Gritstone bio draws Buy rating at B. Riley on mRNA potential

Vaccine-developer Gritstone bio (NASDAQ:GRTS) trended higher on Tuesday after B. Riley launched its coverage with a Buy rating and a 12-month target of $8 per share, noting its prospects in messenger RNA technology.

The analyst Mayank Mamtani argues that Gritstone (GRTS) stands out with its two-pronged approach amid the innovation trend taking place in the mRNA-based personal cancer vaccine space (PCV) led by the likes of Moderna (MRNA)/Merck (MRK) and BioNTech (BNTX).

In December, Moderna (MRNA) posted mid-stage clinical data for a combination involving its mRNA-based vaccine mRNA-4157/V940 and Merck's (MRK) blockbuster immunotherapy Keytruda as an adjuvant treatment for certain patients with melanoma.

Mamtani opines that Gritstone (GRTS) has already disclosed "de-risking" Phase 1 results for its lead programs GRANITE and SLATE "notably in difficult-to-treat, late-line immunologically "cold" tumors," such as colorectal cancer and lung cancer.

He argues the firm even has the potential "to leapfrog the R&D strategy of more advanced" mRNA-based players in PCV space such as Merck (MRK) and Moderna (MRNA), which according to the analyst, have initially targeted "hot" tumors in earlier settings.

Read: Seeking Alpha contributor Edmund Ingham with a Buy rating on GRTS, argues that Phase 2/3 data expected from the company's GRANITE program "could be good enough to secure accelerated approval."