UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 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) (State or other jurisdiction of incorporation or org ...

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, 2023 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. Delaware 47-4859534 (State or Other Jurisdiction of Incorporation or Organization) 5959 Horton St ...

5 Oncology Redefining Survival in Solid Tumors Therapeutic Neoantigen Cancer Vaccines Personalized Cancer Vaccines are Ushering in a New Era of Immunotherapy Potential proof-of-concept for novel modality is rapidly growing, with multiple randomized studies ongoing | --- | --- | --- | --- | --- | |------------------------|---------------------------|---------------------------------------------------------------|------------------------------------------------|------------------------------------------------ ...

PART I. FINANCIAL INFORMATION Presents Gritstone bio, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents Gritstone bio, Inc.'s unaudited condensed consolidated financial statements and detailed notes for Q2 2023 and FY 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's financial position, including assets, liabilities, and stockholders' equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | **Assets** | | | | Cash and cash equivalents | $41,414 | $55,498 | | Marketable securities | $73,119 | $116,389 | | Total current assets | $122,376 | $182,878 | | Total assets | $222,623 | $240,754 | | **Liabilities** | | | | Total current liabilities | $22,111 | $34,801 | | Debt, noncurrent | $29,723 | $19,349 | | Total liabilities | $113,056 | $69,973 | | **Stockholders' Equity** | | | | Total stockholders' equity | $109,567 | $170,781 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Reports the company's revenues, operating expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Total revenues | $1,955 | $5,471 | $4,397 | $12,662 | | Total operating expenses | $37,683 | $35,139 | $74,942 | $71,293 | | Loss from operations | $(35,728) | $(29,668) | $(70,545) | $(58,631) | | Net loss | $(35,256) | $(29,515) | $(69,238) | $(58,431) | | Net loss per share, basic and diluted | $(0.31) | $(0.34) | $(0.60) | $(0.68) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in the company's equity accounts, including common stock and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------- | :----------------------------- | :------------------------------- | | Total Stockholders' Equity | $109,567 | $170,781 | | Accumulated Deficit | $(590,309) | $(521,071) | - Common stock shares issued and outstanding increased from **86,894,901** at December 31, 2022, to **91,224,210** at June 30, 2023, primarily due to ATM equity offerings, warrant exercises, and ESPP issuances[15](index=15&type=chunk)[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the inflows and outflows of cash from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(71,053) | $(59,788) | | Net cash provided by investing activities | $45,765 | $30,113 | | Net cash provided by (used in) financing activities | $9,664 | $(607) | | Net decrease in cash, cash equivalents and restricted cash | $(15,624) | $(30,282) | | Cash, cash equivalents and restricted cash at end of period | $49,141 | $80,295 | [Notes to Condensed Consolidated Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Provides detailed explanations of the company's accounting policies and specific financial statement components [1. Organization](index=8&type=section&id=1.%20Organization) Describes Gritstone bio, Inc.'s business as a clinical-stage biotechnology company and its going concern status - Gritstone bio, Inc. is a clinical-stage biotechnology company focused on developing targeted immunotherapies for cancer and infectious diseases, operating as a single segment[25](index=25&type=chunk) - The company has incurred significant operating losses and an accumulated deficit (**$590.3 million** as of June 30, 2023), with cash, cash equivalents, and marketable securities (**$114.5 million**) insufficient to fund planned operations for **12 months**, raising substantial doubt about its ability to continue as a going concern[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and estimates used in preparing the financial statements - Interim condensed consolidated financial statements are unaudited, prepared in accordance with U.S. GAAP and SEC rules, and include normal recurring adjustments. They should be read in conjunction with the 2022 Annual Report on Form 10-K[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company uses estimates and judgments in financial statement preparation, particularly for fair value measurements, which are categorized into a **three-tier hierarchy** (Level 1, 2, 3) based on input observability[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[37](index=37&type=chunk) - Debt