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 of 2021.
“We continue to be pleased with the progress across our in vivo
and ex vivo technology platforms and programs as well as our
progress in recruiting great people and building the infrastructure
necessary to achieve our long-term vision of using engineered cells
as medicines,” said Steve Harr, Sana’s President and Chief
Executive Officer. “In the second quarter, we presented data
demonstrating the survival and immune evasion for transplanted
hypoimmune cells into non-human primates without immunosuppression,
an important step in enabling the use of engineered cells as
medicines more broadly across multiple diseases. We also signed a
long-term lease to enable the build out of a clinical trial and
commercial manufacturing facility capable of supporting our broad
pipeline. I would particularly like to thank the Sana team, who
despite the ongoing complex operating environment of COVID
continues to make progress in moving our product candidates
forward, with a goal of beginning human studies for multiple
medicines per year beginning as early as next year.”
Recent Corporate Highlights
- Presented data showing survival of
transplanted stem cells in non-human primates without
immunosuppression at a plenary session at the International Society
for Stem Cell Research 2021 Virtual Annual Meeting. The
transplanted cells incorporated Sana’s hypoimmune gene
modifications that enable immune evasion, demonstrating a key step
toward widespread treatment of disease using engineered cells.
- Announced a lease agreement to develop
a 163,000 square foot manufacturing facility in Fremont, California
to support the manufacture of late-stage clinical development and
early commercial product candidates across our technology
platforms.
Second Quarter 2021 Financial Results
GAAP Results
- Cash Position: Cash,
cash equivalents, and marketable securities as of June 30, 2021
were $930.8 million compared to $412.0 million as of December 31,
2020, an increase of $518.8 million. Sana successfully completed
its initial public offering in February 2021 and issued 27.0
million shares of common stock, including 3.5 million shares
pursuant to the full exercise of the underwriters’ option to
purchase additional shares, at a price of $25.00 per share, for net
proceeds of $626.4 million.
- Research and Development
Expenses: For the three and six months ended June 30,
2021, research and development expense, inclusive of non-cash
expenses, was $45.0 million and $86.9 million, respectively,
compared to $30.0 million and $56.4 million for the same periods in
2020. The increases of $15.0 million and $30.5 million for the
three and six months ended June 30, 2021, respectively, were due to
an increase in personnel expenses related to increased headcount to
expand Sana’s research and development capabilities, costs for
preclinical studies, costs for laboratory supplies, and facility
costs. Research and development expenses include non-cash
stock-based compensation of $3.1 million and $5.8 million for the
three and six months ended June 30, 2021, respectively, and $0.9
million and $1.6 million for the same periods in 2020.
- Research and Development
Related Success Payments and Contingent Consideration: For
the three and six months ended June 30, 2021, we recognized a gain
of $76.0 million and an expense of $51.0 million, respectively, in
connection with the change in the estimated fair value of the
success payment liabilities and contingent consideration, compared
to $51.9 million and $52.8 million for the same periods in 2020.
For the three and six months ended June 30, 2021, we recognized a
gain of $83.2 million and an expense of $32.4 million,
respectively, in connection with the change in the estimated fair
value of the success payment liabilities, compared to expenses of
$37.9 million and $38.5 million for the same periods in 2020. The
decreases of $121.1 million and $6.1 million during the three and
six months ended June 30, 2021, respectively, were due to changes
in our market capitalization and stock price during the relative
periods. For the three and six months ended June 30, 2021, we
recognized expenses of $7.2 million and $18.6 million,
respectively, in connection with the change in the estimated fair
value of contingent consideration and $14.0 million and $14.3
million, respectively, for the same periods in 2020. The decrease
of $6.8 million during the three months ended June 30, 2021 and the
increase of $4.3 million during the six months ended June 30, 2021
were due to changes in the discount rate and scientific progress
made toward the achievement of milestones during the relative
periods.
- General and Administrative
Expenses: General and administrative expenses for the
three and six months ended June 30, 2021, inclusive of non-cash
expenses, were $12.5 million and $24.3 million, respectively,
compared to $6.0 million and $12.0 million for the same periods in
2020. The increases of $6.5 million and $12.3 million in the three
and six months ended June 30, 2021, respectively, were primarily
due to increased personnel-related expenses attributable to an
increase in headcount to build our infrastructure, legal fees to
support our patent portfolio and license arrangements, insurance
associated with being a public company, consulting fees, and
facility costs. General and administrative expenses include
stock-based compensation of $1.8 million and $3.3 million for the
three and six months ended June 30, 2021, respectively, and $0.2
million and $0.3 million for the same periods in 2020.
- Net Income (Loss): Net
income for the three months ended June 30, 2021 was $18.7 million,
or $0.10 per share, and net loss for the six months ended June 30,
2021 was $161.9 million, or $1.08 per share, compared to net losses
of $87.8 million, or $7.18 per share, and $120.7 million, or $10.47
per share, for the same periods in 2020.
