On March 16, 2023 Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on creating and delivering engineered cells as medicines, reported financial results and business highlights for the fourth quarter and year ended December 31, 2022 (Press release, Sana Biotechnology, MAR 16, 2023, View Source [SID1234628928]).
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"2022 began our transformation from a research focused organization to a clinical-stage company, setting the stage for important clinical data in 2023 and 2024 to better define our product candidates and platforms," said Steve Harr, Sana’s President and Chief Executive Officer. "The recent clearance of our first IND – for SC291, a hypoimmune-modified, CD19-targeted allogeneic CAR T therapy for patients with B-cell malignancies – offers the first of several near-term opportunities to understand our hypoimmune technology in patients and its potential to move forward important medicines. We anticipate initial clinical data with this program and hypoimmune islet cells in type 1 diabetic patients in 2023. We also expect to file INDs in oncology for an additional allogeneic CAR T program and our first in vivo fusogen program targeting T cells. Our balance sheet gives us the financial strength to build on our execution in 2022 and push our R&D portfolio forward."
Recent Corporate Highlights
Advancing to the clinic with two opportunities for clinical proof of concept this year for the hypoimmune platform, including ex vivo hypoimmune-modified allogeneic CAR T cells and hypoimmune-modified primary human islet cells:
SC291 is a hypoimmune-modified CD19-targeted allogeneic CAR T for patients with B cell malignancies. The SC291 IND has been cleared, and Sana expects to share initial clinical data later this year. Success unlocks potential value of a broader hypoimmune-modified allogeneic CAR T platform with clinically-validated CD22 and BCMA CAR constructs.
Sana expects an investigator sponsor trial using primary human hypoimmune-modified islet cells transplanted in type 1 diabetes patients to begin later this year. Sana anticipates sharing initial clinical data later this year. The goal is to understand pancreatic islet cell survival without immunosuppression in these autoimmune patients, providing insight into Sana’s ongoing hypoimmune-modified stem cell-derived pancreatic islet cell program (SC451), which has a goal of filing an IND in 2024.
Building pipeline with potential to deliver multiple clinical data readouts over the next several years across three platforms – ex vivo hypoimmune-modified allogeneic CAR T cells, stem-cell derived cell therapies, and the in vivo fusogen platform:
ex vivo hypoimmune-modified allogeneic CAR T platform: Sana has the opportunity to unlock a potentially best-in-class, broadly accessible allogeneic CAR T franchise across multiple patient populations using clinically-validated CAR constructs, including SC291 (CD19), SC262 (CD22), SC255 (BCMA), and beyond.
In 2022, entered into an agreement with the National Institutes of Health (NIH) for worldwide exclusive commercial rights to the NIH’s CD22 chimeric antigen receptor with a fully-human binder for use in certain ex vivo allogeneic CAR T applications. This CAR construct has shown a promising efficacy profile in several clinical studies, including in autologous CD19 CAR T cell therapy failures. SC262 incorporates this clinically-validated CAR with T cells manufactured using hypoimmune technology with a goal of filing an IND in 2023.
In 2022, entered into a non-exclusive agreement with IASO Biotherapeutics and Innovent Biologics for commercial rights to a clinically-validated fully-human B cell maturation antigen (BCMA) CAR construct. SC255 incorporates this clinically-validated CAR with T cells manufactured using the hypoimmune platform with a goal of filing an IND in 2024.
stem-cell derived platform: Sana has several programs using stem-cell derived cell therapies, including SC451 and SC379.
SC451 is a hypoimmune stem-cell derived islet cell program for type 1 diabetes with a goal of a 2024 IND.
SC379 is a stem-cell derived glial progenitor cell therapy targeting multiple central nervous system diseases with a goal of a 2024 IND.
in vivo fusogen platform: The fusogen platform focuses on in vivo cell specific delivery of genetic material. Sana’s lead program using this platform is SG299, previously called SG295, an in vivo CAR T product candidate that utilizes a CD8-targeted fusosome to deliver a CD19 CAR to generate a CD19-targeted CAR T cell. The company continues to progress earlier programs focused on cell-specific delivery of various payloads.
SG299 has the potential to generate CAR T cells in vivo (inside the patient), eliminating the need for conditioning chemotherapy and complex CAR T cell manufacturing. The company’s goal is to file an IND this year to study this drug candidate in patients with B cell malignancies.
