Barclays Downgrades Gossamer Bio Inc. (GOSS) to Underweight

Barclays analyst Eliana Merle downgraded Gossamer Bio Inc. (NASDAQ: GOSS) from Overweight to Underweight with a price target of $0.30 (from $9.00).

The analyst comments: "We downgrade GOSS from Overweight to Underweight and adjust our PT from $9/sh to $0.30/sh after Ph3 data from the PROSERA trial in PAH reported the morning of 2/23. We think this is an unfortunate situation highlighting the challenges of drug development, even with an active drug that could be meaningful for patients, but from a stock perspective we see challenges with a debt balance higher than current cash (outstanding ~$200m in June 2027 convertible notes vs ~$105m expected cash ending 1Q) & a potential FDA decision on approval ~18 months away.
We think with a missed primary endpoint & many approved drugs for PAH, it is hard to get visibility on an FDA approval at this point. If we see FDA approval of seralutinib down the line this would be significant upside to our estimates, but with an FDA meeting expected mid year (mgmt expects in June), we wouldn't anticipate a potential FDA decision on approval until 2H27. However, for the next 12 months ahead of definitive clarity on the approvability of seralutinib we think the situation is challenging from a stock perspective given the debt balance."

For an analyst ratings summary and ratings history on Gossamer Bio Inc. click here. For more ratings news on Gossamer Bio Inc. click here.

Shares of Gossamer Bio Inc. closed at $0.42 yesterday.

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