Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on
creating and delivering engineered cells as medicines, today
reported financial results and business highlights for the second
quarter 2022.
“We are pleased with the continued progress this quarter both
across our platforms and with our product candidates. We made
executive hires in critical operational roles, executed on key
pre-IND activities for both SC291 and SG295, made business
decisions that extend our cash runway to allow more potential
clinical data readouts across multiple drug candidates with our
current balance sheet, and presented important preclinical data
across multiple platforms at various scientific conferences,” said
Steve Harr, Sana’s President and Chief Executive Officer. “We are
well-positioned with our current resources to file INDs across
several platforms with multiple drug products in both 2022 and
2023, and our team is enthusiastic to understand the potential of
these medicines to improve outcomes for patients.”
Continued progress in building Sana’s
hypoimmune ex vivo platform
and in vivo fusogen platform with
presentations at AACR, ASGCT, ADA, and ISSCR
- Ex vivo hypoimmune platform (HIP):
Sana’s HIP platform makes multiple genomic modifications to cells
with the goal of preventing allogeneic transplant rejection, and
importantly includes modifications to prevent both adaptive and
innate immune recognition and rejection. Presented data showed
survival of transplanted allogeneic HIP cells of several different
types – including pancreatic islet cells, cardiomyocytes, and
retinal pigment epithelial (RPE) cells – in a variety of locations
in non-human primates. Sana also presented data showing that HIP
allogeneic regulatory T cells function and are able to evade immune
detection in preclinical models. These cells have the potential to
treat a variety of autoimmune disorders. Finally, Sana scientists
presented in vitro and in vivo data showing that exposure to an
anti-CD47 antibody leads to elimination of HIP induced pluripotent
stem cells (iPSCs) as well as HIP pancreatic islet cells. These
data provide a path for a potential safety strategy as well as
validation of the mechanism of immune protection. Sana’s pipeline
includes HIP-modified cells to replace damaged or missing cells in
the body in a number of different diseases, including, among
others, cancer, type 1 diabetes, cardiac disease, and various
neurologic conditions.
- HIP pancreatic islet cells: Type 1
diabetes is a disease where a person’s immune system destroys one’s
own pancreatic beta cells, which are a key component in pancreatic
islets. Presented data showed that transplanted HIP pancreatic
islet cells evade allogeneic immune response and autoimmune
response in a type 1 diabetes mouse model. These data build upon
previous in vitro data showing that HIP pancreatic islet cells are
not recognized by serum from type 1 diabetic patients, including no
T cell or antibody recognition. HIP technology is incorporated in
SC451, Sana’s islet cell product candidate, which has a goal of
filing an IND in 2023 for the treatment of type 1 diabetes.
- In vivo fusogen platform: Presented
additional preclinical data utilizing retargeted fusosomes for in
vivo delivery of genetic payloads to various cells, including CD8+
T cells, CD4+ T cells, and human hepatocytes. This technology is
the backbone of Sana’s in vivo delivery platform and is
incorporated into various product candidates, including SG295.
Announced expected cash runway into 2025 to enable
multiple data readouts across the platforms; largest part of cash
savings from plans to relocate manufacturing facility to Bothell,
Washington
- Expect cash runway into 2025 enabling
multiple data readouts across the platforms based on current
timelines for lead programs. The extension includes a slowed pace
of investment for multiple programs with INDs expected in 2024 and
beyond.
- Announced decision to move Sana’s
manufacturing plant from Fremont, CA to Bothell, WA, resulting in
approximately $100 million in expected cost savings over the next
three years. As part of this decision, Sana signed a lease
agreement to develop an approximately 80,000 square foot
manufacturing facility in Bothell, WA. The facility will be
designed to support the late-stage clinical and early commercial
manufacturing of multiple product candidates across the
portfolio.
Announced key executive hires and appointments, building
on the company’s scientific excellence and operational
capabilities
- Strengthened the leadership team with
the appointments of Snehal Patel to lead internal and external
manufacturing and Julie Lepin to lead regulatory affairs.
Second Quarter 2022 Financial Results
GAAP Results
- Cash Position: Cash, cash equivalents, and
marketable securities as of June 30, 2022 were $579.6 million
compared to $746.9 million as of December 31, 2021. The decrease of
$167.3 million was primarily driven by cash used in operations of
$149.2 million and cash used for the purchase of property and
equipment of $11.9 million. Cash used in operations includes $6.2
million of upfront payments related to licensing technology for our
CD22 and BCMA programs, $3.2 million of costs incurred related to
the previously planned manufacturing facility in Fremont, CA (the
Fremont facility) which will be replaced by the Bothell, WA site
(the Bothell facility), as well as multiple cash payments that will
not recur this year.
