Gritstone downgraded at B. Riley on near-term balance sheet uncertainty

As previously reported, B. Riley analyst Mayank Mamtani downgraded Gritstone to Neutral from Buy with a price target of $1, down from $3, after the company released mature progression-free survival, or PFS, data from the ongoing Phase 2/3 trial evaluating GRANITE, its personalized neoantigen cancer vaccine, in first-line microsatellite stable colorectal cancer, or MSS-CRC. Despite the positive dataset supportive of progression to Phase 3 development, the firm believes Gritstone’s limited cash runway is “restrictive to the company’s ability to independently continue exploration” of GRANITE in a wide range of solid tumors, the analyst tells investors. While management has engaged a financial advisor to pursue a variety of strategic alternatives, the timing and likelihood of such an approach being materially value-enhancing “remains unclear,” says the analyst, who also cites uncertainty tied to the company’s ability to comply with all covenants of the $40M debt balance.