Sana Biotechnology Inc

Previous wording

We currently have four clinical trials that are ongoing, or that we expect to commence in the near-term, evaluating our product candidates, or product candidates developed using our technologies, across seven diseases in multiple therapeutic areas, including B-cell malignancies, B-cell-mediated autoimmune disease, and type 1 diabetes, as described below:

Current wording

We currently have four ongoing clinical trials evaluating our product candidates, or product candidates developed using our technologies, across seven diseases in multiple therapeutic areas, including B-cell malignancies, B-cell-mediated autoimmune diseases, and type 1 diabetes, as described below:

Previous wording

ARDENT, our ongoing Phase 1 clinical trial evaluating SC291, our HIP-modified CD19 targeted allogeneic chimeric antigen receptor (CAR) T program, in B-cell malignancies, including non-Hodgkin’s lymphoma and chronic lymphoblastic leukemia;

Current wording

ARDENT, our Phase 1 clinical trial evaluating SC291, our HIP-modified CD19 targeted allogeneic chimeric antigen receptor (CAR) T program, in B-cell malignancies, including non-Hodgkin’s lymphoma and chronic lymphoblastic leukemia;

Previous wording

Investigator-sponsored first-in-human study (IST) evaluating UP421 an allogeneic, primary islet cell therapy engineered with our HIP technology, in patients with type 1 diabetes mellitus.

Current wording

The investigator-sponsored first-in-human study (IST) evaluating UP421, an allogeneic primary islet cell therapy engineered with our HIP technology, in patients with type 1 diabetes mellitus.

Previous wording

In 2023 and 2024, the FDA cleared our Investigational New Drug (IND) applications for each of the ARDENT, GLEAM, and VIVID trials, and we supported the submission of a clinical trial application for an IST, which was authorized by the Swedish Medical Products Agency. These four trials will evaluate our product candidates across seven diseases in multiple therapeutic areas, including B-cell malignancies, B cell-mediated autoimmune diseases, and type 1 diabetes. We expect to share data from each of these trials in 2024.

Current wording

In 2023 and 2024, the FDA cleared our Investigational New Drug (IND) applications for each of the ARDENT, GLEAM, and VIVID trials, and we supported the submission of a clinical trial application for an IST, which was authorized by the Swedish Medical Products Agency. These four trials will evaluate our product candidates, or product candidates developed using our technologies, across seven diseases in multiple therapeutic areas, including B-cell malignancies, B cell-mediated autoimmune diseases, and type 1 diabetes. We expect to share data from each of these trials in 2024.

Previous wording

Given the depth and breadth of our portfolio, we expect to assess and prioritize our programs on an ongoing basis based on various factors, including internal and external opportunities and constraints, which may result in our decision to advance certain programs ahead or instead of others. For details regarding our product candidates, see the section titled “Business— Overview” in Part I, Item 1 included in our 2023 Annual Report.

Current wording

Given the depth and breadth of our portfolio, we expect to continue to assess and prioritize our programs on an ongoing basis based on various factors, including internal and external opportunities and constraints, which may result in our decision to advance certain programs ahead or instead of others. For details regarding our product candidates, see the section titled “Business— Overview” in Part I, Item 1 included in our 2023 Annual Report.

Previous wording

Our operations to date have included developing ourex vivo andin vivo cell engineering platforms, identifying and developing potential product candidates, executing preclinical studies, establishing manufacturing capabilities, conducting clinical trials of our product candidates, supporting clinical trials of product candidates developed using our technologies, acquiring technology, organizing and staffing the company, business planning, establishing and maintaining our intellectual property portfolio, raising capital, and providing general and administrative support for these operations. All of our programs are currently in the development stage, and we do not have any products approved for sale. Since our inception, we have incurred net losses each year. Our net losses for the three months ended March 31, 2024 and 2023 were $107.5 million and $82.1 million, respectively. As of March 31, 2024, we had an accumulated deficit of $1.4 billion, which includes cumulative non-cash charges of $43.0 million and $63.7 million related to the revaluation of the success payment liabilities and contingent consideration, respectively. Our net losses resulted primarily from our research and development programs, and, to a lesser extent, general and administrative costs associated with our operations.

