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What changed in Senti Biosciences, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Senti Biosciences, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+717 added−743 removedSource: 10-K (2024-03-21) vs 10-K (2023-03-22)

Top changes in Senti Biosciences, Inc.'s 2023 10-K

717 paragraphs added · 743 removed · 483 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

143 edited+104 added−153 removed209 unchanged
Biggest changeOur most advanced programs are from our internal pipeline of off-the-shelf CAR-NK programs under which we are pursuing the discovery and development of product candidates designed to improve the therapeutic outcome in certain oncology indications as outlined below: Our CAR-NK Cell Source Our preferred cell source for our off-the-shelf CAR-NK cell pipeline is peripheral blood NK cells because it allows us to immediately leverage an established supply chain, a mature GMP process, and extensive clinical experience to develop our next generation CAR-NK cell therapies as illustrated below. 14 Table of Contents We have chosen to engineer NK cells with our gene circuits based on our belief that NK cells confer the following advantages in relation to other potential immune cell types in oncology: • Innate Killing: NK cells naturally carry multiple activating and inhibitory receptors that enable them to innately kill tumor cells while sparing healthy tissues.
Biggest changeOur CAR-NK Cell Source Our preferred cell source for SENTI-202 and SENTI-301A, our off-the-shelf CAR-NK cell product programs, is peripheral blood NK cells because it allows us to immediately leverage an established supply chain, a mature GMP process, and extensive clinical experience to develop our next generation CAR-NK cell therapies as described below.
In addition, there may be additional federal, state, and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • federal price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the federal physician payment transparency requirements, sometimes referred to as the “Sunshine Act” under the Affordable Care Act, require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to the CMS information related to transfers of value made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests of physicians and their immediate family members; and • analogous local, state and foreign laws and regulations, such as state anti-kickback and false claims laws that may apply to healthcare items or services reimbursed by third party payors, including private insurers, local, state and foreign transparency laws that require manufacturers to report information related to payments and transfers of value to other healthcare providers and healthcare entities, marketing expenditures, or drug pricing, state laws that require pharmaceutical companies to register certain employees engaged in marketing activities in the location and comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
In addition, there may be additional federal, state, and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • federal price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products; 40 Table of Contents • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the federal physician payment transparency requirements, sometimes referred to as the “Sunshine Act” under the Affordable Care Act, require certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to the CMS information related to transfers of value made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners and teaching hospitals, as well as ownership and investment interests of physicians and their immediate family members; and • analogous local, state and foreign laws and regulations, such as state anti-kickback and false claims laws that may apply to healthcare items or services reimbursed by third party payors, including private insurers, local, state and foreign transparency laws that require manufacturers to report information related to payments and transfers of value to other healthcare providers and healthcare entities, marketing expenditures, or drug pricing, state laws that require pharmaceutical companies to register certain employees engaged in marketing activities in the location and comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The patents and pending patent applications in our portfolio can be categorized as relating to our gene circuit platform technologies, including Logic Gating gene circuits, Multi-Arming gene circuits, Regulator Dial gene circuits and Smart Sensor gene circuits; our product candidates, including SENTI-202, SENTI-301A and SENTI-401, as well as other possible pipeline product candidates; and alternative technologies, and our patents and patent application include claims directed to compositions, methods (including preparation, use, or treatment), processes, dosing and formulations.
The patents and pending patent applications in our portfolio can be categorized as relating to our gene circuit platform technologies, including Logic Gating gene circuits, Multi-Arming gene circuits, Regulator Dial gene circuits and Smart Sensor gene circuits; our product candidates, including SENTI-202 and SENTI-301A, as well as other possible pipeline product candidates; and alternative technologies, and our patents and patent application include claims directed to compositions, methods (including preparation, use, or treatment), processes, dosing and formulations.
