Gossamer Bio (NASDAQ: GOSS) - a young biotech company from California. The business was founded in 2015 and went public in 2019 through a nasdaq offering. The company focuses on the development of drugs in the field of immunology, oncology and therapy of inflammatory processes.
Where does the money come from
Gossamer Bio conducts research, develops medical products and prepares for commercialization in the US market. The company's main products are in the clinical stages of development, which must be passed by any new drugs in America before directly applying for registration with the Food and Drug Administration (FDA).
Portfolio of drugs under development
The company is currently working on several products.:
- GB002, or seralutinib, for use in pulmonary arterial hypertension;
- GB004 for use in patients with ulcerative colitis;
- GB5121 for use in cancer-care facilities with primary CNS lymphoma.
Also in development at an early stage is the drug GB7208 for use in multiple sclerosis.
What's wrong
The company does not have a single registered drug. So far, the company's essential drugs are at best in the second stage of clinical trials or even in the earlier stages of development.. All the ups and downs of quotations are mainly due to the intermediate results of these tests..
With all the ambition, the issuer lacks the reinforcement of its abstract prospects with a real drug., which is approved, successfully sold and brings money. So far, Gossamer Bio shares are more attractive for short-term speculation, than to invest in them.
The ratio of liabilities to equity has been growing for the third year in a row. The financial leverage ratio shows, that the company is borrowing more and more funds. And although the current value in 0,96 item is quite normal, stable growth of the indicator is slightly alarming.
The company is overvalued. This thesis is best supported by the p multiplier. / BV, which reflects the ratio of the company's market capitalization to its book value and is one of the pillars of value investing. If the investor adheres to the precepts of Benjamin Graham and David Dodd, it is unlikely that Gossamer Bio shares at the moment will seem to him a good acquisition.: for every dollar of equity, the company will have to pay more than four.
What good
Novelties on the market. 11 October the company announced work on two new drugs: GB5121 and GB7208 are being investigated for use in CNS-related oncology. The start of clinical trials for the first drug is scheduled for the fourth quarter 2021, for the second half of the year 2022. Replenishment of the public portfolio of developed drugs has a positive effect on the future of Gossamer Bio, and its short-term prospects: according to Finviz, shares of the issuer on the day of the news release added 6,5%.
Institutional investors hold more 63% Shares. Funds and large investment houses are present in the share capital of the company in large numbers, which in turn serves as an indirect reassurance to smaller players – among the most notable names here are the pillars of The Vanguard Group and BlackRock..
Government invests in healthcare. The fact sheet on the budget plan of the President of the United States for 2022 laid $ 6.5 billion for the creation of an agency for advanced research in the field of health care (ARPA-H) with a focus on cancer problems, diabetes and Alzheimer's disease.
The document establishes the goal of the organization to "accelerate the approval and commissioning of breakthrough innovative developments", which may well play into the hands of the target projects of some pharmaceutical companies - such as, as GB5121 Gossamer Bio for lymphoma therapy.
What's the bottom line?
Gossamer Bio is a representative of the biotechnology sector. Great prospects, lack of revenue, significant debt and future, all the positive or negative of which is based on the decisions of the American FDA.
So far, the company is unlikely to be of interest to a wide range of retail investors., but on the horizon of five years, it can safely bring its drugs to the US market and back up corporate ambitions with real commercial success..
