Gossamer Bio Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 15, 2025

There are 11 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Gossamer Bio Q1 twenty twenty five Earnings Call. I will now turn the program over to Brian Girardeau, Chief Financial Officer and Chief Operating Officer.

Speaker 1

Thank you, operator, and thank you all for joining us this afternoon. I am joined on today's call by Fahim Hazne, Gossamer's Founder, Chairman and Chief Executive Officer Doctor. Richard Aranda, Chief Medical Officer Karen Peterson, Executive Vice President, Regulatory Affairs and Bob Smith, Chief Commercial Officer. Earlier this afternoon, Gossamer Bio issued a press release announcing its first quarter twenty twenty five financial results and provided 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.

Speaker 1

We caution listeners that during the 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 statements contained in Gossamer's news releases, SEC filings, including the annual report on Form 10 ks and subsequent filings. This conference call also contains time sensitive information that may be accurate only for 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.

Speaker 1

Now, I'd like to turn it over to Feen.

Speaker 2

Thank you, Brian. Good afternoon everyone, and welcome to our first quarter twenty twenty five earnings call. We're very excited to provide an update on the significant progress and momentum with saralutinib, which is an investigational treatment for pulmonary hypertension, including pulmonary arterial hypertension or PAH, and pulmonary hypertension associated interstitial lung disease or PHILD. So over the past year and a half, we at Gossamer have dedicated immense time, effort and hard work to enroll our pivotal PAH study, the phase three PROCERRA study. In particular, I want to recognize the efforts of our global clinical operations, development and field medical team, who quite literally have been working across the globe around the clock to get us to this point.

Speaker 2

Today, I'm incredibly proud to announce that we have achieved a significant milestone in the Procera study with a closure of new patient screening. And while nearing completion of enrollment is a significant achievement in and of itself, what really matters is enrolling the correct patient population to best position Procera for a successful outcome. In this case, that successful outcome is a demonstration of a significant treatment effect in six minute walk distance at twenty four weeks. Now with this context in mind, we're thrilled to report that the baseline characteristics of the patients enrolled thus far are precisely what we have targeted. And we are more optimistic than ever about the likelihood of achieving positive results.

Speaker 2

But I'll dive more deeply into that in a moment. This year, we've experienced great momentum enrolling the study. As growing appreciation of the seventy two week tori open label extension data from patients and physicians sparked strong interest in the Procera study. Given this late additional surge of interest, the Procera study has a substantial number of patients currently in screening. And when those potential patients are added to the already three forty three patients already enrolled or scheduled to randomize, there are more patients to complete full enrollment by early June.

Speaker 2

We owe the PAH community a great deal of gratitude for entrusting us. And we will honor that trust by allowing every patient in screening the opportunity to enroll in the Procera study if they qualify. While we expect to complete the blinded portion of the study including the twenty four week six minute walk distance primary endpoint by the fourth quarter of this year. We anticipate announcing top line results in February 2026. This timeline ensures that we can lock the database and thoroughly clean, analyze and adjudicate the substantial data collected in this robust forty eight week double blind study without sacrificing data quality or operational excellence.

Speaker 2

Let's now review in detail the baseline characteristics of those enrolled in Procera and how this patient population helps set up sarolutinib for success. Now, the learnings from the phase two Torii study helped us to identify specific patient characteristics that would likely respond favorably to sarahlepid. By carefully selecting patients with impaired six minute walk distance and elevated risk at baseline, through use of the REVEAL LIGHT two risk score and other criteria, we aim to enroll a population where a greater magnitude of effect could be seen on the six minute walk distance at twenty four weeks, which is the primary endpoint. Thereby increasing the likelihood of success of Procera. I'm happy to say that given the baseline characteristics that we've seen thus far, the eligibility criteria was successful in enrolling the exact intended patient population.

Speaker 2

Let's take a closer look at the baseline characteristics. Those that are currently available to us, of the first three twenty four patients enrolled in the PROCERIS study as of May 1225. It's important to remember that this three twenty four patient number is distinct from the previously mentioned three forty three patients, which includes additional patients that randomize after the May 12 date and patients that are scheduled to be randomized. To start, we find that the average six minute walk distance is approximately three seventy six meters. Much lower than the toric baseline where six minute walk distance averaged four zero eight meters.

Speaker 2

For comparison, the phase three STEALAR study of sotatercept had a baseline six minute walk of four zero one meters. Second, our mean NT proBNP, which is an important biomarker of heart failure, is 96 ngL in Procera, which denotes a materially more severe population than the Tori study, where the mean NT proBNP levels were only six twenty eight ngL. For additional reference, cetatercept stellar phase three had a baseline mean NT proBNP of eleven twenty one ngL, nearly double what we enrolled in Torii, and much more similar to what we are seeing in the baseline characteristics of Procera. Third, let's address the functional class. Consistent with other precedent positive PAH trials, in our phase two Tori study, cerolitinib demonstrated a larger magnitude of effect in the functional class three patients.

Speaker 2

But a functional class imbalance in the treatment arm versus the placebo arm created what we believe was a major limiting factor in the magnitude of effect seen on the six minute walk distance in that study. While the placebo arm was fifty two percent functional class three, the sarah luteinib arm only had thirty two percent of its patients classified as functional class three at baseline in the Torrey study. In contrast, seventy four percent of the patients currently enrolled in our Procera study are categorized as functional class three at baseline. A significantly larger portion than in Torii. We will also have a higher proportion than the STELLAR study, which mandated that at least fifty percent of its patients be functional class three and ended up enrolling fifty one percent of these class three patients.

