On Tuesday, H.C. Wainwright adjusted its outlook on shares of Sana Biotechnology (NASDAQ:SANA), reducing the price target to $8 from the previous $11 while maintaining a Buy rating. The firm's decision follows Sana's announcement on Monday (NASDAQ:MNDY) that it is reshuffling its development pipeline.
The biotech company is now focusing on Type 1 diabetes treatments (UP421 and SC451), B-cell driven autoimmune diseases (SC291), and B-cell malignancies (SC262). This strategic shift involves de-prioritizing its SC291 program for B-cell malignancies and its glial progenitor cell initiative.
Sana Biotechnology has not cited any data-related reasons for this change in direction but mentioned the growing competition in the blood cancer market. The company is seeking a licensing partner to continue the development of the deprioritized programs.
Analysts interpret this move as a likely response to less robust efficacy profiles in larger patient groups, a challenge that has affected other allogeneic cell therapy oncology programs.
The shift away from oncology is seen as a strategic move towards autoimmune diseases, which represent a less saturated market compared to the crowded oncology space with several FDA-approved autologous CAR-T therapies.
Sana has yet to release data from its trial involving hypoimmune modified primary islet cells for Type 1 diabetes, indicating that the new focus on diabetes treatments was not driven by clinical trial results.
The company has updated its timeline for delivering proof of concept data, which is now expected in either 2024 or 2025. Similarly, the anticipated results from the Phase 1 GLEAM study for SC291 in B-cell autoimmune diseases and the Phase 1 VIVID study for SC262 in B-cell malignancies have been rescheduled.
The GLEAM study data, initially expected in the second half of 2024, is now slated for 2024 or 2025, while the VIVID study results have been pushed to 2025 from the prior expectation of 2024. Despite the revised timelines and de-prioritization of certain programs, the firm reiterates its Buy rating with a lowered price target.
In other recent news, Sana Biotechnology has experienced several significant developments. The company has been downgraded from Market Outperform to Market Perform by JMP Securities due to uncertainties surrounding data readouts.
The firm has also withdrawn its previous price target for Sana Biotechnology. This rating change comes after Sana Biotechnology announced a strategic shift in its development portfolio, focusing on its SC291 therapy for autoimmune diseases and suspending other programs.
Sana Biotechnology's recent decisions have led to a refocus on autoimmune diseases and type 1 diabetes therapies. The company is prioritizing its SC291 and UP421 programs, with multiple data readouts expected in the next two years. This strategic shift has resulted in the suspension of the SC291 oncology program and the SC379 glial progenitor cell program.
In addition to these changes, the company's Chief Financial Officer, Nathan Hardy, will step down in October 2024 for personal reasons. Meanwhile, Dhaval Patel, M.D., Ph.D., has been appointed as the new Executive Vice President and Chief Scientific Officer, a move expected to boost Sana's clinical pipeline and innovation.
The company is also making progress in its Type 1 diabetes trial. Several patients have been enrolled in an Interventional Study in Uppsala, Sweden, with data for the first patient expected approximately 30 days post-dosing. This progress led Citi to raise its price target for Sana from $8.00 to $15.00, while maintaining a Buy rating.
Finally, Citi has initiated a 90-day Catalyst Watch, expressing optimism for potential significant appreciation in Sana Biotechnology's performance should the forthcoming Type 1 diabetes data prove positive. These recent developments underline the company's ongoing commitment to advancing science and delivering transformative therapies to patients.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Sana Biotechnology's financial position and market performance. The company's market capitalization stands at $836.47 million, reflecting its current valuation in the biotech sector. Notably, Sana's stock has experienced a significant decline, with a 63.98% drop in price over the past six months, aligning with the company's recent strategic shifts and timeline adjustments.
InvestingPro Tips highlight that Sana is quickly burning through cash, which is particularly relevant given the company's pipeline reshuffling and focus on longer-term development programs. This cash burn rate underscores the importance of the company's strategic decisions to prioritize certain treatments and seek licensing partners for deprioritized programs.
Another InvestingPro Tip indicates that analysts do not anticipate the company will be profitable this year, which is consistent with the extended timelines for proof of concept data and clinical trial results announced by Sana. This information provides context for investors considering the company's long-term potential in the autoimmune and diabetes treatment markets.
For readers interested in a more comprehensive analysis, InvestingPro offers 8 additional tips for Sana Biotechnology, providing a deeper understanding of the company's financial health and market position.
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