Sana Biotechnology announced a major strategic restructuring, marking a significant pivot toward autoimmune diseases while implementing staff reductions across all functions. The move represents the latest retrenchment for the company, which raised $588 million in one of biotech's largest IPOs just three years ago.
The Seattle-based company will discontinue testing of SC291 in oncology and halt development of SC379, previously being evaluated for multiple neurological conditions including Huntington's disease. Instead, Sana will redirect its resources toward B-cell associated autoimmune diseases and Type 1 diabetes programs.
Strategic Pipeline Realignment
The company's renewed focus centers on developing treatments for autoimmune conditions, particularly through its repurposed SC291 program targeting diseases like lupus. Additionally, Sana will accelerate development of UP421 for Type 1 diabetes, with initial clinical results expected either later this year or in 2025.
"We need to ensure that we are directing our investments into the areas where we believe we can have the greatest impact for patients," stated Steve Harr, Sana's president and CEO.
Financial Impact and Workforce Reduction
The restructuring aims to extend Sana's cash runway into 2026. With approximately $252 million in cash reserves at the end of the last quarter, the company expects these changes to support multiple data readouts that could potentially enhance its value proposition.
While the exact number of layoffs is still being determined, the reduction will affect all departments. As of late 2023, Sana employed 328 people, with 251 primarily in research and development roles.
Market Performance and Historical Context
Since its February 2021 IPO, Sana has experienced significant challenges, with its share price declining more than 80%. The company's initial clinical trial plans faced delays due to manufacturing issues, coinciding with a broader market downturn in biotech stocks.
This restructuring follows previous workforce reductions of 15% and 29% in recent years, along with substantial pipeline modifications. The company's original portfolio of more than 10 programs targeting cancer, heart disease, and genetic conditions has been dramatically streamlined.
Future Direction
Chief Scientific Officer Dhaval Patel, who joined in August, emphasized the strategic nature of the decision: "Since joining Sana, I have actively engaged with the team to understand both Sana and competitor data and believe it is the right time to prioritize where we have the most differentiated therapeutic candidates."
The market responded negatively to the announcement, with Sana's shares dropping more than 20% in early trading, falling below $3 per share. The restructuring costs may push the company's 2024 spending above its previously projected $200 million target.
