•

SC291 is a hypoimmune-modified CD19-targeted allogeneic CAR T for patients with B cell malignancies. The SC291 IND has been cleared, and Sana expects to share initial clinical data later this year. Success unlocks potential value of a broader hypoimmune-modified allogeneic CAR T platform with clinically-validated CD22 and BCMA CAR constructs.  

•

Sana expects an investigator sponsor trial using primary human hypoimmune-modified islet cells transplanted in type 1 diabetes patients to begin later this year. Sana anticipates sharing initial clinical data later this year. The goal is to understand pancreatic islet cell survival without immunosuppression in these autoimmune patients, providing insight into Sana’s ongoing hypoimmune-modified stem cell-derived pancreatic islet cell program (SC451), which has a goal of filing an IND in 2024.

•

ex vivo hypoimmune-modified allogeneic CAR T platform: Sana has the opportunity to unlock a potentially best-in-class, broadly accessible allogeneic CAR T franchise across multiple patient populations using clinically-validated CAR constructs, including SC291 (CD19), SC262 (CD22), SC255 (BCMA), and beyond.

o

In 2022, entered into an agreement with the National Institutes of Health (NIH) for worldwide exclusive commercial rights to the NIH’s CD22 chimeric antigen receptor with a fully-human binder for use in certain ex vivo allogeneic CAR T applications. This CAR construct has shown a promising efficacy profile in several clinical studies, including in autologous CD19 CAR T cell therapy failures. SC262 incorporates this clinically-validated CAR with T cells manufactured using hypoimmune technology with a goal of filing an IND in 2023.

o

In 2022, entered into a non-exclusive agreement with IASO Biotherapeutics and Innovent Biologics for commercial rights to a clinically-validated fully-human B cell maturation antigen (BCMA) CAR construct. SC255 incorporates this clinically-validated CAR with T cells manufactured using the hypoimmune platform with a goal of filing an IND in 2024.

•

stem-cell derived platform: Sana has several programs using stem-cell derived cell therapies, including SC451 and SC379.  

o

SC451 is a hypoimmune stem-cell derived islet cell program for type 1 diabetes with a goal of a 2024 IND.

o

SC379 is a stem-cell derived glial progenitor cell therapy targeting multiple central nervous system diseases with a goal of a 2024 IND.

•

in vivo fusogen platform: The fusogen platform focuses on in vivo cell specific delivery of genetic material. Sana’s lead program using this platform is SG299, previously called SG295, an in vivo CAR T product candidate that utilizes a CD8-

targeted fusosome to deliver a CD19 CAR to generate a CD19-targeted CAR T cell. The company continues to progress earlier programs focused on cell-specific delivery of various payloads.

o

SG299 has the potential to generate CAR T cells in vivo (inside the patient), eliminating the need for conditioning chemotherapy and complex CAR T cell manufacturing. The company’s goal is to file an IND this year to study this drug candidate in patients with B cell malignancies.

o

In 2022, Sana transitioned to a new manufacturing process for SG295 and renamed the product SG299 in connection with that transition. SG299 has at least a 50X improvement in product potency, which Sana believes has the potential to translate into better efficacy, safety, and long-term manufacturability. The company plans to use this second-generation process for the first-in-human studies in patients with B cell malignancies.

o

Demonstrated that two additional fusosome candidates eliminated tumors in preclinical models – a CD4+ T cell targeting fusosome delivering a CD19 CAR and a CD8+ T cell targeting fusosome delivering a CD22 CAR.