The process required by the FDA before biologics may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements, or GLP; • submission to the FDA of an investigational new drug application, or IND, which must become effective before clinical trials may begin; • approval by an institutional review board, or IRB, or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practice, or GCP, regulations and any additional requirements for the 40 Table of Contents protection of human research subjects and their health information to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a Biologics License Application, or BLA, after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency and, if applicable, to assess compliance with the FDA’s current Good Tissue Practice, or cGTP, requirements for the use of human cellular and tissue products, and of selected clinical investigation sites to assess compliance with GCPs; • potential FDA audit of the nonclinical and clinical study sites that generated the data in support of the BLA; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologics may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements, or GLP; • submission to the FDA of an investigational new drug application, or IND, which must become effective before clinical trials may begin; • approval by an institutional review board, or IRB, or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practice, or GCP, regulations and any additional requirements for the protection of human research subjects and their health information to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a Biologics License Application, or BLA, after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency and, if applicable, to assess compliance with the FDA’s current Good Tissue Practice, or cGTP, requirements for the use of human cellular and tissue products, and of selected clinical investigation sites to assess compliance with GCPs; • potential FDA audit of the nonclinical and clinical study sites that generated the data in support of the BLA; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
Healthcare Reform In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the Patient Protection and Affordable Care Act (the “ACA”) was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the U.S. pharmaceutical industry.
Healthcare Reform In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in 2010, the Patient Protection and Affordable Care Act (the “ACA”) was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the U.S. pharmaceutical industry.
After exercise of an option, Spark will be responsible for all development, manufacture, commercialization and exploitation in the licensed field, at its own cost and expense, of all in vivo gene therapy products containing an applicable licensed promoter, and we will retain the right to develop, manufacture, commercialize and exploit other products that incorporate the licensed promoters as well as in vivo gene therapy products that incorporate the licensed promoters for uses outside the licensed field.
After exercise of an option, Spark Therapeutics will be responsible for all development, manufacture, commercialization and exploitation in the licensed field, at its own cost and expense, of all in vivo gene therapy products containing an applicable licensed promoter, and we will retain the right to develop, manufacture, commercialize and exploit other products that incorporate the licensed promoters as well as in vivo gene therapy products that incorporate the licensed promoters for uses outside the licensed field.
Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one rare disease designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption.
Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that disease or condition. If a product receives multiple orphan designations or has multiple approved indications, it may not qualify for the orphan drug exemption.
For each licensed promoter-containing in vivo gene therapy product, or licensed product, developed and commercialized by Spark or its affiliates or sublicensees, we are eligible to receive development, regulatory and commercialization milestone payments from Spark up to an aggregate dollar amount in the mid teens millions, and sales milestone payments from Spark up to an aggregate dollar amount in the low hundred millions.
For each licensed promoter-containing in vivo gene therapy product, or licensed product, developed and commercialized by Spark Therapeutics or its affiliates or sublicensees, we are eligible to receive development, regulatory and commercialization milestone payments from Spark Therapeutics up to an aggregate dollar amount in the mid teens millions, and sales milestone payments from Spark Therapeutics up to an aggregate dollar amount in the low hundred millions.
Upon completion of work under the research program for a particular promoter profile, Spark may select and designate, subject to a specified maximum, a certain number of synthetic promoters that are designed, built and tested or identified by us under the research program with respect to such promoter profiles as optioned promoters.
Upon completion of work under the research program for a particular promoter profile, Spark Therapeutics may select and designate, subject to a specified maximum, a certain number of synthetic promoters that are designed, built and tested or identified by us under the research program with respect to such promoter profiles as optioned promoters.
In April 2021, we entered into a Research Collaboration and License Agreement, or the Spark Agreement, with Spark Therapeutics, Inc., or Spark. Under the Spark Agreement, we engaged in a collaborative research program with Spark to design, build and test synthetic promoters that are intended to have each one of five sets of desired characteristics, or promoter profiles.
In April 2021, we entered into a Research Collaboration and License Agreement, or the Spark Agreement, with Spark Therapeutics. Under the Spark Agreement, we engaged in a collaborative research program with Spark Therapeutics to design, build and test synthetic promoters that are intended to have each one of five sets of desired characteristics, or promoter profiles.
