Regulus Therapeutics Reports Third Quarter 2019 Financial Results and Recent Updates

On November 12, 2019 Regulus Therapeutics Inc. (Nasdaq: RGLS), a biopharmaceutical company focused on the discovery and development of innovative medicines targeting microRNAs (the "Company" or "Regulus"), reported financial results for the third quarter ended September 30, 2019 and provided a summary of recent events (Press release, Regulus, NOV 12, 2019, View Source [SID1234550978]).

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"We recently received the final reports from the chronic toxicity studies in mice and non-human primates and are preparing our submission of our complete response to Food and Drug Administration ("FDA") in our efforts to address the requirements to reinitiate the Multiple Ascending Dose ("MAD") clinical study for RGLS4326," said Jay Hagan, CEO of Regulus. "We look forward to FDA’s feedback and continued productive dialogue."

Third Quarter 2019 Corporate Highlights and Recent Updates

Management Transition to New Chief Financial Officer: In July 2019, the Company appointed Cris Calsada as its new Chief Financial Officer, effective August 30, 2019. Ms. Calsada’s appointment follows the resignation of the Company’s previous Chief Financial Officer, Dan Chevallard, in July 2019.

New Lease Agreement Significantly Reduces Contractual Lease Obligations: In June 2019, the Company entered into an amendment of its lease (the "Lease Amendment") of 24,562 square feet located at 10628 Science Center Drive Suite 100, San Diego, California 92121. Under the terms of the Lease Amendment, the expiration of the lease was accelerated from June 30, 2023 to June 30, 2019, and the lease terminated on July 1, 2019. Concurrently with the Lease Amendment, the Company entered into a new lease agreement for 8,727 square feet located at 10628 Science Center Drive, Suite 225, San Diego, California, 92121, which it uses as its new principal offices and laboratory for research and development. This relocation reduced the Company’s facility size by approximately 65% and reduced its future contractual lease obligations by approximately 78%.

Program Updates

RGLS4326 for Autosomal Dominant Polycystic Kidney Disease ("ADPKD"): RGLS4326, a novel oligonucleotide designed to inhibit miR-17, is in Phase 1 clinical development for the treatment of ADPKD and currently on a partial clinical hold. In January 2019, the Company submitted a comprehensive data package for RGLS4326 to FDA that included the results from the planned 13-week interim analysis of the repeat mouse chronic toxicity study, as well as results from additional investigations, analytical testing, additional data from the previously terminated mouse chronic toxicity study, data from the completed Phase I single ascending dose ("SAD") study and data from the first cohort of the Phase I MAD study, to support its plan to resume the Phase I MAD study. After review of the requested submission,


FDA notified the Company in July 2019 of additional nonclinical data requirements and placed the IND on a partial clinical hold, formalizing the specific requirements to initiate the MAD study and further proceed into chronic dosing in ADPKD patients. The additional data requirements have been outlined in two parts. In order to resume the MAD study, FDA has requested the final reports from the chronic toxicity studies in both mice and non-human primates and satisfactory related analyses to ensure subjects can be safely dosed. Additional information and analyses from new nonclinical studies, planned to be generated over the next several quarters, are required for chronic dosing and will be submitted at a later date. The Company recently received the final reports from the chronic toxicity studies in mice and non-human primates and is preparing to submit a complete response to the partial clinical hold in order to be able to resume the MAD study, pending agreement with FDA. Regulus anticipates a response from FDA before the end of the year. Regulus is allowed to proceed with additional SAD clinical studies as part of the process to gather additional supporting information to guide the future development of the program.

In September 2019, the Company announced that Nature Communications published an article entitled, "Discovery and preclinical evaluation of anti-miR-17 for the treatment of polycystic kidney disease." The article highlights preclinical research that identifies RGLS4326, a first-in-class anti-miR-17 oligonucleotide, as a potential disease-modifying treatment for ADPKD. In addition, a poster highlighting this work was presented at the Oligonucleotide Therapeutics Society (OTS) Annual Meeting held October 13-16, 2019 in Munich, Germany.

