SANA - Sana Biotechnology: SC291 Moving Forward Beyond Hematological Malignancies

2024-01-05 15:13:56 ET

Summary

• Additional results from a Sana Biotechnology, Inc. phase 1 study, using SC291 for the treatment of patients with B-cell lymphomas and leukemias, are expected in 2024.
• Initial results from phase 1 study, using SC291 for the treatment of patients with autoimmune disorders, expected in 2024.
• Initial results from phase 1 study, using SC262 for the treatment of patients with r/r B-cell Lymphomas who failed prior anti-CD19 therapies, expected in 2024.
• The autoimmune disease treatment market is expected to increase to $10.92 billion by 2030.

Sana Biotechnology, Inc. ( SANA ) has been able to rapidly advance its pipeline full of allogenic CAR-Ts. The last time I spoke about this biotech, I mentioned that it was advancing its phase 1 study, known as ARDENT, using CD-19 directed CAR-T SC291 for the treatment of patients with B-cell lymphomas and leukemias. This was in the prior Seeking Alpha article entitled " Sana Biotechnology: Hypoimmune Platform Might Stealth Cells. " I discussed the technology platform, along with the development of allogenic primary islet cells, for the treatment of patients with type 1 diabetes. There is going to be additional clinical data expected to be released for this program during this year as well.

However, it has potential beyond only these two programs. What do I mean by that? Well, that's because it is also advancing SC291 for the treatment of patients with autoimmune disorders. This proves that this allogeneic CAR-T platform technology is versatile and can be applied towards other indications beyond cancer. Clinical data, to be released from this program in 2024, is going to entail the targeting of multiple indications in the autoimmune disease treatment space. There is also a second shot on goal in terms of being able to target B-cell lymphomas and leukemias. Sana received IND clearance to begin a phase 1 study using CD-22 directed allogeneic CAR-T SC262. The goal is to target relapsed/refractory B-cell lymphoma and leukemia patients in such an early-stage study.

SC291 For the Treatment Of Patients With Autoimmune Disorders

As I noted above, Sana Biotechnology is also in the process of advancing SC291 for the treatment of patients with various types of autoimmune disorders. The last time I wrote about this biotech article, it was in the process of filing its IND to the FDA, so that it could eventually initiate a phase 1 study for this particular program. I'm happy to report that the company was able to receive IND clearance of SC291 for the treatment of autoimmune disorders. The autoimmune disease treatment market is expected to increase to $10.92 billion by 2030 .

The goal of this study is to target several types of disorders in this space, such as: Lupus Nephritis, extrarenal lupus, and antineutrophil cytoplasmic antibody [ANCA]-associated vasculitis. Why do I believe that some value can be unlocked here? It is because the company expects to release preliminary safety and efficacy data in 2024 from this phase 1 study. I believe that this company can possibly help the CAR-T space, if it can achieve its intended goals of advancing this CD-19 directed CAR-T SC291. One such measure is to eliminate the need for apheresis for such a treatment. This would be using the passing of blood through an apparatus to separate a certain constituent in the blood and then return the rest to the person's body.

The second measure would be to remove the patient-by-patient manufacturing process seen with other CAR-T therapies. This is possible, because of the allogeneic nature of SC291, which doesn't require such personalized development.

Allogenic CD-22 CAR-T To Act As Another Shot On Goal

The last time I spoke about Sana Biotechnology, I mentioned that it was advancing the use of SC291 for the treatment of patients with B-cell lymphomas and leukemias, in the ongoing phase 1 ARDENT study . The main thing to note is that this candidate is being advanced as a CD-19 directed CAR-T for these patients who have already been given two or more prior systemic therapies. However, an exclusion criterion is that they couldn't have been treated with prior anti-CD19 therapy. This provides one shot at being able to target this patient population.

However, the biotech is also advancing another allogenic CAR-T, which is SC262. The important thing to note about this candidate is that it is being advanced for relapsed/refractory B-cell malignancies as a CD-22 directed CAR-T. The initial goal of testing will be to go after patients who have already been given a prior anti-CD19 therapy already. Why was it important to mention this fact? That's because this is a highly addressable market opportunity. It is said that incomplete responses or relapses occur in about 60% of CD-19 CAR-T treated B-cell lymphoma patients. There is good news with respect to this clinical program being advanced, because Sana has already been given IND clearance from the FDA to begin a phase 1 study using this candidate. Even better than that, investors can expect a major catalyst to be released as well. It is expected that clinical data is going to be released from this early stage study in 2024.

Financials

According to the 10-Q SEC Filing , Sana Biotechnology had cash, cash equivalents, and marketable securities of $268.6 million as of September 30th of 2023. The reason for the cash on hand is because it did raise some funds through the use of an ATM, along with other cost cutting measures.

For instance, it raised approximately $27 million from an at the market equity offering for the nine months ending September 30th 2023. Not only that, but a lease for a planned manufacturing facility in Fremont, California was terminated during Q3 of 2023 as well. The main item to note in terms of helping its financial position was that it enacted a strategic re-positioning. In essence, it reduced its headcount by 29% to conserve cash.

With such measures taken, it expects its 2024 operating cash burn to be below the $200 million mark. It believes that its cash on hand will be enough to fund its operations into 2025. For the time being, I believe that it is okay in terms of cash on hand. However, by the end of 2024 it may need to start looking at other ways to raise additional funds.

Risks To Business

There are several risks that investors should be aware of before investing in Sana Biotechnology. The first risk to consider would be with respect to the ongoing phase 1 ARDENT study, which is using SC291 for the treatment of patients with B-cell lymphomas and leukemias. Even though preliminary data was shown to be positive , there is no guarantee that the next update will turn out to equivalent to or superior to such prior data.

The second risk to consider would be with respect to the most recent IND clearance of SC291 for the treatment of patients with autoimmune disorders. Initial data is expected later in 2024 from this program. While the allogeneic CAR-T approach targeting B-cell lymphomas seems to be adequate, there is no assurance that this similar approach will work in autoimmune disorders.

The third and final risk would be the other candidate in the pipeline, which would be SC262. First, this is a CD-22 directed CAR-T which has not yet proven for this B-Cell lymphoma patient population, thus remains a major risk. Secondly, the goal is to target 60% of patients who have failed on one prior anti-CD19 directed therapy. Thus, this is going to be a harder pool of patients to treat.

Conclusion

Sana Biotechnology has made additional progress in advancing its other candidates in its pipeline. It has been able to receive IND clearances to advance SC291 for the treatment of patients with autoimmune disorders and SC262 for the treatment of patients with relapsed/refractory B-cell Lymphomas or Leukemia who have failed on prior anti-CD19 CAR-T. This greatly expands the pipeline it has for starters. Plus, it also adds additional catalysts to look forward to in 2024.

To help with respect to this effort, it has also been able to find a way to reduce its cash burn as well. It reduced headcount, cut a lease that was put in place, and implemented other cost-cutting measures.

I believe the most notable thing about Sana is its hypoimmune [HIP] platform. The goal of such a therapy is to overcome the immune rejection of allogeneic like treatments. This provides the advantage of removing the need for patient-patient manufacturing and eliminating the need for apheresis. With continued advancement of allogenic CAR-Ts in the clinic, plus several catalysts to be released in 2024, I believe that Sana Biotechnology, Inc. investors could benefit from any potential gains made.

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