Federal Securities Class Action Lawsuit Filed Against Gossamer Bio, Inc. – GOSS Investors Who Suffered Losses Encouraged to Contact Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is making Gossamer Bio, Inc. (“Gossamer” or the “Company”) (NASDAQ: GOSS) investors aware that on April 3, 2020, a class action lawsuit was filed in United States District Court, Southern District of California, against Gossamer on behalf of all investors who purchased, or otherwise acquired, Gossamer common stock between February 8, 2019 and December 13, 2020, both dates inclusive (the “Class Period”), and/or who acquired Gossamer shares pursuant or traceable to Gossamer’s Registration Statement and Prospectus in connection with its February 8, 2019 Initial Public Offering (“IPO”), seeking to recover damages caused by the Gossamer Defendants’ alleged violations of the federal securities laws and to pursue remedies under §§11, 12(a)(2), and 15 of the Securities Act of 1933 and under §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5.
According to the class action complaint:
Gossamer is a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing, and commercializing therapeutics in the disease areas of immunology, inflammation, and oncology. The Company’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’s GB001 product is in Phase 2 development for asthma and rhinosinusitis.
In the IPO, Gossamer and the underwriters sold 19,837,500 shares of common stock at an initial public offering price of $16.00 per share, for a total offering price of $317.4 million. Proceeds to the Company, net of underwriting discounts and commissions, were $256.68 million. Defendants in this action consist of Gossamer, Gossamer executives and directors who signed the Registration Statement, and the underwriters to the IPO (collectively, ‘Defendants’).
In violation of the 1933 Act, Defendants [allegedly] issued untrue statements of material facts and omitted to state material facts required to be stated from the Registration Statement and accompanying and incorporated offering materials that Gossamer filed with the SEC in support of the IPO. Specifically, 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. [Emphasis added.]
Additionally, the complaint alleges that
[i]n the materials accompanying the IPO and throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and compliance policies. Specifically, Defendants misrepresented and/or failed to disclose to investors: (1) the reasons for Gossamer’s GB001 trial failures; (2) the purported clinical validation of Novartis’ oral DP2 antagonist; and (3) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.
In October 2019, Novartis announced that its fevipiprant product had failed to improve long function in two Phase 3 trials, as measured by FEV1, over placebo.
On December 16, 2019, Novartis announced that it was terminating the development of its DP2 antagonist fevipiprant for asthma after it failed another pair of Phase 3 clinical trials.
Analysts noted that ‘[w]hen Gossamer 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 stock plummeted from a December 13, 2019 closing price of $25.37 per share to $15.96 per share, a one day drop of $9.41 or over 37%. [Emphasis in original and added.]
Gossamer investors who purchased, or otherwise acquired, GOSS securities during the Class Period and/or pursuant or traceable to Gossamer’s Registration Statement and Prospectus in connection with its February 8, 2019 IPO and suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to discuss the class action lawsuit or potential legal claims.