Good morning, everyone. Thank you so much for joining us. Really pleased to have with us this morning Dr. Steve Harr, who's the President and CEO of Sana Therapeutics. I'm Salveen Richter. I cover the biotechnology sector. Steve, before we jump into the programs here, perhaps level set us with where the company stands today regarding the portfolio strategy and key priorities, and walk us through what we should look to from the pipeline over the next 12 months. Sure. First of all, thank you for having us, Salveen, and thank people for joining us this morning. I appreciate people listening online as well. As you probably know, we'll make forward-looking statements. Please do take a look at our risk factors to outline some of the risks for an investment. It's hard to actually delve into the portfolio strategy without delving into the pipeline and the programs, because they really drive it. We don't have a commercial program. Maybe I'll just kind of lay out the table a little bit. The company was started really, and we've been building two different technologies. One, and maybe just take a step back, the goal is to be able to use cells as medicines and to be able to engineer cells in vivo to either replace missing cells or to fix damaged cells. The two most important areas we thought to be able to realize that vision were, one, to be able to modify cells, allogeneic cells or someone else's cells, so they could be transplanted and made and replace a missing cell. That is a technology called the hypoimmune technology. I'll come back to that in a second. The second is to be able to modify genes in vivo and deliver the genetic material. You can more or less do anything you want to a cell in vitro or in a Petri dish. The hard part has been doing that in vivo. To kind of go into that, the majority of the company's capital is allocated towards the hypoimmune platform. The hypoimmune platform, as I said, is a series of genetic modifications that we believe will hide cells from recognition by the immune system and rejection of allogeneic cells by the immune system. The most important area that we're applying that is type 1 diabetes. Type 1 diabetes is a really rare opportunity when you take a step back and think about it. It's a disease that affects about 9 million people in the world, almost 2 million in the United States. It grows at about 5% a year. It's a disease where for people who have it, they are likely to live 10-15 years less than someone without it. During that time, they face a number of complications. They can have blindness, heart attacks, strokes, amputations. They also have the complexity of day-to-day management of their blood sugars. If they take too much insulin, they can die or have other serious side effects from hypoglycemia. You have all of that, and you have a disease where there really hasn't been meaningful progress in 100 years. Up until 100 years ago, and really the discovery of insulin, it was a death sentence to get type 1 diabetes. There have been modified forms of insulin and better ways to monitor your glucose. It is more or less the same disease. We have this chance and a goal to be able to give patients a single treatment, one therapy, where they will end up with normal blood sugars for life with no more insulin and no immunosuppression. It will work. It may not be safe. We may not be able to scale it. We may not have capital. There's still a lot of risks along the way. I think all of the boxes have been checked to turn this into a real therapeutic for patients. We'll go through that. The second area, probably where we allocate capital, is around an allogeneic CAR-T program. That allogeneic CAR-T program, we're taking forward both in oncology and in the autoimmune setting. It's a difficult place to develop a drug right now. I think that the investor base has a bit of fatigue around CAR-T cells. We'll come back to kind of how we think about that in a second. It's an area where there's a lot of competition, right? It is also an area where you offer patients, at least some percentage of patients, the opportunity for a single treatment and maybe a long-term durable remission or even a cure. We have made some good progress there. The third is in vivo delivery of genetic material. Those are kind of the three areas. As I think about portfolio strategy, really we have asked, given the complexities of the market, and someone said to me last week and it came up, I had not seen this person in a while, and said, you know, it has been a tough market for the last few years. Healthcare has been the worst performing sector. Within healthcare, biotech has been the worst performing sector. Within biotech, cell and gene therapy has been the worst performing subsector. How are you doing? Right? It is something where we have to be very thoughtful about capital allocation. Really within each of those three areas, I would say just start with within the broad portfolio, we will invest in type 1 diabetes at all costs. Right? That was something that I kind of think of as a generational opportunity, and it will be protected. Everything we need to understand is it a source of capital or a use of capital. If it's a use of capital, is