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Jones Research has initiated coverage of Gritstone Bio (Nasdaq: GRTS) with a buy rating and price target of $10.
The research group said it sees Gritstone as a “highly underappreciated story” with its vaccine candidates for SARS-CoV-2 and microsatellite-stable colorectal cancer, or MSS-CRC. than other mRNA vaccines “in both immunogenicity and durability.”
Jones said he sees MSS-CRC as a $2B+ market opportunity, noting that preliminary data from the Phase 2/3 study for the vaccine is expected in Q1 2024.
The group also sees COVID-19 vaccines as a market that “is here to stay despite declining sales.” Jones estimates that the market opportunity for Gritstone’s coral vaccines is $2.8B, despite “modest” market penetration. It said the company could have Phase 2b data readout for its COVID-19 vaccine in 2025.
Jones said he also sees “attractive upside potential” in the company’s KRAS and HIV drug candidates.