Welcome back, to the 46th Annual TD Cowen Health Care Conference . I'm Marc Frahm from the biotech team here. Next up, we're really pleased to have with us, from Sana Biotechnology, their CEO and President, Steve Harr. Maybe to start off with, Steve, you wanna kinda give a kind of overview and level set people on Sana, what you've been working on, and what you view as kinda the key, value-creating milestones for investors over the next 12-24 months or so.
Yeah. Well, first, thank you for having us. Thank you to everybody who's joined us here in the room as well as online. It's a great pleasure to have a chance to tell you about our progress. As you probably know, we'll be making a few forward-looking statements, do refer to our filings. We spent a lot of time on the risk factors. The company was founded with really a goal of going after two super challenging problems in taking this exciting field of cell and gene therapy and turning it into something that was gonna be more actionable and something that would have a broader impact.
The two things that we chose to go after were, one, figuring out whether or not and how we could hide cells from immune recognition when transplanted. Since the advent of transplant medicine, one of the real challenges has been that you put, you know, someone else's cells into your body or an organ, you will reject it. You will see it as foreign and reject it. The way people have overcome that historically has been profound immunosuppression, which has a lot of toxicity and really limits the applicability of the technologies or to use autologous cells, and again, those are very difficult to scale and manufacture. First thing was, can we hide cells from the immune system?
The second is, I think you can more or less do anything you want to the genome in a petri dish, the real challenge is delivering the reagents to the cells in the body. We really wanted to go after this idea of being able to really be able to deliver any payload to any cell in a repeatable and specific way. I'm pleased to say both in terms of overcoming immune rejection and in this in vivo delivery, we've made a lot of progress. I think we'll know, again, within that timeframe you're talking about very clearly whether or not what we're doing has a broad impact or if we still have more work to do.
I think the crown jewel of the company, the drug that I think gets people most excited is a potential one-time curative treatment for people with type 1 diabetes. Type 1 diabetes is a disease where a patient's immune system gets confused, and it knocks out all the beta cells in the pancreas. The beta cell is the only cell in the body that makes insulin. Up until 100 years ago, it was a death sentence. Over the last 100 years, it's been something that people can live with insulin and glucose monitoring.
Just to give you a sense of the scale and the challenge, number one, if you're 22 years old and you're diagnosed with you would think this would be like if you have HIV, breast cancer, or type 1 diabetes. Type 1 diabetes has the shortest expected lifespan today. It's pretty incredible, right? The number of people that have type 1 diabetes in the U.S. alone is more than the number of people who have HIV and multiple sclerosis, it just also gives you a sense of the scale of what this is. Progress has been made, and I think we've got this. About 25 years ago, a group in Canada began transplanting pancreatic islets. I'm gonna use two different terms.
Beta cells make the insulin. I t hink of islets as beta cells plus their support structure, right? People started transplanting pancreatic islets, and they found that from cadavers, that people could remain off insulin for a decade plus. The challenge is it's not a scalable or replicable supply source, and people have to be on lifelong immunosuppression. That's very toxic, and there just aren't that many people for whom lifelong immunosuppression is better than lifelong insulin. The impact, there are thousands of people who've gotten it, but the impact's been pretty limited. Over the course of the last several years, several different parties have shown that you can take stem cells, pluripotent stem cells, and make them into pancreatic islets and transplant those. That's a much more replicable supply source. It's almost certainly more scalable. They've still had the challenge of immunosuppression.
What we've shown over the course of last year, published in The New England Journal of Medicine, is that we can get rid of the immunosuppression. Now all of the component parts are there for a curative therapy. It's a gene-modified stem cell-derived pancreatic islet. We'll transplant that intramuscularly. We will, you know, get through the, hopefully, the regulatory process in the U.S. and other countries this year and start the study. I think it's gonna be relatively straightforward to understand if this is working or not. We kinda think of three separate value inflection points or time points so you can understand. One, do these cells engraft, function, and overcome immune recognition? I think you know that within a matter of a handful of weeks.