it something that our investor base broadly wants to pay for? I'm quite confident our investor base broadly wants to pay for type 1 diabetes. I'm less confident that it wants to pay for some of these other areas, which means that if we can't find ways to turn them into sources of capital, mainly through partnerships and things like that, they'll have a difficult time moving forward. That's a little bit about how we thought about portfolio strategy and where we are with the programs. Great. Delving in here to your type 1 diabetes portfolio, your lead program is 451, which is a hypoimmune iPSC-derived islet cell therapy for type 1 diabetes. You're expected to file an IND in 2026. In parallel, we've seen data from investigator-sponsored trials. Help us understand how the IST differs from your lead program and what the key IST findings are that support your 451 development. Yeah. IST being investigator-sponsored trials, you said. Take a step back. Type 1 diabetes immunologically is complicated, but physiologically it is pretty straightforward. Physiologically, a patient or a person who has type 1 diabetes, their immune system has destroyed all their pancreatic beta cells. They no longer make insulin in response to glucose. Insulin replacement therapy has kept people alive, but it is difficult. About 25 years ago, the idea would be, can we replace these pancreatic beta cells and return a patient to normalcy? Right? About 25 years ago, a group led by James Shapiro in Canada did the first pancreatic islet transplants. What they did is they took from a cadaver or a recently deceased person, their pancreas, isolated out pancreatic islets. Islets are alpha, beta, and delta cells. I will go back and forth between those. They isolated the pancreatic islet, which gave patients new pancreatic beta cells and transplanted them. The patients did amazingly well. These patients, many of them are now out 10, 15+ years, and they're off insulin. There are two big problems with that. One, it's not a very good supply source. Right? It's not scalable. It's very variable by how much perimortal kind of ischemia someone's had. Two, there aren't that many patients for whom lifelong immunosuppression is better than lifelong insulin. There have been thousands of these, but this is a disease that affects millions. A few years ago, several parties have started doing pluripotent stem cell-derived islets. You can take a pluripotent stem cell and make it into most cell types and made them into pancreatic islets. They transplanted that. That seems to work. It works very well. It is probably a more consistent result. 100% of patients have benefited to date. It sounds like it is likely going to be more scalable. You still have the problem of immunosuppression. The key last step in our mind to be able to prove that a cure of this disease was inevitable was getting rid of immunosuppression. What we did in this investigator-sponsored trial is we partnered with a group in Uppsala, Sweden, who ran it. That is where the Nordic network is run out of, and they do a lot of these islet transplants. We applied the gene modifications that we use, which you can get into, to hide these cells from the immune system to a cadaveric islet. It worked. The patient is now making insulin, and there is no immunosuppression. He's making insulin for the first time now in over 35 years. We updated 12-week data. That looks great. The patient had very consistent levels of a protein called C-peptide. When our beta cells make insulin, they actually make proinsulin. When it's secreted, it's cleaved into insulin and C-peptide. C-peptide is a one-to-one measurement of the amount of insulin that our body's making. This patient's making insulin for the first time in 35 years. In a mixed meal tolerance test, we've shown that it's glucose-sensitive. Eat a big meal and make more insulin. The third is we can see them both in MRI, and we've shown them in a PET scan as well. You know they're beta cells. It's a simple surgical incision into the arm. The patient's making his own insulin. That, in our mind, kind of closes the circle on all the components you need to be able to have a curative therapy with this disease. What SC451 is, it's a gene-modified pluripotent stem cell. You start with a single cell, literally one cell. You look, and you really understand its genome, its genomic stability, everything about it. Then we grow them many, many times, manifold. Then you differentiate them into pancreatic islets. What we hope we have there is a real therapeutic. Right? It's a consistent product over time that is scalable and can be transplanted and made broadly available for patients. Where, again, the goal is one treatment, it's intramuscular into the arm. A patient will end up with normal blood glucose, with no insulin and no immunosuppression for life. That's been a challenge to make SC451, which is the drug. I can get into that in a second. That is the big difference. It is a stem cell-derived therapy that's scalable and consistent over time. Whereas the other was a cadaveric islet where we applied the gene modifications at a subscale with the goal of just proving the immunology, which we did. By the