(Bloomberg) — Gritstone Oncology Inc. jumped 14% Tuesday after entering into a license pact for its experimental Covid-19 vaccine, extending a rally that has seen the stock more than quadruple over four trading days.

The stock gained even after it received its first critical Wall Street review Wednesday from an analyst at Baird. Madhu Kumar said he was “not buying Covid-19 vaccine hype” as he cut his rating two notches to underperform. He questioned the biotech’s chances of developing a commercially viable shot and assigned Gritstone its first ever sell rating since going public in 2018.

Vaccine-related rallies like Gritstone’s were par for the course last year but are becoming rarer in 2021 after shots from Pfizer Inc., BioNTech SE and Moderna Inc. won regulatory nods, slowing progress for the next wave of inoculations. On Thursday, Gritstone surged as much as 58% intraday, touching a record and triggering at least six trading halts.

Gritstone’s stock rallied on volume more than 30 times above the three-month average on Wednesday. The company could pay as much as $192 million in milestone payments as well as royalties to Genevant Sciences Inc. under the new accord. Shares soared 249% Tuesday on the Emeryville, California-based company’s plan to start an early-stage study of the vaccine.

The small cancer drug developer has far to go to secure a vaccine approval, and the high rate of efficacy seen with Pfizer and Moderna’s inoculations “leaves essentially no room for improvement,” Kumar wrote in a client note. The vaccine leaders could also likely adjust their jabs to address vaccine-resistant strains of the virus, he added.

Three Buys

Three other analysts on the stock still rate Gritstone a buy and one rates it a hold. With shares trading above $25, they have already blown past the average 12-month price target of $13 and are up more than 500% since the start of 2021. Kumar’s target remains $8.

Andrew Allen, the company’s co-founder and chief executive officer, views changing vaccines to match new mutations as a game of whack-a-mole, achievable, but not ideal, he said in an interview. Future mutations could drive more powerful resistance to the current crop of vaccines, which may constantly have to play catch-up, he said.

Gritstone’s vaccines should broaden the attack from beyond the spike proteins to multiple regions of the virus while leveraging the immune system’s antibodies and critical helper T cells, he said.

While the company waits for the initial National Institutes of Health-supported Phase 1 study to start, future registration for a late-stage study will depend on how vaccinations, the ongoing pandemic and the rise of new variants plays out.

“I don’t know what that strategy will look like because the world will be different in the second half of this year,” Allen said.

‘Less Rosy’

The best-case scenario would be for the first-generation vaccines to do their job, letting the company take a more traditional development path, he said. But “we prepare for the worst and we’re now seeing some evidence that the worst, or at least a less rosy scenario, is potentially upon us already,” Allen said.

If Gritstone’s vaccinations are successful in the first stages of testing, the company will need partners to scale up, Allen said.

“We’re not going to be paying for that all ourselves, we don’t have that kind of capital,” he said. The good news is that the technology and potential partners are already out there, he added.

(Updates to add Gritstone CEO’s comments starting in seventh paragraph)