Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on
changing the possible for patients through engineered cells, today
reported financial results and business highlights for the first
quarter 2023.
“Our initial human studies using Sana’s hypoimmune technology
remain on track, as we have begun enrolling patients in our SC291
trial and expect to deliver data from two clinical studies in
2023,” said Steve Harr, Sana’s President and Chief Executive
Officer. “We are also making progress in our earlier-stage pipeline
and are on pace to file two additional INDs later this year and
potentially three more in 2024. The quality of our key hires,
publications in high quality peer-reviewed journals, and
presentations at important scientific conferences are recent
validations of the science behind Sana’s programs. Our capital
position and people give us the resources for multiple data
read-outs with our current balance sheet, and we continue to be
optimistic about our future, with the opportunity to see the
potential of these medicines in patients starting this year.”
Recent Corporate Highlights
Opportunity for clinical proof of concept for two
different first-in-human studies, each with the potential for
initial clinical data this year
- SC291 is an ex vivo hypoimmune-modified
CD19-directed allogeneic CAR T cell therapy. The goal of the
hypoimmune platform is to overcome the immunologic rejection of
allogeneic cells, which, if successful with SC291, may result in
longer CAR T cell persistence and a higher rate of durable complete
responses for patients with B-cell malignancies.
- Received clearance from the Food and
Drug Administration (FDA) to initiate a first-in-human Phase 1
study of SC291 in patients with B-cell malignancies (ARDENT).
- Began enrollment in the ARDENT Phase 1
study.
- Granted Fast Track Designation for
SC291 by the FDA for the treatment of relapsed/refractory (r/r)
large B-cell lymphoma and r/r chronic lymphocytic leukemia.
- SC291 has the potential to serve as
clinical proof-of-platform for other hypoimmune-modified CAR T cell
candidates using validated CAR constructs in development at Sana
for hematological malignancies, such as SC262 (CD22) and SC255
(BCMA). Sana’s goal is to file INDs for SC262 later this year and
SC255 in 2024.
- Sana is developing SC451, a
hypoimmune-modified stem-cell derived islet cell therapy for
patients with type 1 diabetes. SC451, which is engineered with
Sana’s hypoimmune technology, has the potential to replace missing
islet cells without immunosuppression in persons with type 1
diabetes by evading allogeneic and autoimmune responses.
- Expect initial data later this year
from an investigator-sponsored trial transplanting
hypoimmune-modified primary human islet cells into type 1 diabetes
patients. The goal of the study is to show cell survival and immune
evasion without the need for any immunosuppression.
- Sana’s goal is to file an IND for
SC451 in 2024.
Published preclinical data in Nature
Communications describing immune evasion,
persistence, and durable anti-tumor activity of Sana’s
hypoimmune-modified CD19-directed CAR T cells
- Sana developed hypoimmune-modified CD19
targeted allogeneic CAR T cells and compared them to unmodified
CD19-targeted allogeneic CAR T cells in a murine leukemia model
with a humanized immune system.
- Although both hypoimmune-modified and
unmodified CAR T cells showed robust early tumor killing, cell
durability was much greater in humanized mice treated with
hypoimmune-modified cells. Hypoimmune-modified allogeneic CAR T
cells persisted and removed all evidence of tumor for the duration
of the study. Hypoimmune-modified CAR T cells also cleared all
evidence of tumor after re-injection with cancer cells 90 days into
the study. In contrast and consistent with the experience in
patients to date, unmodified allogeneic CAR T cells show greatly
reduced persistence and a high rate of tumor recurrence in this
model.
- These studies provide additional
insight for SC291 and the allogeneic hypoimmune CAR T platform more
broadly, including SC262 and SC255.
Published preclinical data in Science
Translational Medicine demonstrating that Sana’s
hypoimmune-modified pseudo-islets control type 1
diabetes
- Sana developed hypoimmune-modified
human islet cells, which cluster into effective endocrine organoids
termed “pseudo islets” (p-islets) and studied these p-islets in
multiple preclinical models.
- Preclinical data showed that
p-islets survive, persist, escape allogeneic rejection, and
normalize blood glucose in diabetic models with humanized immune
systems.
