Ladies and gentlemen, thank you for standing by, and welcome to the Gossamer Bio Q4 Earnings 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]. I would now like to hand the conference over to your speaker today, Bryan Giraudo. Please go ahead, sir.

Thank you, operator and thank you all for joining us this morning. I am joined on today's call by Gossamer's Co-Founder, Chairman, Chief Executive Officer, Faheem Hasnain; and Gossamer’s Senior Vice President of Clinical Development, Richard Aranda. Earlier this morning, Gossamer Bio issued a press release announcing its year-end 2020 financial results and provided 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, 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. Gossamer Bio takes 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 the call over to Faheem. Faheem?

Thank you, Bryan and thanks to all of you for joining us on the call this morning. Today, we'll provide you an update on Gossamer's four clinical product candidates and then Bryan will walk us through the 2020 year-end financial results. We as a team have made great progress to date and we look forward to continuing that progress in 2021, which we view as a year of intensely focused execution that will, of course, lead us into 2022 where we will share our Phase II top line data on our two key parallel proof-of-concept trials for our co-lead product candidates, seralutinib, also known as GB002 for the treatment of PAH and GB004 for the treatment of inflammatory bowel disease. Now despite the fact that they're obviously treating different indications, both programs share key characteristics that we find very attractive. Both product candidates are targeting populations of severe unmet need using novel as of yet unapproved mechanisms to address the underlying pathophysiology of disease. We believe both assets could be transformative to the current treatment paradigm as both seralutinib and GB004 have to date been generally well tolerated in healthy volunteers and patients in indications where therapies don't always have clean safety profiles. So let's start with seralutinib for the treatment of PAH. Seralutinib is an inhaled inhibitor of PDGF, CSF1R and c-KIT, and it's currently enrolling PAH patients in the ongoing Phase II TORREY study. As a reminder, we expect to enroll approximately 80 functional class II and 3 PAH patients who will remain on background therapy, including triple therapy. The primary endpoint of the TORREY study is changed from baseline in PVR at week 24 with a key secondary endpoint of change from baseline at week 24 and six-minute walk distance, although the trial is not powered for…

Thank you, Faheem. We'll now review the end of year financial results for the full year 2020. We ended the year with $512 million of cash and cash equivalents. We continue to maintain a robust balance sheet, and we anticipate our cash and cash equivalents, plus capital available to us in our debt facility to provide a sufficient capital resources into the second half of 2023. For the quarter ended December 31, 2020, R&D expenses were $38.9 million compared to R&D expenses of $42.6 million for the same period in 2019. R&D expenses for the full year 2020 were $160.9 million compared to $143.4 million for 2019. Fourth quarter 2020 in-process R&D expenses were $5.3 million compared to $1.6 million for the same period of 2019. Full year 2020 expenses were $23.4 million compared to $3.6 million for the full year of 2019. The increases were primarily attributable to a $15 million -- to ARPO in connection with the amendment to the in license agreement of GB004, which we accomplished in May of 2020, a milestone payment of $5 million in connection with the initiation of the Phase II clinical trial of seralutinib in 2020. G&A expenses in the fourth quarter of 2020 were $15.9 million compared to $11.6 million from the same period in 2019. G&A expenses for the full year 2020 were $49.7 million compared to $39.1 million for the full year 2019. The net loss for the three months ended December 31, 2020, was $64.6 million or approximately $0.88 per share, compared to a net loss of $54.7 million or $0.89 per share for the same period in 2019. The net loss for the full year December 31, 2020, was $243.4 million or $3.55 per share compared to a net loss of $180.3 million or $3.29 per share for the full year ended December 31, 2019. With that, I'll turn the call back over to Faheem for some closing comments before we open the line to Q&A. Faheem?

Yes, thanks, Bryan. So Gossamer enters 2021 focused on programs that we believe will drive value, programs like 002 or seralutinib, 004, our HIF-1 alpha stabilizer and GB1275 with multiple solid tumors. But we also have a robust preclinical pipeline that we're very excited about. But we would be unable to do any of this without the continued incredible efforts of our team, our investigators, our study coordinators and most of all the patients who enroll in our trials. So to all of you who have been supporting us, the team within Gossamer and the team outside of the four walls of Gossamer, I'm truly grateful. So with that, I'll now turn over the call to the operator to begin the question-and-answer session. Operator? Question-and-Answer Session

[Operator Instructions]. The first question comes from Tyler Van Buren.

