kind of expect to really see much there? Or I guess, how much efficacy do you think you can obtain on those measures with just 2 weeks of treatment?

Yes. The 2 weeks is definitely a short duration period. So we basically -- this is a study that's designed to look at safety, tolerability, target engagement, some biomarker and pharmacodynamic work as well as start to look at some of these exploratory outcome measures. So I think we're very keen on understanding some of the target engagement and biomarker work coming out of that study and, of course, looking at the safety PK to kind of continue to help us guide our dose selection for Phase II, which is really critical in understanding safety and tolerability in PAH patients, in addition to normal healthy volunteers where the drug was very well tolerated. And we saw good PK, consistent with our limited systemic exposure profile, which is really what we're trying to go after with this local lung delivery. So we do want to temper expectations on what we could be seeing from a clinical activity perspective. In this case, we are hoping to have some patients roll into an open-label extension where maybe we could follow them for longer periods of time. So that's an area -- a way where we could get some more clinical data, looking at some of the echocardiograph measures as well as some of these other biomarkers, especially NT-proBnP. So more to come. This is really, again, depending on how the COVID situation continues to evolve and if we're able to really get patients into the clinic safely. I mean, our primary responsibility is to make sure that PAH patients who are quite sick are really -- their safety is really paramount in terms of making sure that we don't increase their risk to the COVID infection. So that's really what we're focused on.

There are no further questions at this time. I turn the call back to the presenters for closing comments.

Well, thank you again so much for joining us on our call today. I'm so pleased with the tremendous progress Gossamer is making on a number of our clinical programs, really all 4 of our clinical programs to date, as well as the whole research portfolio of therapeutics that we're looking forward to be able to speak to you about shortly, which is a very exciting pipeline of candidates in areas we know very well.

I want to thank the Gossamer employee base for their continued, hard, tireless efforts in these challenging times and really to continue to advance all of our programs in such a high-quality manner. And I look forward to continue the dialogue with investors and shareholders and continue to help support meeting the unmet need for patients and their families. Thank you so much.

That concludes today's conference call. You may now disconnect.