issuance costs and discounts are amortized to interest expense over the debt term. The company is exposed to credit risk from cash, cash equivalents, and marketable securities, but has not experienced losses and limits investments to high-credit-quality institutions[36](index=36&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - Leases are primarily operating leases, with ROU assets and liabilities recognized for terms over **one year**. Revenue from collaboration and grant agreements is recognized based on performance obligations or as qualifying expenses are incurred[46](index=46&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[60](index=60&type=chunk) - No income tax expense was recorded due to cumulative taxable loss and a full valuation allowance against net deferred tax assets. The 2022 TCJA provision requiring capitalization of R&D expenses did not materially impact financial statements[61](index=61&type=chunk)[62](index=62&type=chunk) [3. Cash Equivalents and Marketable Securities](index=13&type=section&id=3.%20Cash%20Equivalents%20and%20Marketable%20Securities) Details the composition and fair value of the company's cash equivalents and marketable securities Cash Equivalents and Marketable Securities (June 30, 2023, in thousands) | Description | Amortized Cost (June 30, 2023, in thousands) | Fair Value (June 30, 2023, in thousands) | | :----------------------------- | :----------------------------------------- | :--------------------------------------- | | Money market funds | $31,922 | $31,922 | | Short-term marketable securities | $73,244 | $73,119 | | Total | $105,166 | $105,041 | Cash Equivalents and Marketable Securities (December 31, 2022, in thousands) | Description | Amortized Cost (December 31, 2022, in thousands) | Fair Value (December 31, 2022, in thousands) | | :----------------------------- | :------------------------------------------- | :----------------------------------------- | | Money market funds | $38,191 | $38,191 | | Short-term marketable securities | $116,464 | $116,389 | | Long-term marketable securities | $4,036 | $4,031 | | Total | $158,691 | $158,611 | - All marketable securities held as of June 30, 2023, had contractual maturities of **less than one year**. The company has the ability and intent to hold marketable securities in continuous loss positions until maturity or recovery, with no significant credit loss allowance recorded[65](index=65&type=chunk) [4. Fair Value Measurements](index=14&type=section&id=4.%20Fair%20Value%20Measurements) Categorizes financial assets and liabilities based on the observability of inputs for fair value Fair Value Measurements (June 30, 2023, in thousands) | Description | Total (June 30, 2023, in thousands) | Level 1 (June 30, 2023, in thousands) | Level 2 (June 30, 2023, in thousands) | | :----------------------------- | :---------------------------------- | :------------------------------------ | :------------------------------------ | | Money market funds | $31,922 | $31,922 | $— | | Short-term marketable securities | $73,119 | $17,891 | $55,228 | | Total | $105,041 | $49,813 | $55,228 | Fair Value Measurements (December 31, 2022, in thousands) | Description | Total (December 31, 2022, in thousands) | Level 1 (December 31, 2022, in thousands) | Level 2 (December 31, 2022, in thousands) | | :----------------------------- | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Money market funds | $38,191 | $38,191 | $— | | Short-term marketable securities | $116,389 | $35,540 | $80,849 | | Long-term marketable securities | $4,031 | $3,099 | $932 | | Total | $158,611 | $76,830 | $81,781 | - Fair values for money market funds and U.S. treasuries are based on **Level 1** quoted prices. Commercial paper, corporate debt securities, certificates of deposit, asset-backed securities, and U.S. government debt securities are valued using **Level 2** inputs from third-party pricing services[68](index=68&type=chunk) [5. Property and Equipment, Net](index=15&type=section&id=5.%20Property%20and%20Equipment,%20Net) Presents the company's property and equipment, net of accumulated depreciation and amortization Property and Equipment, Net (in thousands) | Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Computer equipment and software | $1,716 | $1,155 | | Furniture and fixtures | $3,006 | $2,285 | | Laboratory equipment | $28,011 | $27,309 | | Leasehold improvements | $18,634 | $18,024 | | Less accumulated depreciation and amortization | $(32,096) | $(28,782) | | Construction-in-progress | $1,172 | $1,344 | | Total property and equipment, net | $20,443 | $21,335 | - Depreciation and amortization expense increased to **$1.9 million** for Q2 2023 (from **$1.5 million** in Q2 2022) and **$3.7 million** for H1 2023 (from **$3.1 million** in H1 2022)[70](index=70&type=chunk) [6. Commitments and Contingencies](index=16&type=section&id=6.