Gossamer Bio, Inc. Class Action Lawsuit
- Company Name
- Gossamer Bio, Inc.
- Stock Symbol
- Class Period
- Purchasers of Gossamer common stock between February 8, 2019 and December 13, 2019, including those who acquired Gossamer stock pursuant or traceable to the Company’s February 8, 2019 initial public offering
- Southern District of California
The Gossamer Bio, Inc. securities class action lawsuit charges Gossamer Bio, certain of its officers and directors, and the underwriters of its February 8, 2019 initial public offering (“IPO”) and seeks to represent purchasers of Gossamer Bio common stock between February 8, 2019 and December 13, 2019 (the “Class Period”) and/or those who acquired Gossamer Bio stock pursuant or traceable to Gossamer Bio’s IPO. The Gossamer Bio securities class action lawsuit was commenced on April 3, 2020 in the Southern District of California and is captioned Kuhne v. Gossamer Bio, Inc., No. 20-cv-00649.
Gossamer Bio is a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing, and commercializing therapeutics in the areas of immunology, inflammation, and oncology. Gossamer Bio’s lead drug, GB001, is an oral antagonist of prostaglandin D2 receptor 2, or DP2, in development for the treatment of moderate-to-severe eosinophilic asthma and other allergic conditions. Gossamer Bio’s GB001 product is in Phase 2 development for asthma and rhinosinusitis.
On or about December 21, 2018, Gossamer Bio filed with the U.S. Securities and Exchange Commission (“SEC”) a Form S-1 Registration Statement in connection with the IPO, which, after several amendments, was declared effective on February 7, 2019. On or about February 8, 2019, Gossamer Bio filed the final version of the Prospectus for the IPO with the SEC, which forms part of the Registration Statement (collectively, the “Offering Documents”). The Prospectus solicited investors for an offering of 17.25 million shares of Gossamer Bio common stock at $16.00 per share for proceeds to Gossamer Bio of more than $256 million.
The Gossamer Bio securities class action alleges that in the Offering Materials for the IPO, defendants misrepresented, inter alia, that: (1) a separate, 248-patient Phase 2 trial showed that neither GB001 nor asthma treatment montelukast had met the primary endpoint for improvement in asthma symptoms because of “study design and execution issues related to patient selection, including adherence”; and (2) that Novartis, who had a product that would compete against GB001 in the works, had a successful Phase 2 trial that had clinically validated DP2 antagonism.
In addition, the complaint alleges that over the next several months, defendants continued to publicly state that “DP2 antagonism has been clinically validated by Novartis’ oral DP2 antagonist, fevipiprant,” and that its earlier GB001 trial failure was “primarily related to study design and execution issues related to patient selection.” Based on these misrepresentations, Gossamer Bio stock traded at artificially inflated prices during the Class Period, reaching a high of $27.15 per share.
Then on December 16, 2019, Novartis announced that it was terminating the development of its DP2 antagonist for asthma after it failed a pair of Phase 3 clinical trials. Analysts noted that “[w]hen Gossamer Bio raised $276 million in an IPO earlier in , it said Novartis’ fevipiprant phase 2 had clinically validated DP2 antagonism. That statement now looks premature, particularly when viewed in light of the failures of other DP2 drugs.” On this news, the price of Gossamer Bio stock fell from a December 13, 2019 closing price of $25.37 per share to $15.96 per share, a one-day drop of $9.41 per share, or more than 37%. The stock’s price has continued to decline and at the time the complaint was filed was trading at around $10.00 per share, or 37.5% below the IPO price.
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