One of biotech's most valuable startups just filed to go public. Here are 5 crucial takeaways from Sana's 271-page filing.

Steve Harr

Summary List Placement

After raising more than $700 million since its 2018 launch, one of the biotech industry’s most valuable private companies is planning to go public.

Seattle-based Sana Biotechnology filed paperwork on Wednesday for an initial public offering. Following a red-hot year for biotech IPOs in 2020, Sana is hoping to take advantage of investor enthusiasm to fuel its ambitious cell and gene therapy programs.

The company was founded in July 2018 and is led by former executives of Juno Therapeutics, a cell therapy startup that was acquired in 2018 by Celgene for $9 billion. Sana came out of stealth mode in early 2019 and closed a Series B round in June 2020 in which it raised $435.6 million.

The size of its latest funding round places Sana among the top 10 biotech or life sciences companies in the US, according to data going back to 2002 from PitchBook. Some of the other companies on that shortlist include coronavirus-vaccine-maker Moderna, low-cost drugs startup EQRx, cancer-detection company Grail, and disgraced lab-testing firm Theranos.

Read more: The 26 billion-dollar startups to watch that are revolutionizing healthcare in 2021

Sana commanded a $2.77 billion valuation after the 2020 raise, the second-highest valuation among all private biotechs, according to Silicon Valley Bank’s annual industry report. Sana hasn’t set yet set the pricing terms for its IPO.

The company plans to trade on the Nasdaq under the ticker symbol SANA. Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of America are leading the offering.

We read through Sana’s 271-page filing to learn more about the secretive biotech’s business and strategy. Here are five crucial takeaways from Sana’s latest disclosure. 

Sana’s pipeline is sprawling, but it’s at least a year away from starting human testing

Sana’s filing provides the first detailed look at the treatments it’s working on, and it’s sprawling in terms of both its scientific ambitions and the range of disease areas it’s targeting. 

The biotech’s lead program is focused on a rare genetic blood disorder called ornithine transcarbamylase (OTC) deficiency. Beyond that, the company has early-stage treatment candidates in development for heart failure, Type 1 diabetes, multiple sclerosis, Huntington’s disease, several types of cancer, sickle cell disease, and beta-thalassemia.

Sana’s platform is primarily focused on engineering and manipulating cells. But it’s also researching gene delivery, gene modifications, and pluripotent stem cells.

All this work is still in the earliest stages of development. None of its potential treatments are being tested in people, and Sana doesn’t expect that to happen until 2022 at the earliest.

Biotech companies deciding to go public before any of their treatments are tested in people has been a trend in the last few years, as investor appetite for early scientific bets has grown. By that count, Sana is shaping up to be a mammoth wager. 

The startup has set up an independent research arm and is digging into COVID-19

Sana’s S-1 also gives details on the company’s research arm SanaX, led by Harvard Medical School genetics professor Richard Mulligan. The group is currently investigating new tools for Sana’s cell and gene therapies, including developing new viral vectors, expanding the capacity of existing vectors and manipulating the body’s immune response. 

On top of that, SanaX is exploring how to best delivery specific antibodies to treat the novel coronavirus. That could put the startup in competition with industry giant Regeneron, which has teamed up with gene therapy pioneer Jim Wilson to find new ways of delivering antibodies to fight the virus. 

New tools that come out of SanaX could be folded into Sana’s internal drug portfolio or be used in an external partnership. The company has yet to announce any drug industry collaborations.

“Our goal is to lead both the present and future of cell engineering and we are committed to making significant investments in research and other activities that will ensure a leadership position throughout the next decade,” the S-1 said. 

ARCH and Flagship own nearly half of Sana’s shares

ARCH Venture Partners and Flagship Pioneering are the main venture capital firms backing Sana. 

ARCH owns 27.5% of Sana’s stock going into the offering, and Flagship owns 21.4%. The next largest institutional investor is Canada Pension Plan’s investment fund, which owns 5.8% of the biotech.

How much those shares will ultimately be worth is an open question, as Sana has yet to specify its target pricing range. Most biotech IPOs offered shares somewhere around $15 to $20, which would effectively value Sana at somewhere around $9 billion to $12 billion, Stat News’s Kate Sheridan reported.

Judging by its $705.5 million in previous funding, Sana isn’t a typical biotech. If Sana prices at $20 per share, ARCH’s and Flagship’s stakes would respectively be worth $3.5 billion and $2.7 billion. 

The biotech hasn’t built its own manufacturing presence, instead relying on third parties

The drugs Sana aspires to make are very complex. The filing reveals that Sana hasn’t spent its copious funding on building its own manufacturing capacity. 

“We do not yet own or operate any cGMP manufacturing facilities,” the filing states, referencing current good manufacturing practices, the universal standards enforced by drug regulators. 

Instead, like many pre-commercial biotechs, Sana is relying on third-party contractors to produce its experimental treatments.

While the company doesn’t have a manufacturing footprint, it has built up a nationwide research presence with about 170,000 square-feet in office and lab space across Seattle, South San Francisco, and Cambridge, Massachusetts. 

Sana has been hungry for growth, executing three acquisitions worth a combined $1.5 billion

Sana has made several acquisitions in its first two years of operations, which combined are worth more than the funding it has raised to date. The company has mainly used its own stock to fund the deals.

Its largest was the February 2019 acquisition of Cobalt Biomedicine, which was also incubated at Flagship Pioneering but was still in stealth mode when it was acquired. Sana paid $136 million in stock in the deal, which included the possibility of $500 million in milestone payments and a $500 million “success payment” tied to its valuation.

The acquisition gave Sana access to the in-vivo gene therapy approach used in its lead drug candidate. It also helped Sana grow its workforce, which has ballooned from 37 employees at its launch to more than 200 employees currently. 

Sana has further built out its broad pipeline through the acquisition of two Seattle-based startups. It bought  Cytocardia Inc. in November 2019 for upwards of $148 million and acquired Oscine Corp. in September 2020 for upwards of $234.3 million. 

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Summary List PlacementA Cambridge, Massachusetts biotech chasing the goal of curing heart disease just announced the first treatment it plans to test in people.
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The biotech’s first experimental treatment was built using tools from the biotech Beam Therapeutics called base editing technology. It’s a more precise way to edit genes, allowing scientists to change a single letter of genetic code.
In this case, VERVE-101 aims to change an A to a G in the code of a gene involved in regulating cholesterol levels, called PCSK9. That single infusion should permanently lower someone’s bad cholesterol levels. 
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Even as the technology remains a ways away from potentially reaching large numbers of patients, excitement is clearly building in the space.
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The long-term goal is to develop a one-and-done treatment that can prevent heart attacks
The company’s long-term vision is to tackle cardiovascular disease, the leading cause of death in the US. The initial work in patients with this genetic heart condition is the first of three steps, Kathiresan said.
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