Condensed Consolidated Balance Sheets

1. Organization

2. Summary of significant accounting policies

3. Segment reporting

4. Acquisitions

5. License and collaboration agreements

6. Restricted cash

7. Fair value measurements

8. Property and equipment, net

9. Accrued liabilities

10. Commitments and contingencies

Liquidity and capital resources

Basis of presentation

Use of estimates

Recent accounting pronouncements

Cobalt Biomedicine, Inc.

President and Fellows of Harvard College

Success payments

Lease commitments

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39941

Sana Biotechnology, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	83-1381173
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
188 East Blaine Street, Suite 400 Seattle, Washington	98102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (206) 701-7914

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	SANA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 29, 2025, the registrant had 266,366,120 shares of common stock, $0.0001 par value per share, outstanding.

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Stockholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	114
Item 3.	Defaults Upon Senior Securities	114
Item 4.	Mine Safety Disclosures	114
Item 5.	Other Information	114
Item 6.	Exhibits	115
	Signatures	116

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report could be deemed forward-looking statements, including those statements highlighted below. In some cases, you can identify these statements by forward-looking words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should,” “would,” or “will,” the negative of these terms, and other comparable terminology. These forward-looking statements, which are subject to risks, include, but are not limited to, statements about:

•

our expectations regarding the potential market size and size of the potential patient populations for our product candidates and any future product candidates, if approved for commercial use;

•

our clinical and regulatory development plans;

•

our expectations with regard to our preclinical studies, clinical trials, regulatory submissions, and research and development programs, including the impact, timing, and availability of data from such studies and trials;

•

the timing of commencement and advancement of future preclinical studies, clinical trials, and research and development programs;

•

our ability to acquire, discover, and develop product candidates and timely advance them into and through clinical data readouts and successful completion of clinical trials;

•

our expectations regarding the potential safety, efficacy, or clinical utility of our product candidates;

•

our expectations regarding our business strategy following the implementation of portfolio prioritizations and adjustments in our business strategy, including with respect to our research and development focus on our remaining programs;

•

our intentions with respect to and our ability to establish collaborations or partnerships;

•

the timing or likelihood of regulatory filings and approvals for our product candidates, including regulatory submissions for clinical trials;

•

our commercialization, marketing, and manufacturing expectations, including with respect to our manufacturing capabilities;

•

impact of future regulatory, judicial, legislative, or other governmental changes or developments in the United States and foreign countries;

•

our intentions with respect to the commercialization of our product candidates;

•

the pricing and reimbursement of our product candidates, if approved;

•

the potential effects of public health crises on our preclinical and clinical programs and business;

•

our expectations regarding the impact of global events, geo-political developments, and macroeconomic conditions on our business;

•

the implementation of our business model and strategic plans for our business and product candidates, including additional indications that we may pursue;

•

our ability to effectively manage our future operations, including our ability to retain and recruit personnel and maintain our culture;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technologies, including the projected terms of patent protection;

•

estimates of our expenses, future revenue, capital requirements, needs for additional financing, and ability to obtain additional capital;

•

our financial condition, including the sufficiency of our existing cash, cash equivalents, and marketable securities to finance all of our operations, and our ability to continue as a going concern;

•

our expectations with respect to our facilities and associated lease agreements;

•

the performance of suppliers, manufacturers, and other third parties we may engage;

•

our future financial performance;

•

our expectations regarding the duration for which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act); and

•

developments and projections relating to our competitors and our industry, including competing products.

We have based these forward-looking statements largely on our current expectations, estimates, forecasts, and projections about future events, our business, the industry in which we operate, and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur in a timely manner or at all. You should refer to the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. New risk factors may emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you should not unduly rely upon these statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Sana Biotechnology, Inc.

(in thousands, except per share amounts)


	September 30, 2025			December 31, 2024
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	103,357		$	127,566
Marketable securities		49,697			24,931
Restricted cash		4,195			3,832
Prepaid expenses and other current assets		4,510			4,479
Total current assets		161,759			160,808
Property and equipment, net		29,931			77,308
Operating lease right-of-use assets		40,704			57,961
Intangible asset		59,195			59,195
Goodwill		140,627			140,627
Other non-current assets		3,216			5,121
TOTAL ASSETS	$	435,432		$	501,020
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,858		$	5,210
Accrued compensation		11,296			14,449
Accrued expenses and other current liabilities		7,991			13,240
Operating lease liabilities		14,368			12,534
Total current liabilities		35,513			45,433
Operating lease liabilities, net of current portion		67,868			81,663
Contingent consideration		115,141			108,968
Success payment liabilities		13,726			4,556
Other non-current liabilities		7,876			9,896
Total liabilities		240,124			250,516
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $0.0001 par value; 50,000 shares authorized; zero shares issued and outstanding as of September 30, 2025 and December 31, 2024		-			-
Common stock, $0.0001 par value; 750,000 shares authorized; 262,264 and 223,923 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		26			22
Additional paid-in capital		1,985,452			1,855,318
Accumulated other comprehensive income		21			14
Accumulated deficit		(1,790,191	)		(1,604,850	)
Total stockholders' equity		195,308			250,504
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	435,432		$	501,020

