Gritstone bio filed for Chapter 11 bankruptcy on Thursday morning in a bid to keep itself afloat as it seeks a buyer or other transaction to continue running R&D of its cancer and infectious disease vaccines.
The California and Massachusetts biotech has seen its share price $GRTS dip about 90% year-to-date after running into hurdles with a Phase 2 of its personalized neoantigen vaccine for colorectal cancer and struggles with launching a large Covid-19 vaccine trial.
In March, Gritstone laid off 40% of its staff after being unable to start a Phase 2b of its Covid-19 vaccine on time. The biotech had planned to begin a 10,000-person study in the first quarter of 2024 and was banking on up to $433 million in funding from US federal agencies to help support the development. As of its latest quarterly report, Gritstone did not provide an updated time frame for commencing the study.
Gritstone said it is talking with a “party to act as a stalking horse bidder or plan sponsor” and aims to present an agreement to the court overseeing the restructuring process “as early as next week.” The goal is to ink a “value-maximizing transaction” that would allow the company to keep up R&D of its vaccines and immunotherapies, Gritstone said.
At the end of June, the company had $61.7 million in cash, equivalents and marketable securities.
“The decision to file for Chapter 11 relief allows us to stay focused on our mission of bringing potentially life-saving treatments like GRANITE to patients around the world,” CEO Andrew Allen said in a statement. GRANITE is the name of the company’s personalized vaccine for cancer.
The company plans to keep operating “in the ordinary course” during the restructuring, it said.
Gritstone went public as a three-year-old startup in a $100 million IPO in September 2018. At the time, it was known as Gritstone Oncology, but later dropped the second half as it expanded to include infectious diseases and had hoped to make a dent in the pandemic vaccine landscape. It is also working with Gilead to create a vaccine-based HIV treatment. Gilead is directing the collaboration.