Ladies and gentlemen, thank you for standing by, and welcome to the Gossamer Bio Incorporated Customer Q1 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

[Operator Instructions] 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 Gujrathi.

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 LEDA Phase 2b study of GB001 in moderate-to-severe eosinophilic asthma, as well as the release of topline data from our completed Phase 1b study of GB004 in 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 DP2 antagonist, which is currently being evaluated in two ongoing studies, the Phase 2b LEDA study in eosinophilic asthma and the Phase 2 study in chronic rhinosinusitis.

We announced today that we have completed a pre-specified interim analysis of the LEDA 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 topline 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 IDMC 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 rhinosinusitis, both with and without nasal polyps, which we had previously announced has completed its enrollment.

We expect this proof-of-concept study will be our topline 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 visit, direct-to-patient drug supply and remote monitoring whenever needed. We remain confident that our topline 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 [ph] 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 topline data from our two Phase 2 studies in asthma and chronic rhinosinusitis 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. 34 patients with active disease despite 5-ASA therapy were randomized 2:1 to receive either once-daily 120 milligram solution of GB004 or placebo.

As a reminder, GB004 is a potential first-in-class gut targeted oral HIF-1 alpha stabilizer for the treatment of IBD.

Unlike immunosuppressants, such as anti-TNF antibodies and JAK inhibitors, which focused 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 HIF-1 alpha leads 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 of GB004, with [ph] modifying [ph] 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 dysgeusia, 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 the study drug by the investigator.

GB004 was rapidly clear 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 function, such as Claudin-1 and tight junction protein 1 and other changes associated with HIF-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 in-patient study was neither designed nor powered for efficacy, we did observe favorable trends on 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 six of 20 patients receiving GB004, or 30% compared to two of 11 patients receiving placebo or 18%.

The rectal bleeding sub-score results also trended favorably with 13 of 21 patients receiving GB004 showing improvement, or 62%, as compared to five of the 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'll present a 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 of the compound, we immediately began developing a tablet formulation of the drug to be used in future study.

Part of the reason for this was that we knew the high level to cyclodextrin and the solution formulation could cost tolerability issues, limiting our ability to increase doses in the clinic. In parallel to the study, we successfully completed a Phase 1 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 concerns, seeing 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 2 study.

We plan to commence a 12-week induction study, evaluating higher doses with the tablet form of GB004 in patients with ulcerative colitis in the second half of the year, barring an unforeseen delays related to the ongoing COVID-19 pandemic.

We also announced this afternoon that we have amended our license agreement concerning GB004 with Aerpio Pharmaceuticals. Gossamer paid Aerpio $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.

GB002 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 the convenient dry powder inhaler, all while avoiding high systemic exposures and improving the therapeutic index.

GB002 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 is to evaluate the safety and PK profile of GB002 in patients. 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 start-up activities for our Phase 2 study of GB002 and anticipate beginning enrollment 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 2 plans from a number of investigators and we believe there is tangible excitement building for its commencement. This 24-week Phase 2 study will involve 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 six-minute walk distance at week 24.

GB1275, 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 this study and despite the challenges observed with COVID-19, the trial continues to be on track in terms of all 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 consists of early safety PK/PD and biomarker data, which are consistent with the GB1275 mechanism of action and its impact on myeloid-derived suppressor cells. Please be on the lookout for that virtual poster during the ASCO 2020 Virtual Scientific Program from May 29th to 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 orphan drug designation from both the EMA and the FDA for the treatment of pancreatic cancer. We also have a corporate update to share. Dr.

Jakob Dupont will be departing his position as Chief Medical Officer of Gossamer in June of this year to pursue opportunities on 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 Jakob'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 risks.

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're 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 financial update.

Bryan?.

Thank you, Sheila. We will now review the financial results for the first quarter of 2020. We ended the quarter with $346 million of cash and cash equivalents.

We continue to anticipate our cash, cash equivalents and marketable securities, along with the access to our debt facility, will provide us sufficient capital resources to fund operations and capital expenditures until mid-2022.

Research and development expense in the first quarter of 2020 were approximately $41.4 million as compared to R&D expenses of $25 million for the same period in 2019.

This reflects -- this increase reflects a continued ramp-up of clinical expenses related to our clinical programs and increased expenses related to the development of our proprietary pre-clinical programs. In-process R&D expenses in the first quarter of 2020 were approximately $2.8 million as compared to $1 million for the same period in 2019.