way, we'll have six-month data from that at the American Diabetes Association meeting on June 23rd, 9:00 A.M. Central Time, in a plenary session at that meeting. Before we jump over to scale, regarding read-through to your programs, are there any remaining questions on durable HIP-modified cell survival in your drug or in the CAR-T setting that we or anything that we need to ascertain on this front? From, sorry, anything left in the CAR-T program, you're saying? Questions regarding durable HIP-modified cell survival. Okay. Yeah. HIP, we call it HIP hypoimmune platform. That's it. What is the—so we've now shown this in multiple contexts that we can make these gene modifications and the cells are not recognized by the immune system and they survive, right? We've shown this in type 1 diabetes where there's zero immunosuppression on board, and a patient actually has a pre-existing immune response to that cell, right? It's an autoimmune disease where they destroy all pancreatic beta cells. Our immunologist really felt like if you saw no immune rejection at a month, that there was nothing that would capture it. Others have said we'd like to see three months. We've shown you. We've heard from competitors and things that people should hold out until six months. You don't have that soon. I think to get past six months, some people may say they want a year. People want more. After a year, I can't imagine anybody can really say much. That's really that one. We've also applied, as you said, these to CAR-T cells in multiple settings, both in terms of targets, CD19 and CD22 in people, and in both autoimmune disorders and in oncology. We've never shown you the autoimmune data. We have shown you oncology data that show that there's no immune response to these cells. I think it's pretty well established. In that setting, patients are getting lymphodepleting chemotherapy, which beats up their immune system. We're targeting what we showed you, CD19 or CD22, which beats up their immune system. It's a little bit less robust test of the platform than the type 1 diabetes, which is about the highest bar you can get. It worked. I think it's, I won't tell you it's going to work in every setting for every cell type. I think every one needs to be discovered or looked at separately. I do think it's a broadly applicable technology across multiple cell types and across pretty much all patients. The IST assessed an implementation of a low dose of modified cells, roughly 2%-7% of what's needed for insulin independence. If you were to scale here, is there any risk that injecting 25 times more cells could somehow overcome the hypoimmune evasion mechanism? No. No. In fact, one of the things that we show, when you do this cadaveric islet program, you take a, let's just say, an X number of cells, and we make three genetic modifications to them. Right? We knock out two genes, knock in one. Only about 50% of cells have all gene edits. We can look at unedited cells, partially edited cells, and fully edited cells. What you see is a very robust immune response and killing of the cells that are not fully edited. Even at that, you can see that there's an immune response already. We are completely capable of mounting an immune response to this number of cells. The other challenge is as you increase dose. One is scale. Right? It's manufacturing. Two, there's volume. Right? We have to make sure that we don't yet know what the volume will end up being that we inject. It might have been more than one injection, more than one site. I mean, those things we'll have to see. We have to really figure out our final formulation and the concentration of cells to understand that. We're not quite there yet. From an immunologic perspective, it's pretty straightforward. I mean, there's already plenty of cells in there to have an immune response. They generated one, the patient did, against on then partially edited cells. They will not see these fully edited cells. As you noted, you're giving an oral presentation on the IST at the upcoming ADA meeting. Can you frame expectations here? Will we see any new data that we haven't seen previously with regard to follow-up? Could we see some of the preclinical data from 451 as well at the conference? I'll start there. First part. What you should expect, I've been really clear what I think will happen here. Once you get past a month, these cells are going to do fine. What you should see is that at six months, I hope, you have no evidence at all of the condition. The C-peptide levels are stable. You get glucose-sensitive insulin secretion. You see on MRI that they look more or less the same. I mean, all that stuff should be true. If it isn't, I'll be surprised. We'll have to see what the data really are. The patient just came in, just hit the six-month visit. I think we disclosed that original presentation. The patient was transplanted early December. It would have come in in the last few days. That would be my expectation. We'll see what we have. I don't think we'll see beyond what you've seen at one month and 12 months in terms of parameters. I presume that we'll be more or less presenting the same parameters, but at six months. They may do