- Research and Development Expenses: For the
three and six months ended June 30, 2022, research and development
expenses, inclusive of non-cash expenses, were $72.5 million and
$145.2 million, respectively, compared to $45.0 million and $86.9
million for the same periods in 2021. The increases of $27.5
million and $58.3 million were due to increases in personnel
expenses related to increased headcount to expand Sana’s research
and development capabilities, increased third-party manufacturing
costs for contract development and manufacturing organizations
including pass-through costs for materials, facility and other
allocated costs, research and laboratory costs, and costs to
acquire technology complementary to our own. Research and
development expenses for the three and six months ended June 30,
2022 include non-cash stock-based compensation of $7.4 million and
$13.1 million, respectively, and $3.1 million and $5.8 million for
the same periods in 2021.
- Research and Development Related Success Payments and
Contingent Consideration: For the three and six months
ended June 30, 2022, we recognized non-cash gains of $17.9 million
and $73.4 million, respectively, in connection with the change in
the estimated fair value of the success payment liabilities and
contingent consideration in aggregate, compared to a gain of $76.0
million and an expense of $51.0 million for the same periods in
2021. The value of these potential liabilities can fluctuate
significantly with changes in our market capitalization and stock
price.
- General and Administrative Expenses: General
and administrative expenses for the three and six months ended June
30, 2022, inclusive of non-cash expenses, were $18.3 million and
$32.7 million, respectively, compared to $12.5 million and $24.3
million for the same periods in 2021. The increases of $5.8 million
and $8.4 million, respectively, were primarily due to the write-off
of construction in progress costs incurred in connection with the
previously planned Fremont facility which will be replaced by the
Bothell facility. The increases were also due to personnel-related
expenses attributable to an increase in headcount to support our
continued research and development activities, increased facility
and information technology costs, including rent. These increases
were partially offset by a decrease in legal fees. General and
administrative expenses for the three and six months ended June 30,
2022 include stock-based compensation of $2.5 million and $4.5
million, respectively, and $1.8 million and $3.3 million for the
same periods in 2021.
- Net Loss: Net loss for the three and six
months ended June 30, 2022 was $72.5 million, or $0.39 per share,
and $103.9 million, or $0.56 per share, respectively, compared to
net income of $18.7 million, or $0.10 per share, and net loss of
$161.9 million, or $1.08 per share for the same periods in
2021.
Non-GAAP Measures
- Non-GAAP Operating Cash Burn: Non-GAAP
operating cash burn for the six months ended June 30, 2022 was
$155.4 million compared to $89.8 million for the same period in
2021. Non-GAAP operating cash burn is the decrease in cash, cash
equivalents, and marketable securities, excluding cash inflows from
financing activities, cash outflows from business development
activities, and the purchase of property and equipment.
- Non-GAAP General and Administrative Expense:
Non-GAAP general and administrative expense for the three and six
months ended June 30, 2022 was $13.8 million and $28.3 million,
respectively, compared to $12.5 million and $24.3 million for the
same periods in 2021. Non-GAAP general and administrative expense
excludes the write-off of construction in progress costs incurred
in connection with the previously planned Fremont facility, which
will be replaced by the Bothell facility.
- Non-GAAP Net Loss: Non-GAAP net loss for the
three and six months ended June 30, 2022 was $85.9 million, or
$0.47 per share, and $172.8 million, or $0.93 per share,
respectively, compared to $57.3 million, or $0.32 per share, and
$110.9 million, or $0.74 per share for the same periods in 2021.
Non-GAAP net loss excludes certain one-time costs to acquire
technology, non-cash expenses related to the change in the
estimated fair value of contingent consideration and success
payment liabilities, and the write-off of construction in progress
costs incurred in connection with the previously planned Fremont
facility, which will be replaced by the Bothell facility.
A discussion of non-GAAP measures, including a reconciliation of
GAAP and non-GAAP measures, is presented below under “Non-GAAP
Financial Measures.”
