Gritstone continues Covid-19 push with deal to develop 'self-amplifying RNA' vaccines, as shares continue ballooning
Gritstone Oncology has had a big week, and it’s only Wednesday.
On Tuesday, the biotech revealed plans to start clinical testing of an experimental Covid-19 vaccine — in tandem with NIAID — that can also target other coronaviruses, with the goal of preventing future pandemics should SARS-CoV-2 prove difficult to cure with current vaccines. Then, on Wednesday morning, Gritstone licensed lipid nanoparticle technology from Genevant Sciences to develop what it’s calling “self-amplifying RNA vaccines” against Covid-19.
“As we continue to see new strains of SARS-CoV-2 emerge, we identified an opportunity to apply our key strengths to an innovative COVID-19 vaccine,” Gritstone CEO Andrew Allen said in a statement. “Specifically, extending the antigenic content of a COVID-19 vaccine beyond Spike alone may open up a route to clinical protection even if Spike mutations reduce antibody binding.”
Per the company’s investor presentation, the Genevant deal will provide the foundation for the second part of the company’s Covid-19 approach, combining RNA with adenovirus vaccines. Gritstone plans to give patients one shot of each type of vaccine sequentially, with the adenovirus shot first and the RNA-based shot second.
Should the Genevant program hit all of its milestones, Gritstone would be on the hook for $192 million. Gritstone is also paying an undisclosed upfront payment that accounts for part of that sum, and Genevant is eligible for royalties in the mid-single to mid-double digits.
Gritstone was founded back in 2015 on the idea that targeting rare mutations in cancer can boost the efficacy of checkpoint inhibitors. The company has taken a neoantigen approach to fighting cancer, zeroing in on common solid tumors like metastatic non-small cell lung cancer and gastroesophageal, bladder and colorectal cancers since it sought its IPO in 2018.
But this week casts the spotlight on the biotech’s Covid-19 efforts, one that has already proved financially fruitful for investors. Shares rocketed up roughly 250% in the wake of Tuesday’s news, sending Gritstone’s $GRTS stock price north of $20 for the first time since December 2018. As the market opened Wednesday, the stock continued its ascent by shooting up another 50% and hit a new all-time high.
Wednesday’s deal is an extension of Gritstone’s collaboration with Genevant signed back in 2017, though it won’t provide Gritstone with exclusive access to the platform. The agreement was expanded in October as well to include Genevant’s platform in development for a cancer indication, with Gritstone paying up to $71 million.
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