%20Commitments%20and%20Contingencies) Details the company's lease obligations and other contractual commitments - The company leases office, laboratory, and storage spaces in Emeryville, Pleasanton, and Cambridge, California and Massachusetts, respectively. A new Boston facility lease commenced in April 2023, adding a **$59.3 million** ROU asset and **$50.9 million** lease liability[71](index=71&type=chunk)[72](index=72&type=chunk)[75](index=75&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) Lease Cost (in thousands) | Lease Cost Category | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Operating lease cost | $4,439 | $2,268 | $6,603 | $4,521 | Lease Metrics | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Cash paid for operating leases (in thousands) | $12,256 | $4,193 | | New ROU assets obtained (in thousands) | $59,320 | $781 | | Weighted-average remaining lease term (years) | 8.6 | 5.1 | | Weighted-average discount rate (operating leases) | 9.9% | 7.4% | Lease Financing Obligation (in thousands) | Year Ending December 31, | Lease Financing Obligation (in thousands) | | :----------------------- | :---------------------------------------- | | 2023 (remaining six months) | $4,625 | | 2024 | $12,637 | | 2025 | $10,695 | | 2026 | $10,413 | | 2027 | $10,504 | | Thereafter | $51,024 | | Total minimum payments | $99,898 | | Less: Interest expense | $(34,236) | | Present value of future minimum lease payments | $65,662 | [7. Balance Sheet Components](index=19&type=section&id=7.%20Balance%20Sheet%20Components) Provides a breakdown of prepaid expenses, other current assets, deposits, and long-term assets Prepaid Expenses and Other Current Assets (in thousands) | Prepaid Expenses and Other Current Assets | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :---------------------------------------- | :----------------------------- | :------------------------------- | | Prepaid research and development-related expenses | $3,694 | $4,241 | | Collaboration receivable | $56 | $135 | | Prepaid insurance | $391 | $1,158 | | Interest and other receivables | $343 | $529 | | Facilities-related deposits | $204 | $384 | | Other | $718 | $567 | | Total | $5,406 | $7,014 | Deposits and Other Long-Term Assets (in thousands) | Deposits and Other Long-Term Assets | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :---------------------------------- | :----------------------------- | :------------------------------- | | Lease security deposits | $934 | $934 | | Prepaid research and development-related expenses | $450 | $643 | | Prepaid rent | $1,145 | $8,162 | | Total | $2,529 | $9,739 | [8. Debt](index=19&type=section&id=8.%20Debt) Describes the company's term loan facility, its terms, and related interest expense - In July 2022, Gritstone entered a **$80.0 million** term loan facility with Hercules Capital and SVB. **$20.0 million** was drawn at closing, and an additional **$10.0 million** in March 2023, bringing the total drawn to **$30.0 million**. An additional **$10.0 million** remains available through December 15, 2023, upon meeting certain milestones[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - The loan bears interest at a cash rate (greater of prime rate + **3.15%** or **7.15%**) and a **2.00%** payment-in-kind rate. Interest-only payments are required until January 1, 2025 (extended by **six months** due to milestone achievement)[89](index=89&type=chunk) - The Loan Agreement was amended in March 2023 to adjust minimum liquidity requirements based on market capitalization and performance milestones. As of June 30, 2023, the company was in compliance with all covenants[91](index=91&type=chunk)[92](index=92&type=chunk) Debt Component (in thousands) | Debt Component | June 30, 2023 (in thousands) | | :------------------------------------------------ | :----------------------------- | | Principal loan balance | $30,000 | | Final fee | $1,725 | | Unamortized debt discount, issuance costs, and unaccreted value of final fee | $(2,002) | | Long term debt, net | $29,723 | - Interest expense related to the Loan Agreement was **$1.0 million** for Q2 2023 and **$1.8 million** for H1 2023, with an effective interest rate of **13%**[93](index=93&type=chunk) [9. Collaboration and License Agreements and Grant Revenue](index=20&type=section&id=9.