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 fourth
quarter and year ended December 31, 2020.
“Engineering cells, whether done in vivo or ex vivo, has the
potential to transform outcomes for patients across many diseases.
We are excited about our significant progress in 2020 in turning
this vision into a reality – continuing to build our scientific
team, expanding our technology with key acquisitions and licenses,
and generating important data across multiple platforms and
programs,” said Steve Harr, Sana’s President and Chief Executive
Officer. “With the completion of our initial public offering in
February, we have additional capital to execute our long-term
vision of engineering cells to treat serious diseases such as
cancer, various genetic disorders, type 1 diabetes, heart disease,
and central nervous system diseases. We look forward to providing
updates at multiple scientific conferences throughout the year and
driving our multiple programs toward the clinic.”
Recent Corporate Highlights
- Hired key talent to our senior
leadership team, including Ed Rebar, Ph.D., Chief Technology
Officer, Terry Fry, M.D., Head of T Cell Therapeutics, and Ke Liu,
M.D., Ph.D., Head of Regulatory Affairs & Strategy.
- Entered into an exclusive license
agreement with Washington University for certain intellectual
property rights related to methods of generating, compositions of,
and use of cells of endodermal lineage and beta cells.
- Acquired Oscine Corp., a
privately-held early stage biotechnology company developing glial
progenitor cells focused on brain disorders to complement our
broader ex vivo cell engineering platform.
- Expanded our Board of Directors with
the addition of Joshua Bilenker, M.D., former CEO of Loxo Oncology,
Alise Reicin, M.D., CEO of Tectonic Therapeutic, and Michelle
Seitz, CFA, Chairman and CEO of Russell Investments.
- Entered into a non-exclusive license
and development agreement with FUJIFILM Cellular Dynamics, Inc.
(FCDI) for access to FCDI induced pluripotent stem cells
(iPSCs).
- Further strengthened our balance
sheet with net proceeds of $626.6 million from the sale of 27
million shares of common stock in our initial public offering,
bringing pro forma cash to over $1 billion as of February 28,
2021.
Fourth Quarter and 2020 Financial Results
GAAP Results
- Cash Position:
Cash, cash equivalents, and marketable securities as of December
31, 2020 were $412.0 million compared to $139.0 million as of
December 31, 2019, an increase of $273.0 million. During the year
ended December 31, 2020, Sana sold 27.2 million shares of its
Series B convertible preferred stock at $16.00 per share for gross
proceeds of $435.5 million.
- Research and Development
Expenses: Research and development expenses for the
quarter and year ended December 31, 2020, inclusive of non-cash
expenses, were $104.1 million and $257.9 million, respectively,
compared to $39.3 million and $119.4 million for the same periods
in 2019. The increases of $64.8 million and $138.5 million were
primarily due to personnel-related expenses related to increased
headcount to expand Sana’s research and development capabilities,
costs for laboratory supplies and preclinical studies, and facility
costs. The increase was also due to non-cash expenses for the
increase in the estimated fair value of the success payment
liabilities of $31.0 million and $70.2 million for the quarter and
year ended December 31, 2020, respectively, and the increase in the
estimated fair value of the contingent consideration of $33.8
million and $34.9 million for the quarter and year ended December
31, 2020, respectively. The increases in 2020 were offset by higher
costs incurred in 2019 for the acquisition of technology. Research
and development expense included stock-based compensation of $2.3
million and $4.9 million for the quarter and year ended December
31, 2020, respectively, and $0.4 million and $1.2 million for the
same periods in 2019.
- General and Administrative
Expenses: General and administrative expenses for the
quarter and year ended December 31, 2020, inclusive of non-cash
expenses, were $9.2 million and $28.3 million, respectively,
compared with $5.8 million and $21.8 million for the same periods
in 2019. The increases of $3.4 million and $6.5 million for the
quarter and year ended December 31, 2020, respectively, were
primarily due to increased personnel-related expenses attributable
to an increase in headcount to build our infrastructure, facility
costs, and consulting fees.
- Net Loss: Net loss
for the quarter and year ended December 31, 2020 was $113.2
million, or $7.40 per share, and $285.3 million, or $21.92 per
share, respectively. This compares to $43.0 million, or $4.94 per
share, and $130.8 million, or $26.68 per share for the same periods
in 2019.
