•

Gossamer recently completed a pre-specified interim analysis of LEDA, its Phase 2b clinical study of GB001 in moderate-to-severe eosinophilic asthma. The interim analysis was based on approximately the first two thirds (~320) of patients who either completed or withdrew from the study. The Independent Data Monitoring Committee (IDMC) reviewed results from the interim analysis and recommended continuation of the study to its completion without modification. Based on the results of the interim analysis and the IDMC recommendation, Gossamer has commenced initial Phase 3 planning and supportive activities in anticipation of the completion of the study and final analysis of the study data. The final decision to proceed to Phase 3 will be made based on the totality of the final data from the LEDA study, as well as discussions with global regulatory authorities. Topline results from LEDA continue to be expected in the second half of 2020.

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On April 21, 2020, the United States Patent and Trademark Office issued patent US 10,626,089. This key patent protects the lysine salt that is being studied in the clinical development of GB001. These compound claims further enhance the intellectual property protection around GB001. This patent is not due to expire before 2037.

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The TITAN Phase 2 clinical study of GB001 in CRS, both with and without nasal polyps, is on track to report topline data in the second half of 2020.

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Gossamer today announced promising topline results from its Phase 1b study of GB004 in patients with active mild-to-moderate ulcerative colitis (UC). GB004 is designed to restore intestinal epithelial barrier integrity and function in patients with inflammatory bowel disease.

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The Phase 1b study was designed to evaluate the safety, tolerability, and pharmacokinetics of a 120mg once-daily dose of GB004 in a solution formulation over a 28-day treatment period in UC patients with active disease despite treatment with 5-ASA therapy. In addition, pharmacodynamics and certain outcomes related to clinical activity were studied as exploratory measures. Thirty-four patients were randomized 2:1 to receive either GB004 (n=23) or placebo (n=11).

o

Safety and Tolerability: GB004 was well tolerated during the study with no effects on systemic erythropoietin or vascular endothelial growth factor observed. The most frequent adverse events experienced by patients on the GB004 arm were nausea and dysgeusia, all of which were mild in severity aside from one case of moderate nausea. All patients completed the study, except for a single patient on the GB004 arm who experienced a serious adverse event of worsening UC, which was deemed by the investigator to be unrelated to study drug.

o

PK / PD and Target Engagement: The gut-targeted pharmacokinetic (PK) profile of GB004 was shown with rapid clearance from systemic circulation and multi-fold higher concentrations of drug in the gut as compared to the plasma after eight hours of dosing. Preliminary data from gut biopsies showed increased expression of genes

associated with HIF-1α stabilization and enhanced epithelial barrier function, such as TJP1 and CLDN1, and evidence of reduced gut epithelial neutrophil activity in the GB004 arm compared to the placebo arm.

o

Clinical Activity: While this four-week study was not powered to show differences in clinical outcomes, several encouraging trends related to treatment with GB004 were observed at Day 28. Mucosal healing, defined as the achievement of both histologic remission and endoscopic improvement in the sigmoid or rectum, was observed in 4 of 23 patients (17%) in the GB004 arm compared to 0 of 11 patients in the placebo arm. Ten of 23 patients (43%) in the GB004 arm achieved histologic remission in either the sigmoid or rectum compared to 2 of 11 patients (18%) in the placebo arm. Favorable trends were also observed in clinical response (6/20 [30%] vs. 2/11 [18%]) and improvement in the rectal bleeding sub-score (13/21 [62%] vs. 5/11 [45%]). One patient in the GB004 arm achieved clinical remission; no patients in the placebo arm achieved clinical remission.

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Further data from the Phase 1b study will be presented at future medical conferences.

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Gossamer also recently completed a successful Phase 1 clinical study in healthy volunteers to support the selection of a tablet formulation to be used in future clinical studies of GB004. In the study, the tablet formulation showed improved tolerability compared to solution at higher doses.

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Subject to the developments in the ongoing COVID-19 viral pandemic, Gossamer plans to initiate a Phase 2 study of GB004 in UC with an oral tablet formulation of the product candidate in a 12-week induction setting in the second half of 2020.

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Gossamer gives its thanks to the patients and physicians that participated in its Phase 1b study of GB004. We are grateful for the opportunity to take this novel mechanism to patients in need.

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GB002 is currently being evaluated in an ongoing Phase 1b study in PAH. Given COVID-19 related delays in study enrollment, Gossamer now anticipates reporting initial results from this study in the second half of this year.

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Subject to the developments in the ongoing COVID-19 viral pandemic, Gossamer plans to commence a Phase 2 study in functional class II and III PAH patients in the second half of 2020. The primary endpoint for this 24-week study will be change in pulmonary vascular resistance (PVR) from baseline. A key secondary endpoint will be change from baseline in 6-minute walk distance at week 24.

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Enrollment continues in the KEYNOTE-A36 Phase 1/2 study to evaluate GB1275 as a monotherapy and in combination with either KEYTRUDA® (pembrolizumab) or chemotherapy in patients with selected solid tumors.

