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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38663

 

Gritstone bio, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

47-4859534

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

5959 Horton Street, Suite 300

Emeryville, California

 

94608

(Address of Principal Executive Offices)

 

(Zip Code)

(510) 871-6100

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

GRTS

 

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of August 3, 2022, there were 73,006,922 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

 


 

Gritstone bio, Inc.

Table of Contents

 

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

1

Item 1.

 

Financial Statements (unaudited)

 

1

 

 

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

 

1

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021

 

2

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021

 

3

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

 

5

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

6

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

30

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risks

 

42

Item 4.

 

Controls and Procedures

 

42

 

 

 

 

 

PART II. OTHER INFORMATION

 

44

Item 1.

 

Legal Proceedings

 

44

Item 1A.

 

Risk Factors

 

44

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

48

Item 3.

 

Defaults Upon Senior Securities

 

49

Item 4.

 

Mine Safety Disclosures

 

49

Item 5.

 

Other Information

 

49

Item 6.

 

Exhibits

 

50

 

 

 

 

 

SIGNATURES

 

51

 

 

 


 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Gritstone bio, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share

amounts and par value)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,694

 

 

$

93,287

 

Marketable securities

 

 

78,939

 

 

 

108,346

 

Restricted cash

 

 

9,311

 

 

 

11,285

 

Prepaid expenses and other current assets

 

 

7,791

 

 

 

7,672

 

Total current assets

 

 

161,735

 

 

 

220,590

 

Long-term restricted cash

 

 

5,290

 

 

 

6,005

 

Property and equipment, net

 

 

22,712

 

 

 

21,622

 

Lease right-of-use assets

 

 

21,126

 

 

 

22,920

 

Deposits and other long-term assets

 

 

3,090

 

 

 

2,352

 

Long-term marketable securities

 

 

 

 

 

4,617

 

Total assets

 

$

213,953

 

 

$

278,106

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,381

 

 

$

4,230

 

Accrued compensation

 

 

5,331

 

 

 

6,925

 

Accrued liabilities

 

 

2,035

 

 

 

411

 

Accrued research and development expenses

 

 

4,386

 

 

 

3,706

 

Lease liabilities, current portion

 

 

7,174

 

 

 

7,483

 

Deferred revenue, current portion

 

 

11,079

 

 

 

17,201

 

Total current liabilities

 

 

32,386

 

 

 

39,956

 

Lease liabilities, net of current portion

 

 

17,800

 

 

 

18,936

 

Deferred revenue, net of current portion

 

 

389

 

 

 

3,128

 

Total liabilities

 

 

50,575

 

 

 

62,020

 

Commitments and contingencies (Notes 6 and 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized;
   
no shares issued and outstanding at June 30, 2022 and
   December 31, 2021

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares authorized
   at June 30, 2022 and December 31, 2021;
73,006,089 and
   
69,047,878 shares issued and outstanding at June 30, 2022 and
   December 31, 2021, respectively

 

 

20

 

 

 

20

 

Additional paid-in capital

 

 

623,583

 

 

 

617,523

 

Accumulated other comprehensive loss

 

 

(410

)

 

 

(73

)

Accumulated deficit

 

 

(459,815

)

 

 

(401,384

)

Total stockholders’ equity

 

 

163,378

 

 

 

216,086

 

Total liabilities and stockholders’ equity

 

$

213,953

 

 

$

278,106

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

1


 

Gritstone bio, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenues

 

$

2,761

 

 

$

2,843

 

 

$

7,506

 

 

$

42,536

 

Grant revenues

 

 

2,710

 

 

 

 

 

 

5,156

 

 

 

 

Total revenues

 

 

5,471

 

 

 

2,843

 

 

 

12,662

 

 

 

42,536

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

27,347

 

 

 

22,072

 

 

 

55,546

 

 

 

46,928

 

General and administrative

 

 

7,792

 

 

 

5,937

 

 

 

15,747

 

 

 

12,878

 

Total operating expenses

 

 

35,139

 

 

 

28,009

 

 

 

71,293

 

 

 

59,806

 

Loss from operations

 

 

(29,668

)

 

 

(25,166

)

 

 

(58,631

)

 

 

(17,270

)

Interest income, net

 

 

153

 

 

 

48

 

 

 

200

 

 

 

75

 

Net loss

 

 

(29,515

)

 

 

(25,118

)

 

 

(58,431

)

 

 

(17,195

)

Other comprehensive gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

 

(19

)

 

 

17

 

 

 

(337

)

 

 

14

 

Net and comprehensive loss

 

$

(29,534

)

 

$

(25,101

)

 