In 2022, Sana transitioned to a new manufacturing process for SG295 and renamed the product SG299 in connection with that transition. SG299 has at least a 50X improvement in product potency, which Sana believes has the potential to translate into better efficacy, safety, and long-term manufacturability. The company plans to use this second-generation process for the first-in-human studies in patients with B cell malignancies.
Demonstrated that two additional fusosome candidates eliminated tumors in preclinical models – a CD4+ T cell targeting fusosome delivering a CD19 CAR and a CD8+ T cell targeting fusosome delivering a CD22 CAR.
Advanced Sana’s hypoimmune ex vivo platform and in vivo fusogen platform with presentations at AACR (Free AACR Whitepaper), ASGCT (Free ASGCT Whitepaper), ADA, ISSCR, and ASH (Free ASH Whitepaper):
ex vivo hypoimmune platform: Sana’s hypoimmune 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. Sana’s pipeline includes hypoimmune-modified cells to replace damaged or missing cells in the body in a number of different diseases, including, among others, cancer, type 1 diabetes, and various neurologic conditions.
Presented preclinical data demonstrating that hypoimmune-modified CAR T cells were able to evade both the innate and adaptive arms of the immune system in animal models while retaining their antitumor activity.
Presented preclinical data showing survival of transplanted allogeneic hypoimmune-modified cells of several different types – including pancreatic islet cells, cardiomyocytes, and retinal pigment epithelial cells – in a variety of locations in non-human primates.
Presented preclinical data showing that hypoimmune-modified 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.
Presented preclinical data outlining the importance of CD47 overexpression as part of the hypoimmune platform to evade adaptive and innate immune response, the use of CRISPR/Cas12b in scaled hypoimmune-modified allogeneic CAR T manufacturing, the development of assays to evaluate T cell quality from healthy, allogeneic donors, and the generation of a hypoimmune-modified BCMA-directed allogeneic CAR T cell.
hypoimmune-modified pancreatic islet cells: Type 1 diabetes is a disease in which a person’s immune system destroys one’s own pancreatic beta cells, which are a key component in pancreatic islets. Hypoimmune technology is incorporated in SC451, Sana’s ongoing stem cell-derived pancreatic islet cell program, for which Sana has a goal of filing an IND in 2024 for the treatment of type 1 diabetes.
Presented preclinical data showing that transplanted hypoimmune-modified pancreatic islet cells evade allogeneic immune response and autoimmune response in a novel type 1 diabetes mouse model. These data build upon previous in vitro data showing that hypoimmune-modified pancreatic islet cells are not recognized by serum from type 1 diabetic patients, including no T cell or antibody recognition.
Presented preclinical data showing that hypoimmune-modified islet cells transplanted intramuscularly may be capable of persisting and functioning in diabetic patients without immune suppression.
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, human hepatocytes, and initial data on our work in hematopoietic stem cells. This technology is the backbone of Sana’s in vivo delivery platform and is incorporated into various product candidates, including SG299.
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.
Announced decision to move Sana’s manufacturing plant from Fremont, CA to Bothell, WA, resulting in approximately $100 million in expected cost savings compared to the initial build-out plan. 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 corporate updates, building on the company’s scientific excellence and operational capabilities
Announced a portfolio prioritization and corporate restructuring designed to optimize the development of programs at or nearing clinical development, continue investments in the core research platforms and innovation, and maintain a strong balance sheet.
Named the top place to work on the BioSpace 2023 Best Places to Work small employer list, based on attributes including compensation, innovation, career growth opportunities, leadership, culture, diversity, equity and inclusion, reputation, and flexibility and remote work.
Strengthened the leadership team with the appointments of Snehal Patel to lead technical operations and Julie Lepin to lead regulatory affairs.