•

ex vivo hypoimmune platform: Sana’s hypoimmune platform makes multiple genomic modifications to cells with the goal of preventing allogeneic transplant rejection, and importantly includes modifications to prevent both adaptive and innate immune recognition and rejection. Sana’s pipeline includes hypoimmune-modified cells to replace damaged or missing cells in the body in a number of different diseases, including, among others, cancer, type 1 diabetes, and various neurologic conditions.

o

Presented preclinical data demonstrating that hypoimmune-modified CAR T cells were able to evade both the innate and adaptive arms of the immune system in animal models while retaining their antitumor activity.

o

Presented preclinical data showing survival of transplanted allogeneic hypoimmune-modified cells of several different types – including pancreatic islet cells, cardiomyocytes, and retinal pigment epithelial cells – in a variety of locations in non-human primates.

o

Presented preclinical data showing that hypoimmune-modified allogeneic regulatory T cells function and are able to evade immune detection in preclinical models. These cells have the potential to treat a variety of autoimmune disorders.

o

Presented preclinical data outlining the importance of CD47 overexpression as part of the hypoimmune platform to evade adaptive and innate immune response, the use of CRISPR/Cas12b in scaled hypoimmune-modified allogeneic CAR T manufacturing, the development of assays to evaluate T cell quality from healthy, allogeneic donors, and the generation of a hypoimmune-modified BCMA-directed allogeneic CAR T cell.

•

hypoimmune-modified pancreatic islet cells: Type 1 diabetes is a disease in which a person’s immune system destroys one’s own pancreatic beta cells, which are a key component in pancreatic islets. Hypoimmune technology is incorporated in SC451, Sana’s ongoing stem cell-derived pancreatic islet cell program, for which Sana has a goal of filing an IND in 2024 for the treatment of type 1 diabetes.

o

Presented preclinical data showing that transplanted hypoimmune-modified pancreatic islet cells evade allogeneic immune response and autoimmune response in a novel type 1 diabetes mouse model. These data build upon previous in vitro data showing that hypoimmune-modified pancreatic islet cells are not recognized by serum from type 1 diabetic patients, including no T cell or antibody recognition.

o

Presented preclinical data showing that hypoimmune-modified islet cells transplanted intramuscularly may be capable of persisting and functioning in diabetic patients without immune suppression.

•

in vivo fusogen platform: Presented additional preclinical data utilizing retargeted fusosomes for in vivo delivery of genetic payloads to various cells, including CD8+ T cells, CD4+ T cells, human hepatocytes, and initial data on our work in hematopoietic stem cells. This technology is the backbone of Sana’s in vivo delivery platform and is incorporated into various product candidates, including SG299.

•

Expect cash runway into 2025 enabling multiple data readouts across the platforms based on current timelines for lead programs.

•

Announced decision to move Sana’s manufacturing plant from Fremont, CA to Bothell, WA, resulting in approximately $100 million in expected cost savings compared to the initial build-out plan. As part of this decision, Sana signed a lease agreement to develop an approximately 80,000 square foot manufacturing facility in Bothell, WA. The facility will be designed to support the late-stage clinical and early commercial manufacturing of multiple product candidates across the portfolio.

•

Announced a portfolio prioritization and corporate restructuring designed to optimize the development of programs at or nearing clinical development, continue investments in the core research platforms and innovation, and maintain a strong balance sheet.

•

Named the top place to work on the BioSpace 2023 Best Places to Work small employer list, based on attributes including compensation, innovation, career growth opportunities, leadership, culture, diversity, equity and inclusion, reputation, and flexibility and remote work.

•

Strengthened the leadership team with the appointments of Snehal Patel to lead technical operations and Julie Lepin to lead regulatory affairs.

•

Cash Position: Cash, cash equivalents, and marketable securities as of December 31, 2022 were $434.0 million compared to $746.9 million as of December 31 2021. The decrease of $312.9 million was primarily driven by cash used in operations of $289.9 million and cash used for the purchase of property and equipment of $20.9 million. Cash used in operations includes $6.2 million of upfront payments related to licensing technology for the company’s CD22 and BCMA programs, $4.3 million of one-time restructuring costs related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, and $3.2 million of costs incurred related to the previously planned manufacturing facility in Fremont, CA (the Fremont facility) which will be replaced by the facility in Bothell, WA (the Bothell facility). In addition, our cash balance will increase by $6.7 million in July 2023 as the letter of credit related to the Fremont facility reduces from $6.7 million to $0.6 million in July 2023.