Non-GAAP Measures
- Non-GAAP Operating Cash
Burn: Non-GAAP operating cash burn for the quarter and
year ended December 31, 2020 was $37.8 million and $125.0 million,
respectively, compared to $27.9 million and $76.2 million for the
same periods in 2019. 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 Research and
Development Expenses: Non-GAAP research and development
expenses for the quarter and year ended December 31, 2020 were
$36.5 million and $123.0 million, respectively, and $28.3 million
and $72.1 million for the same periods in 2019. Non-GAAP research
and development expense excludes one-time costs to acquire
technology and non-cash expenses related to the change in the
estimated fair value of its contingent consideration and success
payments.
- Non-GAAP Net Loss: Non-GAAP net loss for the
quarter and year ended December 31, 2020 was $45.5 million, or
$2.98 per share, and $150.4 million, or $11.56 per share,
respectively. This compares to $32.1 million, or $3.68 per share,
and $83.5 million, or $17.04 per share, respectively, for the same
periods in 2019. Non-GAAP net loss excludes one-time costs to
acquire technology and non-cash expenses related to the change in
the estimated fair value of its contingent consideration and
success payments.
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 more than 250 people working together to create an enduring
company that changes how the world treats disease. Sana has
operations in Seattle, Cambridge, and South San Francisco. For more
information about Sana Biotechnology, please visit
https://sana.com/.
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 and clinical and
regulatory development plans and timing expectations; updates at
scientific conferences; and the potential use of intellectual
property and technology licensed or acquired from Washington
University, Oscine Corp., and FCDI. 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 prospectus dated February 3, 2021. Except as required by
law, the Company undertakes no obligation to update publicly any
forward-looking statements for any reason.
Investor Relations:Nicole
Keithinvestor.relations@sana.com
Media:Morgan Warners, Finsbury Glover
Heringmedia@sana.com
Sana Biotechnology,
Inc.Unaudited Selected Consolidated Balance Sheet
Data
|
|
December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(in
thousands) |
Cash, cash
equivalents, and marketable securities |
|
$ |
411,995 |
|
|
$ |
138,982 |
|
Total
assets |
|
|
730,296 |
|
|
|
415,192 |
|
Contingent
consideration |
|
|
121,901 |
|
|
|
69,108 |
|
Success
payment liabilities |
|
|
76,494 |
|
|
|
4,352 |
|
Total
liabilities |
|
|
298,583 |
|
|
|
140,375 |
|
Convertible
preferred stock |
|
|
852,897 |
|
|
|
417,359 |
|
Total
stockholders' deficit |
|
|
(421,184 |
) |
|
|
(142,542 |
) |
|
|
|
|
|
Sana Biotechnology,
Inc.Unaudited Consolidated Statements of
Operations
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(in
thousands, except per share data) |
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
104,117 |
|
|
$ |
39,274 |
|
|
$ |
257,879 |
|
|
$ |
119,375 |
|
General and administrative |
|
|
9,207 |
|
|
|
5,818 |
|
|
|
28,270 |
|
|
|
21,777 |
|
Total operating expenses |
|
|
113,324 |
|
|
|
45,092 |
|
|
|
286,149 |
|
|
|
141,152 |
|
Loss from
operations |
|
|
(113,324 |
) |
|
|
(45,092 |
) |
|
|
(286,149 |
) |
|
|
(141,152 |
) |
Interest
income, net |
|
|
125 |
|
|
|
681 |
|
|
|
747 |
|
|
|
2,856 |
|
Other income
(expense), net |
|
|
29 |
|
|
|
23 |
|
|
|
97 |
|
|
|
(29 |
) |
Loss before
income taxes |
|
|
(113,170 |
) |
|
|
(44,388 |
) |
|
|
(285,305 |
) |
|
|
(138,325 |
) |
Benefit from
income taxes |
|
|
- |
|
|
|
1,343 |
|
|
|
- |
|
|
|
7,547 |
|
Net
loss |
|
$ |
(113,170 |
) |
|
$ |
(43,045 |
) |
|
$ |
(285,305 |
) |
|
$ |
(130,778 |
) |
Net loss per
share, basic and diluted |
|
$ |
(7.40 |
) |
|
$ |
(4.94 |
) |
|
$ |
(21.92 |
) |
|
$ |
(26.68 |
) |
Weighted-average shares outstanding, basic and diluted |
|
|
15,293 |
|
|
|
8,709 |
|
|
|
13,014 |
|
|
|
4,903 |
|
|
|
|
|
|
|
|
|
|
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 period over period and in regards to peer companies.
