Title

Presentation

Gossamer Bio, Inc. beats earnings expectations. Reported EPS is $-0.16, expectations were $-0.18.

Bryan Giraudo – COO & CFO:

Faheem Hasnain – Co-Founder, CEO, President & Chairman:

Richard Aranda – Chief Medical Officer:

Caryn Peterson – EVP, Regulatory Affairs:

Bob Smith – Chief Commercial Officer:

Operator: Good afternoon, ladies and gentlemen, and welcome to the Gossamer Bio Q1 2025 Earnings Call. I will now turn the program over to Bryan Giraudo, Chief Financial Officer and Chief Operating Officer.

Bryan Giraudo: Thank you, operator, and thank you all for joining us this afternoon. I am joined on today’s call by Faheem Hasnain, Gossamer’s Founder, Chairman, and Chief Executive Officer; Dr. Richard Aranda, Chief Medical Officer, Caryn Peterson, Executive Vice President, Regulatory Affairs, and Bob Smith, Chief Commercial Officer. Earlier this afternoon, Gossamer Bio issued a press release announcing its first quarter 2025 financial results and provided a corporate update. Please note that certain information discussed on the call today is covered under the Safe provision of the Private Securities Litigation Reform Act. We caution listeners that during the 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 statements contained in Gossamer’s news releases, SEC filings, including the annual report on Form 10-K and subsequent filings. This conference call also contains time-sensitive information that may be accurate only for a limited period of time. Gossamer BIO undertakes 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 it over to Faheem.

Faheem Hasnain : Thank you, Bryan. Good afternoon, everyone, and welcome to our first quarter 2025 earnings call. We’re very excited to provide an update on the significant progress and momentum with Seralutinib, which is an investigational treatment for pulmonary hypertension, including pulmonary arterial hypertension or PAH, and pulmonary hypertension-associated interstitial lung disease, or PH-ILD. So over the past year and a half, we at Gossamer have dedicated immense time, effort and hard work to enroll our pivotal PAH study, the Phase III PROSERA study. In particular, I want to recognize the efforts of our global clinical operations, development and field medical team who quite literally have been working across the globe around the clock to get us to this point.

Today, I’m incredibly proud to announce that we have achieved a significant milestone in the PROSERA study with the closure of new patient screenings. And while nearing completion of enrollment is a significant achievement in and of itself, what really matters is enrolling the correct patient population to best position PROSERA for a successful outcome. In this case, that successful outcome is a demonstration of a significant treatment effect in six minute walk distance at 24 weeks. Now, with this context in mind, we’re thrilled to report that the baseline characteristics of the patients enrolled thus far are precisely what we have targeted. And we are more optimistic than ever about the likelihood of achieving positive results. But I’ll dive more deeply into that in a moment.

Now, this year, we’ve experienced great momentum enrolling the study, as growing appreciation of the 72-week TORREY open label extension data from patients and physicians sparked strong interest in the PROSERA study. Given this late additional surge of interest, the PROSERA study has a substantial number of patients currently in screening. And when those potential patients are added to the already 343 patients already enrolled or scheduled to randomize, there are more patients to complete full enrollment by early June. We owe the PAH community a great deal of gratitude for entrusting us, and we will honor that trust by allowing every patient in screening the opportunity to enroll in the PROSERA study if they qualify. While we expect to complete the blinded portion of the study, including the 24-week, 6-minute walk distance primary endpoint by the fourth quarter of this year, we anticipate announcing top line results in February 2026.

This timeline ensures that we can lock the database and thoroughly clean, analyze, and adjudicate the substantial data collected in this robust 48-week double-blind study without sacrificing data quality or operational excellence. Let’s now review in detail the baseline characteristics of those enrolled in PROSERA and how this patient population helps set up Seralutinib for success. Now, the learnings from the Phase 2 TORREY study helped us to identify specific patient characteristics that would likely respond favorably to Seralutinib. By carefully selecting patients with impaired 6-minute walk distance and elevated risk at baseline, through use of the REVEAL Lite 2 risk score and other criteria, we aim to enroll a population where greater magnitude of effect could be seen on the 6-minute walk distance at 24 weeks, which is the primary endpoint, thereby increasing the likelihood of success of PROSERA.

I am happy to say that given the baseline characteristics that we’ve seen thus far, the eligibility criteria was successful in enrolling the exact intended patient population. Let’s take a closer look at the baseline characteristics those that are currently available to us, of the first 324 patients enrolled in the PROSERA study as of May 12, ’25. It’s important to remember that this 324 patient number is distinct from the previously mentioned 343 patients, which includes additional patients that randomize after the May 12 date and patients that are scheduled to be randomized. To start, we find that the average 6-minute walk distance is approximately 376 meters, much lower than the TORREY baseline, where 6-minute walk distance averaged 408 meters.

For comparison, the Phase III STELLAR study of sotatercept had a baseline 6-minute walk of 401 meters. Second, our mean NT-proBNP, which is an important biomarker of heart failure is 96 nanograms per liter in PROSERA, which denotes a materially more severe population than the TORREY study, where the mean NT-proBNP levels were only 628 nanograms per liter. For additional reference, sotatercept STELLAR Phase III had a baseline mean NT-proBNP of 1,121 nanograms per liter, nearly double what we enrolled in TORREY and much more similar to what we are seeing in the baseline characteristics of PROSERA. Third, let’s address the functional class. Consistent with other precedent positive PAH trials, in our Phase II TORREY study, Seralutinib demonstrated a larger magnitude of effect in the functional Class III patients.