Third Quarter 2019 Financial Results

Cash Position: As of September 30, 2019, Regulus had $14.6 million in cash and cash equivalents.

Revenue: Revenue was less than $0.1 million and $6.8 million for the three and nine months ended September 30, 2019, respectively, compared to less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2018. The increase for the nine months ended September 30, 2019 was attributable to revenue recognition of the upfront payments received under the 2018 Sanofi Amendment related to the transfer of RG-012.

Research and Development (R&D) Expenses: R&D expenses were $2.4 million and $10.3 million for the three and nine months ended September 30, 2019, compared to $6.9 million and $28.7 million for the same periods in 2018. The decreases were driven by decreases in external development expenses, primarily attributable to the voluntary pause of the RGLS4326 Phase 1 MAD clinical study in the third quarter of 2018 and commencement of the transfer of the RG-012 program to Sanofi in the fourth quarter of 2018. Additionally, the decreases were driven by reductions in personnel and internal expenses, primarily attributable to a reduction in costs subsequent to our corporate restructuring in the third quarter of 2018.

General and Administrative (G&A) Expenses: G&A expenses were $2.6 million and $9.0 million for the three and nine months ended September 30, 2019, compared to $3.0 million and $10.1 million for the same periods in 2018. These amounts reflect personnel-related and ongoing general business operating costs. The decreases were driven by a reduction in costs subsequent to our corporate restructuring in the third quarter of 2018.

Net Loss: Net loss was $5.4 million, or $0.26 per share (basic and diluted), and $13.7 million, or $0.86 per share (basic and diluted), for the three and nine months ended September 30, 2019, respectively, compared to $10.3 million, or $1.18 per share (basic and diluted), and $40.1 million, or $4.62 per share (basic and diluted), for the same periods in 2018. Historical and current period net loss per share values have been retroactively adjusted to reflect our October 2018 reverse stock split.

About Autosomal Dominant Polycystic Kidney Disease (ADPKD)

ADPKD, caused by the mutations in the PKD1 or PKD2 genes, is among the most common human monogenic disorders and a leading cause of end-stage renal disease. The disease is characterized by the development of multiple fluid filled cysts primarily in the kidneys, and to a lesser extent in the liver and other organs. Excessive kidney cyst cell proliferation, a central pathological feature, ultimately leads to end-stage renal disease in approximately 50% of ADPKD patients by age 60.

About RGLS4326

RGLS4326 is a novel oligonucleotide designed to inhibit miR-17 and designed to preferentially target the kidney. Preclinical studies with RGLS4326 have demonstrated direct regulation of PKD1 and PKD2 in human ADPKD cyst cells, a reduction in kidney cyst formation, improved kidney weight/body weight ratio, decreased cyst cell proliferation, and preserved kidney function in mouse models of ADPKD. The RGLS4326 IND is currently on a partial clinical hold by the U.S. Food and Drug Administration.

Halozyme Therapeutics, Inc. Announces Proposed Offering of $400 Million of Convertible Senior Notes due 2024

On November 12, 2019 Halozyme Therapeutics, Inc. (NASDAQ: HALO) (the "Company"), a biotechnology company focused on novel biological and drug delivery approaches, reported that it intends to offer, subject to market conditions and other factors, $400 million aggregate principal amount of convertible senior notes due 2024 (the "Convertible Notes") (Press release, Halozyme, NOV 12, 2019, View Source [SID1234550977]). The Convertible Notes are to be offered and sold to "qualified institutional buyers" pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Company also expects to grant a 30-day option to the initial purchasers to purchase up to an additional $60 million aggregate principal amount of Convertible Notes.

