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Gritstone Reports Second Quarter 2022 Financial Results and Provides Business Update

·11 min read
Gritstone bio, Inc
Gritstone bio, Inc

-- Clinical programs continue to progress, with initial data from Phase 2 study of “off the shelf” SLATE-KRAS and multiple studies within T cell-enhanced SARS-CoV-2 program (CORAL) expected this year --

-- Follow up data from subset of CORAL-BOOST study shows strong neutralizing antibody titers persisted without decay for at least 6 months after single boost administration of self-amplifying mRNA (samRNA) --

-- New credit facility provides financial flexibility entering period of multiple potential milestones --

-- Cash, cash equivalents, marketable securities and restricted cash of $159.2 million as of June 30, 2022 --

-- Gritstone will host a conference call today, August 4 at 4:30 p.m. ET --

EMERYVILLE, Calif., Aug. 04, 2022 (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 second quarter ended June 30, 2022 and reviewed business highlights.

“With steady execution of multiple clinical programs around the world, we are building momentum for the many datasets expected from SLATE, CORAL and GRANITE over the coming months and through 2023,” said Andrew Allen, M.D., Ph.D., Co-founder, President and Chief Executive Officer of Gritstone. “We have observed a correlation between molecular response and extended overall survival in multiple subjects with end-stage colorectal cancer treated with GRANITE, our individualized neoantigen immunotherapy. Today, we shared data demonstrating that the high neutralizing antibody titers to SARS-CoV-2 induced by our self-amplifying mRNA (samRNA) vaccine candidate persisted with no decay for at least 6 months. These data, from a subset of subjects in our CORAL-BOOST study, are encouraging since lack of neutralizing antibody persistence is a major limitation of first-generation vaccines, necessitating frequent boost vaccinations. Our novel samRNA vaccine platform may be driving this durable effect due to its self-replicating nature, an inherent potential benefit of samRNA compared to first-generation mRNA vaccines. We look forward to sharing more data from the CORAL (SARS-CoV-2) program, as well as the SLATE programs later this year.”

Clinical Program Updates
Tumor-Specific Neoantigen (TSNA) Oncology Programs
GRANITE – Individualized, TSNA-directed vaccine-based immunotherapy

  • In May, Gritstone provided updated overall survival (OS) data from GRANITE Phase 1/2 study in end-stage colorectal cancer (n=9).

    • Of the four patients who demonstrated molecular response, median overall survival (mOS) is not yet reached and will exceed 18 months. This compares to 7.8 months mOS in those who did not have a molecular response.

    • All patients alive at the time of the ESMO 2021 data presentation (the initial presentation of data from the Phase 1/2 study) remain alive after an additional 35 weeks of follow-up.

  • GRANITE-CRC-1L, a randomized, controlled Phase 2/3 trial evaluating GRANITE in combination with immune checkpoint blockade for frontline maintenance treatment of newly diagnosed patients with metastatic, microsatellite-stable colorectal cancer (MSS-CRC), is ongoing. Preliminary data (molecular response and progression-free survival) from the Phase 2 portion of the trial are expected in 2H 2023.

  • GRANITE-ADJUVANT, a randomized, controlled Phase 2 trial in patients with high-risk stage II/III colon cancer who are circulating tumor DNA (ctDNA)+ after definitive surgery, is open for enrollment.

SLATE – “Off-the-shelf” shared neoantigen-directed vaccine-based immunotherapy intended for patients who have relevant KRAS mutations and suitable tissue type (HLA)

  • Initial data from the ongoing Phase 2 study of SLATE-KRAS, an optimized, KRAS-specific version of SLATE, will be presented during a mini-oral presentation at the European Society for Medical Oncology (ESMO) in September 2022. SLATE-KRAS is being evaluated in patients with advanced non-small cell lung cancer (NSCLC) and CRC.

    • Early signals from the ongoing Phase 2 study support the potential of SLATE-KRAS to drive stronger CD8+ T cell responses to mutant KRAS than Gritstone’s original candidate, SLATE v1.

  • Gritstone intends to continue advancing its existing candidate, SLATE-KRAS, and has a long-term objective of developing a suite of "off-the-shelf” product candidates that target highly prevalent tumor-specific antigens across a number of patient populations and cancer types.

Infectious Disease Programs
Gritstone’s infectious disease programs aim to deliver vaccine candidates that drive both B cell and T cell immunity with the potential to provide either a protective or therapeutic effect across a broad array of viral diseases.

