Sana Biotechnology (SANA), a clinical-stage biotech company specializing in gene and cell therapies, has recently experienced significant moves in its stock performance, attracting investor attention. On Jan. 8, the stock soared close to 162% after the company announced positive news from its cell therapy targeting Type 1 diabetes, which it claims to be a “potentially life-changing cure.”
Last year, the stock fell 55%, while the S&P 500 Index ($SPX) rose 27.6%. However, 2025 has been a prosperous year for the company. SANA stock is up 120% year-to-date, compared to a 0.71% dip in the broader market.
Wall Street analysts believe the stock has a long way to go and could skyrocket by up to 233% this year. Let’s see if this penny biotech stock is a good buy right now.
What Made Sana Biotechnology Stock Soar?
On Jan. 7, after the market closed, Sana Biotechnology announced positive preliminary results from its ongoing study involving patients with Type 1 diabetes.
Founded in 2018, Sana Biotechnology is developing gene and cell therapies aimed at treating a range of diseases, including autoimmune disorders and Type 1 diabetes. The company’s Hypoimmune (HIP) Platform is designed to develop cells outside the body that can bypass the patient’s immune system, allowing for allogeneic cell transplantation without the need for immunosuppressive treatments.
UP421 is Sana’s human HIP-modified pancreatic islet cell therapy, specifically tailored for individuals with Type 1 diabetes. During the study, the company successfully transplanted the therapy into a patient with Type 1 diabetes. The initial results showed that HIP-modified islet cells were able to evade immune system attacks.
CEO Steve Harr stated, “As far as we are aware, this is the first study showing survival of an allogeneic transplant with no immunosuppression or immune-protective device in a fully immune competent individual. Safe cell transplantation without immunosuppression has the potential to transform the treatment of Type 1 diabetes and a number of other diseases.”
Sana intends to advance the study further to assess the safety, durability, and functionality of the transplanted cells.
The company has expressed optimism about its progress, suggesting the potential for a “scalable, curative treatment for patients with Type 1 diabetes.” This development has sparked excitement among both investors and analysts. SANA stock even soared 356% during trading hours on Jan. 8 before closing at a a 160% gain.
What’s in Store for Sana?
Last year, Sana implemented strategic shifts, including restructuring its development pipeline to prioritize treatments for Type 1 diabetes and B-cell-driven autoimmune diseases. The company also underwent significant leadership changes, with Dhaval Patel stepping in as the new chief scientific officer. These transitions are anticipated to shape Sana’s strategic priorities and operational direction moving forward.
In addition to the Type 1 diabetes clinical trial, Sana is leveraging its HIP platform to progress two other trials. The GLEAM trial focuses on SC291, an allogeneic CAR T therapy for B-cell-mediated autoimmune diseases, while the VIVID trial is evaluating SC262, an allogeneic CAR T therapy aimed at CD22+ cancers. The company anticipates releasing the results from both studies later this year.
Investors should be aware that Sana has yet to bring an approved product to market. As a result, the company is heavily investing in research and development to advance its pipeline and remains unprofitable. For the nine months ending Sept. 30, 2024, Sana reported an adjusted operating cash burn of $153.1 million, leading to an adjusted net loss of $208.3 million for the period.
As of the third quarter, the company held $199 million in cash, cash equivalents, and marketable securities, which it expects will sustain operations through 2026. While Sana’s strong liquidity position and lack of debt provide a temporary cushion as it navigates clinical trials and regulatory processes, the significant cash burn and absence of profitability could pose challenges for the stock in the near term.
Is SANA Stock a Buy Now?
Following the announcement of the clinical trial results, many analysts expressed optimism about SANA stock.
As of Jan. 8, HC Wainwright analyst Emily Bodnar maintained a “Buy” rating, with a $11 price target. Additionally, TD Cowen analyst Marc Frahm upgraded the stock to a “Buy” on the same date. Citi also maintained the same stance with a target price of $15. Conversely, JMP Securities maintained a “Hold” rating for the stock.
More recently, Morgan Stanley analyst Vikram Purohit reaffirmed his “Buy” rating for the stock, setting a price target of $9. Purohit highlighted that the encouraging results from the UP421 therapy bolster confidence in Sana’s HIP technology and offer significant “de-risking” for the company’s potential transformative treatments.
Overall, on Wall Street, SANA stock is a “Strong Buy.” Of the eight analysts that cover the stock, six rate it a “Strong Buy,” and two rate it a “Hold.” Based on the average target price of $12.20, the stock has an upside potential of 233.3% from current levels. Its Street-high estimate of $16 further implies the stock can go as high as 337.1% in the next 12 months.
The Key Takeaway
Over the past year, SANA stock has experienced ups and downs, hitting a 52-week high of $12 and a 52-week low of $2.29. This highlights the inherent challenges and uncertainties associated with biotech stocks, particularly those in the developmental phase.
Although the recent rally and potential short-term gains may appear attractive, the company is burning through cash at a rapid pace and has yet to achieve profitability. Investors should weigh these factors, along with the risks tied to a clinical-stage penny biotech stock, before considering an investment in SANA.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.