See accompanying notes.

Sana Biotechnology, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Operating expenses:
Research and development	$	30,106		$	53,206		$	97,056		$	170,528
Research and development related success payments and contingent consideration		3,124			(5,497	)		15,343			4,566
General and administrative		10,285			14,052			32,110			46,763
Impairment of long-lived assets		-			-			44,611			-
Total operating expenses		43,515			61,761			189,120			221,857
Loss from operations		(43,515	)		(61,761	)		(189,120	)		(221,857	)
Interest income, net		1,003			2,579			2,572			8,815
Other income (expense), net		360			(742	)		1,207			(4,648	)
Net loss	$	(42,152	)	$	(59,924	)	$	(185,341	)	$	(217,690	)
Net loss per common share – basic and diluted	$	(0.16	)	$	(0.25	)	$	(0.75	)	$	(0.95	)
Weighted-average number of common shares – basic and diluted		260,494			235,412			245,580			229,076

See accompanying notes.

Sana Biotechnology, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

(in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net loss	$	(42,152	)	$	(59,924	)	$	(185,341	)	$	(217,690	)
Other comprehensive income:
Unrealized gain on marketable securities, net		21			73			7			114
Total comprehensive loss	$	(42,131	)	$	(59,851	)	$	(185,334	)	$	(217,576	)

See accompanying notes.

Sana Biotechnology, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)


	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital			Income			Deficit			Equity
Balance as of December 31, 2024		223,923	$	22	$	1,855,318		$	14		$	(1,604,850	)	$	250,504
Fees incurred related to common stock financings		-		-		(171	)		-			-			(171	)
Vesting of restricted stock		960		-		-			-			-			-
Exercise of stock options		580		1		1,126			-			-			1,127
Stock-based compensation expense		-		-		7,022			-			-			7,022
Unrealized loss on marketable securities, net		-		-		-			(14	)		-			(14	)
Net loss		-		-		-			-			(49,389	)		(49,389	)
Balance as of March 31, 2025		225,463	$	23	$	1,863,295		$	-		$	(1,654,239	)	$	209,079
Issuance of common stock from at the market offering, net of issuance costs of $174		170		-		315			-			-			315
Exercise of pre-funded warrants		4,445		-		-			-			-			-
Vesting of restricted stock		203		-		-			-			-			-
Exercise of stock options		102		-		148			-			-			148
Issuance of common stock related to employee stock purchase plan		127		-		185			-			-			185
Stock-based compensation expense		-		-		6,629			-			-			6,629
Net loss		-		-		-			-			(93,800	)		(93,800	)
Balance as of June 30, 2025		230,510	$	23	$	1,870,572		$	-		$	(1,748,039	)	$	122,556
Issuance of common stock from at the market offering, net of issuance costs of $886		7,272		1		28,624			-			-			28,625
Issuance of common stock from common stock financings, net of issuance costs of $5,625		24,254		2		80,623			-			-			80,625
Vesting of restricted stock		153		-					-			-			-
Exercise of stock options		75		-		158			-			-			158
Stock-based compensation expense		-		-		5,475			-			-			5,475
Unrealized gain on marketable securities, net		-		-		-			21			-			21
Net loss		-		-		-			-			(42,152	)		(42,152	)
Balance as of September 30, 2025		262,264	$	26	$	1,985,452		$	21		$	(1,790,191	)	$	195,308


