Sana Biotechnology, Inc. (SANA) Earnings Call Transcript & Summary

Welcome to the afternoon sessions of the BofA Healthcare Conference. I'm Geoff Meacham. I'm the senior biopharma analyst here. And we're thrilled to have Sana Biotechnology, and then we have Steve Harr, President and CEO on stage with us. Steve, welcome.

Thank you, Geoff. Thank you for having us. Appreciate it.

Every second counts, I got a 15 minutes spot. So why don't I just turn it you give us like the 2-minute kind of background, and we'll get ready to some questions.

Sure. First off, we'll make some forward-looking statements, and we filed our Q last night, and we spent a lot of time on risk factors, so take a look. There's a lot of good information in there. The company was founded, I guess, about 5 years ago around a couple of technologies, really trying to turn engineered cells into medicines. We have a handful of platforms, the one that's most advanced is something called the hypoimmune platform is what we call it. And since the advent of time, the advent of modern medicine, we've been trying to transplant organs and cells into allogeneic recipients and they are always rejected without immunosuppression. And our goal is to be able to transplant cells without immunosuppression, which we think can really unlock and unleash the power of cell therapy. So with 2 chances to get proof of concept in humans, maybe I'll just start by saying we made a ton of progress and have shown a lot of, I think, very compelling data published in 2 nature journals and in science over the last month related to this hypoimmune technology in animals. And so the real key is what we've seen in nonhuman primates and mice models and other models translate to humans. And we should know this year from 2 different programs. One is looking at a CD19 -- an allogeneic CD19 CAR T cell starting out in blood cancers. And the other would be transplanting islet cells into patients with type 1 diabetes. And in either scenario, hopefully, in both the ability to see these cells live without an immunosuppression could really we think unleash not only these drugs, but a whole bevy of innovation. And so that's a little bit around where we are and what we're up to. We can go into more detail.

Yes, yes. Let's talk about the CD19. So there's a lot of companies in this space. What does, I guess, success look like with respect to differentiation and your initial kind of release of data?

Yes. So I kind of think of this in the biggest like the highest level. We've been spending about the last 25 years, figuring out how to deplete B-cells and figure out where that will have a clinical benefit. And that's been shown across a range of lymphomas, a range of leukemias. Increasingly, we're seeing this in a whole host of autoimmune disorders like lupus and multiple sclerosis. And as you moved out in the last decade or so, we've figured out that you can deplete B-cells much better with the greatest B-cell depleter mass creator, which is the CAR T cell. And that, that has potentially curative effect actually for people in each of these types of indications. And the challenge with all the antibodies, they don't deplete B-cells well enough. The challenge of autologous CAR T cells has been that, a, they don't work in everybody, but the bigger problem has just been manufacturing them at scale. So what looks like -- that means that just in cancer, blood cancers 100,000 people a year die of lymphoma leukemia, multiple myeloma, the diseases where it's been proven to work and approved by regulators. Yet, in the history of humanity, only about 10,000 people have gotten a CAR T cell. There's a massive supply problem, right? So success looks to me like the most basic level, look as good as an autologous CAR T cell. We already improved drugs, but be able to manufacture at a scale that makes it like an antibody. And if that's true, our ability to go after lymphoma, leukemia, multiple myeloma, lupus, multiple sclerosis, these large indications is really spectacular. And so many medications the winner in our spaces are first to market, and then you have a chance to be best-in-class. I think here it's first to scale, right? First to scale with at least as good of a product. So what does that look like? I'd say there are 3 elements of -- there will be 3 steps that we have next this year over the next, call it, 18 months to develop evidence that our drugs work as we hope they will in the CAR T space. One, so the way we make these CAR T cells is we take a normal donor and we gene modify the cell. So some of the cells have all of the modifications and some of them don't, say about half of them, all of them. So when you put [ GEF ] cells in your body, your body would reject them as being foreign, unless we have all of our full set of gene changes in them. So first body of evidence would be when we put those cells in, within about -- you give them a little chemotherapy and within about 3 weeks, the immune system is normal. If at 1 and 2 months, all that's left is 100% fully modified CAR T cells. We've proven that the immune ovation we see in animals is translated to humans. That to me is like the most important thing, and we'll learn that very shortly. It's very simple. First 2 patients tell you. The second thing is -- and I mean the high probability that will translate, if you evade the immune systems to seem cells, CAR T cells that persist over time, which means they can fight the cancer for months instead of weeks. And if that's the case, that has a high probability of translating what we really care about, sorry, which is durable complete responses for patients. And so we'll know the cell selection within a few months, we'll know the persistence within a few quarters, and we'll know the durable complete responses next year. It won't happen this year. So that's really -- so that case will build.

Right. And so if we make that assumption, and let's say that you do have data that's derisking, how do you allocate capital going for -- from liquid tumors to more autoimmune indications, basically like down the risk curve, right? So do you say I believe in technology and therefore, I'm going to go after markets maybe that are more unmet? Or do you go with the tried and true like let's go down the model of a lot of other folks have gone from CD19 to their logical indications?

So first off, the way that we make these cells is essentially just a platform we can swap in different cars with the car is the element that recognizes the cancer cell and activates the T cell. And so we have licensed 3 different cars against 3 different targets, all were validated in human studies with autologous cells. So CD19, CD22, BCMA. The only difference we need to do to go from the first drug to all 3 is to make a very small change in the plasmid of the DNA, it's part of the supply, and we changed a release assay. And that's it. So really, if it works, you should be -- really the main risk is your question, which is capital and execution between us and 3 different drugs. I think that's pretty rare because you'll sometimes have validated targets or validated biology. Here, we actually have validated almost drugs, right, just put into our platform. And we will need to make some tough choices around kind of what indications to go after. I mean, there's pretty much no scenario where we can do all this on our own. I'll start with that. So we'll need help. The second is I find it hard to imagine. If you look at Sana's pipeline slide today, I cannot find it hard to imagine, we'll be doing all of those things 1 year from now. We will either have to put our chips into some of the things that are working and delay some things that are earlier or we'll stop doing things that aren't working, right? And be glad we have some of these on our platforms that we're having, right?

So if you're in a position where you're not -- you don't need external capital to make programs work, right?

Not now. No. We do not need investor capital or partner capital to see if these work. Once they do work, it will be a lot of money to push forward. And we'll need to figure out based on time and the world kind of what the right way to build the company is. Fortunately, though, we own 100% worldwide rights to every drug in our portfolio. So we do still have the opportunity to do a number of different corporate partnerships over time. I always look back and there have been -- there's almost no company I can think of one that has globally launched their lead asset and built a regenerative R&D engine over time. Usually, you get to pick one or the other. The great companies are an industry like Genentech, license their first drug outside the United States. Some of the great global companies like Gilead and Celgene really relied upon business development early on, right? Now they have their own R&D. So that -- if we -- I think there's more value for us in pushing forward with our portfolio and our research. So we will almost certainly partner our drugs over time, at least in parts of the world.