%20Collaboration%20and%20License%20Agreements%20and%20Grant%20Revenue) Outlines revenue-generating agreements with partners and grant providers for research and development - Gritstone has collaboration and license agreements with 2seventy bio, Gilead Sciences, Arbutus Biopharma, a Non-Profit Hospital Cancer Center, and Genevant Sciences, along with grant agreements with CEPI and the Gates Foundation[94](index=94&type=chunk)[108](index=108&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[131](index=131&type=chunk)[138](index=138&type=chunk) - Under the 2seventy Agreement, Gritstone recognized **$0.3 million** and **$0.7 million** in collaboration revenue for Q2 and H1 2023, respectively, a significant decrease from **$2.3 million** and **$6.3 million** in the prior year due to cumulative catch-up adjustments in 2022[106](index=106&type=chunk) - For the Gilead Collaboration Agreement, Gritstone recognized **$0.1 million** and **$0.2 million** in collaboration revenue for Q2 and H1 2023, respectively. Gilead has an option to progress development beyond Phase 1, which would trigger a **$40.0 million** non-refundable option fee[110](index=110&type=chunk)[122](index=122&type=chunk) - Grant revenue from CEPI Funding Agreement was **$1.1 million** (Q2 2023) and **$2.6 million** (H1 2023), and from Gates Foundation Grant Agreement was **$0.5 million** (Q2 2023) and **$0.9 million** (H1 2023)[136](index=136&type=chunk)[139](index=139&type=chunk) [10. Stockholders' Equity](index=28&type=section&id=10.%20Stockholders'%20Equity) Details changes in common stock, warrant activity, and capital raised through equity offerings - As of June 30, 2023, **91,224,210** shares of common stock were issued and outstanding, up from **86,894,901** at December 31, 2022[142](index=142&type=chunk) - The company has raised capital through various PIPE financings and an 'at-the-market' (ATM) offering program. Through June 30, 2023, **$22.1 million** in aggregate proceeds were received from the 2022 ATM Offering Program, with **$77.2 million** remaining available[143](index=143&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[224](index=224&type=chunk) Warrants Outstanding | Warrant Issue Date | Expiration Date | Exercise Price | Number of Warrants Outstanding (June 30, 2023) | | :----------------- | :-------------- | :------------- | :--------------------------------------------- | | December 28, 2020 | None | $0.01 | 10,713,733 | | October 24, 2022 | None | $0.0001 | 13,274,923 | | Total | | | 23,988,656 | - During H1 2023, **2,859,971** warrants were exercised, resulting in the issuance of **2,849,405** common stock shares[153](index=153&type=chunk) [11. Stock-Based Compensation](index=30&type=section&id=11.%20Stock-Based%20Compensation) Reports on stock option and restricted stock unit activity and related compensation expenses - The 2018 Award Incentive Plan and the 2021 Employment Inducement Incentive Award Plan govern stock-based compensation. The 2021 Plan's share limit was increased by **1,300,000** shares in February 2023[156](index=156&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk) Stock Option Activity | Stock Option Activity | December 31, 2022 | June 30, 2023 | | :-------------------- | :---------------- | :------------ | | Options Outstanding | 6,951,620 | 7,340,113 | | Weighted Average Exercise Price | $7.92 | $7.55 | | Weighted Average Remaining Contractual Term (years) | 8.08 | 7.74 | | Aggregate Intrinsic Value (in thousands) | $1,089 | $188 | - Unrecognized compensation cost for non-vested options was **$11.8 million** as of June 30, 2023, expected to be recognized over a weighted-average period of **2.0 years**[164](index=164&type=chunk) Restricted Stock Units | Restricted Stock Units | December 31, 2022 | June 30, 2023 | | :--------------------- | :---------------- | :------------ | | Outstanding, unvested | 561,526 | 3,457,041 | Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expenses | $1,631 | $1,723 | $3,244 | $3,468 | | General and administrative expenses | $1,309 | $1,631 | $2,587 | $3,017 | | Total | $2,940 | $3,354 | $5,831 | $6,485 | [12. Net Loss Per Common Share](index=32&type=section&id=12.%20Net%20Loss%20Per%20Common%20Share) Calculates basic and diluted net loss per common share, considering potentially dilutive securities Net Loss Per Common Share | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (in thousands) | $(35,256) | $(29,515) | $(69,238) | $(58,431) | | Weighted-average common shares outstanding, basic and diluted | 114,929,523 | 86,448,632 | 114,676,261 | 86,363,116 | | Net loss per share, basic and diluted | $(0.31) | $(0.34) | $(0.60) | $(0.68) | - Potentially dilutive securities, including options, ESPP shares, and restricted stock, were anti-dilutive and thus excluded from diluted EPS calculations due to the net loss position[168](index=168&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition and results of operations for Q2 2023 and FY 2022 [Overview](index=33&type=section&id=Overview) Introduces Gritstone bio's focus on developing vaccine-based immunotherapies for cancer and infectious diseases - Gritstone bio is a clinical-stage biotechnology company developing next-generation vaccine-based immunotherapies for cancer and infectious diseases, leveraging proprietary technologies to generate antigen-specific T cells, particularly cytotoxic CD8+ T cells[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - Key clinical programs