The second question is, do you get normal blood glucose, meaning just like what, you know, I have with no insulin, no immunosuppression, and patients who will not need insulin or monitoring or immunosuppression for years and years. I think we'll know that within several months after let's call it two to six months after we start doing this. The third question will be, is this really replicable across many patients? I think, you know, again, if it's like others, it seems to work in basically every patient. You'll probably know that within a handful of patients. That's kinda like the next, call it, you know, under 24 months for the company for that program. The second is we have an in vivo CAR T-cell. I'll be very brief on that.
You know, I can get into that technology and the competitive landscape. We, you know, expect to start a study this year and begin generating data and again, within 12 months, have a pretty good idea of is this really working. This is a CD19. This is a single shot where you inject a, a virus-like particle that goes directly to T-cells and makes a in vivo CAR T-cell. I think you'll. You know what we're taking that forward and first is blood cancers. Things like non-Hodgkin lymphoma. Hopefully we would know, you know, again, pretty quickly if that's working, if you're getting people safely into a complete response.
If you know the CAR T-cell field at all, it's, I've been involved with it for a long time, and it's had a tremendous impact. Its impact has been limited somewhat by scalability and complexity of manufacturing, as well as some of the toxicities that come with the CAR T-cells and the complexities of lymphodepletion. Hopefully we're able to navigate all of those with a single treatment, make the CAR T-cell in the body, and people do well. A lot of information coming in the not-too-distant future, you know, optimistic based on the work we've done that we have, you know, really exciting therapies for both of them.
Okay. Thanks for that overview. Maybe starting still at a bit of a high level with SC451, the islet program. You started to touch on it a little bit in your comments, but there's a few other islet programs out there that are either in the clinic or getting close to the clinic as well. Just may compare and contrast how Sana's approach is different particularly about some of the ones that are also kind of hoping to have gotten rid of immune suppression as well.
Yeah. I'll just start by saying that there are approximately 10 million people in the world with type 1 diabetes. If I get super optimistic about our manufacturing, I can see us treating 100,000 people or something like that. I mean, that's like super optimistic. If you do that, all you do is take the global growth rate from 5% a year to 4%. There's plenty of room for competition. That's gonna be my first thing I say. I presume that others will find out different approaches to make this something that really does work.
You mentioned a few of them. Vertex is a company that is ahead of us, they have a regular stem cell-derived islet where they're going after a very sick group of people who have both high blood sugars persistently, as well as multiple severe hypoglycemic or low blood sugar events per year. That's a very sick population and in need of something much better. They're doing this with immunosuppression. It's a smaller market, but it's one that has a very big unmet need, and hopefully they're successful. There are other companies that are doing kind of hypoimmune attacks. There are two parts of the immune system to think about. There's the adaptive immune system of B and T- cells, and that reacts to specific signals.
There everybody's kind of doing the same thing, which is knock out class I and class II, right? When you do that, our innate immune system says, "Hold on a minute, I don't want these cells here," and it tries to kill them. In particular, natural killer cells will knock them out. Different people have tried different approaches. We overexpress a protein called CD47. We've shown it works in all kinds of animal models. We've now shown it in humans. It's actually, when you take a step back, the only cell that's transplanted successfully is our red blood cells. What's unique about red blood cells, they have no MHC class I, no MHC class II, and they markedly overexpress CD47.
That's not what we do, why we do it, but it does tell you that there's no part of the immune system that's set up specifically to take out those cells. Others are looking at different proteins instead of CD47 to try to take out natural killer cells. I think some people have shown interesting things in vitro assays, and in some cases, those haven't translated into humans. Others have just shown what they're doing in vitro, and they may translate into humans, and we'll just have to see what happens.
You know, Century's one that people ask us a lot. Instead of CD47, they use CD300a. You know, they also have an IgG-degrading enzyme on their cell surface. The, you know, great group of scientists. The chief scientific officer used to work at Sana. Y ou know, I have no reason to think that they won't figure something out over time, and, you know, we'll be rooting for them.
Okay. maybe more specifically on your program, just kind of what is the status of Sana's work to kind of establish that master cell bank and show that comparability and reproducibility of lots, to get the FDA comfortable?
