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Gracell Biotechnologies Inc.

Building 12, Block B, Phase II

Biobay Industrial Park

218 Sangtian St.

Suzhou Industrial Park, 215123

People’s Republic of China

January 6, 2023

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Life Sciences

100 F Street, N.E.

Washington, D.C. 20549

 Attn: Ibolya Ignat

Franklin Wyman

 Re: Gracell Biotechnologies Inc. (the “Company”)

Form 20-F for Fiscal Year Ended December 31, 2021

Filed April 22, 2022

File No. 001-39838

Ladies and Gentlemen:

This letter sets forth the
Company’s responses to the comment of the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) contained in the letter dated December 27, 2022 (the “Comment Letter”)
and the comment of the Staff communicated verbally on December 27, 2022, relating to the above referenced Form 20-F (the “Form
20-F”). The Staff’s comments are repeated below in bold and are followed by the Company’s responses. Capitalized
terms used but not defined herein are used herein as defined in the Form 20-F.

Form 20-F for the Fiscal Year Ended December
31, 2021

Item 5. Operating and Financial Review and
Prospectus

A. Operating Results

Comparison of Years Ended December 31, 2020
and 2021

Research and Development Expenses, page
174

 1. You state that research and development activities are central to the Company’s business model
and are expected to increase substantially in the future. In this regard, please disclose costs incurred during each period presented
for each of your key research and development projects and provide other quantitative or qualitative disclosure that increases transparency
as to the type of research and development expenses incurred. We note that this information had been requested in our comment letters
dated November 15, 2020 and December 12, 2020 and included in your Registration Statement on Form F-1 that was declared effective on January
7, 2021.

In response to the Staff’s comment, the Company respectfully
proposes to include the below disclosure in its annual report for the fiscal year ended December 31, 2022 on Form 20-F (the “2022
Form 20-F”) under the section entitled “Item 5. A. Results of Operations – Comparison of Years Ended December
31, 2022 and 2021 – Operating Expenses – Research and Development Expenses” once it clears the Staff’s comments.

January 6, 2023

 Page 2

Operating Expenses

Research and Development Expenses

Research and development expenses for the year ended December 31,
2021 were RMB326.9 million, compared to RMB168.8 million for the year ended December 31, 2020. This increase of RMB158.1 million
was primarily due to (i) an increase of RMB60.1 million in preclinical studies and clinical trials from RMB76.7 million for the year
ended December 31, 2020 to RMB136.8 million for the year ended December 31, 2021, as a result of manufacturing and other costs to support
the progression of our preclinical studies and clinical trials; (ii) an increase of RMB37.3 million in payroll and other personnel expenses
from RMB37.6 million for the year ended December 31, 2020 to RMB74.9 million for the year ended December 31, 2021, as a result of expanded
research and development headcount; (iii) an increase of RMB21.7 million in depreciation expenses from RMB21.1 million for the year ended
December 31, 2020 to RMB42.8 million for the year ended December 31, 2021, as a result of depreciation of manufacturing facilities; (iv)
an increase of RMB19.3 million in professional services, from RMB6.8 million for the year ended December 31, 2020 to RMB26.1 million for
the year ended December 31, 2021, as a result of various projects during the course of 2021; (v) an increase of RMB15.7 million in share-based
compensation, from nil for the year ended December 31, 2020 to RMB15.7 million for the year ended December 31, 2021, as a result of completion
of our IPO and additional share-based awards issued; and (vi) an increase of RMB3.9 million in other expenses from RMB26.6
million for the year ended December 31, 2020 to RMB30.6 million for the year ended December 31, 2021.

Our key research and development projects for the years ended
December 31, 2020 and 2021 were GC012F, GC007g, and GC019F. GC012F is our lead FasTCAR autologous CAR-T product candidate that is being
studied in investigator-initiated Phase 1 trials in China for two indications, MM and B-NHL. Our research and development expenses for
GC012F increased by RMB76.3 million from RMB23.2 million for the year ended December 31, 2020 to RMB99.5 million for the year ended December
31, 2021, primarily because we enrolled additional patients to the ongoing investigator-initiated Phase 1 trials. GC007g is a donor-derived
CD19-directed allogeneic CAR-T cell therapy and our most clinically advanced product candidate. Our research and development expenses
for GC007g increased by RMB38.0 million from RMB34.3 million for the year ended December 31, 2020 to RMB72.3 million for the year ended
December 31, 2021, as we engaged in more clinical development activities for this product candidate during the course of 2021 following
the grant of approval from the NMPA on December 24, 2020 for a seamless Phase 1/2 registrational trial. Our research and development expenses
for GC019F, another FasTCAR autologous CAR-T product candidate, decreased by RMB11.2 million from RMB66.5 million for the year ended December
31, 2020 to RMB55.3 million for the year ended December 31, 2021, as we concluded the investigator-initiated Phase 1 trials for this product
candidate in China in 2020, had initiated the Phase 1 trial for this product candidate in China but had not yet engaged in substantive
clinical development for such Phase 1 trial by the end of 2021. Our research and development expense for other product candidates in clinical,
preclinical and earlier stages increased by RMB54.9 million from RMB44.8 million for the year ended December 31, 2020 to RMB99.8 million
for the year ended December 31, 2021, as we continued to invest in our overall research and development efforts.

The Company further advises the Staff
that it intends to include similar disclosure for the comparison of years ended December 31, 2021 and 2022 in the 2022 Form
20-F.

January 6, 2023

 Page 3

Verbal Comment Communicated on December
27, 2022

 2. In the next Form 20-F filing, please address the Staff’s comments in relation to the Company’s
registration statement on Form F-3, that was effective on June 30, 2022 (the “F-3 Registration Statement”).

In response to the Staff’s comment, the Company undertakes
to include in the 2022 Form 20-F such disclosure to reflect the Staff’s comments in its comment letters dated May 11 and June 1,
2022, respectively, in relation to the F-3 Registration Statement, to the extent applicable.

*                 *                 *

If you have any questions regarding
the response letter, please contact the Company’s U.S. counsel Will H. Cai of Cooley LLP by phone at +852-3758-1210 or via e-mail
at wcai@cooley.com.

    Very truly yours,

    /s/ William Wei Cao

    William Wei Cao
 Chairman and Chief Executive Officer

 cc: Yili Kevin Xie, Chief Financial Officer, Gracell Biotechnologies Inc.

Will H. Cai, Esq., Cooley LLP