In a May 7 research note, H.C. Wainwright & Co. analyst Sean Lee reported how Gritstone Bio Inc. (GRTS:NASDAQ) performed financially during Q1/21 and what stock catalysts investors may expect in H2/21.
The biotech surpassed earnings expectations in Q1/21. It garnered $39.7 million in collaboration and contribution revenue and posted a $0.10 per share net loss. In comparison, consensus estimated revenue would be $12.2 million, less than one-third of the actual figure. It projected a net earnings loss of $0.39 per share, nearly four times that of the reported amount. Lee indicated that Gritstone having recognized the upfront payment from Gilead accounts for the differences.
At quarter's end, the California-based company had $198 million in cash and cash equivalents, which Lee noted "is sufficient to fund operations into H1/23."
Looking ahead to Gritstone's full-year 2021 earnings, H.C. Wainwright forecasts total revenue to come in at about $48.7 million and the net loss to be of roughly $1.43 per share.
As for the upcoming potential stock-moving events, Lee highlighted two. The first is "the most important clinical update for the company in 2021," he wrote. It is data from the Phase 1/2 clinical trial of GRANITE, a personalized cancer vaccine, which Gritstone is slated to announce at the European Society for Medical Oncology (ESMO) meeting in September.
There, Gritstone will likely announce two sets of GRANITE results, those on additional Phase 2 expansion cohort patients and those of long-term follow-up of Phase 1 patients.
Later this year, the life sciences firm plans to further advance GRANITE in the clinic, by launching two randomized, Phase 2 studies, evaluating it in earlier-stage patients.
"Positive results at ESMO could bode well for the success of these upcoming studies," Lee commented.
Gritstone's second catalyst is initial results from the Phase 1 CORAL trial of a second generation COVID-19 vaccine, the result of a collaboration between Gritstone and the National Institute of Allergy and Infectious Diseases. Data are expected in Q3/21. A successful vaccine of this type could meet a significant need, Lee noted.
"Despite the wide availability of first-gen COVID vaccines, we believe there remains a significant untapped market for immunocompromised patients and for booster shots that are effective against newly arisen virus variants," he added.
H.C. Wainwright has a Buy rating and a $24 per share target price on Gritstone, the stock of which is trading now at about $8.13 per share.
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