Yeah. Making these drugs is very complicated. I'll start there. The first step in you're taking one cell, and forever that single cell will be what all of your product is derived from, right? That starts with, you take a, you know, in our case it was a young female, O negative blood type female, and we reprogrammed her cells back into an induced pluripotent stem cell. You need to do all kinds of testing to ensure that the genome is really in a good place still, right? We gene modify that. We knock two genes out and we knock two genes in, right?
We knocked out MHC class I, MHC class II, we knock in, overexpress the CD47, and we put in a safety switch just in case something goes wrong, we can kill the cells. As we did that for years, we and others in the field have struggled with gene mutations popping up, right? In particular, there are a couple of DNA repair enzyme defects that seem to be selected for as you're rapidly growing cells. For us, the key was to see that we could do this. We had a GMP genomically stable master cell bank that retained pluripotency and effectively made pancreatic islet cells.
That took us a long time, and we now have done that, and we with an O negative donor, and we have clear alignment with multiple regulators around the world that, you know, again, around the testing and what we have there. That's, that's done, it's released, it sits in a, we don't keep it in a single, we keep them separated, freezers in different geographies just in case something happens. What you do is you thaw a single vial of master cell bank, and then you'll make hundreds of vials of working cell bank. Again, you'll freeze those. Right? You'll take one vial of working cell bank, and then we'll grow that into a number of different stem cells, iPS cells, and then you make islets.
Think of it as, like, for every cell you get in, you get one cell out. It's not quite like that, but it's close enough, right? If a dose is circa 1 billion cells, you need 1 billion iPS cells more or less at the start, and then to get for one patient, right? It'll make them into pancreatic islets. And then all that is is, like, think of, like, an embryo, right? You go from a stem cell to, like... Remember anybody who took biology. Mesoderm, ectoderm, endoderm. It was about there where I tended to fall asleep. But once you have definitive endoderm, you can start making foregut, and then you go to pancreas and then endocrine pancreas. You have to go through that system, and that's what we do for manufacturing. How do you get reproducibility?
Number one. Again, we start with the same cell product every time, which helps. You have to have really a very robust manufacturing process. It's a lot of testing that goes into this. You know, as bad as I said type 1 diabetes is, and it is a very difficult disease to live with, if you have family or friends or anybody that lives with it. That being said, but for us, these patients would likely live for decades. We have a very high safety bar we have to have, to ensure that we're not doing something like causing a tumor in the patient.
Okay. What needs to happen still to, you know, to ultimately file and have an accepted IND, you know, in the next, within 2026? Is it filling out the IND and you have all the data? Is there still data that needs to be generated? Just what... I like to think we can fill out the IND pretty quickly.
Yeah. This is where, yeah, although it always takes longer than you think to kind of put together study reports and things like that. There are two things that have to be completed. One is to complete the non-clinical testing package. You know, the longest pole in the tent on that is just finishing GLP toxicology studies. We've done many animal studies for a long, long time. You know, one would like to think that all we're doing is replicating things we've done in the past under GLP conditions, and hopefully that will turn out to be something that's done.
The second thing is that we have to transfer the manufacturing from, you know, we do it first in our labs, and then you have to make it with GMP material, right, and have a real process. You have to move it into a GMP manufacturing facility with, operators who are, you know, manufacturers, not operators who are research scientists. We have to finish the tech transfer. It's finish the GLP toxicology study, finish tech transfer, make drug, release it, and then go.
As you get closer to the IND, what is kind of the disclosure plan? Do you plan on telling investors once those steps have been done to your satisfaction internally, not talking until an IND is cleared or somewhere in between?
I don't know. I don't know. That's a good question. I think some of it is, you know, our obligations to tell people what is deemed to be material. I'm pretty sure that given the challenges that this field has had, the challenges that we've had, that clearing an IND would be very important, and people would wanna know that. Steps along the way, I think, you know, I don't know if we'll need to disclose. We won't disclose everything we do. You know, maybe we'll do filing. I have no idea. We would definitely let you know. We'll let you know when we have data too, right? That'll be pretty clear.
