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Sana Biotechnology(SANA) - 2024 Q3 - Quarterly Report
SANASana Biotechnology(SANA)2024-11-08 14:14

Financial Performance - Research and development expenses for the three months ended September 30, 2024, were 53.2million,adecreasefrom53.2 million, a decrease from 65.6 million in the same period in 2023[8] - Total operating expenses for the three months ended September 30, 2024, were 61.8million,comparedto61.8 million, compared to 2.2 million in the same period in 2023[8] - Net loss for the three months ended September 30, 2024, was 59.9million,comparedtoanetincomeof59.9 million, compared to a net income of 984,000 in the same period in 2023[8] - Net loss per common share (basic and diluted) for the three months ended September 30, 2024, was 0.25,comparedto0.25, compared to 0.00 in the same period in 2023[8] - Net loss for the nine months ended September 30, 2024, was 217.7million,comparedto217.7 million, compared to 195.1 million for the same period in 2023[16] - Net loss attributable to common stockholders for the three months ended September 30, 2024 was 59.9million,comparedtoanetincomeof59.9 million, compared to a net income of 984 thousand in the same period last year[73] - Basic and diluted loss per common share for the three months ended September 30, 2024 was 0.25,comparedto0.25, compared to 0.00 in the same period last year[73] - Net loss attributable to common stockholders for the nine months ended September 30, 2024 was 217.7million,comparedto217.7 million, compared to 195.1 million in the same period last year[73] - Basic and diluted loss per common share for the nine months ended September 30, 2024 was 0.95,comparedto0.95, compared to 1.01 in the same period last year[73] Cash and Marketable Securities - Cash, cash equivalents, and restricted cash decreased by 6.5millionto6.5 million to 130.8 million as of September 30, 2024[16] - As of September 30, 2024, the company had cash, cash equivalents, and marketable securities totaling 199.0million[22]−Thecompany′scashequivalentstotaled199.0 million[22] - The company's cash equivalents totaled 103.1 million, and short-term marketable securities were valued at 72.0millionasofSeptember30,2024[41]−Thecompanyhadcash,cashequivalents,andrestrictedcashof72.0 million as of September 30, 2024[41] - The company had cash, cash equivalents, and restricted cash of 130.8 million and marketable securities of 72.0millionasofSeptember30,2024[146]−TotalcashequivalentsasofDecember31,2023were72.0 million as of September 30, 2024[146] - Total cash equivalents as of December 31, 2023 were 104,468 thousand, with gross unrealized holding gains of 3thousand,resultinginanestimatedfairvalueof3 thousand, resulting in an estimated fair value of 104,471 thousand[43] - Total short-term marketable securities as of December 31, 2023 were 71,741thousand,withgrossunrealizedholdinggainsof71,741 thousand, with gross unrealized holding gains of 16 thousand and losses of 79thousand,resultinginanestimatedfairvalueof79 thousand, resulting in an estimated fair value of 71,678 thousand[43] Stockholders' Equity and Accumulated Deficit - Total stockholders' equity as of September 30, 2024, was 292.5million,adecreasefrom292.5 million, a decrease from 287.5 million as of December 31, 2023[11] - Accumulated deficit as of September 30, 2024, was 1.56billion,anincreasefrom1.56 billion, an increase from 1.34 billion as of December 31, 2023[11] - Accumulated deficit as of September 30, 2024, was 1.6billion,includingnon−cashchargesrelatedtosuccesspaymentliabilitiesandcontingentconsideration[22]Stock−BasedCompensationandEquity−Stock−basedcompensationexpensefortheninemonthsendedSeptember30,2024,was1.6 billion, including non-cash charges related to success payment liabilities and contingent consideration[22] Stock-Based Compensation and Equity - Stock-based compensation expense for the nine months ended September 30, 2024, was 31.2 million[16] - Stock-based compensation expense for the three months ended September 30, 2024, was 10.770million,with10.770 million, with 6.481 million allocated to research and development and 4.289milliontogeneralandadministrativeexpenses[64]−ThefairvalueofRSUsthatvestedduringtheninemonthsendedSeptember30,2024,was4.289 million to general and administrative expenses[64] - The fair value of RSUs that vested during the nine months ended September 30, 2024, was 5.0 million[69] - The company had 28,483 stock options outstanding as of September 30, 2024, with a weighted-average exercise price of 7.26pershareandaweighted−averageremainingcontractuallifeof7.8years[66]ContingentConsiderationandSuccessPayments−TheCompanymaypayupto7.26 