Up-and-coming cell and gene engineering company Sana Biotechnology Inc. raised $700 million in a first round financing, bumping Moderna Inc., which previously had the highest venture capital (VC) financing of a traditional biotech company to date.

Sana beat Moderna by about $200 million. The Cambridge, Mass.-based messenger RNA (mRNA) firm pulled in $500 million through a series G round in February 2018, just prior to going public that December with the largest biotech IPO on record worth $604.35 million.

While it cannot yet compete with Moderna’s IPO, Sana now boasts not only the largest VC round, but the largest first round, or series A, ever, according to the BioWorld database.

The company emerged in the first quarter of 2019 to focus on cell and gene therapies, as well as gene editing. In a trail of big money, it was founded by executives from Juno Therapeutics Inc., acquired for $10.4 billion in 2018 by Celgene Corp., which itself was later acquired for $74 billion in 2019 by Bristol Myers Squibb Co. Those two acquisitions of biotech developers rank as the 14th and first largest, respectively. Juno completed the ninth largest biopharma IPO raising $304.8 million in 2014.

Little is known about Sana and the company did not immediately return inquiries on June 24, but one of its founding investors, Arch Venture Partners, which also provided early money for Juno, announced in a press release on April 2 that Sana is working on a COVID-19 therapeutic. Arch Venture and another founding investor of Sana, Flagship Pioneering, recently put together $1.46 billion and $1.1 billion funds, respectively, with some of the money going to support companies working on solutions to the pandemic.

Sana, which is Latin for “healthy,” will use the funds from its first round to advance initiatives in gene delivery, immunology, stem cell biology, and gene modification and control. Its approaches include in vivo delivery of genetic payloads to specific cells and ex vivo genetic modifications that hide allogeneic cells from a patient’s immune system. It also seeks to create differentiated cells to replace missing or damaged tissue.

The big picture could include replacing dead cardiomyocytes following a heart attack or dopaminergic neurons in those with Parkinson’s disease. Stem cells also could be turned into endothelial cells, hepatocytes or pancreatic beta cells, but the challenges include manufacturing the cells, developing the right delivery system and overcoming immune rejection and cell death.

The company’s president and CEO, Steve Harr, said Sana is working on potential therapies for cancer, central nervous system diseases, heart disease and various genetic disorders. The financing is expected to bring several therapeutic candidates into the clinic, expand Sana’s portfolio and staff, and build manufacturing capabilities.

Sana launched in January 2019. In addition to Arch, both Alaska Permanent Fund and Bezos Expeditions invested in Juno and Sana. Another founding investor of Sana, F-Prime Capital, was joined by investments from Canada Pension Plan Investment Board, Baillie Gifford, the Public Sector Pension Investment Board, GV, Omega Funds, Altitude Life Science Ventures and several others. Sana’s $700 million first round financing was completed through several tranches.

In March 2019, Sana formed a license agreement with Harvard University’s Office of Technology Development to gain access to methods for producing hypoimmunogenic stem cells. Since then, the company has grown from 70 employees to 200, with offices in Seattle, South San Francisco and Cambridge, Mass. It was co-founded by Harr, Juno’s former chief financial officer and head of corporate development, as well as its executive chairman, Hans Bishop, among others. In 2013, Bishop founded Juno and served as its president and CEO until the Celgene acquisition.

Only one biopharma company has raised more than Sana through a VC financing. Roivant Sciences Inc., of Basel, Switzerland, brought in $1.1 billion in August 2017, but the company is not considered a traditional biotech firm as it deploys assets into subsidiary companies. Two others ranking higher than Moderna are also not traditional biotech rounds. Pro Bono Bio, now called Ascension Healthcare plc, raised $600 million in September of 2011, with half of the money coming from the Russian government, and Boston Pharmaceuticals, which focuses on in-licensing assets, raised $600 million in November of 2015.

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