I think you know pretty quickly, again, within if the cell's engrafted, if you have overcome with this product, immune recognition and immune rejection. If they function. They need to function really well. If you guys have read For those of you who don't know, we did a human study last year where we gene- modified islets that we'd taken out of a person who was recently deceased. So they're cadaveric primary islets. We dosed a low dose into the muscle of a person with type 1 diabetes. What we've shown is that those cells both evade immune detection and they continue to function. The last time we showed data, we were out at 12 months plus.
it was a low dose. you're seeing in endogenous insulin production. The way you measure that is when a beta cell makes insulin, it actually makes something called proinsulin, it's secreted as C-peptide plus insulin in a one-to-one molar basis. you know if you're seeing C-peptide in someone who's never hasn't had it in years and years and years, that the patient's making insulin for the, you know, on their own for the first time. we've just seen What we need to see in the stem cell-derived product is we're not gonna give a very low dose. We're gonna give, you know, a much higher dose. we'd like to see that they're really making lots of insulin. The goal is to get them off of all insulin shots.
That's a good segue into the phase I design. Is that initial, your expected initial dose? Obviously, as you just said, it's gonna be much higher than what you did in that IST with the cadaver cells. Is it high enough that you would expect it to actually achieve those goals of getting people off of insulin, or you're still gonna need to likely do some dose escalation to get to that bigger goal?
I don't know. I mean, I know what the dose is.
Yeah.
We know what the dose is. We have alignment with regulators on what that will be. We will probably disclose that at a different time just because it's a relatively competitive space. You know, I like to think that we're at a dose that will be therapeutically efficacious. If anybody knows Vertex's program, the first patient was a front-page New York Times article. That first patient had a half of their regular dose and was off insulin and fine. To think we will get people off of insulin that first dose. You know, you learn as you go. Biology has this super stubborn way of humbling us.
We'll range, but we'll learn that. First thing you'll be tracking rate is the C-peptide. What level of production need to get to physicians and the patient enough that they are backing off, if not completely removing?
They won't be looking at C-peptide. They'll be watching the patient's glucose in real time. Like, you're gonna see patients are gonna come off of insulin. You have to watch. First, you're gonna be relatively well, because you don't want glucose toxicity on beta cells. They're gonna these cells if some of them will die and they'll release, they have to manage them that so they don't low blood glucose. See these cells gradually engraft better and better, right? Over the course of several months.
Patients will almost certainly entire time be taken off of insulin. Oh, yeah, you'll know. There people are, you know, every person continuous glucose monitor and all of them will be on automatic insulin pumps, and that feedback loop will be just titrating them off of insulin over a couple of months. But to truly have a patient off of insulin, you probably want to sense this level of under 100 we would have something like that. Those times will predict that people will do very well off insulin.
Okay.
By that both exile and so insulin shots because they will have making their own insulin. They won't need insulin anymore.
The cadaver transplant trial reported last year, it was doing injection intramuscularly. The, yeah, the historic cadaver work had often been through portal vein. Just are you gonna stay with the subQ in the muscle, or go?
Again, to step back just for people here that Every field has very predictable challenges. One of the challenges of any cell therapy is can you get the cells to engraft, right? One of the great things is when you can go into a field where somebody else has taken the time to figure that out, right? There have now been thousands of cadaveric islet transplants, and there have been many stem cell-derived islet transplants. The vast majority of those have been with the law into the some kind of radiologic guide. They're injecting the portal vein up. We're not for several reasons. One is, you know, we're putting in gene-modified stem cell-derived cells that are comparable to the...
That makes some people a little bit uncomfortable if they're kind of all over the place, we can't monitor them. We put them in the muscle, which has been used a lot of. You can see them, and you could always, if something went awry, just hopefully just cut them out, right? The second is when you do this intraportal, it's difficult. That is interventional radiology. About 5% of people end up in the hospital. They're from clotting or because they're so likely to clot, they get anticoagulated, and they bleed. We wanna get rid of that problem because you're not gonna democratize it. You're not gonna get If you have 10 million people with this disease and 500,000 of them end up in the hospital, that's really bad, right?
The third is that you're not supposed to have somatic cells in your bloodstream, right? That's usually because cancer has, like, started to metastasize. Our immune system will immediately recognize and kill regular cells in your bloodstream. That's called Instant Blood-Mediated Inflammatory Reaction, IBMIR. We wanted to get rid of that because you lose a lot of cells. We chose to go in the muscle. It turns out, by the way, that the most common surgical endocrine transplant is every time someone gets their thyroid removed, the surgeon has to dissect out the parathyroid. If they don't, you can die from not being able to metabolize calcium. They grind up the parathyroid, and they put it into the forearm muscle of the person.
