Sana Biotechnology(US:SANA)2025-08-11 20:10PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) H1 2025 unaudited financials report a $143.2 million net loss, $361.6 million total assets, and a $44.6 million impairment Condensed Consolidated Balance Sheets | Financial Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $71,271 | $127,566 | | Total current assets | $82,502 | $160,808 | | Total Assets | $361,645 | $501,020 | | Total Liabilities | $239,089 | $250,516 | | Total Stockholders' Equity | $122,556 | $250,504 | Condensed Consolidated Statements of Operations | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $29,761 | $60,874 | $66,950 | $117,322 | | Impairment of long-lived assets | $44,611 | - | $44,611 | - | | Total operating expenses | $94,975 | $49,372 | $145,605 | $160,096 | | Net loss | $(93,800) | $(50,291) | $(143,189) | $(157,766) | | Net loss per share | $(0.39) | $(0.21) | $(0.60) | $(0.70) | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(81,758) | $(124,173) | | Net cash provided by (used in) investing activities | $24,283 | $(71,410) | | Net cash provided by financing activities | $1,543 | $197,024 | | Net decrease in cash, cash equivalents, and restricted cash | $(55,932) | $1,441 | Notes to Condensed Consolidated Financial Statements - As of June 30, 2025, the company had $72.7 million in cash, cash equivalents, and marketable securities. Subsequent financing, including a $70.0 million public offering in August 2025 and $28.6 million from an ATM facility, is expected to fund operations for at least one year, removing substantial doubt about its ability to continue as a going concern3033 - In Q2 2025, the company recognized a $44.6 million non-cash impairment loss on long-lived assets. This was primarily related to its manufacturing facilities in Bothell and Seattle, following a decision to suspend the build-out of internal manufacturing capabilities due to increased availability of third-party capacity75121 - The fair value of the Cobalt Contingent Consideration liability increased to $117.1 million as of June 30, 2025, from $109.0 million at year-end 2024. The change in fair value is recognized in R&D expenses52 Management's Discussion and Analysis of Financial Condition and Results of Operations H1 2025 net loss decreased to $143.2 million due to portfolio prioritization, offset by a $44.6 million impairment, with recent financing bolstering liquidity Overview - Sana is developing ex vivo and in vivo cell engineering platforms to treat a broad array of therapeutic areas, including type 1 diabetes, B-cell mediated autoimmune diseases, and oncology91 - The clinical pipeline includes three ongoing trials: SC291 in autoimmune diseases (GLEAM study), SC262 in B-cell malignancies (VIVID study), and an investigator-sponsored trial of UP421 for type 1 diabetes. Data from the GLEAM and VIVID trials are expected in 202593 - In November 2024, the company prioritized its portfolio to focus on T1D, autoimmune diseases, refractory B-cell malignancies, and the fusogen platform for in vivo CAR T cells. Development of SC291 in oncology and the SC379 glial progenitor program were suspended to seek partnerships99 Results of Operations | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $67.0 | $117.3 | | General and administrative | $21.8 | $32.7 | | Impairment of long-lived assets | $44.6 | $0.0 | | Total operating expenses | $145.6 | $160.1 | | Net loss | $(143.2) | $(157.8) | - R&D expenses for the first six months of 2025 decreased by $50.4 million compared to the same period in 2024, primarily due to lower headcount and reduced laboratory, research, and clinical development costs following the November 2024 portfolio prioritization124126 - G&A expenses for the first six months of 2025 decreased by $10.9 million compared to the prior year period, mainly due to lower personnel-related costs and reduced legal and consulting fees as a result of the portfolio prioritization129131 Liquidity, Capital Resources, and Capital Requirements - As of June 30, 2025, the company had $72.7 million in cash, cash equivalents, and marketable securities135 - Subsequent to the quarter end, the company raised approximately $70.0 million in net proceeds from a public offering in August 2025 and an additional $28.6 million from its ATM facility136137 - Management believes that existing cash, combined with recent financing proceeds, will be sufficient to fund planned operations for at least one year from the filing of the report141 Quantitative and Qualitative Disclosures About Market Risk Market risks primarily involve interest rate sensitivities and stock price volatility, with a 20% change in market capitalization materially impacting liabilities - The company's exposure to interest rate risk is not considered significant due to the short-term duration of its $1.4 million in marketable securities as of June 30, 2025159 - The fair value of success payment liabilities is highly sensitive to the company's stock price and market capitalization. A hypothetical 20% increase in market capitalization as of June 30, 2025, would have increased the related Q2 expense by $1.9 million162 Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level166 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting167 PART II. OTHER INFORMATION Legal Proceedings A putative class action lawsuit filed March 21, 2025, alleges false and misleading statements, which the company intends to vigorously defend - A putative class action complaint was filed against the company and its executives on March 21, 2025, alleging false and misleading statements concerning the company's business, operations, and prospects170 - The lawsuit, captioned In re Sana Biotechnology, Inc. Securities Litigation, covers the period from March 17, 2023, to