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Sana Biotech Market Cap Expected to Top $10 Billion Post-IPO

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- By Barry Cohen

Seattle-based Sana Biotechnology is shooting to raise $150 million in its initial public offering, but soon after is expected to see its market value to soar to more than $10 billion, according to leading industry publication BioSpace

That's a pretty hefty valuation for a pharma newcomer that doesn't have a single drug in clinical testing and isn't expected to submit the first of its Investigational New Drug applications until next year. Sana plans to list itself on the Nasdaq under the ticker "SANA."

In its S-1 filing, Sana, founded in 2018, stated its work is based on the idea that engineered cells will transform medicine in the coming years. The company hopes to "control or modify any gene in the body, to replace any cell that is damaged or missing, and to markedly improve access to cellular and gene-based medicines." Its focus is disease areas such as oncology, diabetes, central nervous system disorders, cardiovascular diseases and genetic disorders.

The company's mammoth valuation is not so outlandish given, according to FierceBiotech, it raised a titanic $700 million last summer from some of the biggest names in venture funding such as Arch Venture Partners, Flagship Pioneering, the Canada Pension Plan Investment Board and Bezos Expeditions, among others.

Last year, Sana licensed technology from Harvard University to speed efforts to develop off-the-shelf cell therapies, its main pipeline focus. The goal is to genetically modify and differentiate stem cells to create cell therapies that are hidden from the immune system. The company's big challenge is to find ways to stop the immune system from rejecting the cells as foreign.

Sana's founder and CEO is Dr. Steve Harr, formerly chief financial officer of Juno Therapeutics Inc., where he helped build the company's CAR-T cell therapy program before Juno's acquisition by Celgene, which itself was later purchased by Bristol-Myers Squibb Co. (NYSE:BMY).

GeekWire reported that Harr said Sano is taking a different approach than many other biotechs, who sell solutions in search of problems. He said that method is akin to someone showing up with a tiny screwdriver and looking for a loose screw to fix. He sees Sana more as a toolbox that can help build the right medicine for the right patient.

In October, Sana acquired Oscine, which concentrates on developing curative and disease-modifying cell therapies for brain and central nervous system disorders.

Sana needs the IPO cash because of its high burn rate. It currently has $459 million in cash and cash equivalents, but it spent $153 million on research and development in the first nine months of 2020, an increase from $80 million in the same period of 2019.

Sano ranked number one on BioSpace's 2021 NextGen list of up-and-coming life sciences companies in North America.

Disclosure: The author has a position in Bristol-Myers.

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This article first appeared on GuruFocus.