Current wording

Our operations to date have included developing ourex vivo andin vivo cell engineering platforms, identifying and developing potential product candidates, executing preclinical studies, establishing manufacturing capabilities, conducting clinical trials of our product candidates, supporting clinical trials of product candidates developed using our technologies, acquiring technologies, staffing the company, business planning, establishing and maintaining our intellectual property portfolio, raising capital, and providing general and administrative support for these operations. All of our programs are currently in the development stage, and we do not have any products approved for sale. Since our inception, we have incurred net losses each year. Our net losses for the six months ended June 30, 2024 and 2023 were $157.8 million and $196.1 million, respectively. As of June 30, 2024, we had an accumulated deficit of $1.5 billion, which includes cumulative non-cash charges of $18.5 million and $60.4 million related to the revaluation of the success payment liabilities and contingent consideration, respectively. Our net losses resulted primarily from our research and development programs, and, to a lesser extent, general and administrative costs associated with our operations.

Previous wording

In August 2022, we entered into a sales agreement with Cowen and Company, LLC (Cowen), acting as sales agent, pursuant to which we may offer and sell through Cowen up to $150.0 million in shares of our common stock from time to time in a series of one or more at the market equity offerings (collectively, the ATM facility). As of March 31, 2024, we have sold an aggregate of 4.9 million shares of our common stock under the ATM facility for net proceeds of $28.7 million, after deducting commissions and expenses.

Current wording

In August 2022, we entered into a sales agreement with Cowen and Company, LLC (Cowen), acting as sales agent, pursuant to which we may offer and sell through Cowen up to $150.0 million in shares of our common stock from time to time in a series of one or more at the market equity offerings (collectively, the ATM facility). As of June 30, 2024, we have sold an aggregate of 4.9 million shares of our common stock under the ATM facility for net proceeds of $28.6 million, after deducting commissions and expenses.

Previous wording

As of March 31, 2024, we had cash, cash equivalents, and marketable securities of $311.1 million. Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months from the filing of these financial statements.

Current wording

As of June 30, 2024, we had cash, cash equivalents, and marketable securities of $251.6 million. Based on our current operating plan, we expect 2024 operating cash burn of less than $200.0 million and believe that our existing cash, cash equivalents, and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least 12 months from the filing of this Quarterly Report.

Previous wording

In October 2023, we announced a strategic repositioning to increase our focus on ourex vivo cell therapy product candidates. As a result, we reduced our near-term investment in our fusogen platform forin vivo gene delivery, including by delaying the IND submission for our SG299 program. The strategic repositioning resulted in a workforce reduction of approximately 29%. We incurred approximately $5.2 million of cash-based expenses related to employee severance, benefits, and related costs. The strategic repositioning and associated workforce reduction is complete, and is expected to result in 2024 operating cash burn of less than $200.0 million.

Current wording

In October 2023, we announced a strategic repositioning to increase our focus on ourex vivo cell therapy product candidates. As a result, we reduced our near-term investment in our fusogen platform forin vivo gene delivery, including by delaying the IND submission for our SG299 program. The strategic repositioning resulted in a workforce reduction of approximately 29%. We incurred approximately $5.2 million of cash-based expenses related to employee severance, benefits, and related costs. The strategic repositioning and associated workforce reduction is complete.

Previous wording

Comparison of the three months ended March 31, 2024 and 2023

Current wording

Comparison of the three and six months ended June 30, 2024 and 2023

Previous wording

Research and development expense was $56.4 million and $67.2 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $10.7 million was primarily due to:

Current wording

Research and development expense was $60.9 million and $73.0 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $12.1 million was primarily due to:

Previous wording

a decrease of $4.5 million in personnel-related expenses due to lower research and development headcount related to the strategic repositioning in October 2023;

Current wording

a net decrease of $6.4 million in personnel-related expenses due to lower research and development headcount related to the strategic repositioning in October 2023, partially offset by an increase in personnel-related costs for the acceleration of our internal manufacturing capabilities;

Previous wording

a decrease of $2.0 million in third-party manufacturing costs for CDMOs;

Current wording

a decrease of $2.7 million in third-party manufacturing costs for CDMOs; and

Previous wording

The expense related to the change in the estimated fair value of our Cobalt Success Payment was $27.9 million for the three months ended March 31, 2024, compared to a gain of $4.8 million for the same period in 2023. The changes in value were due to changes in our market capitalization. The expense related to the change in the estimated fair value of our Harvard Success Payments was $4.7 million for the three months ended March 31, 2024, compared to a gain of $0.6 million for the same period in 2023. The changes in value were primarily due to changes in our common stock price during the relevant periods. The expenses related to the change in the estimated fair value of our Cobalt Contingent Consideration was $5.4 million and $5.5 million for the three months ended March 31, 2024 and 2023, respectively. The changes in value were due to changes in the timing and probability of the achievement of milestones during the relevant periods.

