Gritstone investors get pre-Granite jitters

Sellside analysts tried to reassure investors last week that Gritstone’s 40% workforce reduction wouldn't hit its neoantigen immunotherapy Granite, which faces one of the most eagerly awaited clinical catalysts of 2024, but the company’s stock slumped 28% on Friday. Though the layoffs were down to a Covid vaccine delay, this means that Gritstone will not get BARDA revenue this quarter as expected, a development that highlighted the group’s precarious financial situation: Gritstone has cash to last only until the third quarter, and the cuts will have little impact on its quarterly burn rate of $25-30m, noted Jones Research. This puts even more pressure on the imminent readout, from a phase 2/3 trial of Granite plus Tecentriq plus chemo, versus chemo alone, in first-line metastatic microsatellite-stable colorectal cancer. The results could be tricky to interpret as Gritstone is primarily evaluating circulating tumour DNA (ctDNA), an endpoint that has yet to get full backing from regulators. Gritstone will also report PFS data, but the company argues that radiographic endpoints aren’t as good as ctNDA, setting up the possibility that the two endpoints might not match up. If data confuse or disappoint Gritstone could have a hard time raising much-needed cash.

This story has been updated to clarify Covid vaccine BARDA implications.