Good morning, everyone. Thank you for joining our Piper Sandler Healthcare Conference. It's day one of our conference. My name is Yasmeen Rahimi. I'm a Senior Biotech Analyst here at Piper Sandler. Excited to have the team from Gossamer Bio here with us. My goodness, we have an incredible 2025 ahead of us, and with PROSERA's enrollment completion expected in Q1. Last stretch, I think maybe give us some color on how things are progressing and how confident are you in bringing the study in terms of enrollment completion to the finish line?
Thank you. And first and foremost, yes, thanks to you and to Piper Sandler for having us. We feel very good about the study. I think we've been telling folks it'll be late Q1, early Q2. The cutoff was always kind of at some point end of March, beginning of April. Still feel very good about that timing. I think the most important thing is the protocol that we designed to ensure we've got patients that would move at week 24 on six-minute walk. Very much the protocol that Rich designed is working. We feel very good with the baseline characteristics of the patients that we are getting, which again is giving us confidence in the PROSERA study.
And I think secondarily, the other piece that has been very, very nice to be part of is that I think there was a lot of concern in the investment community that the launch of sotatercept was going to mute participation in the United States in the PROSERA study. And I think we're seeing the opposite of that. Sotatercept is available in the United States and in Germany. And I think initially it was a little bit of an impediment to enrollment in the April-May timeframe. We had planned for that. That's why nearly 2/3 to 70% of the studies are going to come from outside the United States.
But six months into the sotatercept launch, six months into real-world experience and safety issues that sotatercept has experienced, we're seeing and feeling tremendous momentum in the U.S., which we think not only bodes well for PROSERA, but longer term when you start to think about the commercial realities of both the efficacy and safety profile that's inherent in sotatercept versus some of the challenges that sotatercept will have long term.
Could you maybe talk about what are some of the challenges as patients are being sort of warehoused or even put into PROSERA? What are some of the aspects that have come up? Because I know, Bryan, you're on the road almost every week when I talk to you, talking to investigators and sites. So I'd love for you to maybe take this as an opportunity to kind of share some of those stories and commentaries that you're hearing.
Yeah. And again, I think this sotatercept reality is very much a U.S. reality. There absolutely were patients that were warehoused going into that launch. The phenotype of that patient, not clinically, but the folks that are most active in their disease management, right? The folks that are doing the PAH walks, the ones that are active with the patient advocacy groups, those were the patients that were really clamoring for sotatercept. That wave was satiated within call it the first two to three months.
And so now you've got patients that are coming in and physicians are able to have an honest conversation with their patients around, "Here's what we've seen in regards to real-world safety issues," right? The FDA Adverse Event Reporting System website details all of the issues. Physicians are saying you can also go on a phase III study with a therapy called seralutinib. Here's the safety.
Here's the efficacy. Patients are out now a couple of years, and importantly, we did modify the protocol after we saw the label for sotatercept so that patients in our open label extension are able to get sotatercept. And why that's been really important is that physicians are now able to say, "Listen, if you go into the PROSERA study, yes, you've got a 50/50 chance to get drug or placebo, but at six months, you're guaranteed to get seralutinib and I can put you on sotatercept. So you're going to get the two newest drugs before anyone else because if you don't go into the PROSERA study, we're not going to get seralutinib until it's commercially available." And that's changed the dialogue tremendously in the United States.
When was that implemented?
Summertime?
Yeah. We first put in the amendment in the middle of the summer and started getting approval kind of late summer, early fall.
Okay. And.
And we obviously had to wait to see the actual label for sotatercept to be able to do that.
The PROSERA study is a global study with quite what is now that you're almost line of sight of enrollment completion. What is the split of U.S. versus rest of the world in terms of.
It's going to be somewhere. My guess is that it'll be somewhere between kind of 2/3 to 75% ex-U.S. And again, just frame of reference on that, the sites that we are using outside the United States are very much the same sites that our friends at Merck used for the STELLAR study. We're using the same CRO PPD. And again, the infrastructure for doing clinical work in PAH has been tried and true for the past 30 years. So this is not like in oncology or I& I where you're going to former Soviet republics where we're talking about Western Europe.
Okay. And then so let's say you announce enrollment completion. We're going to do our math of how long it took for TORREY to read out. So we would then project the data would be like sort of at fourth quarter, maybe end of fourth quarter.
That's our plan.
