Updated: Gritstone goes the credit facility route, securing $80M to keep clinical efforts running
A California developer is following up on one of the hottest trends in biotech, taking out a loan to extend its operating runway while the biotech sector takes a beating on Nasdaq.
Vaccine outfit Gritstone bio put out word Thursday that it entered into an $80 million credit facility with Hercules Capital and Silicon Valley Bank. The facility, a type of loan, breaks down in the following: $20 million drawn by Gritstone at closing, with another $10 million available to withdraw by March 15, 2023. The remaining $50 million will become available in tranches through June 15, 2024 as Gritstone achieves certain, unspecified milestones.
Gritstone CFO Celia Economides tells Endpoints News that part of the reason the company went down the credit facility route was for flexibility’s sake. “It does enable us a lot of flexibility to just continue executing — not have to worry about the stock price, not have to worry about how the market might react on potential catalysts that we have coming up,” Economides said.
She added that the company is looking at the “appropriate capital conservation measures,” identifying costs and spending organization-wide and figuring out what needs to be prioritized.
As for runway, the company is holding back some of the details until after the company’s Q2 earnings call in a couple of weeks. But Economides said that it is enough capital to get the biotech through company milestones over the next 18 months.
Founded in 2015, the biotech once known as Gritstone Oncology launched with a $102 million megaround co-led by Versant and was originally focused on a neoantigen approach. The company then went public in 2018, raising $100 million. At the outset of the Covid-19 pandemic, the biotech touted some investigatory work in Covid-19 vaccines, which ballooned the company’s share price to over $27 a share by January 2021.
Today, the Nasdaq opened with $GRTS at $2.87 a share — a drop of 78% year-to-date.
Gritstone’s co-founder and CEO, Andrew Allen, said in a release that the biotech expects several data readouts over the next 18 months, with the soonest readout coming on the company’s SLATE-KRAS product candidate, slated for later in Q3.
“Establishing this facility reduces our dependence on the capital markets and enables us to focus on executing against our clinical, operational, and strategic goals,” Allen added.
Other candidates in Gritstone’s pipeline include a candidate for HIV, partnered programs for Covid-19 and other oncology indications such as colorectal cancer.
The biotech added in its announcement Thursday that it will divulge more information about the credit facility in an upcoming SEC filing. The biotech’s most recent quarterly filing for Q1 this year pointed out that it has $192.5 million in current assets, including cash and securities.