In total, we are potentially eligible to receive upfront, opt-in and milestone payments exceeding $645 million if Spark exercises its options for all five promoter profiles and Spark, its affiliates and its sublicensees successfully develop and commercialize five licensed products; we will be eligible to receive additional milestone payments if additional licensed products are developed and commercialized by Spark, its affiliates and its sublicensees.
In total, we are potentially eligible to receive upfront, opt-in and milestone payments exceeding $645 million if Spark Therapeutics exercises its options for all five promoter profiles and Spark Therapeutics, its affiliates and its sublicensees successfully develop and commercialize five licensed products; we will be eligible to receive additional milestone payments if additional licensed products are developed and commercialized by Spark Therapeutics, its affiliates and its sublicensees.
The applicant will receive a fee reduction for the marketing authorization application if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
The applicant will receive a fee reduction for the marketing authorization application if the orphan designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
Globally, it is the sixth most commonly diagnosed cancer, and the fourth leading cause of cancer deaths. In the United States, the rate of death from liver cancer increased by 43% from 7.2 to 10.3 deaths per 100,000 people between 2000 and 2016.
Globally, it is the sixth most diagnosed cancer, and the fourth leading cause of cancer deaths. In the United States, the rate of death from liver cancer increased by 43% from 7.2 to 10.3 deaths per 100,000 people between 2000 and 2016.
In 2017, the FDA established a new regenerative medicine advanced therapy, or RMAT, designation, which is intended to facilitate an efficient development program for, and expedite review of, any biologic that meets the following criteria: (i) the biologic qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; (ii) the biologic is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (iii) preliminary clinical evidence indicates that the biologic has the potential to address unmet medical needs for such a disease or condition.
The FDA established a new regenerative medicine advanced therapy, or RMAT, designation, which is intended to facilitate an efficient development program for, and expedite review of, any biologic that meets the following criteria: (i) the biologic qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; (ii) the biologic is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (iii) preliminary clinical evidence indicates that the biologic has the potential to address unmet medical needs for such a disease or condition.
The NOT GATE functions by recognizing Protective Antigens (PAs), or antigens that are selectively expressed on healthy cells and not on cancer cells, thus limiting on-target, off-tumor killing. By protecting healthy cells, the NOT GATE has the potential to enable more effective on-target, on-tumor killing of tumor cells that express Tumor- Associated Antigens (TAAs).
The NOT GATE functions by recognizing Protective Antigens (PAs), or antigens that are selectively expressed on healthy cells and not on cancer cells, thus limiting on-target, off-tumor killing. By protecting healthy cells, the NOT GATE has the potential to enable more effective on-target, on-tumor killing of tumor cells that express TAAs.
Department of Health and Human Services, as represented by the National Cancer Institute, or the NCI, under which the NCI granted us a worldwide, royalty-bearing, sublicensable license under the NCI’s patent rights related to FLT3-targeting chimeric antigen receptor, or CAR, technology (i) exclusively for the development of a universal or split CAR-based immunotherapy using T-cells or NK cells transduced with lentiviral vectors or other retroviral vectors, depending on the cell type, for the prophylaxis or treatment of cancers expressing FMS-like tyrosine kinase 3, or FLT3, where the CAR construct binds to specific domains and (ii) co-exclusively, with a third party, for the development of a multi-specific FLT3 CAR-based immunotherapy or FLT3-specific regulated or switch or Logic Gated CAR-based immunotherapy using T-cells or NK cells transduced with lentiviral vectors or other retroviral vectors, depending on the cell type, for the prophylaxis or treatment of FLT3-expressing cancers, where the CAR construct contains specific domains, in each case of (i) and (ii), to make and have made, use and have used, sell and have sold, offer to sell and import products covered by the licensed patent rights and to practice and have practiced processes covered by the licensed patent rights.