Non-GAAP Measures
- Non-GAAP Operating Cash
Burn: Non-GAAP operating cash burn for the six months
ended June 30, 2021 was $89.8 million compared to $56.9 million for
the six months June 30, 2020. 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 three and six months ended June 30, 2021 were
$45.0 million and $86.9 million, respectively, compared to $28.9
million and $55.0 million for the same periods in 2020. Non-GAAP
research and development expenses excludes one-time costs to
acquire technology.
- Non-GAAP Net Loss:
Non-GAAP net loss for the three and six months ended June 30, 2021
was $57.3 million, or $0.32 per share, and $110.9 million, or $0.74
per share, compared to $34.8 million, or $2.85 per share, and $66.4
million, or $5.76 per share, for the same periods in 2020. 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
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 more than 320 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.
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 ability
to make hypoimmune-modified induced pluripotent stem cells that
survive and evade the immune system without immunosuppression; the
ability to treat diseases using the Company’s hypoimmune platform
technology; its manufacturing plans and strategy; and expectations
with respect to the manufacturing capabilities of the 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 Annual Report on Form 10-K dated March 24, 2021 and
Quarterly Report on Form 10-Q dated August 5, 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
|
|
June 30, 2021 |
|
|
December 31, 2020 |
|
|
|
(in thousands) |
|
Cash, cash equivalents, and marketable securities |
|
$ |
930,770 |
|
|
$ |
411,995 |
|
Total assets |
|
|
1,259,837 |
|
|
|
730,296 |
|
Contingent consideration |
|
|
140,457 |
|
|
|
121,901 |
|
Success payment liabilities |
|
|
108,963 |
|
|
|
76,494 |
|
Total liabilities |
|
|
353,940 |
|
|
|
298,583 |
|
Convertible preferred stock |
|
|
- |
|
|
|
852,897 |
|
Total stockholders' equity
(deficit) |
|
|
905,897 |
|
|
|
(421,184 |
) |
Sana Biotechnology,
Inc.Unaudited Consolidated Statements of
Operations
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands, except per share data) |
|
Operating expenses (gains): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
44,996 |
|
|
$ |
29,991 |
|
|
$ |
86,876 |
|
|
$ |
56,397 |
|
Research and development related success payments and contingent
consideration |
|
|
(76,025 |
) |
|
|
51,906 |
|
|
|
51,025 |
|
|
|
52,820 |
|
General and administrative |
|
|
12,477 |
|
|
|
6,009 |
|
|
|
24,298 |
|
|
|
11,964 |
|
Total operating expenses (gains) |
|
|
(18,552 |
) |
|
|
87,906 |
|
|
|
162,199 |
|
|
|
121,181 |
|
Gain (loss) from
operations |
|
|
18,552 |
|
|
|
(87,906 |
) |
|
|
(162,199 |
) |
|
|
(121,181 |
) |
Interest income, net |
|
|
130 |
|
|
|
79 |
|
|
|
251 |
|
|
|
474 |
|
Other income, net |
|
|
1 |
|
|
|
19 |
|
|
|
14 |
|
|
|
24 |
|
Net income (loss) |
|
$ |
18,683 |
|
|
$ |
(87,808 |
) |
|
$ |
(161,934 |
) |
|
$ |
(120,683 |
) |
Net income (loss) per share -
basic |
|
$ |
0.10 |
|
|
$ |
(7.18 |
) |
|
$ |
(1.08 |
) |
|
$ |
(10.47 |
) |
Weighted-average shares
outstanding - basic |
|
|
179,899 |
|
|
|
12,232 |
|
|
|
149,683 |
|
|
|
11,526 |
|
Net income (loss) per share -
diluted |
|
$ |
0.09 |
|
|
$ |
(7.18 |
) |
|
$ |
(1.08 |
) |
|
$ |
(10.47 |
) |
Weighted-average shares
outstanding - diluted |
|
|
190,508 |
|
|
|
12,232 |
|
|
|
149,683 |
|
|
|
11,526 |
|
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, 2020 |
|
$ |
76,494 |
|
|
$ |
121,901 |
|
|
$ |
198,395 |
|
Changes in fair value - expense (gain) |
|
|
115,657 |
|
|
|
11,393 |
|
|
|
127,050 |
|
Liability balance as of March 31,
2021 |
|
|
192,151 |
|
|
|
133,294 |
|
|
|
325,445 |
|
Changes in fair value - expense (gain) |
|
|
(83,188 |
) |
|
|
7,163 |
|
|
|
(76,025 |
) |
Liability balance as of June 30,
2021 |
|
$ |
108,963 |
|
|
$ |
140,457 |
|
|
$ |
249,420 |
|
Total change in fair value for
the six months ended June 30, 2021 |
|
$ |
32,469 |
|
|
$ |
18,556 |
|
|
$ |
51,025 |
|
(1) |
Cobalt Biomedicine, Inc. (Cobalt) and the Presidents of Harvard
College (Harvard) are entitled to success payments pursuant to the
terms 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 changes 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 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 changes 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 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