But a functional class imbalance in the treatment arm versus the placebo arm created what we believe was a major limiting factor in the magnitude of effect seen on the 6-minute walk distance in that study. While the placebo arm was 52% functional Class III, the Seralutinib arm only had 32% of its patients classified as functional Class III at baseline in the TORREY study. In contrast, 74% of the patients currently enrolled in our PROSERA study are categorized as functional Class III at baseline, a significantly larger portion than in TORREY. We will also have a higher proportion than the STELLAR study, which mandated that at least 50% of its patients be functional Class III and ended up enrolling 51% of these Class III patients. And to prevent an imbalance, we have incorporated a stratification factor for functional class to ensure a balanced population between the arms.

Now, why are we spending so much time walking through these baseline characteristics? Well, in short, study after study in PAH has shown us that patients who are sicker at baseline, those with more room to improve, tend to have better outcomes, particularly on the 6-minute walk distance in a 24-week study. We saw this in TORREY, where patients with higher baseline REVEAL risk scores and those with functional Class III disease had a much more dramatic improvement in their 6-minute walk and their PVR. It was also seen in both the Phase II and Phase III studies of sotatercept where functional Class III patients had better outcomes than the functional Class II patients. Even going back to the pivotal studies of Tyvaso and oral imatinib in PAH, the pattern holds the same.

PROSERA was designed to enroll more of these patients to increase the study’s probability of success. Our team has executed against this goal while maintaining the commercial applicability of the study’s findings to a broader population of PAH patients. We believe that the baseline characteristics in PROSERA represent a population of both functional Class II and III that is consistent with contemporary studies in PAH evaluating 6-minute walk at 24 weeks. Because of all this, we believe that we are closer than ever to potentially providing patients with a first-in-class new treatment for PAH that addresses the underlying disease. With that progress in mind, let’s now shift our focus to the exciting prospects ahead for Seralutinib. But before I hand it over to Richard to discuss PH-ILD, I want to take a quick moment to thank our partner, the Chiesi Group.

Their partnership has enabled Seralutinib to immediately enter a global registrational Phase III study in PH-ILD. This was one of the key rationale for our joint development and commercialization agreement. They are a world leader in relevant disease areas, such as respiratory, cardiometabolic, and rare disease. We feel proud and highly validated that Chiesi sees the same vision for Seralutinib as we do. And more than that, they are a committed partner and proponents of this trailblazing clinical development plan in PH-ILD. And with that, I’ll hand it over to Richard for discussion of PH-ILD and the Phase III SERANATA study. Richard?

Richard Aranda: Thank you, Faheem. In addition to what Faheem mentioned, I am thrilled to spotlight our planned Phase III SERANATA study in patients with pulmonary hypertension associated with interstitial lung disease, or PH-ILD. To remind you, PH-ILD is a progressive disorder characterized by the development of pulmonary hypertension in the setting of chronic and progressive lung diseases. PH-ILD poses a severe burden on patients’ quality of life diagnosis. The three-year survival rate has been reported to be 40%, which is quite dismal. With only one approved treatment available for PH-ILD in the U.S. and limited availability outside of the U.S., there remains a substantial unmet need for effective therapies. The SERANATA study aims to fill this critical gap, offering a potentially transformative treatment option to a patient population that has long-awaited effective treatment options.

To this end, our development program at PH-ILD underscores our unwavering commitment to innovation, excellence and our focus on enhancing the lives of patients. Developed jointly with the Chiesi Group, the SERANATA study will be a global, double-blind, placebo-controlled registrational Phase III trial. Approximately 480 patients will be randomized evenly to receive either 90-milligram Seralutinib twice daily, 120-milligram Seralutinib twice daily, or placebo. The primary endpoint is the change in six-minute walk distance from baseline as compared to placebo at week 24. Key secondary endpoints include time to clinical worsening and change from baseline in forced vital capacity. A successful outcome on this latter key measure would provide differentiated results as compared to the currently approved treatment.

We believe that in addition to targeting the pulmonary hypertension of PH-ILD patients, the PH, so to say, Seralutinib could also target the underlying interstitial lung disease. With preclinical data demonstrating Seralutinib’s antifibrotic and anti-inflammatory attributes, treatment with Seralutinib could also improve lung function separately from its effect on pulmonary hypertension by targeting the underlying lung fibrosis, which is characteristic of PH-ILD. Recent preclinical modeling has led us to believe that there is value in testing a higher dose because increasing lung exposure may provide a greater improvement to the lung component of PH-ILD. This potential for a dual mechanistic benefit has led us to incorporate 120 milligrams twice daily dose level of Seralutinib in addition to the 90 milligrams twice daily dose level in SERANATA Study.

With the same painstaking detail with which we planned and enrolled the PROSERA study, we are diligently collaborating with our partners to identify the most suitable sites globally for this Phase III trial. Considering our unique non-vasculatory mechanism, there is high investor and patient demand, but given the complexity and significance of this program, we are proceeding with thoughtful consideration. Further, there are no successful registrational global PH-ILD clinical trial precedents to follow. Therefore, we hope the SERANATA Study will be the first. We expect to begin first site activations in the fourth quarter of this year. With this, we are extremely excited about the possibilities that this trial holds and the profound impact it could have on the lives of so many.