It happens about 14,000 x a year in the United States. It works every time. This is really well-studied, very well-validated. You can transplant endocrine tissue. You know, we've done it now. All of our animal studies are done, as we've done with humans, right? We will put it into muscle. We think it's safer. We think it's more, it's gonna be more scalable, it's certainly gonna be easier to monitor from that.
Okay. What has that experience with that IST in Sweden, taught you about kinda how to enroll or conduct a trial in this space? Besides the obvious of not having to match a cadaver, donor to a patient, you know, are there other kind of exclusion, inclusion criteria that you plan to approach differently? Maybe more broadly than just at IST because there are, you know, like the Vertex trial that you mentioned before and so on.
I think our goal is for every person with type 1 diabetes to get access to this drug. Everyone. You don't start that way, but you start pretty close to that, right? We'll start at 18 and older. You're not gonna start on kids, but I think we'll get into that pretty rapidly. You know, you wanna avoid some things that can confuse you, like someone who just had a heart attack, when the study that another one of you might We'll have some things.
We'll be a pretty population. If we can't enroll this study, you should really worry about us, because this would be a very broad patient population with many, many patients who are eligible. The fact even that we have an O negative donor, we don't have to match anything like blood type, it's massive. It's just any transplant that's an issue, and that's we're able to take care of that.
Okay. If we roll the clock forward a year and a half from now, hopefully you're starting to have that clinical data rolling out that looks impressive. What do you need to do to then be able to scale to keep moving forward?
Yeah. I would say there are really four important questions for the company related to type 1 diabetes. Number 1, does it work? Once it works, can you scale it? Once you've scaled it, can you figure out the commercial model for a one-time curative treatment, right? All of which is different, right? Then the fourth question underlines all that is, you know, is capital to do it all, right? Those are kind of the major questions for the company. Scaling manufacturing is challenging in something like this, and I wouldn't want you to think that we've already done it. I kinda look at scale in three buckets for us. One will be make enough drug to run a phase I study. I think we can do that now, right?
we lock that process, and the scientists start working on the second stage, which is make enough drug to have a really nice, viable, early commercial launch, right? The third will be broad access. We don't need to solve for the third right out of the gate because there'll be other things that slow us down. Like, you know, we're not gonna launch everywhere in the world at once.
You're gonna have to train sites how to do this intramuscular injection. You're gonna have to get reimbursement, all those, right? I do think we need to be at that program before we can study, right? What makes it hard? I think just the very simplest thing is to say, "Okay, well, manufacturing, it's wild to scale." What they saw was a bunch of that were supposed to protein y ou want to have a stable metabolic, right? Just all of the cells are kind of under the... We're able to just do the same thing.
We have to that, the way that, you know, you're We're taking a stem cell, making it into an islet. Changing the signaling environment very rapidly. You can go from stem to derm, blah, right? You figure out how do I maintain a stable metabolic milieu while I'm rapidly changing the signaling environment, right? The faster, the more shear stress you put on cells and the more likely it is you get mutations. The faster you do it, the more likely it is you make a little stomach, right? You just get off target, make a little bit of GI tract.
Those things, particularly if they're not terminally differentiated, may keep dividing in the patient, right? You don't want those things. That's actually at the heart of it, that's the challenge, right? We'll figure it out. It will probably be less than everybody hopes for out of the gate. I think we'll get there to where it's a very commercially important drug, and we'll just keep making progress on it.
Okay. We're starting to get low on time, but just maybe move to SG293, the in vivo CAR that you touched on a minute ago, at the beginning. Maybe, you know, how does that Fusogen platform differ from some of the other in vivo CAR programs that are out there? We have seen quite a bit of M&A volume around these technologies.
