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10-Q

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, 2023

☐ 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 7, 2023, there were 93,075,427 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, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	43
Item 4.	Controls and Procedures	43

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	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46

SIGNATURES		48

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,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	41,414		$	55,498
Marketable securities		73,119			116,389
Restricted cash		2,437			3,977
Prepaid expenses and other current assets		5,406			7,014
Total current assets		122,376			182,878
Long-term restricted cash		5,290			5,290
Property and equipment, net		20,443			21,335
Lease right-of-use assets		71,985			17,481
Deposits and other long-term assets		2,529			9,739
Long-term marketable securities		—			4,031
Total assets	$	222,623		$	240,754
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	4,925		$	8,694
Accrued compensation		6,036			8,215
Accrued liabilities		1,452			4,124
Accrued research and development expenses		2,042			3,343
Lease liabilities, current portion		4,838			5,294
Deferred revenue, current portion		2,818			5,131
Total current liabilities		22,111			34,801
Other liabilities, noncurrent		398			150
Lease liabilities, net of current portion		60,824			15,673
Debt, noncurrent		29,723			19,349
Total liabilities		113,056			69,973
Commitments and contingencies (Notes 6, 8 and 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized at June 30, 2023 and December 31, 2022; 91,224,210 and 86,894,901 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		22			22
Additional paid-in capital		699,979			691,910
Accumulated other comprehensive loss		(125	)		(80	)
Accumulated deficit		(590,309	)		(521,071	)
Total stockholders’ equity		109,567			170,781
Total liabilities and stockholders’ equity	$	222,623		$	240,754

See accompanying notes to the unaudited condensed consolidated financial statements.

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,
	2023			2022			2023			2022
Revenues:
Collaboration and license revenues	$	400		$	2,761		$	941		$	7,506
Grant revenues		1,555			2,710			3,456			5,156
Total revenues		1,955			5,471			4,397			12,662
Operating expenses:
Research and development		30,967			27,347			61,481			55,546
General and administrative		6,716			7,792			13,461			15,747
Total operating expenses		37,683			35,139			74,942			71,293
Loss from operations		(35,728	)		(29,668	)		(70,545	)		(58,631	)
Interest income		1,479			153			3,157			200
Interest expense		(985	)		—			(1,828	)		—
Other expense		(22	)		—			(22	)		—
Net loss		(35,256	)		(29,515	)		(69,238	)		(58,431	)
Other comprehensive loss:
Unrealized loss on marketable securities		(73	)		(19	)		(45	)		(337	)
Comprehensive loss	$	(35,329	)	$	(29,534	)	$	(69,283	)	$	(58,768	)
Net loss per share, basic and diluted	$	(0.31	)	$	(0.34	)	$	(0.60	)	$	(0.68	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		114,929,523			86,448,632			114,676,261			86,363,116

See accompanying notes to the unaudited condensed consolidated financial statements.

Gritstone bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share amounts)

Three Months Ended June 30, 2023:


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at March 31, 2023		87,848,417	$	22	$	695,961	$	(52	)	$	(555,053	)	$	140,878
Issuance of common stock upon exercise of stock options		6,000		—		5		—			—			5
Issuance of common stock under the ATM equity offering program, net of issuance costs of $21		246,199		—		623		—			—			623
Issuance of common stock for warrant exercises		2,849,405		—		—		—			—			—
Issuance of common stock under the ESPP		274,189		—		450		—			—			450
Stock-based compensation		—		—		2,940		—			—			2,940
Unrealized loss on marketable securities		—		—		—		(73	)		—			(73	)
Net loss		—		—		—		—			(35,256	)		(35,256	)
Balance at June 30, 2023		91,224,210	$	22	$	699,979	$	(125	)	$	(590,309	)	$	109,567

Three Months Ended June 30, 2022:


	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		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

Continued on next page.

See accompanying notes to the unaudited condensed consolidated financial statements.

Gritstone bio, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share amounts)

Six Months Ended June 30, 2023:


	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital			Loss			Deficit			Equity
Balance at December 31, 2022		86,894,901	$	22	$	691,910		$	(80	)	$	(521,071	)	$	170,781
Issuance of common stock under the ATM equity offering program, net of issuance costs of $79		854,052		—		2,525			—			—			2,525
Issuance of common stock upon restricted stock units vesting		345,663		—		—			—			—			—
Tax payments related to shares withheld for vested restricted stock units		—		—		(742	)		—			—			(742	)
Issuance of common stock upon exercise of stock options		6,000		—		5			—			—			5
Issuance of common stock for warrant exercises		2,849,405		—		—			—			—			—
Issuance of common stock under the ESPP		274,189		—		450			—			—			450
Stock-based compensation		—		—		5,831			—			—			5,831
Unrealized loss on marketable securities		—		—		—			(45	)		—			(45	)
Net loss		—		—		—			—			(69,238	)		(69,238	)
Balance at June 30, 2023		91,224,210	$	22	$	699,979		$	(125	)	$	(590,309	)	$	109,567

Six Months Ended June 30, 2022:

Common Stock

Additional
Paid-In

Accumulated
Other
Comprehensive