Speaker 2

And to prevent an imbalance, we have incorporated a stratification factor for functional class to ensure a balanced population between the arms. Now, why are we spending so much time walking through these baseline characteristics? Well, short, study after study in PAH has shown us that patients who are sicker at baseline, those with more room to improve, tend to have better outcomes. Particularly on the six minute walk distance in a twenty four week study. We saw this in Torrey, where patients with higher baseline reveal risk scores and those with functional class three disease had a much more dramatic improvement in their six minute walk and their PVR.

Speaker 2

It was also seen in both the phase two and phase three studies of sotatercept where functional class three patients had better outcomes than the functional class two patients. Even going back to the pivotal studies at Tyvaso and oral imatinib in pH, the pattern holds the same. Procera was designed to enroll more of these patients to increase the study's probability of success. Our team has executed against this goal while maintaining the commercial applicability of the study's findings to a broader population of PAH patients. We believe that the baseline in Procera represent a population of both functional class two and three that is consistent with contemporary studies in PH, evaluating six minute walk at twenty four weeks.

Speaker 2

Because of all this, we believe that we are closer than ever to potentially providing patients with a first in class new treatment for PAH that addresses the underlying disease. And with that progress in mind, let's now shift our focus to the exciting prospects ahead for saralutinib. But before I hand it over to Richard to discuss PHILD, I want to take a quick moment to thank our partner, the Chiesi Group. Their partnership has enabled saralidinib to immediately enter a global registrational phase three study in PH ILD. This was one of the key rationale for our joint development and commercialization agreement.

Speaker 2

They are a world leader in relevant disease areas such as respiratory, cardiometabolic and rare disease. And we feel proud and highly validated that Kiesi sees the same vision for sarilodip as we do. And more than that, they are a committed partner and proponents of this trailblazing clinical development plan in PHILD. And with that, I'll hand it over to Richard for a discussion of PHILD and the phase three SERANATA study. Richard?

Speaker 2

Thank you, Faikumi. In addition to what Fahim mentioned, I am thrilled to spotlight our planned Phase III Serenada study in patients with pulmonary hypertension associated with interstitial lung disease, or PHILD. To remind you, PHILD is a progressive disorder characterized by the development of pulmonary hypertension in the setting of chronic and progressive lung diseases. PHILD poses a severe burden on patients' quality of life diagnosis. The three year survival rate has been reported to be forty percent, which is quite dismal.

Speaker 2

With only one approved treatment available for PH ILD in The US and limited availability outside of The US, there remains a substantial unmet need for effective therapies. The Serenada study aims to fill this critical gap, offering a potentially transformative treatment option to a patient population that has long awaited effective treatment options. To this end, our development program at PHILD underscores our unwavering commitment to innovation, excellence, and our focus on enhancing the lives of patients. Developed jointly with the Chiesi Group, the Serenada study will be a global, double blind, placebo controlled, registrational Phase three trial. Approximately four eighty patients will be randomized evenly to receive either ninety milligrams serolutide twice daily, one hundred and twenty milligrams serolutide twice daily, or placebo.

Speaker 2

The primary endpoint is the change in six minute walk distance from baseline as compared to placebo at week twenty four. Key secondary endpoints include time to clinical worsening and change from baseline and forced vital capacity. A successful outcome on this latter key measure would provide differentiated results as compared to the currently approved treatment. We believe that in addition to targeting the pulmonary hypertension of PH ILD patients, the PH, so to say, saralutinib could also target the underlying interstitial lung disease. With preclinical data demonstrating cerulutide's anti fibrotic and anti inflammatory attributes, treatment with cerulutide could also improve lung function separately from its effect on pulmonary hypertension by targeting the underlying lung fibrosis, which is characteristic of ILD.

Speaker 2

Recent preclinical modeling has led us to believe that there is value in testing a higher dose because increasing lung exposure may provide a greater improvement to the lung component of PH ILD. This potential for a dual mechanistic benefit has led us to incorporate one hundred and twenty milligrams twice daily dose level of seralutide in addition to the ninety milligrams twice daily dose level in the Serranada study. With the same painstaking detail with which we planned and enrolled the PROCERO study, we are diligently collaborating with our partners to identify the most suitable sites globally for this phase three trial. Considering our unique nonvasulatory mechanism, there is high investor and patient demand. But given the complexity and significance of this program, we are proceeding with thoughtful consideration.

Speaker 2

Further, there are no successful registrational global PH ILD clinical trial precedents to follow. Therefore, we hope the SERENata study will be the first. We expect to begin first site activations in the fourth quarter of this year. With this, we are extremely excited about the possibilities that this trial holds and the profound impact it could have on the lives of so many. Now I will hand it over to our CFO and COO, Brian Giardo for a financial update.

Speaker 2

Brian?

Speaker 1

Thank you Richard. We will now review the end of quarter financial results for the first quarter of twenty twenty five. We ended the quarter with $257,900,000 of cash and cash equivalents and marketable securities. We continue to maintain a robust balance sheet and anticipate that our financial resources will provide sufficient capital since the first half of twenty twenty seven. For the quarter ended 03/31/2025, recognized revenue was $9,900,000 Our revenues associated with our collaboration with Chiesi and includes $6,600,000 of cost reimbursements for the quarter.

