0001193125-21-092641.txt : 20210324 0001193125-21-092641.hdr.sgml : 20210324 20210324161900 ACCESSION NUMBER: 0001193125-21-092641 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20210324 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210324 DATE AS OF CHANGE: 20210324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Sana Biotechnology, Inc. CENTRAL INDEX KEY: 0001770121 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-39941 FILM NUMBER: 21768417 BUSINESS ADDRESS: STREET 1: 188 EAST BLAINE STREET, SUIT 400 CITY: SEATTLE STATE: WA ZIP: 98102 BUSINESS PHONE: (206) 701-7914 MAIL ADDRESS: STREET 1: 188 EAST BLAINE STREET, SUIT 400 CITY: SEATTLE STATE: WA ZIP: 98102 8-K 1 d31051d8k.htm 8-K 8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 24, 2021

 

 

SANA BIOTECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-39941   83-1381173

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

188 East Blaine Street, Suite 400

Seattle, Washington 98102

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (206) 701-7914

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

  

Trading Symbol(s)

 

  

Name of each exchange on which registered

 

Common Stock, $0.0001 par value per share    SANA    The Nasdaq Global Select Market

 

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐


Item 2.02

Results of Operations and Financial Condition.

On March 24, 2021, Sana Biotechnology, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02, including the attached Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits

 

      Exhibit No.      

 

Description

99.1

  Press release of Sana Biotechnology, Inc. dated March 24, 2021.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

SANA BIOTECHNOLOGY, INC.

Date: March 24, 2021     By:   /s/ Nathan Hardy                                                     
     

Nathan Hardy

Executive Vice President and Chief Financial Officer

EX-99.1 2 d31051dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Sana Biotechnology Reports Fourth Quarter and 2020 Financial Results and Business Updates

Expects to present data at multiple scientific conferences in 2021

2020 year-end cash position of $412 million

Further strengthened cash position with $627 million in net IPO proceeds

SEATTLE — March 24, 2021 — Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on creating and delivering engineered cells as medicines, today reported financial results and business highlights for the fourth quarter and year ended December 31, 2020.

“Engineering cells, whether done in vivo or ex vivo, has the potential to transform outcomes for patients across many diseases. We are excited about our significant progress in 2020 in turning this vision into a reality – continuing to build our scientific team, expanding our technology with key acquisitions and licenses, and generating important data across multiple platforms and programs,” said Steve Harr, Sana’s President and Chief Executive Officer. “With the completion of our initial public offering in February, we have additional capital to execute our long-term vision of engineering cells to treat serious diseases such as cancer, various genetic disorders, type 1 diabetes, heart disease, and central nervous system diseases. We look forward to providing updates at multiple scientific conferences throughout the year and driving our multiple programs toward the clinic.”

Recent Corporate Highlights

 

   

Hired key talent to our senior leadership team, including Ed Rebar, Ph.D., Chief Technology Officer, Terry Fry, M.D., Head of T Cell Therapeutics, and Ke Liu, M.D., Ph.D., Head of Regulatory Affairs & Strategy.

 

   

Entered into an exclusive license agreement with Washington University for certain intellectual property rights related to methods of generating, compositions of, and use of cells of endodermal lineage and beta cells.

 

   

Acquired Oscine Corp., a privately-held early stage biotechnology company developing glial progenitor cells focused on brain disorders to complement our broader ex vivo cell engineering platform.

 

   

Expanded our Board of Directors with the addition of Joshua Bilenker, M.D., former CEO of Loxo Oncology, Alise Reicin, M.D., CEO of Tectonic Therapeutic, and Michelle Seitz, CFA, Chairman and CEO of Russell Investments.

 

   

Entered into a non-exclusive license and development agreement with FUJIFILM Cellular Dynamics, Inc. (FCDI) for access to FCDI induced pluripotent stem cells (iPSCs).

 

   

Further strengthened our balance sheet with net proceeds of $626.6 million from the sale of 27 million shares of common stock in our initial public offering, bringing pro forma cash to over $1 billion as of February 28, 2021.

Fourth Quarter and 2020 Financial Results

GAAP Results

 

   

Cash Position: Cash, cash equivalents, and marketable securities as of December 31, 2020 were $412.0 million compared to $139.0 million as of December 31, 2019, an increase of $273.0 million. During the year ended December 31, 2020, Sana sold 27.2 million shares of its Series B convertible preferred stock at $16.00 per share for gross proceeds of $435.5 million.

