Gossamer Bio rises following competitor’s failure in PAH trial

Shares of Gossamer Bio (GOSS) are on the rise on Monday after Aerovate Therapeutics (AVTE) said its AV-101 did not meet the primary endpoint in the company’s Phase 2b portion of its IMPAHCT study in patients with pulmonary arterial hypertension, or PAH. AV-101 has a similar and related mechanism of action as Gossamer’s seralutinib, which is currently enrolling its Phase 3 PROSERA study after a positive result in the Phase 2 TORREY trial supported by longer term OLE data.

TOPLINE RESULTS: Aerovate Therapeutics announced topline results from the Phase 2b portion of the Inhaled iMatinib Pulmonary Arterial Hypertension Clinical Trial, a Phase 2b/Phase 3, randomized, double-blind, placebo-controlled, multi-national trial of AV-101, a novel dry powder inhaled formulation of imatinib, in adults with PAH. The objective of the Phase 2b portion of IMPAHCT was to assess the efficacy, safety and tolerability of three different doses of AV-101 compared to placebo. The primary endpoint for the Phase 2b portion of IMPAHCT is change in PVR compared with placebo.

Results showed that, while AV-101 was well tolerated across all dose groups, the study did not meet its primary endpoint for improvement in PVR compared to placebo for any of the studied doses or show meaningful improvements in the secondary endpoint of change in six minute walk distance The company has also reviewed data from several additional secondary endpoints of the Phase 2b portion of IMPAHCT, which also failed to show meaningful improvements.

Based upon these results, Aerovate, in agreement with the independent study advisory committee, is halting enrollment and shutting down the Phase 3 portion of IMPAHCT as well as the long-term extension study. Aerovate plans to release full data from the Phase 2b portion of IMPAHCT at a later date, the timing of which is to be determined.

MOVING TO THE SIDELINES: BTIG downgraded Aerovate Therapeutics to Neutral from Buy after AV-101 did not separate from placebo on its primary endpoint in the Phase 2b portion of the IMPAHCT trial and all doses of AV-101 failed to meet statistical significance on PVR at 24 weeks. Management plans to release a full data analysis from the Phase 2b portion of IMPAHCT at a later date, which has yet to be disclosed. While waiting for additional clarity from management on the next steps, the firm is lowering its view of the probability of success for AV-101 from 65% to 0% in the wake of this update.

MORE ATTRACTIVE OPPORTUNITY: Goldman Sachs notes Gossamer Bio’s shares are outperforming on Monday after Aerovate Therapeutics announced 24-week topline results from the Phase 2b portion of its IMPAHCT study of AV-101 in patients with pulmonary arterial hypertension, or PAH. Neither an improvement in PVR nor in the 6-minute walk test was seen with treatment with AV-101 vs. placebo, which resulted in missing both the primary and secondary endpoints of the trial.

The firm recalls that AV-101 has a similar and related mechanism of action as Gossamer’s seralutinib, which is currently enrolling its Phase 3 PROSERA study after a positive result in the Phase 2 TORREY trial supported by longer term OLE data. However, tolerability has historically been an issue with imatinib, and Goldman looks for detailed results from IMPAHCT at a medical meeting later this year. Overall, the firm remains constructive on Gossamer’s seralutinib in PAH, and views this latest negative development as underscoring the asset’s differentiated clinical profile despite a similar underlying mechanism. The firm has a Buy rating on Gossamer’s shares with a price target of $8.

PRICE ACTION: In Monday morning trading, shares of Gossamer Bio have gained over 15% to 60c, while Aerovate has plunged almost 92% to $1.98.