G&A expenses were $10.7 million in the first quarter as compared to G&A expenses of $8 million for the same period in 2019. And our net loss for the quarter was $54.1 million, equating to $0.87 per share. For the same period in 2019, we reported a net loss of $32.6 million, which equated to $0.90 a share.

With that, I'll turn the call back over to Sheila to offer closing comments before we open the line for Q&A.

Sheila?.

Thank you, Bryan. As we close the scripted portion of this call, I would like to take a moment to personally thank those who have contributed so far to the success of Gossamer.

From the patients in our clinical trials to our valued investigators advancing the field of medicine, to our investors who have bought into our shared mission and finally to our employees who are working diligently every day in the labs or virtually at home, your valiant efforts have enabled Gossamer to pursue its goal of enhancing and extending the lives of patients.

Thank you all. With that, I will now turn the call over to the operator for questions.

Operator?.

Thank you. [Operator Instructions] Your first question comes from the line of Geoff Meacham from Bank of America. Your line is open..

Hi, guys. This is Olivia Kapra [ph] on for Geoff. Thanks so much for the questions and congrats on all the progress today.

And can you give us a little more insight into what went into that interim go-no-go decision for GB001? Was there a level of clinical reduction that was met that really ultimately drove that recommendation? And when you think about success in the Phase 3, are you looking for some more thresholds versus what was met in that Phase 2 interim? Thanks so much..

Thank you, Olivia. Yes, whilst the interim, just to be clear, was pre-specified and planned as an administrative analysis and that we were basically looking at the totality of the data on the [indiscernible] primary and key secondary efficacy endpoints, safety and tolerability, it wasn't really designed to adjust anything significantly for the study.

Having said that, of course, whenever you do the analysis, you do look at all the efficacy and safety and the IDMC, which is a very seasoned group of really pulmonary and respiratory experts, take a look at that data and also make a determination.

So, we did take a look at the clinical outcomes that we were measuring and we are very pleased that we actually designed our Phase 2 study to really focus on those clinical outcomes that are most important and relevant for Phase 3, including exacerbation.

And so that's the totality of the data set that they were able to take a look at in the first two-thirds of patients and we're again very pleased and encouraged that they recommended to continue on with the study to study completion.

And so we're very much keeping that in mind about what does our Phase 3 endpoints we are going to be looking at in that Phase 3 decision? And I think this study puts us in a very good position to make that [indiscernible] decision..

Your next question comes from the line of Joseph Schwartz from SVB Leerink. Your line is open..

Great. Thanks and congrats on the great news. I was wondering if you could talk a little bit about what else you look for in the totality of the data for 001 when making your final go-no-go decision? If you can characterize what more insight you'd like to gain from the data set, that would be helpful. Thanks..

Sure. It's really around continuation of the study and the maturity -- that continued evolving maturity of the data set with the total sample size that we're looking at. Again, for the efficacy endpoints, secondary endpoints, as well as, again, the safety and tolerability aspects.

So, it's really around looking at all of the data on the full 480 patients plus that we enrolled into the study, which is the full sample size. So just continuing to make sure that all of these things are reading out, so again that evolution that you get from a full data set versus an interim dataset.

So, that's really what we will be continuing to look at and evaluate..

Okay, that makes sense. Thanks.

And then do you foresee any challenges to completing the evaluations for the last third of the patients enrolled in LEDA, given what's going on in the world?.

Yes -- actually no. We're actually -- we put in so many risk mitigation plans. As I've mentioned, we are feeling very confident that we'll have not only a high rate of completion for those remaining patients, but good quality as well in terms of the data collection and monitoring.

So, we're feeling very comfortable about being able to complete the study and actually be able to really see it through completions to the final analysis..

Sounds great. I look forward to seeing the full data. Congrats..

Thanks, Joseph..

Your next question comes from the line of Eliana Merle from Cantor Fitzgerald. Your line is open..

Hey, guys. Thanks so much for taking my question and congrats on all the progress.

Just in terms of the UC data, can you help us think about what the next steps would be for GB004 in terms of thinking about the potential next study? And I guess, what data you would want to see to further derisk the asset before you'd be comfortable moving forward into a Phase 3 study? And then secondly, on the UC program, I guess, just in terms of your pre-clinical modeling or perhaps maybe from the initial clinical data, what is the JAK [ph] in terms of the length of time it would take to get to sort of the peak efficacy? So basically, I mean, do you think that like as you would move from say, four weeks to eight weeks or 12 weeks in an induction study, I guess, when would you expect to get to that peak sort of level of efficacy? Thanks..

