Earnings call transcript: Gossamer Bio exceeds Q1 2025 revenue forecasts

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call showed improved net loss figures and cost management, but the Q&A revealed some uncertainties, particularly around enrollment and regulatory milestones. While management expressed confidence in their safety profile and global trial expansion, they avoided direct answers on key metrics, raising concerns. The lack of clear guidance and the decision to push data into 2026 may temper investor enthusiasm, resulting in a neutral stock price reaction.

Key Financial Performance

Cash and Cash Equivalents $257,900,000, no year-over-year change mentioned.

Recognized Revenue $9,900,000, compared to $6,600,000 in the same period in 2024, reflecting increased collaboration revenue with Chiesi.

R&D Expenses $38,000,000, up from $32,400,000 in Q1 2024, attributed to increased clinical trial activities.

G&A Expenses $8,700,000, down from $9,600,000 in Q1 2024, indicating cost management efforts.

Net Loss $36,600,000 or $0.16 per share, improved from a net loss of $41,900,000 or $0.19 per share in Q1 2024, due to higher revenues and lower G&A expenses.

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Operating Highlights

Saralutinib Progress: Significant progress with saralutinib, an investigational treatment for pulmonary hypertension, including PAH and PHILD. Achieved milestone in PROCERA study with closure of new patient screening.

Phase III PROCERA Study: Completion of enrollment expected by early June 2025, with top-line results anticipated in February 2026.

Seranada Study: Planned Phase III study for PHILD, aiming to enroll approximately 480 patients with a focus on severe cases.

Market Positioning: Saralutinib is positioned as a potential first-in-class treatment for PAH and PHILD, with expectations of becoming a backbone therapy.

International Market Expansion: Plans to expand into international markets, including Japan, with clinical sites participating in PROCERA.

Operational Efficiency: Efforts to ensure high-quality data collection and analysis in the PROCERA study, emphasizing operational excellence.

Strategic Shift: Focus on enrolling a more severe patient population in PROCERA to increase the likelihood of positive outcomes.

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Risk or Challenges

Regulatory Risks: The company faces uncertainties related to regulatory approvals for saralutinib, particularly in the context of the FDA's expectations for clinical trial outcomes and safety profiles.

Competitive Pressures: Gossamer Bio anticipates significant competition from existing therapies like sotatercept, which may impact market share and pricing strategies.

Supply Chain Challenges: The complexity of global clinical trials may introduce supply chain risks, particularly in ensuring the availability of the investigational drug across diverse geographic locations.

Economic Factors: Economic conditions may affect funding and investment in clinical trials, potentially impacting the company's financial stability and growth.

Enrollment Challenges: Stringent enrollment criteria and the need for a specific patient population may prolong the enrollment process, affecting timelines for data reporting.

Market Dynamics: The potential for a market reset upon the launch of saralutinib could lead to fluctuations in patient treatment patterns and market demand.

Patient Population Variability: Differences in patient characteristics across global sites may influence the outcomes of clinical trials, complicating the interpretation of results.

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Guidance & Outlook

Saralutinib Progress: Significant progress in the pivotal PAH study, PROCERA, with completion of new patient screening and a focus on enrolling the correct patient population.

Phase III Studies: Plans for the Phase III Serenada study in PHILD, targeting a global patient population with a focus on severe cases.

Collaboration with Chiesi Group: Partnership with Chiesi Group to support global registrational studies for saralutinib.

Market Opportunity: Potential for saralutinib to become a multi-billion dollar franchise in PAH and PHILD markets.

Enrollment Timeline: Expect to complete the blinded portion of the PROCERA study by Q4 2025 and announce top-line results in February 2026.

Financial Outlook: Anticipate sufficient capital to support operations through the first half of 2027, with cash and equivalents at $257.9 million.

Revenue Expectations: Recognized revenue of $9.9 million for Q1 2025, primarily from collaboration with Chiesi.

R&D and G&A Expenses: R&D expenses were $38 million, and G&A expenses were $8.7 million for Q1 2025.

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Shareholder Return Plan

Cash and Cash Equivalents: $257,900,000

Recognized Revenue: $9,900,000

R&D Expenses: $38,000,000

G&A Expenses: $8,700,000

Net Loss: $36,600,000 or $0.16 per share

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Key Q&A

Q:With three forty three patients enrolled in PROCERA to date, have you considered stopping enrollment there in order to be able to still report data this year? Could you give us some insight into your calculus here and why you’ve decided to enroll these last patients and push the data into 26?

