Gossamer Bio: Seralutinib's Inhaled Edge Targets Pulmonary Hypertension Franchise (GOSS) - GOSS Stock Research Report

## Executive Summary / Key Takeaways * Gossamer Bio is strategically focused on advancing seralutinib, an inhaled kinase inhibitor, as a potential disease-modifying therapy for pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD), addressing significant unmet needs. * Seralutinib's inhaled delivery and multi-target mechanism offer potential advantages, including improved safety and the possibility of addressing underlying disease pathology, differentiating it from existing therapies like oral TKIs and vasodilators. * The registrational Phase 3 PROSERA study in PAH has completed new patient screening, with full enrollment expected by early June 2025 and topline data anticipated in February 2026, representing a critical near-term catalyst. * A global collaboration with Chiesi provides significant financial support, including a $160 million upfront payment and cost-sharing for development and U.S. commercialization, enabling the planned Phase 3 SERANATA study in PH-ILD (site activation Q4 2025) and extending the cash runway into the first half of 2027. * While the company continues to incur significant operating losses, the focus on seralutinib, supported by the Chiesi partnership and upcoming clinical milestones, positions Gossamer for a high-stakes period with potential for substantial value creation if clinical outcomes are positive. ## Setting the Stage: Targeting Pulmonary Hypertension with a Differentiated Approach Gossamer Bio, Inc. is a clinical-stage biopharmaceutical company strategically centered on developing and commercializing seralutinib for the treatment of pulmonary hypertension (PH), encompassing both pulmonary arterial hypertension (PAH) and PH associated with interstitial lung disease (PH-ILD). These are severe, progressive conditions characterized by high mortality and a persistent need for more effective and better-tolerated therapies. The current treatment landscape, while evolving, primarily relies on vasodilators that address symptoms but often fall short of modifying the underlying disease pathology. The company's journey in PH began with the in-licensing of seralutinib from Pulmokine, Inc. in 2017, a foundational step that established its lead program. This asset acquisition set the stage for Gossamer's focus on an inhaled small molecule inhibitor targeting key receptors implicated in vascular remodeling, inflammation, and fibrosis: PDGFR, c-KIT, and CSF1R. This multi-targeted approach, delivered directly to the lungs via inhalation, represents a key technological differentiator aimed at maximizing local therapeutic effect while minimizing systemic exposure and potential side effects, a challenge faced by oral kinase inhibitors like imatinib. The strategic rationale is clear: by targeting the root causes of the disease, seralutinib has the potential to offer a disease-modifying benefit beyond vasodilation, potentially leading to improved long-term outcomes for patients. This focus on a differentiated mechanism and delivery method positions Gossamer to potentially carve out a significant space in the competitive PH market, which includes established players like United Therapeutics (TICKER:UTHR), Gilead Sciences (TICKER:GILD), Johnson & Johnson (TICKER:JNJ), and Merck (TICKER:MRK) with their respective PAH therapies. ## The Inhaled Edge: Technology and Its Potential Impact Seralutinib's core technological advantage lies in its inhaled delivery and its specific multi-kinase inhibition profile. Preclinical data highlight the benefits of this approach, demonstrating significantly greater lung-to-plasma exposure ratios, approximately 30 times higher in animal models, compared to systemic exposure. This is designed to concentrate the drug where it is needed most – in the pulmonary vasculature and lung tissue – while allowing for rapid clearance from the bloodstream. This targeted delivery is hypothesized to translate into tangible clinical benefits. Unlike oral TKIs such as imatinib, which faced high discontinuation rates in trials due to systemic side effects, seralutinib's profile aims for improved tolerability and safety. Early clinical experience, including open-label extension (OLE) data from the Phase 2 TORREY study, has been encouraging in this regard, with a blinded discontinuation rate comparable to the more manageable rate seen with sotatercept in its PULSAR study. Beyond safety, the multi-targeted mechanism is intended to address the complex pathology of PH, including vascular remodeling and inflammation. TORREY OLE data, though from a small number of patients, showed decreases in NT-proBNP (a biomarker of heart strain) and increases in 6-minute walk distance (6MWD), hinting at a potential for reverse remodeling – a significant outcome not consistently achieved by current therapies. In the context of PH-ILD, seralutinib's potential extends to addressing the underlying interstitial lung disease component. Preclinical data suggest antifibrotic and anti-inflammatory attributes. The planned Phase 3 SERANATA study in PH-ILD will explore this, notably including change from baseline in forced vital capacity (FVC) as a key secondary endpoint. Demonstrating an efficacy signal on FVC would be a crucial differentiator compared to the currently approved treatment, Tyvaso, which evaluated FVC primarily as a safety endpoint. The inclusion of a higher dose (120mg BID) in SERANATA, based on preclinical modeling, further underscores the strategic intent to maximize lung exposure for potential impact on the fibrotic lung component. The "so what" for investors is that this technological differentiation could provide a significant competitive moat. A therapy that offers improved safety and tolerability, potentially addresses the underlying disease, and shows efficacy in both PAH and the lung component of PH-ILD could command a premium, achieve better patient adherence, and potentially be positioned earlier in the treatment paradigm or as a backbone therapy, driving market share and long-term revenue growth. ## Strategic Evolution and Partnership Fueling Advancement Gossamer's strategy has evolved to prioritize its most promising assets, focusing resources to maximize their potential. This included the decision in 2021 to discontinue clinical activities for GB1275, an oral CD11b modulator, to concentrate investment on the lead programs and the preclinical pipeline, including CNS-penetrant BTK inhibitors. A pivotal moment arrived on May 3, 2024, with the announcement of a strategic global collaboration and license agreement with Chiesi. This partnership is transformative, providing substantial financial backing and global commercial expertise. The agreement included a $160 million upfront payment and establishes a cost-sharing arrangement where Gossamer and Chiesi will equally share the costs of ongoing global seralutinib clinical development (with the exception of the PROSERA study, which Gossamer solely funds) and commercialization efforts in the U.S. This infusion of capital and shared financial burden significantly strengthens Gossamer's position and validates the potential of seralutinib on a global scale. The collaboration also includes potential regulatory and sales milestones totaling up to $326 million, and escalating mid-to-high teens royalties on ex-U.S. net sales. This partnership is directly enabling the advancement of seralutinib into late-stage development for both PAH and PH-ILD. The registrational Phase 3 PROSERA study in PAH was initiated in Q4 2023, and the global registrational Phase 3 SERANATA study in PH-ILD is planned, with first site activations expected in Q4 2025, developed jointly with Chiesi. ## Operational Momentum and Financial Performance Operationally, Gossamer has achieved significant milestones. The PROSERA study has seen strong momentum, leading to the recent closure of new patient screenings. Full enrollment is anticipated by early June 2025. The decision to target patients with impaired 6MWD and elevated risk (74% functional Class III, average 6MWD ~376m, mean NT-proBNP ~960 in the first 324 patients) is a deliberate strategy based on learnings from the TORREY study and historical trials, where sicker patients often show a greater magnitude of effect on 6MWD. This targeted enrollment, coupled with stratification for functional class, aims to maximize the probability of demonstrating a significant treatment effect on the primary endpoint. The timeline for the PROSERA topline data readout has been set for February 2026. While the blinded portion is expected to complete in Q4 2025, the extended timeline allows for thorough data cleaning, analysis, and adjudication, prioritizing data quality for this critical registrational study. Financially, as a clinical-stage biopharmaceutical company, Gossamer continues to incur significant operating losses. For the three months ended March 31, 2025, the company reported a net loss of $36.6 million, compared to $41.9 million for the same period in 2024. The accumulated deficit as of March 31, 2025, stood at $1.3 billion.