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The Convertible Notes will be senior, unsecured obligations of the Company and will accrue interest payable semiannually in arrears. The Convertible Notes will mature on December 1, 2024, unless earlier redeemed, repurchased or converted in accordance with their terms. Prior to June 1, 2024, the Convertible Notes will be convertible only upon the satisfaction of certain conditions and during certain periods, and on and after June 1, 2024, at any time prior to the close of business on the scheduled trading day immediately preceding the maturity date, the Convertible Notes will be convertible regardless of these conditions. The Convertible Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The initial conversion rate, interest rate and other terms of the Convertible Notes will be determined at the time of pricing in negotiations with the initial purchasers of the Convertible Notes.

The Company plans to use up to $200 million of the net proceeds from the offering to repurchase shares of the Company’s common stock concurrently with, or shortly after, the pricing of the offering in privately negotiated transactions or otherwise, which may be effected through one or more of the initial purchasers or an affiliate thereof. Such repurchases could increase (or reduce the size of any decrease in) the market price of our common stock prior to, concurrently with or shortly after the pricing of the notes, and could result in a higher effective conversion price for the notes.

The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, including share repurchases subsequent to the offering, working capital and retirement of existing debt obligations under the Company’s loan agreement with Oxford Finance and Silicon Valley Bank. If the initial purchasers exercise their option to purchase additional notes, the Company intends to use net proceeds from the sale of additional notes for general corporate purposes.

This press release is neither an offer to sell nor a solicitation of an offer to buy the Convertible Notes or the shares of the Company’s common stock issuable upon conversion of the Convertible Notes, if any, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offer of these securities will be made only by means of a private offering memorandum.

The offer and sale of the Convertible Notes and the shares of the Company’s common stock issuable upon conversion of the Convertible Notes, if any, have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Alector Reports Recent Business Highlights and Third Quarter 2019 Financial Results

On November 12, 2019 Alector, Inc. (Nasdaq: ALEC), a clinical stage biotechnology company pioneering immuno-neurology, reported Company highlights and financial results for the third quarter of 2019 (Press release, Alector, NOV 12, 2019, View Source [SID1234550976]).

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"We continue to integrate insight from human genetics, immunology, and neuroscience to advance our portfolio of novel therapeutics. AL001 has advanced to a Phase 2 trial in two genetically defined patient populations suffering from frontotemporal dementia. In addition, AL002 and AL003 are currently being evaluated in Phase 1b clinical trials in Alzheimer’s disease patients," said Arnon Rosenthal, Ph.D., Alector’s chief executive officer. "We are looking forward to our first presentation of data from the AL002 program taking place at the CTAD annual meeting and an update on our clinical and development pipelines at our R&D Day in December."

Recent Business Highlights

Initiated the AL001 Phase 2 clinical study and dosed multiple frontotemporal dementia patients – In September 2019, Alector dosed the first frontotemporal dementia patient with a progranulin mutation (FTD-GRN) in its Phase 2 clinical study of AL001 followed by the enrollment of the first frontotemporal dementia patient with a C9orf72 mutation (FTD-C9orf72) in October 2019. This Phase 2 study will assess the longitudinal safety, tolerability, pharmacokinetics and pharmacodynamics of AL001, as well as its effects on biomarkers of neurodegeneration and on cognition. The study will continue to enroll FTD-GRN patients and a cohort of FTD-C9orf72 patients.

Initiated screening of Alzheimer’s disease patients for the AL003 Phase 1b clinical study – In November 2019, Alector initiated screening of Alzheimer’s disease patients that carry one or two copies of the SIGLEC 3 risk allele (~80% of the AD population) for the Phase 1b clinical study of AL003. AL003 is one of two clinical program candidates Alector is developing for the treatment of Alzheimer’s disease. AL003 is a monoclonal antibody that that blocks the function of SIGLEC 3, an inhibitory receptor on microglia.

The Phase 1b study will assess the safety and tolerability of multiple doses and importantly, also measure target engagement and target-specific biomarker changes related to AL003.