- Two different murine models showed that
the hypoimmune-modified cells can evade autoimmune rejection and
normalize blood glucose. First, these cells were studied in the NOD
mouse model, which is the standard model for autoimmunity in
diabetes. Second, Sana created a humanized mouse model with immune
cells from a diabetic person and transplanted pancreatic islet
cells derived from the diabetic person’s stem cells. In both cases,
unmodified pancreatic islet cells were rapidly cleared by the
immune system. In contrast, hypoimmune-modified pancreatic islet
cells survived, persisted, and provided sustained blood glucose
control in both models.
- These studies provide additional
insight for SC451 in persons with type 1 diabetes.
Published preclinical data in Nature
Biotechnology demonstrating that Sana’s
hypoimmune-modified cells survive allogeneic transplant across
several species, including non-human primates (NHPs) with normal
immune systems, and remain fully functional
- Sana developed hypoimmune-modified NHP
induced pluripotent stem cells (iPSCs) and transplanted them into
immune-competent NHPs. Results were compared to transplantation of
unmodified iPSCs into immune-competent NHPs.
- Data showed that hypoimmune-modified
iPSCs survived for the duration of the study (16 weeks), while
unmodified iPSCs disappeared within two weeks. There was an
antibody and T cell response directed toward unmodified cells, but
not hypoimmune-modified cells.
- Hypoimmune-modified primary NHP
pancreatic islet cells survived 40 weeks (duration of the study)
after allogeneic transplantation into an immune-competent NHP
versus less than one week for unmodified primary islet cells.
- Hypoimmune-modified iPSCs were
differentiated into pancreatic islet cells. Transplantation of
hypoimmune-modified iPSC-derived pancreatic cells into allogeneic
diabetic mice with a humanized immune system showed immune evasion
after transplantation for the duration of the studies (4 weeks) and
amelioration of diabetes and normalization of blood glucose
levels.
Presented multiple abstracts at the 2023 American
Association for Cancer Research (AACR) Annual Meeting
highlighting ex vivo
hypoimmune-modified allogeneic CAR T cells, as well
as in vivo cell-specific delivery
of genetic material using Sana’s in vivo
fusogen platform
- Presented preclinical data
demonstrating that hypoimmune-modified CAR T cells provide lasting
tumor control in immunocompetent allogeneic humanized mice even
with tumor re-challenge.
- Presented preclinical data in a
late-breaking poster presentation demonstrating that the increased
potency of CD8-targeted fusosomes enhances CAR transgene delivery
to resting primary T cells.
- Presented preclinical data
demonstrating the effectiveness of Sana’s fully human CD19 CAR
delivered by CD8-targeted fusosomes in tumor killing assays. These
fusosomes led to similar levels of tumor control as ex vivo
generated CD19 CAR T cells.
- Presented preclinical data
demonstrating increased potency of CD8-targeted fusosomes
delivering a CD19 CAR with pre-treatment of resting T cells with
IL-7, rapamycin, or both. Pre-treatment with these molecules led to
increased anti-tumor efficacy through increased T cell transduction
and greater CAR T cell expansion.
Strengthened Research and Development leadership with
the appointment of two seasoned drug developers
- Appointed Doug Williams, Ph.D., as
President of Research and Development. Dr. Williams has over 30
years of experience leading R&D organizations – including at
Biogen, Seattle Genetics (now Seagen), Amgen, and Immunex – and
over the course of his career has participated in the development
of over a dozen approved drugs including multiple
blockbusters.
- Appointed Gary Meininger, M.D., as
Chief Medical Officer. Dr. Meininger has approximately 20 years of
experience in drug development. Most recently, he was at Vertex as
Senior Vice President, Head of Clinical Development for Vertex Cell
and Genetic Therapies and previously was at Janssen and Merck. Dr.
Meininger is currently the industry representative to the FDA’s
Endocrine and Metabolic Drug Advisory Committee.
First Quarter 2023 Financial Results
GAAP Results
- Cash Position: Cash, cash equivalents, and
marketable securities as of March 31, 2023 were $355.1 million
compared to $434.0 million as of December 31, 2022. The decrease of
$78.9 million was primarily driven by cash used in operations of
$79.2 million and cash used for the purchase of property and
equipment of $2.2 million. Cash used in operations includes
multiple cash payments that will not recur this year. In addition,
our cash balance will increase by $6.1 million in July 2023 as the
letter of credit related to the Fremont facility reduces from $6.7
million to $0.6 million in July 2023.
