Goldman Sachs Is Bearish On Gritstone Bio: 'Avenues For Financing Are Likely Too Modest'

Gritstone bio Inc GRTS has insufficient cash either to reach de-risking catalysts for its lead oncology program, GRANITE, or to support the clinical development of its second program, SLATE, beyond early data, according to Goldman Sachs.

The Gritstone bio Analyst: Corinne Jenkins downgraded the rating for Gritstone bio from Neutral to Sell, while maintaining the price target at $2.

The Gritstone bio Thesis: Vaccine studies in the indications that the company is currently pursuing require substantial capital and involve long duration trials to reach meaningful endpoints, Jenkins said in the downgrade note.

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Gritstone bio could receive “additional non-dilutive financing via a recent credit transaction or via partnerships of its infectious disease programs,” the analyst stated. “However, such avenues for financing are likely too modest to substantively improve the company’s challenging balance sheet position, which we expect to be an overhang on the stock for the foreseeable future,” he added.

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GRTS Price Action: Shares of Gritstone bio had declined by 4.06% to $4.02 at the time of publication Monday.