|
|
Six Months Ended June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Beginning cash, cash equivalents, and marketable securities |
|
$ |
411,995 |
|
|
$ |
138,982 |
|
Ending cash, cash equivalents,
and marketable securities |
|
|
930,770 |
|
|
|
503,375 |
|
Change in cash, cash
equivalents, and marketable securities |
|
|
518,775 |
|
|
|
364,393 |
|
Cash paid to purchase property and equipment |
|
|
16,596 |
|
|
|
8,290 |
|
Change in cash, cash
equivalents, and marketable securities, excluding capital
expenditures |
|
|
535,371 |
|
|
|
372,683 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Cash paid to acquire technology(1) |
|
|
1,246 |
|
|
|
- |
|
Cash paid to satisfy contingent liability(2) |
|
|
- |
|
|
|
6,000 |
|
Net proceeds received from the initial public offering of common
stock |
|
|
(626,405 |
) |
|
|
- |
|
Net cash received from the sale of convertible preferred stock |
|
|
- |
|
|
|
(435,543 |
) |
Operating cash burn -
Non-GAAP |
|
$ |
(89,788 |
) |
|
$ |
(56,860 |
) |
(1) |
The non-GAAP adjustment of $1.2 million for the six months
ended June 30, 2021 was the payment of the holdback amount related
to the acquisition of Cytocardia, Inc. in November 2019. |
(2) |
The non-GAAP adjustment of $6.0 million for the six months
ended June 30, 2020 was 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 June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Research and development expense - GAAP |
|
$ |
44,996 |
|
|
$ |
29,991 |
|
|
$ |
86,876 |
|
|
$ |
56,397 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in the estimated fair value of contingent liability(1) |
|
|
- |
|
|
|
(1,070 |
) |
|
|
- |
|
|
|
(1,443 |
) |
Research and development
expense - Non-GAAP |
|
$ |
44,996 |
|
|
$ |
28,921 |
|
|
$ |
86,876 |
|
|
$ |
54,954 |
|
(1) The contingent liability was recorded in connection with the
Harvard license agreement and paid in June 2020.
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, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands, except per share data) |
|
Net income (loss) - GAAP |
|
$ |
18,683 |
|
|
$ |
(87,808 |
) |
|
$ |
(161,934 |
) |
|
$ |
(120,683 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in the estimated fair value of the success payment
liabilities(1) |
|
|
(83,188 |
) |
|
|
37,929 |
|
|
|
32,469 |
|
|
|
38,481 |
|
Change in the estimated fair value of contingent
consideration(2) |
|
|
7,163 |
|
|
|
13,977 |
|
|
|
18,556 |
|
|
|
14,339 |
|
Change in the estimated fair value of contingent liability(3) |
|
|
- |
|
|
|
1,070 |
|
|
|
- |
|
|
|
1,443 |
|
Net loss - Non-GAAP |
|
$ |
(57,342 |
) |
|
$ |
(34,832 |
) |
|
$ |
(110,909 |
) |
|
$ |
(66,420 |
) |
Net income (loss) per share -
GAAP(4) |
|
$ |
0.10 |
|
|
$ |
(7.18 |
) |
|
$ |
(1.08 |
) |
|
$ |
(10.47 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in the estimated fair value of the success payment
liabilities(1) |
|
|
(0.46 |
) |
|
|
3.10 |
|
|
|
0.22 |
|
|
|
3.34 |
|
Change in the estimated fair value of contingent
consideration(2) |
|
|
0.04 |
|
|
|
1.14 |
|
|
|
0.12 |
|
|
|
1.24 |
|
Change in the estimated fair value of contingent liability(3) |
|
|
- |
|
|
|
0.09 |
|
|
|
- |
|
|
|
0.13 |
|
Net loss per share -
Non-GAAP |
|
$ |
(0.32 |
) |
|
$ |
(2.85 |
) |
|
$ |
(0.74 |
) |
|
$ |
(5.76 |
) |
Weighted-average shares
outstanding - basic |
|
|
179,899 |
|
|
|
12,232 |
|
|
|
149,683 |
|
|
|
11,526 |
|
(1) |
For the three and six months ended June 30, 2021, the gain
related to the Cobalt success payment liability was $66.6 million
and the expense was $25.1 million, respectively, and for the three
and six months ended June 30, 2020 the expenses were $33.5 million
and $33.9 million, respectively. For the three and six months ended
June 30, 2021 the gain related to the Harvard success payment
liability was $16.6 million and the expense was $7.3 million,
respectively, and for the three and six months ended June 30, 2020
the expenses were $4.4 million and $4.6, respectively. |
(2) |
The contingent consideration was recorded in connection with
the acquisition of Cobalt. |
(3) |
The contingent liability was recorded in connection with the
Harvard license agreement and paid in June 2020. |
(4) |
Diluted net income per share for the three months ended June
30, 2021 was $0.09. |
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