•

Research and Development Expenses: For the three and twelve months ended December 31, 2022, research and development expenses, inclusive of non-cash expenses, were $63.9 million and $285.9 million, respectively, compared to $108.5 million and $248.6 million for the same periods in 2021. The decrease of $44.6 million for the three months ended December 31, 2022 was primarily due to the one-time upfront payment to Beam Therapeutics Inc. (Beam) in the fourth quarter of 2021 to license its gene editing technology, partially offset by an increase in research, development, and third-party manufacturing costs, and facility and software expenses. The increase of $37.3 million for the twelve months ended December 31, 2022 was largely due to increases in personnel-related expenses, including increased headcount to expand Sana’s research and development capabilities, increased research, laboratory, and third-party manufacturing costs, and allocated personnel costs, depreciation expense, and facility and software costs. These increases were partially offset by the one-time upfront payment to Beam in the fourth quarter of 2021 to license its gene editing technology. Research and development expenses for the three and twelve months ended December 31, 2022 include non-cash stock-based compensation of $6.0 million and $26.6 million, respectively, and $5.3 million and $15.2 million, respectively, for the same periods in 2021.

•

Research and Development Related Success Payments and Contingent Consideration: For the three and twelve months ended December 31 2022, Sana recognized non-cash gains of $5.5 million and $84.9 million, respectively, in connection with the change in the estimated fair value of the success payment liabilities and contingent consideration in aggregate. Sana recognized a non-cash gain of $9.9 million for the three months ended December 31, 2021 and a non-cash expense of $57.9 million for the twelve months ended December 31, 2021. The value of these potential liabilities may fluctuate significantly with changes in Sana’s market capitalization and stock price.

•

General and Administrative Expenses: General and administrative expenses for the three months ended December 31, 2022, inclusive of non-cash expenses, were $23.3 million compared to $12.7 million for the same period in 2021. The increase of $10.6 million was primarily due to one-time restructuring costs of $8.7 million, including stock-based compensation of $1.9 million, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, operating costs associated with the Fremont facility, business taxes, and legal fees. These increases were offset by a decline in personnel-related expenses. General and administrative expenses for the twelve months ended December 31, 2022 were $71.6 million compared to $50.4 million for the same period in 2021. The increase of $21.2 million was primarily due to one-time restructuring costs of $8.7 million, including stock-based compensation of $1.9 million, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, the write-off of construction in progress costs incurred in connection with the Fremont facility, personnel-related expenses attributable to an increase in headcount to support Sana’s continued research and development activities, and operating costs associated with the Fremont facility. General and administrative expenses for the three and twelve months ended December 31, 2022 include stock-based compensation of $4.6 million and $11.8 million, respectively, and $2.0 million and $7.1 million, respectively, for the same periods in 2021.

•

Net Loss: Net loss for the three and twelve months ended December 31, 2022 was $80.4 million, or $0.42 per share, and $269.5 million, or $1.43 per share, respectively, compared to $110.7 million, or $0.60 per share, and $355.9 million, or $2.14 per share, respectively, for the same periods in 2021.

•

Non-GAAP Operating Cash Burn: Non-GAAP operating cash burn for the twelve months ended December 31, 2022 was $288.3 million compared to $209.6 million for the same period in 2021. 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 and non-recurring restructuring activities, and the purchase of property and equipment.

•

Non-GAAP General and Administrative Expense: Non-GAAP general and administrative expense for the three and twelve months ended December 31, 2022 was $14.6 million and $58.4 million, respectively, compared to $12.7 million and $50.4 million, respectively, for the same periods in 2021. Non-GAAP general and administrative expense excludes one-time restructuring costs, including stock-based compensation, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022 and the write-off of construction in progress costs incurred in connection with the Fremont facility.

