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 first quarter 2022.
“In the first quarter, we made significant progress in moving toward clinical trials for programs across our multiple platforms including the ex vivo hypoimmune allogeneic CAR T (SC291) and in vivo fusogen CAR T (SG295) programs, and we remain on track to file INDs for both of these programs this year,” said Steve Harr, Sana’s President and Chief Executive Officer. “In addition to advancing these programs, we continue to make progress across our earlier pipeline, including SC451, our hypoimmune stem-cell derived pancreatic islet cell therapy for patients with type 1 diabetes, and multiple product candidates in our CAR T portfolio. Our people, broad set of technologies, and strong balance sheet enable us to pursue this ambitious pipeline.”
Continued progress in building Sana’s hypoimmune ex vivo platform and in vivo fusogen platform with presentations at multiple conferences
Expanded Sana’s CAR T capability to potentially develop best-in-class, broadly accessible CAR T cell therapies
First Quarter 2022 Financial Results
GAAP Results
Non-GAAP Measures
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; the potential ability to make hypoimmune CAR T cells that evade the immune system while retaining their antitumor activity; the Company’s participation in the 2022 American Society of Gene & Cell Therapy meeting and the subject matter of the Company’s presentation at that meeting; the potential use and utility of licensed technologies for Sana’s programs; the potential efficacy of the NIH’s CAR construct; and the potential benefits of targeting both CD19 and CD22 with an “off-the-shelf” product, including in combination with Sana’s hypoimmune or fusogen platform. 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 May 10, 2022. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statements for any reason.
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Sana Biotechnology, Inc.
Unaudited Selected Consolidated Balance Sheet Data
March 31, 2022 | December 31, 2021 | |||||||
(in thousands) | ||||||||
Cash, cash equivalents, and marketable securities | $ | 657,392 | $ | 746,877 | ||||
Total assets | 1,047,613 | 1,129,407 | ||||||
Contingent consideration | 153,215 | 153,743 | ||||||
Success payment liabilities | 47,615 | 102,525 | ||||||
Total liabilities | 345,958 | 400,905 | ||||||
Total stockholders' equity | 701,655 | 728,502 |
Sana Biotechnology, Inc.
Unaudited Consolidated Statements of Operations
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
(in thousands, except per share data) | ||||||||
Operating expenses: | ||||||||
Research and development | $ | 72,689 | $ | 41,880 | ||||
Research and development related success payments and contingent consideration | (55,438 | ) | 127,050 | |||||
General and administrative | 14,434 | 11,821 | ||||||
Total operating expenses | 31,685 | 180,751 | ||||||
Loss from operations | (31,685 | ) | (180,751 | ) | ||||
Interest income, net | 339 | 121 | ||||||
Other income (expense), net | (102 | ) | 13 | |||||
Net loss | $ | (31,448 | ) | $ | (180,617 | ) | ||
Net loss per common share - basic and diluted | $ | (0.17 | ) | $ | (1.52 | ) | ||
Weighted-average number of common shares - basic and diluted | 185,955 | 119,131 |
Sana Biotechnology, Inc.
Changes in the Estimated Fair Value of Success Payments and Contingent Consideration
Success Payment Liability(1) | Contingent Consideration(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 - expense (gain) | (54,910 | ) | (528 | ) | (55,438 | ) | ||||||
Liability balance as of March 31, 2022 | 47,615 | 153,215 | 200,830 | |||||||||
Total change in fair value for the three months ended March 31, 2022 | $ | (54,910 | ) | $ | (528 | ) | $ | (55,438 | ) |
(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 to
Non-GAAP Operating Cash Burn
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Beginning cash, cash equivalents, and marketable securities | $ | 746,877 | $ | 411,995 | ||||
Ending cash, cash equivalents, and marketable securities | 657,392 | 981,864 | ||||||
Change in cash, cash equivalents, and marketable securities | (89,485 | ) | 569,869 | |||||
Cash paid to purchase property and equipment | 7,533 | 6,440 | ||||||
Change in cash, cash equivalents, and marketable securities, excluding capital expenditures | (81,952 | ) | 576,309 | |||||
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 | $ | (81,952 | ) | $ | (48,850 | ) |
(1) | The non-GAAP adjustment of $1.2 million for the three months ended March 31, 2021 was the holdback payment related to the acquisition of Cytocardia, Inc. in 2019. |
Sana Biotechnology, Inc.
Unaudited Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
(in thousands, except per share data) | ||||||||
Net loss - GAAP | $ | (31,448 | ) | $ | (180,617 | ) | ||
Adjustments: | ||||||||
Change in the estimated fair value of the success payment liabilities(1) | (54,910 | ) | 115,657 | |||||
Change in the estimated fair value of contingent consideration(2) | (528 | ) | 11,393 | |||||
Net loss - Non-GAAP | $ | (86,886 | ) | $ | (53,567 | ) | ||
Net loss per share - GAAP | $ | (0.17 | ) | $ | (1.52 | ) | ||
Adjustments: | ||||||||
Change in the estimated fair value of the success payment liabilities(1) | (0.30 | ) | 0.97 | |||||
Change in the estimated fair value of contingent consideration(2) | - | 0.10 | ||||||
Net loss per share - Non-GAAP | $ | (0.47 | ) | $ | (0.45 | ) | ||
Weighted-average shares outstanding - basic | 185,955 | 119,131 |
(1) | For the three months ended March 31, 2022, the gain related to the Cobalt and Harvard success payment liabilities was $46.8 million and $8.1 million, respectively, compared to expense of $91.8 million and $23.9 million, respectively, for the same period in 2021. |
(2) | The contingent consideration was recorded in connection with the acquisition of Cobalt. |
Last Trade: | US$2.70 |
Daily Change: | 0.04 1.55 |
Daily Volume: | 405,968 |
Market Cap: | US$600.910M |
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