Speaker 1

R and D expenses were $38,000,000 compared to $32,400,000 for the same period in 2024. G and A expenses for the first quarter of twenty twenty five were $8,700,000 compared to $9,600,000 for the same period in 2024. The net loss for the three months ended 03/31/2025 was $36,600,000 or $0.16 a share compared to a net loss of $41,900,000 or $0.19 per share for the same period of 2024. Now, I'll turn the call back over to Theme for closing remarks.

Speaker 2

Yeah, thanks Brian. So, before we take questions, I just want to remind everyone of the substantial unmet need in PAH and PHILD. These are progressive diseases with high mortality that need new, safe and effective therapies. Due to this dire need and historical lack of innovation, even approved therapies with limited efficacy or poor tolerability have achieved commercial success. Patients and physicians are eagerly awaiting new therapies.

Speaker 2

Particularly those with differentiated mechanisms and improved outcomes. With its potential first in class mechanism and growing body of evidence of the potential for reverse remodeling in this disease paired with the safety profile observed to date, we can envision a future where saralutinib becomes a backbone therapy in pH and a multi billion dollar franchise. And the Tunity is not confined to The United States. It extends to international markets as well. Japan, which is the second largest pH market globally after The US, has a number of clinical sites participating in the Procera study.

Speaker 2

Considering sarahiddim's recent orphan drug designation and the participation of Japanese patients in Procera, we believe that with positive results, this could support a JNDA and a subsequent approval in Japan. So if there's one takeaway from today's discussion, let it be that Gossamer is doing everything that we can to increase the chances of long term clinical and commercial success for saralidom. And we're committed to maintaining the highest standards to accomplish this mission. Our focus is not to just achieve approvable results. That's the bare minimum.

Speaker 2

Our focus is on generating comprehensive, definitive and differentiated outcomes in both of our phase three trials that will set saralutinib apart from other therapies on the market. Helping lay the groundwork for a saralutinib franchise. Operator, you may now open the line to questions.

Operator

All right, ladies and gentlemen, at this time you may press And first up, we have Joe Schwartz of Leerink.

Speaker 1

Great. Thanks so much for taking my questions. I have two. First, with three forty three patients enrolled in PROCERA to date, have you considered stopping enrollment there in order to be able to still report data this year? Could you give us some insight into your calculus here and why you've decided to enroll these last patients and push the data into 26?

Speaker 1

And then I have a follow-up.

Speaker 2

Yeah, thanks Joe. Thanks for your question. It really relates to the fact that there's been such incredible demand to study Joe. And obviously as we started to signal that we were nearing the end of enrollment, that demand got even bigger. And it's really important that we honor the commitment we have to patients and to their physicians to ensure that we have worked alongside of all of these physicians, continue to do so into the future, not only with sarahidna but also with the PH ILD phase three, which many of these physicians will also be investigators in.

Speaker 2

And so we wanted to honor that commitment and decided to honor, and we closed off screening. So we will no longer be screening patients, but there is a bolus, a large bolus of patients that are in the screening funnel now and our commitment was to follow through, determine which of those patients would qualify for the study, and then if they qualify, enroll them. That should take us into somewhere around the June timeframe. And just as we think about the timing of that, first and foremost, we care about the quality of the study. First and foremost, we care about bringing the right patients into the study.

Speaker 2

And timelines, of course, are important. So we will conclude the study. Last patient out will certainly be in the fourth quarter,

Speaker 3

near the end of the

Speaker 2

fourth quarter. But by the time we scrub, analyze, collect the data, scrub the data, analyze the data, and get it ready for a complex presentation. That will take a little bit of time, thus the February date.

Speaker 1

Very helpful, thanks. And then could we delve some more into baseline characteristics in Procera Since the Tory trial enrolled patients primarily from North America, whereas Procera will be more global.

Speaker 2

I was wondering if we could

Speaker 1

get your thoughts on how this factor could influence the results.

Speaker 2

Yes. At Tory, we had sites also globally, but not as extensively as we have with Procera. So Procera has a much broader global footprint in the context of the sites that we've enrolled. As an example, there is a significant portion of patients that will come out of places like Latin America, South America, Eastern European countries, and Asia Pacific. And the reason I highlight that is it's really interesting because what we find in those jurisdictions are really excellent patients for us to enroll into this study.

Speaker 2

And by that, I mean, low morbidities and patients that in historical trials from those regions have shown a much larger magnitude of effect on their six minute walk. So as an example, the STELLAR study for sotatercept, the patients that they enrolled in South America saw somewhere in the neighborhood of mid 70 meter improvement in walk versus The US patients in that study were around 26. And that's largely we believe because these patients are just more pure PAH patients with less comorbidity and an easier opportunity to show that magnitude of effect.

Speaker 1

Richard, I don't know if

Speaker 2

you have anything else you want to add to that? No, Faheem, I think that's exactly right. Younger patients, the different treatment regimens also contribute to those patients that you've outlined. Yeah, Brian?

Speaker 1

And Joe, I'd also just remind you that part of the reason why we had a disproportionately large number of patients from North America and The United States in Tory was because many of our ex US sites were closed because of the COVID-nineteen pandemic and those physicians were not actively doing clinical research. So we do believe the combination of operating in a normal time and in a broader global reach is going to give us ridiculous then much more patient population. Thanks for the color.

Speaker 2

Thanks Joe.

Operator

Alright, next up we have Andreas Argebrais of Oppenheimer. Your line is now open.