Hi team, good morning. This is Tara on for Tyler. So following the GB004 event recently, I was hoping you could give us some more color on the disease clearance secondary endpoint for the Phase II, which is a really interesting endpoint, so how many patients do you expect to see this in, in this time frame and how many do you think you need to see to be meaningful? Then how do you think regulators will think about this endpoint maybe as part of a potential pivotal program, like is there any precedence for this?

Hey thanks. I'll turn that question over to Dr. Richard Aranda, who heads up our clinical development team. Richard?

Yes. Thank you, Faheem. Thank you for the question. As you know, disease clearance is a relatively new concept, so it's difficult to sort of put parameters on what we would expect to see. I think we can probably use some extrapolation on both requiring a histologic remission and mucosal healing endoscopy. And so let's say, that's approximately 20% or so, then something north of that probably could be quite meaningful, assuming that there's a difference between placebo. In terms of as we know, there's clear guidance on what is required for approval in the disease and so far, the guidance has commented on in addition to the clinical endpoints more histologic remission endpoints or the value of histology and therefore the concept of disease clearance has not yet been placed within that context by the regulators. So it's difficult on what they would think about it although, obviously, if we do see an effect on that particular parameter, it will be considered within the totality of all of our data, including clinical and histology and that being the most -- the highest bar, and we would have discussions to see the value of it.

Great, thanks.

Your next question comes from the line of Carter Gould.

Great, good morning guys. Just I guess, two for me. I guess, just first on the -- as we think about executing on shift you see, clearly, the non-immunosuppressant component should be helpful with recruitment. But I guess just want to understand if there are other things you're doing to help ensure you hit these time lines in terms of either reducing the number of clinical visits as such, just I think you guys are calling case to make around hitting the time lines, but just with COVID going on still in the background and maybe some reluctance to the clinics, anything you're doing on that front? And then just also, any effort you potentially do something exploratory in Crohn's, either in parallel with the ongoing UC study? Thank you.

Yes. I'll take the last question first, and then I'll turn the first question over to Richard. But certainly, Crohn's will be of interest, but our view will be to wait until after we've got the Phase II results in UC before we would contemplate initiating Crohn's study. Richard, do you want to handle the first question?

Sure. When we designed the Phase II safety C study, we consider the pandemic and the potential implications. So we did several things. First of all, we made sure that we have the right geographic distribution of sites, given sort of the differences in pandemic and countries and things like that. Second, we've made our protocol user-friendly, so to speak, for the site and for the patients, trying to have tele-visits, shipping of drug to their home as appropriate, etc. And third, we have a great operations and great medical team that is spearheading the program. We have great relationships with a number of investigators globally in conjunction with partnership with the CRO. So, all of these are being executed upon so that we can progress the program accordingly.

Thank you.

Yeah and I'll add in just one other comment, and it really expands on Richard's last point is that apart from the pandemic, which of course is new to all of us, IBD is something that this team has tremendous depth and experience in. Richard and two other gastroenterologists on staff and our clinical operations team. The core of the team was also the team that executed on the ozanimod IBD program. So extremely familiar with the landscape, as Richard said, and extremely familiar with the sites and the investigators, and that really helped significantly for this program.

Operator, next question.

Your next question comes from the line of Emma Nealon.

Hi, thank you for taking the question. I guess, how do you think about what you want the pipeline to look like maybe 12 to 18 months from now in seralutinib and 004 potentially move into later-stage studies and I guess, curious how you think about your excitement for the current preclinical pipeline versus potentially looking externally in terms of growing that pipeline?

