GOSS - Wedbush expects positive phase 2 data readout from Gossamer Bio starts with outperform

Wedbush research on Monday initiated U.S. clinical-stage biotech Gossamer Bio ( NASDAQ: GOSS ) with an outperform rating, as it expects positive data from an ongoing mid-stage trial of the company's lead drug candidate.

San Diego, Calif-based GOSS is evaluating an inhibitor, called seralutinib, for the treatment of pulmonary arterial hypertension in a phase 2 trial known as TORREY, with a data readout anticipated in H2 of Nov. or H1 of Dec. The company also has a few other programs in development.

Wedbush analysts Andreas Argyrides and Liana Moussatos believe that the mid-stage trial has a high likelihood of success due to seralutinib's mechanism of action and positive results in both the preclinical and early-stage studies.

"We view Gossamer Bio as the opportunity to invest in a novel, potentially disease-modifying dry powder inhaler therapy for the treatment of pulmonary arterial hypertension," the analysts wrote in a research note.

Argyrides and Moussatos believe that seralutinib has the potential to capture 42% of the market in the U.S. in 2030 with projected sales of $2.5B, assuming that the drug is launched in 2026.

The analysts gave GOSS stock a price target of $24, implying a 77.5% upside to its last closing price.

However, shares of GOSS were 2% lower at $13.25 in morning trading.

Wedbush's outperform rating on the stock compares to a Wall Street average rating of strong buy. Seeking Alpha's Quant system, which consistently beats the market , rates it hold .

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