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Does This Biotech Have the Secret to Conquering Covid Variants?

By Adria Cimino – Sep 29, 2021 at 7:00AM

Key Points

  • Gritstone is testing its vaccine candidate alone and as a booster.
  • The candidate targets the spike protein and other viral proteins.
  • If all goes smoothly, it could enter the vaccine market -- but farther down the road.

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The company uses mRNA technology -- with a new twist.

Gritstone Bio (GRTS -0.68%) is far from being the first to the coronavirus vaccine finish line. The biotech company's vaccine candidate just began phase 1 trials this year. Like vaccine leaders Pfizer and Moderna, Gritstone's candidate uses mRNA technology. Wait a minute, you might say. Aren't those highly successful vaccines? Why do we need another?

And is there room for a latecomer? Gritstone's clinical trials are in the earliest stage. Even if all goes smoothly, a potential product probably wouldn't be ready until the pandemic is over. But this one may be worth waiting for. Let's take a closer look at why you should keep an eye on this small but exciting player.

A masked and gloved healthcare worker vaccinates a masked patient in a medical office.

Image source: Getty Images.

A second-generation vaccine

Gritstone knows it won't be part of this initial coronavirus vaccine rollout. The company calls its vaccine candidate a second-generation one. And it's also exploring the possibility of using its candidate as a booster for people who've received a primary series from another vaccine maker. Of course, Pfizer and Moderna scored the biggest prize: market leadership during the pandemic.

But that doesn't mean others should pack their bags and go home. Experts say the coronavirus will be around for the long term. We can expect the situation will move from pandemic to endemic. That means the virus will always be present in various areas. And that means individuals still must be protected from it. As a result, we're likely looking at annual vaccination. Much like the flu shot. Pfizer CEO Albert Bourla made the prediction recently in an ABC interview.

So, down the road, the safest and most effective vaccines likely will rise above the rest. What makes Gritstone one to watch? Unlike Pfizer and Moderna, Gritstone uses self-amplifying mRNA. This mRNA replicates within cells -- and this means vaccines can do the job with a lower dose. This in and of itself is positive. It can lead to savings and speed when it comes to manufacturing.

Even better, though, is the way Gritstone's candidate may work against variants. The candidate includes mRNA targeting the spike protein and other viral proteins that are less likely to mutate. This means that even if the spike changes drastically, the immune system still will recognize other bits of the coronavirus -- and fight back. Pfizer, Moderna, and other vaccine makers target the spike protein. The virus uses the spike to infect cells. So, it makes a logical target.

Beyond the spike protein

However, as we move forward and variants gain ground, it clearly is a good idea to expand beyond the spike. Today's vaccines are holding up against strains such as the delta and beta. But breakthrough infections are occurring. And we don't know if the vaccines will perform as well against other variants down the road. It's important to be proactive.

Gritstone in March launched a phase 1 trial in the U.S. to test safety and immune activity. The company then expanded this trial to include individuals who already received authorized vaccines. Gritstone plans to report data by the end of the year.

This month, Gritstone began another trial to study its candidate as a booster in those ages 60 and older. In this study, the candidate will be given to volunteers in the U.K. who already were vaccinated with the AstraZeneca vaccine. Gritstone plans to report initial results early next year.

Of course, vaccine giants Pfizer and Moderna are working on vaccine updates or next-generation vaccines. But if Gritstone shows its vaccine candidate may be more efficacious against variants, it could carve out market share. It's wise of Gritstone to explore booster possibilities too. It could become part of a vaccine mix-and-match option down the road.

Time to invest?

Now, what about buying the shares? Gritstone remains a risky investment right now. That's because the company doesn't yet have products on the market. Gritstone has four programs in the pipeline -- two in oncology and two in infectious diseases. The oncology program is farthest along, with several candidates in phase 2 trials. It's unlikely the coronavirus vaccine program will wrap up in time for an Emergency Use Authorization (EUA) request. The U.S. Food and Drug Administration offers EUAs during a public health emergency. Regulators will go back to the traditional evaluation process once the pandemic is over. So that means a longer time to market for potential products.

Cautious investors should watch Gritstone -- but from afar. For aggressive investors who are looking for a future coronavirus winner, though, it may be a good idea to consider a small position in this biotech stock.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Gritstone bio, Inc. Stock Quote
Gritstone bio, Inc.
$2.92 (-0.68%) $0.02
AstraZeneca Stock Quote
$11,060.00 (0.09%) $10.00
Pfizer Stock Quote
$49.49 (-0.16%) $0.08
Moderna Inc. Stock Quote
Moderna Inc.
$173.15 (-1.27%) $-2.23

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