 

   

Research and Development Expenses: Research and development expenses for the quarter and year ended December 31, 2020, inclusive of non-cash expenses, were $104.1 million and $257.9 million, respectively, compared to $39.3 million and $119.4 million for the same periods in 2019. The increases of $64.8 million and $138.5 million were primarily due to personnel-related expenses related to increased headcount to expand Sana’s research and development capabilities, costs for laboratory supplies and preclinical studies, and facility costs. The increase was also due to non-cash expenses for the increase in the estimated fair value of the success payment liabilities of $31.0 million and $70.2 million for the quarter and year ended December 31, 2020, respectively, and the increase in the estimated fair value of the contingent consideration of $33.8 million and $34.9 million for the quarter and year ended December 31, 2020, respectively. The increases in 2020 were offset by higher costs incurred in 2019 for the acquisition of technology. Research and development expense included stock-based compensation of $2.3 million and $4.9 million for the quarter and year ended December 31, 2020, respectively, and $0.4 million and $1.2 million for the same periods in 2019.

 


   

General and Administrative Expenses: General and administrative expenses for the quarter and year ended December 31, 2020, inclusive of non-cash expenses, were $9.2 million and $28.3 million, respectively, compared with $5.8 million and $21.8 million for the same periods in 2019. The increases of $3.4 million and $6.5 million for the quarter and year ended December 31, 2020, respectively, were primarily due to increased personnel-related expenses attributable to an increase in headcount to build our infrastructure, facility costs, and consulting fees.

 

   

Net Loss: Net loss for the quarter and year ended December 31, 2020 was $113.2 million, or $7.40 per share, and $285.3 million, or $21.92 per share, respectively. This compares to $43.0 million, or $4.94 per share, and $130.8 million, or $26.68 per share for the same periods in 2019.

Non-GAAP Measures

 

   

Non-GAAP Operating Cash Burn: Non-GAAP operating cash burn for the quarter and year ended December 31, 2020 was $37.8 million and $125.0 million, respectively, compared to $27.9 million and $76.2 million for the same periods in 2019. 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 activities, and the purchase of property and equipment.

 

   

Non-GAAP Research and Development Expenses: Non-GAAP research and development expenses for the quarter and year ended December 31, 2020 were $36.5 million and $123.0 million, respectively, and $28.3 million and $72.1 million for the same periods in 2019. Non-GAAP research and development expense excludes one-time costs to acquire technology and non-cash expenses related to the change in the estimated fair value of its contingent consideration and success payments.

 

   

Non-GAAP Net Loss: Non-GAAP net loss for the quarter and year ended December 31, 2020 was $45.5 million, or $2.98 per share, and $150.4 million, or $11.56 per share, respectively. This compares to $32.1 million, or $3.68 per share, and $83.5 million, or $17.04 per share, respectively, for the same periods in 2019. Non-GAAP net loss excludes one-time costs to acquire technology and non-cash expenses related to the change in the estimated fair value of its contingent consideration and success payments.

A discussion of non-GAAP measures, including a reconciliation of GAAP and non-GAAP measures, is presented below under “Non-GAAP Financial Measures.”

About Sana

Sana Biotechnology, Inc. is focused on creating and delivering engineered cells as medicines for patients. We share a vision of repairing and controlling genes, replacing missing or damaged cells, and making our therapies broadly available to patients. We are more than 250 people working together to create an enduring company that changes how the world treats disease. Sana has operations in Seattle, Cambridge, and South San Francisco.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements about Sana Biotechnology, Inc. (the “Company,” “we,” “us,” or “our”) within the meaning of the federal securities laws, including those related to the Company’s vision, progress, and business plans; expectations for its development programs, product candidates and technology platforms, including its pre-clinical and clinical and regulatory development plans and timing expectations; updates at scientific conferences; and the potential use of intellectual property and technology licensed or acquired from Washington University, Oscine Corp., and FCDI. All statements other than statements of historical facts contained in this press release, including, among others, statements regarding the Company’s strategy, expectations, cash runway and future financial condition, future operations, and prospects, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms


or other comparable terminology. The Company has based these forward-looking statements largely on its current expectations, estimates, forecasts and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. These statements are subject to risks and uncertainties that could cause the actual results to vary materially, including, among others, the risks inherent in drug development such as those associated with the initiation, cost, timing, progress and results of the Company’s current and future research and development programs, preclinical and clinical trials, as well as the economic, market and social disruptions due to the ongoing COVID-19 public health crisis. For a detailed discussion of the risk factors that could affect the Company’s actual results, please refer to the risk factors identified in the Company’s SEC reports, including but not limited to its prospectus dated February 3, 2021. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statements for any reason.