Great. No, thanks for the questions. Yes, so we're, again, very pleased with our Phase 1b data in that to look at the clinical efficacy outcomes that we're seeing already in four weeks, gives us, again, that confidence to move forward into the Phase 2. So now we're going to be doing a more robust Phase 2 induction study. This is going to be a 12 weeks.

And will really give us, again, additional time to be able to assess the impact on induction. The fact that we're already seeing effects on histologic remission and mucosal healing is again very encouraging for us. And typically, we do see earlier effects on histology then you could see on some of the other clinical parameters.

So it fits very nicely with the mechanism of action for GB004. And again, these are very meaningful endpoints. The unmet need and you see is really around mucosal healing and improvements in histology. That's really kind of what we're trying to address with this differentiated mechanism looking at epithelial barrier, repair and healing and function.

And so, again, just to have this set of data already at four weeks, where we think we're probably at a lower range of the dose exposure, we'd like to study is very encouraging. So now, we'll be going forward into that more robust Phase 2.

We'll be looking at additional outcome measures such as the clinical response remission and continue to look at mucosal healing and the effect on histology. And based on that, we'll be able to make a final Phase 3 decision. But I think we're in a very good position and are going into that trial with a good degree of confidence.

At around the peak time, I mean, I think that's really where we think going for 12-week induction study really gives us enough time to [indiscernible] evaluate induction effects. We're seeing good efficacy at four weeks.

So, I think that will improve over time over the next eight weeks that we're giving ourselves to continue to see good effects in that induction setting. So, we feel pretty comfortable with that.

That does seem to correlate, again, well with all the data we're seeing preclinically in terms of our impact on gene expression profiles, as well as what we're seeing in terms of like the mucosal lining. And so I think, if anything, I think we're giving ourselves more time to really make sure we have a good effect.

So, I feel comfortable with the 12-week induction period..

Yes. And then in terms of the detail on the program, can you elaborate a little bit more on the biology and why pancreatic cancer was a focus? Is there anything particular to the target and sort of that tumor type and biology there? Thanks..

Yes. And just to be clear, so, yes, this is a really interesting mechanism that goes after more immunosuppressive mechanisms within oncology and is a great combination approach with checkpoint inhibition.

So, we're really affecting the myeloid suppressor cell types such as the tumor-associated macrophages and other MDSC cells with granulocytic and monocytic, all of which really contribute to the immunosuppressive phenotype, for especially for selected tumor types where you have primary and secondary of resistance to checkpoint inhibitors.

And we impact not only, the trafficking of these cells from the periphery into tumors themselves, but we also skewed polarization to a more immunostimulatory phenotype away from that immunosuppressive M2 phenotype for macrophages. So again, potentially, several mechanisms that play for this mechanism.

And to that regard, we are setting a number of other tumor types outside of pancreatic cancer. So while we have gotten orphan drug designation for pancreatic cancer, we actually are setting a number of other areas such as prostate cancer, colorectal cancer, triple-negative breast cancer.

Other areas where, again, we see gastric cancer, maybe low rates of checkpoint of response as well as, again, lot of mechanism of resistance, which we think are very related to the myeloid biology I had spoken to.

So, we have a number of different tumors that we're studying in the Phase 1 dose escalation period through both combination cohorts, monotherapy cohorts, as well as the cohort with chemotherapy.

So with that, Luisa, do you have anything else to add on the mechanism and our thoughts about tumor types?.

No, I think you covered most of it, Sheila. I mean, one of the things we have seen as well is in mechanisms of secondary resistance that a lot -- not only you have the immunosuppressive effect, you also have some fibrotic effects in stromal. And we believe this mechanism could actually addressed it as well.

So as Sheila mentioned, we believe in secondary resistance. There is an opportunity in quite a wide range of tumors as well and we definitely are looking for the biomarkers in this study that will help us and then really focus on the right patient for subsequent studies..

Very helpful. Thanks so much..

Your next question comes from the line of Carter Gould from Barclays. Your line is open..

Great. Good afternoon and congrats on all the progress. Thanks for taking the questions. Just a couple I guess to start with on 001 first.

Can you maybe just talk now as you think about that sort of go-no-go decision in going into potentially into a Phase 3? Just kind of where you're sort of setting the internal bar from a high level in light of the obvious Novartis data late last year? And I guess to follow-up on that question as well.

Maybe just kind of clarify then around when we get the topline data, it sounds like we may not get a go-no-go decision at that point. Is that kind of where the -- our expectation should be set? I guess reading the PR, it sounded like you would still kind of meet with regulators at that point.