CORAL – Second-generation SARS-CoV-2 vaccine program delivering both Spike and highly conserved non-Spike T cell epitopes (TCEs) with a focus on the samRNA vector. This approach offers potential for more durable clinical protection and broader immunity against SARS-CoV-2 variants than first generation mRNA products by inducing potent and persistent neutralizing antibody responses with broad variant protection, plus T cell responses to conserved regions from across the SARS-CoV-2 genome (not just Spike).

  • In June, results from a preclinical study of its samRNA vaccine against SARS-CoV-2 were published in Nature Communications (article here). The results of the study, which were previously pre-printed in bioRxiv (in November 2021), demonstrate the samRNA vaccine candidate induced broad and potent neutralizing antibodies and T cell immune responses following administration to non-human primates (NHP) at low doses, and that these immune responses were protective against SARS-CoV-2 challenge.

  • Today, Gritstone reported antibody durability results from the first two cohorts of its CORAL-BOOST trial showing the strong neutralizing antibody response observed following single boost administration of samRNA (10µg or 30µg) persisted without decay after 6 months. In a small subset of subjects who elected to receive only a single samRNA boost vaccination (n=7), at six months:

    • Durable neutralizing antibodies against wild type Spike as well as key Spike variants of concern (Beta, Delta and Omicron) were observed.

    • Neutralizing antibody titers formed a plateau and remained stable for at least 6 months.

    • These results can be found in Gritstone’s corporate presentation.

    • Additionally, T cell responses to Spike and non-Spike T cell epitopes (TCEs) remained generally stable over the 6-month observation period (Omicron mutations impacted TCEs minimally).

  • Three Phase 1 studies – CORAL-BOOST, CORAL-CEPI and CORAL-NIH – are ongoing and data from each are expected in the second half of 2022.

    • The CORAL-BOOST study is a Phase 1 study in the UK evaluating a T cell enhanced samRNA vaccine as a booster against SARS-CoV-2 in healthy volunteers over 60 years old who had received two prior doses of Vaxzevria (AstraZeneca COVID-19 vaccine). In January, Gritstone announced positive clinical data from the first cohort and subsequently expanded the study to permit boosting after both mRNA as well as adenoviral primary vaccine series.

    • The CORAL-CEPI trial is ongoing in South Africa with support from the Coalition for Epidemic Preparedness Innovations (CEPI) and is evaluating T cell enhanced omicron- and beta-spike (plus TCE) constructs in virus-naïve, convalescent, and HIV+ patients.

    • The CORAL-NIH trial, which is being sponsored and executed by the National Institute of Allergy and Infectious Disease (NIAID), is ongoing in the United States evaluating T cell enhanced samRNA and/or adenoviral vaccines in previously vaccinated healthy volunteers.

HIV – Collaboration with Gilead Sciences, Inc. (Gilead) under Gilead’s HIV Cure Program to research and develop vaccine-based HIV immunotherapy treatment

  • An investigational new drug application (IND) was cleared in December 2021.

  • If Gilead decides to progress development beyond the initial Phase 1 study by exercising their exclusive option, the Company will receive a $40.0 million non-refundable option exercise fee.

Corporate Highlights

  • Established a credit facility of up to $80 million with Hercules Capital (NYSE: HTGC) and Silicon Valley Bank and drew $20 million at closing (July 2022). An additional $10 million is available for drawdown by March 15, 2023, and the remaining $50 million becomes available in tranches through June 15, 2024, upon achievement of certain milestones by Gritstone. Gritstone is under no obligation to draw funds in the future, and there are no warrants associated with this transaction.

  • Earned Great Place to Work® Certification (May 2022).

Second Quarter 2022 Financial Results
Cash, cash equivalents, marketable securities and restricted cash were $159.2 million as of June 30, 2022, compared to $223.5 million as of December 31, 2021.

Research and development expenses were $27.3 million for the three months ended June 30, 2022, compared to $22.1 million for the three months ended June 30, 2021. The increase of $5.2 million was primarily due to increases of $1.9 million in personnel-related expenses, $3.1 million in outside services, consisting primarily of clinical trial and other chemistry, manufacturing and controls (“CMC”) related expenses, and $0.8 million in facilities related costs, offset by a decrease of $0.5 million in laboratory supplies.

General and administrative expenses were $7.8 million for the three months ended June 30, 2022, compared to $5.9 million for the three months ended June 30, 2021. The increase of $1.9 million was primarily attributable to increases of $1.5 million in personnel-related expenses and $0.6 million in outside services, offset by a decrease of $0.2 million in facilities-related costs.