A:It really relates to the fact that there’s been such incredible demand to study Joe. And obviously as we started to signal that we were nearing the end of enrollment, that demand got even bigger. And it’s really important that we honor the commitment we have to patients and to their physicians to ensure that we have worked alongside of all of these physicians, continue to do so into the future, not only with sarahidna but also with the PH ILD phase three, which many of these physicians will also be investigators in.

Q:Could we delve some more into baseline characteristics in Procera since the Tory trial enrolled patients primarily from North America, whereas Procera will be more global?

A:Procera has a much broader global footprint in the context of the sites that we’ve enrolled. As an example, there is a significant portion of patients that will come out of places like Latin America, South America, Eastern European countries, and Asia Pacific. And the reason I highlight that is it’s really interesting because what we find in those jurisdictions are really excellent patients for us to enroll into this study.

Q:The baseline in Procera now in hand, have powering assumptions changed at all? And then were stringent enrollment criteria the reason that the enrollment took a little longer than previously expected?

A:I would say unequivocally, yes. As an example, we screened somewhere in the neighborhood of seven fifty patients, which is a significant number of patients. And the fact that that’s about double what we’ve actually will end up enrolling. That should tell you two things. One, that we’ve been incredibly stringent to our entry criteria into this study for all the reasons that we’ve talked about.

Q:How do you think these outcome results can address the generalized concern that TKIs have off target effects and sarahutinib doesn’t?

A:Certainly to date we remain very very pleased with the safety profile we have seen. Again, that is a function of both design of the molecule, the route of administration, as well as the fact that we designed everything to be on target, which we think again, as Bob has spoken many times about long term, in addition to what we think robust efficacy, our safety profile and ease of use will be a competitive advantage.

Q:Did you look at baseline PVR in the PROCERA study?

A:We did have a PVR entry criteria of 400 or greater. We did not mandate to have a PVR as an endpoint.

Q:Can you share or do you plan to share with the final baseline just what baseline sotatercept usage is given that it’s been available both in The U.S. and ex U.S. for a few quarters now?

A:We had expectations that we would probably have about ten percent of the study or roughly thirty five patients on background Recall, if you were on background cetadricep there were two important components to that. You had to meet our entry criteria, which would suggest cetadricep wasn’t working for you.

Q:Can you just remind us what key related milestones are sort of baked into your cash runway guidance?

A:Our cash runway does not have any of the big milestones that we would expect on regulatory milestones. I think the biggest influence on our financials with the Chiesa relationship is the cost sharing.

Q:Can you disclose what treatment effect you’re targeting as it relates to your powering assumptions?

A:The initial powering, which is the same, is based on a 30 meter treatment effect on six minute walk with a standard deviation of 70, which gives us greater than 90% power.

Q:Can you just talk about the population you’re aiming to enroll in Serenada for PH ILD?

A:We are targeting idiopathic interstitial pneumonia and IPF, systemic autoimmune disease related pH, fibrotic interstitial pneumonitis, and occupational interstitial lung disease.

Q:Review of Unclear Management Responses

A:Management appeared to avoid giving a direct answer regarding the specific baseline characteristics of patients who discontinued sotatercept and the exact number of patients who were on background sotatercept in the PROCERA study. Additionally, there was a lack of clarity on the specific regulatory thresholds the FDA is looking for regarding six-minute walk improvement.

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Earnings Word Cloud

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GOSS Transcript

Gossamer Bio, Inc. (NASDAQ:GOSS) Q1 2025 Earnings Call Transcript

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The earnings call presented mixed signals: EPS beat expectations, but guidance remains negative. Regulatory challenges and competitive pressures pose risks. The Q&A highlighted demand for trials but also revealed management's evasiveness on critical details, which might concern investors. Although EPS improved, the lack of clear shareholder return strategy and ongoing challenges suggest a neutral stock movement.

Earnings call transcript: Gossamer Bio exceeds Q1 2025 revenue forecasts

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Gossamer Bio, Inc. (GOSS) Q1 2025 Earnings Conference Call Transcript

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The earnings call reveals mixed signals. Financial performance shows some improvement, with increased revenue and reduced net loss. However, high R&D expenses and the critical dependency on clinical trial outcomes pose risks. The Q&A session highlights management's confidence in trial safety and market potential but also reveals uncertainties in patient enrollment and regulatory milestones. Overall, the sentiment is balanced with positive and negative elements, resulting in a neutral rating for the stock's short-term movement.

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