Department of Health and Human Services, as represented by the National Cancer Institute, or the NCI, under which the NCI granted us a worldwide, royalty-bearing, sublicensable license under the NCI’s patent rights related to FLT3-targeting chimeric antigen receptor, or CAR, technology (i) exclusively for the development of a universal or split CAR-based immunotherapy using T-cells or NK cells transduced with lentiviral vectors or other retroviral vectors, depending on the cell type, for the prophylaxis or treatment of cancers expressing FMS-like tyrosine kinase 3, or FLT3, where the CAR construct binds to specific domains and (ii) co-exclusively, with a third party, for the development of a multi-specific FLT3 CAR-based immunotherapy or FLT3-specific regulated or switch or Logic Gated CAR-based immunotherapy using T-cells or NK cells transduced with lentiviral vectors or other retroviral vectors, depending on the cell type, for the prophylaxis or treatment of FLT3-expressing cancers, where the CAR construct contains specific domains, in each case of (i) and (ii), to make and have made, use and have used, sell and have sold, offer to sell and import products covered by the licensed patent rights and to 20 Table of Contents practice and have practiced processes covered by the licensed patent rights.
Further, Spark will be obligated to pay us royalties in the low-single digits percentage on net sales of each licensed product sold by Spark, its affiliates and its sublicensees, subject to specified reductions and offsets.
Further, Spark Therapeutics will be obligated to pay us royalties in the low-single digits percentage on net sales of each licensed product sold by Spark Therapeutics, its affiliates and its sublicensees, subject to specified reductions and offsets.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; 51 Table of Contents • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and its implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations on certain covered entity healthcare providers, health plans and healthcare clearinghouses as well as their business associates and their subcontractors that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and its implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations on certain covered entity healthcare providers, health plans and healthcare clearinghouses as well as their business associates and their subcontractors that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information.
We are also aware of other companies that are focused on the application of engineered CAR-based immune cell therapies, including NK cells, to oncology, and such competitors include Allogene Therapeutics, Inc., Artiva Biotherapeutics, Inc., Atara Biotherapeutics, Inc., Bristol-Myers Squibb Company, Century Therapeutics, Inc., Caribou Biosciences, Inc., Catamaran Bio, Inc., Cytovia Therapeutics, Inc., Fate Therapeutics, Inc., Gilead Sciences, Inc., Lyell Immunopharma, Inc., Nkarta, Inc., Sana Biotechnology, Inc., Shoreline Biosciences, Inc., Takeda Pharmaceutical Company and Vor Biopharma Inc.
We are also aware of other companies that are focused on the application of engineered CAR-based immune cell therapies, including NK cells, to oncology, and such competitors include Allogene Therapeutics, Inc., Artiva Biotherapeutics, Inc., Atara Biotherapeutics, Inc., Bristol-Myers Squibb Company, Century Therapeutics, Inc., Caribou Biosciences, Inc., Cytovia Therapeutics, Inc., Fate Therapeutics, Inc., Gilead Sciences, Inc., Lyell Immunopharma, Inc., Nkarta, Inc., Sana Biotechnology, Inc., Shoreline Biosciences, Inc., Takeda Pharmaceutical Company and Vor Biopharma Inc.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; 46 Table of Contents • fines, warning letters, or untitled letters; • clinical holds on clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC. The SEC’s Internet website address is http://www.sec.gov.
The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC. The SEC’s Internet website address is www.sec.gov.
Corporate Information We were incorporated under the laws of the State of Delaware on June 9, 2016. Our principal executive office is located at 2 Corporate Drive, First Floor, South San Francisco, California 94080, and our telephone number is (650) 382-3281. Our website address is https://sentibio.com.
Corporate Information We were incorporated under the laws of the State of Delaware on June 9, 2016. Our principal executive office is located at 2 Corporate Drive, First Floor, South San Francisco, California 94080, and our telephone number is (650) 382-3281. Our website address is www.sentibio.com.
Spark is obligated to reimburse us for our costs and expenses incurred in connection with the conduct of the research program.
Spark Therapeutics is obligated to reimburse us for our costs and expenses incurred in connection with the conduct of the research program.
Spark may terminate the Spark Agreement in its entirety, or on a promoter profile-by-promoter profile or licensed promoter-by-licensed promoter basis, following a specified notice period.
Spark Therapeutics may terminate the Spark Agreement in its entirety, or on a promoter profile-by-promoter profile or licensed promoter-by-licensed promoter basis, following a specified notice period.