Speaker 3

Great. Thanks for taking our questions, and congrats on all the progress on your, completion of enrollment. And also, thanks for the comparisons, the various baseline characteristics to SELLER. You preempted one of my questions, but very helpful. So we only have a couple here.

Speaker 3

We'll keep it short if we can. The baseline in Procera now in hand, have powering assumptions changed at all? And then were stringent enrollment criteria the reason that the enrollment took a little longer than previously expected? And then last, when it comes to safety, sarahutinib has a clean profile to date. How do you think these outcome results can address the generalized concern that TKIs have off target effects and sarahutinib doesn't?

Speaker 3

Thanks.

Speaker 2

Yeah, so I'll take a portion of that question and have Richard as well jump in, anybody else on the team. Certainly, as it relates to the baseline characteristics that you've seen, I think your question, Andreas, was really kind of, does that kind of lend, does the focus on those baseline characteristics and the stringent entry criteria lend to kind of the time that it took to enroll the study? I would say unequivocally, yes. As an example, and just kind of further highlight that point Andres, we screened somewhere in the neighborhood of seven fifty patients, which is a significant number of patients. And the fact that that's about double what we've actually will end up enrolling.

Speaker 2

That should tell you two things. One, that we've been incredibly stringent to our entry criteria into this study for all the reasons that we've talked about. We think we, given this criteria that we put into place and now have been able to achieve, we think that really enhances our probability of success. And I think the second thing that that says in terms of the number of screening opportunities that we've had is the significant demand for this study. That's a significant number of patients and there was a tremendous amount of demand from physicians and treat physicians, the treaters to be able to have their patients evaluated for their entry into the study.

Speaker 2

And I think that's, you know, a vote of confidence, if you will, from the physician community about the promise of saralutinib. Yeah, Richard, I think one of your first questions around does the baseline characteristics impact the power of the study? And the answer is no. Directly from a technical standpoint, we have over 90% power given the sample size. In fact, just to reiterate what Fahim mentioned, the study intentionally was designed to enroll this population.

Speaker 2

So in anticipation of the treatment effect that we would observe, which is complementary to the sample size and the expected power based on that treatment effect and standard deviation, we're basically right on target.

Speaker 1

I think Andreas your last question was around safety. And certainly to date we remain very very pleased with the safety profile we have seen. Again, that is a function of both design of the molecule, the route of administration, as well as the fact that we designed everything to be on target, which we think again, as Bob has spoken many times about long term, in addition to what we think robust efficacy, our safety profile and ease of use will be a competitive advantage.

Speaker 2

Yeah, and Andreas, if I could just add just to what Brian said, just for one last comment here. That safety profile combined with the efficacy that we expect to see, certainly the efficacy that we saw in functional class three and higher risk patients in Torrey, and the open label extension experience that showed that we continue to see improvement over time, possibly related to the effect, the reverse remodeling effect that we hypothesized is going on. That really positions us well commercially to be used across not only a broad swath of PAH patients, but also to suggest that there's an opportunity for positioning this drug as the backbone of therapy for earlier use to prevent longer term progression. As we all know, this is a progressive disease where every patient progresses. And if we can delay, halt that progression, that's an incredibly meaningful outcome for patients.

Speaker 3

Fantastic. Appreciate the color. Congrats on all the progress.

Speaker 2

Yeah, thank you.

Operator

All right. Next up, we have Yasmeen Rahimi of Piper Sandler.

Speaker 4

Good afternoon, team. Really excited for you. Congrats on so many milestones, right? Enrollment completion, unveiling the baseline, and the PHILD to kicking that all off. Really incredible progress and updates today.

Speaker 4

A few questions, three for you. I guess the first question, team, is for the baseline measures, did you look at baseline PVR in the PROCERA study? Question one. Question two, once the study finishes fully enrollment, are you planning to give us another cut of the baseline and maybe a little bit additional information? I don't know if there's gonna be another disclosure around it before we get the data in February.

Speaker 4

And then the third one is, given that the endpoints for both of these pop between the PH ILD and the PH study are at the six minute walk test, Is there anything we can infer from read through from PERSERRA to Sernata now that we have the study design? Appreciate if you could take those three questions.

Speaker 2

Thanks for your question, Yasmeen. As it relates to the question around further updates, I think as it relates to the baseline, we've given you baseline data on 03/23 patients. We don't expect that to materially change, given just the number of patients that we've been able to evaluate baselines on. And I think we can be pretty clear with you that we will complete enrollment by latest mid June. And so, I won't be any mystery there, just we know that now with great certainty given that we know exactly how many patients are in the funnel.

Speaker 2

So, I think there should be no uncertainty as to when our last patient in will be. As I said, it'll be by mid June. And I think it's fair to conclude that the baseline that we've given you will be very close to the baseline that we'll end up with in this study. Richard? Yeah, to Yasmin answer your question about the PVR, we did have a PVR entry criteria of 400 or greater.

Speaker 2

We did not mandate to have a PVR as an endpoint. So, won't have that in this particular study, but yes, we did have minimal criteria for a PVR and that could have been based on some historic data or at the time of screening. And it's in line to what you would expect given the requirement that we had. In terms of your question around read through, of course, assuming that Pulsara is positive, that portends the possibility that the PH ILD would also be positive. Having said that, we also know that PH ILD patients are going to have lower six minute walks than in group one patients.

