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Painting by the numbers, Sana founders carve up a giant unicorn-sized IPO — for a biotech that hasn’t quite made it to the clinic

Sana Biotechnology is one of those startups that was sketched in on the chalkboard day one in the shape of a unicorn.
A giant unicorn.
And from the numbers the cell therapy 2.0 play spelled out in their S-1 $SANA, it’s clear that the company founders…

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Sana Biotechnology is one of those startups that was sketched in on the chalkboard day one in the shape of a unicorn.

A giant unicorn.

And from the numbers the cell therapy 2.0 play spelled out in their S-1 $SANA, it’s clear that the company founders — led by a pair of major VCs aligned with some high-profile industry figures — are hunting a big chunk of that value for themselves.

The raise they penciled in — $150 million — isn’t likely what they actually have in mind, and it doesn’t do justice to the size of their ambitions.

There are 593,452,519 shares issued and outstanding in the company, of which 270,779,928 are controlled by principals in the company. ARCH has 176 million of that as a result of Bob Nelsen’s decision to come on the board as the big investor in getting the company on its way to raising $705 million — large by any standard in biotech startups.

Just behind ARCH is Flagship Pioneering, Noubar Afeyan’s startup shop with 137 million shares, not included in the execs/directors’ holdings.

The 2 individuals with the biggest stakes are company CEO Steve Harr, credited with 36 million shares, and his longtime colleague, Hans Bishop, the company chairman with 23 million shares. Harr and Bishop, you’ll recall, sold Juno to Celgene 3 years ago for $9 billion, a sum based to a large extent on the value of their first-gen CAR-T, which just missed a year-end deadline for an approval — wiping out a $6.3 billion CVR.

So nothing Juno worked on has yet delivered an actual drug, though that could be rectified at just about any point in Q1.

We don’t know how much the company will price this at this stage, but biotech IPOs ended 2020 selling initially in the high teens and low 20s. So for the purpose of sizing their dollar horizons, a $20 price would be worth a paper fortune of well over a billion dollars. And that’s going into an IPO where they have mapped out bright ideas in cell therapy, but haven’t actually put one of them into the clinic yet.

This is a fortune — prospectively registering a market value of around $12 billion-plus — built on animal data and track records. To put that into perspective, another Flagship startup, Moderna, went public at a value of $7.5 billion, selling shares at $23 in what was then a record-setting debut.

Richard Mulligan

Today, as the company fields a Covid-19 vaccine that succeeded brilliantly in a large late-stage study, the company is worth close to $50 billion.

There’s more. Richard Mulligan, the legendary Harvard gene therapy expert, runs their skunkworks division SanaX, netting a stake of close to 12 million shares that would also be worth a fortune. And Flagship exec Geoff von Maltzahn — whose day job involves setting up another big platform play at Tessera, which just raised $230 million as it starts down a trail to what may well end up as a unicorn style IPO of its own — is down for 7.3 million shares of his own.

This is Sana’s vision manifesto, outlined in the S-1:

We were founded on the belief that engineered cells will be one of the most important transformations in medicine over the next several decades. The burden of diseases that can be addressed at their root cause through engineered cells is significant. We view engineered cells as having the potential to be as therapeutically disruptive as biologics to clinical practice. Our long-term aspirations are to be able 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. We have brought together an experienced group of scientists, engineers, and company builders and combined them with the necessary technologies to move this vision forward. We are developing in vivo and ex vivo cell engineering platforms to revolutionize treatment across a broad array of therapeutic areas with unmet treatment needs, including oncology, diabetes, central nervous system (CNS) disorders, cardiovascular diseases, and genetic disorders, among others. While our current product candidates are all in preclinical development, our goal is to file multiple investigational new drug applications (INDs) both in 2022 and 2023.

In this market, they’re betting it’s a mission statement that is worth billions. And if they’re right, it will get the biotech IPO market started in 2021 with a new definition of success for startups.

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