	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital			Loss			Deficit			Equity
Balance as of December 31, 2023		197,857	$	20	$	1,625,637		$	(60	)	$	(1,338,091	)	$	287,506
Issuance of common stock from at the market offering, net of issuance costs of $113		150		-		1,037			-			-			1,037
Issuance of common stock from follow-on offering and accompanying pre-funded warrants, net of issuance costs of $9,741		21,773		2		180,006			-			-			180,008
Vesting of restricted stock		386		-		-			-			-			-
Exercise of stock options		1,120		-		4,929			-			-			4,929
Stock-based compensation expense		-		-		9,092			-			-			9,092
Unrealized gain on marketable securities, net		-		-		-			45			-			45
Net loss		-		-		-			-			(107,475	)		(107,475	)
Balance as of March 31, 2024		221,286	$	22	$	1,820,701		$	(15	)	$	(1,445,566	)	$	375,142
Fees incurred related to common stock financings		-		-		(16	)		-			-			(16	)
Vesting of restricted stock		52		-		-			-			-			-
Exercise of stock options		548		-		2,361			-			-			2,361
Issuance of common stock related to employee stock purchase plan		323		-		1,077			-			-			1,077
Stock-based compensation expense		-		-		11,380			-			-			11,380
Unrealized loss on marketable securities, net		-		-		-			(4	)		-			(4	)
Net loss		-		-		-			-			(50,291	)		(50,291	)
Balance as of June 30, 2024		222,209	$	22	$	1,835,503		$	(19	)	$	(1,495,857	)	$	339,649
Fees incurred related to common stock financings		-		-		(29	)		-			-			(29	)
Vesting of restricted stock		84		-		-			-			-			-
Exercise of stock options		815		-		1,939			-			-			1,939
Stock-based compensation expense		-		-		10,770			-			-			10,770
Unrealized gain on marketable securities, net		-		-		-			73			-			73
Net loss		-		-		-			-			(59,924	)		(59,924	)
Balance as of September 30, 2024		223,108	$	22	$	1,848,183		$	54		$	(1,555,781	)	$	292,478

See accompanying notes.

Sana Biotechnology, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2025			2024
OPERATING ACTIVITIES:
Net loss	$	(185,341	)	$	(217,690	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		9,697			11,698
Stock-based compensation expense		19,127			31,242
Change in the estimated fair value of contingent consideration		6,173			2,250
Change in the estimated fair value of success payment liabilities		9,170			2,316
Non-cash expense for operating lease right-of-use assets		6,780			7,501
Impairment of long-lived assets		44,611			-
Other non-cash items, net		(7,876	)		(7,853	)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,861			(6,781	)
Operating lease right-of-use assets and liabilities		(1,539	)		7,591
Accounts payable		(3,356	)		(904	)
Accrued expenses and other liabilities		(10,494	)		(5,362	)
Net cash used in operating activities		(111,187	)		(175,992	)
INVESTING ACTIVITIES:
Purchases of marketable securities		(51,209	)		(212,988	)
Proceeds from maturities of marketable securities		26,761			216,347
Purchases of property and equipment		(65	)		(32,994	)
Proceeds from disposal of assets		771			-
Net cash used in investing activities		(23,742	)		(29,635	)
FINANCING ACTIVITIES:
Proceeds from employee stock purchase plan and exercise of stock options		1,617			10,306
Proceeds related to common stock financings, net		109,724			181,000
Proceeds (principal payments), net for tenant improvement loan		(258	)		7,800
Net cash provided by financing activities		111,083			199,106
Net decrease in cash, cash equivalents, and restricted cash		(23,846	)		(6,521	)
Cash, cash equivalents, and restricted cash at beginning of period		131,398			137,349
Cash, cash equivalents, and restricted cash at end of period	$	107,552		$	130,828
SUPPLEMENTAL CASH FLOW INFORMATION:
Purchases of property and equipment included in accounts payable and accrued liabilities	$	-		$	258
Cash received for tenant improvement allowances	$	891		$	7,344
Derecognition of operating lease right-of-use assets for lease modification	$	(2,724	)	$	(6,362	)

See accompanying notes.

Sana Biotechnology, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Sana Biotechnology, Inc. (the Company or Sana) is a biotechnology company focusing on utilizing engineered cells as medicines. The Company’s operations to date have included identifying and developing potential product candidates, executing preclinical studies, establishing manufacturing capabilities, preparing for and executing clinical trials of its product candidates and supporting clinical trials of product candidates developed using its technologies, acquiring technologies, staffing the Company, business planning, establishing and maintaining the Company’s intellectual property portfolio, raising capital, and providing general and administrative support for these operations.

The Company is subject to a number of risks and uncertainties similar to other biotechnology companies in the development stage, including, but not limited to, those related to the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, building out manufacturing capabilities, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s products, the need to protect the Company’s intellectual property and proprietary technologies, and the need to attract and retain key scientific and management personnel. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations with the proceeds from additional equity or debt financings or capital obtained in connection with strategic collaborations or licensing or other arrangements. In the event that additional financing is required, the Company may not be able to raise capital on terms acceptable to it or at all.