Speaker 2

They're actually sicker overall. And so under the thesis that in Procera we have an enriched population of greater severity, I think just implicit in studying the group three population, those patients are sicker. So, if the drug is effective in that population, we should also see a very good treatment effect on six minute walk, as well as other parameters such as NT proBNP, etcetera. And so, I think that definitely does increase the probability of success and there would be a read through. But I think the other dimension here that's exciting about the PH ILD population and the opportunity for sarilutinib is that certainly preclinically we've been able to determine that sarilutinib also has some anti fibrotic properties and infecting really important markers of fibrosis.

Speaker 2

And as you think about this next patient population, those with interstitial lung disease, that could be a significant added benefit to the treatment of those patients.

Speaker 4

Excellent. Thank you so much, team. Really excited for you. And I'll jump back in the queue.

Speaker 2

Thank you, Esme.

Operator

All right, next up we have Paul Choi of Goldman Sachs.

Speaker 5

Hi, everyone. Good afternoon and thank you for taking our questions. Congratulations on all the progress. Want to return to baseline characteristics for a moment. And can you share or do you plan to share with the final baseline just what baseline sotatercept usage is given that it's been available both in The U.

Speaker 5

S. And ex U. S. For a few quarters now? And then in terms of a clinical impact from that, can you maybe just comment on how you're thinking of what is considered clinically meaningful now in terms of six minute walk given that it has been available commercially.

Speaker 5

Has there been any evolution and change of thought among the community on six minute walk here, given sotatercept has been on the market for a few quarters? And then one for Brian is, can you just remind us what key related milestones are sort of baked into your cash runway guidance? Is there anything else that we should be factoring in just sort of what the pushes and pulls are that could potentially extend your cash runway? Thank you for taking our questions.

Speaker 1

Sure, Paul. I'll start with the first one around background sotatercept. As you recall, we had expectations that we would probably have about ten percent of the study or roughly thirty five patients on background Recall, if you were on background cetadricep there were two important components to that. You had to meet our entry criteria, which would suggest cetadricep wasn't working for you. Or, and you would have to have been on stable dosing for six months.

Speaker 1

I think we were very surprised on how few patients were on stable background sotatercept dosing. So of the couple dozen inquiries we had about patients coming in, to date I think we've enrolled three or four patients on background sotatercept which we think again speaks to the real world experience of sutatercept being not as linear as we were expecting. In regards to clinical effect, I'll turn it over to him.

Speaker 2

Yeah, so Paul, it's a really interesting question that you've asked and one that I think is really important. The clinically meaningful effect for six minute walk. So I guess I'll start off by saying, serolutinib appears to be differentiated from any other PAH treatment thus far that we've seen in that. We see continued improvement over time, as evidenced by our open label extension data, where patients, even the less sick patients in Torrey that didn't have as profound a result, saw improvement out to week seventy two. And certainly, even those patients with a more profound improvement, the more sick patients, also saw improvement.

Speaker 2

And that is fairly, a fairly unprecedented result. Assuming that we continue to see that trend in the open label extension portion of the Procera study, what I believe that the treating community is thinking about is that the week 24 data will just be a point in time to which then they can expect patients to improve beyond that. And so that really starts to then ask and play into the question that you've asked is what is a clinically meaningful effect for Procera? And certainly in the dialogue that we've had with our experts, our key opinion leaders, our steering committee, I would say that anything in the 20 meter plus improvement in six minute walk becomes a very clinically meaningful effect given the safety profile of the drug, the opportunity to use it earlier in line of therapy to try to prevent longer term progression, and the promise of improvement over time. Again, that's unprecedented, not been seen in this environment.

Speaker 2

So I think it's erroneous to actually just say, Sotatercept was at X and therefore you need to be at X or Y. Because the basic point is this, every one of these patients will progress. Sotatercept will see really profound effects in a subset of patients, somewhere in the neighborhood of thirty percent. It's what we've seen from the trials, which leaves a large swath of patients with significant unmet need. And certainly there will still be patients who experience untolerable side effects with sotatercept.

Speaker 2

And we're seeing that continuing to build in the real world database. And we will see patients who wane in their effect with cetadircept and are also left with a need. So by the time we get to market, there is going to be a large portion of patients that really need something. And the promise of a drug like this that has the potential to show reverse remodeling effects can be pretty profound. Richard, just to add, I think it's also important that the treatment effect needs to be interpreted without the context of the influence of hemoglobin that probably influenced the response that was observed with sotatercept, for example.

Speaker 2

Plus the population that we've been talking about is a much more sicker population overall. So, I think those are some additional considerations. Bob, do want add anything? No, Bob. Okay, thanks.

Speaker 6

I think,

Speaker 1

Bob, your question on Chiesi milestones, our cash runway does not have any of the big milestones that we would expect on regulatory milestones. I think the biggest influence on our financials with the Chiesa relationship is the cost sharing. And we expect that cost sharing to meaningfully increase as we bring the costs in from the PROCERO study and kick off the Serenana study where we'll be cost sharing on a fiftyfifty basis.

Speaker 5

Great, thank you very much.

Speaker 2

Thanks Paul.

Operator

Alright, next up we have Olivia Brayer of Cantor.

Speaker 7

Hey, good afternoon guys and thank you for the question and congrats on all the progress you've been making this year. Can you disclose what treatment effect you're targeting as it relates to your powering assumptions? Then as you think about the regulatory bar for success, do you know whether FDA is looking for a certain threshold on six minute walk improvement both with respect to p value but also meter improvement? And then just maybe in terms of timing of the disclosure, does that include a safety cut period or was anything else added to that protocol that's maybe changing the time of those data?