include GRANITE (individualized neoantigen vaccine for solid tumors), SLATE (off-the-shelf neoantigen vaccine for solid tumors), CORAL (second-generation SARS-CoV-2 vaccine), and an HIV vaccine program in collaboration with Gilead Sciences[173](index=173&type=chunk)[174](index=174&type=chunk) [COVID-19 Impact on our Business](index=34&type=section&id=COVID-19%20Impact%20on%20our%20Business) Discusses the pandemic's effects on clinical trials, patient recruitment, and operational adjustments - While operations have not been materially impacted, the COVID-19 pandemic has caused slowing of patient recruitment and sample collection in clinical trials. Competition for patients may increase due to clinical site closures[176](index=176&type=chunk) - The company has implemented health and safety measures and a flexible work environment. The expiration of the COVID-19 Public Health Emergency in May 2023 may have an unclear impact on the business[177](index=177&type=chunk) [Oncology Program Updates](index=34&type=section&id=Oncology%20Program%20Updates) Provides updates on the GRANITE and SLATE individualized and off-the-shelf neoantigen immunotherapy programs - GRANITE, an individualized neoantigen-based immunotherapy, received FDA Fast Track designation for MSS-CRC. Phase 1/2 data showed positive results with consistent CD8+ neoantigen-specific T cell induction and an association between molecular responses (ctDNA reduction) and improved overall survival in MSS-CRC patients[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - Enrollment for the Phase 2 portion of the randomized, controlled Phase 2/3 trial for GRANITE in first-line MSS-CRC was completed in August 2023, with preliminary efficacy data expected in **Q1 2024**[182](index=182&type=chunk) - SLATE, an 'off-the-shelf' neoantigen immunotherapy, demonstrated immunogenic superiority of SLATE-KRAS over SLATE v1 in preclinical and clinical studies, showing similar molecular response and overall survival trends to GRANITE. The SLATE platform is considered ready for 'plug and play' application[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - In February 2023, Gritstone entered a clinical trial agreement with the NCI to evaluate SLATE-KRAS in combination with autologous T cell therapy targeting mutated KRAS in a Phase 1 study[187](index=187&type=chunk) [Infectious Disease Program Updates](index=36&type=section&id=Infectious%20Disease%20Program%20Updates) Details progress on the HIV vaccine collaboration and the CORAL COVID-19 vaccine program - The HIV vaccine collaboration with Gilead Sciences is progressing, with a Phase 1 trial ongoing. Preclinical data presented in February 2023 showed strong and broad CD8+ T cell immune responses induced by SIV, ChAd, and samRNA vaccines, enhanced by immune modulators[189](index=189&type=chunk)[190](index=190&type=chunk) - The CORAL program, a second-generation COVID-19 vaccine, aims to elicit potent and durable neutralizing antibody and cytotoxic cellular responses against Spike and other conserved viral targets. Early data from multiple Phase 1 trials suggest potential advantages of self-amplifying mRNA over first-generation mRNA[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - The CORAL program is supported by the Gates Foundation, CEPI, and NIAID, with the goal of developing pan-coronavirus protection against future pandemics[195](index=195&type=chunk) [Components of Our Operating Results](index=37&type=section&id=Components%20of%20Our%20Operating%20Results) Explains the primary drivers of revenue, R&D, G&A expenses, and interest income/expense - The company has not generated revenue from product sales and does not expect to in the foreseeable future. Revenue is currently derived from collaboration and license agreements (2seventy, Gilead) and grant agreements (CEPI, Gates Foundation)[196](index=196&type=chunk)[197](index=197&type=chunk) - Research and development (R&D) expenses are a significant portion of operating costs, expensed as incurred, and include external (CROs, CMOs, license fees) and internal (personnel, facilities) costs. R&D expenses are expected to increase substantially as product candidates advance through clinical stages[198](index=198&type=chunk)[201](index=201&type=chunk)[204](index=204&type=chunk) - General and administrative (G&A) expenses primarily consist of salaries, stock-based compensation, legal costs for patent protection, and professional service fees. G&A expenses are expected to increase with expanded operations and potential commercialization[206](index=206&type=chunk) - Interest income is earned on cash, cash equivalents, and marketable securities. Interest expense is primarily from the debt facility, including contractual interest, amortization of debt discount, and accretion of final payment fees[207](index=207&type=chunk)[208](index=208&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including