Gossamer Bio nets $230M in series B to advance portfolio against undisclosed targets

A stethoscope and paper money.
Gossamer's executives hail from immunotherapy developer Receptos, which was sold to Celgene for $7.2 billion in 2015. (Getty/utah778)

Gossamer Bio netted $230 million in a series B financing round—on the heels of its $100 million launch in January—to accelerate the company’s growth and fund clinical trials of candidates with undisclosed targets in immunology, inflammation, immuno-oncology and fibrosis.

In addition, the San Diego-based startup named its co-founder, Sheila Gujrathi, M.D., as its new CEO. Gujrathi previously served as Gossamer’s president and chief operating officer, while co-founder Faheem Hasnain will serve as executive chairman.

Both previously held executive roles at Receptos, with Hasnain as CEO and Gujrathi as chief medical officer. That autoimmune treatment developer was acquired by Celgene in 2015 for $7.2 billion in cash.

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Gossamer’s preferred stock funding round was led by Hillhouse Capital and included new investments from Invus, The Baupost Group, Polaris Partners and a subsidiary of the Abu Dhabi Investment Authority. The company’s previous investors, ARCH Venture Partners and Omega Funds, also participated.

RELATED: Former Receptos executives launch Gossamer Bio with $100M war chest

“I am incredibly honored to lead the Gossamer Bio team through this next chapter of growth,” said Gujrathi in a statement. “This significant financing from a committed, knowledgeable, and sophisticated investor syndicate positions us well to continue development of our programs. With Faheem’s continued partnership, we look forward to creating value for investors while helping patients who are suffering.”

The company’s website vaguely describes four programs at varying stages of preclinical and clinical development, with its lead candidate in phase 2 with “additional indication(s) planned” and targets “to be disclosed.”

It also lists a HIF-1 alpha stabilizer, aimed at a subunit of hypoxia-inducible factor, in phase 1 development for the treatment of inflammatory bowel diseases—the subject of a recent licensing deal with Aerpio Pharmaceuticals.

Under the agreement, Gossamer offered $20 million upfront through a subsidiary devoted to the project, with milestone payments up to $400 million plus royalties, and will be responsible for the remaining development, regulatory and commercialization expenses.

Aerpio previously conducted a phase 1, single-ascending-dose study which found the once-daily oral drug—AKB-4924, since renamed  GB004—to be safe and well-tolerated. In May, Aerpio launched a multiple-ascending-dose study to assess pharmacokinetics, safety and tolerability in 24 healthy volunteers.

“The Gossamer team has a demonstrated track record of successful therapeutic development in IBD, specifically the development of ozanimod in multiple sclerosis and IBD, as evidenced by the sale of Receptos to Celgene in 2015 for $7.2 billion,” Aerpio CEO Stephen Hoffman, M.D., said at the time. “Our partnership allows us to focus our resources on our ophthalmology and diabetes programs currently in development at Aerpio.”

RELATED: After FDA rebuff, Celgene on track to refile ozanimod—in 2019

However, in February, the FDA refused to file Celgene’s ozanimod application in MS, saying the big biotech failed to provide necessary preclinical and clinical pharmacology information. The company expects to resubmit its NDA in the first quarter of 2019, delaying its timeline for the potential blockbuster drug by a year.

Last month, Celgene’s president of hematology and oncology, Nadim Ahmed, said the company’s arm’s-length relationship with San Diego’s Receptos led to the rare substandard filing. Talking to the Financial Times, Ahmed framed the setback as a lesson in integrating acquisitions rather than leaving them “completely away from the mothership.”

Ozanimod could become a key pillar of Celgene’s portfolio, with forecasted peak sales of around $5 billion annually, as the company heads toward its patent cliff with other products.

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