I'm gonna start just scientifically, we made two big bets. I hope they're both right. One is that cell specificity really matters. I think that's not clear. Most people don't believe that. They actually think just getting enough into your target cell is really the goal. We're trying to avoid all the off targets, beause I can get into why. The second is within the CAR T, you could do this with an mRNA, which some people would view as safer 'cause it doesn't integrate into DNA of the cell you're going after, the T- cell in this case. What we wanna see is we're gonna make 100 million, maybe 10 million, who knows, CAR T- cells, you wanna take out 100 billion B cells and tumor cells, right? You need logarithmic growth of your CAR T.
We made the bet that, one, specificity matters, and two, you have to integrate into the target T- cell. That's like the heart of what we've done that's different. There are two different platforms that people are using at the highest level. There's kind of the mRNA LNPs, and you've seen a lot of strategic activity in those, right? That is a bet that just good enough is good enough, and that you don't need to integrate, right? They're easier. If it turns out that they're good enough, they're a lot easier to make than what we're doing, and I think that pharma. That's where you've seen more strategic activity because it feels more like a drug to people, right? We think this virus-like particle, or VLP, is the way to go.
I get our is more specific than others in its delivery, and it has different ways of getting in the cell, which I think will end up being safer. A couple of companies have shown quite impressive early efficacy data, right? Where they're getting basically all patients have undetectable myeloma. I'm hoping we can do something similar on efficacy, where it really works well and that it's a bit safer. And we'll start to learn that this year. I mean, I can get into why they're different. We have a different way of targeting cells than others, which is, which leads to what will hopefully be better safety profile.
Yeah. How would those safety differences manifest? Because is it on the kind of traditional metric we think about with CAR T-cells of CRS and things like that, or it's something completely different?
Yeah.
Yeah.
Three things to worry about safety-wise in these VLPs. First off, what you've seen is, unlike with regular CAR T-cells, there's like acutely a very substantial, acute reaction. It's had grade 3/4 liver toxicity, grade 3/4, cardiovascular effects within the first day or two. That's basically because most of them are utilizing CD3 to enter the cell. CD3 is what we use to activate T- cells. These T- cells are overactivated, right? That we don't do. Second is you should worry about the regular CRS and ICANS, right? You could see it even being worse than with an autologous CAR T-cell, because an autologous CAR T-cell, you're giving someone chemotherapy, and you're knocking out a lot of the target cells, right? We're not gonna do that.
We're just gonna give them a single injection. In animals, that doesn't prove out to be true so far. I think it's because it takes a while to make these in vivo CAR T-cells grow. I'm hopeful that will maintain its safety. The third theoretical risk that we have is we are going to integrate the DNA into the target cell, right? I don't find that to be, I mean, that's something we have to study and be thoughtful around. 40, 50 million people in the United States I'm sorry, in the world, have had HIV. You're using HIV integrase to get in, and none of them have ever gotten a T-cell, like a, you know, tumor or something. It does seem to you know, predict to be relatively safe.
I'm not saying it will never happen, and we need to monitor it, but I think this will be very safe. Those are your three things, and that acute reaction is something a big difference. Hope toxicity, you know, CAR collapse. You can see those things in the off-target 90 and others in clinical model. We look for be very well-tolerated in non-human primates, and so hopefully will translate into people.
I think you've promised data late this year.
I said we'll generate data.
Generate data. Yeah. Okay, what is the plan? Like, when is the disclosure? Is it that you see some CAR T-cells being made.
That's a good question. I don't know.
Some B-cells being killed, or is it, like, induction of a CR?
I think it's when we think we can tell you something that's meaningful. I'm pretty sure within the type 1 diabetes space, within a very small error bar, I could tell you what the right dose is, right? I think with these, we could be a log-off on dose very easily, right? Exactly if we, you know, are we gonna nail the first dose with the right dose level maybe.
You'll know pretty quickly.
Right. Might we be off by a log or something like that? It's possible, and we'll just need, you know, we'll either be too high, and then we'd have to disclose it because of lot of toxicity issues. We'll be too low, and we'll just need to keep going up. I'm pretty sure we're gonna work hard not to be too high. You never know. You'd rather not do something detrimental to people.
Okay. Unfortunately, that we're gonna have to cut off there. We're over time. Thanks a lot, Steve, and everybody in the room as well as online.
Thank you, Marc. Yeah, I'd move you around if anybody has questions.