GOSS - Gossamer Bio downgraded to Equal Weight at Barclays after PAH readout

Clinical stage biotech Gossamer Bio ( NASDAQ: GOSS ) continued to trade lower in the premarket trading Wednesday as Barclays downgraded the stock to Equal Weight from Overweight in reaction to the company’s Phase 2 data for seralutinib, a candidate for pulmonary arterial hypertension (PAH).

The topline data from the TORREY trial sent Gossamer ( GOSS ) shares ~75% lower on Wednesday, and Piper Sandler attributed the selloff to lower-than-expected results for clinical measures, pulmonary vascular resistance ( PVR ) and six-minute walk distance (6MWD).

However, Barclays analysts led by Carter Gould argued that while PVR was statistically significant for the intent-to-treat population, it was modest and lacked clinical significance.

“In our view, this limited how de-risking these data will be viewed, particularly against the backdrop of uncertain funding for the full phase 3 program,” the team added, lowering the price target on the stock to $2 from $18 per share.

The analysts also see uncertainty to clinical impact given the potential shift in standard-of-care over the next 12 – 18 months with the introduction of rival PAH therapy sotatercept developed by Merck ( MRK ) unit Acceleron Pharma.

The analysts expect Gossamer ( GOSS ) shares to remain under pressure until there are significant events, including regulatory feedback on TORREY data (H12023) and communication on a potential seralutinib Phase 3 trial design.

Wall Street has remained bullish on Gossamer ( GOSS ) stock, with an average rating of Buy from analysts, while Seeking Alpha Authors and SA’s Quant System, which consistently beats the market, rated GOSS as a Hold.

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