Alector to present data from AL002 program in an oral presentation at the Clinical Trials on Alzheimer’s Disease (CTAD) conference – On December 6, 2019, Alector will give an oral presentation on AL002 Phase 1 progress at the CTAD conference being held in San Diego. AL002 is being developed by Alector for the treatment of Alzheimer’s disease. AL002 is a monoclonal antibody that enhances the activity of TREM2.

Alector to host its first annual R&D Day in New York City – On December 13, 2019, Alector will host an R&D Day presentation for analysts and investors. The R&D Day will include presentations by Alector management about the Company’s clinical and development pipeline and key opinion leaders focusing on the human genetics of neurodegeneration. A live webcast and replay of the event will be made available.

Third Quarter 2019 Financial Results

Revenue. Collaboration revenue for the third quarter of 2019 was $2.7 million compared to $6.5 million for the same period in 2018. Alector recognizes revenue from the upfront payments under the AbbVie Agreement over time as the services are provided. Revenues are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. Changes in estimates for revenue recognized over time are recognized on a cumulative basis.

R&D Expenses. Total research and development expenses for the third quarter of 2019 were $28.5 million compared to $20.4 million for the same period in 2018. The increase was driven by higher personnel-related expenses as headcount grew to support the advancement of the clinical and preclinical programs, increased expenditures related to the clinical trials, increased laboratory expenses for the development of our pipeline, and increased facilities and other unallocated research and development expenses to support the growth of the business.

G&A Expenses. Total general and administrative expenses for the third quarter of 2019 were $8.3 million compared to $2.9 million for the same period in 2018. This increase was primarily due to higher personnel-related expenses, increased facilities and general overhead expenses, and increased expenses related to information technology, accounting, legal, human resources, and other administrative functions to support the growth of the business.

Net Loss. For the third quarter of 2019, Alector reported a net loss of $31.7 million, compared to a net loss of $15.3 million for the same period in 2018.

Cash Position. Cash, cash equivalents, and marketable securities were $381.4 million as of September 30, 2019.

Equillium Reports Third Quarter 2019 Financial Results and Recent Highlights

On November 12, 2019 Equillium, Inc. (Nasdaq: EQ), a biotechnology company leveraging deep understanding of immunobiology to develop products to treat severe autoimmune and inflammatory disorders with high unmet medical need, reported financial results for the third quarter 2019 and recent business highlights (Press release, Equillium, NOV 12, 2019, View Source [SID1234550975]).

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"With the recent initiation of the EQUALISE trial in lupus nephritis and ongoing studies in uncontrolled asthma and aGVHD, we are concurrently running clinical studies of itolizumab in three indications where effective treatments are lacking for patients," said Dan Bradbury, chairman and chief executive officer of Equillium. "As we continue to efficiently execute our clinical programs, we anticipate important data readouts next year that may establish the foundation for broadly developing itolizumab in severe autoimmune and inflammatory disorders for patients in urgent need of novel treatments."

Business Highlights:

Secured a term loan for up to $20 million that, together with cash on-hand, is expected to provide sufficient resources to fund currently planned development programs into the second half of 2021 and through anticipated initial data readouts

Obtained exclusive rights to negotiate third-party licensing rights to develop and commercialize itolizumab in select major markets outside of North America

Initiated Phase 1b EQUALISE proof-of-concept trial evaluating itolizumab for the treatment of lupus nephritis

Continued to advance itolizumab in Phase 1b development for both the treatment of uncontrolled asthma and the frontline treatment of aGVHD

Upcoming Milestones

Itolizumab initial data from the Phase 1b:

EQUIP trial in uncontrolled asthma expected in 2H 2020

EQUATE trial in aGVHD expected in 2H 2020

EQUALISE trial in lupus nephritis – systemic lupus erythematosus (SLE) cohort expected in 2H 2020, lupus nephritis cohort expected in 1H 2021

Third Quarter 2019 Financial Results

Research and development (R&D) expenses. Total R&D expenses for the three months ended September 30, 2019 were $4.2 million, compared with $1.2 million for the same period in 2018. The increase in R&D expenses was primarily driven by additional costs related to regulatory and clinical development activities associated with the EQUIP, EQUATE and EQUALISE clinical trials, increased headcount expenses, and preclinical research activities to support Equillium’s clinical development program.