Is there any caveat that we should be aware of that it could push to read out more into 2026 or unlikely based on what you're pushing?
Right now, our plan is to finish enrollment in Q2 and have the data announced in Q4.
You may not be at our conference next year. Yeah.
Or it might be a big party you're throwing for us.
Or we will be. Yeah. So yeah, a lot going on next year. Team, I guess upon enrollment completion, you know the drill. There will be continuous questions around what's the bar for success? What do you want to show in six-minute walk test in terms of change and what do you want to pick up in PVR? And I think there's a lot of understanding that seralutinib is absolutely highly safe. So we'd love for you to just remind us what's the study powered for? What product profile do you need to show to be really commercially successful?
Yeah. So the study is powered for a 30-meter difference in six-minute walk at week 24. That gives us 96% power at about 175 patients per arm. Just a little caveat to that. It's also powered at the 85% level for our first secondary, which is time to clinical worsening, which is important for our European regulatory agencies. So I think that's what the power is. But I think the bar for success can be anywhere to mid-20s all the way up to 30 or greater in terms of the treatment effect because based on the profile that we know so far on TORREY of durability, safety, and the anti-proliferative mechanism of action, we think that any difference, any treatment effect in mid-20s and beyond is sufficient.
It's been consistent with our work, which we started on the commercial side with payers in the United States where, again, somewhere between a 25- 30 meters increase would be meaningful, especially when you're overlaying our safety profile, as well as, Rich said, that durability of effect. All of that in totality, I think, is putting forth a profile that's very attractive to a variety of constituencies in PAH.
In terms of the numbers you're quoting, these are placebo-adjusted, right?
Correct.
I think investors definitely were caught by surprise of sotatercept phase III readout in terms of managing placebo in a six-minute walk test. You have a phenomenal CRO that conducted the study. And so what have you learned now that you're in the middle of PROSERA mitigating to also come out with a low placebo? Because that's going to be critically important for the.
I think it comes down to first and foremost, obviously, patient selection, which our REVEAL Lite 2 enrichment strategy is ensuring that we have patients with what I like to call active disease, if you will, and one where a new therapeutic intervention can have an effect. I think the other piece that was different than from what we were able to do in the phase II TORREY study, again, for the audience, I mean, we were doing that study during the height of COVID. So our ability to QA/QC every six-minute walk test was very difficult because our team wasn't allowed to go on site into many institutions. A Gossamer representative has seen every single site multiple times, has seen every single six-minute walk test. So the QA/QC, aside from what we're doing from a patient enrichment, has been very, very robust.
Okay, and we also expect your data readout in Q4 to be very similar to the way that you did TORREY, right? We're not expecting any differences in terms of the disclosures or the type of information you'll have on hand.
No. No.
Okay. That's helpful. And then I think it's important to kind of talk about getting commercially ready as well, right? While you're finishing up, what activities are in play right now? How's your partner helping you through the process? So I would love for you to kind of talk about that.
Certainly, the partnership that we announced in May with Chiesi was an important step to really accelerate commercial planning, and as you know, Yaz, Chiesi is a privately held European one of the oldest European pharmaceutical companies, but with expertise, especially in the European Union in respiratory and cardiology. They do roughly about $3.5 billion of revenue and probably have one of the highest EBITDA margins of any pharma company in the world. Why does that matter? Because they're really good at getting drugs approved and reimbursed, especially in the European Union. That was one of the great attributes and why we were so attracted to working with them.
Upon that transaction being announced, that has started on both sides of the Atlantic, a very robust commercial readiness workflow under Bob Smith, our Chief Commercial Officer, who came to us from Merck, where he was leading the U.S. sotatercept launch. Just to remind people, Chiesi is responsible for rest of world commercialization in the United States. We have a 50/50 profit share with Gossamer having ultimate final say on decision-making. We're in the process of not only working through the profile of what seralutinib will be and how differentiated it is to other therapies, we're doing the work with payers today. Importantly, really starting to build the infrastructure to ensure a very successful launch in hopefully 2027.
I think, team, on one hand, investors were happy to see that you struck the partnership, gave you the cash and the infrastructure to have in place. But then now some investors may say, "You know what? The takeout premium is out of Gossamer." Could you maybe talk about how do you foresee strategic discussions post-PROSE RA data and why maybe a full takeout is still not?