Now I will hand it over to our CFO and COO, Bryan Giraudo, for a financial update. Bryan?

Bryan Giraudo: Thank you, Richard. We will now review the end-of-quarter financial results for the first quarter of 2025. We ended the quarter with $257.9 million in cash and cash equivalents and marketable securities. We continue to maintain a robust balance sheet and anticipate that our financial resources will provide sufficient capital for the first half of 2027. For the quarter ended March 31, 2025, recognized revenue was $9.9 million. Our revenue is associated with our collaboration with Chiesi and includes $6.6 million cost reimbursements for the quarter. R&D expenses were $38 million, compared to $32.4 million for the same period in 2024. G&A expenses for the first quarter of 2025 were $8.7 million, compared to $9.6 million for the same period in 2024.

The net loss for the three months ended March 31, 2025, was $36.6 million, or $0.16 a share, compared to a net loss of $41.9 million, or $0.19 per share for the same period in 2024. Now I’ll turn the call back over to Faheem for closing remarks.

Faheem Hasnain : Yeah, Thanks, Bryan. Before we take questions, I just want to remind everyone of the substantial unmet need in PAH and PH-ILD. These are progressive diseases with high mortality that need new, safe, and effective therapies. Due to this dire need and historical lack of innovation, even improved therapies with limited efficacy or poor tolerability have achieved commercial success. Patients and physicians are eagerly awaiting new therapies, particularly those with differentiated mechanisms and improved outcomes. With its potential first-in-class mechanism and growing body of evidence of the potential for reverse remodeling in this disease, paired with the safety profile observed to date, we can envision a future where Seralutinib becomes a backbone therapy in PAH and a multibillion-dollar franchise.

Endotunity is not confined to the United States. It extends to international markets as well. Japan, which is the second-largest PAH market globally after the U.S., has a number of clinical sites participating in the PROSERA study. Considering Seralutinib’s recent orphan drug designation and the participation of Japanese patients in PROSERA, we believe that with positive results, this could support a JMDA and a subsequent approval in Japan. So if there’s one takeaway from today’s discussion, let it be that Gossamer is doing everything that we can to increase the chances of long-term clinical and commercial success for Seralutinib. And we’re committed to maintaining the highest standards to accomplish this mission. Our focus is not to just achieve approvable results.

That’s the bare minimum. Our focus is on generating comprehensive, definitive, and differentiated outcomes in both of our Phase III trials that will set Seralutinib apart from other therapies on the market, helping lay the groundwork for a Seralutinib franchise. Operator, you may now open the line to questions.

Operator: All right. [Operator Instructions] And first up, we have Joe Schwartz of Leerink.

Joseph Schwartz: Great. Thanks so much for taking my questions. I have two. First, with 343 patients enrolled in PROSERA 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? And then I have a follow-up.

Faheem Hasnain : Yeah, thanks, Joe. Thanks for your question. 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 Sarah Lindner [ph], but also with the PHIL-D Phase III, which many of these physicians will also be investigators in. And so we wanted to honor that commitment and decided to honor — and we closed off screening, so we will no longer be screening patients, but there is a large bolus of patients that are in the screening funnel now.

And our commitment was to follow through, determine which of those patients would qualify for the study, and then if they qualify, enroll them. So that should take us into somewhere around the June timeframe. And just as we think about the timing for that, first and foremost, we care about quality of the study. First and foremost, we care about bringing the right patients into the study. And timelines, of course, are important. So we will conclude the study. Last patient out will certainly be in the fourth quarter, near the end of the fourth quarter. But by the time we scrub, analyze, collect the data, scrub the data, analyze the data, and get it ready for a top notch presentation that will take a little bit of time. That’s the February date.

Joseph Schwartz: Very helpful. Thanks. And then could we delve some more into baseline characteristics in PROSERA? Since the TORREY trial enrolled patients primarily from North America, whereas PROSERA will be more global, I was wondering if we could get your thoughts on how this factor could influence the results.

Faheem Hasnain : Yeah, at TORREY we had sites also globally, but not as extensively as we have with PROSERA. So PROSERA 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 in this study. And by that I mean low morbidities and patients that in historical trials from those regions have shown a much larger magnitude of effect on their six-minute walk. So as an example, the STELLAR study for sotatercept, the patients that they enrolled in South America saw somewhere in the neighborhood of mid-70-meter improvement in walk versus the U.S. patients in that study were around 26 meters.

And that’s largely, we believe, because these patients are just more pure PAH patients with less comorbidity and an easier opportunity to show that magnitude of effect. Richard, I don’t know if you have anything else you want to add to that?

Richard Aranda: No, Faheem, I think that’s exactly right. The younger patients, the different treatment regimens also contribute to those patients that you’ve outlined.

Faheem Hasnain : Yeah, Bryan?

Bryan Giraudo: And Joe, I’d also just remind you that part of the reason why we had a disproportionately large number of patients from North America, the United States and TORREY was because many of our ex-U.S. sites were closed because of the COVID-19 pandemic, and those physicians were not actively doing clinical research. So we do believe the combination of operating in a normal time and in a broader global reach is going to give us a much more patient population.

Joseph Schwartz: Thanks for the color.

Faheem Hasnain : Thanks, Joe.

Operator: All right. Next up we have Andreas Argyrides of Oppenheimer. Your line is now open.

