Seeking Alpha • Sep 26
Gritstone bio: Early Data For SLATE Candidate Sets Up 2023 Catalyst
Summary
Gritstone bio results from the phase 1/2 study, using SLATE vaccines in treating patients with KRAS mutant MSS-CRC and NSCLC, were positive with a 39% molecular response observed.
Molecular response achieved in KRAS mutant NSCLC patients led to a doubling of overall survival; previous checkpoint inhibitor literature and another study using GRANITE proved this correlation.
Updated results from the phase 1/2 study using SLATE vaccines for KRAS mutant MSS-CRC and NSCLC patients are expected in 2023.
Additional Gritstone bio catalysts include data readouts from three phase 1 studies using CORAL for Covid-19 in 2nd half of 2022 and then GRANITE for MSS-CRC expected in the 2nd half of 2023.
Gritstone bio, Inc. (GRTS) is a great speculative biotech play to look into. That's because it has already released early clinical data showing that its "off the shelf" SLATE candidate is capable of helping solid tumor patients. Especially, where it has moved from SLATE v1 (version 1) over to a more robust mutation targeting solid tumor treatment candidate known as SLATE-KRAS. It was able to achieve a 39% molecular response rate in both patients with late-stage microsatellite-stable colorectal cancer ((MSS-CRC)) and non-small cell lung cancer ((NSCLC)).
While it may play out well for MSS-CRC, I was intrigued about what was shown in the NSCLC patient population. It was shown that for patients with NSCLC who achieved a molecular response, their overall survival ((OS)) number doubled. While observed only in a limited number of patients, this sets up long-term data which is expected to be released from this same study in 2023. I think this might be worth looking into, especially since the company wasn't afraid to apply a shift in strategy. When it saw that SLATEv1 wasn't performing well, it was able to shift over to SLATE-KRAS. Not only that, but I like that SLATE-KRAS (immunotherapy vaccine) can be combined with a PD-1 checkpoint blockade (Opdivo) and an anti-CTLA-4 antibody known as Yervoy. The ability to combine all these to achieve a molecular response, plus an excellent tolerability and safety profile is quite outstanding.
Lastly, there is one more item to consider based on this SLATE vaccine, which is that the most recent data provides a pathway to target earlier lines of solid tumor patients. There are also many other catalysts for investors to look forward to over the next 18 months.
Molecular Response Generates Substantial Improvement In Overall Survival In NSCLC Patients
As I stated above, the most recent data is based on the SLATE-vaccines targeting solid tumor patients with mutations. The results are based on a phase 1/2 study which used SLATE v1 and SLATE-KRAS along with PD-1 checkpoint blockade Opdivo and an anti-CTLA antibody known as Yervoy, to treat both of these patient populations. Both of these KRAS vaccines were targeting patients with late-line microsatellite-stable colorectal cancer ((MSS-CRC)) and non-small cell lung cancer ((NSCLC)). It was noted that both of these vaccines generated a 39% molecular response rate in these specific evaluable patients. What exactly does molecular response mean? In essence the ability to reduce circulating tumor DNA ((ctDNA)) from baseline. The lower the ctDNA, the greater the molecular response rate. Where I believe this biotech has a good chance at moving forward with is specifically targeting NSCLC patients with KRAS mutations. That's not to say it won't still advance the SLATE vaccines against MSS-CRC, but it observed an impressive correlation. What correlation did it observe and why was it to impressive? It was shown that NSCLC patients who took SLATE vaccines, who achieved a molecular response, saw a doubling in their overall survival rate. This can be portrayed as follows:
NSCLC patients who achieved a molecular response - achieved a median overall survival of 9.6 months
NSCLC patients who didn't achieve a molecular response - achieved a median overall survival of 4.5 months.
As you can see, the biomarker of molecular response predicted a greater outcome for these KRAS-mutant NSCLC patients. The two scenarios above prove that from these 18 NSCLC patients who achieved a molecular response, they saw a marked improvement in overall survival. However, updated data later on could also prove such an outcome in the colorectal cancer ((CRC)) patients. Why is that? Well, such a correlation of molecular response and OS could not be done for this patient population because there weren't enough evaluable patients then.
What I would watch for in the next data update is to see if such a molecular response correlation happens for these CRC patients as well. I would also like to note that such a molecular response correlation is not just observed here on a whim. It has been observed in recent publications with checkpoint inhibitors. In addition, Gritstone has proved this same exact correlation with the GRANITE immunotherapy study in patients with advanced CRC. Therefore, with scientific literature making note of molecular response signifying major improvement in overall survival, along with it being observed in two studies by this company, I don't see how this effect can be a mere anomaly.