•

Non-GAAP Net Loss: Non-GAAP net loss for the three and twelve months ended December 31, 2022 was $77.2 million, or $0.40 per share, and $341.2 million, or $1.81 per share, respectively, compared to $120.6 million, or $0.65 per share, and $298.1 million, or $1.79 per share, respectively, for the same periods in 2021. Non-GAAP net loss excludes non-cash expenses related to the change in the estimated fair value of contingent consideration and success payment liabilities, one-time restructuring costs, including stock-based compensation, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022, and the write-off of construction in progress costs incurred in connection with the Fremont facility.

December 31, 2022

December 31, 2021

(in thousands)

Cash, cash equivalents, and marketable securities

$

434,014

$

746,877

Total assets

822,720

1,129,407

Contingent consideration

150,379

153,743

Success payment liabilities

21,007

102,525

Total liabilities

323,405

400,905

Total stockholders' equity

499,315

728,502

Three Months Ended December 31,

Twelve Months Ended December 31,

2022

2021

2022

2021

(in thousands, except per share data)

Operating expenses:

Research and development

$

63,921

$

108,505

$

285,885

$

248,626

Research and development related success payments and contingent consideration

(5,454

)

(9,905

)

(84,882

)

57,873

General and administrative

23,321

12,679

71,561

50,410

Total operating expenses

81,788

111,279

272,564

356,909

Loss from operations

(81,788

)

(111,279

)

(272,564

)

(356,909

)

Interest income, net

1,613

267

3,762

676

Other income (expense), net

(268

)

281

(674

)

305

Net loss

$

(80,443

)

$

(110,731

)

$

(269,476

)

$

(355,928

)

Net loss per common share - basic and diluted

$

(0.42

)

$

(0.60

)

$

(1.43

)

$

(2.14

)

Weighted-average number of common shares - basic and diluted

190,420

183,987

188,344

166,433

Success Payment

Liability⁽¹⁾

Contingent

Consideration⁽²⁾

Total Success Payment Liability and Contingent Consideration

(in thousands)

Liability balance as of December 31, 2021

$

102,525

$

153,743

$

256,268

Changes in fair value – gain

(54,910

)

(528

)

(55,438

)

Liability balance as of March 31, 2022

47,615

153,215

200,830

Changes in fair value – gain

(14,098

)

(3,830

)

(17,928

)

Liability balance as of June 30, 2022

33,517

149,385

182,902

Changes in fair value – expense (gain)

2,193

(8,255

)

(6,062

)

Liability balance as of September 30, 2022

35,710

141,130

176,840

Changes in fair value – expense (gain)

(14,703

)

9,249

(5,454

)

Liability balance as of December 31, 2022

$

21,007

$

150,379

$

171,386

Total change in fair value for the twelve months ended December 31, 2022

$

(81,518

)

$

(3,364

)

$

(84,882

)

(1)

Cobalt Biomedicine, Inc. (Cobalt) and the Presidents of Harvard College (Harvard) are entitled to success payments pursuant to the terms and conditions of their respective agreements. The success payments are recorded at fair value and remeasured at each reporting period with changes in the estimated fair value recorded in research and development related success payments and contingent consideration on the statement of operations.

(2)

Cobalt is entitled to contingent consideration upon the achievement of certain milestones pursuant to the terms and conditions of the agreement. Contingent consideration is recorded at fair value and remeasured at each reporting period with changes in the estimated fair value recorded in research and development related success payments and contingent consideration on the statement of operations.

Twelve Months Ended December 31,

2022

2021

(in thousands)

Beginning cash, cash equivalents, and marketable securities

$

746,877

$

411,995

Ending cash, cash equivalents, and marketable securities

434,014

746,877

Change in cash, cash equivalents, and marketable securities

(312,863

)

334,882

Cash paid to purchase property and equipment

20,876

29,862

Change in cash, cash equivalents, and marketable securities, excluding capital expenditures

(291,987

)

364,744

Adjustments:

Cash paid for restructuring⁽¹⁾

4,333

-

Cash paid to acquire technology⁽²⁾

-

52,096

Net proceeds from issuance of common stock⁽³⁾

(601

)

(626,405

)

Operating cash burn - Non-GAAP

$

(288,255

)

$

(209,565

)

(1)

The non-GAAP adjustment of $4.3 million for the twelve months ended December 31, 2022 consisted of cash payments related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022.