Andreas Argyrides: Great, thanks for taking our questions and congrats on all the progress on your completion of enrollment. And also, thanks for the comparisons of the various baseline characteristics to seller. You preempted one of my questions, but very helpful. So we only have a couple here. We’ll keep it short as we can. With baseline in PROSERA 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? And then last, when it comes to safety, Seralutinib has a clean profile to date. How do you think these upcoming results can address the generalized concern that TKIs has off-target effects and Seralutinib doesn’t? Thanks.

Faheem Hasnain : Yeah, so I’ll take a portion of that question and then have Richard as well jump in, anybody else on the team. Certainly, as it relates to the baseline characteristics that you’ve seen, I think your question, Andreas, was really kind of does that kind of lend — does the focus on those baseline characteristics and the stringent entry criteria lend to kind of the time that it took to enroll the study? I would say unequivocally, yes. As an example, and just kind of further highlight that point, Andreas, we screened somewhere in the neighborhood of 750 patients in this study, which is a significant number of patients. And the fact that that’s about double what we 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. We think we, given this criteria that we put into place and now have been able to achieve, we think that really enhances our probability of success. And I think the second thing that that says in terms of the number of screening opportunities that we’ve had is the significant demand for this study. That’s a significant number of patients, and there was a tremendous amount of demand from physicians, the treaters, to be able to have their patients evaluated for their entry into the study. And I think that’s a vote of confidence, if you will, from the physician community about the promise of Seralutinib.

Richard Aranda: Yeah, Richard. I think one of your first questions around does the baseline characteristics impact the power of the study, and the answer is no. Directly from a technical standpoint, we have over 90% power given the sample size. In fact, just to reiterate what Faheem mentioned, the study intentionally was designed to enroll this population, so in anticipation of the treatment effect that we would observe, which is complementary to the sample size and the expected power, based on that treatment effect and standard deviation, we’re basically right on target.

Bryan Giraudo: I think, Andreas, your last question was around safety, and certainly to date, we remain very, very pleased with the safety profile we have seen. Again, that is a function of both the 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 is robust efficacy, our safety profile and ease of use will be a competitive advantage.

Faheem Hasnain : Yeah and Andreas, if I could just add just to what Bryan said, just for one last comment here. That safety profile combined with the efficacy that we expect to see, certainly the efficacy that we saw in the functional Class III and the higher-risk patients in TORREY, and the open-label extension experience that showed that we continue to see improvement over time, possibly related to the effect, the reverse remodeling effect that we hypothesize is going on, that really positions us well commercially to be used across not only a broad swath of PAH patients, but also to suggest that there’s an opportunity for positioning this drug as the backbone of therapy for earlier use to prevent longer-term progression. As we all know, this is a progressive disease where every patient progresses, and if we can delay, halt that progression that’s an incredibly meaningful outcome for patients.

Andreas Argyrides: Fantastic. Appreciate the color. Congrats on all the progress.

Faheem Hasnain : Yeah, thank you.

Operator: All right. Next up, we have Yasmeen Rahimi of Piper Sandler.

Yasmeen Rahimi: Good afternoon, team. Really excited for you. Congrats on so many milestones, right? Enrollment completion, unveiling the baseline, and the PH-ILD is kicking that all off. Really incredible progress and updates today. A few questions for you. I guess the first question, team, is for the baseline measures, did you look at baseline PVR in the PROSERA study? Question one. Question two, once the study finishes fully enrollment, are you planning to give us another cut of the baseline and maybe a little bit additional information? I don’t know if there’s going to be another disclosure around it before we get the data in February. And then the third one is, given that the endpoints of both of these between the PH-ILD and the PAH study are at the six-minute walk test, is there anything we can infer from read-through from PROSERA to SERANATA now that we have the study design? Appreciate if you could take those three questions.

Faheem Hasnain : Thanks for your question, Yasmeen. As it relates to the question around further updates, I think as it relates to the baseline, we’ve given you baseline data on 323 patients. We don’t expect that to materially change given just the number of patients that we’ve been able to evaluate baselines on. And I think we can be pretty clear with you that we will complete enrollment by latest mid-June. And so there won’t be any mystery there. Just we know that now with great certainty given that we know exactly how many patients are in the funnel. So I think there should be no uncertainty as to when our last patient in will be. As I said, it’ll be by mid-June. And I think it’s fair to conclude that the baseline that we’ve given you will be very close to the baseline that we’ll end up with in the study. Richard?

Richard Aranda: Yeah. Yasmeen, to answer your question about the PVR, we did have a PVR entry criteria of 400 or greater. We did not mandate to have a PVR as an endpoint. So we won’t have that in this particular study. But yes, we did have minimal criteria for a PVR. And that could have been based on some historic data or at the time of screening. And it’s in line to what you would expect given the requirement that we had. In terms of your question around read-through, of course, assuming that PROSERA is positive, that portends the possibility that the PH-ILD would also be positive. Having said that, we also know that PH-ILD patients are going to have lower six-minute walks than in Group I patients. They’re actually sicker overall.

And so under the thesis that in PROSERA we have an enriched population of greater severity, I think just implicit in studying the Group III population, those patients are sicker. So if the drug is effective in that population, we should also see a very good treatment effect on six-minute walk as well as other parameters such as NT-proBNP, et cetera.

Faheem Hasnain : And so I think that definitely does increase the probability of success and there would be a read-through. But I think the other dimension here that’s exciting about the PH-ILD population and the opportunity for Seralutinib is that certainly preclinically we’ve been able to determine that Seralutinib also has some anti-fibrotic properties and affecting really important markers of fibrosis. And as you think about this next patient population, those with interstitial lung disease that could be a significant added benefit to the treatment of those patients.