changes in revenues, operating expenses, and net loss Results of Operations (Three Months Ended June 30, in thousands) | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Total revenues | $1,955 | $5,471 | $(3,516) | | Total operating expenses | $37,683 | $35,139 | $2,544 | | Loss from operations | $(35,728) | $(29,668) | $(6,060) | | Net loss | $(35,256) | $(29,515) | $(5,741) | Results of Operations (Six Months Ended June 30, in thousands) | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Total revenue | $4,397 | $12,662 | $(8,265) | | Total operating expenses | $74,942 | $71,293 | $3,649 | | Loss from operations | $(70,545) | $(58,631) | $(11,914) | | Net loss | $(69,238) | $(58,431) | $(10,807) | - Total revenues decreased significantly YoY for both the three-month (from **$5.5 million** to **$2.0 million**) and six-month (from **$12.7 million** to **$4.4 million**) periods, primarily due to lower collaboration revenue from the 2seventy Agreement, which included large catch-up adjustments in 2022[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - Research and development expenses increased by **$3.6 million** (QoQ) and **$5.9 million** (YoY) due to higher personnel-related expenses, laboratory supplies, and facilities-related costs, partially offset by decreases in outside services and milestone payments[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - General and administrative expenses decreased by **$1.1 million** (QoQ) and **$2.2 million** (YoY), mainly due to reductions in outside services and personnel-related expenses, partially offset by increased facilities-related costs[217](index=217&type=chunk)[218](index=218&type=chunk) - Interest income increased substantially to **$1.5 million** (QoQ) and **$3.2 million** (YoY) due to higher interest rates in 2023. Interest expense was **$1.0 million** (QoQ) and **$1.8 million** (YoY) in 2023, compared to nil in 202 prior periods, reflecting the new debt facility[219](index=219&type=chunk)[220](index=220&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, funding needs, and ability to continue as a going concern - As of June 30, 2023, cash, cash equivalents, and marketable securities totaled **$114.5 million**, down from **$175.9 million** at December 31, 2022. The accumulated deficit grew to **$590.3 million**[221](index=221&type=chunk) - The company's current capital is insufficient to fund operations for **12 months**, and it expects continued operating losses, raising substantial doubt about its ability to continue as a going concern[221](index=221&type=chunk)[233](index=233&type=chunk) - Future funding will be sought through private and public equity offerings (including ATM programs), debt financings, and potential collaboration/license agreements. Failure to secure additional capital could lead to delays or discontinuation of development programs[232](index=232&type=chunk) Cash Flow Activity (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash used in operating activities | $(71,053) | $(59,788) | | Cash provided by investing activities | $45,765 | $30,113 | | Cash provided by (used in) financing activities | $9,664 | $(607) | | Net decrease in cash and cash equivalents | $(15,624) | $(30,282) | - Cash used in operating activities increased to **$71.1 million** in H1 2023 from **$59.8 million** in H1 2022, driven by net loss and changes in operating assets and liabilities. Cash provided by investing activities increased to **$45.8 million** in H1 2023 from **$30.1 million** in H1 2022, primarily from marketable securities maturities[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Cash provided by financing activities was **$9.7 million** in H1 2023, compared to cash used of **$0.6 million** in H1 2022, mainly due to proceeds from long-term debt and ATM equity offerings[241](index=241&type=chunk)[242](index=242&type=chunk) [Critical Accounting Policies and Use of Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) Highlights key accounting policies and the significant judgments and estimates in financial reporting - The preparation of financial statements requires management to make estimates and judgments, including those related to preclinical study trial accruals, fair value of assets and liabilities, and stock-based compensation. No material changes to critical accounting policies have occurred since the 2022 Annual Report on Form 10-K[248](index=248&type=chunk)[249](index=249&type=chunk) [Recent Accounting Pronouncements](index=45&type=section&id=Recent%20Accounting%20Pronouncements) Discusses the expected impact of recently issued accounting standards on financial statements - The company does not expect the adoption of ASU 2020-06 (Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's Own Equity), effective for fiscal years beginning after December 15, 2023, to have a material impact on its