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Why Gossamer Bio Shares Are Plunging

Why Gossamer Bio Shares Are Plunging

Gossamer Bio Inc (NASDAQ: GOSS) shares are tumbling to their lowest level since Oct. 22 as a rival to the company's lead product candidate that's being developed by Novartis AG (NYSE: NVS) failed in two late-stage studies, prompting the latter to shelve the study.

Sympathy Move With Novartis 

Gossamer Bio is developing GB001, a DP2 antagonist that's in a Phase 2b study for moderate to severe eosinophilic asthma.

The company plans to conduct an interim analysis of data from the midstage study in the first half of 2020, with the full results likely in the second half of 2020.

Novartis released topline results from two pivotal Phase 3 studies dubbed LUSTER-1 and LUSTER-2 that evaluated its DP2 receptor antagonist fevipiprant, and they spooked Gossamer Bio investors, as Novartis said pooled analysis of data from these two studies did not support further development of fevipiprant in asthma as a primary indication.

"The pooled analyses of the LUSTER trials did not meet the clinically relevant threshold for reduction in rate of moderate -to-severe exacerbation compared to placebo over a 52-week treatment period for either of the doses (150mg / 450 mg)," according to Novartis

Fevipiprant is a steroid-free, once-daily pill that blocks the DP2 pathway — a potentially important regulator of the asthma inflammatory cascade.

Gossamer Bio's GB001 has the same mechanism of action.

GB001 is also being studied in a Phase 2 trial for chronic rhinosinusitis.

Gossamer Bio is also planning to initiate a translational Phase 2 trial of the candidate in chronic spontaneous urticaria in the first half of 2020.

Gossamer Bio shares were down 36.95% at $16 at the time of publication Monday. 

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