About Sana
Sana Biotechnology, Inc. is focused on creating and delivering
engineered cells as medicines for patients. We share a vision of
repairing and controlling genes, replacing missing or damaged
cells, and making our therapies broadly available to patients. We
are a passionate group of people working together to create an
enduring company that changes how the world treats disease. Sana
has operations in Seattle, Cambridge, South San Francisco, and
Rochester.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements about
Sana Biotechnology, Inc. (the “Company,” “we,” “us,” or “our”)
within the meaning of the federal securities laws, including those
related to the company’s vision, progress, and business plans;
expectations for its development programs, product candidates and
technology platforms, including its pre-clinical, clinical and
regulatory development plans and timing expectations, including
with respect to the expected timing of IND filings for the
Company’s product candidates; the Company’s expected cash runway
and the impact of the increase in the cash runway on the Company’s
business, including with respect to the expected timing of IND
filings for its product candidates; the potential ability of Sana’s
HIP platform to make genomic modifications to cells that prevent
allogeneic transplant rejection and prevent both adaptive and
innate immune recognition and rejection; the potential of HIP
allogeneic regulatory T cells to treat a variety of autoimmune
disorders; the impact of the in vitro and in vivo data regarding
exposure of an anti-CD47 antibody on iPSCs and HIP pancreatic islet
cells on a potential safety strategy and validation of the
mechanism of immune protection with respect to the HIP platform;
the potential cost savings associated with moving the Company’s
manufacturing plant from Fremont, CA to Bothell, WA; and the
Company’s expectations with respect to the Bothell facility. All
statements other than statements of historical facts contained in
this press release, including, among others, statements regarding
the Company’s strategy, expectations, cash runway and future
financial condition, future operations, and prospects, are
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “aim,”
“anticipate,” “assume,” “believe,” “contemplate,” “continue,”
“could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,”
“may,” “objective,” “plan,” “positioned,” “potential,” “predict,”
“seek,” “should,” “target,” “will,” “would” and other similar
expressions that are predictions of or indicate future events and
future trends, or the negative of these terms or other comparable
terminology. The Company has based these forward-looking statements
largely on its current expectations, estimates, forecasts and
projections about future events and financial trends that it
believes may affect its financial condition, results of operations,
business strategy and financial needs. In light of the significant
uncertainties in these forward-looking statements, you should not
rely upon forward-looking statements as predictions of future
events. These statements are subject to risks and uncertainties
that could cause the actual results to vary materially, including,
among others, the risks inherent in drug development such as those
associated with the initiation, cost, timing, progress and results
of the Company’s current and future research and development
programs, preclinical and clinical trials, as well as the economic,
market and social disruptions due to the ongoing COVID-19 public
health crisis. For a detailed discussion of the risk factors that
could affect the Company’s actual results, please refer to the risk
factors identified in the Company’s SEC reports, including but not
limited to its Quarterly Report on Form 10-Q dated August 4, 2022.
Except as required by law, the Company undertakes no obligation to
update publicly any forward-looking statements for any reason.
Investor Relations & Media:Nicole
Keithinvestor.relations@sana.com media@sana.com
Sana Biotechnology,
Inc.Unaudited Selected Consolidated Balance Sheet
Data
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
|
|
(in thousands) |
|
Cash, cash equivalents, and marketable securities |
|
$ |
579,566 |
|
|
$ |
746,877 |
|
Total assets |
|
|
971,089 |
|
|
|
1,129,407 |
|
Contingent consideration |
|
|
149,385 |
|
|
|
153,743 |
|
Success payment liabilities |
|
|
33,517 |
|
|
|
102,525 |
|
Total liabilities |
|
|
331,584 |
|
|
|
400,905 |
|
Total stockholders' equity |
|
|
639,505 |
|
|
|
728,502 |
|
Sana Biotechnology,
Inc.Unaudited Consolidated Statements of
Operations
