Gritstone bio, Inc. (GRTS)·Q3 2023 Earnings Summary

Executive Summary

• Q3 2023 revenue was $1.565M and diluted EPS was $(0.33); revenue declined both sequentially and year over year while the net loss widened, reflecting elevated R&D and facilities costs .
• The BARDA award (up to $433.0M) and strong IDWeek data position the CORAL samRNA COVID-19 vaccine for a Phase 2b head-to-head efficacy study initiation in Q1 2024, a notable catalyst alongside forthcoming GRANITE Phase 2 preliminary data in MSS-CRC also expected in Q1 2024 .
• Cash, cash equivalents, marketable securities, and restricted cash fell to $90.5M as of 9/30/23 from $122.3M in Q2 and $153.2M in Q1, highlighting cash burn and the importance of external funding and upcoming milestones .
• Management underscored differentiation of samRNA durability (12-month nAb persistence) and continued progress in oncology (GRANITE enrollment target met; NCI IND cleared for SLATE-KRAS combo), setting near-term data and trial-start catalysts that can drive stock reaction .

What Went Well and What Went Wrong

What Went Well

• BARDA contract valued up to $433.0M enables a 10,000-participant Phase 2b head-to-head study versus an approved COVID-19 vaccine, with initiation expected in Q1 2024, materially elevating CORAL’s visibility and funding support .
• samRNA durability reinforced at IDWeek: high neutralizing antibody responses sustained through ≥12 months (CORAL-CEPI, CORAL-BOOST), with broad T-cell responses and generally favorable tolerability across >300 subjects dosed, supporting a potential next-gen COVID-19 platform .
• Oncology pipeline execution: GRANITE Phase 2 enrollment target (100 randomized) achieved; preliminary efficacy data expected in Q1 2024; NCI IND cleared for Phase 1 autologous T cell therapy combined with SLATE-KRAS, expanding translational breadth in “cold” tumors .
  • Quote: “The ongoing advancement of our CORAL program... positions our... samRNA... as a leading potential next-generation vaccine platform... With GRANITE and CORAL now in or entering randomized Phase 2 studies, Gritstone stands at the precipice of unlocking the full potential of our novel vaccine platforms...” — Andrew Allen, CEO .

What Went Wrong

• Revenue declined to $1.565M in Q3 from $1.955M in Q2 and $3.021M in Q3 2022; collaboration and grant inflows remained modest, contributing to a widening operating loss .
• R&D expenses rose to $32.763M versus $31.0M in Q2 and $26.436M in Q3 2022, driven by milestone/license payments, personnel, facilities, and external services; G&A also increased year over year, pressuring P&L .
• Cash decreased to $90.5M at quarter-end from $122.3M at Q2 and $153.2M at Q1, highlighting funding needs amid multi-program clinical execution; noncurrent debt stood at $29.868M .

Financial Results

Revenue, EPS, Net Margin vs Prior Periods and YoY

Notes: Net Income Margin % is calculated as Net Loss / Revenue; citations reference the underlying reported figures .

Revenue Breakdown (Collaboration vs Grants)

Operating Expenses and Cash KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The ongoing advancement of our CORAL program positions our infectious disease approach, which combines self-amplifying mRNA (samRNA) with novel B and T cell targets, as a leading potential next-generation vaccine platform for COVID-19 and beyond... With GRANITE and CORAL now in or entering randomized Phase 2 studies, Gritstone stands at the precipice of unlocking the full potential of our novel vaccine platforms...” — Andrew Allen, CEO .
• Q2: “Completing enrollment for the Phase 2 portion underscores the enthusiasm for this trial... GRANITE has the potential to be the first neoantigen-based PCV to demonstrate efficacy in a randomized study against a cold tumor...” — Andrew Allen .
• Q1: “Strategically prioritizing GRANITE... potentially being the first to demonstrate efficacy... Expanding the study... increases statistical power...” — Andrew Allen .

Q&A Highlights

• Q3 earnings call transcript was not available in our dataset; therefore Q&A themes and any guidance clarifications from the call could not be assessed [Search attempted; no transcript found].

Estimates Context

• Wall Street consensus estimates from S&P Global (Primary EPS Consensus Mean, Revenue Consensus Mean) for Q3 2023 were unavailable due to a missing mapping in the S&P Global CIQ company map for GRTS; as a result, comparisons to consensus could not be provided [GetEstimates error].

Key Takeaways for Investors

• Near-term catalysts in Q1 2024: (1) GRANITE Phase 2 preliminary efficacy (ctDNA and PFS) and (2) CORAL Phase 2b head-to-head initiation; either could be stock-moving given the novelty of samRNA and potential randomized vaccine efficacy data .
• The BARDA contract (up to $433.0M) significantly de-risks CORAL’s development costs and enables a robust comparative efficacy readout design, a meaningful validation-by-proxy for platform value .
• Revenue remains modest and variable due to reliance on collaboration/grant flows; cash burn elevated as R&D scales, underscoring importance of disciplined spend and timely external funding/milestones .
• samRNA durability and breadth (≥12-month nAb, T-cell activation) are differentiators vs first-gen mRNA vaccines; the head-to-head design should test real-world efficacy, informing potential future commercialization paths .
• Oncology momentum persists: GRANITE’s Phase 2 enrollment completion and forthcoming data in MSS-CRC could validate the neoantigen-based PCV approach; SLATE-KRAS plus NCI T-cell therapy advances translational immunotherapy breadth .
• Trading lens: Expect increased volatility around Q1 2024 events; positive granularity from GRANITE efficacy or CORAL trial initiation/logistics may drive rerating, while further revenue softness or higher cash burn could temper sentiment .
• Medium-term thesis: Platform breadth across oncology and infectious disease with non-dilutive support (BARDA, CEPI, Gates, NIAID) mitigates funding risk; clinical efficacy signals will be pivotal for valuation inflection .