Current wording

The gain related to the change in the estimated fair value of our Cobalt Success Payment was $20.7 million for the three months ended June 30, 2024, compared to an expense of $18.5 million for the same period in 2023. The changes in value were due to changes in our market capitalization during the relevant periods. The gain related to the change in the estimated fair value of our Harvard Success Payments was $3.9 million for the three months ended June 30, 2024, compared to an expense of $2.3 million for the same period in 2023. The changes in value were primarily due to changes in our common stock price during the relevant periods. The gain related to the change in the estimated fair value of our Cobalt Contingent Consideration was $3.4 million compared to an expense of $5.9 million for the three months ended June 30, 2024 and 2023, respectively. The changes in value were due primarily to changes in the timing and probability of the achievement of milestones during the relevant periods.

Previous wording

General and administrative expenses were $16.3 million and $16.8 million for the three months ended March 31, 2024 and 2023, respectively. The decrease of $0.5 million was primarily due to lower personnel-related costs due to a decrease in headcount related to the strategic repositioning in October 2023 and a decrease in costs related our previously planned manufacturing facility in Fremont, California. The decreases were partially offset by an increase in patent and other legal fees.

Current wording

The decrease of $0.2 million for the three months ended June 30, 2024 was primarily due to a decrease in costs related our previously planned manufacturing facility in Fremont, California, lower personnel-related costs due to a decrease in headcount related to the strategic repositioning in October 2023, and a decrease in legal fees. These decreases were partially offset by an increase in non-cash stock-based compensation and consulting fees.

Previous wording

Interest income, net, was $3.0 million and $2.0 million for the three months ended March 31, 2024 and 2023, respectively, and consisted primarily of interest earned on our cash and marketable securities balances.

Current wording

Interest income, net, was $3.2 million and $6.2 million for the three and six months ended June 30, 2024, respectively, compared to $2.4 million and $4.4 million for the same periods in 2023, respectively, and consisted primarily of interest earned on our cash and marketable securities balances.

Previous wording

As of March 31, 2024, we had $311.1 million in cash, cash equivalents, and marketable securities. To date we have raised an aggregate of approximately $1.5 billion in net proceeds from sales of common stock and private placements of our convertible preferred stock.

Current wording

As of June 30, 2024, we had $251.6 million in cash, cash equivalents, and marketable securities. To date we have raised an aggregate of approximately $1.5 billion in net proceeds from sales of common stock and private placements of our convertible preferred stock.

Previous wording

In August 2022, we entered into a sales agreement with Cowen, acting as sales agent, pursuant to which we may offer and sell through Cowen up to $150.0 million in shares of our common stock under the ATM facility. As of March 31, 2024, we have sold an aggregate of 4.9 million shares of our common stock under the ATM facility for net proceeds of $28.7 million, after deducting commissions and expenses.

Current wording

In August 2022, we entered into a sales agreement with Cowen, acting as sales agent, pursuant to which we may offer and sell through Cowen up to $150.0 million in shares of our common stock under the ATM facility. As of June 30, 2024, we have sold an aggregate of 4.9 million shares of our common stock under the ATM facility for net proceeds of $28.6 million, after deducting commissions and expenses.

Previous wording

We expect to incur additional losses for the foreseeable future as we conduct and expand our research and development efforts, including conducting preclinical studies and clinical trials, developing new product candidates, establishing internal and external manufacturing capabilities, and funding our operations generally.

Current wording

We expect to incur additional losses for the foreseeable future as we conduct and expand our research and development efforts, including conducting clinical trials and preclinical studies, developing new product candidates, establishing internal and external manufacturing capabilities, and funding our operations generally.

