California Biotech Gossamer Bio Lays Off Half Its Workforce After Failed Drug Trial

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Gossamer Bio, a San Diego-based biotech company, has announced plans to lay off 65 employees, nearly half of its total workforce, after its lead drug candidate, seralutinib, failed a crucial Phase 3 clinical trial. The company is now scrambling to find a path forward, examining options to potentially salvage the drug or focus on its other pipeline candidates, but warns it may not have sufficient resources to continue development.

Why it matters

The failure of seralutinib, Gossamer's most advanced drug, is a significant setback for the company and raises questions about its long-term viability. The layoffs will impact the clinical development team and several senior positions, further straining the company's resources as it tries to determine its next steps. The outcome of this situation could have broader implications for the local biotech industry and San Diego's reputation as a hub for pharmaceutical innovation.

The details

Gossamer Bio was focused on developing seralutinib, a drug candidate intended to treat a rare lung disease. The company had high hopes for the drug, and its stock price jumped to over $25 per share when it announced positive results from a Phase 2 trial in 2022. However, the recent Phase 3 trial failure has sent the stock plummeting to just $0.40 per share. The company now plans to lay off 65 of its 135 employees, primarily from the clinical development team and several senior leadership positions. Gossamer is also examining options to potentially salvage seralutinib, including meeting with the FDA, but warns it may not have sufficient resources to continue development of its other drug candidates, RT234 and PH-ILD, which are also in various stages of clinical trials.

• Gossamer Bio announced the Phase 3 failure of seralutinib in March 2026.
• The 65-employee layoff will take effect on May 15, 2026, according to a WARN notice released by the state.
• Gossamer plans to meet with the FDA sometime in the current quarter to review the seralutinib study results and determine the path forward.

What’s next

Gossamer plans to meet with the FDA this quarter to review the seralutinib study results and determine if there is a path forward for the drug. The company is also examining all options to potentially salvage the development of seralutinib or focus on its other pipeline candidates, RT234 and PH-ILD, but warns it may not have sufficient resources to continue those efforts.