Speaker 2

So, to answer your question about the powering, the initial powering, which is the same, is based on a 30 meter treatment effect on six minute walk with a standard deviation of 70, which gives us greater than 90% power. That hasn't changed. The other question was around the time of the data readout does include the safety follow-up and that also hasn't changed. Did we capture all your questions there?

Speaker 3

Yeah.

Speaker 2

Maybe

Speaker 7

just to follow-up on that safety closeout period. Was anything added to the protocol that's actually maybe shifted timing of the data readout? Okay. No. And then the other question, Faheem, was just on the regulatory bar and how the FDA is thinking about six minute walk improvement.

Speaker 7

Have they said anything in terms of what p value or an accurate improvement that they're looking to see for approval?

Speaker 2

I'll turn that question over to Karen Peterson, our Head of Regulatory. Yeah, so we had this discussion with the FDA when we designed the protocol as well as EMA. They agreed to both the powering and how it was powered in terms of the distance and the magnitude of the fact that we were looking for.

Speaker 7

Okay, great, helpful. Thank you guys.

Speaker 2

Thank you.

Operator

All right. Next up we have Patrick Tuccio of H. C. Wainwright.

Speaker 6

Thanks. Good afternoon. I have a few questions on PAH. The first is just a baseline. Do we know the number of patients who discontinued sotatercept previously?

Speaker 6

And then separately, you presented open label extension data that shows continued PVR and six minute walk distance benefit. What read through from this data do you see to PERSERRA, if any? And separately, what are the commercial implications of that OLE data? And then a few on HILD. The first is just the doses, the rationale behind the doses selected for this study.

Speaker 6

And then separately, it was mentioned the data could demonstrate that ceruleutinib is having a beneficial impact on underlying interstitial lung disease. What data or if you're able to demonstrate this benefit, what are the implications for the product profile? What data should we be looking for to show that potential? And what are the implications then for the potential addressable patient population?

Speaker 1

Thanks Patrick, I'll take the first one as far as patients who discontinued cetadircept. Due to the long half life of cetadircept, there are a requirement that you need to have a five half life washout before you can come in. We had very few cetadriceps discontinuations in the study. If memory serves me correct, I think it was high single digits to date. Rich, I'll turn it over to the other part.

Speaker 2

Could you just remind me on what the other Patrick,

Speaker 1

was the other second part to your question?

Speaker 6

Yeah, so just the second part on PAH was just around the open label extension data, the read through from that data, if any, to Procera, and as well just sort of commercial implications of that OLE data.

Speaker 2

Yeah, I'll ask Bob Smith, our Chief Commercial Officer, to touch on that one.

Speaker 1

Yeah, think there's a very positive read through there. As we have taken the OLE data out into the community, the KOL community, We just had really impressive feedback. And when we saw as well that being a key lever for the increased enrollment in Procera, when they started to realize the benefit over time, which as Fahim mentioned is to ceruleutinib.

Speaker 2

Yeah, I think the open label extension implications on commercial are kind of what I've already mentioned, Patrick, which is if that data is replicated as we hope it will be in the context of the Procera study, I mean, is, and we've had this feedback from the community that as I said, it was largely unprecedented. Most studies you see and would expect to see just a plateauing of effect. So it really has an impact on positioning of the drug in the marketplace. And that is like other progressive diseases, we see the desire and the hope to be able to use these drugs earlier, assuming that they've got the right safety profile. Because if you're using a drug earlier in the line of therapy, quality of life matters.

Speaker 2

And matters because they're going to be on treatment for long period of time, longer duration of treatment, and they're being treated in the earlier stage of their disease, which means they're otherwise living a reasonably normal life. So safety really matters. And if there's a promise there or potential to actually remodel both lung and heart, as we've seen by our imaging data and our echo data, that's hugely impactful in terms of the potential to stave off progression for a longer period of time. So that will be an important positioning concept commercially.

Speaker 1

Yeah, because what we're hearing a lot in the the CAEL community, is the desire to use these kind of disease modifying quote unquote, if you will, therapies earlier in the process. And I think if our profile plays out from the OLE through to Procera, will have a very safe, tolerable, and effective agent that can be used very early along with the vasodilator PD-five and ERA. So again, that's one of the rationale for the interest that we're getting for early utilization.

Operator

So,

Speaker 2

I could further comment on your question around the PH ILD around dose and potential impact. So, first, let me start off by saying that we're confident in the ninety milligram dose in PH ILD given the results that we have in group one. Nonetheless, we believe it's important to acknowledge that, as we mentioned, PH ILD represents basically two disease processes. One, a vascular component with the pH and then a lung component characterized by the lung fibrosis. So, factoring in some of the preclinical work that we had performed and was presented at CHEST Conference in 2024 using fibrotic models, using human lung and fibroblast cells, which we showed a favorable effect.

Speaker 2

The thought process is we wanted to deliver more drug to the lung, factoring in the fact that the lung architecture is already distorted due to the lung fibrosis. So, we want to ensure that sufficient exposure is occurring in the setting of that differences in the architecture. Recall that we have elevated the functional forced vital capacity as a secondary endpoint. That was done intentionally because we believe that this could be a clear differentiating feature of this molecule in treating both the pH part and the lung disease part. And so, assuming that we have positive results, not only would it be differentiating for us, but we would obviously have a discussion with regulators about potential mentioning of it or positioning of it in the product label.

