Sana Biotechnology(US:SANA)2024-11-08 14:14Financial Performance - Research and development expenses for the three months ended September 30, 2024, were $53.2 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 $61.8 million, compared to $2.2 million in the same period in 2023[8] - Net loss for the three months ended September 30, 2024, was $59.9 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, compared to $0.00 in the same period in 2023[8] - Net loss for the nine months ended September 30, 2024, was $217.7 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 $59.9 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, 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 $217.7 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, compared to $1.01 in the same period last year[73] Cash and Marketable Securities - Cash, cash equivalents, and restricted cash decreased by $6.5 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 $199.0 million[22] - The company's cash equivalents totaled $103.1 million, and short-term marketable securities were valued at $72.0 million as of September 30, 2024[41] - The company had cash, cash equivalents, and restricted cash of $130.8 million and marketable securities of $72.0 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 $3 thousand, resulting in an estimated fair value of $104,471 thousand[43] - Total short-term marketable securities as of December 31, 2023 were $71,741 thousand, with gross unrealized holding gains of $16 thousand and losses of $79 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 $292.5 million, a decrease from $287.5 million as of December 31, 2023[11] - Accumulated deficit as of September 30, 2024, was $1.56 billion, an increase from $1.34 billion as of December 31, 2023[11] - Accumulated deficit as of September 30, 2024, was $1.6 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 $10.770 million, with $6.481 million allocated to research and development and $4.289 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 $7.26 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 $500.0 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 $111.9 million[33][34] - The Company paid $12.0 million to Harvard College in March 2019 and may pay up to $175.0 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 $15.1 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 $140.6 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 $65.0 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 $6.4 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 $8.031 million, including $4.728 million in operating lease costs and $2.195 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 $82,826 thousand, an increase from $70,689 thousand as of December 31, 2023, primarily due to construction in progress increasing from $26,332 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 $6.4 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 $127.0 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 $19 thousand and losses of $79 thousand, resulting in an estimated fair value of $176,508 thousand[43] - Total long-term financial liabilities as of December 31, 2023 were $122,405 thousand, primarily consisting of contingent consideration of $109,606 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 $213.0 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 $180.0 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 $28.6 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 $1.1 billion would have decreased the gain recorded in the three months ended September 30, 2024 by $3.4 million to $1.5 million[149] - A hypothetical 20% decrease in the common stock price from $4.16 per share to $3.33 per share would have increased the gain recorded in the three months ended September 30, 2024 by $0.5 million to $1.3 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 $1.6 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 $23,722 thousand as of December 31, 2023, primarily due to a decrease in accrued bonuses from $14,379 thousand to $8,813 thousand[53] - Total accrued expenses and other current liabilities as of September 30, 2024 were $15,362 thousand, a decrease from $23,462 thousand as of December 31, 2023, primarily due to a decrease in accrued property and equipment from $9,200 thousand to $199 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]