Yasmeen Rahimi: Excellent. Thank you so much team. Really excited for you. And I’ll jump back in the queue.

Faheem Hasnain : Thank you, Yasmeen.

Operator: All right. Next up, we have Paul Choi of Goldman Sachs.

Paul Choi: Hi, everyone. Good afternoon, and thank you for taking our questions. Congratulations on all the progress. I want to return to baseline characteristics for a moment. And 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? And then in terms of a clinical impact from that, can you maybe just comment on how you’re thinking of what is considered clinically meaningful now in terms of six-minute walk, given that it has been available commercially? Has there been any evolution and change of thought among the KOL community on six-minute walk here, given sotatercept has been on the market for a few quarters?

And then one for Bryan is, can you just remind us what Chiesi-related milestones are sort of baked into your cash runway guidance? Is there anything else that we should be factoring in, just sort of what the pushes and pulls are that could potentially extend your cash runway? Thank you for taking our questions.

Bryan Giraudo: Sure, Paul. I’ll start with the first one around backgrounds to sotatercept. As you recall, we had expectations that we would probably have about 10% of the study or roughly 35 patients on background sotatercept. Recall, if you were on background sotatercept, there were two important components to that. You had to meet our entry criteria, which would suggest sotatercept wasn’t working for you, and you would have to have been on stable sotatercept dosing for six months. I think we were very surprised on how few patients were on stable backgrounds sotatercept dosing. So of the couple dozen inquiries we had about patients coming in, to date I think we’ve enrolled three or four patients on background sotatercept, which we think, again, speaks to the real-world experience of sotatercept being not as linear as we were expecting. In regards to clinical effect, let’s turn it over to Faheem.

Faheem Hasnain : Yeah, so, Paul, it’s a really interesting question that you’ve asked and one that I think is really important, the clinically meaningful effect for six-minute walk. So I guess I’ll start off by saying Seralutinib appears to be differentiated from any other PAH treatment thus far that we’ve seen in that we see continued improvement over time as evidenced by our open-label extension data where patients, even the less sick patients in TORREY that didn’t have as profound a result saw improvement up to week 72. And certainly, even those patients with a more profound improvement, the more sick patients, also saw improvement. And that is a fairly unprecedented result. Assuming that we continue to see that trend in the open-label extension portion of the PROCERA study, what I believe that the treating community is thinking about is that the week 24 data will just be a point in time to which then they can expect patients to improve beyond that.

And so that really starts to then ask and play into the question that you’ve asked, is what is a clinically meaningful effect for PROCERA? And certainly in the dialogue that we’ve had with our experts, our key opinion leaders, our steering committee, I would say that anything in the 20-meter-plus improvement in six-minute walk becomes a very clinically meaningful effect given the safety profile of the drug, the opportunity to use it earlier in line of therapy to try to prevent longer-term progression, and the promise of improvement over time. Again, that’s unprecedented, not been seen in this environment. So I think it’s erroneous to actually just say sotatercept was at X and therefore you need to be at X or Y because the basic point is this.

Every one of these patients will progress. Sotatercept will see really profound effects in a subset of patients, somewhere in the neighborhood of 30%. It’s what we’ve seen from the trials, which leaves a large swath of patients with significant unmet need. And certainly there will still be patients who experience intolerable side effects with sotatercept, and we’re seeing that continuing to build in the real-world database. And we will see patients who wane in their effect with sotatercept and are also left with a need. So by the time we get to market, there is going to be a large portion of patients that really need something, and the promise of a drug like this that has the potential to show reverse remodeling effects can be pretty profound.

Richard Aranda: Just to add, I think it’s also important that the treatment effect needs to be interpreted without the context of the influence of hemoglobin that probably influenced the response that was observed with sotatercept, for example, plus the population that we’ve been talking about is a much more sicker population overall. So I think those are some additional considerations. Bryan, do you want to add anything?

Bryan Giraudo: Okay, thanks. I think, Paul, to your question on Chiesi milestones, our cash flow 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 Chiesi relationship is the cost sharing, and we expect that cost sharing to meaningfully increase as we bring the costs in from the PROSERA study and kick off the SERENATA study, where we’ll be cost sharing on a 50-50 basis.

Paul Choi: Great. Thank you very much.

Faheem Hasnain : Thanks, Paul.

Operator: All right. Next up, we have Olivia Brayer of Cantor.

Olivia Brayer: Hey, good afternoon, guys, and thank you for the question, and congrats on all the progress you’ve been making this year. Can you disclose what treatment effects you’re targeting as it relates to your powering assumptions? And then as you think about the regulatory bar for success, do you know whether FDA is looking for a certain threshold on six-minute walk improvement, both with respect to P-value but also meter improvement? And then just maybe in terms of timing of the disclosure, does that include a safety period, or was anything else added to that protocol that’s maybe changing the time of those data?

Richard Aranda: So to answer your question about the powering, 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. That hasn’t changed. And the other question was around the time of the data readout does include the safety follow-up, and that also hasn’t changed.

Faheem Hasnain : Did we capture all your questions there? Did you add regulatory guidance as well?