Speaker 2

And maybe Bob would just want to comment on some of the commercial implications of this approach.

Speaker 1

Of the? Of the FVC. Oh, okay, yeah. So commercially it would be a huge differentiator because right now Tyvaso looked at FVC as a safety endpoint in the study, whereas we're looking at as an efficacy endpoint in the study. So that would be a significant commercial differentiator for ceruleutinib.

Speaker 1

And I also think, Patrick, importantly, in conjunction with our partners at Chiesi, having an efficacy signal on FVC would also be a significant barrier to entry in the European Union where no drugs are approved.

Speaker 6

Terrific, thanks so much.

Speaker 3

Thanks, Andrew.

Operator

All right. Next up, have Laura Chico of Wedbush.

Speaker 8

Hey, good afternoon. Thanks very much for taking the questions. I just have a couple here. First, and I apologize, I'm just trying to reconcile some of the commentary around the geographic split on recruitment and Procera and some of the commercial dialogue you've had there. How do you think about the types of patients that would be more suited for sirlutinib presuming success in Prasara versus sotatercept patient?

Speaker 8

I'm just kind of curious, is there certain characteristics that might skew the market one whether? And then related to Serenada, I think I missed this, but could you elaborate a little bit further? This is kind of blazing new trails here. So trying to understand the powering assumptions around the primary endpoint, guess specifically on treatment effect and how you derive that. Thanks very much.

Speaker 1

Yeah, on the commercial side, assuming positive Procera, we will launch seralutinib roughly three years after sotatercept launched in the market. At that point what you'll see is basically a market reset. So all of the prevalent patients that are currently out there will have tried sotatercept, probably three quarters of them, not all patients are going to be good candidates for sotatercept, but call it seventy percent. So by the time you launch, you'll have this market reset where patients have been on sotatercept, have come off sotatercept, that now have advanced in their progression of their disease. And that's kind of the large patient population that Fahim spoke of before.

Speaker 1

So we could potentially look at having a 70 to 80% of the market opportunity out there because cetadixep will probably have say 30% of the market in three years because of the discontinuations and just the normal progression of the market and the disease. In addition, think there's a lot of interest as well to using both cerulutinib and sotatercept in combination. As Brian mentioned, we only have very few patients in the study on that combination, but there are data that are being looked at both pre clinically and then we'll have a little bit of clinical data to suggest how these therapies could be used in combination. So if I take my crystal ball out to

Speaker 2

say, let's fast forward to the time that we launch, as Bob said, say early twenty twenty seven, all the points that Bob made is exactly right. So what we're going to see is not only the patients that have tried cetadircept failed, the patients that weren't eligible for cetadircept for one reason or another, and the patients who've been on cetadircept and overall treatment has waned, those patients that have been on cetadircept that may still be on cetadircept but we're starting to see a waning of the effect, one can imagine docs are going be very encouraged to use combination therapy, especially given the preclinical evidence that's been generated thus far around the potential synergy between these two agents. But I think that saralutinib gets positioned as a drug to try first before saralutinib once we're in the market, as we see newer patients coming in. I think that is a potential just because as you see it for the reasons I mentioned, to be able to see the potential to prevent longer term progression, but also to be able to put these patients on a product with a safer profile, I think will be incredibly encouraging for dogs.

Speaker 2

So I think it'd be kind of an interesting marketing concept and positioning concept once we get approved. So I could answer your question around some of the powering assumptions around our PHLD six minute walk. So, I think as you've mentioned and as we stated, there's not a lot of precedent for randomized controlled trials. But we do have the increased trial that we could get the six minute walk data from that particular trial. And so we had to do some extrapolations.

Speaker 2

Just add to maybe three points around trying to provide a framework and then I'll get into the the power assumptions that we did. So, as I mentioned, this is a very sick population. They're going to have lower six minute walks in group one. And furthermore, over the course of a trial, they're likely going to deteriorate much more than group one. And I want to go back and look at the INCREASE trial.

Speaker 2

That was a sixteen week trial. Our trial is twenty four weeks. So, the assumption here is that those that are randomized to placebo are likely going to get worse than even in the increased trial. That's one factor. Related to that then, as in the active arm, we have assumed at least a 30 meter difference, much like what we did for group but we have some latitude there.

Speaker 2

If it's less likely more, we still have greater than 94%, ninety five % power comparing the active arm versus placebo. And that's also assuming a standard deviation of about 70.

Speaker 8

That's super helpful. Thank you, guys.

Speaker 2

Thank you.

Operator

All right. Next up, have of UBS.

Speaker 9

This is Jasmine on for Congratulations on all the progress, and thanks so much for taking our question. So first, a follow-up to an earlier question, your comments. Are you allowing sotatercept drop ins in PROCERA? And then more generally, how are you thinking about how looking at a combination effect here could impact the opportunity commercially? And then secondly, can you just talk about the population you're aiming to enroll in Serenada for PH ILD?

Speaker 9

Do you think that similarly to PH effects in the more severe range of patients here? Thanks.

Speaker 2

Yeah, in terms of the allowing cetadircept patients who are on cetadircept into the Procera study, we actually do allow for patients who are on cetadircept, but of course, in order for them to get into the study, they need to actually qualify for the study, which means there's a kind of a period where they need to be on stable medication. Rich, if you can kind of outline the criteria for sotatercept patient, eligible patients. Yeah, I mean, they have to be some background sotatercept for six months at a stable dose without changing due to hemoglobin or platelet changes. And then they still have to meet our PVR criteria of greater than 400, reveal like two point zero risk score five or greater, or a PVR greater than 800.

