Gossamer Bio, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Gossamer Bio, Inc. Customer Q1 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. 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 Gujarati. 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 the 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 pre-specified interim analysis for our LIDA 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 and patients with active ulcerative colitis. Beyond those, we 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 DPQ antagonist, which is currently being evaluated in two ongoing studies, the Phase II B LIDA study in eosinophilic asthma and the Phase II Titan study in chronic rhinositis. We announced today that we have completed a pre-specified interim analysis of the LIDA study which was based on approximately the first two-thirds 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 3 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 IBMC recommendation, Gossamer has commenced initial Phase 3 planning and supportive activities. GB001 is also being studied in the Phase 2 Titan study for the treatment of chronic rhinocytosis, both with and without nasal polyps, which we had previously announced had 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, directed patient drug supply, and remote monitoring whenever needed. We remain confident that our top-line data timeline 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 two phase two studies in asthma and chronic rhinocytosis in the second half of the year. Next, we are excited to announce promising results from the Phase 1B study of GB004 in patients with active ulcerative colitis, or UC. This Phase 1B was a four-week study to assess the safety, tolerability, and pharmacokinetics of GB004 in patients with mild to moderate UC. Thirty-four patients with active disease, despite five ASA therapy, were randomized two to one 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 HIF1-alpha stabilizer for the treatment of IBD. Unlike immunosuppressants such as anti-TNF antibodies and JAK inhibitors, which focus on reducing inflammation 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 HIF1-alpha leads to the expression of a number of genes associated with barrier function and integrity. As we entered into our Phase 1b 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 dysgousia, 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 experiencing a serious adverse event of worsening UC, which was deemed non-related to study drug by the investigators. GB004 was rapidly cleared from the plasma, had minimal systemic accumulation over the four-week dosing period, and was found in significantly higher concentrations in the gut compared to plasma after eight hours of dosing. There was no impact on systemic EPO or VEGF levels. These findings are consistent with a 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 CLAUDIN1 and tight junction protein 1, and other changes associated with HIP 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 four-week first inpatient 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. Four 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 two 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 subscore 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 the high hurdle endpoint of clinical remission, while no patients in the placebo arm achieved clinical remission. We will present the 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 the high level of the 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 one 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 concern seen with the solution form. Despite a short four-week dosing duration and a potentially non-optimized dose, these are promising early results, and our advisors have encouraged us to move into a robust Phase II study. We plan to commence a 12-week induction study, evaluating higher doses with a 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 Airpeo Pharmaceuticals. Gossamer paid Airpeo $15 million upfront, and in exchange, Gossamer received more favorable downstream economic terms, including lowering our 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 us move on to GB002, our inhaled PDGFR inhibitor for the treatment of pulmonary arterial hypertension, or PAH. DUPUS-002 was designed to improve upon prior success observed with kinase inhibition in PAH by delivering a potent PDGFR inhibitor directly to the site of disease with a convenient dry powder inhaler, all while avoiding high systemic exposures and improving the therapeutic index. DUPUS-002 is currently being studied in an ongoing dose-ranging Phase 1b trial in PAH patients. As a reminder, the objective of this two-week study to evaluate the safety and PK profile of GB002 inpatients. While we had an encouraging start to enrollment, given the ongoing COVID-19 pandemic, enrollment in this Phase 1b 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 the study from Q2 to the second half of 2020. We have launched study startup activities for our phase two study of GB002 and anticipate beginning involvement 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 two plans from a number of investigators, and we believe there is tangible excitement building for commencement. This 24-week phase 2 study will enroll PAH functional class 2 and 3 patients. Patients will stay on background therapy throughout the study, including prostacyclin. The primary endpoint will be a change from baseline in PVR at week 24, and the key secondary endpoint will be change from baseline in 6-minute walk distance at week 24. GP1275, our oral CD11B modulator being developed for the treatment of solid tumors, continues to advance through dose escalation in the Phase 1-2 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 PKPD and biomarker data, which are consistent with the GB1275 mechanism of action and its impact on myeloid-derived suppressive cells. Please be on the lookout for that virtual poster during the ASCO 2020 Virtual Scientific Program from May 29th through May 31st. When we are able to do so, we will make the poster available on our website at gossamerbio.com in the poster and publication 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 organ drug designation from both the EMA and the FDA for the treatment of pancreatic cancer. We also have a corporate update to share. Dr. Jacob 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 Jacob'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 risk. 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?