Yes, thanks for that question. If I kind of progress 12 to 18 months from now, obviously, we'll be looking forward as we mentioned, to seeing the top line data on our two parallel proof-of-concept programs, 002 and 004. Beyond that we are certainly expecting to progress our preclinical pipeline. We have a pretty robust preclinical pipeline. We're hoping we will be actually outlining our first next clinical program. We'll be doing that later on in the spring so more to come on the target and our plans for that program. And so 12 to 18 months from now, I think it's fair to say that we would hope to see what will essentially be our fifth program into the clinic, if I include the DP2 program that we talked about earlier, at 1275, 002, 004 and then a yet undisclosed program entering into the clinic at that point with a number of programs continuing to advance in the preclinical pipeline. As it relates to, I think, your question speaking about business development, we've got a pretty significant pipeline as we sit now, the team has done an incredible job of sourcing really great opportunities for Gossamer really since the inception of founding the company in 2018. And so our perspective is that we've got a pipeline of exciting opportunities. And so that really suggests that for the time being, we'll be standing down on business development as we really focus the entire organization on execution of the pipeline that we've got in place now.

Great, that is helpful, thank you.

Your next question comes from Geoff Meacham.

Hey guys, this is Olivia Brayer. Thanks for the questions. Two for me. First, can you just give us some more color around the interactions with regulators and how that's been going for GB001 at this point, is there a Phase III development plan in place or is that something that you're really waiting to finalize until there's a potential partner in play? And then second, just quickly on GB1275. What's the longer-term strategy with that asset assuming we see some more positive Phase I data later this year, are there some opportunities to expand the development there into other indications going forward? Thanks very much.

Yes. As it relates to the interactions with the regulators, it's been very good, extremely constructive and very helpful. So as I mentioned, we believe that there is a clinical path Phase III path forward for the program and a reasonable amount of concurrence between both the FDA and the EMA. That being said, we would not be moving forward with our -- with Phase III plans in the absence of not having a partner. The program would require pretty substantial effort and our view is that we've got a lot of optimism and excitement and potential in the rest of the pipeline. And so we made a clear decision that our view is that we would not progress this in Phase III without having a substantive partnership by our side. Richard, do you want to handle the 1275 question?

Sure. Yes, I think that if we do have a positive signal, obviously, there's always a possibility to explore other tumor types beyond the expansion of tumor types that we are currently studying. Right now the focus is obviously in immuno-oncology for that assay. As you may know, the literature indicates that perhaps the molecule is applicable to some other therapeutic areas but at this time, we're focusing on our immuno-oncology efforts.

Okay, great. Thanks guys.

Your next question comes from Patrick Trucchio.

Thanks, good morning. Just one follow-up on the COVID-19 pandemic. I'm wondering if you can discuss what impact, if any, at this stage, the pandemic is having on data collection and data integrity? And what assumptions around the pandemic or post-pandemic environment are included in the guidance for the expectations for top line data and the lead programs in the first half of 2022, particularly PAH, which had at least initially been impacted by COVID?

Yes. Richard?

Sure. I could address the first question. First of all, there's no impact on data accumulation or data quality. If you recall 001 was completed during sort of the height of the pandemic, and we had no issues with that program. We took learnings from that program and implemented them in our 002 and 004 programs. So we don't anticipate and we don't expect any issues with data collection and quality because we have provisions in place.

And both of our -- both of the programs as it relates to kind of pandemic planning and time lines that to the best of our ability, we've been including our assumptions around COVID impact. And beyond just kind of including room in the context of the time line, really trying to be as innovative as we can in terms of site selection, regional involvement, and looking at ensuring that we are -- as we think about these as global trials in locations where we've got a better chance of enrollment and better access to patients, depending on kind of local circumstances. So I can tell you this has been a tremendous focus, not only of ours, I know the entire industry is kind of -- is looking at this. But from our perspective, we're moving along as we had predicted and we continue to hold to the guidance that we laid out earlier. Of course, hard to see exactly how this will play out. But hopefully, what we will see in the next 6 to 12 months is kind of a lessening of the COVID effect but none of us have crystal ball, so we'll have to see.