General and administrative (G&A) expenses. Total G&A expenses for the three months ended September 30, 2019 were $2.1 million, compared with $1.0 million for the same period in 2018.

The increase in G&A expenses was primarily driven by additional costs related to increased headcount expenses, costs related to being a public company and legal and professional fees.

Net loss. Net loss for the three months ended September 30, 2019 was $6.0 million, or $(0.35) per basic and diluted share, compared with a net loss of approximately $4.9 million, or $(0.44) per basic and diluted share, for the same period in 2018.

Cash and cash equivalents. As of September 30, 2019, Equillium reported total cash, cash equivalents and short-term investments of $62.2 million, compared to $65.9 million as of December 31, 2018. The amount of cash and investments at September 30, 2019 included approximately $9.9 million of net proceeds from the initial advancement from the term loan.

Gossamer Bio Announces Third Quarter 2019 Financial Results

On November 12, 2019 Gossamer Bio, Inc. (Nasdaq: GOSS), a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutics in the disease areas of immunology, inflammation and oncology, reported its financial results for the quarter ended September 30, 2019 and provided a corporate update (Press release, Gossamer Bio, NOV 12, 2019, View Source [SID1234550974]).

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"Since the beginning of the third quarter, we have realized substantial progress advancing our diverse pipeline of four clinical-stage programs," said Sheila Gujrathi, M.D., Co-Founder and Chief Executive Officer of Gossamer. "Notably, this morning we were pleased to announce that we entered into a clinical trial collaboration with Merck to evaluate KEYTRUDA in combination with GB1275 in selected advanced solid tumors. We believe this combination holds great promise to address a significant unmet need, and we look forward to sharing initial data from our Phase 1/2 study in 2020."

Dr. Gujrathi concluded, "We look forward to continuing the momentum we have built during 2019 into what we expect will be an exciting 2020, with data readouts expected across all of our clinical programs."

Pipeline Updates

GB001: Oral DP2 Antagonist for Asthma and Allergic Disease

Two abstracts supporting GB001 were presented at the American College of Allergy, Asthma and Immunology (ACAAI) Annual Scientific Meeting 2019, held November 7-11 in Houston, Texas, including an analysis of Phase 2 study results previously reported by our partner, Teijin Pharma Ltd. Both posters can now be found in the Posters and Publications section of Gossamer’s website:

Phase 2 study results of DP2-antagonist GB001 on asthma worsening and other asthma control markers

Indicators of Asthma Exacerbation Before Initiation of Biologic Therapy: A Real-world Experience

A poster supporting GB001 was presented at the European Respiratory Society (ERS) International Congress 2019, held September 28 – October 2 in Madrid, Spain. This poster can also be found in the Posters and Publications section of Gossamer’s website.

Markers of Eosinophilic Inflammation are Associated with Response to the DP2 Antagonist GB001 in Patients with Mild Atopic Asthma

Enrollment in the Phase 2b LEDA study in moderate-to-severe eosinophilic asthma remains on track, with an interim analysis expected in the first half of 2020 and topline results expected in the second half of 2020.

Enrollment continues in the Phase 2 TITAN proof-of-concept study in chronic rhinosinusitis, with and without nasal polyps. Topline data from the TITAN study are expected in the second half of 2020.

Gossamer plans to initiate a translational Phase 2 trial in chronic spontaneous urticaria in the first half of 2020 to further characterize the opportunity for DP2 antagonism in this indication.