Fourth Quarter 2022 Financial Results
GAAP Results
Cash Position: Cash, cash equivalents, and marketable securities as of December 31, 2022 were $434.0 million compared to $746.9 million as of December 31 2021. The decrease of $312.9 million was primarily driven by cash used in operations of $289.9 million and cash used for the purchase of property and equipment of $20.9 million. Cash used in operations includes $6.2 million of upfront payments related to licensing technology for the company’s CD22 and BCMA programs, $4.3 million of one-time restructuring costs related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, and $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 facility in Bothell, WA (the Bothell facility). In addition, our cash balance will increase by $6.7 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 and twelve months ended December 31, 2022, research and development expenses, inclusive of non-cash expenses, were $63.9 million and $285.9 million, respectively, compared to $108.5 million and $248.6 million for the same periods in 2021. The decrease of $44.6 million for the three months ended December 31, 2022 was primarily due to the one-time upfront payment to Beam Therapeutics Inc. (Beam) in the fourth quarter of 2021 to license its gene editing technology, partially offset by an increase in research, development, and third-party manufacturing costs, and facility and software expenses. The increase of $37.3 million for the twelve months ended December 31, 2022 was largely due to increases in personnel-related expenses, including increased headcount to expand Sana’s research and development capabilities, increased research, laboratory, and third-party manufacturing costs, and allocated personnel costs, depreciation expense, and facility and software costs. These increases were partially offset by the one-time upfront payment to Beam in the fourth quarter of 2021 to license its gene editing technology. Research and development expenses for the three and twelve months ended December 31, 2022 include non-cash stock-based compensation of $6.0 million and $26.6 million, respectively, and $5.3 million and $15.2 million, respectively, for the same periods in 2021.
Research and Development Related Success Payments and Contingent Consideration: For the three and twelve months ended December 31 2022, Sana recognized non-cash gains of $5.5 million and $84.9 million, respectively, in connection with the change in the estimated fair value of the success payment liabilities and contingent consideration in aggregate. Sana recognized a non-cash gain of $9.9 million for the three months ended December 31, 2021 and a non-cash expense of $57.9 million for the twelve months ended December 31, 2021. 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 December 31, 2022, inclusive of non-cash expenses, were $23.3 million compared to $12.7 million for the same period in 2021. The increase of $10.6 million was primarily due to one-time restructuring costs of $8.7 million, including stock-based compensation of $1.9 million, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, operating costs associated with the Fremont facility, business taxes, and legal fees. These increases were offset by a decline in personnel-related expenses. General and administrative expenses for the twelve months ended December 31, 2022 were $71.6 million compared to $50.4 million for the same period in 2021. The increase of $21.2 million was primarily due to one-time restructuring costs of $8.7 million, including stock-based compensation of $1.9 million, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, the write-off of construction in progress costs incurred in connection with the Fremont facility, personnel-related expenses attributable to an increase in headcount to support Sana’s continued research and development activities, and operating costs associated with the Fremont facility. General and administrative expenses for the three and twelve months ended December 31, 2022 include stock-based compensation of $4.6 million and $11.8 million, respectively, and $2.0 million and $7.1 million, respectively, for the same periods in 2021.
Net Loss: Net loss for the three and twelve months ended December 31, 2022 was $80.4 million, or $0.42 per share, and $269.5 million, or $1.43 per share, respectively, compared to $110.7 million, or $0.60 per share, and $355.9 million, or $2.14 per share, respectively, for the same periods in 2021.
Non-GAAP Measures
Non-GAAP Operating Cash Burn: Non-GAAP operating cash burn for the twelve months ended December 31, 2022 was $288.3 million compared to $209.6 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 and non-recurring restructuring activities, and the purchase of property and equipment.
Non-GAAP General and Administrative Expense: Non-GAAP general and administrative expense for the three and twelve months ended December 31, 2022 was $14.6 million and $58.4 million, respectively, compared to $12.7 million and $50.4 million, respectively, for the same periods in 2021. Non-GAAP general and administrative expense excludes one-time restructuring costs, including stock-based compensation, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022 and the write-off of construction in progress costs incurred in connection with the Fremont facility.
Non-GAAP Net Loss: Non-GAAP net loss for the three and twelve months ended December 31, 2022 was $77.2 million, or $0.40 per share, and $341.2 million, or $1.81 per share, respectively, compared to $120.6 million, or $0.65 per share, and $298.1 million, or $1.79 per share, respectively, for the same periods in 2021. Non-GAAP net loss excludes non-cash expenses related to the change in the estimated fair value of contingent consideration and success payment liabilities, one-time restructuring costs, including stock-based compensation, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, and the write-off of construction in progress costs incurred in connection with the Fremont facility.
A discussion of non-GAAP measures, including a reconciliation of GAAP and non-GAAP measures, is presented below under "Non-GAAP Financial Measures."