Right. Got it. And then just a few follow-ups on GB004. So you see patients [indiscernible] biologics and JAK inhibitors tend to have improved responses to novel treatments compared to those with loss response. So GB004 positioning being with 5 ASA failures, so prior to biologics, I'm wondering if you could discuss the baseline characteristics expected in SHIFT-UC trial and what regulatory expectations are related to these characteristics and endpoints in the earlier disease patient population? And then secondly, just related to the positioning of GB004, I'm wondering how it could be impacted, if at all, by some of these competing efforts, including a gut-selective JAK inhibitor and an S1P modulator that's also moving forward in earlier stages in the more moderate UC patient population?

Yes. Richard, I'll take the second question. Do you want to grab the first?

Sure. Yeah, the SHIFT-UC trial is enrolling a post 5 ASA inadequate response population. Our inclusion criteria really is including a moderate population more so than mild. We require endoscopic disease activity that's consistent with more moderate disease, although they may have more milder symptoms. So net of that is we anticipate enrolling more of a moderate post 5 ASA pre-biologic failure population. Having said that, the same regulatory guidelines apply to that population for moderate to severe, which is the classic population that most other therapies have of steadied. So we don't anticipate any major differences in terms of expectations from the regulators on the type of responses or endpoints that are required.

And as it relates to your question about positioning, Patrick, I mean, our view is that, first off, I mean, I think we all agree that mucosa healing rates are still incredibly low despite available therapies. And that patients, and we've seen this play out in multiple therapeutic areas that when offered an opportunity to be able to go on an oral therapy and push back the need for biologics, and in this case, reduce hopefully the reliance on steroids, I mean there's pretty incredible need. In the context of other orals coming in, I think there will be a couple of interesting dynamics. One is that the remission rates are still not where they need to be, and that would suggest that probably, unfortunately, for these patients they're going to see almost all of the available therapies over the lifetime. And we see that in other indications like MS, where we see patients cycling through kind of oral to oral to oral kind of trying to kind of get disease in check. So there's that dynamic, but there's also a safety, an important safety dynamic here. And if the profile of 004 continues to play out as we hope, we think we would have an agent that not only could have an effect on mucosal healing and endothelial barrier integrity but also with a safety profile that will not only allow for monotherapy, but potentially combination therapy to try to get us to the next level of disease management that we would hope to be able to attain. So we think the unmet need is large enough, the market size is certainly significant and the need for a safer profile is pretty clear. So from our perspective, I think we have a pretty significant opportunity in front of us with this program.

Great, thank you very much.

Your next question comes from the line of Tong Lu.

Hi, thanks for taking the question. It's Tong for David from SMBC. We have two questions, one for 002 and the other for 1275. For 002, can you give any comment on how do you see the correlation would be between the pulmonary vascular resistance and six-minute walk test results and is there any kind of target range you have in mind for PVR to be competitive in terms the result or in the PAH space and what is the minimum you'll see to inform a decision to advance further into the Phase III trial? For GB1275 a similar question, what are the expectations would you have around the response that you would see in the next readout in order to continue the development? Thanks.

Yes, in the context of 002 seralutinib and kind of their expectation of results, in order for us to be comfortable moving to Phase III, I mean, we would hope to see the imatinib like results that they were able to see in their IMPRESS study. So I think we're hoping that that will be the profile that would play out both on six-minute walk and PVR. Richard?

Yes, that's correct, Faheem. And just want to add is that there's -- I think your question was also around what kind of relationship you would expect and I think that there's generally considered a reasonable relationship between if you have an effect on a hemodynamic parameter, you should see some benefit on six-minute walk as well.

Got you. And how about the 1275, any color around the expectation of the readout to reform the next steps?

Yes. I think there -- we're in the expansion phase, looking at two particular -- actually three tumor types and the expectation is that we would have a robust result such as a PR in the number of patients. And obviously, then we will look at the totality of the data to make the decision on that.

Yes. And Tong, we've communicated, we hope to have an update at ASCO and a further update at SITC as the trial progresses.

Yeah, got you. Thanks a lot.

There are no questions at this time, do you have any closing remarks?

Other than just to thank everybody on the phone, thank you for your thoughtful questions. We look forward to continuing our dialogue. And as I mentioned to you, we're very excited about other programs that we're working on and most importantly, we're hoping to make a significant difference for patients. So thank you all, and I hope you all have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.