Sunday, 14 April 2024


Gritstone bio shares target slashed, retains Buy rating By

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On Tuesday, BTIG adjusted its outlook on Gritstone bio (NASDAQ:GRTS), significantly reducing the stock price target to $3.00 from the previous $20.00, yet maintaining a Buy rating on the stock. The firm’s decision follows an evaluation of interim results from Gritstone’s Granite program, which indicated a trend toward improvement in progression-free survival (PFS) among all treated patients.

Specifically, the data revealed a hazard ratio (HR) of 0.82 in all treated patients and a more pronounced improvement in high-risk patients, with an HR of 0.52 and median PFS extending from 7 to 12 months.

Despite these findings, the lack of a clear separation in the PFS curve and the absence of a correlation between PFS improvement and ctDNA molecular response rate or RECIST response rate in patients treated with the vaccine compared to those receiving chemotherapy led to a cautious stance.

The analyst noted that the interim results provide limited assurance in de-risking the Granite program. The firm acknowledged the potential for more favorable data as it matures, yet the current results have prompted a reduction in the probability of success (POS) estimate from 65% to 30%.

The mature PFS data, expected in the third quarter of 2024, along with overall survival (OS) data anticipated in the first half of 2025, could still demonstrate positive PFS outcomes. Still, the analyst emphasized that the interim data currently do not significantly mitigate the perceived risks associated with the program.

This reassessment of risk and tempered expectations have led to the lowered price target for Gritstone bio’s shares.

InvestingPro Insights

Following the recent assessment by BTIG, it is worth considering the financial health and market performance of Gritstone bio (NASDAQ:GRTS) through InvestingPro insights. Real-time data indicates that Gritstone has a market cap of approximately $122.58M and is trading near its 52-week low, with a previous close price of $2.35.

Despite the significant potential seen in their Granite program, the company is not expected to be profitable this year, with a negative P/E ratio of -1.04, reflecting the challenges ahead.

InvestingPro Tips suggest that analysts have revised their earnings upwards for the upcoming period, indicating some optimism in the company’s future performance. Still, they also note that Gritstone is quickly burning through cash, which could be of concern to investors.

Moreover, with the company suffering from weak gross profit…

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