condensed consolidated financial statements[63](index=63&type=chunk)[250](index=250&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) No material changes in market risk, including interest rate risk, since the 2022 Annual Report on Form 10-K - No material changes in market risk, including interest rate risk, have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022[251](index=251&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures as effective; no material changes in internal control - As of June 30, 2023, management concluded that the design and operation of the company's disclosure controls and procedures were effective at the reasonable assurance level[252](index=252&type=chunk)[253](index=253&type=chunk) - No material changes in internal control over financial reporting occurred during the three and six months ended June 30, 2023[254](index=254&type=chunk) PART II. OTHER INFORMATION Presents additional information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings with a material adverse effect - The company is not currently involved in any legal proceedings deemed likely to have a material adverse effect on its business[256](index=256&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) Recurring losses and negative cash flows raise substantial doubt about the company's going concern ability - Recurring losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern, necessitating additional capital[259](index=259&type=chunk)[260](index=260&type=chunk) - Failure to raise additional capital through equity, debt, or strategic alliances could materially adversely affect the business, potentially forcing delays, reductions, or elimination of development programs[261](index=261&type=chunk) - No material changes to the risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022, except for the going concern disclosure[258](index=258&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report for the period [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No other information to report [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including organizational documents and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Form of Common Stock Certificate, Description of Common Stock, and certifications from the Chief Executive Officer and Chief Financial Officer[268](index=268&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the cover page formatted in Inline XBRL are also included[269](index=269&type=chunk) [SIGNATURES](index=50&type=section&id=SIGNATURES) Contains the required signatures for the filing of the report

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 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 March 31, 2023 Commission file number: 001-38663 Gritstone bio, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 47-4859534 (State or Other Jurisdicti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 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) (State or other jurisdiction of incorporation or org ...

The Promise of Potent and Durable Immunity Gritstone bio, Inc. Safe Harbor and Forward-Looking Statements The forward-looking statements in this presentation are based on information available to Gritstone as of the date this presentation. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. For a further description of the risks and unc ...

Clinical Programs - Gritstone's GRANITE program has shown a median overall survival of >18 months for patients with microsatellite stable colorectal cancer (MSS-CRC) who demonstrated a molecular response, compared to 7.8 months for those without[201]. - The SLATE program demonstrated a molecular response rate (MRR) of 39% in evaluable patients with advanced non-small cell lung cancer (NSCLC) and colorectal cancer (CRC), comparable to the 44% MRR seen in the GRANITE studies[206]. - Gritstone's oncology programs utilize a heterologous prime-boost approach to activate tumor-specific neoantigens, with GRANITE being individualized and SLATE being off-the-shelf[199]. - The company has initiated a randomized Phase 2/3 study (GRANITE-CRC-1L) for MSS-CRC patients, with initial data expected in Q4 2023[202]. - The CORAL program targets COVID-19 with a second-generation prophylactic vaccine, demonstrating robust immune responses in preclinical and clinical studies[207]. - The CORAL program is a second-generation SARS-CoV-2 vaccine platform that aims to provide more durable protection and broader immunity against variants compared to first-generation vaccines[208]. - Preclinical studies demonstrated significant and sustained levels of neutralizing antibodies and T cells against the Spike protein, with results published in Nature Communications in June 2022[209]. - Four distinct SARS-CoV-2 product candidates are currently being evaluated across three different Phase 1 clinical trials, with data expected in Q4 