something different. From the SC451, the stem cell-derived therapy, not as part of that presentation. There won't be more from it. You've seen a lot. I kind of think of this as there are four major scientific challenges to making this vision of a gene-edited stem cell-derived therapy a reality. The first is you need to overcome autoimmune and allogeneic rejection. Let's check that box, and you'll see that data. Hopefully, it would be true at six months as well. Number two is you have to make the drug at a purity, potency, and yield to run a clinical study. We've done that. Others have. I mean, so we've done that. Number three is you have to make a gene-modified master cell bank. So a single cell you start with, right, where as you try to make trillions and trillions of cells, you have real genomic stability. What you'll see if you're not extraordinarily careful in the field, and I'm not sure anybody's ever made a GMP gene-modified pluripotent stem cell bank, is you see the emergence of some mutations. We've now done that, we think. We have an upcoming meeting with the FDA that's very soon where we will hopefully align on what the testing strategy is that says, yes, you've actually kind of accomplished that. If we have, I think that's another many-year advantage for the company. Because again, I think it's something that we struggled with for a while. The fourth is you have to make these cells at a scale that allows us to treat a disease that has millions and millions of people. We're not close. Right? Of these four big challenges, I think we've really nailed three. We have one to go. We haven't really, really invested dramatically in that last question yet. We've been really focused on the first three. We'll ultimately have to get to that fourth to make the important medicine we hope we have. Can you speak to your progress in generating a master iPSC cell bank? Yeah. So it's been really hard. It's been really hard. What we're trying to do is we knock—sorry, just I don't even want to have enough water. We knock two genes out, and we knock two genes in. Right? The two genes get knocked into a safe harbor site that is known by us to be where you see no epigenetic modification of the expression over time, nor do you see a change as you go through differentiation states. What we're knocking in is both CD47 for overexpression as well as a safety switch, so we can kill these cells if we want to. The challenge has been as we make those gene modifications and grow the cells over time, there's a lot of stress that comes to these cells. If you think about it, every patient is going to have a dose that's plus or minus a billion cells. If you say you need a little bit more than that from every batch to be able to do testing, let's just say it's about 2 billion cells per dose. If you want to treat 1,000 people, that's 2 trillion cells that you have to make. If you want to treat 100,000 people, that's 200 trillion cells a year. If you just want to treat 100,000 people a year for a decade, you have only treated 10% of people. The scale of this is just so large. You just see these mutations come up. It's taken us a long time to figure out how to really make these cells without mutations arise. I think it's three things that it takes. You have to really have a really high-quality starting cell. The conditions you do this under are super important. You have to have luck. I mean, I think all three of them come together to create a single cell that we've now tested. The one we have, which I really hope is one we take forward, we've gone through over 60 divisions, which is two to the 60th, is over a quintillion cells. To put it in perspective, right, you could treat millions of people with that number. We have done differentiation and transplanted cells into mice and seen them out 15 months. They function. You see no histologic abnormalities or emergence of any tumors. It is well tested. It is scalable. It's got all of the features that we want it to have to be able to treat basically any person in the world. Fingers crossed that we align with the FDA that that's the right cell line to take forward. It's been hard. It's been really, really hard. Maybe speak to how SC451 is differentiated from the competitors out there from Vertex and CRISPR. I'm going to start by saying I wouldn't focus very much on competitors. And not because they're not good, but because it's going to be a competitive because if you just take your most idealistic thinking, which is the company somehow makes 100,000 patients of drug per year. Right? And that would be spectacular. And if you put some reasonable price on that, you can see that's a gigantic business. Right? I mean, if you just pick one fibrosis treatment from Vertex alone, that would be over a $40 billion a year revenue number. Right? So you do 100,000 patients per year. And you do that for a decade, you will have treated around 10% of type 1 diabetics. And by 2040, it will be about 7%. Right? You will not be treating, you will just be at a level where you are able to treat the infant population, let alone all the prevalence pool that you have to deal with. I think we have to get our own knitting straight. If competitors