For each collaboration program, BlueRock may conduct evaluation activities on the option gene circuits from such collaboration program to determine whether to exercise its option, and BlueRock may exercise its option to such option gene circuits together with certain closely related derivative gene circuits, or licensed gene circuits, prior to the expiration of a certain time period, or the option exercise period, which includes a minimum amount of time after the expiration of the three-year research term, delivery of a data package to 36 Table of Contents BlueRock, and completion of a transfer of technology to enable BlueRock’s evaluation activities, whichever happens last.
For each collaboration program, BlueRock may conduct evaluation activities on the option gene circuits from such collaboration program to determine whether to exercise its option, and BlueRock may exercise its option to such option gene circuits together with certain closely related derivative gene circuits, or licensed gene circuits, prior to the expiration of a certain time period, or the option exercise period, which includes a minimum amount of time after the expiration of the three-year research term, delivery of a data package to BlueRock, and completion of a transfer of technology to enable BlueRock’s evaluation activities, whichever happens last.
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the 47 Table of Contents biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Spark may exercise its option for any optioned promoter prior to the expiration of the applicable evaluation period.
Spark Therapeutics may exercise its option for any optioned promoter prior to the expiration of the applicable evaluation period.
National Cancer Institute (NCI) Contract to Support Development of SENTI-202 in Acute Myeloid Leukemia In September 2021, we were awarded funding from the National Cancer Institute in the form of a Small Business Innovation Research (SBIR) contract to support further development of SENTI-202 for acute myeloid leukemia (AML) towards clinical development.
National Cancer Institute (NCI) Contract to Support Development of SENTI-202 in Acute Myeloid Leukemia In September 2021, we were awarded funding from the National Cancer Institute in the form of a Small Business Innovation Research (“SBIR”) contract to support further development of SENTI-202 for AML towards clinical development.
On a promoter profile-by-promoter-profile basis, for each optioned promoters, Spark will have the right to obtain an exclusive, royalty-bearing, sublicensable, worldwide license under our intellectual property rights to develop, manufacture, commercialize and otherwise exploit, for the cure, treatment, palliation, prevention or diagnosis of specified indications, or a licensed field, in vivo gene therapy products incorporating such applicable optioned promoter with respect to such promoter profile and is directed towards specific cell types in the central nervous system, eye, or liver.
On a promoter profile-by-promoter-profile basis, for each optioned promoters, Spark Therapeutics will have the right to obtain an exclusive, royalty-bearing, sublicensable, worldwide license under our intellectual property rights to develop, manufacture, commercialize and otherwise exploit, for the cure, treatment, palliation, prevention or diagnosis of specified indications, or a licensed field, in vivo gene therapy products incorporating such applicable optioned promoter with respect to such promoter profile and is directed towards specific cell types in the central nervous system, eye, or 22 Table of Contents liver.
Biologic manufacturers and other entities involved in the manufacture and distribution of approved biological products, and those supplying products, ingredients, and components of them, are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and other laws, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.
Biologic manufacturers and other entities involved in the manufacture and distribution of approved biological products, and those supplying products, ingredients, and 34 Table of Contents components of them, are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and other laws, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.
Pursuant to the NCI FLT3 Agreement, we must use commercially reasonable efforts to adhere to a commercial development plan, including by achieving certain specified development and regulatory milestones by certain dates, provided that we may request to extend the timelines of such milestones, which the NCI shall not unreasonably deny if the request is supported by a reasonable showing of our diligent performance under the commercial development 33 Table of Contents plan.
Pursuant to the NCI FLT3 Agreement, we must use commercially reasonable efforts to adhere to a commercial development plan, including by achieving certain specified development and regulatory milestones by certain dates, provided that we may request to extend the timelines of such milestones, which the NCI shall not unreasonably deny if the request is supported by a reasonable showing of our diligent performance under the commercial development plan.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory agencies have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory agencies have also required that companies enter into consent 35 Table of Contents decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
The foregoing license is subject to (i) certain rights of the United States government, including an irrevocable, non-exclusive, nontransferable, royalty-free license for the government to practice all licensed patent rights throughout the world and (ii) the NCI’s reserved rights to grant a non-exclusive license to practice the licensed patent rights for purposes of internal research (and not for purposes of commercial manufacture or distribution) at an academic or corporate facility.
