Is Gritstone Stock a Buy Right Now? This Is What You Need to Know

In what looks like an extreme case of “sell the news,” shares of Gritstone bio (GRTS) cratered by 42% in Tuesday’s session following the release of positive trial data.

Results from the first group (10 µg dose) in the Phase 1 booster study (CORAL-BOOST) of Gritstone’s self-amplifying mRNA (samRNA) COVID-19 vaccine showed the vaccine elicited sturdy neutralizing antibody responses to Spike and powerful CD8+ T cell responses.

Healthy adults over 60 years old received the single 10 µg dose at least 22 weeks following a two-dose program of AstraZeneca’s Vaxzevria. CORAL’s samRNA vaccine showed a favorable safety profile and was well-tolerated; no grade 3/4 adverse events or unforeseen reactogenicity or safety events were noted.

The CORAL-BOOST Phase 1 trial is still taking place in the UK, and as planned, has now dose-escalated to a 30 mg dose. Given the Phase 1 data, Gritstone will expand enrollment to 120 participants and assess the addition of a second samRNA-Spike-TCE dose.

BTIG’s Kaveri Pohlman is impressed with the study’s outcome.

“The key readout to our eyes was that the vaccine showed robust T-cell responses against non-Spike proteins/T-cell epitopes. This is the GRTS value add,” said the analyst. “Also reassuring were the comparable neutralizing antibody responses against the WT (pseudovirus neutralizing NT50 titers = 2,370 for samRNA vs. 2,368 for Moderna’s mRNA) and delta variant (525 vs. 580 for MRNA). We note that these equal antibody responses were at a lower total mRNA level (10µg dose, n = 10) suggesting the “sam” technology is working as hoped (the mRNA amplifies in the patient).”

While Pohlman notes the vaccine’s “impressive” CD8+ response has yet to receive full clinical validation, the analyst points to the “significant” UK epidemiological data which implies the T-cell responses against non-Spike proteins “might provide better protection against all the variants of coronavirus.”

So, positive results and a tumbling share price – a perfect recipe for the opportunist, or so Pohlman appears to think if her actions are anything to go by. The analyst reiterated a Buy rating along with a $20 price target, suggesting shares will claw back the losses and some; there’s upside potential of ~211% from current levels. (To watch Pohlman’s track record, click here)

Looking at the consensus breakdown, 2 Buys and 1 Hold add up to a Moderate Buy analyst consensus. The average target of $17.50 implies an upside of 172% from the current trading price of $6.44. (See Gritstone stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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