Gritstone bio’s stock took a tumble in premarket trading Tuesday morning following mixed data from a Phase 2 study of its cancer vaccine, but it’s still moving ahead with a public offering of its stock and Phase 3 planning.

In a late Monday release, Gritstone touted the data as positive from the Phase 2 portion of its Phase 2/3 GRANITE trial of its neoantigen cancer vaccine in front-line metastatic microsatellite stable colorectal cancer (MSS-CRC). Progression-free survival favored Gritstone’s vaccine in an early trend, even though the dataset is “immature,” the company said in its presentation.

But the primary endpoint of the study — the short-term circulating tumor DNA (ctDNA) response — was described as “negative” and the data utility as “low” by Gritstone in a Monday presentation. The short-term ctDNA response analysis didn’t show a difference between study arms.

Immediately after the announcement, Gritstone priced a $32.5 million public offering of 8.3 million shares of its stock $GRTS at a price of about $1.65 per share, below its previous close. The stock tumbled as much as 33% and was trading at around $1.56 premarket Tuesday. The offering is expected to close on April 4.

The company suggested that it had made a mistake in defining the original clinical trial protocol and setting the primary endpoint.

“Pioneering new spaces carries inherent risks, and with regard to defining molecular response, we simply got it wrong,” Gritstone president and CEO Andrew Allen said in a statement. “ctDNA levels in both arms decreased on chemotherapy for longer than we anticipated, generating similar short-term molecular response rates across arms and rendering our protocol measure of ctDNA change uninformative.”

Allen added that “long-term analysis demonstrates the expected correlation of ctDNA with clinical benefit and favors GRANITE patients,” with the potential to share mature progression-free survival data in the third quarter of this year and then enter regulatory discussions regarding the Phase 3 portion of the study.

Randolph Hecht, director of the UCLA GI Oncology Program and an investigator in the GRANITE Phase 2/3 study, noted that the progression-free survival difference shows a “potential” for clinical benefit as well as a reason to move into a confirmatory Phase 3 trial.

“Furthermore, we are learning how to better analyze ctDNA continuously to study the efficacy of this novel immunotherapy,” Hecht added.

As for safety, Gritstone said that no patients discontinued due to an adverse event, and “most” adverse events were grade 1 or 2.

Earlier this year, Gritstone laid off about 40% of its staff following a delay in a Phase 2b trial (and its expected funding) of its next-gen Covid-19 vaccine. The trial won’t start until the fall of this year.

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The telecommunications industry faced a significant amount of distress in 2023, with several firms filing for bankruptcy.

Cyxtera Technologies, a provider of data center colocation, interconnection services and digital infrastructure, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of New Jersey in June 2023 and sold its assets to Brookfield Infrastructure Partners in November 2023.

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QualTek Services, a provider of infrastructure services to 5G wireless, telecom, power grid modernization and renewable energy solutions, filed Chapter 11 bankruptcy in May 24, 2023, in the U.S. Bankruptcy Court for the Southern District of Texas to restructure debt and emerged from bankruptcy on June 30, 2023, after reducing its debt by $307 million.

Cloud-based data center provider Internap Holding filed for Chapter 11 bankruptcy on April 28, 2023 in the District of Delaware, with over $198 million in debt and emerged on Aug. 1, 2023, after a restructuring.

Starry Group, a licensed fixed wireless technology developer and internet service provider, filed for a prepackaged Chapter 11 in the District of Delaware on Feb. 20, 2023, seeking to reduce its debt and emerged from bankruptcy in August 2023.

Airspan files bankruptcy to hand majority ownership to Fortress

The bankruptcy trend has continued on from 2023 into 2024, as pioneering telecom company Airspan Networks Holdings  (MIMO)  on March 31, 2024, filed for a prepackaged Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware that calls for handing majority ownership to funds managed by its senior secured prepetition lender Fortress Investment Group.

Under the debtor's restructuring support agreement, Fortress and certain key stakeholders will provide up to $95 million in new equity financing and eliminate all of the company's existing funded debt. Fortress affiliates have also committed to providing $53 million in debtor-in-possession financing, which, along with cash on hand, will fund the company's operations during restructuring. 

The Boca Raton, Fla.-based company had about $205.1 million in total funded debt obligations on the petition date, according to a declaration by CEO Glenn Laxdal. The firm in recent years had incurred sizeable operating losses in part because of a commitment of significant resources to research and development as well as competitive pressures. The company relied on funded indebtedness to cover the shortfall in its cash flow from operations.

Airspan during the Covid pandemic in 2020 suffered from supply chain disruptions, significant price increases for silicon-based components, increased transportation costs, inflation and stagnant growth, the declaration said.

Beginning in 2021, the company retained an investment banker to pursue strategic alternatives and engaged in talks for a potential sale of its assets or a restructuring transaction. In 2022, the company focused on reducing operating costs by reducing its workforce from 800 employees to 494 workers. Since then, the number of employees has decreased to about 370, the declaration said.

In March 2023, Airspan sold an affiliate Mimosa Networks to Radisys for about $60 million. It used $45 million to pay obligations and prepetition senior secured debt, allocated about $5 million for costs and fees and netted about $10 million for fund operations.

Airspan and its prepetition lenders in May 2023 amended senior secured debt, which provided the company with $25 million in delay-draw term loan commitments and granted the company  waivers on existing defaults and events of default. The company continued seeking a sale of all its assets until mid-December 2023, when it realized a sale would not happen.

Seeking comprehensive restructuring with senior creditors

It instead sought a comprehensive restructuring with its senior secured lenders and subordinated creditors. The company entered a restructuring support agreement with its lenders and creditors on March 29.

As part of the agreement, existing common stockholders have the option of receiving their pro rata share of $450,000 or, at their election, warrants in lieu of cash. If more than 150 shareholders  elect for warrants, no warrants will be provided. 

Founded in 1998, Airspan began its business in proprietary digital wireless access technology, primarily broadband wireless solutions.

Airspan provides a broad range of software defined radios, broadband access products and network management software to enable cost-effective deployment and efficient management of mobile, fixed and hybrid wireless networks. Its customers include leading mobile communications service providers, large enterprises, infrastructure operators, military communications integrators and internet service providers.

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