The foregoing license is subject to (i) certain rights of the United States government, including an irrevocable, non-exclusive, nontransferable, royalty-free license for the government to practice all licensed patent rights throughout the world and (ii) the NCI’s reserved rights to grant a 21 Table of Contents non-exclusive license to practice the licensed patent rights for purposes of internal research (and not for purposes of commercial manufacture or distribution) at an academic or corporate facility.
We will remain a smaller reporting company if (1) the market value of our common stock held by non-affiliates is less than $250 million as of the last business day of the second fiscal quarter, or (2) our annual revenues in our most recent fiscal year completed before the last business day of our second fiscal quarter are less than $100 million and the market value of our common stock held by non-affiliates is less than $700 million as of the last business day of the second fiscal quarter.
We will remain a smaller reporting company if (1) the market value 44 Table of Contents of our common stock held by non-affiliates is less than $250 million as of the last business day of the second fiscal quarter, or (2) our annual revenues in our most recent fiscal year completed before the last business day of our second fiscal quarter are less than $100 million and the market value of our common stock held by non-affiliates is less than $700 million as of the last business day of the second fiscal quarter.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower.
There can be no 37 Table of Contents assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower.
Clinical trials are conducted under protocols 41 Table of Contents detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments.
An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not 31 Table of Contents bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to 33 Table of Contents predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites.
A CRL will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate 43 Table of Contents to support approval, the FDA may issue the CRL without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling.
A CRL will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling.
A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website, www.sentibio.com, under “Investors”.
A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of our Board of Directors are posted on our website, www.sentibio.com, under “Investors”.
Increasingly, third-party payors are 48 Table of Contents requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.
Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient 50 Table of Contents reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Below are examples of Logic Gates applied to cancer, although Logic Gating may also be applied to various other disease indications. 6 Table of Contents NOT GATE: NOT GATE gene circuits are designed to widen the therapeutic window by enabling effective killing of cancer cells while preserving healthy cells.
Below are examples of Logic Gates applied to cancer, although Logic Gating may also be applied to various other disease indications. NOT GATE: NOT GATE gene circuits are designed to widen the therapeutic window by enabling effective killing of cancer cells while preserving healthy cells.
Due to the Statutory Pay-As-You-Go Act of 2010, 49 Table of Contents estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation, Medicare payments to providers will be further reduced starting in 2025 absent further legislation.
Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation, Medicare payments to providers will be further reduced starting in 2025 absent further legislation.
Spark’s obligation to pay royalties to us will expire for each licensed product when certain licensed patents and regulatory exclusivities have expired in the country of sale and a minimum number of years has elapsed since the first commercial sale of such licensed product in such country.
Spark Therapeutics’s obligation to pay royalties to us will expire for each licensed product when certain licensed patents and regulatory exclusivities have expired in the country of sale and a minimum number of years has elapsed since the first commercial sale of such licensed product in such country.
In the United States, 39 Table of Contents a term of a patent may be lengthened by patent term adjustment (PTA), which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent.
In the United States, a term of a patent may be lengthened by patent term adjustment (PTA), which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
In such a case, the IND may be 29 Table of Contents placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new biologic may request that the FDA designate the biologic as a fast track product at any time during the clinical development of the product.
Fast track designation applies to the combination of the product and the specific indication for which it is 32 Table of Contents being studied. The sponsor of a new biologic may request that the FDA designate the biologic as a fast track product at any time during the clinical development of the product.
These technologies can be categorized as follows: Multi-Arming: Multi-Arming gene circuits are designed to incorporate multiple payloads into a single cell or gene therapy product. These gene circuits are intended to activate various biological pathways in complementary ways to prevent diseases from evading single-target treatments, and thereby potentially improve treatment efficacy.