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The American Society for Clinical Oncology (ASCO) accepted an abstract for poster presentation (abstract 3085; poster 149) containing initial dose-escalation data from the KEYNOTE-A36 study, which will be presented in the Developmental Therapeutics—Immunotherapy Poster Session at the ASCO20 Virtual Scientific Program. Gossamer also expects to present further data from the study in the second half of the year.

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During the first quarter 2020, the European Medicines Agency granted orphan designation to GB1275 for the treatment of pancreatic cancer. GB1275 had previously received orphan drug designation from the U.S. Food and Drug Administration for the treatment of pancreatic cancer.

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On May 11, 2020, Gossamer paid Aerpio Pharmaceuticals, Inc. $15 million as part of an amendment to the GB004 license agreement. Under the amended terms, all development milestones have been obviated, total remaining milestones were reduced from $400 million to $90 million, and royalties on worldwide net sales now range from a low- to mid-single digit percentage. Gossamer continues to be responsible for the remaining development, regulatory, and commercialization expenses for GB004. Aerpio’s participation right on a disposition of GB004 remains.

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Chief Medical Officer Jakob Dupont, M.D. will depart Gossamer to pursue oncology opportunities closer to his family in the San Francisco Bay Area. He will serve as a consultant to Gossamer to support the development of GB1275 through a transitional period. Chief Executive Officer Sheila Gujrathi, M.D., together with Richard Aranda, M.D., Senior Vice President for Clinical Development, Caryn Peterson, Senior Vice President for Regulatory and Quality, Heather Smith, Senior Vice President for Clinical Operations, and Matt Cravets, Vice President for Biometrics will assume Dr. Dupont’s responsibilities.

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Gossamer will participate in the upcoming Bank of America Securities Virtual Healthcare Conference. Chief Executive Officer Dr. Sheila Gujrathi will present at the conference on Thursday, May 14, 2020, at 6:40 p.m. ET. A live webcast will be available on the “Events & Presentations” page within the Investors section of the Gossamer website and a replay will be available for 30 days following the event.

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Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents and marketable securities as of March 31, 2020, were $346.2 million. The Company expects the combination of current cash, cash equivalents and marketable securities, and access to our debt facility will be sufficient to fund its operating and capital expenditures to mid-2022.

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Research and Development (R&D) Expenses: For the quarter ended March 31, 2020, R&D expenses were $41.4 million, compared to R&D expenses of $25.0 million for the same period in 2019. This increase reflects a continued ramp-up of clinical expenses in connection with

the further advancement of the GB001, GB002, GB004 and GB1275 programs and increased expenses related to the development of proprietary pre-clinical programs.

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In-Process Research and Development (IPR&D) Expenses: For the quarter ended March 31, 2020, IPR&D expenses were $2.8 million, compared to $1.0 million for the same period in 2019.

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General and Administrative (G&A) Expenses: For the quarter ended March 31, 2020, G&A expenses were $10.7 million, compared to $8.0 million for the same period in 2019.

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Net Loss: Net loss for the quarter ended March 31, 2020, was $54.1 million, or $0.87 per share, compared to a net loss of $32.6 million, or $0.90 per share, for the same period in 2019.

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Histology: evaluated using the Robarts Histopathology Index, or RHI.

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Histologic remission: RHI ≤ 3 with lamina propria neutrophils sub-score = 0 and neutrophils in epithelium sub-score = 0, among patients with baseline RHI > 3 and baseline lamina propria neutrophils and neutrophils in epithelium sub-scores > 0.

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Endoscopic improvement: endoscopic sub-score of 0 or 1 if baseline endoscopic sub-score > 1, or 0 if baseline endoscopic sub-score = 1.

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Mucosal healing: achievement of both histologic remission and endoscopic improvement in the same segment.

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Clinical response: reduction in Mayo score of ≥ 3 points and ≥ 30% from baseline with an accompanying decrease in rectal bleeding sub-score of ≥ 1 point or absolute rectal bleeding sub-score of ≤ 1 point, among patients with baseline rectal bleeding sub-score ≥ 1 and baseline sigmoid endoscopy sub-score ≥ 1.

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Clinical remission: Mayo score ≤ 2, with no individual sub-score > 1, among patients with baseline sigmoid endoscopy sub-score ≥ 1.

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Improvement in rectal bleeding: reduction from baseline in rectal bleeding sub-score of ≥ 1, among patients with a baseline rectal bleeding sub-score ≥ 1.

Three months ended March 31,

STATEMENTS OF OPERATIONS DATA:

2020

2019

Operating expenses:

Research and development

$

41,414

$

24,983

In process research and development

2,805

1,000

General and administrative

10,748

8,034

Total operating expenses

54,967

34,017

Loss from operations

(54,967

)

(34,017

)

Other income, net

893

1,406

Net loss

$

(54,074

)

$

(32,611

)

Net loss per share, basic and diluted

$

(0.87

)

$

(0.90

)

Weighted average common shares outstanding, basic and diluted

61,890,323

36,317,230

BALANCE SHEET DATA:

March 31, 2020

December 31, 2019

Cash, cash equivalents, and marketable securities

$

346,165

$

401,829

Working capital

327,076

372,394

Total assets

371,478

426,604

Total liabilities

65,015

74,119

            Accumulated deficit

(388,244

)

(334,170

)

            Total stockholders' equity (deficit)

306,463

352,485