(2)

The non-GAAP adjustment of $52.1 million for the twelve months ended December 31, 2021 consisted of the one-time upfront payment of $50.0 million to Beam to license its gene editing technology and holdback payments of $2.1 million related to the acquisitions of Cytocardia, Inc. and Oscine Corp.

(3)

Net proceeds of $0.6 million were received in connection with the at the market sales agreement in the twelve months ended December 31, 2022. Net proceeds of $626.4 million were received in connection with the initial public offering in the twelve months ended December 31, 2021.

Three Months Ended December 31,

Twelve Months Ended December 31,

2022

2021

2022

2021

(in thousands)

General and administrative - GAAP

$

23,321

$

12,679

$

71,561

$

50,410

Adjustments:

Write-off of construction in progress costs incurred in connection with the previously planned Fremont facility⁽¹⁾

-

-

(4,474

)

-

Costs incurred in connection with restructuring⁽²⁾

(8,704

)

-

(8,704

)

-

General and administrative - Non-GAAP

$

14,617

$

12,679

$

58,383

$

50,410

(1)

The Fremont facility will be replaced with the Bothell facility.

(2)

One-time restructuring costs, including stock-based compensation of $1.9 million, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022.

Three Months Ended December 31,

Twelve Months Ended December 31,

2022

2021

2022

2021

(in thousands, except per share data)

Net loss - GAAP

$

(80,443

)

$

(110,731

)

$

(269,476

)

$

(355,928

)

Adjustments:

Change in the estimated fair value of the success payment liabilities⁽¹⁾

(14,703

)

(31,667

)

(81,518

)

26,031

Change in the estimated fair value of contingent consideration⁽²⁾

9,249

21,762

(3,364

)

31,842

Write-off of construction in progress costs incurred in connection with the previously planned Fremont facility³⁾

-

-

4,474

-

Costs incurred in connection with restructuring⁽⁴⁾

8,704

-

8,704

-

Net loss - Non-GAAP

$

(77,193

)

$

(120,636

)

$

(341,180

)

$

(298,055

)

Net loss per share - GAAP

$

(0.42

)

$

(0.60

)

$

(1.43

)

$

(2.14

)

Adjustments:

Change in the estimated fair value of the success payment liabilities⁽¹⁾

(0.08

)

(0.17

)

(0.43

)

0.16

Change in the estimated fair value of contingent consideration⁽²⁾

0.05

0.12

(0.02

)

0.19

Write-off of construction in progress costs incurred in connection with the previously planned Fremont facility⁽³⁾

-

-

0.02

-

Costs incurred in connection with restructuring⁽⁴⁾

0.05

-

0.05

-

Net loss per share - Non-GAAP

$

(0.40

)

$

(0.65

)

$

(1.81

)

$

(1.79

)

Weighted-average shares outstanding - basic and diluted

190,420

183,987

188,344

166,433

(1)

For the three months and twelve ended December 31, 2022, the gains related to the Cobalt success payment liability were $12.9 million and $69.3 million, respectively, compared to a gain of $23.3 million and an expense of 23.6 million for the same periods in 2021. For the three months and twelve ended December 31, 2022, the gains related to the Harvard success payment liability were $1.8 million and $12.2 million, respectively, compared to a gain of $8.4 million and an expense of $2.4 million for the same periods in 2021.

(2)

The contingent consideration was recorded in connection with the acquisition of Cobalt.

(3)

The Fremont facility will be replaced with the Bothell facility.

(4)

One-time restructuring costs, including stock-based compensation of $1.9 million, related to the portfolio prioritization and corporate restructuring in the fourth quarter of 2022.