These technologies can be categorized as follows: 16 Table of Contents Multi-Arming: Multi-Arming gene circuits are designed to incorporate multiple payloads into a single cell or gene therapy product. These gene circuits are intended to activate various biological pathways in complementary ways to prevent diseases from evading single-target treatments, and thereby potentially improve treatment efficacy.
We continually grow and supplement our intellectual property portfolio with new filings and applications not only to strengthen the protection of proprietary technology and intellectual property rights, but also to protect and support the development and commercialization of current and future product candidates.
We continually grow and supplement our intellectual property portfolio with new filings and 27 Table of Contents applications not only to strengthen the protection of proprietary technology and intellectual property rights, but also to protect and support the development and commercialization of current and future product candidates.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a BLA.
These clinical trials are intended to 30 Table of Contents establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a BLA.
Our arrangements with third-party payors, providers and customers, among others, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations in the future that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.
Our arrangements with third-party payors, providers and customers, among others, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations in the future that may constrain the business or financial 39 Table of Contents arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.
Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programs.
Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and 38 Table of Contents manufacturer patient programs.
For 44 Table of Contents original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).
For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).
Additionally, marketing authorization may be granted to a similar product for the same indication at any time if: • The second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; • The applicant consents to a second orphan medicinal product application; or • The applicant cannot supply enough orphan medicinal product.
Additionally, marketing authorization may be granted to a similar medicinal product for the same indication as an authorized orphan product at any time if: • The second applicant can establish that its product, although similar to the authorized orphan product, is safer, more effective or otherwise clinically superior; • The marketing authorization holder for the authorized orphan product consents to a second orphan medicinal product application; or • The marketing authorization holder for the authorized orphan product cannot supply enough orphan medicinal product.
We may terminate the Spark Agreement if Spark or any of its affiliates commences any action challenging the validity or enforceability of the licensed patents, other than in certain specified circumstances, or if Spark’s sublicensee challenges our licensed patents, under certain specified circumstances.
We may terminate the Spark Agreement if Spark Therapeutics or any of its affiliates commences any action challenging the validity or enforceability of the licensed patents, other than in certain specified circumstances, or if Spark Therapeutics’s sublicensee challenges our licensed patents, under certain specified circumstances.
Such expiration shall occur no later than January 2026 unless the parties mutually agree to extend the research term. BlueRock may terminate the BlueRock Agreement in its entirety, or on a collaboration program-by-collaboration program basis, following a specified notice period.
Such expiration shall occur no later than January 2026 unless the parties mutually agree to extend the research term. BlueRock may 24 Table of Contents terminate the BlueRock Agreement in its entirety, or on a collaboration program-by-collaboration program basis, following a specified notice period.
In particular, we have entered into collaborations with Spark Therapeutics, Inc (subsidiary of Roche Holding AG) for the design of Smart Sensors for disease- and tissue-specific gene therapy, and with Bluerock Therapeutics LP (subsidiary of Bayer AG) for the use of Smart Sensors and Regulator Dials for regenerative medicines.
We have entered into collaborations with Spark Therapeutics (subsidiary of Roche Holding AG) for the design of Smart Sensors for disease- and tissue-specific gene therapy, and with Bluerock Therapeutics (subsidiary of Bayer AG) for the use of Smart Sensors and Regulator Dials for regenerative medicines.
Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences. U.S.
Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences. 28 Table of Contents U.S.
For example, this can be implemented by regulating therapeutic payload expression in response to varying concentrations of FDA-approved drugs. Regulator Dials are expected to enable the exogenous regulation of next-generation cell and gene therapies even after they have been delivered in vivo. Existing cell and gene therapies cannot be modulated once they have been delivered into patients.
For example, this can be implemented by regulating therapeutic payload expression in response to varying concentrations of FDA-approved drugs. Regulator Dials are expected to enable the exogenous regulation of next-generation cell and gene therapies even after they have been delivered in vivo.
During the additional two-year period of market exclusivity, a generic marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic product can be marketed until the expiration of the market exclusivity.
During the additional two-year period of market exclusivity, a biosimilar or generic marketing authorization can be submitted, and the innovator’s data may be referenced, but no biosimilar or generic product can be marketed in the EU until the expiration of the market exclusivity.
