Gossamer Bio Files for IPO to Raise $264.5 Million for Immunology, Inflammation, and Oncology Drug Development

Recently, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that Gossamer Bio, a biotechnology startup led by former executives of Receptos, filed an application for an initial public offering (IPO) on the Nasdaq Stock Exchange last Friday (December 21). The company, trading under the ticker symbol GOSS, plans to raise $264.5 million through this IPO to advance the development of its therapeutics in immunology, inflammation, and oncology. However, this target may change before the company goes public.

Gossamer Bio is dedicated to discovering and developing novel and differentiated therapeutic products to address significant unmet medical needs across various target patient populations. Headquartered in San Diego, the company was founded in 2015, commenced operations in 2017, and reported a net loss of $7 million in that same year.

Gossamer Bio’s two founders, Dr. Faheem Hasnain and Dr. Sheila Gujrathi, both previously served at Receptos, a company focused on immune and metabolic diseases, where they held the positions of former CEO and former Chief Medical Officer, respectively, leading and advancing the company’s new drug development. In 2015, Celgene acquired Receptos for $7.2 billion in cash; following the acquisition, they left the company and jointly established Gossamer Bio.

In January 2018, Gossamer Bio made its debut in the capital markets, securing $100 million in Series A financing and causing a stir in the industry.

In July 2018, Gossamer Bio secured $230 million in Series B financing, with participation from existing investor Hillhouse Capital and new investors Arch Venture Partners, Omega Funds, Abu Dhabi Investment Authority, Invus, Baupost Group, and Polaris Partners.

According to documents filed by Gossamer Bio with the U.S. Securities and Exchange Commission (SEC), the company’s cumulative net loss for the first nine months of 2018, as of September 30, 2018, reached $108 million. The company now plans to seek additional funding from Wall Street through an initial public offering.

In its IPO filing, Gossamer Bio stated that it expects to “incur significant losses” for the “foreseeable future” as it works to bring its drugs to market. The company also indicated that it plans to use the proceeds from the initial public offering to fund the research and development of three clinical-stage drug candidates and to continue developing three preclinical programs.

According to reports, Gossamer Bio’s lead candidate is GB001, a drug for the treatment of eosinophilic asthma, a difficult-to-control chronic lung disease. According to data from the U.S. Centers for Disease Control and Prevention (CDC), one in every 13 people in the United States has asthma, and half of patients with severe asthma have the eosinophilic subtype.

Gossamer Bio stated that 409 individuals have received its investigational drug to date, with overall good tolerability. Phase 2 clinical trials of GB001 conducted in Japan demonstrated that the drug improved the time to asthma exacerbation compared with placebo.

In October this year, Gossamer Bio initiated the Phase 2b trial of GB001. The company stated that this candidate drug could also be used to treat other conditions, such as chronic rhinosinusitis with nasal polyps and chronic spontaneous urticaria. In 2019, Gossamer Bio planned to conduct Phase 2 clinical trials for proof-of-concept in these indications.

Gossamer Bio’s other candidate drug in development, GB002, is designed to treat pulmonary arterial hypertension, a progressive and fatal disease. Gossamer Bio stated that although treatments for this condition are currently available, its candidate drug could be the first to slow disease progression. The company plans to initiate Phase 1b trials in the first half of 2019 and Phase 2/3 trials in the second half of the year.

Gossamer Bio’s third drug candidate, GB004, is currently in Phase I clinical trials. This drug can be used to treat inflammatory bowel disease, ulcerative colitis, and Crohn's disease.

Meanwhile, the company is evaluating oral small-molecule drugs for oncology indications, targeted protein Bruton's tyrosine kinase drug combinations for autoimmune indications, and investigational small-molecule cancer therapeutics.

Hillhouse Capital is a private equity firm dedicated to long-term value investing, value discovery, and value creation. Founded in 2005, it is headquartered in Beijing, China.

Hillhouse Capital aims to create sustainable long-term growth and is committed to identifying the finest entrepreneurs and management teams globally, particularly in Asia, to jointly create value.

Hillhouse Capital’s investments span sectors such as TMT, healthcare, consumer goods, and enterprise services, while covering investment stages ranging from early-stage seed funding, venture capital, and private equity to public market investments and mergers and acquisitions.

Arch Venture Partners (ARCH) is a venture capital firm headquartered in Chicago, Illinois, USA. Founded in 1986, it primarily invests in companies co-founded by scientists and entrepreneurs, with a commitment to bringing innovations in life sciences, physical sciences, and information technology to market.

ARCH currently manages seven funds with total assets under management of nearly $1.5 billion, and has made early-stage venture capital investments in more than 120 companies.

Omega Funds is an investment firm grounded in global life sciences, founded in 2004 and headquartered in Boston, Massachusetts, USA.

Omega Funds primarily provides funding to companies that leverage novel therapies, devices, or platform technologies to address serious, unmet medical needs. Since its inception, the firm has raised over $700 million in capital.

Abu Dhabi Investment Authority (ADIA) is a public institution established by the Abu Dhabi government in 1976, and it is also an independent investment entity.

ADIA was established in 1976 and is headquartered in Abu Dhabi, United Arab Emirates. Since 1976, ADIA has been prudently investing on behalf of the Government of Abu Dhabi, with decisions driven solely by its economic objective of delivering sustained long-term financial returns.

Currently, ADIA manages a diversified global portfolio spanning more than twenty asset classes and sub-classes.

Invus, established in 1985, is a venture capital firm headquartered in New York, USA, with offices in New York, London, Paris, and Hong Kong.

Since its inception, the company’s funding has been provided by a European family group through the Artal investment vehicle. Within Evergreen Funds, Invus manages over $8 billion in assets.

Baupost Group is a hedge fund founded by Seth Klarman in 1982, who continues to manage the fund.

Baupost Group is headquartered in Boston, Massachusetts, United States.

Polaris Partners is a venture capital firm headquartered in Boston, Massachusetts, with an office in San Francisco. It was co-founded in 1996 by Jon Flint, Steve Arnold, and Terrance McGuire.

Polaris Partners, valued at billions of dollars, has made investments across various stages of corporate development, including startup formation and profitable growth, with a primary focus on the healthcare and technology sectors.