In August 2025, the Company completed an underwritten public offering (the Offering) pursuant to which it sold 24.3 million shares of its common stock, including 3.4 million shares pursuant to the full exercise of the underwriters' option to purchase additional shares, and pre-funded warrants to purchase 1.5 million shares of its common stock for net proceeds of approximately $80.6 million, after deducting underwriting discounts and commissions and offering expenses.

In May 2025, the Company entered into a sales agreement (the Sales Agreement) with TD Securities (USA) LLC (TD Cowen), acting as sales agent, pursuant to which it may offer and sell through TD Cowen up to $119.0 million of shares of the Company’s common stock from time to time in a series of one or more at the market equity offerings (collectively, the ATM facility). During the quarter ended September 30, 2025, the Company sold an aggregate of 7.3 million shares of the Company's common stock under the Sales Agreement for net proceeds of $28.6 million, after deducting commissions and expenses.

In February 2024, the Company completed an underwritten public offering pursuant to which it sold 21.8 million shares of its common stock, including 4.5 million shares pursuant to the full exercise of the underwriters' option to purchase additional shares, and pre-funded warrants to purchase 12.7 million shares of its common stock for net proceeds of approximately $180.0 million, after deducting underwriting discounts and commissions and offering expenses.

The Company has incurred operating losses each year since inception and expects such losses to continue for the foreseeable future. As of September 30, 2025, the Company had cash, cash equivalents, and marketable securities of $153.1 million, and an accumulated deficit of $1.8 billion, which includes cumulative non-cash charges related to the revaluation of the success payment liabilities and contingent consideration of $11.3 million and $63.9 million, respectively. Based on the Company’s current operating plan, the Company believes that its existing cash, cash equivalents, and marketable securities as of September 30, 2025, together with the net proceeds received from the Offering and the ATM facility, will be sufficient to fund its planned operations for at least one year from the filing of this Quarterly Report. In assessing its ability to continue as a going concern, the Company carefully evaluated the conditions and events that may raise substantial doubt about its ability to continue operations for one year from the filing of this Quarterly Report. This evaluation considered several factors, including the Company’s current financial condition and available liquidity resources, including the proceeds from the Offering and the ATM facility.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Certain prior period amounts have been reclassified to conform to current period presentation.

The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (SEC) on March 17, 2025 (2024 Annual Report).

Significant accounting policies

The significant accounting policies used in the preparation of these condensed consolidated financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 are consistent with those discussed in Note 2 of the 2024 Annual Report. Selected significant accounting policies are discussed in further detail below.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates. The most significant estimates in the Company’s condensed consolidated financial statements relate to success payment liabilities, contingent consideration, business combinations, accrued expenses, and operating lease right-of-use assets (ROU) and liabilities.

Impairment of long-lived assets

The Company reviews the carrying value and estimated lives of its long-lived assets whenever events or circumstances indicate the carrying values may not be recoverable. Factors that may indicate potential impairment and trigger an impairment test include, but are not limited to, general macroeconomic conditions, conditions specific to the industry and market, business climate or operational performance of the business, and sustained decline in the stock price and market capitalization compared to the net book value.

If a change in circumstance occurs that indicates long-lived assets may be impaired, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. The long-lived asset evaluation is performed at the asset group level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If this review indicates that the carrying amount of the asset group may not be recoverable, an impairment loss is measured as the amount by which the carrying amount of an asset group exceeds its estimated fair value. To measure impairment, the Company uses market participant assumptions to determine the estimated fair value of the asset based on anticipated future cash flows. Any impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the carrying amount of an individual asset will not be reduced below its fair value.

Calculating the fair value of a reporting unit, an asset group, and an individual asset involves significant estimates and assumptions. These estimates and assumptions include, among others, projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparables. Changes in these factors and assumptions used can materially affect the amount of impairment loss recognized in the period the asset was impaired.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard-setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the adoption of any recently issued standards has had or may have a material impact on its condensed consolidated financial statements or disclosures.

In November 2024, the FASB issued ASU 2024-03 Income Statement (Subtopic 220-40) Reporting Comprehensive Income – Expense Disaggregation Disclosures, which requires disclosure of disaggregated information about specific income statement expense categories. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. This ASU is effective for the Company's fiscal year 2025. Early adoption is permitted. The Company is currently evaluating income tax disclosures related to its annual report for fiscal year 2025.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (CODM), the Company's Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. When evaluating the Company's financial performance, the CODM reviews total expenses and expenses by function. Further, the CODM reviews the segment's assets based on total assets reported on the consolidated balance sheet.