$

(58,768

)

 

$

(17,181

)

Net loss per share, basic and diluted

 

$

(0.34

)

 

$

(0.33

)

 

$

(0.68

)

 

$

(0.23

)

Weighted-average number of shares used in
   computing net loss per share,
   basic and diluted

 

 

86,448,632

 

 

 

76,749,641

 

 

 

86,363,116

 

 

 

76,368,506

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

2


 

Gritstone bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share amounts)

Three Months Ended June 30, 2022:

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at March 31, 2022

 

 

72,779,508

 

 

$

20

 

 

$

619,862

 

 

$

(391

)

 

$

(430,300

)

 

$

189,191

 

Issuance of common stock upon exercise of
   stock options

 

 

33,325

 

 

 

 

 

 

36

 

 

 

 

 

 

 

 

 

36

 

Issuance of common stock under the ESPP

 

 

193,256

 

 

 

 

 

 

331

 

 

 

 

 

 

 

 

 

331

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,354

 

 

 

 

 

 

 

 

 

3,354

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(19

)

 

 

 

 

 

(19

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,515

)

 

 

(29,515

)

Balance at June 30, 2022

 

 

73,006,089

 

 

$

20

 

 

$

623,583

 

 

$

(410

)

 

$

(459,815

)

 

$

163,378

 

Three Months Ended June 30, 2021:

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at March 31, 2021

 

 

49,197,828

 

 

$

18

 

 

$

517,715

 

 

$

(3

)

 

$

(318,379

)

 

$

199,351

 

Issuance of common stock under the
   ATM equity offering program, net of
   issuance costs of $
45

 

 

170,103

 

 

 

 

 

 

1,620

 

 

 

 

 

 

 

 

 

1,620

 

Issuance of common stock upon exercise
   of stock options

 

 

65,430

 

 

 

 

 

 

222

 

 

 

 

 

 

 

 

 

222

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,733

 

 

 

 

 

 

 

 

 

2,733

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,118

)

 

 

(25,118

)

Balance at June 30, 2021

 

 

49,433,361

 

 

$

18

 

 

$

522,290

 

 

$

14

 

 

$

(343,497

)

 

$

178,825

 

 

Continued on next page.

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

3


 

Gritstone bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share amounts)

Six Months Ended June 30, 2022:

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

69,047,878

 

 

$

20

 

 

$

617,523

 

 

$

(73

)

 

$

(401,384

)

 

$

216,086

 

Issuance of common stock for warrant
   exercises

 

 

3,442,567

 

 

 

 

 

 

34

 

 

 

 

 

 

 

 

 

34

 

Issuance of common stock upon restricted
   stock units vesting

 

 

215,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax payments related to shares withheld for
   vested restricted stock units

 

 

 

 

 

 

 

 

(890

)

 

 

 

 

 

 

 

 

(890

)

Issuance of common stock upon exercise
   of stock options

 

 

107,038

 

 

 

 

 

 

100

 

 

 

 

 

 

 

 

 

100

 

Issuance of common stock under the ESPP

 

 

193,256

 

 

 

 

 

 

331

 

 

 

 

 

 

 

 

 

331

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,485

 

 

 

 

 

 

 

 

 

6,485

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(337

)

 

 

 

 

 

(337

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(58,431

)

 

 

(58,431

)

Balance at June 30, 2022

 

 

73,006,089

 

 

$

20

 

 

$

623,583

 

 

$

(410

)

 

$

(459,815

)

 

$

163,378

 

Six Months Ended June 30, 2021:

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2020

 

 

47,552,693

 

 

$

18

 

 

$

493,023

 

 

$

 

 

$

(326,302

)

 

$

166,739

 

Offering costs related to the sale of
   common stock and pre-funded warrants

 

 

 

 

 

 

 

 

(451

)

 

 

 

 

 

 

 

 

(451

)

Issuance of common stock under Sales
   Purchase Agreement, net of issuance
   costs of $
330

 

 

1,169,591

 

 

 

 

 

 

20,839

 

 

 

 

 

 

 

 

 

20,839

 

Issuance of common stock under the
   ATM equity offering program, net of
   issuance costs of $
45

 

 

170,103

 

 

 

 

 

 

1,620

 

 

 

 

 

 

 

 

 

1,620

 

Issuance of common stock upon exercise
   of stock options

 

 

431,410

 

 

 

 

 

 

2,046

 

 

 

 

 

 

 

 

 

2,046

 

Issuance of common stock under the
   ESPP

 

 

109,564

 

 

 

 

 

 

279

 

 

 

 

 

 

 

 

 

279

 

Stock-based compensation