- Research and Development Expenses: For the
three months ended March 31, 2023, research and development
expenses, inclusive of non-cash expenses, were $67.2 million
compared to $72.7 for the same period in 2022. The decrease of $5.5
million was primarily due to a decline in costs to acquire
technology, laboratory supplies, third-party manufacturing costs,
and other research costs. These decreases were partially offset by
increased clinical development costs, personnel-related costs,
operating costs for our manufacturing facility in Bothell,
Washington, and other allocated costs. Research and development
expenses include non-cash stock-based compensation of $6.0 million
and $5.7 million, for the three months ended March 31, 2023 and
2022, respectively.
- Research and Development Related Success Payments and
Contingent Consideration: For the three months ended March
31, 2023, we recognized an expense of $0.1 million and a gain of
$55.4 million for the same period in 2022, in connection with the
change in the estimated fair value of the success payment
liabilities and contingent consideration in aggregate. The value of
these potential liabilities may fluctuate significantly with
changes in Sana’s market capitalization and stock price.
- General and Administrative Expenses: General
and administrative expenses for the three months ended March 31,
2023, inclusive of non-cash expenses, were $16.8 million compared
to $14.4 million for the same period in 2022. The increase of $2.4
million was primarily due to operating costs for the previously
planned manufacturing facility, formerly in research and
development expense, and increased non-cash stock-based
compensation and personnel-related expenses. General and
administrative expenses include non-cash stock-based compensation
of $2.8 million and $2.0 million, for the three months ended March
31, 2023 and 2022, respectively.
- Net Loss: Net loss for the three months ended
March 31, 2023 was $82.1 million, or $0.43 per share, compared to
$31.4 million, or $0.17 per share, for the same period in
2022.
Non-GAAP Measures
- Non-GAAP Operating Cash Burn: Non-GAAP
operating cash burn for the three months ended March 31, 2023 was
$74.8 million compared to $82.0 million for the same period in
2022. 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 and
non-recurring restructuring activities, and the purchase of
property and equipment.
- Non-GAAP Net Loss: Non-GAAP net loss for the
three months ended March 31, 2023 was $82.0 million, or $0.43 per
share, compared to $86.9 million, or $0.47 per share, for the same
period in 2022. Non-GAAP net loss excludes non-cash expenses
related to the change in the estimated fair value of contingent
consideration and success payment liabilities.
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 preclinical, clinical and
regulatory development plans and timing expectations, including the
expected timing of IND filings and clinical trials for the
Company’s product candidates and indications for which such INDs
will be filed, and expected timing, substance, and impact of data
from clinical trials of its product candidates and an
investigator-sponsored trial utilizing hypoimmune-modified primary
human islet cells in type 1 diabetes patients (the “IST”);
expectations regarding the IST, including the ability to initiate
the IST and the potential of the IST to show cell survival and
immune evasion without immunosuppression; the potential ability of
SC291 to serve as clinical proof-of-platform for other
hypoimmune-modified CAR T cell candidates; expectations with
respect to the potential therapeutic benefits and impact of its
development programs and platforms, including the potential ability
of the hypoimmune platform to overcome immunologic rejection of
allogeneic cells and the impact thereof, the potential for
hypoimmune-modified islet cells to demonstrate allogeneic immune
evasion, autoimmune evasion, and control of type 1 diabetes, and
the potential ability to replace missing islet cells without
immunosuppression in patients with type 1 diabetes; the potential
ability of preclinical data to provide insight for the Company’s
development programs and platforms; expectations regarding the
Company’s capital position, resources, and balance sheet and the
potential impact thereof on the Company’s development programs,
including data readouts from such programs; expectations regarding
the impact of a reduction in the amount of the letter of credit for
the Company’s Fremont, California facility on the Company’s cash
balance; and the potential impact of changes in the Company’s
market capitalization and stock price on its potential success