emerge, that is great. To date, what differentiates our program from others is we get rid of immunosuppression. Every other program requires some type of immunosuppression to hide the cells from immune rejection. I think that can offer a tremendous benefit for some patients. It is unlikely to be as broadly acceptable. I have never met a patient with type 1 diabetes or a person with type 1 diabetes that, if this works like we hope it does, does not want this therapy. I have met very few who want to take lifelong immunosuppression. I'm presuming that all of these people will figure out their own way to go after and get rid of immunosuppression. It will be a competitive market like almost every other field is. Right now, we have a multi-year advantage on everybody on the planet on a gigantic market, which is when we think about all these other areas where you worry about competition from 14 different modalities, 13 different targets, 12 different companies, U.S., China, blah, blah, blah, we get the privilege right now and the burden and responsibility of having a really differentiated therapeutic. Pivoting to the autoimmune disease vertical, walk us through, one, what you've seen on the oncology side that lends confidence to the autoimmune approach, recognizing that there's been a good amount of data from the field in general. Secondly, what we should expect from the upcoming data set release. Before we leave type 1 diabetes, I want to say one last thing. This will work. All the boxes have been checked. Again, we have to make it work for us. This will work for patients. There are three main risks for us. One is capital and time. Two is safety. Safety is a really big risk, which is why we spend so much time on the genomics and on the manufacturing for product purity. Because you can't have emergence of tumors. These patients otherwise will live for decades. Right? The third is we have to figure out scale. Right? We're not there yet. Those are three big things just to think about. Now let's transition to the allogeneic CAR-T program. Take a step back. I think most people recognize that autologous CAR-T cells, which are made from a patient's own cells, have had a tremendous impact in patients with lymphoma, leukemia, multiple myeloma. Increasingly, it looks like they will have a really great impact for patients with a host of autoimmune disorders. The number of autoimmune disorders that they should have a benefit on is probably about 50-75. They are very broadly utilizable for a host of different patients. What we know in the autoimmune setting to date is that what you're really looking for, I think of this as a control delete of the patient's B cell repertoire or their ability to make antibodies. You want to knock every single B cell out of the patient and then let them come back. You can't knock out most likely 20% or 70% or 80% or just circulating B cells, the ones you see in your blood. Because only about 2% of your B cells are actually in your blood. You have to get tissue-resident memory B cells or plasma blasts, or you're probably not going to get that control alt delete. If you hit control alt delete, hopefully you get rid of all the pathologic B cells. That's kind of the goal of these therapies. You would like to let the immune system come back. Hopefully the patient goes on and lives a very normal life from there. What we know from our studies in the oncology setting, right, we use this drug in a host of patients, is that, one, it's safe and well tolerated. Two, we can scale it. We make hundreds of patient doses per manufacturing batch. Three, this is the most important, is that we get a dose-dependent B cell depletion. Right? A deep B cell depletion. What we saw in oncology at low doses was very few patients, few had the deep B cell depletion. As we got to higher doses, every patient had deep B cell depletion. That gives us optimism that we should see the same thing in autoimmune. The fourth thing we learned in oncology is that when you look just kind of at self, like the number, the dose, the dose is a bit higher than it was in the autologous setting, which means that we have to go through the dose escalation with our allogeneic CAR-T cells. It's slower than I hoped it would be just because you've got to get to a higher dose than where we started. What should we expect? I think, again, we know that this drug has some therapeutic benefit. I think the real question is, is it OK, good, or great? To me, OK is it's pretty good. Right? It's got some clinical benefit. Maybe it competes with the T cell engagers, but it's not quite as good as the autologous CAR-T cells. Good is it competes with autologous CAR-T cells. We look pretty similar. We've got this scalability and an ability to offer patients an off-the-shelf therapy that's available tomorrow without having to taper on and off of their immunosuppressants several times. Great is we're better. Right? I think that's really the framework that I look at this from is how do you compare to what is a very dynamic and competitive field. Right? I mean, the challenge with, I think, this field is you have multiple targets. Once you get the target right, you have multiple