So, I'm just trying to, I guess, level set expectations there. Thank you..

Yes. So great questions. And I think I'd like to remind everyone about the intention of this program, again, is to be in oral treatment for patients with moderate-to-severe asthma, where there is so much high unmet need.

There is at least 50% of patients who are not controlled today with moderate-to-severe asthma that are really on high dose or medium-dose inhaled corticosteroids, plus one or even two other controller medications. And that's the population that we enrolled into our clinical trial.

So, what we're really looking to see is a good impact on clinical exacerbation, which is the approvable Phase 3 endpoint. So from that regarding, we've done a lot to talk about what we think our efficacy could be for these types of oral mechanisms and what would be very acceptable to patients providers and payers.

And again, that's really the range that we have been talking about. And in prior discussions, we've talked about anywhere between 20% to 30% of exacerbation reduction is something that we were looking for and targeting. As you recall, Novartis has mentioned information in that regard as well.

And they did have that in the LUSTER-2 data that they reported out. So it's a very interesting evolving area and something we'll continue to monitor and measure in our clinical trials as well as, as we continue the maturation of the study.

In addition to that, I think it is important that we do our homework around understanding the totality of the Novartis data when it is released. As you've probably heard at the American Thoracic Society, it's now going through a virtual meeting presentation.

So, we'll see what additional data we get on the fevipiprant program either through publications or through presentation and to see how much we can learn from that program as well as, again, our own interactions with global regulatory authorities, in addition to looking at the top line and final data coming out of the LEDA trial to really make a very well-informed decision since we have more time now to really make sure that we're bedding all this information, so that we can design the most robust Phase 2 program moving forward.

You can take all this information to really make sure we have a very well sought through [ph] program and plan for Phase 3 informed by health authority interactions, as well as a lot of learning, looking at this range in clinical endpoints and being able to really design our studies correctly using the correct assumptions from a statistical perspective.

So, I think that there is a lot of very interesting developments that are occurring, that we can really capitalize on and make sure that we're making the best decision for the Phase 3 decision..

Great. And then maybe just one follow-up on 004, going into the dose escalation.

I guess maybe based on your pre-clinical models, do you have a sense sort of on the target dose? Or maybe another way of asking that, when you think about sort of the level, which you could push the dose up to any insights from the pre-clinical models there? I'm just trying to get a sense for maybe the number of doses you might evaluate in the Phase 2 study.

Thank you..

Yes. Another great question. So, I think we're in a really good position for the next study. We have a very good pre-clinical colitis model that we've done. This is really under Luisa's and her research team leadership and expertise that she is a true expert in really any animal models, especially the IBD colitis models, to sing her praises.

And we've had some very good data that kind of help guide our dose escalation based on the exposure that we're achieving for efficacy in those animal models.

We have a lot of information from our Phase 1 normal healthy volunteer studies with both the solution and the tablet formulation that we recently completed in normal healthy volunteers, which is not only looking at systemic concentrations or colonic concentrations and both, again, the solution and the tablet formulation studies, because we did actually sigmoidoscopies and we're able to get colonic biopsies to really measure tissue concentration there, which is very helpful to really share that we had a greater colonic concentration than the peripheral exposure that also helps guide our decisions, as well as, of course, the Phase 1b 28-day study now with not only a biomarker data, but also that clinical data that we discussed.

So, we have a really nice set of data to guide what we want to do moving forward in terms of just exposure dose levels, as well as the formulation that we wanted to explore.

So, we can make decisions based on the target levels and we can come back and discuss all of that at a future date after we are finished analyzing the data, but I think we're in a really good position to help us select the doses for the Phase 2..

Thank you..

Your next question comes from the line of Tyler Van Buren from Piper Sandler. Your line is open..

Great, thanks. Good afternoon. Great to see the progress. I had some on 004. I guess in the release, you mentioned multi-fold higher gut concentrations. Is it possible to quantify the difference or the increase in the gut concentration there? And then on, with respect to the clinical observations, there is clearly some activity here.

But as we've looked at other effective agents, for example, [indiscernible] topical JAK, you're seeing I guess similar numbers.

So is there, I guess, anything as you look at the data that stands out as kind of more clearly differentiated, maybe with respect to the histology? Or are we going to have to wait for the Phase 2, 12-week induction study? And then, just finally as we think about clinical development, it sounds like you're describing a fairly traditional Phase 2 UC study.

So is it possible to differentiate the program from a clinical development standpoint moving forward just given the unique mechanism here?.

