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Gritstone bio Reports Fourth Quarter and Full Year 2023 Financial Results and Provides Corporate Updates

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Gritstone bio, Inc. (Nasdaq: GRTS) reported financial results for Q4 2023, highlighting key developments in their oncology and infectious disease programs. The company is expecting preliminary data from the Phase 2 study of their personalized cancer vaccine, GRANITE, in 1Q 2024. They are also preparing to launch a Phase 2b study for their COVID-19 vaccine in Fall 2024. Gritstone's cash position stood at $86.9 million as of December 31, 2023.
Positive
  • Preliminary data from Phase 2 study of GRANITE expected in 1Q 2024.
  • National Cancer Institute-led study combining SLATE with neoantigen therapy to commence soon.
  • Incorporating GMP-grade materials in samRNA vaccine for COVID-19 for Phase 2b study in Fall 2024.
  • Cash position of $86.9 million as of December 31, 2023.
  • Reduction of workforce by 40% in February 2024 to reduce costs.
  • Delay of CORAL Phase 2b study due to incorporation of GMP-grade materials.
  • Research and development expenses increased to $127.2 million in 2023.
  • Collaboration, license, and grant revenues totaled $16.3 million in 2023.
Negative
  • Reduction in workforce by 40% to reduce costs.
  • Delay in CORAL Phase 2b study due to incorporation of GMP-grade materials.

The financial results detailed in the update from Gritstone bio, Inc. highlight a significant reduction in cash reserves year-over-year, from $185.2 million to $86.9 million. This drawdown is a critical point of consideration for stakeholders as it indicates a high burn rate, which could raise concerns regarding the company's sustainability and the need for additional capital infusion. The reported increase in research and development expenses, despite a workforce reduction of 40%, suggests a continued investment in clinical studies, which could be seen as a commitment to advancing their product pipeline. However, the delay in receiving external funding due to the postponed CORAL Phase 2b study may impact the company's financial runway and necessitate strategic financial planning to mitigate potential liquidity risks.

The expectation of preliminary Phase 2 data from the study of GRANITE in metastatic MSS-CRC could have significant implications for Gritstone's valuation if the results are positive. A successful outcome might open pathways for further development in both adjuvant and metastatic solid tumors, potentially positioning Gritstone as a leader in personalized cancer vaccines. However, the inherent risks of clinical trials, such as the possibility of negative outcomes or inconclusive data, could adversely affect the company's prospects. The collaboration with the NCI and the FDA's clearance of the IND for the SLATE-KRAS study corroborate the scientific credibility of Gritstone's approach. The strategic decision to incorporate GMP-grade materials into their COVID-19 vaccine candidate may enhance the vaccine's regulatory profile, which could be advantageous for future approvals and market acceptance.

The current landscape for cancer vaccines and infectious disease treatments is highly competitive, with numerous companies vying for market share. Gritstone's focus on personalized and 'off-the-shelf' neoantigen vaccines places them in a niche but rapidly evolving segment of the market. The anticipated data release and subsequent clinical progress are likely to influence investor sentiment and market positioning. Moreover, the strategic pivot to ensure GMP-grade manufacturing for their COVID-19 vaccine candidate could be a response to market demands for higher quality standards in vaccine production. This move might improve the company's competitive edge but also comes with increased production costs that need to be weighed against the potential market benefits.

-- Preliminary data from Phase 2 portion of Phase 2/3 study evaluating GRANITE, Gritstone’s personalized cancer vaccine in front-line metastatic, microsatellite-stable colorectal cancer (MSS-CRC) remain expected in 1Q 2024 --

-- National Cancer Institute-led Phase 1 study evaluating Gritstone's "off-the-shelf" cancer vaccine, SLATE, combined with neoantigen cell therapy expected to begin in the coming months --

-- Gritstone incorporating GMP-grade raw materials in the manufacture of its samRNA vaccine for COVID-19, preparing to launch Phase 2b head-to-head study in the Fall of 2024 --

-- Cash, cash equivalents, marketable securities and restricted cash of $86.9 million as of December 31, 2023 --

EMERYVILLE, Calif., March 05, 2024 (GLOBE NEWSWIRE) -- Gritstone bio, Inc. (Nasdaq: GRTS), a clinical-stage biotechnology company working to develop the world’s most potent vaccines, today reported financial results for the fourth quarter and full year ended December 31, 2023 and provided recent corporate and clinical updates.

“As we rapidly approach the first randomized dataset from our flagship oncology program, GRANITE, we remain focused on leveraging our innovative technologies to drive transformative advances in oncology and infectious disease,” said Andrew Allen, M.D., Ph.D., Co-founder, President, and Chief Executive Officer of Gritstone bio. “The continued collaboration with Dr. Rosenberg and the National Cancer Institute involving our ‘off-the-shelf’ oncology vaccine highlights the pioneering vision and scientific rigor upon which we have built the SLATE and GRANITE platforms. And the recent decision to incorporate GMP-grade materials in the manufacture of our self-amplifying mRNA (samRNA) candidate enhances the potential regulatory utility of the Phase 2b CORAL-BARDA study, as well as our broader platform, an important development as we prepare to launch the study later this year.”