Olivia Brayer: Maybe just to follow up on that safety closeout period, was anything added to the protocol that’s actually maybe shifted timing of the data readout? And then the other question, Faheem, was just on the regulatory bar and how the FDA is thinking about six-minute walk improvement. Have they said anything in terms of what P-value or an accurate improvement that they’re looking to see for approval?

Faheem Hasnain : I’ll turn that question over to Caryn Peterson, our Head of Regulatory.

Caryn Peterson: Yeah, so we had this discussion with the FDA when we designed the protocol as well as EMA [ph]. They agreed to both the powering and how it was powered in terms of the distance and the magnitude of the fact that we were looking for.

Olivia Brayer: Okay, great. Helpful. Thank you, guys.

Faheem Hasnain : Thank you.

Operator: All right. Next up, we have Patrick Trucchio of HC Wainwright.

Patrick Trucchio: Thanks. Good afternoon. I have a few questions on PAH. The first is just a baseline. Do we know the number of patients who discontinued Sotatercept previously? And then separately, you presented open-label extension data that shows continued PVR and six-minute walk distance benefit. What read-through from this data do you see to PROSERA, if any? And separately, what are the commercial implications of that OLE data? And then a few on PH-ILD. The first is just the doses, the rationale behind the doses selected for this study. And then separately, it was mentioned that data could demonstrate Seralutinib is having a beneficial impact on underlying interstitial lung disease. If you’re able to demonstrate this benefit, what are the implications for the product profile? What data should we be looking for to show that potential? And what are the implications then for the potential addressable patient population?

Bryan Giraudo: Thanks, Patrick. I’ll take the first one as far as patients who discontinued Sotatercept. Due to the long half-life of Sotatercept, there are requirements that you need to have a five-half-life washout before you can come in. We had very few Sotatercept discontinuations in the study. Memory is certainly correct. I think it was high single digits to date. Rich, I’ll turn it over to you for the other part.

Richard Aranda: Could you just remind me on what the other…?

Faheem Hasnain : Pat, what was the other second part to your question?

Patrick Trucchio: Yeah, so just the second part on PAH was just around the open-label extension data, the read-through from that data if any, to PROSERA, and as well just sort of commercial implications of that OLE data.

Faheem Hasnain : Yeah, I’ll ask Bob Smith, our Chief Commercial Officer, to touch on that one.

Bob Smith: Yeah, I think there’s a very positive read-through there. As we have taken the OLE data out into the community, the KOL community, we’ve just had really impressive feedback, and we saw, as well, that being a key lever for the increased enrollment in PROSERA when they started to realize the benefit over time, which, as Faheem mentioned, is due to Seralutinib.

Faheem Hasnain : Yeah, I think the open-label extension implications on commercial are kind of what I’ve already mentioned, Patrick, which is if that data is replicated, as we hope it will be in the context of the PROSERA study, I mean, it is — and we’ve had this feedback from the community, that, as I said, it was largely unprecedented. Most studies you see and would expect to see just a plateauing of effect. So it really has an impact on positioning of the drug in the marketplace, and that is, like other progressive diseases, we see the desire and the hope to be able to use these drugs earlier, assuming that they’ve got the right safety profile, because if you’re using a drug earlier in the line of therapy, quality of life matters, because they’re going to be on treatment a long period of time, a longer duration of treatment, and they’re being treated in the earlier stage of their disease, which means they’re otherwise living a reasonably normal life.

So safety really matters. And if there’s a promise there or a potential to actually remodel both lung and heart, as we’ve seen by our imaging data and our echo data, that’s hugely impactful in terms of the potential to stave off progression for a longer period of time, so that will be an important positioning concept commercially.

Bryan Giraudo: Yeah, because what we’re hearing a lot in the community health community, is the desire to use these kind of disease-modifying, quote-unquote, if you will, therapies earlier in the process. And I think if our profile plays out from the OLE through to PROSERA, we’ll have a very safe, tolerable, and effective agent that can be used very early, along with the vasodilator, PD5 and ERA. So, again, that’s one of the rationale for the interest that we’re getting for early utilization.

Richard Aranda: So, I could further comment on your question around the PH-ILD, around dose and the potential impact. So first, let me start off by saying that we’re confident in the 90-milligram dose in PH-ILD, given the results that we have in Group 1. Nonetheless, we believe it’s important to acknowledge that, as we mentioned, PH-ILD represents basically two disease processes, one, a vascular component with the PH, and then a lung component characterized by the lung fibrosis. So factoring in some of the preclinical work that we have performed and was presented at the CHEST conference in 2024, using fibrotic models, using human lung and fibroblast cells, which we showed a favorable effect. The thought process is we wanted to deliver more drug to the lung, factoring in the fact that the lung architecture is already distorted due to the lung fibrosis.

So we want to ensure that sufficient exposure is occurring in the setting of that differences in the architecture. Recall that we have elevated the functional force vital capacity as a secondary endpoint. That was done intentionally because we believe that this could be a clear differentiating feature of this molecule in treating both the PH part and the lung disease part. And so assuming that we have positive results, not only would it be differentiating for us, but we would obviously have a discussion with regulators about potential mentioning of it or positioning of it in the product label. And maybe Bob would just want to comment on some of the commercial implications of this approach of the FEC.

Bob Smith: Okay, yeah. So commercially it would be a huge differentiator because right now Tyvaso looked at FEC as a safety endpoint in the study, whereas we’re looking at it as an efficacy endpoint in the study. So that would be a significant commercial differentiator for Seralutinib.