The table below is a summary of the segment loss, including significant segment expenses (in thousands):


	Three months ended September 30,						Nine months ended September 30,
	2025			2024			2025			2024
	(in thousands)						(in thousands)
Operating expenses:
Support functions	$	12,311		$	17,347		$	39,619		$	56,171
Research, development, and laboratory		10,483			20,454			31,535			68,191
Stock-based compensation		5,475			10,769			19,126			31,241
Technical operations and manufacturing		4,667			9,617			16,615			31,092
Facility costs		5,406			6,083			15,740			18,257
Other(1)		2,049			2,988			6,531			12,339
Research and development related success payments and contingent consideration		3,124			(5,497	)		15,343			4,566
Impairment of long-lived assets		-			-			44,611			-
Total operating expenses		43,515			61,761			189,120			221,857
Loss from operations		(43,515	)		(61,761	)		(189,120	)		(221,857	)
Interest income, net		1,003			2,579			2,572			8,815
Other income (expense), net		360			(742	)		1,207			(4,648	)
Net loss	$	(42,152	)	$	(59,924	)	$	(185,341	)	$	(217,690	)

(1) Other includes licensing costs, consulting fees, insurance, and business taxes for the three and nine months ended September 30, 2025 and 2024.

In February 2019, the Company acquired 100% of the outstanding equity of Cobalt Biomedicine, Inc. (Cobalt), a privately held early-stage biotechnology company developing a platform technology using its fusogen technology to specifically and consistently deliver various biological payloads to cells (the Cobalt acquisition).

As part of the Cobalt acquisition, the Company recorded an intangible asset of $59.2 million, which consists of in-process research and development that is classified as indefinite-lived until the successful completion of the associated research and development technology, at which point it becomes a finite-lived asset and will be amortized over its estimated useful life. If the research and development technology is abandoned, an impairment charge will be recorded. The Company is actively developing the fusogen technology and, accordingly, the intangible asset is not complete. Amortization will begin when regulatory approval of a product candidate developed using the fusogen technology is obtained in a major market, typically either the United States or the European Union.

The Company recognized $140.6 million of goodwill as a result of the Cobalt acquisition, which is primarily attributable to the value the acquisition provides the Company by complementing the Company’s ex vivo portfolio with in vivo fusogen cell engineering technology and furthering the Company’s research in using engineered cells as medicines. The goodwill is not deductible for income tax purposes. There were no impairments of the intangible asset or goodwill since the acquisition.

Pursuant to the terms and conditions in the Cobalt acquisition agreement, the Company has an obligation to pay to certain former Cobalt stockholders contingent consideration (Cobalt Contingent Consideration) of up to an aggregate of $500.0 million upon the achievement of certain specified development milestones and a success payment (Cobalt Success Payment) of up to $500.0 million, each of which is payable in cash or stock. The Cobalt Success Payment is payable if, at pre-determined valuation measurement dates, the Company’s market capitalization equals or exceeds $8.1 billion, and the Company is advancing a program based on the fusogen technology in a clinical trial pursuant to an investigational new drug application, or has filed, or received approval for, a biologics license application or new drug application for a product developed using the fusogen technology. The Cobalt Success Payment can be achieved over a maximum of 20 years from the date of the acquisition, but this period could be shorter upon the occurrence of certain events. A valuation measurement date would also be triggered upon a change of control of the Company if at least one of the Company’s programs based on the fusogen technology is an active research program at the time of such change of control. If the Company’s market capitalization is below $8.1 billion as of the date of a change of control, the amount of the potential Cobalt Success Payment will decrease, and the amount of potential Cobalt Contingent Consideration will increase. As of September 30, 2025, a Cobalt Success Payment had not been triggered.