Dr. Allen added, “Preliminary Phase 2 data from the Phase 2/3 study of GRANITE in metastatic MSS-CRC are rapidly accruing and remain expected this quarter. Positive signal in this metastatic context would likely unlock enormous opportunity in both adjuvant and metastatic solid tumors. As the calendar flips further into 2024, Gritstone continues marching forward toward potentially enabling the full potential of our novel vaccine platforms in both oncology and infectious disease.”

Corporate Update

  • In February 2024, Gritstone bio reduced its workforce by approximately 40% to reduce costs and preserve capital. The reduction primarily impacted employees associated with vaccine manufacturing and clinical infectious disease operations, who were not active in the ongoing Phase 2 study of GRANITE, Gritstone’s personalized cancer vaccine. The reduction occurred approximately two weeks following the previously announced delay of the proposed CORAL Phase 2b study, which resulted in Gritstone not receiving external funding it previously anticipated beginning in 1Q 2024, associated with the initiation of the study.

Clinical Program Updates
Tumor-Specific Neoantigen Oncology Programs (GRANITE and SLATE)
GRANITE – Personalized neoantigen vaccine program
SLATE – “Off-the-shelf” neoantigen vaccine program

  • The Phase 2 portion of the Phase 2/3 study evaluating GRANITE as a front-line maintenance therapy in metastatic MSS-CRC remains ongoing and preliminary efficacy data from the Phase 2 portion remain expected in the first quarter of 2024. Gritstone met its enrollment target of 100 patients randomized in August 2023.

  • The clinical trial collaboration with the National Cancer Institute (NCI) to evaluate an autologous mutant KRAS-directed TCR-T cell therapy in combination with Gritstone’s KRAS-directed “off the shelf” vaccine candidate, SLATE-KRAS, is ongoing. The study is led by Steven A. Rosenberg, M.D., Ph.D., Chief of the Surgery Branch at the NCI's Center for Cancer Research and builds into the growing interest in combining tumor-antigen specific cell therapy with matched vaccines. The IND was cleared by the U.S. Food and Drug Administration (FDA) in October 2023.

  • Pending funding, Gritstone remains ready to initiate a randomized Phase 2 clinical trial within SLATE (“off-the-shelf” neoantigen vaccine program).

Infectious Disease Programs
CORAL – Next-generation SARS-CoV-2 vaccine program that serves as proof-of-concept for Gritstone’s samRNA platform and novel approach in infectious diseases

  • In February 2024, Gritstone announced it will incorporate GMP-grade materials in the manufacture of its self-amplifying mRNA (samRNA) candidate, resulting in a delay of the CORAL Phase 2b study (CORAL-BARDA). The move is expected to increase the regulatory utility of the anticipated 10,000 subject, comparative Phase 2b study contracted by the Biomedical Advanced Research and Development Authority (BARDA)(a). Gritstone is now preparing to launch the study in Fall 2024.

HIV – Collaboration with Gilead under Gilead’s HIV Cure Program to research and develop vaccine-based HIV immunotherapy treatment

  • The collaboration with Gilead to research and develop a vaccine-based HIV immunotherapy treatment continues under Gilead’s direction.

Full Year 2023 Financial Results

  • Cash, cash equivalents, marketable securities and restricted cash were $86.9 million as of December 31, 2023, compared to $185.2 million as of December 31, 2022.

  • Research and development expenses were $127.2 million for the year ended December 31, 2023 compared to $111.4 million for the year ended December 31, 2022. The increase was primarily due to increases in personnel-related costs and clinical trial expenses.

  • General and administrative expenses were $28.8 million for the year ended December 31, 2023 compared to $29.0 million for the year ended December 31, 2022. The decrease was primarily attributable to a decrease in outside services for legal, finance, recruiting and other professional services to support our ongoing operations due to the recruitment of full-time equivalents, offset by an increase in personnel-related and facility related costs.

  • Collaboration, license, and grant revenues were $16.3 million for the year ended December 31, 2023 compared to $19.9 million for the year ended December 31, 2022. During the year ended December 31, 2023, we recorded $9.0 million of grant revenue from the BARDA Contract, $4.3 million of grant revenue related to the CEPI Agreement and $1.7 million in grant revenue related to the Gates Agreement. During the year ended December 31, 2023, we recorded $1.0 million in collaboration revenue related to the 2seventy Agreement and $0.3 million in collaboration revenue related to the Gilead Collaboration Agreement.
(a) This project has been supported in whole or in part with federal funds from the Department of Health and Human Services; Administration for Strategic Preparedness and Response; Biomedical Advanced Research and Development Authority (BARDA), under contract number 75A50123C00062.