Faheem Hasnain : And I also think, Patrick, importantly, in conjunction with our partners at Chiesi, having an efficacy signal on FEC would also be a significant barrier to entry in the European Union where no drugs are approved.

Patrick Trucchio: Perfect. Thanks so much.

Faheem Hasnain : Thanks.

Operator: All right. Next up we have Laura Chico of Wedbush.

Laura Chico: Hey, good afternoon. Thanks very much for taking the questions. I just have a couple here. First, and I apologize, I’m just trying to reconcile some of the commentary around the geographic split on recruitment in PROSERA and some of the commercial dialogue you’ve had there. How do you think about the types of patients that would be more suited for Seralutinib, presuming success in PROSERA, versus a sotatercept patient? I’m just kind of curious, is there certain characteristics that might skew the market one way or the other? And then related to SERANATA, I think I missed this, but could you elaborate a little bit further? This is kind of blazing new trails here. So trying to understand the powering assumptions around the primary endpoint, I guess specifically on treatment effect and how you derive that. Thanks very much.

Faheem Hasnain : Yeah, on the commercial side, assuming positive PROSERA, we will launch Seralutinib roughly three years after sotatercept launched in the market. At that point, what you’ll see is basically a market reset. So all of the prevalent patients that are currently out there will have tried sotatercept, probably three-quarters of them. Not all patients are going to be good candidates for sotatercept, but call it 70%. So by the time launch, you’ll have this market reset where patients that have been on sotatercept have come off sotatercept, that now have advanced in their progression of their disease. And that’s kind of the large patient population. The theme spoke of before. So we could potentially look at having a 70% to 80% of the market opportunity out there because sotatercept will probably have, say, 30% of the market in three years because of the discontinuations and just the normal progression of the market and the disease.

In addition, I think there’s a lot of interest as well to using both Seralutinib and sotatercept in combination. As Bryan mentioned, we only have, very few patients in the cellular combination, but there are data that are being looked at both preclinically, and then we’ll have a little bit of clinical data to suggest how these therapies could be used in combination.

Bryan Giraudo: So if I take my crystal ball out to say, let’s fast forward to the time that we launched, as Bob had said, say early 2027. All the points that Bob made is exactly right. So what we’re going to see is not only the patients that have tried sotatercept fail, the patients that weren’t eligible for sotatercept for one reason or another, and the patients who’ve been on sotatercept and overall treatment has waned. Those patients that have been on sotatercept that may still be on sotatercept, but we’re starting to see a waning of the effect. One can imagine doctors are going to be very encouraged to use combination therapy, especially given the preclinical evidence that’s been generated thus far around the potential synergy between these two agents.

But I think that Seralutinib gets positioned as a drug to try first before Seralutinib once we’re in the market, as we see newer patients coming in. I think that is a potential just because, as you see it for the reasons I mentioned, to be able to see the potential to prevent longer-term progression, but also to be able to put these patients on a product with a safer profile, I think will be incredibly encouraging for docs. So I think it would be kind of an interesting marketing concept and positioning concept once we get approved.

Richard Aranda: So I could answer your question around some of the powering assumptions around our PH-ILD six-minute walk. So I think, as you mentioned and as we stated, there’s not a lot of precedent for randomized controlled trials, but we do have the increased trial that we could get the six-minute walk data from that particular trial. And so we had to do some extrapolations. Just add to maybe three points around trying to provide a framework, and then I’ll get into the power assumptions that we did. So as I mentioned, this is a very sick population. They’re going to have lower six-minute walks than group one. And furthermore, over the course of a trial, they’re likely going to deteriorate much more than group one. And I want to go back and look at the increased trial.

That was a 16-week trial. Our trial is 24 weeks. So the assumption here is that those that are randomized to placebo are likely going to get worse than even in the increased trial. So that’s one factor. Related to that, then, as in the active arm, we have assumed at least a 30-meter difference, much like what we did for group III, but we have some latitude there. If it’s slightly less, likely more, we still have greater than 94%, 95% power comparing the active arm versus placebo. And that’s also assuming a standard deviation of about 70.

Laura Chico: That’s super helpful. Thank you, guys.

Faheem Hasnain : Thank you.

Operator: All right. Next up, we have Ellie Murley of UBS.

Unidentified Analyst: Hey, this is Jasmine on for Ellie. Congratulations on all the progress, and thanks so much for taking our question. So first, a follow-up to an earlier question, your comments. Are you allowing sotatercept drop-ins in for Sara? And then, more generally, how are you thinking about how looking at a combination effect here could impact the opportunity commercially? Then, secondly, can you just talk about the population? You’re aiming to enroll in SERANATA for PH-ILD. Do you think that, similarly to PH, you’ll see greater effects in the more severe range of patients here? Thanks.

Faheem Hasnain : Yeah, in terms of the allowing sotatercept, patients who are on sotatercept, into the PROSERA study, we actually do allow for patients who are on sotatercept, but, of course, in order for them to get into the study, they need to actually qualify for the study, which means there is kind of a period where they need to be on stable medication. Richard, you can kind of outline the criteria for sotatercept eligible patients.

Richard Aranda: Yeah, I mean, they have to be on background sotatercept for six months at a stable dose without changing due to hemoglobin or platelet changes, and then they still have to meet our PVR criteria of greater than 400, we feel like 2.0; risk score, five greater, or a PVR greater than 800.

Faheem Hasnain : And also after 24 weeks, right?

Richard Aranda: Yeah, 24 weeks.