I highlighted above that it is quite astonishing that SLATE vaccines were combined with Opdivo and Yervoy to achieve this efficacy, yet treatment was highly tolerated. It was shown that the majority of treatment-related adverse events were Grade 1/2. There were about three ≥ Grade 3 events reported with SLATE v1 and no ≥ Grade 3 events reported with SLATE-KRAS. This point here highlights that not only does SLATE-KRAS provide far more substantial efficacy compared to SLATE v1, but that it is also safer to administer to these KRAS tumor associated MSS-CRC/NSCLC patients.
Not Afraid To Alter Strategy Got Them To Reach SLATE-KRAS Vaccine
The data noted above, achieved in the phase 1/2 study, was done with both SLATE v1 and SLATE-KRAS. However, as I described above, SLATE-KRAS is likely going to be the better option moving forward towards other studies in these KRAS mutant tumor patients. Especially, since this positive data provides the rationale for moving towards treating patients with earlier lines of therapy. In other words, these solid tumor patients who have not yet received prior therapies. That's another impressive factor to consider for the molecular responses, along with the improvement OS observed in KRAS mutant NSCLC patients, in that these were patients who took and progressed on prior therapies already. The ability to allow SLATE-KRAS to start working earlier on, when the patient doesn't have advanced cancer disease, may generate a greater response (possibly even an improvement in survival as well). Such an improvement remains to be seen.
The point is that this data noted above allows such a move, as Gritstone Bio has stated it intends to explorer earlier lines of therapy for these patient populations. Why the move to SLATE-KRAS from SLATE v1? The company thought that if it incorporated the targeting of shared neoantigens from KRAS, TP53, Beta-catenin and BRAF genes it could improve upon efficacy. However, this wasn't the case as non-KRAS neoantigens could gain immunodominance over their counterparts of KRAS neoantigens, thus making them obsolete. That was counterintuitive and as such, SLATE-KRAS was born. SLATE-KRAS is impressive because of its ability to exclusively only go after KRAS neoantigens.
Over the years, you may have heard of common KRAS mutations/therapy targets such as G12C, G12D, G12V and Q61H. I think it was great that Gritstone recognized the need to pivot in this situation. Such a change in strategy allowed it to generate the data it date from the phase 1/2 study. While not all patients received SLATE-KRAS (some received SLATE v1), positive efficacy was still observed across both patient populations with both neoantigen vaccines. Again, moving forward, I believe that SLATE-KRAS will be the vaccine to move forward with. This point is illustrated as follows:
Induction of KRAS-specific CD8+ T-cells for those given SLATE-KRAS - 55%
Induction o KRAS specific CD8+ T-cells for those given SLATE v1 - 31%
This highlights that the pivot to SLATE-KRAS was a great move. The biotech recognized the need to pivot and it did so quickly. Additional results from the phase 1/2 study to be released in 2023 will shed more light on this SLATE vaccine program. As such, this is a major catalyst for investors to look forward to moving into next year.
Financials
According to the 10-Q SEC Filing, Gritstone Bio had cash, cash equivalents, marketable securities and restricted cash of $159.2 million as of June 30, 2022. Despite this amount of cash, I think that this biotech is worth a look because it was able to establish an $80 million credit facility with Hercules Capital Inc., and Silicon Valley Bank. Under the terms of the agreement, it obtained $20 million upon closing and then another $10 million available for drawdown by March 15, 2023. From there, it could receive the remaining $50 million as tranches all the way through June 15, 2024. This is significant, because over the next 18 months it will have many other catalysts to look forward to. Not only will there be an update on the phase 1/2 study using the SLATE vaccine targeting MSS-CRC and NSCLC, but there are many other data updates for investors to look forward to. For instance, there are three ongoing phase 1 studies using CORAL vaccine for Covid-19. Results from all three of these early-stage studies from the CORAL program are expected in the 2nd half of 2022. Besides SLATE vaccines being used for cancer, there is another neoantigen treatment being developed by this biotech known as GRANITE.
This treatment is being explored in a phase 2/3 study in combination with immune checkpoint blockade for 1st-line maintenance treatment of newly diagnosed patients with metastatic, microsatellite-stable colorectal cancer ((MSS-CRC)). Preliminary results from this specific study is another catalyst to look forward to and the expected release is set for 2nd half of 2023. The bottom-line is that this cash position should likely be enough for the expected catalysts. However, it will likely need to raise cash before the end of 2023 if the credit facility is not enough to cover costs.
For the time being, it estimates that is has enough cash to last for at least the next 12 months from August of 2022. Therefore, it's possible it may need to raise cash by other means by at least Q1 of 2023, if it feels the Credit Facility it developed won't be enough.
Risks To Business
There are several risks that investors should be aware of before investing in this biotech. The biggest risk to consider for the near-term would be the ongoing CORAL program, which is being explored in three ongoing phase 1 studies. Results from all of these studies are expected to be readout in the 2nd half of 2022. While the hope is that it can advance this program forward, there is no guarantee that the efficacy results will warrant further exploration for CORAL. As such, it's possible that these studies could be terminated if the desired efficacy is not achieved, especially since there are so many Covid-19 vaccines/treatments out there already.