The following table sets forth various thresholds for the Company’s market capitalizations as of the date of a change of control and the resulting potential Cobalt Success Payment and additional potential Cobalt Contingent Consideration:


Sana market capitalization upon a change of control and resulting impact to Cobalt Success Payment and additional potential Cobalt Contingent Consideration	Cobalt Success Payment		Additional potential Cobalt Contingent Consideration
	(in millions)
Equal to or exceeds $8.1 billion	$	500	$	-
Equal to or exceeds $7.4 billion, but less than $8.1 billion		150		350
Equal to or exceeds $6.8 billion, but less than $7.4 billion		100		400
Less than $6.8 billion		-		500

The Cobalt Success Payment and Cobalt Contingent Consideration liabilities are carried at fair value, with changes in fair value recognized in research and development related success payments and contingent consideration. As of September 30, 2025 and December 31, 2024, the estimated fair value of the Cobalt Success Payment liability was $12.8 million and $4.2 million, respectively, and was recorded in long-term liabilities. In connection with the change in the estimated fair value of the Cobalt Success Payment, the Company recognized an expense of $4.8 million and a gain of $4.9 million for the three months ended September 30, 2025 and 2024, respectively, and expenses of $8.5 million and $2.3 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025 and December 31, 2024, the estimated fair value of the Cobalt Contingent Consideration was $115.1 million and $109.0 million, respectively, and was recorded in long-term liabilities. In connection with the change in the estimated fair value of the Cobalt Contingent Consideration, the Company recognized a gain of $2.0 million and an expense of $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and expenses of $6.2 million and $2.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Beam Therapeutics Inc.

In October 2021, the Company entered into an option and license agreement with Beam Therapeutics Inc. (Beam), pursuant to which the Company was granted a non-exclusive license to use Beam’s proprietary CRISPR Cas12b nuclease editing technology to research, develop, and commercialize engineered cell therapy products that (i) are directed to certain antigen targets, with respect to the Company’s allogeneic T cell programs, or (ii) comprise certain human cell types, with respect to the Company’s stem cell-derived programs. The Company made an upfront payment of $50.0 million to Beam, which was recorded in research and development expense for the year ended December 31, 2021. Additionally, under the terms of the agreement, the Company may be obligated to pay, with respect to each licensed product, up to $65.0 million in specified developmental and commercial milestone payments as well as royalties. At the time of the entry into the option and license agreement, a member of the Company’s board of directors was a beneficial owner of greater than 10% of the outstanding shares of Beam. In 2024, this director was also affiliated with a member of the board of directors of Beam.

In March 2019, the Company entered into an exclusive license agreement with the President and Fellows of Harvard College (Harvard) to access certain intellectual property for the development of hypoimmune-modified cells.

Under the terms of the agreement, the Company paid to Harvard aggregate consideration of $12.0 million, comprising $9.0 million in common stock and $3.0 million in cash. Additionally, the Company may be required to pay to Harvard up to an aggregate of $175.0 million in success payments, payable in cash, based on increases in the fair value of the Company’s common stock (Harvard Success Payments). The potential Harvard Success Payments are based on multiples of increased value ranging from 5x to 40x, based on a comparison of the fair market value of the Company’s common stock relative to the original issuance price of $4.00 per share at ongoing pre-determined valuation measurement dates. The Harvard Success Payments can be achieved over a maximum of 12 years from the effective date of the agreement. If a higher success payment tier is first met at the same time a lower tier is first met, both tiers will be owed. Any previous success payments made to Harvard would be credited against the success payment owed as of any valuation measurement date so that Harvard does not receive multiple success payments in connection with the same threshold. As of September 30, 2025, a Harvard Success Payment had not been triggered.

The following table summarizes the potential success payments and common stock price required for payment:


Multiple of Equity Value at Issuance	5x		10x		20x		30x		40x
Per share common stock price required for payment	$	20.00	$	40.00	$	80.00	$	120.00	$	160.00
Success payment(s) (in millions)	$	5.0	$	15.0	$	30.0	$	50.0	$	75.0

The Harvard Success Payment liabilities are carried at fair value, with the initial value and changes in fair value recognized in research and development related success payments and contingent consideration. As of September 30, 2025 and December 31, 2024, the estimated fair value of the Harvard Success Payment liability was $0.9 million and $0.3 million, respectively, and was recorded in long-term liabilities. In connection with the change in the estimated fair value of the Harvard Success Payment liability, the Company recognized an expense of $0.3 million and a gain of $0.8 million for the three months ended September 30, 2025 and 2024, respectively, and an expense of $0.7 million and an immaterial gain for the nine months ended September 30, 2025 and 2024, respectively.

The Company maintains standby letters of credit that are collateralized with a bank account at a financial institution in accordance with certain lease agreements. The aggregate amount of such standby letters of credit was $4.2 million and $3.8 million as of September 30, 2025 and December 31, 2024, respectively.