payment and contingent consideration liabilities. 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 economic, market, and social
disruptions, including due to the 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 Securities and Exchange Commission
(SEC) reports, including but not limited to its Quarterly Report on
Form 10-Q dated May 8, 2023. 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 |
|
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
|
|
|
|
|
(in thousands) |
|
Cash, cash equivalents, and marketable securities |
|
$ |
355,131 |
|
|
$ |
434,014 |
|
Total assets |
|
|
746,928 |
|
|
|
822,720 |
|
Contingent consideration |
|
|
155,839 |
|
|
|
150,379 |
|
Success payment liabilities |
|
|
15,667 |
|
|
|
21,007 |
|
Total liabilities |
|
|
318,666 |
|
|
|
323,405 |
|
Total stockholders' equity |
|
|
428,262 |
|
|
|
499,315 |
|
Sana Biotechnology, Inc. |
Unaudited Consolidated Statements of
Operations |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands, except per share data) |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
67,166 |
|
|
$ |
72,689 |
|
Research and development related success payments and contingent
consideration |
|
|
120 |
|
|
|
(55,438 |
) |
General and administrative |
|
|
16,766 |
|
|
|
14,434 |
|
Total operating expenses |
|
|
84,052 |
|
|
|
31,685 |
|
Loss from operations |
|
|
(84,052 |
) |
|
|
(31,685 |
) |
Interest income, net |
|
|
1,976 |
|
|
|
339 |
|
Other expense, net |
|
|
(47 |
) |
|
|
(102 |
) |
Net loss |
|
$ |
(82,123 |
) |
|
$ |
(31,448 |
) |
Net loss per common share -
basic and diluted |
|
$ |
(0.43 |
) |
|
$ |
(0.17 |
) |
Weighted-average number of
common shares - basic and diluted |
|
|
191,228 |
|
|
|
185,955 |
|
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, 2022 |
|
$ |
21,007 |
|
|
$ |
150,379 |
|
|
$ |
171,386 |
|
Changes in fair value – expense (gain) |
|
|
(5,340 |
) |
|
|
5,460 |
|
|
|
120 |
|
Liability balance as of March 31,
2023 |
|
|
15,667 |
|
|
|
155,836 |
|
|
|
171,506 |
|
Total change in fair value for
the three months ended March 31, 2023 |
|
$ |
(5,340 |
) |
|
$ |
5,460 |
|
|
$ |
120 |
|
(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 respective
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 actual ongoing 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 to |
Non-GAAP Operating Cash Burn |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
(in thousands) |
|
Beginning cash, cash equivalents, and marketable securities |
|
$ |
434,014 |
|
|
$ |
746,877 |
|
Ending cash, cash equivalents,
and marketable securities |
|
|
355,131 |
|
|
|
657,392 |
|
Change in cash, cash
equivalents, and marketable securities |
|
|
(78,883 |
) |
|
|
(89,485 |
) |
Cash paid to purchase property and equipment |
|
|
2,176 |
|
|
|
7,533 |
|
Change in cash, cash
equivalents, and marketable securities, excluding capital
expenditures |
|
|
(76,707 |
) |
|
|
(81,952 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Cash paid for restructuring(1) |
|
|
1,881 |
|
|
|
- |
|
Operating cash burn -
Non-GAAP |
|
$ |
(74,826 |
) |
|
$ |
(81,952 |
) |
(1) The non-GAAP adjustment of $1.9 million for
the three months ended March 31, 2023 consisted of cash payments
related to the portfolio prioritization and corporate restructuring
in the fourth quarter of 2022.
Sana Biotechnology, Inc. |
Unaudited Reconciliation of GAAP to Non-GAAP Net Loss and
Net Loss Per Share |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
(in thousands, except per share data) |
|
Net loss - GAAP |
|
$ |
(82,123 |
) |
|
$ |
(31,448 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Change in the estimated fair value of the success payment
liabilities(1) |
|
|
(5,340 |
) |
|
|
(54,910 |
) |
Change in the estimated fair value of contingent
consideration(2) |
|
|
5,460 |
|
|
|
(528 |
) |
Net loss - Non-GAAP |
|
$ |
(82,003 |
) |
|
$ |
(86,886 |
) |
Net loss per share - GAAP |
|
$ |
(0.43 |
) |
|
$ |
(0.17 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Change in the estimated fair value of the success payment
liabilities(1) |
|
|
(0.03 |
) |
|
|
(0.30 |
) |
Change in the estimated fair value of contingent
consideration(2) |
|
|
0.03 |
|
|
|
- |
|
Net loss per share -
Non-GAAP |
|
$ |
(0.43 |
) |
|
$ |
(0.47 |
) |
Weighted-average shares
outstanding - basic and diluted |
|
|
191,228 |
|
|
|
185,955 |
|
(1) For the three months ended March 31, 2023,
the gains related to the Cobalt and Harvard success payment
liabilities were $4.8 million and $0.6 million, respectively,
compared to gains of $46.8 million and 8.1 million, respectively,
for the same periods in 2022. (2) The contingent
consideration is in connection with the acquisition of Cobalt.
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