Previous wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. However, we anticipate that we will need to raise additional financing in the future to fund our operations, including the commercialization of any approved product candidates. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Current wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least 12 months from the filing of this Quarterly Report. However, we anticipate that we will need to raise additional financing in the future to fund our operations, including the commercialization of any approved product candidates. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Previous wording

During the three months ended March 31, 2024, net cash used in operating activities was $65.6 million, consisting primarily of net loss of $107.5 million and the change in net operating assets and liabilities of $7.4 million, offset by non-cash adjustments of $49.3 million. The non-cash adjustments of $49.3 million consisted of $9.1 million of non-cash stock-based compensation, expenses of $32.6 million and $5.4 million for revaluation of our success payment liabilities and contingent consideration, respectively, and depreciation expense of $3.7 million, offset by other non-cash adjustments of $1.5 million.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $124.2 million, consisting primarily of net loss of $157.8 million and the change in net operating assets and liabilities of $5.1 million, offset by non-cash adjustments of $38.7 million. The non-cash adjustments of $38.7 million consisted of $20.5 million of non-cash stock-based compensation, expenses of $8.0 million and $2.0 million for revaluation of our success payment liabilities and contingent consideration, respectively, and depreciation expense of $7.6 million, offset by other non-cash adjustments of $0.6 million.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities was $79.3 million, consisting primarily of net loss of $82.1 million, the change in net operating assets and liabilities of $10.8 million, and non-cash adjustments of $13.6 million. The non-cash adjustments of $13.6 million consisted of non-cash stock-based compensation expense of $8.8 million, depreciation expense of $4.3 million, and other non-cash adjustments of $0.5 million.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities was $138.1 million, consisting primarily of net loss of $196.1 million, the change in net operating assets and liabilities of $3.2 million, and non-cash adjustments of $54.8 million. The non-cash adjustments of $54.8 million consisted of non-cash stock-based compensation expense of $18.6 million, expenses of $15.4 million and $11.4 million for revaluation of our success payment liabilities and contingent consideration, respectively, depreciation expense of $8.8 million, and other non-cash adjustments of $0.6 million.

Previous wording

Cash used in investing activities was $77.2 million during the three months ended March 31, 2024, and cash provided by investing activities was $62.7 million during the three months ended March 31, 2023. For the three months ended March 31, 2024, this consisted of net purchases and maturities of marketable securities of $61.4 million and purchases of property and equipment of $15.8 million. For the three months ended March 31, 2023, this consisted of net purchases and maturities of marketable securities of $64.9 million, offset by purchases of property and equipment of $2.2 million.

Current wording

Cash used in investing activities was $71.4 million during the six months ended June 30, 2024, and cash provided by investing activities was $105.4 million during the six months ended June 30, 2023. For the six months ended June 30, 2024, this consisted of net purchases and maturities of marketable securities of $42.5 million and purchases of property and equipment of $28.9 million. For the six months ended June 30, 2023, this consisted of net purchases and maturities of marketable securities of $109.1 million, offset by purchases of property and equipment of $3.7 million.

Previous wording

During the three months ended March 31, 2024 and 2023, cash provided by financing activities was $186.4 million and $0.2 million, respectively, consisting primarily of net proceeds from issuance of common stock.

Current wording

During the six months ended June 30, 2024 and 2023, cash provided by financing activities was $197.0 million and $29.7 million, respectively, consisting primarily of net proceeds from issuance of common stock.

Previous wording

We are also obligated to make a success payment to Cobalt of up to $500.0 million, payable in cash or stock, pursuant to the terms and conditions in the Cobalt acquisition agreement, and up to an aggregate of $175.0 million in success payments to Harvard, payable in cash. See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “—Critical accounting policies and significant judgments and estimates—Success payments” in our 2023 Annual Report and Note 4, License and collaboration agreements, to our condensed consolidated financial statements located elsewhere in this Quarterly Report for more information on the success payments. As of March 31, 2024, the timing and likelihood of achieving the milestones and success payments and generating future product sales are uncertain, and therefore any related payments are not included in the table above.

Current wording

We are also obligated to make a success payment to Cobalt of up to $500.0 million, payable in cash or stock, pursuant to the terms and conditions in the Cobalt acquisition agreement, and up to an aggregate of $175.0 million in success payments to Harvard, payable in cash. See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “—Critical accounting policies and significant judgments and estimates—Success payments” in our 2023 Annual Report and Note 3, Acquisitions, and Note 4, License and collaboration agreements, to our condensed consolidated financial statements located elsewhere in this Quarterly Report for more information on the success payments. As of June 30, 2024, the timing and likelihood of achieving the milestones and success payments and generating future product sales are uncertain, and therefore any related payments are not included in the table above.

Previous wording

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in more detail in the notes to our condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023, are consistent with those discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “—Critical accounting policies and significant judgments and estimates” in our 2023 Annual Report.

Current wording

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in more detail in the notes to our condensed consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, are consistent with those discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations “—Critical accounting policies and significant judgments and estimates” in our 2023 Annual Report.