Vaccine biotech Gritstone bio is filing for bankruptcy while securing a stalking horse bid from an unnamed party, which the company hopes will save its clinical research in cancer and infectious disease.
Gritstone bio has filed for bankruptcy to allow time for a strategic alternatives process that is currently underway to finish up, which could ultimately save its clinical program.
The vaccines-focused biotech announced the filing of a voluntary Chapter 11 petition on Thursday morning. With the bankruptcy proceeding underway, Gritstone will continue discussions with an unnamed party to undergo a stalking horse transaction. A stalking horse bid is when a party swoops in to buy out a bankrupt company’s assets prior to a court auction process. Gritstone plans to operate as normal during the restructuring process.
Gritstone joins a long line of biotechs that have resorted to bankruptcy in recent years as the sector has struggled to regain its footing. A record 41 biotechs filed for bankruptcy in 2023, exceeding the prior high of 20 companies set in 2022.
Gritstone described the pending transaction as “value-maximizing,” and said its assets will continue development under the deal. The biotech has vaccine programs spanning cancer and infectious diseases, including a Phase II personalized vaccine program for colorectal cancer called Granite. Gritstone is also partnered with Gilead on a therapeutic vaccine for HIV.
Gritstone touted an “encouraging” Phase II readout from the Granite program at the end of September, with a 21% relative risk reduction of progression or death in patients taking the study medication versus standard of care, according to the company’s release. The greatest benefit was seen in the half of patients who had lower disease burden at the start of the study; in these patients, the company reported a 38% risk reduction.
Gritstone noted, however, that the data needed more time to mature and that more follow up would help assess the durability of the survival benefit.
Gritstone reported $61.7 million in cash and equivalents as of June 30 and said it was not sufficient to fund operations for a period of 12 months, according to a second quarter earnings filing from August. The company’s runway was expected to run out in the fourth quarter without additional financing.