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 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
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(in
thousands) |
Beginning
cash, cash equivalents, and marketable securities |
|
$ |
459,070 |
|
|
$ |
171,560 |
|
|
$ |
138,982 |
|
|
$ |
30,630 |
|
Ending cash,
cash equivalents, and marketable securities |
|
|
411,995 |
|
|
|
138,982 |
|
|
|
411,995 |
|
|
|
138,982 |
|
Change in
cash, cash equivalents, and marketable securities |
|
|
(47,075 |
) |
|
|
(32,578 |
) |
|
|
273,013 |
|
|
|
108,352 |
|
Cash paid to purchase property and equipment |
|
|
9,266 |
|
|
|
5,730 |
|
|
|
23,872 |
|
|
|
26,183 |
|
Change in
cash, cash equivalents, and marketable securities, excluding
capital expenditures |
|
|
(37,809 |
) |
|
|
(26,848 |
) |
|
|
296,885 |
|
|
|
134,535 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Cash paid to acquire technology(1) |
|
|
- |
|
|
|
6,800 |
|
|
|
7,650 |
|
|
|
12,995 |
|
Cash paid to satisfy contingent liability(2) |
|
|
- |
|
|
|
- |
|
|
|
6,000 |
|
|
|
- |
|
Net cash received from the sale of convertible preferred stock |
|
|
- |
|
|
|
(7,815 |
) |
|
|
(435,538 |
) |
|
|
(223,739 |
) |
Operating
cash burn - Non-GAAP |
|
$ |
(37,809 |
) |
|
$ |
(27,863 |
) |
|
$ |
(125,003 |
) |
|
$ |
(76,209 |
) |
|
|
|
|
|
|
|
|
|
(1) The non-GAAP adjustment of $6.8 million for the three months
ended December 31, 2019 is the upfront payment in connection with
the acquisition of Cytocardia. The non-GAAP adjustment of $7.7
million for the twelve months ended December 31, 2020 is the
upfront cash payment in connection with the acquisition of Oscine
Corp. The non-GAAP adjustment of $13.0 million for the twelve
months ended December 31, 2019 includes (i) the upfront payment of
$6.8 million in connection with the acquisition of Cytocardia, (ii)
net cash paid of $3.2 million in connection with the acquisition of
Cobalt, and (iii) the upfront payment of $3.0 million in connection
with the Harvard license agreement. (2) For the twelve months ended
December 31, 2020, the non-GAAP adjustment of $6.0 million was for
the payment of a contingent liability due to Harvard in connection
with the closing of the Series B convertible preferred stock
financing.