Yes. No, I think we can talk about all three of those questions. And I'll actually ask Richard Aranda who's on the call with us today, who is a gastroenterologist, who has been involved with many IB development programs including ozanimod [indiscernible] receptors to talk a little bit about the exposures in the colon and versus the periphery.

So he can address that. In terms of the other two, I'll take those and again, Richard can bolster that or Luisa. Yes, we are really compelled with the 1b data.

And when you look at the Theravance data that they published in their Journal of Crohn's and Colitis, the JCC in the March timeframe, where they had a really nice robust publication, evaluating a lot of similar outcome that we've been evaluating and we do seem to be in line with what they've already, what they've shown in their one month, gut-targeted JAK program, which again is very exciting from our perspective.

I think the one area of difference that, again, we're focused on here is because we have a differentiated mechanism looking at the epithelial barrier of repair and function, we do seem to have, again, more mucosal healing and histologic remission. That's a potential now. They did measure histology in their program.

And so they do not report mucosal healing from the traditional definition that's the regulatory definition of endoscopic improvement and histologic remission or patients who've met that criteria of histologic remissions, but we don't know for certain. But that wasn't reported out in their publication.

So that may be just a distinction that we have in terms of targeting JAK versus really going after this differentiated mechanism. Potentially, it could be a complementary mechanism as well.

So, I think we're pretty excited not only as a monotherapy but potential ways to add in a complementary fashion, given that we are a non-immunosuppressant mechanism and potentially could combined safely with other mechanisms. So more to come on that front.

But we are seeing already potential differentiation with our mechanism versus potentially some of the other immunosuppressants. So, that's something that we thought was notable.

And I think our clinical data seems to be in line with what we've seen with that four-week study as well as other programs, where we've looked at a four week to eight week induction periods where we're seeing, again, something better in line associated with that four-week time period.

And then for clinical development, I think, yes, we are very focused on getting to that definitive proof of concept. I think one area that we are excited about differentiating for is we're looking at the patient population.

So given, basically, that this is a differentiated gut epithelial type directed mechanism and we are hoping to have continued good thinking tolerability, we're very interested in moving this up into earlier lines of treatment. So, we're focused on continuing to study this mechanism in the mild-to-moderate setting.

We should really differentiate it from other immunosuppressants, including the other orals that are being developed or recently been approved where because of safety liabilities, they have been relegated to more moderate-to-severe disease. So, this is an area where we think we can truly differentiate from the clinical development program.

And then we'll be assessing and looking at a lot of similar endpoints from that regard, but this will be a differentiated program than other moderate-to-severe ulcerative colitis programs.

With that, Richard, do you want to add some other information, especially on the colonic exposure?.

Sure. So, what I can add to Sheila's comments is that I just want to remind you that we obtained biopsies at eight hours after the dose. And at that time point, the systemic levels of 004 is quite low in the single-digit nanogram concentration.

And I also want to remind you that in tissue biopsies of looking at drug concentrations, there is a lot of variability. Nonetheless, in that setting, we consistently see significantly a greater concentrations that are far above the single digits and from a nanogram per ml perspective that we see in the circulation.

And just to add to that, the concentrations we see are also consistent to what is achieved in some of the animal models that has been conducted with our compound by our research group and those concentrations are associated with efficacy..

Great. Thanks so much. Very helpful..

[Operator Instructions] Your next question comes from the line of David Hoang from SMBC. Your line is open..

Hey, guys. Thanks for taking the questions and congrats on getting the green light to move forward with the LEDA study. I had a few questions on GB002. So, I know recently, I think earlier this year, Acceleron had some positive data with their compound, sotatercept.

And I know that was a Phase 2 study where they looked at PVR in six-minute walk distance. I think they also have another study where they're looking at oxygen consumption. So peak VO2 or VO2 max.

So, I guess my question is, do you think you need to look at anything else besides PVR in six-minute walk distance in terms of secondary or exploratory endpoints to help ensure a competitive profile for 002 in PAH?.

Yes, I'll start that and I will also ask Richard to provide some comments. So, I think, clearly, this is also another area of very high unmet need. We're going after patients who are having significant disease, the functional class 2, 3 and 4 that -- so they are very significantly disease severity and symptomatology.

Despite being on two or three classes of vasodilator therapies, so really all the available therapies that are available to them today. So for the ARADPD [ph] class and the process second class, particularly and we have data, obviously, with imatinib here in that same group of patients.