The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy:


		September 30, 2025
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
		(in thousands)
Financial assets:
Cash equivalents:
Money market funds	Level 1	$	51,140	$	-	$	-	$	51,140
U.S. government and agency securities	Level 2		28,920		3		-		28,923
Total cash equivalents			80,060		3		-		80,063
Short-term marketable securities:
U.S. government and agency securities	Level 2		49,679		18		-		49,697
Total short-term marketable securities			49,679		18		-		49,697
Total financial assets		$	129,739	$	21	$	-	$	129,760
Financial liabilities:
Long-term financial liabilities:
Contingent consideration	Level 3		115,141		-		-		115,141
Success payment liabilities	Level 3		13,726		-		-		13,726
Total long-term financial liabilities			128,867		-		-		128,867
Total financial liabilities		$	128,867	$	-	$	-	$	128,867


		December 31, 2024
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
		(in thousands)
Financial assets:
Cash equivalents:
Money market funds	Level 1	$	66,641	$	-	$	-	$	66,641
U.S. government and agency securities	Level 2		25,237		5		-		25,242
Total cash equivalents			91,878		5		-		91,883
Short-term marketable securities:
U.S. government and agency securities	Level 2		19,137		7		-		19,144
Corporate debt securities	Level 2		5,785		2		-		5,787
Total short-term marketable securities			24,922		9		-		24,931
Total financial assets		$	116,800	$	14	$	-	$	116,814
Financial liabilities:
Long-term financial liabilities:
Contingent consideration	Level 3		108,968		-		-		108,968
Success payment liabilities	Level 3		4,556		-		-		4,556
Total long-term financial liabilities			113,524		-		-		113,524
Total financial liabilities		$	113,524	$	-	$	-	$	113,524

The Company measures the fair value of money market funds based on quoted prices in active markets for identical assets or liabilities. The Level 2 marketable securities include U.S. government and agency securities and corporate debt securities and are valued based on either recent trades of securities in inactive markets or quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

There were no available-for-sale debt securities in a material loss position as of September 30, 2025 and December 31, 2024. The Company determined that there was no material change in the credit risk of the investments during the three months ended September 30, 2025. As such, an allowance for credit losses has not been recognized. As of September 30, 2025, the Company does not intend to sell such securities, and it is not more-likely-than-not that the Company will be required to sell the securities prior to the recovery of the amortized cost basis.

As of September 30, 2025, all marketable securities had an effective maturity date of two years or less. Investments in securities with maturities of less than one year, or those for which management intends to use to fund current operations, are included in current assets and classified as available-for-sale. As of September 30, 2025 and December 31, 2024, the balance in accumulated other comprehensive income included net unrealized gains (losses) related to the Company’s available-for-sale debt securities.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities:


	Contingent Consideration			Cobalt Success Payment Liability		Harvard Success Payment Liability
	(in thousands)
Balance as of December 31, 2024	$	108,968		$	4,236	$	320
Changes in fair value – expense (gain)		1,864			105		(12	)
Balance as of March 31, 2025		110,832			4,341		308
Changes in fair value – expense		6,300			3,611		351
Balance as of June 30, 2025		117,132			7,952		659
Changes in fair value – expense (gain)		(1,991	)		4,822		293
Balance as of September 30, 2025	$	115,141		$	12,774	$	952

Contingent consideration

The Company utilizes significant estimates and assumptions it believes would be made by a market participant in determining the estimated fair value of the Cobalt Contingent Consideration at each balance sheet date. The fair value of the Cobalt Contingent Consideration was determined by calculating the probability-weighted estimated value of the pre-specified development milestone payments based on the assessment of the likelihood and estimated timing that the milestones would be achieved and the applicable discount rates. The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. The Company assesses these estimates on an ongoing basis as additional data impacting the assumptions are obtained.

The fair value of the Cobalt Contingent Consideration was calculated using the following unobservable inputs:


	September 30, 2025		December 31, 2024
Unobservable Input	Range	Weighted-Average	Range	Weighted-Average
Discount rates	9.8% – 10.9%	10.6%	11.3% – 12.3%	11.9%
Probability of milestone achievement	5.0% – 55.0%	25.7%	5.0% –55.0%	25.7%

The weighted-average unobservable inputs were calculated based on the relative value of the pre-specified development milestones. The estimated fair value of the Cobalt Contingent Consideration may change significantly as development progresses and additional data are obtained, impacting the assumptions regarding probabilities of successful achievement of the milestones used to estimate the fair value of the liability and the timing in which they are expected to be achieved. In evaluating the fair value assumptions, judgment is required to interpret the market data used to develop the estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions, inputs, and/or different valuation techniques could result in materially different fair value estimates.

