GRTS - Gritstone bio sheds 14% as Goldman Sachs cuts to sell on liquidity issues

• Gritstone bio ( NASDAQ: GRTS ) slipped ~14% in the pre-market trading Monday after Goldman Sachs downgraded the immunotherapy developer to Sell from Neutral, citing concerns over its liquidity position.
• The analyst Corinne Jenkins thinks that GRTS' current cash position is unlikely to allow the company to achieve key de-risking events for the lead oncology program GRANITE and advance the second program SLATE beyond early data anticipated in September.
• The analyst supports her view after a review of the scope and necessary duration required for the company's vaccine studies in the indications it currently pursues.
• However, Jenkins highlights GRTS' plans to seek non-dilutive financing through debt or collaborations for its infectious disease programs.
• Yet, such initiatives are unlikely to generate sizable financing to address "the company's challenging balance sheet position, which we expect to be an overhang on the stock for the foreseeable future," Jenkins wrote, handing GRTS a Street low target of $2 per share.
• Read: Seeking Alpha contributor Terry Chrisomalis with a Strong Buy recommendation on the stock, reviews GRTS' prospects in colorectal cancer.

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