On Wednesday, Gritstone bio (NASDAQ:GRTS) received a new Market Outperform rating from JMP Securities, with a price target set at $4.00. The investment firm started coverage on the biotechnology company, highlighting the near-term potential of its lead GRANITE personalized cancer vaccine candidate. The upcoming Phase 2 results for GRANITE in metastatic colorectal cancer (MSS-CRC) are considered pivotal in setting the tone for the company's platforms.
The Phase 2 readout, which is expected in the coming weeks, will focus on circulating tumor DNA (ctDNA) and progression-free survival (PFS) in approximately 50 front-line MSS-CRC subjects. Despite the historically low responsiveness of MSS-CRC to immunotherapy, JMP Securities has given the program a 50% probability of success. This cautious optimism is based on GRANITE's demonstrated clinical benefit in Phase 1 trials for later-line MSS-CRC patients.
In addition to the immediate focus on MSS-CRC, JMP Securities sees potential in Gritstone's EDGE platform, which could offer broader benefits in the long term. The firm believes this represents possible upside to the current valuation of Gritstone bio. The coverage initiation also notes the promise of Gritstone's self-amplifying mRNA technology in the field of infectious disease, citing evidence of its durability at low doses.
The announcement of the Market Outperform rating and the $4.00 price target reflects the firm's confidence in Gritstone's technology and its prospects in the competitive landscape of cancer immunotherapy and infectious disease treatment. Investors will be closely watching the upcoming Phase 2 results, which could significantly influence the company's stock performance.
InvestingPro Insights
In light of JMP Securities' new Market Outperform rating for Gritstone bio, a closer look at the company's financial health and stock performance metrics from InvestingPro provides additional context for investors. Despite the optimistic outlook on Gritstone's GRANITE vaccine candidate, InvestingPro Tips suggest some caution. Analysts have recently revised their earnings downwards for the upcoming period, and they do not anticipate the company will be profitable this year. This aligns with concerns about Gritstone's cash burn rate, which has been flagged as rapid. For those interested in further analysis, more InvestingPro Tips are available on the company's profile page at https://www.investing.com/pro/GRTS. There are a total of 13 additional tips to explore, offering deeper insights for those considering an investment.
InvestingPro Data metrics reveal a market capitalization of $260.28 million USD and a negative Price to Earnings (P/E) Ratio of -2.21, reflecting the company's current lack of profitability. The Revenue Growth for the last twelve months as of Q3 2023 has decreased by 45.47%, which may be a concern for investors looking for growth potential. However, the stock has shown significant returns over the past week with a 31.25% increase, and an impressive 110.0% return over the last three months, highlighting recent positive momentum in the market.
Investors interested in a comprehensive analysis, including additional InvestingPro Tips, can utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to in-depth financial data and expert insights that can help in making informed investment decisions.
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