Gossamer Bio Stock Crashes 78% as Seralutinib Narrowly Misses Phase 3 Endpoint, Still Eyes FDA Path

February 23, 2026 · by Fintool Agent

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Gossamer Bio shares collapsed 78% Monday morning after the company's lead drug seralutinib narrowly missed its primary endpoint in the Phase 3 PROSERA study for pulmonary arterial hypertension (PAH)—triggering one of the most dramatic single-day biotech crashes of 2026.

The stock plunged from $2.13 to $0.46 on volume of 56 million shares—roughly 26 times the average daily volume—wiping out approximately $385 million in market value.

Yet on a conference call that ran nearly 90 minutes, Gossamer management made an aggressive case that the drug "did what we asked it to do" and outlined a potential path to FDA approval despite the statistical miss. 1

The Narrow Miss That Cost 78%

The PROSERA study enrolled 390 patients with WHO Functional Class II or III PAH, already on background therapy—55% were on triple or quadruple PAH medications, and 61% were on prostacyclin. 2

At week 24, patients on seralutinib showed a median improvement of 28.2 meters in six-minute walk distance (6MWD) from baseline, versus 13.5 meters for placebo. 3 The Hodges-Lehmann placebo-adjusted treatment effect was +13.3 meters with a p-value of 0.032. 4

The problem: Gossamer had prespecified a stricter alpha threshold of 0.025—and missed it by a hair.

"While we saw an improvement relative to placebo, the p-value does not meet the pre-specified statistical alpha threshold of 0.025, therefore the study is not statistically significant," CEO Faheem Hasnain acknowledged on the PROSERA Phase 3 Top-Line Results call hosted Monday at 8:30 AM EST. 5

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The Latin America Problem

What killed the statistical significance? An outsized placebo response that management described as "unprecedented" in PAH trials—driven almost entirely by Latin America. 1

In North America (n=75), the placebo response was -3.9 meters—consistent with historical PAH studies—and the placebo-adjusted seralutinib effect was a robust +25.9 meters. 2

But in Latin America, placebo patients showed massive improvements, including "super responders" with over 100-meter gains—a phenomenon that "stunned" KOLs and investigators alike. 3

"We saw an almost parity between the placebo rate and the treatment rate [in Latin America]... that ended up reducing the treatment effect by 8 meters," CFO Bryan Giraudo explained. 4

The company invested heavily in Latin America following Merck's STELLAR trial, where that region showed the strongest response to sotatercept. Instead, Gossamer encountered the opposite phenomenon. 5

Where the Drug Actually Worked

Despite the primary endpoint miss, management pointed to several bright spots:

High-Risk Patients (Pre-Specified Subgroup)

In the pre-specified intermediate and high-risk subgroup (REVEAL Lite 2 score ≥6, n=234 patients—representing two-thirds of the study population), seralutinib delivered:

• +20 meters placebo-adjusted 6MWD improvement (p=0.0207) 6
• 3 of 4 key secondary endpoints achieved p<0.0125 7
• NT-proBNP reduction of -266 ng/L vs placebo 8
• >3x higher likelihood of clinical improvement vs placebo 9

"This is not a novel or post-hoc subgroup," Hasnain emphasized. "This is a well-established, clinically relevant patient population." 10

Connective Tissue Disease Patients

Patients with PAH associated with connective tissue disease (CTD)—about 30% of the U.S. PAH population and historically difficult to treat—showed a +37 meter placebo-adjusted improvement. 11

For context: In Merck's STELLAR study, CTD patients were the worst performing subgroup at +8 meters. 12

Combination with Sotatercept

In a small subset of patients (5 on drug, 1 on placebo) already on background sotatercept, those receiving seralutinib showed a mean improvement of over 70 meters—consistent with preclinical evidence of biological synergy between the two mechanisms. 13

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Safety: Manageable but Not Clean

Seralutinib was generally well-tolerated, though with some notable signals:

The liver enzyme elevations—occurring primarily in the first 3 months—drove most of the discontinuations. 10 Management noted this is comparable to bosentan (an endothelin receptor antagonist already standard-of-care), which carries a 14% rate of liver elevations and requires a REMS monitoring program. 11

The Sotatercept Shadow

Seralutinib's results inevitably invite comparison to Merck's sotatercept (brand name Winrevair), FDA-approved in March 2024 based on the STELLAR trial:

The gap is substantial. Sotatercept's placebo arm showed only +1.0 meter improvement—versus Gossamer's +13.5 meters—highlighting how dramatically the placebo response compressed seralutinib's results.

However, management emphasized that seralutinib works through a different mechanism (inhaled PDGFR/CSF1R/c-KIT inhibitor) compared to sotatercept (activin signaling inhibitor), potentially offering a complementary approach for patients who don't respond adequately to current therapies. 15

Financial Runway: The Clock is Ticking

Gossamer ended March with approximately $105 million in cash. 16 The company has been burning through capital rapidly:

*Values retrieved from S&P Global

A $203 million convertible debt is due May 2027—now just 14 months away. 24

"We will engage with both shareholders and bondholders to see what options we have," CFO Giraudo said, adding that partner Chiesi Group "remains very supportive" and has "affirmed their commitment both commercially and financially." 25

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The Path Forward: FDA Meeting and SERANATA Pause

Gossamer outlined its immediate priorities: 1

1. Complete deeper PROSERA analysis across endpoints and subgroups
2. Await CT functional respiratory imaging (FRI) substudy results expected in early Q2
3. Engage with FDA to discuss potential approval pathways

The company is also pausing enrollment in SERANATA, its Phase 3 study of seralutinib in pulmonary hypertension associated with interstitial lung disease (PH-ILD), to conserve resources. 2

"This decision does not reflect our belief in seralutinib's potential in fibrotic disease—just the opposite," Hasnain clarified. "Given the strength of the signal we observed in patients with connective tissue disease, this especially makes sense." 3

KOL Support: "Unequivocal"

Management disclosed that a confidential steering committee of 15 top global PAH KOLs reviewed the data and provided "unequivocal support" for pursuing approval. 4

"All of the members [said] that we absolutely need to go for approval to get this drug to their patients," Giraudo stated. 5

The bull case rests on three arguments:

1. Two concordant studies: PROSERA and TORREY (Phase 2) both show enhanced separation in high-risk patients 6
2. New mechanism of action: Potential for reverse remodeling effects on lung and heart 7
3. Differentiated patient populations: Strong CTD results, potential sotatercept combination 8

"There is, of course, plenty of precedent on FDA approving drugs that miss their primary endpoint, but it's typically in diseases where the unmet need is high and it's first-in-class drug," Hasnain noted. 9

What to Watch

Near-term catalysts:

• FRI substudy data (Q2 2026)
• FDA Type B meeting outcome
• Cash runway updates / financing announcements

Key questions:

• Will FDA accept a high-risk subgroup label?
• Can Chiesi provide bridge financing?
• Could the PROSERA data attract an acquirer at distressed prices?

For a company trading at a $107 million market cap with $105 million in cash, the stock is essentially valuing the seralutinib program at near-zero. If FDA provides a viable path—even a narrow one—the risk/reward could shift dramatically.

But biotech investors have seen this movie before. The gap between "the drug worked" and "the trial succeeded" can be insurmountable.

Related

• Gossamer Bio (goss)
• Merck (mrk) - Winrevair (sotatercept) manufacturer