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June 3, 2018
Andrew Allen, M.D., Ph.D.
President and Chief Executive Officer
Gritstone Oncology, Inc.
5858 Horton Street, Suite 210
Emeryville, California 94608
Re: Gritstone Oncology, Inc.
Draft Registration Statement on Form S-1
Submitted May 4, 2018
CIK No. 0001656634
Dear Dr. Allen:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Implications of Being an Emerging Growth Company, page 6
1. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Andrew Allen, M.D., Ph.D.
FirstName LastNameAndrew Allen, M.D., Ph.D.
Gritstone Oncology, Inc.
Comapany NameGritstone Oncology, Inc.
June 3, 2018
June 3, 2018 Page 2
Page 2
FirstName LastName
Risk Factors
Litigation or other proceedings or third-party claims of intellectual property
infringement, page
47
2. We note your disclosure concerning pending patent applications in the
U.S. and European
Union that may impact your ability to commercialize GRANITE-001.
Please disclose
whether these potential patents are composition of matter, use or
process patents and when
such patents, if issued, would expire. With respect to the European
patent, please identify
which European countries would be covered by this patent.
Use of Proceeds, page 72
3. We note that you intend to use the net proceeds from this offering to
fund your planned
Phase 1/2 clinical trial of GRANITE-001 and the continued buildout of
your
manufacturing facility. Please revise your disclosure to clarify
whether the net proceeds
will be sufficient to complete these purposes; if they will not be
sufficient, please disclose
how far into the trial and the buildout you expect to reach with the
offering proceeds.
Please also describe what the buildout entails, as it appears you
opened the facility in
November 2017.
Critical Accounting Policies and Use of Estimates
Stock-Based Compensation, page 90
4. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
Business
License Agreement with Arbutus Biopharma Corporation, page 118
5. Please disclose the royalty term for this agreement.
Intellectual Property, page 119
6. Please identify all of the jurisdictions where you have pending patent
applications with
claims related to neoantigen identification and related uses and
manufacture. Please also
revise to disclose how many of your pending patent applications relate
to composition of
matter, use or process patents and whether all of the pending patents
relate to GRANITE-
001.
Andrew Allen, M.D., Ph.D.
Gritstone Oncology, Inc.
June 3, 2018
Page 3
Executive Compensation Arrangements, page 149
7. We note your disclosure in this section that you were party to offer
letters with each of
your named executive officers as of December 31, 2017. Please clarify
whether these
offer letters are still in effect or whether they were replaced by the
employment
agreements that you intend to file. If that is not the case, please file
the offer letters as
exhibits or tell us why you believe that you are not required to do so
pursuant to Item
601(b)(10) of Regulation S-K.
Notes to Financial Statements
9. Convertible Preferred Stock and Common Stock
Convertible Preferred Stock, page F-21
8. Please provide us an analysis with reference to authoritative literature
supporting your
classification of the convertible preferred stock as permanent equity
rather than outside of
permanent equity. In your response, please include how you considered
whether
redemption or liquidation rights are within the company's control as well
as how you
considered that the convertible preferred stockholders are entitled to
elect four of the five
directors of the company.
General
9. Please provide us proofs of all graphics, visual, or photographic
information you will
provide in the printed prospectus prior to its use, for example in a
preliminary prospectus.
Please note that we may have comments regarding this material.
You may contact Rolf Sundwall at 202-551-3105 or Jim B. Rosenberg at
202-551-3679 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Ada D. Sarmento at 202-551-3798 or Mary Beth Breslin at 202-551-3625
with any other
questions.
FirstName LastNameAndrew Allen, M.D., Ph.D.
Division of
Corporation Finance
Comapany NameGritstone Oncology, Inc.
Office of
Healthcare & Insurance
June 3, 2018 Page 3
cc: Brian J. Cuneo, Esq.
FirstName LastName