Please ensure Javascript is enabled for purposes of website accessibility

Why Gritstone Oncology Is Bolting Higher Today

By George Budwell - Jan 19, 2021 at 9:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Gritstone's COVID-19 vaccine may have a critical role to play in halting the ongoing pandemic.

What happened

Shares of the clinical-stage biotech Gritstone Oncology (GRTS -1.51%) rose by as much as 44% in pre-market trading Tuesday morning. The drugmaker's stock is heating up today in response to an agreement with the National Institute of Allergy and Infectious Diseases (NIAID) to initiate a phase 1 trial of its second-generation SARS-CoV-2 vaccine candidate.

The NIAID is reportedly covering the cost of the vaccine's early-stage trial through its Infectious Diseases Clinical Research Consortium. The Bill and Melinda Gates Foundation provided a grant to fund the vaccine's pre-clinical evaluation -- work that seems to indicate that this novel vaccine candidate may confer a more robust and prolonged immune response than the first wave of COVID-19 vaccines. 

A researcher inspecting vials of COVID-19 vaccine.

Image source: Getty Images.

So what

While there are already two COVID-19 vaccines approved under the FDA's emergency use authorization program and three more vaccines in late-stage development inside the U.S., there are serious questions about the ability of any these first-generation vaccines to provide long-term immunity against SARS-CoV-2. Gritstone's vaccine candidate is designed to fill this critical gap by evoking T-cell responses -- the key to long-term immunity -- across multiple forms of the virus. This novel vaccine, in effect, may play a major role in both curtailing the ongoing pandemic and perhaps transforming COVID-19 into a fairly rare seasonal ailment. Time will tell.  

Now what

Is this tiny biotech stock a screaming buy on this news? Probably not. The long and short of it is that Gritstone's COVID-19 vaccine is unlikely to ever advance into late-stage testing. That's not to say that it can't happen, but a lot has to go wrong within the current crop of COVID-19 options for there to be a real need for this early-stage vaccine. 

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Gritstone bio, Inc. Stock Quote
Gritstone bio, Inc.
GRTS
$1.95 (-1.51%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
327%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.