The Company utilizes significant estimates and assumptions in determining the estimated fair value of the success payment liabilities and the associated expense or gain at each balance sheet date. The estimated fair value of the Cobalt Success Payment and Harvard Success Payment liabilities was determined using a Monte Carlo simulation methodology, which models the estimated fair value of the liability based on several key assumptions, including the expected volatility, remaining term, risk-free interest rate, estimated number and timing of valuation measurement dates on the basis of which payment may be triggered, and, for the Cobalt Success Payment, the Company’s market capitalization, and, for the Harvard Success Payments, the per share fair value of the Company’s common stock.

The fair values of the Cobalt Success Payments and Harvard Success Payments were calculated using the following unobservable inputs:


	September 30, 2025		December 31, 2024
Unobservable Input	Cobalt	Harvard	Cobalt	Harvard
Expected stock price volatility	75.0%	75.0%	75.0%	75.0%
Expected term (years)	13.4	5.5	14.1	6.2

Property and equipment, net consists of the following:


	September 30, 2025			December 31, 2024
	(in thousands)
Laboratory equipment	$	40,575		$	52,957
Leasehold improvements		39,061			33,344
Construction in progress		-			40,337
Computer equipment, software, and other		4,138			4,836
Total property and equipment, at cost		83,774			131,474
Less: Accumulated depreciation		(53,843	)		(54,166	)
Property and equipment, net	$	29,931		$	77,308

Depreciation expense was $3.2 million and $4.1 million for the three months ended September 30, 2025 and 2024, respectively, and $9.7 million and $11.7 million for the nine months ended September 30, 2025 and 2024, respectively. In the second quarter of 2025, the Company recognized non-cash impairment losses related to construction in progress, laboratory equipment, and leasehold improvements for the Company's manufacturing facility in Bothell, Washington (the Bothell facility) and a portion of the Company's laboratory and office space in Seattle, Washington (the Seattle facility). The losses were recorded as a reduction in the cost of the assets and related accumulated depreciation in the second quarter of 2025. Refer to Note 11, Impairment of long-lived assets for further information.

Accrued compensation and accrued expenses and other current liabilities consist of the following:


	September 30, 2025		December 31, 2024
	(in thousands)
Accrued compensation:
Accrued bonuses	$	6,264	$	7,704
Accrued paid time off		2,537		3,151
Accrued payroll		1,996		3,021
Other accrued compensation		499		573
Total accrued compensation	$	11,296	$	14,449
Accrued expenses and other current liabilities:
Accrued research and development services	$	4,712	$	10,493
Accrued professional fees		1,948		993
Other accrued current liabilities		1,331		1,754
Total accrued expenses and other current liabilities	$	7,991	$	13,240

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

The Company’s lease portfolio primarily comprises operating leases for office, laboratory, and manufacturing space. These leases contain various rent abatement periods, after which they require monthly lease payments that may be subject to annual increases throughout the lease term. Certain leases include options to extend the term. The renewal option is considered in the remaining lease term for the lease only when the Company is reasonably certain it will renew the lease. Certain leases provide the Company with the right to make tenant improvements, including the addition of laboratory space or build-out of manufacturing capabilities, and include a lease incentive allowance.

In June 2022, the Company entered into a lease agreement for 79,565 square feet of office, laboratory, and manufacturing space located in Bothell, Washington. The initial term of the lease expires in February 2039, with the option to extend the lease for up to three additional five-year terms. The lease agreement also provides for up to $19.9 million for reimbursement of tenant improvements, as well as an additional $8.0 million loan for tenant improvements, available at the Company’s election (the Tenant Improvement Loan). The Company elected to receive the Tenant Improvement Loan in the second quarter of 2024 and is obligated to repay to the landlord monthly over the initial term of the lease with interest at a rate of 6.5% per year. As of September 30, 2025, $0.4 million was included in accrued expenses and other current liabilities and $7.1 million was included in other non-current liabilities. The Company is obligated to pay base rent of approximately $68.8 million over the initial term of the lease. In accordance with the lease agreement, the Company has obtained a letter of credit in the amount of $1.6 million.

In the second quarter of 2025, the Company recognized non-cash impairment losses for the operating lease right-of-use (ROU) asset, construction in progress, and laboratory equipment for the Bothell facility, and for the operating lease ROU asset, leasehold improvements, and laboratory equipment for the Seattle facility. The Company also recognized additional non-cash impairment losses for other long-lived assets. Refer to Note 11, Impairment of long-lived assets for further information.

The following table contains additional information related to the Company’s operating leases:

Sana Biotechnology, Inc. 10-Q