GlobeNewswire Inc | Aug 5, 2020 09:01AM EDT

August 05, 2020

EMERYVILLE, Calif., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Gritstone Oncology, Inc. (Nasdaq: GRTS), a clinical-stage biotechnology company developing the next generation of cancer immunotherapies to fight multiple cancer types, today reported financial results for the second quarter ended June 30, 2020 and reviewed business highlights.

We have made important advances in our two cancer immunotherapy programs, GRANITE and SLATE, demonstrating early signals of clinical benefit together with a well-tolerated safety profile, said Andrew Allen, M.D., Ph.D., co-founder, president and chief executive officer of Gritstone Oncology. Building upon our data presented 6 months ago, we have shown that GRANITE, our personalized N of 1 therapy, consistently elicited large numbers of Class I HLA-presented neoantigen-specific CD8+ T cells in all patients treated. Furthermore, we have shown that these very same T cells can expand within the tumor mass. Excitingly, we have seen signs of clinical benefit, with no GRANITE patient at dose level 3 or above having experienced disease progression to date. Most notably, in a microsatellite-stable colon cancer patient treated at dose level three, we are observing ongoing clinical response, corresponding with a decline in the tumor marker CEA and the normalization of liver function tests. We await further CT scans to assess for RECIST response. Further colorectal cancer patients with microsatellite-stable disease are on treatment at dose level 4, and we expect to present additional data from this dose level later this year. For SLATE, our shared neoantigen program, we are initiating Phase 2 expansion cohorts.

Recent Accomplishments

-- Presented preliminary efficacy, immunogenicity, and safety data from the ongoing Phase 1 study evaluating GRANITE in combination with immune checkpoint blockade for the treatment of patients with advanced solid tumors, including microsatellite stable colorectal cancer (MSS-CRC), gastroesophageal cancer, metastatic non-small cell lung cancer (NSCLC), and bladder cancer Demonstrated consistent, strong neoantigen-specific CD8+ T cells generated in all patients tested and signals of clinical benefit, as well as a favorable safety profile -- Presented the same data types from the Phase 1 study evaluating SLATE in combination with immune checkpoint blockade for the treatment of patients with metastatic NSCLC, pancreatic ductal adenocarcinoma and MSS-CRC, as well as in patients with other solid tumor types who have relevant mutation/human leukocyte antigen (HLA) combinations Induced CD8+ T cells against multiple KRAS driver mutations, with the most pronounced response against immunodominant neoantigens such as TP53mut, and demonstrated a favorable safety profile -- Expanded the training dataset of HLA class II peptides and alleles for the EDGE platform -- Augmented its Scientific Advisory Board with the addition of Jean-Charles Soria, M.D., Ph.D., chief executive officer of Gustave Roussy Cancer Campus, the premier European comprehensive cancer center based in Villejuif, France -- Appointed Rahsaan W. Thompson, J.D., seasoned legal executive with over 20 years of corporate counsel experience, as executive vice president and general counsel -- Appointed Elaine V. Jones, Ph.D., an existing board member, to the position of chair of the board of directors

Anticipated Upcoming Milestones

-- Present additional efficacy and safety data from the Phase 1 GRANITE study, including at the higher GRANITE dose level, in 2020 -- Initiate single-arm Phase 2 expansion cohorts with GRANITE for patients with MSS CRC and gastroesophageal cancer in 2020 -- Initiate single-arm Phase 2 expansion cohorts with SLATE for patients with NSCLC following previous therapy with checkpoint inhibitors and patients with TP53 mutations in 2020 -- Nominate a lead bispecific antibody development candidate directed towards a novel solid tumor-specific HLA-peptide complex in 2020 -- Present data from Phase 2 SLATE cohorts in the first half of 2021 -- Present data from Phase 2 GRANITE cohorts in the second half of 2021 -- Report data from SLATE cassette optimized for KRAS mutations in patients with NSCLC in the second half of 2021

Second Quarter 2020 Financial ResultsFor the three months ended June 30, 2020, Gritstone reported a net loss of $25.9 million, compared to a net loss of $21.2 million for the three months ended June 30, 2019.

Collaboration revenue was $0.5 million for the three months ended June 30, 2020, compared to $1.2 million for the three months ended June 30, 2019. Collaboration revenue was due to the Research Collaboration and License Agreement with bluebird bio Inc and another small collaboration agreement.

Total research and development expenses were $21.3 million for the three months ended June 30, 2020, compared to $18.5 million for the three months ended June 30, 2019. The increase was primarily attributable to an increase in personnel-related expenses driven by increased headcount, as well as an increase in facilities-related expenses to accommodate our manufacturing expansion and increased personnel.