Speaker 1

It helps after twenty four weeks, right?

Speaker 2

Yeah, twenty four weeks. Yeah. And so, just given the kind of the stringent application of the entry criteria, we will probably just get a handful of patients on cetadircept. There really won't be a substantive number in this study, given the timeframe under which it's been launched and the access to patients who've been on for six months, as Richard just laid out. But so the short answer is yes, we allow cetadircept patients in, but they've got to qualify in the context of the entry criteria, which will equate to a small number.

Speaker 2

And then yeah, I could comment is the target population Yeah, probably the best way to frame this is suggest to go back and look at the INCREASE trial and their population. We have some similarities but clearly some differences and I can just highlight some of those differences. So, first of all, our hemodynamic criteria We have four wood units for PVR. They had three wood units.

Speaker 2

That's because we do want to leverage the fact that there are more severe patients and we would anticipate a greater treatment effect in those patients. In addition, we are targeting idiopathic interstitial pneumonia and IPF, systemic autoimmune disease related pH, fibrotic interstitial pneumonitis, and occupational interstitial lung disease. Unlike INCREASE, however, we're not allowing for a combined pulmonary fibrosis or emphysema. We're not allowing sarcoid either. And then we're much more stringent upon criteria around having CT scans reviewed by central reader and other things like that.

Speaker 2

Probably related to your question is, do we anticipate the more severe population that we would also observe a greater treatment effect? I think the answer is yes to that question.

Speaker 9

Great, that's helpful. So just to clarify, patients are not allowed to drop in or begin Zotiracet during Procerus?

Speaker 1

As far as dropping in with snottercept, no. When you are enrolled you have to be on stage for therapy.

Speaker 9

Great, thanks so much for answering my questions.

Speaker 3

Thank you.

Operator

All right, and our final question in queue today is Vamil Divan of Guggenheim.

Speaker 10

Hi, this is Daniel on for Vamil. Thanks for taking our questions. So, the first one is you described ferulunav as a multi billion dollar PH franchise potentially. Can you maybe compare the commercial opportunity for this drug in PAH versus PH ALD? And then my second question is if you can kind go into more details around the expected geographic distribution of enrollment for the PH ILD trial.

Speaker 10

Do you think it will be similar to what we saw in PAH with the majority seen internationally? Or is there less of a need for this imbalance without the win revere dynamic at play? Thanks.

Speaker 1

Yeah, Bob? Yeah, so in terms of the multi billion dollar opportunity, if you look at PAH there's about 50,000 patients in The US. If you look at the current pricing of the newer therapies, obviously we haven't presented anything publicly, but if you look at sotatercept price, quickly, sotatercept right now is on about a billion and a half downgrade in its second full year. Right now they're sitting at I think five thousand eight hundred patients, or five thousand two hundred patients have already started drug. And that continues to grow.

Speaker 1

So you can see the opportunity within the PAH marketplace in terms of the number of patients and the potential price associated with it. In terms of the ILD PH, that market is probably three to four times greater than PAH. Call it roughly worldwide 400,000, something like 400,000 patients. So again, and if you look at what Tyvaso is doing with their price point and number of patients despite a very high number of discontinuations on that therapy, their run rate PHILD is roughly 2,000,000,000. Dave, to answer your question about geographic mix for Serenana, I do think it will be similar to Procera.

Speaker 1

If anything, it may be an even larger contribution from the European Union. And that's really a function of, remember the dynamics in Procera is that while, cetadriceps was not available in in the European Union, there was an expectation that it was coming so patients were saying, I'll wait for cetadircept before I go on trial. That dynamic doesn't exist because inhaled Tyvaso has not been approved and there is, at least from what we can tell from looking at regulatory processes, is not a plan for United's partner Farrar to get the drug registered in the European Union. So there is an even greater unmet medical need in Europe for PHILD therapies than there was for PH therapies.

Speaker 2

So in summary, you've got a patient population PH ILD, that is much larger, significantly underserved with only one drug approved in The US being Tyvaso. I think Tyvaso is now available in a couple other smaller jurisdictions, but for the most part, only available in The US. With a sicker patient population than PAH. So the unmet need is substantial and the opportunity therefore is also substantial.

Speaker 10

Okay, great. Yeah, thank you very much.

Speaker 2

Thanks. All right. Any other questions in the queue, operator?

Operator

At this time, there are no further questions in queue.

Speaker 2

Okay. I would just like to first off thank everybody for your participation on this call. We've enjoyed the opportunity to be able to speak with you and be able to outline the progress that we've made on Procera. We of course eagerly await the top line results from this study. And for all the reasons that we've discussed today, we're very excited about the potential of saralutinib making a huge difference for patients.

Speaker 2

And I just want to end this call by first and foremost thanking those patients contributed themselves to this study and to their physicians for having the confidence in Gossamer and Sarah Ludna to entrust us with treating their patients, the ability to treat their patients. And lastly, just want to thank the Gossamer organization for the tireless effort over the last couple of years to be able to get us to where we are today. So thank you all. And we look forward to being able to talk to you again and certainly look forward to the top line results on Proseq. Thanks everybody.

Operator

And with that, ladies and gentlemen, this does conclude your call. You may now disconnect your lines and thank you again for joining us today.

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Earnings Conference Call
Gossamer Bio Q1 2025
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