Sana Biotechnology: Hypoimmune Platform Might Stealth Cells

Sana Biotechnology (NASDAQ:SANA) is a good speculative biotech play to look into. The reason why I state that is because it has a unique approach in using SC291, which is a CD19-targeted allogeneic CAR T cell therapy. What makes this drug unique, like all others in its pipeline, is that it is using its hypoimmune technology platform. A big problem with CAR T is that persistence is a major issue. To combat this, this biotech has a unique approach, in that its hypoimmune platform hides cells from both the innate and adaptive immune system. It is believed that by doing so, SC291 can possibly do better in being able to treat patients with B-cell malignancies. Investors won't have to wait long to see such proof of concept, because the plan for Sana Biotechnology is to be able to release results from the ongoing phase 1 study later in 2023.

Such a study is using SC291 for the treatment of patients with B-cell malignancies. This data is important, because it will provide a clearer direction on whether this technology is appropriate in being able to target patients with cancer. There are additional catalysts expected from this biotech in 2023 as well, which might provide a boost to the stock price. For instance, the goal is to submit INDs this year for both SC262 and SG299, which are to be used for the treatment of patients with hematological cancers. Lastly, there will be the release of some data from an investigator-sponsored study, which is using the hypoimmune-modified primary human islet cells for the treatment of patients with Type 1 Diabetes. With a unique hypoimmune platform, plus a few data readouts expected later this year in 2023, these are the reasons why I believe that Sana Biotechnology is a good speculative biotech play to look into.

Phase 1 Study Initiated To Provide Proof Of Concept In Targeting B-Cell Malignancies

As I noted above, Sana Biotechnology is already evaluating the use of SC291 in a phase 1 study to treat patients with B-cell malignancies. This biotech received clearance to initiate this early-stage study back on January 26, 2023. This program is quite promising, especially when you consider that the FDA has already given SC291 Fast Track Designation for the treatment of patients with relapsed/refractory large B-cell lymphoma and relapsed/refractory chronic lymphocytic leukemia. This is a good first market opportunity for Sana Biotechnology to go after. The reason why I say that is because B-cell lymphoma is a type of non-Hodgkin lymphoma that originates in the B-cells, and it is the most common type of lymphoma. In addition, it is said that about 85% of all lymphomas in the United States are B-cell.

How big of a market opportunity is it? It is said that the global B-cell lymphoma treatment market could reach $13.14 billion by 2030. A good question to ask is, how can SC291 differentiate itself from all other CAR T cell therapies? It all has to do with its mechanism of action. What SC291 is designed to do is to specifically target CD19 cancer cells. However, it might be able to overcome the immunologic rejection of allogeneic cells, which might end up resulting in greater CAR T cell persistence. How might such a task be possible? Preclinical data has shown that SC291 might be able to cloak itself from immune recognition. Think about it, in being able to hide itself from both the innate and adaptive immune system, it might allow for longer CAR T cell persistence. Such persistence could improve the duration of responses that these patients might be able to experience. A huge positive that can be made about this platform is that it would be able to be established as proof of concept in CD19 targeting at first, but could ultimately then be deployed to target other proteins successfully such as CD22, BCMA and others.

Investors won't have to wait long, because there is a catalyst opportunity that is expected to take place later in 2023. That is when Sana Biotechnology intends to release results from its ongoing phase 1 study using SC291 for the treatment of patients with B-cell malignancies. Speaking of catalysts, there is another data readout expected later in 2023. It is said that data from an investigator sponsored study, using pancreatic islet cell therapy for patients with Type 1 Diabetes [T1D], will be released then. This would give a look to see if the hypoimmune platform could be applied towards other indications besides cancer. Some other smaller catalysts which are expected in the latter part of 2023, would be the filing of two Investigational New Drugs [INDs] for other clinical candidates from the pipeline as well. Such candidates are SC262 and SG299, which are being developed for treating patients with hematologic malignancies.

Financials

According to the 10-Q SEC Filing, Sana Biotechnology had cash, cash equivalents, and marketable securities of $355.1 million as of March 31, 2023. A good thing about this biotech is that it believes its cash of $355 million will be enough to fund its operations into 2025. This is a good thing, because by then it will be able to release several data readouts. Such data readouts might have a huge impact on the stock price. It has been able to raise cash from time to time through the sale of equities or debt, and it will likely need to use the same type of cash raising activities going forward. However, a good thing about this biotech is that it is well capitalized to reach many of these catalysts.

Should it need to raise additional cash in the coming months, then it could do so with an agreement which was made in the prior year. I'm talking about the fact that it entered into a sales agreement with Cowen back in August of 2022. Through this sales agreement, it can from time to time offer and sell shares of its common stock with an aggregate offering price of up to $150 million. It may not have to tap into this option, but it is nice that it can do so if it needs to. My guess is that, should a positive news release cause the stock to climb significantly, then it won't hesitate to raise cash immediately.

Risks To Business

There are several risks that investors should be aware of before investing in this biotech. The first risk to consider would be with respect to the expected results from the phase 1 study, which is using SC291 for the treatment of patients with B-cell malignancies. That's because while the use of the hypoimmune platform has been shown to work well in preclinical testing, there is no guarantee that it will do so in humans. A second risk to consider would be with respect to the investigator sponsored study, which is exploring the use of the hypoimmune platform using islet cells for the treatment of patients with Type 1 Diabetes [T1D].

Should data released from the investigator sponsored study go well, then it will be able to file an IND for the use of SC451 for the treatment of this patient population in 2024. A good thing about targeting this indication, just in case the platform technology doesn't work for the treatment of patients with cancer, is that it provides a way to reduce investor risk. In that, the hypoimmune platform concept might end up working better with Type 1 diabetes, as opposed to being used for the treatment of patients with cancer. What might reduce investor risk a bit is that Sana Biotechnology expects to submit INDs for both SC262 and SG299 for the treatment of patients with hematologic cancers in 2023. These would provide additional shots on goal for the treatment of patients with blood cancers. In addition, if all goes well with establishing proof of concept in targeting blood cancers, then it expects to file another three INDs in 2024.

Conclusion

The final conclusion is that Sana Biotechnology is a good speculative biotech play to look into. The reason why I state that is because of the unique technology it has, which is its hypoimmune platform. Such a platform might provide persistence for its CAR T candidates. How would such persistence of CAR T be possible? This will only be possible if the mechanism of action is proven, in that its hypoimmune technology is able to overcome the immunologic rejection of allogenic cells. Again, it accomplishes this by being able to allow cells to hide from both the innate and adaptive immune system, like "stealth cells". Proof-of-concept of this mechanism of action will be shown with the release of results from several studies that are expected in 2023. Hopefully, the use of SC291 for the treatment of patients with B-cell malignancies is proven. That's because it is expected that the global B-cell lymphoma treatment market could reach $13.14 billion by 2030. With a unique hypoimmune platform, plus a few data readouts expected later this year in 2023, these are the reasons why I believe that Sana Biotechnology is a good speculative biotech play to look into.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.