General and administrative expenses were $5.3 million for the three months ended June 30, 2020, compared to $4.8 million for the three months ended June 30, 2019. The increase was primarily attributable to an increase in personnel-related expenses.

Cash, cash equivalents, marketable securities and restricted cash were $92.9 million as of June 30, 2020, compared to $128.8 million as of December 31, 2019.

About Gritstone OncologyGritstone Oncology (Nasdaq: GRTS), a clinical-stage biotechnology company, is developing the next generation of cancer immunotherapies to fight multiple cancer types. Gritstone develops its products by leveraging two key pillarssecond, a proprietary machine learning-based platform, Gritstone EDGETM, which is designed to predict, from a routine tumor biopsy, the tumor-specific neoantigens (TSNA) that are presented on a patients tumor cells; and second, the ability to develop and manufacture potent immunotherapies utilizing patients TSNA to potentially drive the patients immune system to specifically attack and destroy tumors. The companys individualized neoantigen-based immunotherapy, GRANITE, and its off the shelf shared neoantigen-based immunotherapy, SLATE, are being evaluated in clinical studies. Novel tumor-specific antigens can also provide targets for bispecific antibody (BiSAb) therapeutics for solid tumors, and Gritstones BiSAb program is currently in lead optimization. For more information, please visit gritstoneoncology.com.

Gritstone Forward-Looking StatementsThis press release contains forward-looking statements, including, but not limited to, statements related to the potential of Gritstones therapeutic programs; the advancements in the Companys ongoing clinical trials; the timing of data announcements related to ongoing clinical trials and the initiation of future clinical trials, including the timing thereof. Such forward-looking statements involve substantial risks and uncertainties that could cause Gritstones research and clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the drug development process, including Gritstones programs early stage of development, the process of designing and conducting preclinical and clinical trials, the regulatory approval processes, the timing of regulatory filings, the challenges associated with manufacturing drug products, Gritstones ability to successfully establish, protect and defend its intellectual property and other matters that could affect the sufficiency of existing cash to fund operations. Gritstone undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the company in general, see Gritstones most recent Quarterly Report on Form 10-Q filed on August 5, 2020 and any current and periodic reports filed with the Securities and Exchange Commission.

ContactsMedia:Dan Budwick1AB(973) 271-6085dan@1abmedia.com

Investors:Alexandra SantosWheelhouse Life Science Advisors(510) 871-6161asantos@wheelhouselsa.com

Gritstone Oncology, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Collaboration $ 488 $ 1,150 $ 1,750 $ 2,497 revenue Operating expenses:Research and 21,290 18,529 43,758 34,428 developmentGeneral and 5,255 4,835 10,720 9,212 administrativeTotaloperating 26,545 23,364 54,478 43,640 expensesLoss from (26,057 ) (22,214 ) (52,728 ) (41,143 ) operationsInterest andother income, 189 1,042 654 1,962 netNet loss $ (25,868 ) $ (21,172 ) $ (52,074 ) $ (39,181 ) Net loss percommon share, $ (0.69 ) $ (0.63 ) $ (1.41 ) $ (1.25 ) basic anddilutedShares used tocompute fornet loss per 37,256,247 33,582,844 37,027,405 31,273,696 common share,basic anddiluted Gritstone Oncology, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) June 30, December 31, 2020 2019 Assets Current assets:Cash and cash $ 62,631 $ 57,408 equivalentsMarketable 29,282 70,368 securitiesPrepaidexpenses and 2,584 3,497 other currentassetsTotal current 94,497 131,273 assetsProperty and 24,581 26,911 equipment, netOperatinglease 23,909 23,427 right-of-useassetsDeposits andother 2,679 2,778 long-termassetsTotal assets $ 145,666 $ 184,389 Liabilitiesand stockholders'equityCurrent liabilities:Accounts $ 4,301 $ 4,621 payableAccrued 3,765 4,598 compensationAccrued 138 1,041 liabilitiesAccruedresearch and 953 1,779 developmentLeaseliabilities, 4,240 2,505 currentportionDeferredrevenue, 5,778 4,956 currentportionTotal current 19,175 19,500 liabilitiesOthernon-current 375 - liabilitiesLeaseliabilities, 22,258 20,985 net of currentportionDeferredrevenue, net 7,630 9,560 of currentportionTotal 49,438 50,045 liabilitiesCommitmentsand contingenciesStockholders' equity:Convertiblepreferred - - stockCommon stock 17 17 Additionalpaid-in 369,223 355,291 capitalAccumulatedother 50 24 comprehensivegainAccumulated (273,062 ) (220,988 ) deficitTotalstockholders' 96,228 134,344 equityTotalliabilitiesand $ 145,666 $ 184,389 stockholders'equity