GB002: Inhaled PDGFR Inhibitor for Pulmonary Arterial Hypertension (PAH)

Two abstracts supporting GB002 have been accepted for presentation at the American Heart Association (AHA) Scientific Sessions 2019, being held November 16-18 in Philadelphia, Pennsylvania, both of which will be found in the Posters and Publications section of Gossamer’s website following their presentation:

In Vivo Efficacy of a Novel, Inhaled PDGFRa/b Inhibitor, GB002, In the Rat Monocrotaline and Pneumonectomy Model of Pulmonary Arterial Hypertension

GB002, A Novel Inhaled PDGFR Kinase Inhibitor, Demonstrates Efficacy in The Su5416 Hypoxia Rat Model of Pulmonary Arterial Hypertension (PAH)

Gossamer expects enrollment of its Phase 1b study of GB002 in patients with PAH to begin in the fourth quarter of 2019. Gossamer expects to release initial topline results from the study in the first half of 2020.

Gossamer plans to initiate a Phase 2 study in patients with PAH in the first half of 2020.

GB004: Oral HIF-1α Stabilizer for Inflammatory Bowel Disease

The Phase 1b study in active mild-to-moderate ulcerative colitis remains on track for initial topline results in the first half of 2020.

GB1275: Oral CD11b Modulator for Oncology Indications

Gossamer reported that it has entered into a clinical trial collaboration with Merck to evaluate GB1275 in combination with KEYTRUDA (pembrolizumab) in the KEYNOTE-A36 Phase 1/2 trial. Enrollment in the trial is now underway, with initial data expected in the second half of 2020.

During the third quarter, the U.S. Food and Drug Administration granted orphan drug designation to GB1275 for the treatment of pancreatic cancer.

The design and rationale for the Phase 1/2 first-in-human trial of GB1275 was featured in a trial-in-progress poster at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 34th Annual Meeting, held November 6-10 in National Harbor, Maryland. This poster can now be found in the Posters and Publications section of Gossamer’s website.

A phase 1/2 study of GB1275, a novel CD11b modulator, as monotherapy and with an anti-PD-1 antibody in specified advanced solid tumors or with chemotherapy in metastatic pancreatic cancer (mPDAC)

Financial Results for Quarter Ended September 30, 2019

Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents and marketable securities as of September 30, 2019, were $446.5 million. The Company expects

current cash, cash equivalents and marketable securities, and access to its debt facility will be sufficient to fund its operating and capital expenditures into the fourth quarter of 2021.

Research and Development (R&D) Expenses: For the quarter ended September 30, 2019, R&D expenses were $40.1 million, including $2.7 million of stock-based compensation, compared to R&D expenses of $18.9 million for the quarter ended September 30, 2018. The increase was primarily due to an increase in expenses for GB001, GB002, GB004 and GB1275.

In-Process Research and Development (IPR&D) Expenses: For the quarter ended September 30, 2019, IPR&D expenses were $0.0 million, compared to $8.3 million for the quarter ended September 30, 2018, which included $7.5 million associated with the acquisition of GB1275.

General and Administrative (G&A) Expenses: For the quarter ended September 30, 2019, G&A expenses were $9.8 million, which included $3.0 million of stock-based compensation. This compared to G&A expenses of $22.9 million for the quarter ended September 30, 2018, which included $18.0 million of stock-based compensation.

Net Loss: For the quarter ended September 30, 2019, net loss was $48.5 million, or a loss of $0.80 per share.

Conference Call and Webcast

Gossamer’s management team will host a conference call and live audio webcast at 4:30 p.m. ET today, Tuesday, November 12, to discuss its third quarter 2019 financial results and provide a corporate update.

The live audio webcast may be accessed through the Events/Presentations page in the Investors section of the Company’s website at www.gossamerbio.com. Alternatively, the conference call may be accessed through the following:

Conference ID: 1981058

Domestic Dial-in Number: (866) 221-1654

International Dial-in Number: (470) 495-9466

Live Webcast: View Source