November 4, 2024. The company intends to defend itself vigorously170 Risk Factors Significant risks include unproven cell engineering platforms, funding needs, third-party reliance, intellectual property, regulatory hurdles, and limited operating history Risks Related to Our Business and Industry - The company's ex vivo and in vivo cell engineering platforms are based on novel, unproven technologies, which makes predicting development time, cost, and ultimate success difficult and exposes the company to unforeseen risks175 - The company may not realize the expected benefits from acquired or in-licensed technologies, such as the fusogen platform from Cobalt, due to portfolio reprioritizations and development challenges185187 - Negative public opinion and increased regulatory scrutiny of gene editing and cell engineering technologies could damage public perception and hinder the ability to conduct business or obtain approvals213 Risks Related to the Development and Clinical Testing of Our Product Candidates - Clinical drug development is a lengthy, expensive, and uncertain process; positive results in early studies may not be predictive of future trial success215217 - The manufacture of product candidates is complex and may encounter difficulties in production and scaling, which could delay or halt supply for clinical trials or commercial sale248 - The supply chain for materials is subject to risks, including reliance on sole-source vendors and potential shortages of key reagents, consumables, and equipment, which could disrupt manufacturing253256 Risks Related to Our Dependence on Third Parties - The company relies on a limited number of Contract Development and Manufacturing Organizations (CDMOs) for manufacturing, which poses risks related to capacity, regulatory compliance (cGMP), and potential production delays263264 - The company depends on third parties like CROs and clinical trial sites to conduct studies; failure of these parties to perform their duties or comply with regulations (GCP) could compromise data and delay programs272 Risks Related to Intellectual Property and Information Technology - The company's success depends on protecting its intellectual property, but it may not be able to protect these rights in all countries, and enforcement is costly and uncertain276 - The company depends on intellectual property licensed from third parties (e.g., Harvard, Cobalt); breaching these agreements could result in the loss of significant rights280281 - Internal computer systems and those of third-party vendors are vulnerable to security breaches and cyberattacks, which could compromise confidential information, including trade secrets and clinical trial data322323 Risks Related to Our Regulatory Environment - The regulatory approval process for biopharmaceutical products is lengthy, expensive, and unpredictable, and the company has no experience submitting a Biologics License Application (BLA)336338 - Even if approved, products will be subject to ongoing regulatory review, post-marketing requirements, and potential restrictions, which could be costly and limit commercialization351 - Recent and future healthcare legislation, such as the Inflation Reduction Act (IRA), could increase costs, affect drug pricing, and negatively impact the company's ability to generate revenue364367 Risks Related to Our Limited Operating History, Financial Condition, and Need for Additional Capital - The company will require substantial additional funding to finance operations and could be forced to delay, reduce, or eliminate programs if unable to raise capital on acceptable terms399 - The company has a history of significant losses ($1.7 billion accumulated deficit as of June 30, 2025) and may never achieve or maintain profitability408 - Success payment and contingent consideration obligations to Harvard and Cobalt could result in stockholder dilution, drain cash resources, and cause significant fluctuations in reported financial results413416 Risks Related to Commercialization of Our Product Candidates - The biotechnology industry is highly competitive, and competitors with greater resources may develop and commercialize products more successfully or render the company's technology obsolete419420 - The addressable patient populations for the company's product candidates may be smaller than estimated, limiting market opportunity424 - The company currently lacks marketing, sales, and distribution infrastructure and faces substantial risks whether it chooses to build its own or outsource these functions427 Risks Related to Ownership of Our Common Stock - As of June 30, 2025, principal stockholders and management owned approximately 59.9% of the company's stock, allowing them to exert significant control over corporate matters434 - Future sales of securities by the company or existing stockholders could cause the stock price to fall due to dilution and market pressure435438 - Provisions in the company's charter and bylaws, along with Delaware law, could discourage or prevent a change in control, potentially depressing the market price of the stock440 Unregistered Sales of Equity Securities and Use of Proceeds The company did not sell any unregistered securities during the three months ended June 30, 2025 - The company did not sell any unregistered securities in the three months ended June 30, 2025479 Defaults Upon Senior Securities Not applicable Mine Safety Disclosures Not applicable Other Information During the last fiscal quarter, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter482 Exhibits This section lists the exhibits filed with the Form 10-Q, including the company's certificate of incorporation, bylaws, forms of stock and warrant certificates, a license agreement amendment, a sales agreement, and officer certifications