50% of the IMPRES trial patients were on process cycles and IV [ph], process cycles of the time, where we saw that's really improved clinical benefit looking at PVR reduction in six-minute walk distance.

So any of the stuff, you look at those clinical functional outcomes of an improvement in six-minute walk distance, as well as the effective endpoint of PVR reduction, these are really critical endpoints in the setting of PAH.

And these are also, obviously, the six-minute walk distance is the approvable endpoint or one of the approvable endpoints for PAH. So, those are really the ones that we're very focused on, as we stated for our Phase 3 design and we have the hope and the thinking that this could be a disease modifying therapy.

We have a lot of great pre-clinical data that really supports that. And we have a lot of crosstalk with actually this sotatercept mechanism that Richard and Luisa could speak to, which really gets to, again, the underlying biology improvement that we're seeing, preclinically, definitively within our animal model.

And what we think we could show clinically and including, we've seen increase in BMPR2 signaling in our pre-clinical models as well. So, I think those are what's critical. In addition, we have a number of other biomarkers that we're looking at.

And we're going to be looking at echocardiography imaging and looking at right ventricular function and looking at proBNP levels ourselves as a measure of right heart stream to kind of get at really how we're affecting right ventricular function.

And then we have some exploratory measures that we'll be looking at that really could get at potential for disease remodeling. So with that, maybe I'll ask Richard to say a few words and maybe Luisa comment on some of the biology that we're so excited about with our mechanism..

Sure. I'll say a few words just to add to Sheila's comments. So, as you may know, CPETs or cardiopulmonary exercise testing is not yet validated as an endpoint for PAH. As Sheila mentioned, the key sort of endpoints required for approval still remain a six-minute walk, as well as evidence of a reduction in pulmonary vascular resistance.

CPET is being used in exploratory to see if there could be other non-invasive methodologies to determine. First of all, a diagnosis of pulmonary arterial hypertension, but also could it be used as a measure to determine a therapeutic benefit.

So, I still think it's a little bit too early to say that CPET can be used in the absence of the other endpoints. However, it can be considered as sort of supplemental if some of the data that's coming out and its used and some other programs seem to be suggestive that it can add some additional information..

Got it, thanks. That was really helpful. And I think I just have one follow-up. In terms of the Phase 1b data, when we [indiscernible] that. I know that it's a -- I think it's a two-week study you have there and you do have some exploratory endpoints.

So, maybe just to help kind of set expectations in terms of BNP and ejection fraction over a two-week period, should we kind of expect to really see much there or I guess how much efficacy do you think you can obtain on those measures with just two weeks of treatment?.

Yes. The two weeks is definitely a short-duration period. So we basically -- this is a study that's designed to look at safety, tolerability, target engagement, some biomarker and pharmacodynamic work, as well as start to look at some of these exploratory outcome measures.

So, I think we're very keen on understanding some of the target engagement and biomarker were coming out of that study.

And, of course, looking at the safety PK to kind of continue to help us guide our dose selection for Phase 2, which is really critical in understanding safety and tolerability in PAH patients in addition to normal healthy volunteers where the drug was very well tolerated.

And we saw good PK consistent with our limited systemic exposure of profile, which is really what we're trying to go after with this local lung delivery. So, we want to temper expectations on what we could be seeing from a clinical activity perspective.

In this case, we are hoping to have some patients roll into an open-label extension, where maybe you get to file them for a longer period of time. So that's an area -- a way where we could get some more clinical data, looking at some of the echocardiograph measures as well as some of these other biomarkers, especially NT-proBNP. So more to come.

This is really, again, dependent on how the COVID situation continues to evolve and we're able to really get patients into the clinics safely.

I mean, our primary responsibility is to make sure that these PAH patients who are quite sick are really -- their safety is really paramount in terms of making sure you don't increase their risk to the COVID infection. So that's really what we're focused on..

Okay, great. Thanks for taking the questions..

There are no further questions at this time. I'll turn the call back to the presenters for closing comments..

Well, thank you again so much for joining us on our call today.

I'm so pleased with the tremendous progress Gossamer is making on a number of our clinical programs, really all four of our clinical programs to-date as well as the whole research portfolio therapeutic, where we're looking forward to be able to speak to you about shortly, which is a very exciting pipeline of candidates and areas we know very well.

I want to thank the Gossamer employee base for their continued hard tireless efforts in these challenging times and really continuing to advance all of our programs in such a high quality manner. I look forward to continue the dialogue with investors and shareholders and continue to help support meeting the unmet need for patients and their families.

Thank you so much..

That concludes today's conference call. You may now disconnect..