Sana Biotechnology, an unusually heavily financed cell and gene therapy developer run by former Juno Therapeutics executives, has raised $588 million in an initial public offering, a strong sign that interest in emerging biotechs hasn't waned after a record-setting 2020.
The Seattle-based biotech sold 23.5 million shares at $25 apiece, well ahead of projections it set just last week. The offering gives Sana, which raised more than $700 million while privately held, among the largest ever valuations for a newly public biotech. The valuation is notable as Sana is at least a year away from the start of its first clinical trial.
The lofty numbers put Sana in rare company. Its IPO is the third biggest U.S. biotech offering since 2018 and the largest for any gene or cell therapy company over that time, according to a database compiled by BioPharma Dive. It's also the most significant IPO haul since then for a company without clinical data.
Sana's fundraising suggests the biotech sector is set to continue an IPO boom that began in 2013 but climbed to new heights last year, even as the coronavirus pandemic shook the global economy. Nine other drug developers are expected to go public this week, aiming to raise more than $1 billion combined. Two of them, Landos Biopharma and Sensei Biotherapeutics, priced offerings late Wednesday.
The surging interest in biotech is fueled in part by the sector's work on coronavirus vaccines and treatments. Two of the top performing companies to go public last year, CureVac and Atea Pharmaceuticals, raised funds specifically for COVID-19 research.
But IPO activity was high across the industry. There were 71 biotechs with IPOs of at least $50 million last year, collectively raising nearly $15 billion. Eighty-six percent of those companies now trade above their offering price.
Biotechs developing genetic medicines have performed well, despite a year marred by regulatory and clinical setbacks that have renewed questions about the field. Nine of 11 genetic medicine companies that went public in the U.S. last year have generated positive returns, led by gene editing specialist Beam Therapeutics. Shares in Beam have climbed nearly 500% since its February 2020 debut.
For Sana, expectations will be exceptionally high. The biotech arrives on the public markets with an ambitious, yet unproven technology; a sprawling pipeline of experimental treatments for cancer, heart disease and rare genetic conditions; and leaders who helped navigate Juno Therapeutics to a $9 billion buyout by Celgene in 2018.
In betting on Sana, investors are envisioning a Juno-like outcome. The biotech was an early pioneer in cancer cell therapy and splashed onto the public markets in 2014 with a $265 million IPO, touting an array of treatments in early testing.
From an investor perspective, Juno succeeded. Celgene acquired the company at $87 a share, roughly 3.5-times its initial offering price of $24 and 22-times its initial Series A funding round price.
But Juno hasn't had the impact on cancer its founders envisioned, at least not yet. Delays and clinical setbacks caused Juno to fall behind competitors Kite Pharma — acquired by Gilead in 2017 — and Novartis. Its most advanced, surviving program, a lymphoma treatment known as liso-cel and owned by Bristol Myers Squibb, still hasn't been approved, years after Kite and Novartis' rival products arrived on market.
Some of the key names involved with Juno are taking another shot with Sana. Former Juno executives Steve Harr and Hans Bishop are co-founders, for instance, with Harr serving as Sana's CEO and Bishop its executive chairman. Several other ex-Juno executives have come along with them, like former research chief Sunil Agarwal. Juno's top investor Arch Venture Partners, meanwhile, reprised its role with Sana, and held 28% of the company's shares before the IPO.
Sana's plans are more ambitious than its predecessor, though, and its work to date is more expansive.
Juno's focus was on genetically modifying one type of white blood cell to better target and attack blood cancers. By comparison, Sana aims to tweak an array of different cell types to treat a range of different diseases. Juno raised about $300 million before going public; Sana more than doubled that total. And while Juno amassed a pipeline out of research from three major cancer centers, Sana did so by acquiring three privately held biotech companies — Cobalt Medicine, Cytocardia and Oscine — in deals that could ultimately be worth some $1.5 billion. The biotech even has a "research arm," SanaX, led by longtime scientist and gene therapy pioneer Richard Mulligan, meant to work on improving existing gene and cell therapy technologies.
Sana has roughly 200 employees, 11 publicly disclosed programs in preclinical testing, and much to prove. While cell therapies are approved for a small group of blood cancers, most efforts outside of oncology to use genetic engineering on cells are in very early stages of research.
The company plans to bring "multiple" candidates to human testing in 2022 and 2023, according to a regulatory filing.