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Revenue for Q1 2025 was $9.9 million, derived entirely from the Chiesi collaboration, reflecting ongoing cost-sharing for R&D and pre-commercial services. Research and development expenses increased by $5.6 million in Q1 2025 compared to Q1 2024, primarily driven by increased costs for seralutinib clinical trials, partially offset by reduced spending on terminated programs. General and administrative expenses saw a decrease of $0.9 million, mainly due to lower stock-based compensation.

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As of March 31, 2025, Gossamer held $257.9 million in cash, cash equivalents, and marketable securities. Management believes these resources are sufficient to fund operations through at least the next 12 months from the filing date (May 15, 2025).

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Crucially, the Chiesi collaboration, particularly the cost-sharing mechanism for the SERANATA study and increasing costs for PROSERA, is a significant factor extending the anticipated financial runway into the first half of 2027. However, the company acknowledges the need for additional capital in the future to support potential commercialization efforts if seralutinib is approved.

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## Competitive Positioning and Outlook Gossamer operates in highly competitive markets. In PAH, established therapies and emerging treatments like sotatercept from Merck represent significant competition. While direct, precise market share comparisons with all niche competitors are challenging to ascertain, the landscape is dominated by large players with extensive resources and approved products. Gossamer's strategy leverages seralutinib's unique profile to differentiate itself. The inhaled delivery and multi-targeted mechanism are intended to offer a better safety and tolerability profile compared to some existing oral therapies, potentially leading to better patient adherence. Management believes this, combined with the potential for disease modification and reverse remodeling, could position seralutinib as a competitive option, potentially even as a backbone therapy or for earlier use in patients who may not tolerate or fully respond to existing treatments like sotatercept. The observation of few patients enrolling in PROSERA on background sotatercept is seen by management as potentially reflecting the real-world experience with existing therapies. In the PH-ILD market, the unmet need is even greater, with Tyvaso being the only approved therapy in the U.S. despite facing high discontinuation rates. Gossamer sees a significant opportunity here, with the market being estimated at 3-4 times larger globally than the PAH market. Seralutinib's potential dual mechanism targeting both the vascular and fibrotic components, supported by the FVC endpoint in SERANATA, could provide a strong competitive advantage and address a critical gap in treatment options, particularly in regions like the European Union where no drugs are currently approved for PH-ILD. The outlook for Gossamer is heavily tied to the success of its seralutinib program. The upcoming PROSERA topline data in February 2026 is the most significant near-term catalyst. Positive results, particularly demonstrating a clinically meaningful improvement in 6MWD in the targeted patient population, would be transformative, paving the way for regulatory filings and potential commercialization. The planned initiation of the SERANATA study in Q4 2025 further expands the potential market opportunity. Risks remain, including the inherent uncertainties of clinical trials, the potential for unexpected safety signals, challenges in securing regulatory approvals, and the need for future funding which could result in dilution. Changes in global trade policy are also noted as a potential risk. However, the partnership with Chiesi significantly de-risks the development funding and provides a clear path forward for global commercialization if successful. ## Conclusion Gossamer Bio stands at a critical juncture, with its investment thesis firmly rooted in the potential of seralutinib to address the significant unmet needs in pulmonary hypertension. The company's strategic focus, underpinned by the differentiated inhaled technology and the transformative partnership with Chiesi, positions it for a high-impact period. While current financials reflect the costs of late-stage clinical development, the extended cash runway provides the necessary resources to reach key data readouts. The upcoming topline results from the PROSERA study represent a pivotal moment that will largely determine the near-term trajectory of the company. Success here, coupled with the advancement of the SERANATA study in the larger PH-ILD market, could validate seralutinib's potential as a differentiated, disease-modifying therapy and lay the groundwork for a significant franchise in pulmonary hypertension, offering a compelling opportunity for investors willing to embrace the clinical development risk.