Why Is Gossamer Bio (GOSS) Stock Down Over 70% Today?
Gossamer Bio (NASDAQ:GOSS) is one of the top-trending tickers on social media today, and its shares are plunging more than 70%. The company announced that a trial of its drug for hypertension, seralutinib, had met the primary goal in a Phase 2 trial. However, analysts were skeptical about the drug’s effectiveness in comparison with the efficacy of a competing treatment that also recently underwent Phase 2 trials.
The Results of Seralutinib’s Trial
Among 44 patients with pulmonary arterial hypertension (PAH) who received seralutinib, the pulmonary vascular resistance was 14.3% less than those who received a placebo, Gossamer reported. And in a six-minute walking test, viewed as “the main clinical outcome in PAH,” those who received the drug walked an average of 6.5 meters more than the patients who were given a placebo, Gossamer added.
In a statement provided by the company, Dr. Raymond Benza, a Professor of Medicine in the Cardiovascular Division at the Ohio State University said, “the strong concordance of the results generated in the TORREY study, particularly the impact seen on cardiac measures of disease progression, suggest that seralutinib could be an important future therapy for patients with PAH.”
GOSS Stock and Analysts’ Reaction
In a note to investors, SVB Securities’ Joseph Schwartz wrote that Gossamer’s drug had failed to post better numbers than Merck’s (NYSE:MRK) sotatercept drug in the latter treatment’s own Phase 2 trial.
According to Schwartz, Merck’s treatment performed better than Gossamer’s drug when it came to both of the primary data points, and the analyst added that he had expected seralutinib to reduce pulmonary vascular resistance by 20%-30%. As I noted earlier, the pulmonary vascular resistance of the PAH patients who were given Gossamer’s drug was “14.3% less than those who received a placebo.”
Seralutinib’s underperformance has GOSS stock underperforming as well this morning.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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