modalities. Right? You have CAR-T cells and K cells, T cell engagers, ADCs, antibodies. Once you get the target and the modality right, you have multiple companies. Figuring out where we fit into a very competitive landscape is going to be the question that comes out of these data. If we don't think it's very compelling data, we will not move forward with it. I mean, the internal rate of return, I think, on a risk-adjusted basis in type 1 diabetes is spectacular. We have to justify any capital we're spending in other areas with a very high bar. I mean, no guarantees type 1 diabetes works. I mean, there's some, I mean, going to the safety issues we talked about, we could scale it. But that's where our capital should be going. What about the strategy with your CD22 CAR-T, which is going to be used in the post-CD19 setting? Just curious on the back of actually some interesting data at ASCO where we saw data from a dual CD19, CD20 CAR-T. I'm just curious how you're thinking about where CD22 target being employed kind of plays a role here. Yeah. I just start. What's amazing if you look at multiple myeloma is you go back 15-20 years ago, and a patient was diagnosed, and they could expect to live 15-18 months. Today, a patient is diagnosed, and they can expect to live 15-18 years. Right? One of the reasons that's occurred is because there have been a host of different modalities, a host of different targets. Patients are able to serially work their way through many, many modalities and therapies. The same will be true in lymphoma and leukemia. Right? There isn't going to be a single magic bullet. I think if there is going to be a single magic bullet, it would be something like a dual-targeted CAR-T cell. I mean, those are very smart to develop. It's more likely it's going to be serial for patients. I think the most important thing for us in something like this is to understand what to deal with our own knitting, right, and what we can do. I do think CD22 has become more complicated. I think you know there was a company called Cargo that had CD22 targeted autologous CAR-T cell where they had very compelling phase I data. The phase III data were less interesting, right? Very early and robust, high levels of responses that did not last very long. I think that makes it there are reasons that likely that it ran into challenges. They changed the patient population. They changed the drug product. It may be something about CD22. I think the hard part for us is we have to see at least six-month data at scale, right? The number of patients to understand are we really different. That's going to be a high bar for us to keep moving that forward, again, just given all the competing priorities within the company and the necessity to see, I think, long-term, durable, complete responses to be clinically valuable. I think that's a different place than in lymphoma where with CD19, where you see very few recurrences after three months. Here, basically, the majority of patients recurred between three and six months. We have to get a lot of data to understand what we have. One last question, Steve, with regard to balance sheet here. How are you thinking about partnerships and the ability to kind of fund all these programs through development? I think you talked about possible licensing deals as a non-dilutive option. Maybe expand for us where you're thinking of what you're actively exploring and what your strategy is here. We need more money. We can't develop all these drugs in any reasonable scenario ourselves. Those things are both true. In almost any scenario, we will protect this type 1 diabetes franchise. We will ensure we have the capital to go forward. We may be able to do that without a partnership for a while. If someone came forward with a really compelling partnership where our shareholders retained a good bit of value or the value end, where we thought it improved the probability of success, we'd think about it. I think it's a super, super, super high bar. For the other programs in the company, whether that's allogeneic CAR-T cells or we did not talk really about the in vivo CAR-T cells, I think that it's unlikely our shareholders are going to pay for them in any meaningful way over the next year or two. That means that we need a partnership to continue to justify investing in them. I think that that is doable in the allogeneic CAR-T space, but complicated. It will be relatively straightforward for the in vivo delivery, but not completely straightforward. I think there we have to think about, do we find the capital ourselves? Do we slow it down a little bit until the company's in a better place? Do we partner it, or could we spin it in a new company? I think all four of those are always going to be on the table until we decide what to do. That is one where the in vivo delivery of genetic material in a cell-specific way, if we get that right, is a platform in and of itself. Right? You can make many, many different drugs from that. We would like to find a way to ensure that we test it in people before we make any dramatic decision. Right? Right. With that, Steve, thank you so much. Thank you, Salveen. Thank you to everybody for your time and attention.