Gritstone (GRTS) Plummets 58% in a Week: Here's Why
Gritstone Bio GRTS is a clinical-stage biotechnology company focused on developing vaccines targeting multiple indications, including cancer.
In the past week, the company’s stock lost 57.5%. This downside came after management came out with preliminary results from the mid-stage portion of the phase II/III study on its investigational personalized cancer vaccine (PCV), Granite.
The phase II/III study evaluated the combination of Granite as a maintenance therapy in patients with metastatic microsatellite stable colorectal cancer (MSS-CRC).
The mid-stage portion of the study did not meet its primary endpoint of short-term molecular response, defined as atleast 30% decline from baseline in circulating tumor DNA (ctDNA). Data from this portion showed that patients who received Granite achieved a molecular response of 30%, compared to 42% for those in the control arm. Investors were disappointed with the above results.
Year to date, Gritstone’s shares have plunged 41.7% against the industry’s 1.5% rise.
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Gritstone attributed the above results to its misunderstanding of how ctDNA would change after treatment. Per the general industry trends, the primary endpoint should have been measured using progression free survival (PFS) — how long a person lives without the disease worsening. Instead, management went for using an untested measure like ctDNA because of its concerns that therapies can sometimes enlarge tumors after treatment to infiltrate the cancer.
However, management focused on PFS data which it termed as ‘highly encouraging’. Gritstone reported hazard rates (HR) of 0.82 for the overall population and 0.52 for a subgroup of high-risk patients. Though these results show an early trend favoring Granite, this data is still yet to mature.
Despite the mixed data, Gritstone is confident that it could advance Granite to the phase III portion of the study. Per management, the long-term ctDNA responses align with PFS trends and also favor Granite compared with the control group.
A mature dataset on PFS is expected later this year during the third quarter. Gritstone expects to report overall survival (OS) data in the early next year.
The timing of these results is also relevant considering the fact that Gritstone is currently facing a cash crunch, with an existing cash and cash equivalents balance not even sufficient to take the company beyond 2024. As of 2023-end, the company’s cash balance stood at $86.9 million.
Post the announcement of the Granite results, Gritstone announced its decision to raise around $32.5 million through a public offering of its common stock.
Gritstone bio Inc. Price
Gritstone bio Inc. price | Gritstone bio Inc. Quote
Zacks Rank & Other Key Picks
Gritstone currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the overall healthcare sector include ADMA Biologics ADMA, ANI Pharmaceuticals ANIP and Ligand Pharmaceuticals LGND, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share (EPS) have risen from 22 cents to 30 cents. During the same period, EPS estimates for 2025 have improved from 32 cents to 50 cents. Year to date, shares of ADMA have surged 40.5%.
Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting the same on one occasion. ADMA delivered a four-quarter average earnings surprise of 85.00%.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPShave risen from $4.06 to $4.43. Meanwhile, during the same period, EPS estimates for 2025 have improved from $4.80 to $5.04. Year to date, shares of ANIP have risen 21.9%.
Earnings of ANI Pharmaceuticals beat estimates in each of the last four quarters. ANI delivered a four-quarter average earnings surprise of 109.06%.
In the past 60 days, Ligand Pharmaceuticals’ earnings estimates per share for 2024 have increased from $4.42 to $4.56. During the same period, earnings estimates for 2025 have risen from $5.11 to $5.20. Year to date, shares of Ligand Pharmaceuticalshave gained 4.6%.
Ligand Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters. On average, LGND’s four-quarter earnings surprise was 84.81%.
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