Sana Biotechnology: Burning Cash, Going Nowhere Fast

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People are sheep. TV is nan shepherd."― Jess C. Scott

Today, we are putting CAR T objective interest Sana Biotechnology, Inc. (NASDAQ:SANA) successful nan spotlight for nan first time. The institution came nationalist early successful 2021. The equity debuted to overmuch fanfare correct successful nan mediate of a astir five-quarter SPAC/IPO bonanza that was spurred mostly by nan Federal Reserve's easy monetary policies that saw money proviso turn by astir 40% complete a two-year period, successful consequence to nan impacts of nan Covid pandemic. Like astir IPOs 'birthed' during this period, SANA has destroyed a immense magnitude of shareholder worth since debuting connected nan markets immoderate 2 years ago. Should shareholders bent connected aliases is it clip to springiness up nan ghost? An study follows below.

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Company Overview:

Sana Biotechnology, Inc. is simply a Seattle-based clinical-stage biotech concern. The institution is focused connected processing ex vivo and successful vivo compartment engineering platforms and candidates for various therapeutic areas pinch unmet curen needs. This includes oncology, diabetes, and cardinal tense strategy {CNS} disorders. The banal trades for astir 4 bucks a stock and sports an approximate marketplace capitalization of astir $750 million. The company's lofty imagination is to 'develop platforms that tin repair and power genes successful cells aliases switch immoderate compartment successful nan body.'

Company Website circa 2021

The institution came nationalist early successful 2021 pinch a preclinical pipeline of galore pre-clinical candidates targeting myriad indications (See above). Unfortunately, advancement successful moving these candidates guardant has been exceedingly slow. They each stay pre-clinical 2 years aft nan company's nationalist debut though precocious successful January, nan FDA did accept Sana's IND exertion for SC291, an allogenic CAR T therapy for respective B-cell malignancies.

This campaigner was developed utilizing Sana's hypoimmune platform. Management believes this could let SC291 to flooded nan immune strategy rejection of allogeneic cells arsenic good arsenic to lead to a longer CAR T compartment persistence and a higher complaint of durable complete response.

The institution has signed a mates of mini (I, II, III) licensing deals since coming public. In addition, Sana Biotechnology successful June of past twelvemonth announced that it will move its manufacturing operations to a tract successful Washington State from a tract established successful Fremont, Calif successful nan summertime of 2021. This move was expected to consequence successful much than $100 cardinal successful costs savings complete time. Management has stated that:

Sana's manufacturing process appears to create, successful a replicable fashion, precocious value T cells astatine a standard pinch nan imaginable for hundreds of doses per batch."

Analyst Commentary & Balance Sheet:

Both J.P. Morgan ($11 value target) and Goldman Sachs ($6 value target) presently person Neutral ratings connected nan stock. At nan extremity of November, Bank of America maintained their Buy standing connected SANA but reduced their value target connected nan equity by 2 bucks a stock to $13. Morgan Stanley reissued their Buy standing pinch an identical value target past month.

Nearly 30% of nan outstanding float successful this banal is presently held short contempt nan shares already shedding complete 80% of nan worth since coming nationalist astir 2 years ago. Neither are insiders buying nan dip, albeit they are not selling. The past insider activity successful nan shares was successful March of past year.

The institution ended nan 3rd 4th pinch conscionable complete $510 cardinal successful rate and marketable securities connected its equilibrium against nary semipermanent debt. Sana Biotechnology utilized conscionable complete $65 cardinal of rate to support each operations successful nan 4th and guidance has stated it has a 'cash runway' into 2025. Sana burned done conscionable complete $235 cardinal of rate for each expenses successful nan first 9 months of FY2022; it should beryllium noted.

Verdict:

The situation astir Sana is that it is bleeding rate pinch small successful nan measurement of imaginable milestones successful 2023. Initial information results for SC291 should beryllium retired sometime this twelvemonth and nan institution plans to record a 2nd IND for SC262 successful 2023. SC262 CD22-targeted allogeneic CAR T therapy developed disconnected nan aforesaid hypoimmune level arsenic SC291.

Even pinch nan immense diminution successful Sana's banal since its IPO and nan company's ample rate hoard compared to its marketplace cap, it is difficult to get very excited astir nan shares. The institution is (many, galore years from now) apt to astatine slightest make 1 aliases 2 important superior raises from immoderate imaginable commercialization. It is besides measurement excessively early to person immoderate religion successful nan imaginable of nan company's pipeline aliases developmental platforms until investors spot immoderate clinical-stage data.

Given nan deficiency of catalysts and nan company's ample quarterly pain rate, it is easy to spot why complete a 4th of nan company's shares are presently held short moreover aft nan immense diminution successful nan banal since Sana's IPO. With nary compelling logic to bargain nan equity currently, SANA seems an 'avoid' until nan institution tin importantly beforehand its pipeline.

Quality sells itself. No hype needed."― Brandi L. Bates