Sana Biotechnology,
Inc.Unaudited Reconciliation of GAAP to Non-GAAP
Research and Development Expense
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(in
thousands) |
Research and
development expense - GAAP |
|
$ |
104,117 |
|
|
$ |
39,274 |
|
|
$ |
257,879 |
|
|
$ |
119,375 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Costs to acquire technology(1) |
|
|
- |
|
|
|
(8,000 |
) |
|
|
(8,500 |
) |
|
|
(22,928 |
) |
Change in the fair value of the success payment liabilities(2) |
|
|
(31,505 |
) |
|
|
(497 |
) |
|
|
(72,142 |
) |
|
|
(1,924 |
) |
Change in the fair value of contingent consideration(3) |
|
|
(36,121 |
) |
|
|
(2,296 |
) |
|
|
(52,793 |
) |
|
|
(17,860 |
) |
Change in the estimated fair value of contingent liability(4) |
|
|
- |
|
|
|
(193 |
) |
|
|
(1,443 |
) |
|
|
(4,557 |
) |
Research and
development expense - Non-GAAP |
|
$ |
36,491 |
|
|
$ |
28,288 |
|
|
$ |
123,001 |
|
|
$ |
72,106 |
|
Sana Biotechnology,
Inc.Unaudited Reconciliation of GAAP to Non-GAAP
Net Loss and Net Loss Per Share
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
(in
thousands, except per share data) |
Net loss -
GAAP |
|
$ |
(113,170 |
) |
|
$ |
(43,045 |
) |
|
$ |
(285,305 |
) |
|
$ |
(130,778 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Costs to acquire technology(1) |
|
|
- |
|
|
|
8,000 |
|
|
|
8,500 |
|
|
|
22,928 |
|
Change in the estimated fair value of the success payment
liabilities(2) |
|
|
31,505 |
|
|
|
497 |
|
|
|
72,142 |
|
|
|
1,924 |
|
Change in the estimated fair value of contingent
consideration(3) |
|
|
36,121 |
|
|
|
2,296 |
|
|
|
52,793 |
|
|
|
17,860 |
|
Change in the estimated fair value of contingent liability(4) |
|
|
- |
|
|
|
193 |
|
|
|
1,443 |
|
|
|
4,557 |
|
Net loss -
Non-GAAP |
|
$ |
(45,544 |
) |
|
$ |
(32,059 |
) |
|
$ |
(150,427 |
) |
|
$ |
(83,509 |
) |
Net loss per
share - GAAP |
|
$ |
(7.40 |
) |
|
$ |
(4.94 |
) |
|
$ |
(21.92 |
) |
|
$ |
(26.68 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Costs to acquire technology(1) |
|
|
- |
|
|
|
0.92 |
|
|
|
0.65 |
|
|
|
4.68 |
|
Change in the estimated fair value of the success payment
liabilities(2) |
|
|
2.06 |
|
|
|
0.06 |
|
|
|
5.54 |
|
|
|
0.39 |
|
Change in the estimated fair value of contingent
consideration(3) |
|
|
2.36 |
|
|
|
0.26 |
|
|
|
4.06 |
|
|
|
3.64 |
|
Change in the estimated fair value of contingent liability(4) |
|
|
- |
|
|
|
0.02 |
|
|
|
0.11 |
|
|
|
0.93 |
|
Net loss per
share - Non-GAAP |
|
$ |
(2.98 |
) |
|
$ |
(3.68 |
) |
|
$ |
(11.56 |
) |
|
$ |
(17.04 |
) |
Weighted-average shares outstanding, basic and diluted |
|
|
15,293 |
|
|
|
8,709 |
|
|
|
13,014 |
|
|
|
4,903 |
|
(1) The non-GAAP adjustment of $8.0 million for the three months
ended December 31, 2019 is the upfront expense recorded in
connection with the acquisition of Cytocardia. The non-GAAP
adjustment of $8.5 million for the twelve months ended December 31,
2020 is the upfront expense recorded in connection with the
acquisition of Oscine Corp. The non-GAAP adjustment of $22.9
million for the twelve months ended December 31, 2019 includes (i)
the upfront expense of $12.0 million recorded in connection with
the Harvard license agreement, $9.0 million of which was non-cash,
(ii) the upfront expense of $8.0 million recorded in connection
with the acquisition of Cytocardia, and (iii) a non-cash upfront
expense of $3.0 million recorded in connection with license
agreement with The Regents of the University of California. (2) For
the three months ended December 31, 2020 and 2019, the expense
related to the Cobalt success payment liability was $27.1 million
and $0.3 million, respectively, and $62.3 million for the twelve
months ended December 31, 2020. The expense for the Cobalt success
payment liability was immaterial for the twelve months ended
December 31, 2019. For the three months ended December 31, 2020 and
2019, the expense related to the Harvard success payment liability
was $4.4 million and $0.2 million, respectively, and $9.9 million
and $1.9 million for the twelve months ended December 31, 2020 and
2019, respectively.(3) The contingent consideration was recorded in
connection with the acquisition of Cobalt.(4) The contingent
liability was recorded in connection with the Harvard license
agreement and paid in June 2020.
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