per share and a weighted-average remaining contractual life of 7.8 years[66] Contingent Consideration and Success Payments - The Company may pay up to 500.0 million in contingent consideration and 500.0millioninsuccesspaymentstoformerCobaltstockholders,contingentondevelopmentmilestonesandmarketcapitalizationthresholds[32]−AsofSeptember30,2024,theestimatedfairvalueoftheCobaltSuccessPaymentliabilitywas500.0 million in success payments to former Cobalt stockholders, contingent on development milestones and market capitalization thresholds[32] - As of September 30, 2024, the estimated fair value of the Cobalt Success Payment liability was 13.5 million, and the Cobalt Contingent Consideration was 111.9million[33][34]−TheCompanypaid111.9 million[33][34] - The Company paid 12.0 million to Harvard College in March 2019 and may pay up to 175.0millioninsuccesspaymentsbasedonstockvalueincreases[36][37]−AsofSeptember30,2024,theestimatedfairvalueoftheHarvardSuccessPaymentliabilitywas175.0 million in success payments based on stock value increases[36][37] - As of September 30, 2024, the estimated fair value of the Harvard Success Payment liability was 1.6 million[39] - The estimated aggregate fair value of the success payment liabilities was 15.1millionasofSeptember30,2024[148]−ThefairvalueoftheCobaltContingentConsiderationasofSeptember30,2024wascalculatedusingadiscountraterangeof10.715.1 million as of September 30, 2024[148] - The fair value of the Cobalt Contingent Consideration as of September 30, 2024 was calculated using a discount rate range of 10.7% to 11.7% (weighted average of 11.3%) and a probability of milestone achievement range of 5.0% to 55.0% (weighted average of 25.7%)[48] - The fair value of the Cobalt Success Payments and Harvard Success Payments as of September 30, 2024 was calculated using expected stock price volatility of 75.0% and expected terms of 14.4 years and 6.5 years, respectively[50] Acquisitions and Licensing Agreements - The Company acquired Cobalt Biomedicine, Inc. in February 2019, recording an intangible asset of 59.2 million and goodwill of 140.6million[29][30][31]−TheCompanyenteredintoalicenseagreementwithBeamTherapeuticsinOctober2021,paying140.6 million[29][30][31] - The Company entered into a license agreement with Beam Therapeutics in October 2021, paying 50.0 million upfront and potentially up to 65.0millioninmilestonepayments[35]LeasesandProperty−Thecompanyleased79,565squarefeetofoffice,laboratory,andmanufacturingspaceinBothell,Washington,withabaserentobligationofapproximately65.0 million in milestone payments[35] Leases and Property - The company leased 79,565 square feet of office, laboratory, and manufacturing space in Bothell, Washington, with a base rent obligation of approximately 68.8 million over the initial term expiring in February 2039[55] - The company derecognized 6.4millioninright−of−useassetsand6.4 million in right-of-use assets and 6.2 million in lease liabilities related to vivarium spaces in Cambridge, Massachusetts, and South San Francisco, California[56] - Total lease costs for the three months ended September 30, 2024, were 8.031million,including8.031 million, including 4.728 million in operating lease costs and 2.195millioninvariableleasecosts[58]−Thepresentvalueofthecompany′soperatingleaseliabilitiesasofSeptember30,2024,was2.195 million in variable lease costs[58] - The present value of the company's operating lease liabilities as of September 30, 2024, was 96.084 million, with a weighted-average remaining lease term of 9.7 years and a weighted-average incremental borrowing rate of 11.4%[59] - Total property and equipment, net as of September 30, 2024 was 82,826thousand,anincreasefrom82,826 thousand, an increase from 70,689 thousand as of December 31, 2023, primarily due to construction in progress increasing from 26,332thousandto26,332 thousand to 40,229 thousand[52] Workforce Reduction and Strategic Repositioning - The company announced a strategic repositioning in November 2024, resulting in a workforce reduction of approximately 45% and expected cash-based expenses of 6.4millionrelatedtoemployeeseveranceandbenefits[76]FinancialAssetsandLiabilities−TheCompany′stotalfinancialassetswerevaluedat6.4 million related to employee severance and benefits[76] Financial Assets and Liabilities - The Company's total financial assets were valued at 175.1 million, and total financial liabilities were 127.0millionasofSeptember30,2024[41]−TotalfinancialassetsasofDecember31,2023amountedto127.0 million as of September 30, 2024[41] - Total financial assets as of December 31, 2023 amounted to 176,568 thousand, with gross unrealized holding gains of 19thousandandlossesof19 thousand