Gossamer Bio is going all in on seralutinib, laying off 25% of its staff and stopping work on all other candidates to free up money for a phase 3 trial of its pulmonary arterial hypertension (PAH) prospect.
San Diego-based Gossamer has suffered a string of setbacks in recent years. The asthma prospect GB001 flunked a pair of phase 2 trials in 2020, and the next cab off the rank, ulcerative colitis candidate GB004, joined the biotech’s list of failed candidates one year ago. Gossamer identified GB5121 as part of its plan for bouncing back, only to stop a phase 1/2 lymphoma trial earlier this year after two patients died.
The flurry of body blows has left seralutinib as the last candidate standing. Gossamer has tied its future to the tyrosine kinase inhibitor, outlining plans to use the $202 million it had at the last count to take the candidate into a phase 3 clinical trial in PAH in the third quarter.
Investors have low expectations. The release of phase 2 trial data on seralutinib late last year cut the last thread keeping Gossamer’s share price out of the gutter. While the study met its primary endpoint, the effect of seralutinib on pulmonary vascular resistance fell short of expectations, and the candidate failed to statistically improve six-minute walk distance, a key secondary endpoint. Gossamer’s stock fell 70%.
The stock has mostly traded between $1 and $2 since the midphase data drop, having touched $15 in the run-up to the readout in the fall. Investors were unmoved by Gossamer’s latest update, sending the stock up 1.5% to $1.38 in premarket trading. If Gossamer can show seralutinib works in phase 3 and take the drug to market, it will likely face competition from Merck & Co.’s near-approval sotatercept.
Having identified seralutinib as its best bet, Gossamer has restructured to focus its resources on the drug candidate. The biotech is stopping further development of all other product candidates and considering strategic options for the assets. Gossamer’s pipeline has one other named candidate, a BTK inhibitor that is in early-stage development as a treatment for multiple sclerosis.
In conjunction with the narrowing of its focus, the biotech is laying off more than 25% of its employees. Gossamer had 178 full-time employees as of March 10, meaning around 44 jobs could be at risk.