Yeah. I think there are two things to say about that. We structured the partnership so that obviously the most important marketplace, the United States, Gossamer would have final say. So we structured a little bit the way that Pharmacyclics and J&J structured their deal that allowed Pharmacyclics to be obviously acquired by AbbVie for a big number. But I think the other piece that people don't understand, and I appreciate it's challenging if you don't know who Chiesi is, Chiesi is a privately held company that's controlled by four individuals, the third generation of the Chiesi family.
When you look at the capital that they have committed to the development and commercialization of seralutinib, if any one of those four family members who are all on the board were in the room, they'd say, "That was my money that I was investing in seralutinib." So their return expectation for the investment that they're making in seralutinib is not different than any of us at Gossamer or our investors. So if the franchise, when we think about PAH, PH-ILD, potentially IPF, Pulmonary Hypertension Associated with COPD, they could very well look at monetizing their piece together with us.
So if anything, the capital and expertise that we were able to bring with our partnership with Chiesi to mature, grow, and expand seralutinib's possibility, and the fact that their return profile and view of risk capital is very similar to ours means that you absolutely could see a scenario where a very, very valuable seralutinib franchise could be monetized collectively to a larger company.
Okay. Very helpful. I think what's opaque for investors is upon PROSERA data, who's going to be on sotatercept, who's going to be on seralutinib, who's going to be on a combination. So can you talk about the market research that you're doing to understand sort of the size fragmentation that's going to occur? Or maybe we'll just yeah, what have docs said about?
I think, again, let's take a frame of reference on the sotatercept data, right? Sotatercept works well in a third of patients. It works really well in a third of third. So that leaves roughly about 85% of PAH patients that are not having a durable or sustained or very efficacious response to therapy. That's a really great marketplace to launch a drug that has got an efficacy, durability, and safety profile that seralutinib has. So those first, call it 18-24 months, we think will be very robust from a launch dynamic. But in our mind, what really matters is what happens in the real world when both drugs have been on the market and there's a new patient start, right? Our expectation is that there'll be a step through from ERAs and PDE5s because they will be generic at that point.
But then it comes down to a data comparison, right? And to your question about what are KOLs saying, when people look at our data, the safety, the tolerability, but importantly, our open label extension data from our phase II study, which showed sotatercept-like results at month 18 or week 72 in a much less sick patient population, that's the KOL saying, "Goodness me, I can really put my patients on seralutinib earlier than I can with sotatercept.
Excuse me.
Than on sotatercept. And I can keep my patients on seralutinib for an extended period of time, which means that the revenue profile for a seralutinib patient is much more significant than a sotatercept patient. So we think the franchise just in PAH could be substantially larger because you're going to have patients that are going to be on seralutinib for three, four, five years without physicians having to worry about the safety liabilities that are presenting itself robustly right now in the sotatercept real-world experience. We do think sotatercept and seralutinib will be used in combination. We believe that there could be tremendous synergy. Richard and his team have been looking at some of that work preclinically. Clearly, we'll have some interesting data from our open label extension from our phase III where we'll have some combination experience.
There's all the reason to believe that more mechanisms working, having drugs on multiple mechanisms makes more sense. At the end of the day, what we do think though long-term is sotatercept will be used after seralutinib or in a case where a patient has just, and you see this with disease, they're on double therapy and the disease just starts raging and they need to have some sort of an acute intervention. That's going to be where you'll see, I think, sotatercept used ahead of seralutinib.
Okay, and then typically, BLA and NDA filings occur like 6-9 months after phase III data. How much work is being done in 2025? And what are you projecting timing on filing for the U.S. and Europe? Yeah.
Yeah. I know we're going to be doing a tremendous amount of work in 2025 preparing for those filings. And I think that would be our goal is kind of to stay within the time frames that you referenced to have both the NDA filing and an MAA filing around the same time. That kind of 6-9 months post-top line.
Okay. And team, what type of data or information are you privy to in PROSERA as you're conducting the study?
Certainly, we're watching the baseline characteristics of the patients that are coming into the study. As I said earlier, the enrichment strategy that Rich helped put together to ensure we're getting those sicker patients with really active disease, I would say it's working quite well. We're very pleased with the patients that have been enrolled in the study to date.
Would you consider upon enrollment completion to share baseline demographics, or would that not be?
I think it's a possibility. I think, again, we have to balance that with, again, the study conduct and just scientific advice.