###

Investor Relations:

Nicole Keith

investor.relations@sana.com

Media:

Morgan Warners, Finsbury Glover Hering

media@sana.com


Sana Biotechnology, Inc.

Unaudited Selected Consolidated Balance Sheet Data

 

     December 31,  
     2020     2019  
     (in thousands)  

Cash, cash equivalents, and marketable securities

     $                 411,995       $                 138,982   

Total assets

     730,296       415,192   

Contingent consideration

     121,901       69,108   

Success payment liabilities

     76,494       4,352   

Total liabilities

     298,583       140,375   

Convertible preferred stock

     852,897       417,359   

Total stockholders’ deficit

     (421,184     (142,542)  

Sana Biotechnology, Inc.

Unaudited Consolidated Statements of Operations

 

     Three Months Ended December 31,     Twelve Months Ended December 31,  
     2020     2019     2020     2019  
     (in thousands, except per share data)  

Operating expenses:

        

Research and development

     $             104,117         $             39,274         $             257,879         $             119,375   

General and administrative

     9,207         5,818         28,270         21,777   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     113,324         45,092         286,149         141,152   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (113,324)        (45,092)        (286,149)        (141,152)  

Interest income, net

     125         681         747         2,856   

Other income (expense), net

     29         23         97         (29)  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (113,170)        (44,388)        (285,305)        (138,325)  

Benefit from income taxes

     -             1,343         -             7,547   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     $ (113,170)        $ (43,045)        $ (285,305)        $ (130,778)  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, basic and diluted

     $ (7.40)        $ (4.94)        $ (21.92)        $ (26.68)  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares outstanding, basic and diluted

     15,293         8,709         13,014         4,903   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Financial Measures

To supplement the financial results presented in accordance with generally accepted accounting principles in the United States (GAAP), Sana uses certain non-GAAP financial measures to evaluate its business. Sana’s management believes that these non-GAAP financial measures are helpful in understanding Sana’s financial performance and potential future results, as well as providing comparability period over period and in regards to peer companies. In particular, Sana’s management utilizes non-GAAP operating cash burn, non-GAAP research and development expense and non-GAAP net loss and net loss per share. Sana believes the presentation of these non-GAAP measures provides management and investors greater visibility into the Company’s ongoing actual costs to operate its business, including actual research and development costs unaffected by non-cash valuation changes and one-time expenses for acquiring technology, as well as facilitating a more meaningful comparison of period to period activity. Sana excludes these items because they are highly variable from period to period and, in respect of the non-cash expenses, provides investors with insight into the actual cash investment in the development of its therapeutic programs and platform technologies.

These are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with Sana’s financial statements prepared in accordance with GAAP. These non-GAAP measures differ from GAAP measures with the same captions, may be different from non-GAAP financial measures with the same or similar captions that are used by other companies, and do not reflect a comprehensive system of accounting. Sana’s management uses these supplemental non-GAAP financial measures internally to understand, manage, and evaluate Sana’s business and make operating decisions. In addition, Sana’s management believes that the presentation of these non-GAAP financial measures is useful to investors because they enhance the ability of investors to compare Sana’s results from period to period and allows for greater transparency with respect to key financial metrics Sana uses in making operating decisions. The following are reconciliations of GAAP to non-GAAP financial measures:


Sana Biotechnology, Inc.

Unaudited Reconciliation of Change in Cash, Cash Equivalents, and Marketable Securities to

Non-GAAP Operating Cash Burn

 

     Three Months Ended December 31,      Twelve Months Ended December 31,  
     2020      2019      2020      2019  
     (in thousands)  

Beginning cash, cash equivalents, and marketable securities

     $ 459,070          $ 171,560          $ 138,982          $ 30,630   

Ending cash, cash equivalents, and marketable securities

     411,995          138,982          411,995          138,982   
  

 

 

    

 

 

    

 

 

    

 

 

 

Change in cash, cash equivalents, and marketable securities

     (47,075)         (32,578)         273,013          108,352   

Cash paid to purchase property and equipment

     9,266          5,730          23,872          26,183   
  

 

 

    

 

 

    

 

 

    

 

 

 

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

     (37,809)         (26,848)         296,885          134,535   

Adjustments:

           

Cash paid to acquire technology(1)

     -               6,800          7,650          12,995   

Cash paid to satisfy contingent liability(2)

     -               -               6,000          -        

Net cash received from the sale of convertible preferred stock

     -               (7,815)         (435,538)         (223,739)  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating cash burn - Non-GAAP

     $ (37,809)         $ (27,863)         $ (125,003)         $ (76,209)  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

The non-GAAP adjustment of $6.8 million for the three months ended December 31, 2019 is the upfront payment in connection with the acquisition of Cytocardia. The non-GAAP adjustment of $7.7 million for the twelve months ended December 31, 2020 is the upfront cash payment in connection with the acquisition of Oscine Corp. The non-GAAP adjustment of $13.0 million for the twelve months ended December 31, 2019 includes (i) the upfront payment of $6.8 million in connection with the acquisition of Cytocardia, (ii) net cash paid of $3.2 million in connection with the acquisition of Cobalt, and (iii) the upfront payment of $3.0 million in connection with the Harvard license agreement.

