Shares of Gossamer Bio (NASDAQ:GOSS) were crashing 37.7% lower as of 11:31 a.m. EST on Monday. The big sell-off came after Novartis (NYSE:NVS) announced it was discontinuing development of fevipiprant as a potential treatment for asthma after disappointing results in late-stage clinical studies. Both fevipiprant and Gossamer's lead candidate, GB001, use the same mechanism of action by inhibiting DP2 pathways.
The setback for fevipiprant wasn't unexpected. Novartis reported in October that the drug failed to meet the primary endpoint in two late-stage clinical studies. That news caused Gossamer's share price to swing wildly, with pessimism giving way to optimism that GB001 might be successful despite fevipiprant's setback. Novartis' latest update appears to have zapped all of that optimism.
Biotech stocks are often volatile, with clinical-stage biotechs like Gossamer especially prone to huge swings. Making today's news worse is that Novartis' failure with fevipiprant isn't the only canary in the coal mine for Gossamer's GB001. Other DP2 inhibitors have also proved unsuccessful in treating asthma, including another Novartis drug, QAV680, Amgen's vidupiprant, Array Biopharma's ARRY-502, and AstraZeneca's AZD1981.
Gossamer will report interim results from a phase 2 study evaluating GB001 in treating asthma in the first half of 2020, with top-line results expected in the second half of next year. The company also should report results from another phase 2 study of the drug in treating chronic rhinosinusitis in the second half of 2020. The news from Novartis doesn't provide much reason to be hopeful about how GB001 will fare. The good news for Gossamer is that it has other pipeline candidates to turn to if GB001 isn't successful.