and losses of 79 thousand, resulting in an estimated fair value of 176,508thousand[43]−Totallong−termfinancialliabilitiesasofDecember31,2023were176,508 thousand[43] - Total long-term financial liabilities as of December 31, 2023 were 122,405 thousand, primarily consisting of contingent consideration of 109,606thousandandsuccesspaymentliabilitiesof109,606 thousand and success payment liabilities of 12,799 thousand[43] Marketable Securities Transactions - Purchases of marketable securities for the nine months ended September 30, 2024, totaled 213.0million[16]−ProceedsfrommaturitiesofmarketablesecuritiesfortheninemonthsendedSeptember30,2024,were213.0 million[16] - Proceeds from maturities of marketable securities for the nine months ended September 30, 2024, were 216.3 million[16] Public Offerings and ATM Facility - The company completed a public offering in February 2024, raising net proceeds of approximately 180.0million[20]−ThecompanycompletedapublicofferinginFebruary2024,selling21.8millionsharesofcommonstockandpre−fundedwarrantsfornetproceedsofapproximately180.0 million[20] - The company completed a public offering in February 2024, selling 21.8 million shares of common stock and pre-funded warrants for net proceeds of approximately 180.0 million[61] - As of September 30, 2024, the company had sold 4.9 million shares under its ATM facility for net proceeds of 28.6million[62]TaxandValuationAllowance−Thecompanyrecordedafullvaluationallowanceagainstitsnetdeferredtaxassetsduetouncertaintysurroundingtherealizationoffavorabletaxattributesinfuturetaxreturns[70]ForeignCurrencySensitivity−Thecompanydoesnotbelieveitwillexperiencematerialimpactsfromforeigncurrencysensitivity,despitecontractingwithvendorslocatedoutsidetheUnitedStates[150]HypotheticalMarketScenarios−Ahypothetical2028.6 million[62] Tax and Valuation Allowance - The company recorded a full valuation allowance against its net deferred tax assets due to uncertainty surrounding the realization of favorable tax attributes in future tax returns[70] Foreign Currency Sensitivity - The company does not believe it will experience material impacts from foreign currency sensitivity, despite contracting with vendors located outside the United States[150] Hypothetical Market Scenarios - A hypothetical 20% increase in market capitalization from 0.9 billion to 1.1billionwouldhavedecreasedthegainrecordedinthethreemonthsendedSeptember30,2024by1.1 billion would have decreased the gain recorded in the three months ended September 30, 2024 by 3.4 million to 1.5million[149]−Ahypothetical201.5 million[149] - A hypothetical 20% decrease in the common stock price from 4.16 per share to 3.33persharewouldhaveincreasedthegainrecordedinthethreemonthsendedSeptember30,2024by3.33 per share would have increased the gain recorded in the three months ended September 30, 2024 by 0.5 million to 1.3million[149]ComprehensiveLoss−TotalcomprehensivelossforthethreemonthsendedSeptember30,2024,was1.3 million[149] Comprehensive Loss - Total comprehensive loss for the three months ended September 30, 2024, was 59.9 million, compared to a comprehensive income of 1.6millioninthesameperiodin2023[10]Weighted−AverageShares−Weighted−averagenumberofcommonshares(basic)forthethreemonthsendedSeptember30,2024,was235.4million,anincreasefrom197.0millioninthesameperiodin2023[8]AccruedExpensesandLiabilities−TotalaccruedcompensationasofSeptember30,2024was1.6 million in the same period in 2023[10] Weighted-Average Shares - Weighted-average number of common shares (basic) for the three months ended September 30, 2024, was 235.4 million, an increase from 197.0 million in the same period in 2023[8] Accrued Expenses and Liabilities - Total accrued compensation as of September 30, 2024 was 18,050 thousand, a decrease from 23,722thousandasofDecember31,2023,primarilyduetoadecreaseinaccruedbonusesfrom23,722 thousand as of December 31, 2023, primarily due to a decrease in accrued bonuses from 14,379 thousand to 8,813thousand[53]−TotalaccruedexpensesandothercurrentliabilitiesasofSeptember30,2024were8,813 thousand[53] - Total accrued expenses and other current liabilities as of September 30, 2024 were 15,362 thousand, a decrease from 23,462thousandasofDecember31,2023,primarilyduetoadecreaseinaccruedpropertyandequipmentfrom23,462 thousand as of December 31, 2023, primarily due to a decrease in accrued property and equipment from 9,200 thousand to 199thousand[53]NetCashUsedinOperatingActivities−NetcashusedinoperatingactivitiesfortheninemonthsendedSeptember30,2024,was199 thousand[53] Net Cash Used in Operating Activities - Net cash used in operating activities for the nine months ended September 30, 2024, was 176.0 million[16]