(2)

For the twelve months ended December 31, 2020, the non-GAAP adjustment of $6.0 million was for the payment of a contingent liability due to Harvard in connection with the closing of the Series B convertible preferred stock financing.

Sana Biotechnology, Inc.

Unaudited Reconciliation of GAAP to Non-GAAP Research and Development Expense

 

     Three Months Ended December 31,      Twelve Months Ended December 31,  
     2020      2019      2020      2019  
     (in thousands)  

Research and development expense - GAAP

   $ 104,117        $ 39,274        $ 257,879        $ 119,375   

Adjustments:

           

Costs to acquire technology(1)

     -               (8,000)         (8,500)         (22,928)  

Change in the fair value of the success payment liabilities (2)

     (31,505)         (497)         (72,142)         (1,924)  

Change in the fair value of contingent consideration (3)

     (36,121)         (2,296)         (52,793)         (17,860)  

Change in the estimated fair value of contingent liability (4)

     -               (193)         (1,443)         (4,557)  
  

 

 

    

 

 

    

 

 

    

 

 

 

Research and development expense - Non-GAAP

     $ 36,491          $ 28,288          $ 123,001          $ 72,106   
  

 

 

    

 

 

    

 

 

    

 

 

 


Sana Biotechnology, Inc.

Unaudited Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share

 

    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2020     2019     2020     2019  
          (in thousands, except per share data)        

Net loss - GAAP

    $ (113,170)        $ (43,045)        $ (285,305)        $ (130,778)  

Adjustments:

       

Costs to acquire technology(1)

    -             8,000         8,500         22,928   

Change in the estimated fair value of the success payment liabilities (2)

    31,505         497         72,142         1,924   

Change in the estimated fair value of contingent consideration (3)

    36,121         2,296         52,793         17,860   

Change in the estimated fair value of contingent liability (4)

    -             193         1,443         4,557   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss - Non-GAAP

    $ (45,544)        $ (32,059)        $ (150,427)        $ (83,509)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share - GAAP

    $ (7.40)        $ (4.94)        $ (21.92)        $ (26.68)  

Adjustments:

       

Costs to acquire technology(1)

               0.92         0.65         4.68   

Change in the estimated fair value of the success payment liabilities (2)

    2.06         0.06         5.54         0.39   

Change in the estimated fair value of contingent consideration (3)

    2.36         0.26         4.06         3.64   

Change in the estimated fair value of contingent liability (4)

    -             0.02         0.11         0.93   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share - Non-GAAP

    $ (2.98)        $ (3.68)        $ (11.56)        $ (17.04)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares outstanding, basic and diluted

    15,293         8,709         13,014         4,903   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

The non-GAAP adjustment of $8.0 million for the three months ended December 31, 2019 is the upfront expense recorded in connection with the acquisition of Cytocardia. The non-GAAP adjustment of $8.5 million for the twelve months ended December 31, 2020 is the upfront expense recorded in connection with the acquisition of Oscine Corp. The non-GAAP adjustment of $22.9 million for the twelve months ended December 31, 2019 includes (i) the upfront expense of $12.0 million recorded in connection with the Harvard license agreement, $9.0 million of which was non-cash, (ii) the upfront expense of $8.0 million recorded in connection with the acquisition of Cytocardia, and (iii) a non-cash upfront expense of $3.0 million recorded in connection with license agreement with The Regents of the University of California.

(2)

For the three months ended December 31, 2020 and 2019, the expense related to the Cobalt success payment liability was $27.1 million and $0.3 million, respectively, and $62.3 million for the twelve months ended December 31, 2020. The expense for the Cobalt success payment liability was immaterial for the twelve months ended December 31, 2019. For the three months ended December 31, 2020 and 2019, the expense related to the Harvard success payment liability was $4.4 million and $0.2 million, respectively, and $9.9 million and $1.9 million for the twelve months ended December 31, 2020 and 2019, respectively.

(3)

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

(4)

The contingent liability was recorded in connection with the Harvard license agreement and paid in June 2020.