Gossamer Sells Rights to Potential Merck Rival Drug

Gossamer Bio has entered into a significant collaboration with Italy-based Chiesi Farmaceutici to develop and commercialize its experimental drug, seralutinib. This partnership, announced on Monday, could position seralutinib as a strong competitor to Merck & Co.'s newly approved PAH treatment, Winrevair. The agreement is seen by at least one analyst as a positive move for Gossamer.

Seralutinib is being developed as a treatment for pulmonary arterial hypertension (PAH), a condition characterized by high blood pressure in the lungs, leading to increased strain on the heart. Gossamer is currently recruiting patients for a late-stage clinical trial, named Prosera, which aims to gather the necessary data for regulatory approval. PAH treatments generally focus on widening blood vessels to reduce symptoms, and the FDA has recently approved Winrevair, a unique therapy from Merck that inhibits a protein responsible for thickening blood vessel walls. This treatment, which is injected every three weeks, has potential peak sales estimated between $1 billion and $8 billion annually.

Despite the market presence of Winrevair, Gossamer believes there is still an opportunity for seralutinib due to its distinct mechanism and inhaled form. Encouraged by positive results from an earlier study, Gossamer is advancing seralutinib into the Prosera trial, which will involve 350 participants and conclude by late 2025. However, investor confidence in the drug has been shaky. Shares of Gossamer plummeted by 75% in late 2022 following the announcement of earlier trial findings. As of the latest update, the stock was trading at approximately 75 cents per share.

Joseph Schwartz, an analyst at Leerink Partners, highlighted that the partnership with Chiesi could address investors' concerns about Gossamer’s ability to enroll and fund the Prosera trial. According to Schwartz, such collaborations are typically preceded by extensive diligence, suggesting a strong endorsement of Gossamer's efforts.

Under the terms of the agreement, Gossamer will continue to lead the development of seralutinib for PAH and another related condition, pulmonary hypertension associated with interstitial lung disease. The development costs for these indications will be shared equally between Gossamer and Chiesi, although Gossamer will finance the Prosera trial. In the United States, both companies will share commercial profits and losses equally. Gossamer will be responsible for U.S. commercialization for PAH and the related condition, while Chiesi will manage commercialization for any other indications that may arise.

Chiesi will have exclusive commercialization rights for seralutinib outside the United States, with Gossamer receiving royalties in the mid-to-high teens on net sales. As part of the deal, Chiesi will provide Gossamer with $160 million as a development reimbursement, with potential additional payments up to $326 million contingent upon achieving specific regulatory and sales milestones.

This collaboration represents a strategic move for Gossamer Bio, providing necessary financial backing and shared resources to advance seralutinib. If successful, seralutinib could become a significant player in the PAH treatment landscape, complementing existing therapies and potentially offering patients a new, inhaled treatment option.