Collaboration, license, and grant revenues were $5.5 million for the three months ended June 30, 2022, compared to $2.8 million for the three months ended June 30, 2021. The $2.7 million increase was primarily attributable to revenue recognized under the CEPI Funding Agreement, which was entered into in August 2021, for the three months ended June 30, 2022.

Conference call and webcast details
A conference call to discuss second quarter results will be held at 4:30 p.m. ET August 4:

Conference call: 800-263-0877
Conference passcode: 8108859
Webcast: https://event.webcasts.com/starthere.jsp?ei=1561514&tp_key=4f6eab0ea9

About Gritstone
Gritstone is working to create 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 and have programs in viral diseases and solid tumors. Independently and with our partners, we are advancing a portfolio of product candidates with the aim 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 the potential of Gritstone’s therapeutic programs; the advancements in the company’s ongoing clinical trials; the timing of data announcements related to ongoing clinical trials and the initiation of future clinical trials. 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 Quarterly Report on Form 10-Q filed on August 4, 2022 and any current and periodic reports filed with the Securities and Exchange Commission.

Gritstone Contacts
Investors:
George E. MacDougall
Director, Investor Relations & Corporate Communications
Gritstone bio, Inc.
ir@gritstone.com

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

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

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenues

$

2,761

 

 

$

2,843

 

 

$

7,506

 

 

$

42,536

 

Grant revenues

 

2,710

 

 

 

-

 

 

 

5,156

 

 

 

-

 

Total revenue

 

5,471

 

 

 

2,843

 

 

 

12,662

 

 

 

42,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

27,347

 

 

 

22,072

 

 

 

55,546

 

 

 

46,928

 

General and administrative

 

7,792

 

 

 

5,937

 

 

 

15,747

 

 

 

12,878

 

Total operating expenses

 

35,139

 

 

 

28,009

 

 

 

71,293

 

 

 

59,806

 

Loss from operations

 

(29,668

)

 

 

(25,166

)

 

 

(58,631

)

 

 

(17,270

)

Interest income, net

 

153

 

 

 

48

 

 

 

200

 

 

 

75

 

Net loss

$

(29,515

)

 

$

(25,118

)

 

$

(58,431

)

 

$

(17,195

)

Net loss per share, basic and diluted

$

(0.34

)

 

$

(0.33

)

 

$

(0.68

)

 

$

(0.23

)

Weighted-average number of shares used in computing net loss per share, basic and diluted

 

86,448,632

 

 

 

76,749,641

 

 

 

86,363,116

 

 

 

76,368,506

 

 

 

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

 

June 30,
2022

 

December 31,
2021

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

65,694

 

 

$

93,287

 

Marketable securities

 

78,939

 

 

 

108,346

 

Restricted cash

 

9,311

 

 

 

11,285

 

Prepaid expenses and other current assets

 

7,791

 

 

 

7,672

 

Total current assets

 

161,735

 

 

 

220,590

 

Restricted cash

 

5,290

 

 

 

6,005

 

Property and equipment, net

 

22,712

 

 

 

21,622

 

Lease right-of-use assets

 

21,126

 

 

 

22,920

 

Deposits and other long-term assets

 

3,090

 

 

 

2,352

 

Long-term marketable securities

 

-

 

 

 

4,617

 

Total assets

$

213,953

 

 

$

278,106

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,381

 

 

$

4,230

 

Accrued compensation

 

5,331

 

 

 

6,925

 

Accrued liabilities

 

2,035

 

 

 

411

 

Accrued research and development

 

4,386

 

 

 

3,706

 

Lease liabilities, current portion

 

7,174

 

 

 

7,483

 

Deferred revenue, current portion

 

11,079

 

 

 

17,201

 

Total current liabilities

 

32,386

 

 

 

39,956

 

Lease liabilities, net of current portion

 

17,800

 

 

 

18,936

 

Deferred revenue, net of current portion

 

389

 

 

 

3,128

 

Total liabilities

 

50,575

 

 

 

62,020

 

Commitments and contingencies

 

 

 

Stockholders' equity:

 

 

 

Common stock

 

20

 

 

 

20

 

Additional paid-in capital

 

623,583

 

 

 

617,523

 

Accumulated other comprehensive loss

 

(410

)

 

 

(73

)

Accumulated deficit

 

(459,815

)

 

 

(401,384

)

Total stockholders' equity

 

163,378

 

 

 

216,086

 

Total liabilities and stockholders' equity

$

213,953

 

 

$

278,106