2022[210]. Financial Performance - For the three months ended September 30, 2022, total revenues were $3.0 million, a slight increase from $2.6 million in the same period in 2021[230]. - The company recognized $15.7 million in total revenues for the nine months ended September 30, 2022, compared to $45.15 million in the same period in 2021, indicating a decline of $29.47 million[231]. - Collaboration and license revenues for the nine months ended September 30, 2022, were $7.94 million, a significant decrease from $44.94 million in the same period in 2021[230]. - The net loss for the nine months ended September 30, 2022, was $88.40 million, compared to a net loss of $45.31 million in the same period in 2021, reflecting an increase in losses of $43.08 million[230]. - The company expects to continue recognizing revenue from collaboration agreements and may generate revenue from product sales in the future[217]. Research and Development Expenses - Research and development expenses for the nine months ended September 30, 2022, were $81.98 million, up from $71.32 million in the same period in 2021, reflecting a $10.66 million increase[230]. - Research and development expenses increased to $26.4 million and $82.0 million for the three and nine months ended September 30, 2022, compared to $24.4 million and $71.3 million for the same periods in 2021[234]. Cash Flow and Financial Position - Cash used in operating activities was $85.6 million for the nine months ended September 30, 2022, compared to $26.9 million in 2021[258]. - The company had cash, cash equivalents, and marketable securities of $139.8 million as of September 30, 2022, down from $206.3 million as of December 31, 2021[241]. - The accumulated deficit increased to $489.8 million as of September 30, 2022, compared to $401.4 million at the end of 2021[241]. - The company expects to continue incurring net operating losses for at least the next several years as it advances its product candidates through clinical development[251]. - Cash provided by financing activities was $18.7 million for the nine months ended September 30, 2022, compared to $75.9 million in 2021[258]. - During the nine months ended September 30, 2022, cash provided by investing activities was $33.2 million, consisting of $102.2 million in proceeds from the maturity of marketable securities, offset by $64.6 million in purchases of marketable securities[261]. Collaborations and Agreements - The company has entered into a collaboration with Gilead Sciences to develop an HIV-specific therapeutic vaccine, with a potential $40 million non-refundable option exercise fee if Gilead progresses beyond Phase 1[214]. - The company is obligated to pay up to $36.4 million in milestone payments related to a contract research and development agreement, with no milestones achieved as of September 30, 2022[270]. General and Administrative Expenses - General and administrative expenses were $6.5 million for the three months ended September 30, 2022, compared to $6.4 million for the same period in 2021, and $22.2 million for the nine months ended September 30, 2022, compared to $19.2 million in 2021[237][238]. Other Financial Information - Interest income was $0.5 million and $0.7 million for the three and nine months ended September 30, 2022, compared to immaterial amounts in the same periods of 2021[239]. - The company has future minimum lease payments totaling $108.1 million under lease agreements, with $2.5 million due in the fourth quarter of 2022[268]. - The company has not entered into any off-balance sheet arrangements as defined under SEC rules[267]. - There have been no changes to critical accounting policies since the last Annual Report filed on March 10, 2022[275]. - There have been no material changes in market risk since the last Annual Report filed for the year ended December 31, 2021[277].

Personalized, off-the-shelf KRAS neoantigen-specific immunotherapy for the treatment of advanced solid tumors: Clinical benefit associated with decreases in ctDNA (SLATE-KRAS) Chrisann Kyi1, Alexander I. Spira2, Chih-Yi Liao3, Ardaman Shergill3, Melissa Lynne Johnson4, Brian S. Henick5, David Paul Carbone6, Hossein Borghaei7, Benny Johnson8, Regan M. Memmott6, Carolyn J. Presley6, Amit Mahipal9, J. Randolph Hecht 10, Daniel V.T. Catenacci3, Jason R. Jaroslavsky11 Desiree Schenk11, Karin Jooss11, Andrew R. F ...

Gritstone bio Inc. (NASDAQ:GRTS) Q2 2022 Earnings Conference Call August 4, 2022 4:30 PM ET Company Participants George MacDougall - Director, Investor Relations and Corporate Communications Andrew Allen - Co-Founder, President, CEO and Director Vassiliki Economides - Executive VP and CFO Karin Jooss - Head of Research and Development Conference Call Participants Marc Frahm - Cowen Tom Shrader - BTIG Sean Lee - H.C. Wainwright Corinne Jenkins - Goldman Sachs Umer Raffat - Evercore Operator Welcome to Gritst ...