On November 8, 2024 Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on creating and delivering engineered cells as medicines, reported financial results and business highlights for the third quarter 2024 (Press release, Sana Biotechnology, NOV 8, 2024, View Source [SID1234648033]).

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"Early clinical data with our hypoimmune technology suggest HIP-modified cells evade immune detection, and we look forward to sharing data in 2024 and 2025 across multiple clinical settings, including type 1 diabetes, B-cell mediated autoimmune diseases, and oncology," said Steve Harr, Sana’s President and Chief Executive Officer. "This past quarter was an important one for the company, as we enhanced our leadership team with the addition of Dhaval Patel as our new Chief Scientific Officer, made progress with our clinical programs, and focused our pipeline. We are optimistic that our recent strategic repositioning to increase focus on immunologic diseases, particularly type 1 diabetes and B-cell mediated autoimmune diseases, will help accelerate development and prolong the capital runway for the company. We look forward to multiple clinical data readouts with our current balance sheet with our cash runway into 2026."

Payments related to ongoing activities combined with the strategic repositioning may increase the 2024 operating cash burn above prior guidance of less than $200 million.

Recent Corporate Highlights

Advancing three clinical programs across five indications, including a gene-modified primary islet cell therapy in type 1 diabetes, an allogeneic CAR T program for B-cell mediated autoimmune diseases, and an allogeneic CAR T program for cancer patients that have failed a CD19-targeted therapy:

Type 1 Diabetes – UP421 is a primary human HIP-modified pancreatic islet cell therapy for patients with type 1 diabetes. The goal of this investigator-sponsored trial (IST) is to understand immune evasion, islet cell survival, and beta cell function, as measured by C-peptide production, of HIP-modified pancreatic islet cells in type 1 diabetics without any immunosuppression. Sana expects to share initial data in 2024 and/or 2025. Sana is also making progress with the pre-clinical development of SC451, a HIP-modified, stem cell-derived pancreatic islet cell program.
B-cell Mediated Autoimmune Diseases – The GLEAM trial evaluates SC291, a HIP-modified CD19-directed allogeneic CAR T therapy, in patients with B-cell mediated autoimmune diseases including lupus nephritis, extrarenal lupus, and antineutrophil cytoplasmic antibody (ANCA)-associated vasculitis. Sana is enrolling patients in this study and expects to share initial data in 2024 and/or 2025.
Oncology – The VIVID trial evaluates SC262, a HIP-modified CD22-directed allogeneic CAR T therapy, in patients with relapsed or refractory B-cell malignancies who have received prior CD19-directed CAR T therapy. Sana is enrolling patients and expects to share data in 2025.
Strengthened Research and Development leadership with the appointment of new Chief Scientific Officer

Appointed Dhaval Patel, M.D., Ph.D., as Executive Vice President and Chief Scientific Officer. Dr. Patel has decades of experience in research, drug discovery, drug development, and clinical care – including roles at UCB, Novartis, University of North Carolina, and the Duke University School of Medicine – and over the course of his career has participated in the development of 10 approved drugs in multiple indications.
Third Quarter 2024 Financial Results

GAAP Results

Cash Position: Cash, cash equivalents, and marketable securities as of September 30, 2024 were $199.0 million compared to $205.2 million as of December 31, 2023. The decrease of $6.2 million was primarily driven by cash used in operations of $176.0 million and cash used for the purchase of property and equipment of $33.0 million, partially offset by net proceeds from equity financings of $181.0 million, proceeds from stock option exercises and the employee stock purchase plan of $10.3 million, and net proceeds of $7.8 million from a loan to fund tenant improvements for our manufacturing facility in Bothell, Washington during the nine months ended September 30, 2024.

Research and Development Expenses: For the three and nine months ended September 30, 2024, research and development expenses, inclusive of non-cash expenses, were $53.2 million and $170.5 million, respectively, compared to $65.6 million and $205.8 million for the same periods in 2023. The decreases of $12.4 million and $35.3 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023 were primarily due to lower personnel-related and laboratory costs due to a decrease in headcount and decreased research costs related to the strategic repositioning in the fourth quarter of 2023, lower costs for third-party manufacturing at contract development and manufacturing organizations, and a decline in facility and other allocated costs. These decreases were partially offset by increased clinical development costs. Research and development expenses include non-cash stock-based compensation of $6.5 million and $19.5 million, respectively, for the three and nine months ended September 30, 2024 and $5.7 million and $18.4 million, for the same periods in 2023.

Research and Development Related Success Payments and Contingent Consideration: For the three and nine months ended September 30, 2024, Sana recognized a non-cash gain of $5.5 million and a non-cash expense of $4.6 million, respectively, in connection with the change in the estimated fair value of the success payment liabilities and contingent consideration in aggregate, compared to non-cash gains of $82.6 million and $55.8 million for the same periods in 2023. The value of these potential liabilities fluctuate significantly with changes in Sana’s market capitalization and stock price.
General and Administrative Expenses: General and administrative expenses for the three and nine months ended September 30, 2024, inclusive of non-cash expenses, were $14.1 million and $46.8 million, respectively, compared to $19.2 million and $52.5 million for the same periods in 2023. The decreases of $5.1 million and $5.8 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023 were primarily due to a decrease in costs related to Sana’s previously planned manufacturing facility in Fremont, California, a decrease in legal and consulting fees, and lower personnel-related costs due to a decrease in headcount. These decreases were partially offset by an increase in non-cash stock-based compensation.

Net Loss: Net loss for the three and nine months ended September 30, 2024 was $59.9 million, or $0.25 per share, and $217.7 million, or $0.95 per share, respectively. Net income for the three months ended September 30, 2023 was $1.0 million, or $0.00 per share, and net loss for the nine months ended September 30, 2023 was $195.1 million, or $1.01 per share.

Non-GAAP Measures

Non-GAAP Operating Cash Burn: Non-GAAP operating cash burn for the nine months ended September 30, 2024 was $153.1 million compared to $187.2 million for the same period in 2023. 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, non-recurring items, and the purchase of property and equipment.
Non-GAAP General and Administrative Expenses: Non-GAAP general and administrative expenses for the three and nine months ended September 30, 2024 were $14.1 million and $46.8 million, respectively, compared to $16.5 million and $49.8 million for the same periods in 2023. Non-GAAP general and administrative expenses for the three and nine months ended September 30, 2023 excludes the loss on termination of the Fremont lease.
Non-GAAP Net Loss: Non-GAAP net loss for the three and nine months ended September 30, 2024 was $64.7 million, or $0.27 per share, and $208.3 million, or $0.91 per share, respectively, compared to $79.0 million, or $0.41 per share, and $248.3 million, or $1.28 per share, for the same periods in 2023. Non-GAAP net loss excludes non-cash expenses and gains related to the change in the estimated fair value of contingent consideration and success payment liabilities, the impairment of other assets, and, for the three and nine months ended September 30, 2023, the loss on termination of the Fremont lease.