Faheem Hasnain : Yeah, and so just given the kind of the stringent application of the entry criteria, we will probably just get a handful of patients on sotatercept. There really won’t be a substantive number in the study given the timeframe under which it’s been launched and the access to patients who’ve been on for six months, as Richard just laid out. So the short answer is yes, we allow sotatercept patients in, but they’ve got to qualify in the context of the entry criteria, which will equate to a small number.

Richard Aranda: And then I could comment, this is the target population for SERANATA. Yeah, probably the best way to frame this is suggest to go back and look at the increased trial and their population. We have some similarities, but clearly some differences, and I can just highlight some of those differences. So first of all, our hemodynamic criteria are more. We have four wood units for PVR. They had three wood units. That’s because we do want to leverage the fact that there are more severe patients and we would anticipate a greater treatment effect in those patients. In addition, we are targeting idiopathic interstitial pneumonia and IPF, systemic autoimmune disease-related PH, fibrotic interstitial pneumonitis, and occupational interstitial lung disease.

Unlike increase, however, we’re not allowing for a combined pulmonary fibrosis or emphysema. We’re not allowing sarcoid in either. And then we’re much more stringent upon criteria around having CT scans reviewed by central reader and other things like that. And probably related to your question is, do we anticipate the more severe population that we would also observe a greater treatment effect? I think the answer is yes to that question.

Unidentified Analyst: Okay, great. That’s helpful. So just to clarify, patients are not allowed to drop in or begin sotatercept during PROSERA?

Bryan Giraudo: As far as dropping in with sotatercept, no. When you are enrolled, you have to be on state-approved therapy.

Unidentified Analyst: Great. Thanks so much for answering my questions.

Faheem Hasnain : Thank you.

Operator: All right. And our final question in queue today is Vamil Divan of Guggenheim.

Unidentified Analyst: Hi. This is Daniel on Vamil. Thanks for taking our question. So the first one is, you described Seralutinib [ph] as a multibillion-dollar PH franchise potentially. Can you maybe compare the commercial opportunity for this drug in KH versus PH-ILD? And then my second question is just, if you can kind of go into more details around the expected geographic distribution of enrollment for the PH-ILD trial, do you think it will be similar to what we saw in PAH with the majority seen internationally, or is there less of a need for this imbalance without the [indiscernible] dynamic at play? Thanks.

Faheem Hasnain : Yeah, Bob?

Bob Smith: Yeah, so in terms of the multibillion-dollar opportunity, if you look at PAH, there’s about 50,000 patients in the U.S. If you look at the current pricing of the newer therapies, obviously we haven’t presented anything publicly, but if you look at the Sotatracept price, you quickly… Sotatracept right now is on about a billion-and-a-half downgrade in its second full year. Right now they’re sitting at, I think, 5,800 patients, or 5,200 patients that have already started drug, and that continues to grow. So you can see the opportunity within the PAH marketplace in terms of the number of patients and the potential price associated with it. In terms of the ILD PH, that market is probably three to four times greater than PAH.

Call it roughly, worldwide, 400,000, something like 400,000 patients. So, again, and f you look at what Tyvaso is doing with their price point and number of patients, despite a very high number of discontinuations on that therapy, their run rate in PH-ILD is roughly 2 billion.

Richard Aranda: And Daniel to answer your question about geographic mix for SERANATA, I do think it will be similar to PROSERA in anything. It may be an even larger contribution from the European Union. And that’s really a function, remember the dynamics in PROSERA is that, well, Sotatracept was not available in the European Union. There was an expectation that it was coming, so patients were saying, I’ll wait for Sotatracept before I go on CLIL [ph]. That dynamic doesn’t exist, because inhaled Tyvaso has not been approved. And there is, at least from what we can tell from looking at regulatory processes, there is not a plan for United’s partner, Ferrer, to get the drug registered in the European Union. So there is an even greater unmet medical need in Europe for PH-ILD therapies than there was for PH therapies.

Faheem Hasnain : So, in summary, you’ve got a patient population, PH-ILD, that is much larger, significantly underserved, with only one drug approved in the U.S., being Tyvaso. I think Tyvaso is now available in a couple of other smaller jurisdictions, but for the most part only available in the U.S., with a sicker patient population than PAH. The unmet need is substantial, and the opportunity, therefore, is also substantial.

Unidentified Analyst: Okay, great. Thank you very much.

Faheem Hasnain : Thanks. All right. Any other questions in the queue, operator?

Operator: At this time, there are no further questions in queue.

Faheem Hasnain : Okay. I would just like to, first off, thank everybody for your participation on this call. We’ve enjoyed the opportunity to be able to speak with you and be able to outline the progress that we’ve made on PROSERA. We, of course, eagerly await the top-line results from this study, and for all the reasons that we’ve discussed today, we’re very excited about the potential of Seralutinib making a huge difference for patients. And I just want to end this call by, first and foremost, thanking those patients who contributed themselves to this study and to their physicians for having the confidence in Gossamer and Seralutinib to entrust us with treating their patients, the ability to treat their patients. And lastly, I just want to thank the Gossamer organization for the tireless effort over the last couple of years to be able to get us to where we are today.

So thank you all, and we look forward to being able to talk to you again and certainly look forward to the top-line results on PROSERA. Thanks, everybody.

Operator: And with that, ladies and gentlemen, this does conclude your call. You may now disconnect your lines, and thank you again for joining us today.