About Gritstone bio
Gritstone bio, Inc. (Nasdaq: GRTS) is a clinical-stage biotechnology company that aims to develop the world’s most potent vaccines. We leverage our innovative vectors and payloads to train multiple arms of the immune system to attack critical disease targets. Independently and with our collaborators, we are advancing a portfolio of product candidates to treat and prevent viral diseases and solid tumors in pursuit of improving patient outcomes and eliminating disease. www.gritstonebio.com

Gritstone Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to our clinical and regulatory development plans for our product candidates; our expectations regarding the data to be derived in our ongoing and planned clinical trials; the timing of commencement of our future nonclinical studies, clinical trials and research and development programs; our ability to discover, develop and advance product candidates into, and successfully complete, clinical trials; and our plans and strategy regarding maintaining existing and entering into new collaborations and/or partnerships. Such forward-looking statements involve substantial risks and uncertainties that could cause Gritstone’s research and clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the drug development process, including Gritstone’s programs’ clinical stage of development, the process of designing and conducting preclinical and clinical trials, the regulatory approval processes, the timing of regulatory filings, the challenges associated with manufacturing drug products, Gritstone’s ability to successfully establish, protect and defend its intellectual property and other matters that could affect the sufficiency of existing cash to fund operations. Gritstone undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the company in general, see Gritstone’s most recent Annual Report on Form 10-K filed on March 5, 2024 and any subsequent current and periodic reports filed with the Securities and Exchange Commission.

Gritstone Contacts
Investors:
George E. MacDougall
Gritstone bio, Inc.
ir@gritstone.com

Media:
Dan Budwick
1AB
(973) 271-6085
dan@1abmedia.com

Gritstone bio, Inc.
Consolidated Balance Sheets
(In thousands)

 
December 31,
  2023   2022 
Assets   
Current assets:   
Cash and cash equivalents$62,986   55,498 
Marketable securities 16,288   116,389 
Restricted cash 2,299   3,977 
Prepaid expenses and other current assets 5,862   7,014 
Total current assets 87,435   182,878 
Long-term restricted cash 5,290   5,290 
Property and equipment, net 17,281   21,335 
Lease right-of-use assets 66,839   17,481 
Deposits and other long-term assets 924   9,739 
Long-term marketable securities    4,031 
Total assets$177,769  $240,754 
Liabilities and stockholders’ equity   
Current liabilities:   
Accounts payable$3,819  $8,694 
Accrued compensation 9,357   8,215 
Accrued liabilities 1,213   4,124 
Accrued research and development expenses 3,696   3,343 
Lease liabilities, current portion 6,904   5,294 
Deferred revenue, current portion 2,350   5,131 
Total current liabilities 27,339   34,801 
Other liabilities, noncurrent 709   150 
Lease liabilities, net of current portion 57,727   15,673 
Debt, noncurrent 40,144   19,349 
Total liabilities 125,919   69,973 
    
Stockholders’ equity:   
Common stock 22   22 
Additional paid-in capital 711,386   691,910 
Accumulated other comprehensive gain (loss) 3   (80)
Accumulated deficit (659,561)  (521,071)
Total stockholders’ equity 51,850   170,781 
Total liabilities and stockholders’ equity$177,769  $240,754 
        

Gritstone bio, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)

  Year Ended December 31,
   2023   2022 
Revenues:    
Collaboration and license revenues $1,331  $9,269 
Grant revenues  15,013   10,676 
  Total revenues  16,344   19,945 
Operating expenses:    
Research and development  127,182   111,403 
General and administrative  28,783   28,970 
  Total operating expenses  155,965   140,373 
Loss from operations  (139,621)  (120,428)
Interest income  5,199   1,976 
Interest expense  (4,036)  (1,235)
Other expense  (32)   
Net loss  (138,490)  (119,687)
Other comprehensive loss:    
Unrealized gain (loss) on marketable securities  83   (7)
Comprehensive loss $(138,407) $(119,694)
Net loss per share, basic and diluted $(1.20) $(1.32)
Weighted-average number of shares used in computing net loss per share basic and diluted  115,527,546   90,918,333 

 


FAQ

When is the expected release of preliminary data from the Phase 2 study of GRANITE?

The preliminary data from the Phase 2 study of GRANITE is expected in 1Q 2024.

What is the cash position of Gritstone as of December 31, 2023?

Gritstone's cash, cash equivalents, marketable securities, and restricted cash totaled $86.9 million as of December 31, 2023.

Why did Gritstone reduce its workforce by 40% in February 2024?

Gritstone reduced its workforce to reduce costs and preserve capital, primarily impacting employees not involved in the ongoing Phase 2 study of GRANITE.

What caused the delay in the CORAL Phase 2b study?

The delay in the CORAL Phase 2b study was due to Gritstone's decision to incorporate GMP-grade materials in its samRNA vaccine.

How much were the research and development expenses in 2023?

Gritstone's research and development expenses were $127.2 million in 2023.

Gritstone bio, Inc.

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About GRTS

gritstone oncology is a cancer immunotherapy company developing next-generation personalized cancer therapeutics. gritstone brings together distinguished scientific founders, an experienced and diverse management team, a seasoned and successful board of directors, and very deep financial backing to tackle fundamental challenges at the intersection of cancer biology, immunology, and immunotherapy design. the company’s initial goal is to identify and deploy therapeutic neo-antigens from individual patients’ tumors to develop novel treatments for lung cancer. gritstone oncology is headquartered in the san francisco bay area with certain key functions located in cambridge, ma. gritstone oncology launched in october 2015 with a series a financing of $102 million.