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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 September 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 November 1, 2022, there were 83,366,277 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 September 30, 2022 and December 31, 2021

 

1

 

 

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

 

2

 

 

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

 

3

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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

 

32

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risks

 

45

Item 4.

 

Controls and Procedures

 

45

 

 

 

 

 

PART II. OTHER INFORMATION

 

46

Item 1.

 

Legal Proceedings

 

46

Item 1A.

 

Risk Factors

 

46

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

46

Item 3.

 

Defaults Upon Senior Securities

 

46

Item 4.

 

Mine Safety Disclosures

 

46

Item 5.

 

Other Information

 

46

Item 6.

 

Exhibits

 

47

 

 

 

 

 

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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

64,909

 

 

$

93,287

 

Marketable securities

 

 

74,900

 

 

 

108,346

 

Restricted cash

 

 

6,727

 

 

 

11,285

 

Prepaid expenses and other current assets

 

 

6,891

 

 

 

7,672

 

Total current assets

 

 

153,427

 

 

 

220,590

 

Long-term restricted cash

 

 

5,290

 

 

 

6,005

 

Property and equipment, net

 

 

21,672

 

 

 

21,622

 

Lease right-of-use assets

 

 

19,321

 

 

 

22,920

 

Deposits and other long-term assets

 

 

5,532

 

 

 

2,352

 

Long-term marketable securities

 

 

 

 

 

4,617

 

Total assets

 

$

205,242

 

 

$

278,106

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,885

 

 

$

4,230

 

Accrued compensation

 

 

6,708

 

 

 

6,925

 

Accrued liabilities

 

 

2,670

 

 

 

411

 

Accrued research and development expenses

 

 

5,037

 

 

 

3,706

 

Lease liabilities, current portion

 

 

6,325

 

 

 

7,483

 

Deferred revenue, current portion

 

 

8,688

 

 

 

17,201

 

Total current liabilities

 

 

32,313

 

 

 

39,956

 

Other liabilities, noncurrent

 

 

49

 

 

 

 

Lease liabilities, net of current portion

 

 

16,752

 

 

 

18,936

 

Deferred revenue, net of current portion

 

 

 

 

 

3,128

 

Debt, noncurrent

 

 

19,281

 

 

 

 

Total liabilities

 

 

68,395

 

 

 

62,020

 

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 September 30, 2022 and
   December 31, 2021

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares authorized
   at September 30, 2022 and December 31, 2021;
73,134,051 and
   
69,047,878 shares issued and outstanding at September 30, 2022 and
   December 31, 2021, respectively

 

 

20

 

 

 

20

 

Additional paid-in capital

 

 

626,889

 

 

 

617,523

 

Accumulated other comprehensive loss

 

 

(281

)

 

 

(73

)

Accumulated deficit

 

 

(489,781

)

 

 

(401,384

)

Total stockholders’ equity

 

 

136,847

 

 

 

216,086

 

Total liabilities and stockholders’ equity

 

$

205,242

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Collaboration and license revenues

 

$

436

 

 

$

2,401

 

 

$

7,942

 

 

$

44,937

 

Grant revenues

 

 

2,585

 

 

 

213

 

 

 

7,741

 

 

 

213

 

Total revenues

 

 

3,021

 

 

 

2,614

 

 

 

15,683

 

 

 

45,150

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

26,436

 

 

 

24,396

 

 

 

81,983

 

 

 

71,324

 

General and administrative

 

 

6,462

 

 

 

6,373

 

 

 

22,209

 

 

 

19,251

 

Total operating expenses

 

 

32,898

 

 

 

30,769

 

 

 

104,192

 

 

 

90,575

 

Loss from operations

 

 

(29,877

)

 

 

(28,155

)

 

 

(88,509

)

 

 

(45,425

)

Interest income

 

 

462

 

 

 

37

 

 

 

663

 

 

 

112

 

Interest expense

 

 

(551

)

 

 

 

 

 

(551

)

 

 

 

Net loss

 

 

(29,966

)

 

 

(28,118

)

 

 

(88,397

)

 

 

(45,313

)

Other comprehensive gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

 

129

 

 

 

(7

)

 

 

(208

)

 

 

7

 

Comprehensive loss

 

$

(29,837

)

 

$

(28,125

)

 

$

(88,605

)

 

$

(45,306

)

Net loss per share, basic and diluted

 

$

(0.35

)

 

$

(0.36

)

 

$

(1.02

)

 

$

(0.59

)

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

 

 

86,597,405

 

 

 

77,775,497

 

 

 

86,441,212

 

 

 

76,837,503

 

 

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 September 30, 2022:

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2022

 

 

73,006,089

 

 

$

20

 

 

$

623,583

 

 

$

(410

)

 

$

(459,815

)

 

$

163,378

 

Issuance of common stock under the
   ATM equity offering program, net of
   issuance costs of $
48

 

 

95,000

 

 

 

 

 

 

197

 

 

 

 

 

 

 

 

 

197

 

Issuance of common stock upon exercise of
   stock options

 

 

32,962

 

 

 

 

 

 

45

 

 

 

 

 

 

 

 

 

45

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,064

 

 

 

 

 

 

 

 

 

3,064

 

Unrealized gain on marketable securities

 

 

 

 

 

 

 

 

 

 

 

129

 

 

 

 

 

 

129

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,966

)

 

 

(29,966

)

Balance at September 30, 2022

 

 

73,134,051

 

 

$

20

 

 

$

626,889

 

 

$

(281

)

 

$

(489,781

)

 

$

136,847

 

Three Months Ended September 30, 2021:

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Gain (Loss)

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2021

 

 

49,433,361

 

 

$

18

 

 

$

522,290

 

 

$

14

 

 

$

(343,497

)

 

$

178,825

 

Issuance of common stock under the
   ATM equity offering program, net of
   issuance costs of $
49

 

 

55,062

 

 

 

 

 

 

602

 

 

 

 

 

 

 

 

 

602

 

Issuance of common stock under private
   investment in public entity (“PIPE”)
   financing, net of issuance costs of
   $
2,269

 

 

5,000,000

 

 

 

1

 

 

 

52,731

 

 

 

 

 

 

 

 

 

52,732

 

Issuance of common stock for warrant
   exercises

 

 

9,555,876

 

 

 

1

 

 

 

39

 

 

 

 

 

 

 

 

 

40

 

Issuance of common stock upon exercise
   of stock options

 

 

207,282

 

 

 

 

 

 

1,062

 

 

 

 

 

 

 

 

 

1,062

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,819

 

 

 

 

 

 

 

 

 

2,819

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(7

)

 

 

 

 

 

(7

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,118

)

 

 

(28,118

)

Balance at September 30, 2021

 

 

64,251,581

 

 

$

20

 

 

$

579,543

 

 

$

7

 

 

$

(371,615

)

 

$

207,955

 

 

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)

Nine Months Ended September 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 under the
   ATM equity offering program, net of
   issuance costs of $
48

 

 

95,000

 

 

 

 

 

 

197

 

 

 

 

 

 

 

 

 

197

 

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

 

 

140,000

 

 

 

 

 

 

145

 

 

 

 

 

 

 

 

 

145

 

Issuance of common stock under the ESPP

 

 

193,256

 

 

 

 

 

 

331

 

 

 

 

 

 

 

 

 

331

 

Stock-based compensation

 

 

 

 

 

 

 

 

9,549

 

 

 

 

 

 

 

 

 

9,549

 

Unrealized loss on marketable securities

 

 

 

 

 

 

 

 

 

 

 

(208

)

 

 

 

 

 

(208

)

Net loss

 

 

 

 

 

 

 

 

&