Shares of a small cancer drug maker quadrupled this week after the company got help from a branch of the National Institutes of Health to begin testing a potential coronavirus vaccine that could fight coronavirus mutations found around the world.
Gritstone Oncology’s stock rose nearly 300% in the last two trading sessions after it was revealed the company has entered into a clinical trial agreement with the National Institute of Allergy and Infectious Diseases to test what the company calls the second vaccine Generation that could protect against Covid-19 spike mutants.
Andrew Allen, CEO of Gritstone, appeared on CNBC Wednesday to discuss the developments and to tell Jim Cramer that scientists were using their oncology research to develop the solution.
“It’s a very natural extension of what we’ve done,” Allen told Mad Money. “At some level we hoped it would never be necessary [for coronavirus], but … we’re seeing some resistant variants now, so we may need alternative approaches like ours. “
Gritstone also received support from the Bill & Melinda Gates Foundation to help with preclinical evaluations of the potential coronavirus vaccine. The biotech company, which was founded five years ago and is based in Emeryville, California, has developed a solution that enables the immune system to respond to cancer cells. The company identified and isolated proteins on the surface of cancer cells that are foreign to the body to make a vaccine that can instruct white blood cells to effectively kill tumor cells, Allen said.
“When Covid came in, it was clear that there might be variants of resistance within the virus and that using T cells from this arm of the immune system as part of the solution might be important,” he said.
The comments come as health officials around the world sound the alarm over the discovery of coronavirus mutations. Germany, the United Kingdom and South Africa reported on Wednesday that they had found different variants of the virus in sick patients. The variants contracted in Great Britain and South Africa should spread more easily.
Cramer compared Gritstone to Moderna, another oncology drug company, which has launched a coronavirus vaccine that is about 95% effective in preventing transmission.
Allen praised Moderna, explaining how the company’s vaccine solution focuses on spike protein outside of the virus, which is a target for antibodies. He said Gritstone’s potential vaccine using T cells goes even further.
“T cells kill virally infected cells, and that’s why we have both limbs in the immune system. They complement and reinforce each other, and we’ve seen all of the potential benefits of Spike,” he said. “Our program causes antibodies to rise, but now we’re adding additional targets from the virus and creating strong T cell responses against those targets.”
Allen said he expected a phase 1 study, supported by NIAID, to begin soon. According to a press release announcing the partnership, Gritstone uses both self-amplifying mRNA and adenoviral vectors to trigger an immune response.
After rising 14% to $ 25.49 on Wednesday, Gritstone stocks are down more than 6% in after-hours trading. The stock rose from less than $ 4 at the start of the year to a high of $ 35.20 during Wednesday’s session.
Stocks are up nearly 547% in less than three weeks of trading.