Gossamer Bio, Inc., a company with six drugs in its pipeline, is planning to go public and has applied to list on the Nasdaq exchange under the ticker symbol “GOSS.”
Three of the company’s drugs are in clinical trials, while the rest are still in preclinical stages of development. The company’s most advanced product candidate is in Phase 2 trials for the treatment of eosinophilic asthma, and it has Phase 1 trials in the works for two other treatments, one for pulmonary arterial hypertension and another for inflammatory bowel disease.
In its prospectus, Gossamer said it could raise up to $264.5 million in its initial public offering. The San Diego-based biotech plans to offer 14.4 million shares at $16 a share, with an additional 2.2 million shares for underwriters to cover overallotments, which, if used, could value the company at just over $1 billion.
Bank of America Merrill Lynch, SVB Leerink, Barclays and Evercore ISI are the underwriters on the deal.
Here are five things to know about Gossamer as it readies its IPO.
Gossamer has a diverse pipeline, something that could appeal to investors
Along with a potential treatment for eosinophilic asthma, Gossamer is developing a molecule that inhibits a cellular pathway involved in pulmonary arterial hypertension, an often fatal illness characterized by abnormally high blood pressure in the vessels transporting blood from the right side of the heart to the lungs. Gossamer currently has a Phase 1 study in the works.
Gossamer is also developing a therapy for inflammatory bowel disease, or IBD, called GB004. It’s a molecule that prevents hypoxia-inducible factor, a protein complex in the body that helps induce blood-vessel growth in areas of the body without enough oxygen, from breaking down. Gossamer said pre-clinical data from animal models of IBD showed that preventing hypoxia-inducible factor from breaking down results in the restoration of the intestine’s lining and function. The company has completed a Phase 1 dosing study of GB004 in healthy volunteers.
In addition to these, Gossamer has three pre-clinical drugs in development for the potential treatment of autoimmune disorders and cancer.
But Gossamer’s most advanced product candidate suffered a recent Phase 2 setback
Gossamer’s most advanced product candidate is GB001, a drug that blocks the prostaglandin D2 receptor, a part of the cellular pathway involved in allergic inflammation and allergic airway inflammation in asthma. The company is developing GB001 to treat patients with eosinophilic asthma, a more severe form marked by high levels of white blood cells known as eosinophils.
Gossamer said in a securities filing that while a Phase 2 clinical trial of GB001 in Japan showed positive results, a separate 248-patient Phase 2 trial showed that neither GB001 nor asthma treatment montelukast had met the primary endpoint for improvement in asthma symptoms.
The company said it believes the setback was primarily due to “study design and execution issues related to patient selection, including adherence.”
Gossamer’s GB001 faces some tough competition from other biopharma companies
Gossamer’s GB001 faces some tough competition from already-existing biologics used in the treatment of asthma: Genentech and Novartis’s Xolair; Regeneron Pharmaceuticals Inc. REGN, +0.20% and Sanofi S.A.’s SNY, -0.44% Dupixent; and the generic montelukast.
In the eosinophilic asthma space, there’s potential competition from GlaxoSmithKline’s GSK, +0.00% Nucala; Teva Pharmaceutical Industries Ltd.’s TEVA, -0.76% Cinqair; and AstraZenca Pharmaceuticals’ AZN, +0.19% Fasenra.
And although there are no prostaglandin D2 antagonists currently approved as therapies, Novartis NVS, +0.16% , Chiesi Farmaceutici S.o.A., Merck & Co. Inc. MRK, +2.71% and Sunshine Lake Pharma Co. Ltd. are all working on developing this particular class of drug.
Gossamer has not yet made a profit, and it may never make a profit
Like most biotech companies, Gossamer is a high-risk investment. The company has not made a profit since its inception in 2015, and it could be years before it does.
The company posted a net loss of $6.77 million in 2017 and a net loss of $108 million in the nine months ended September 30 of 2018, mostly due to research and development expenses.
“Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk,” the company wrote in its S-1 filing. “We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as we continue our development of, seek regulatory approval for and potentially commercialize any of our product candidates and seek to identify, assess, acquire, in-license or develop additional product candidates,” Gossamer added.
Gossamer needs cash… lots of it
Gossamer is burning through cash very quickly. In the nine months ended September 30, the company’s total operating expense was $109 million.
“The development of biopharmaceutical product candidates is capital-intensive,” Gossamer wrote in its prospectus.
For now, the company needs money to conduct its ongoing and planned clinical trials and to research future product candidates. Eventually, the company will also need cash to make milestone payments to potential licensors and third parties that acquire Gossamer’s drugs. If the company’s drug candidates get approved by the U.S. Food and Drug Administration, Gossamer will need cash to manufacture, market, sell and distribute those products.
The net proceeds from the initial public offering should fund Gossamer’s operations for “at least the next 12 months,” the company wrote in its prospectus. After the IPO, the company expects to have a total of $467.3 million in cash.