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands, except per share data) |
|
Operating expenses (gains): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
72,540 |
|
|
$ |
44,996 |
|
|
$ |
145,229 |
|
|
$ |
86,876 |
|
Research and development related success payments and contingent
consideration |
|
|
(17,928 |
) |
|
|
(76,025 |
) |
|
|
(73,366 |
) |
|
|
51,025 |
|
General and administrative |
|
|
18,292 |
|
|
|
12,477 |
|
|
|
32,726 |
|
|
|
24,298 |
|
Total operating expenses (gains) |
|
|
72,904 |
|
|
|
(18,552 |
) |
|
|
104,589 |
|
|
|
162,199 |
|
Gain (loss) from
operations |
|
|
(72,904 |
) |
|
|
18,552 |
|
|
|
(104,589 |
) |
|
|
(162,199 |
) |
Interest income, net |
|
|
637 |
|
|
|
130 |
|
|
|
976 |
|
|
|
251 |
|
Other income (expense),
net |
|
|
(198 |
) |
|
|
1 |
|
|
|
(300 |
) |
|
|
14 |
|
Net income (loss) |
|
$ |
(72,465 |
) |
|
$ |
18,683 |
|
|
$ |
(103,913 |
) |
|
$ |
(161,934 |
) |
Net income (loss) per common
share - basic |
|
$ |
(0.39 |
) |
|
$ |
0.10 |
|
|
$ |
(0.56 |
) |
|
$ |
(1.08 |
) |
Weighted-average number of
common shares - basic |
|
|
187,626 |
|
|
|
179,899 |
|
|
|
186,801 |
|
|
|
149,683 |
|
Net income (loss) per share -
diluted |
|
$ |
(0.39 |
) |
|
$ |
0.09 |
|
|
$ |
(0.56 |
) |
|
$ |
(1.08 |
) |
Weighted-average shares
outstanding - diluted |
|
|
187,626 |
|
|
|
190,508 |
|
|
|
186,801 |
|
|
|
149,683 |
|
Sana Biotechnology,
Inc.Changes in the Estimated Fair Value of Success
Payments and Contingent Consideration
|
|
Success
PaymentLiability(1) |
|
|
ContingentConsideration(2) |
|
|
Total Success Payment Liability and Contingent
Consideration |
|
|
|
(in thousands) |
|
Liability balance as of December 31, 2021 |
|
$ |
102,525 |
|
|
$ |
153,743 |
|
|
$ |
256,268 |
|
Changes in fair value - gain |
|
|
(54,910 |
) |
|
|
(528 |
) |
|
|
(55,438 |
) |
Liability balance as of March 31,
2022 |
|
|
47,615 |
|
|
|
153,215 |
|
|
|
200,830 |
|
Changes in fair value - gain |
|
|
(14,098 |
) |
|
|
(3,830 |
) |
|
|
(17,928 |
) |
Liability balance as of June 30,
2022 |
|
$ |
33,517 |
|
|
$ |
149,385 |
|
|
$ |
182,902 |
|
Total change in fair value for
the six months ended June 30, 2022 |
|
$ |
(69,008 |
) |
|
$ |
(4,358 |
) |
|
$ |
(73,366 |
) |
(1) Cobalt Biomedicine, Inc. (Cobalt) and the Presidents of
Harvard College (Harvard) are entitled to success payments pursuant
to the terms and conditions of their agreements. The success
payments are recorded at fair value and remeasured at each
reporting period with changes in the estimated fair value recorded
in research and development related success payments and contingent
consideration on the statement of operations. (2) Cobalt is
entitled to contingent consideration upon the achievement of
certain milestones pursuant to the terms and conditions of the
agreement. Contingent consideration is recorded at fair value and
remeasured at each reporting period with changes in the estimated
fair value recorded in research and development related success
payments and contingent consideration on the statement of
operations.
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States
(GAAP), Sana uses certain non-GAAP financial measures to evaluate
its business. Sana’s management believes that these non-GAAP
financial measures are helpful in understanding Sana’s financial
performance and potential future results, as well as providing
comparability to peer companies and period over period. In
particular, Sana’s management utilizes non-GAAP operating cash
burn, non-GAAP research and development expense and non-GAAP net
loss and net loss per share. Sana believes the presentation of
these non-GAAP measures provides management and investors greater
visibility into the Company’s ongoing actual costs to operate its
business, including actual research and development costs
unaffected by non-cash valuation changes and certain one-time
expenses for acquiring technology, as well as facilitating a more
meaningful comparison of period-to-period activity. Sana excludes
these items because they are highly variable from period to period
and, in respect of the non-cash expenses, provides investors with
insight into the actual cash investment in the development of its
therapeutic programs and platform technologies.
These are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read in
conjunction with Sana’s financial statements prepared in accordance
with GAAP. These non-GAAP measures differ from GAAP measures with
the same captions, may be different from non-GAAP financial
measures with the same or similar captions that are used by other
companies, and do not reflect a comprehensive system of accounting.