Okay. I think another reason for the partnership with Chiesi was also to give you the capital to move forward in PH-ILD. I think you were going to have regulatory discussions, especially on the European front, which was a little opaque. Can you give us an update where you are on those discussions and how soon could we have alignment to then lead to kickoff a registrational study?
Yeah. I think we'll be in a position to talk about what we've agreed to with regulators in the first half of next year. Those conversations are literally ongoing as we speak. What I would say is that the focus that we had on where our European colleagues were from a regulatory perspective versus where they are on the U.S. side, like in PAH, there's been. They'd like to kind of speak with one voice. We're certainly seeing the Europeans and the U.S. FDA now starting to collaborate more, which I think, in PH-ILD, which has really made the conversations very constructive on both sides of the Atlantic. Part of that has been the success that we've seen with inhaled Tyvaso in PH-ILD and the fact that that drug is not approved in Europe and that the European KOL community when it comes to PH-ILD is clamoring for something.
That pressure is being felt by our European regulators, which is, we think, being next up, if you will, in PH-ILD with seralutinib, will hopefully be the beneficiary of that excitement for a therapy, especially in the European Union.
So let's say you arrive at a decision. Based on your math, when could you start the study? How long would enrollment take? What are you? Yeah.
So our hope is to have the study up and running by, call it the third quarter of next year. Enrollment and time will be a function of sample size and what we agreed to with regulators. But be that as it may, the competitive dynamic is very, very different, right? There's only one approved therapy in the United States, one approved therapy or soon to be approved in Japan, and nothing approved in the European Union with a patient population that's 2x that of pulmonary arterial hypertension. So the dynamics are quite robust for phase III execution.
Richard, it would be great to talk about what data do we saw out of TORREY, what data could we see out of PROSERA to increase our conviction on PH-ILD? Because I think investors all agree it's a great commercial opportunity, it's a great path, but what's opaque to them is like, "Well, what's the evidence to believe it's going to work?
Yeah. So I think there's a combination of data or information, and it has to start from the pathophysiology and biology of PH-ILD and its similarities and perhaps some differences, but it's more similar than different to group one in terms of the PH lesions and the vasculature. So I think there's a strong scientific foundation. First of all, I think second of all, we've demonstrated preclinically that we have not only anti-proliferative effects, but anti-inflammatory and anti-fibrotic effects. And then we overlay that with our group one data, our successful effect on hemodynamics because we're treating, first of all, the PH part of PH-ILD. And related to that, we have not only the hemodynamic, but we have the CT scan imaging, which is corroborative of the reverse remodeling effect on the vasculature.
We also have circulating biomarker data such as endoglin and angiopoietin from TORREY that indicate that we're clearly having a pharmacologic effect on molecules that are involved in the remodeling process. I think that all collectively gives us really the confidence to proceed on a pretty assertive program on PH-ILD.
If it comes to a junction where you see there's no alignment between the FDA and the EMA in terms of the phase III program, would you then pivot and just do a U.S. study since the path is clear? Would you just then at the end of?
I don't foresee that as a real possibility. I mean, I think, again, given the unmet medical need and it being even more acute in the European Union because there is nothing approved, I think we're going to get to an agreement with both sides of the Atlantic from a regulatory perspective. I think the one big difference is that, again, as opposed to PH, when it comes to EMA, there's more of a pulmonary or pulmonology bent to how they look at PH-ILD. But again, that's the benefit of having a respiratory leader like Chiesi as your partner. They've navigated those rapids for decades. So I think we will get to a very strong global clinical trial that hopefully will enroll quickly and have a second shot on goal from a revenue perspective.
And then team, what is the cash runway, and then also any milestones that you're expecting, obviously, upon whether it's enrollment completion or top line data from FDA?
Yeah. So most of our Chiesi milestones will be around regulatory approvals. We ended the second quarter with $325 million of cash on the balance sheet. That gets us into the second quarter of 2027. I think the other piece of the Chiesi relationship that is not fully appreciated is that for everything other than the PROSERA study, we have a 50/50 cost share. So all of our work in PH-ILD is going to be split 50/50 with Chiesi. So while it's not a milestone per se, we're certainly invoicing them on a quarterly basis.
Okay. Perfect. Team, it's been a pleasure having you at the conference. Thank you for traveling from San Fran to be with us. Let's stand and applaud.