Sana Biotechnology Pivots Manufacturing Strategy, Halts Washington Plant Build-Out

Manufacturing Shift Sparks Financial Repercussions

Sana Biotechnology, a prominent player in the cell and gene therapy sector, has announced a significant shift in its manufacturing strategy. The company will now rely on Contract Development and Manufacturing Organizations (CDMOs) for its production needs, leading to the suspension of further build-out at its internal manufacturing facility in Bothell, Washington.

This strategic pivot, revealed in Sana's second-quarter financial results, has resulted in a substantial non-cash impairment charge of $44.6 million. The charge primarily relates to the 80,000-square-foot Bothell facility, which Sana had opened just a year ago in August 2024. Consequently, the company reported a net loss of $93.6 million for the quarter.

CDMO Landscape and Cost-Saving Measures

Sana cited the "increased availability of manufacturing capacity at third-party CDMOs for cell and gene therapy products" as a key factor in its decision. This shift allows the company to better align with its current understanding of near-term manufacturing requirements.

In a move to optimize costs, Sana plans to explore potential subleases for both the Bothell site and additional lab/office space in Seattle. This decision marks a significant departure from the company's previous strategy, which had anticipated savings of approximately $100 million over three years by relocating production from Fremont, California to Bothell.

Financial Challenges and Clinical Progress

Despite raising an impressive $588 million in its 2021 initial public offering, Sana has faced financial headwinds in recent years. The company has implemented cost-cutting measures, including trimming about 30% of its workforce and scaling back certain product development initiatives.

However, amidst these challenges, Sana has reported encouraging progress in its clinical pipeline. Notably, the company's potential "functional cure" for type 1 diabetes, UP421, an allogeneic primary islet cell therapy, showed promising results at the six-month mark in June. This development underscores Sana's ongoing commitment to advancing innovative therapies despite its manufacturing strategy shift.