Sana’s management uses these supplemental non-GAAP financial
measures internally to understand, manage, and evaluate Sana’s
business and make operating decisions. In addition, Sana’s
management believes that the presentation of these non-GAAP
financial measures is useful to investors because they enhance the
ability of investors to compare Sana’s results from period to
period and allows for greater transparency with respect to key
financial metrics Sana uses in making operating decisions. The
following are reconciliations of GAAP to non-GAAP financial
measures:
Sana Biotechnology,
Inc.Unaudited Reconciliation of Change in Cash,
Cash Equivalents, and Marketable Securities
toNon-GAAP Operating Cash Burn
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
(in thousands) |
|
Beginning cash, cash equivalents, and marketable securities |
|
$ |
746,877 |
|
|
$ |
411,995 |
|
Ending cash, cash equivalents,
and marketable securities |
|
|
579,566 |
|
|
|
930,770 |
|
Change in cash, cash
equivalents, and marketable securities |
|
|
(167,311 |
) |
|
|
518,775 |
|
Cash paid to purchase property and equipment |
|
|
11,924 |
|
|
|
16,596 |
|
Change in cash, cash
equivalents, and marketable securities, excluding capital
expenditures |
|
|
(155,387 |
) |
|
|
535,371 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Cash paid to acquire technology(1) |
|
|
- |
|
|
|
1,246 |
|
Net proceeds received from the initial public offering of common
stock |
|
|
- |
|
|
|
(626,405 |
) |
Operating cash burn -
Non-GAAP |
|
$ |
(155,387 |
) |
|
$ |
(89,788 |
) |
(1) The non-GAAP adjustment of $1.2 million for the six months
ended June 30, 2021 was the holdback payment related to the
acquisition of Cytocardia, Inc. in 2019.
Sana Biotechnology,
Inc.Unaudited Reconciliation of GAAP to Non-GAAP
General and Administrative Expense
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
General and administrative - GAAP |
|
$ |
18,292 |
|
|
$ |
12,477 |
|
|
$ |
32,726 |
|
|
$ |
24,298 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of construction in progress costs incurred in connection
with the previously planned Fremont facility(1) |
|
|
(4,474 |
) |
|
|
- |
|
|
|
(4,474 |
) |
|
|
- |
|
General and administrative -
Non-GAAP |
|
$ |
13,818 |
|
|
$ |
12,477 |
|
|
$ |
28,252 |
|
|
$ |
24,298 |
|
(1) The Fremont facility will be replaced with the Bothell
facility.
Sana Biotechnology,
Inc.Unaudited Reconciliation of GAAP to Non-GAAP
Net Loss and Net Loss Per Share
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands, except per share data) |
|
Net loss - GAAP |
|
$ |
(72,465 |
) |
|
$ |
18,683 |
|
|
$ |
(103,913 |
) |
|
$ |
(161,934 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in the estimated fair value of the success payment
liabilities(1) |
|
|
(14,098 |
) |
|
|
(83,188 |
) |
|
|
(69,008 |
) |
|
|
32,469 |
|
Change in the estimated fair value of contingent
consideration(2) |
|
|
(3,830 |
) |
|
|
7,163 |
|
|
|
(4,358 |
) |
|
|
18,556 |
|
Write-off of construction in progress costs incurred in connection
with the previously planned Fremont facility3) |
|
|
4,474 |
|
|
|
- |
|
|
|
4,474 |
|
|
|
- |
|
Net loss - Non-GAAP |
|
$ |
(85,919 |
) |
|
$ |
(57,342 |
) |
|
$ |
(172,805 |
) |
|
$ |
(110,909 |
) |
Net loss per share - GAAP |
|
$ |
(0.39 |
) |
|
$ |
0.10 |
|
|
$ |
(0.56 |
) |
|
$ |
(1.08 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in the estimated fair value of the success payment
liabilities(1) |
|
|
(0.08 |
) |
|
|
(0.46 |
) |
|
|
(0.37 |
) |
|
|
0.22 |
|
Change in the estimated fair value of contingent
consideration(2) |
|
|
(0.02 |
) |
|
|
0.04 |
|
|
|
(0.02 |
) |
|
|
0.12 |
|
Write-off of construction in progress costs incurred in connection
with the previously planned Fremont facility(3) |
|
|
0.02 |
|
|
|
- |
|
|
|
0.02 |
|
|
|
- |
|
Net loss per share -
Non-GAAP |
|
$ |
(0.47 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.93 |
) |
|
$ |
(0.74 |
) |
Weighted-average shares
outstanding - basic |
|
|
187,626 |
|
|
|
179,899 |
|
|
|
186,801 |
|
|
|
149,683 |
|
(1) For the three months and six ended June 30, 2022, the gains
related to the Cobalt success payment liability were $12.1 million
and $58.9 million, respectively, compared to a gain of $66.6
million and an expense of $21.5 million for the same periods in
2021. For the three months and six ended June 30, 2022, the gains
related to the Harvard success payment liability were $2.0 million
and $10.1 million, respectively, compared to a gain of $16.6
million and an expense of $7.3 million for the same periods in
2021.(2) The contingent consideration was recorded in connection
with the acquisition of Cobalt. (3) The Fremont facility will be
replaced with the Bothell facility.
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