In connection with the consummation of the Merger on the Closing Date, DYNS changed its name from DYNS to Senti Biosciences, 54 Table of Contents Inc.
In connection with the consummation of the Merger on the Closing Date, DYNS changed its name from DYNS to Senti Biosciences, Inc.
Item 1. Business Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “our,” “our Company,” “the Company” or “Senti” refer to Senti Biosciences, Inc. and its subsidiaries. Overview We are a preclinical biotechnology company developing next-generation cell and gene therapies engineered with our gene circuit platform technologies to fight challenging diseases.
Item 1. Business Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “our,” “our Company,” “the Company” or “Senti” refer to Senti Biosciences, Inc. and its subsidiaries. Overview We are a clinical-stage biotechnology company developing next-generation cell and gene therapies engineered with our gene circuit platform technologies for patients living with incurable diseases.
As of February 19, 2023, we own two United States trademark registrations, five pending and/or allowed United States trademark applications, five foreign trademark registrations, and one pending foreign trademark application. We have also registered multiple internet domain names to further supplement the protection of our brand. Government Regulation The U.S.
As of February 16, 2024, we own two United States trademark registrations, four pending and/or allowed United States trademark applications, and five foreign trademark registrations. We have also registered multiple internet domain names to further supplement the protection of our brand. Government Regulation The U.S.
Employees and Human Capital Resources As of February 16, 2023, we had 122 employees, all of whom were full-time, consisting of clinical, research, operations, regulatory, finance and business development personnel. 29 of our employees hold Ph.D. or M.D. degrees. None of our employees are subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
Employees and Human Capital Resources As of March 13, 2024, we had 48 employees, all of whom were full-time, consisting of clinical, research, operations, regulatory, finance and business development personnel. 13 of our employees hold Ph.D. or M.D. degrees. None of our employees are subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
GPC3 is a Tumor-Associated Antigen expressed in approximately 70% to 90% of human HCCs and in 29-54% of other solid tumors, but not expressed in healthy liver tissue or other human organs after birth. GPC3 has previously been clinically evaluated as a therapeutic target for immunotherapy in HCC.
GPC3 is a TAA expressed in approximately 70% to 90% of human HCCs and in 29-54% of other solid tumors (including lung, ovarian, and thyroid), but not expressed in healthy liver tissue or other human organs after birth. GPC3 has previously been clinically evaluated as a therapeutic target for immunotherapy in HCC.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Intellectual Property Intellectual property is critical to our differentiated technology.
We injected 1:1:1 ratio of effector cells with model leukemia cells that expressed CD33 and FLT3 target antigens, and model “healthy” cells that expressed CD33, FLT3 and the protective EMCN antigen. The three effector cells used in this experiment were either unengineered NK cells, CAR-NK cells with just the CD33 and/or FLT3 activating CAR, and SENTI-202.
In preclinical studies, 1:1:1 ratio of effector cells were injected with model leukemia cells that expressed CD33 and FLT3 target antigens, and model “healthy” cells that expressed CD33, FLT3 and the protective EMCN antigen. The three effector cells used in this experiment were either non-engineered NK cells, CAR-NK cells with just the CD33 and/or FLT3 aCAR, and SENTI-202.
Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the European Union when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the European Union to justify investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the European Union, or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000.
Under Article 3 of Regulation (EC) 141/2000, the European Commission grants an orphan designation in respect of a product if its sponsor can establish that (1) the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the European Union when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the European Union 42 Table of Contents to justify the necessary investment in its development; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the European Union, or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000.
In younger, fitter patients, the goal of treatment is to induce a complete remission (CR) with intensive chemotherapy and consolidate with allogeneic hematopoietic cell transplantation (HCT). Treatment is combined with the respective targeted agents in patients who have CD33‑positive disease or a FLT3‑mutated disease (Mylotarg USPI; Rydapt USPI; Xospata USPI).
In patients who can tolerate more intensive treatments, the goal of treatment is to induce a complete remission (“CR”) with intensive chemotherapy and consolidate with allogeneic hematopoietic cell transplantation (“HCT”). Treatment is combined with the respective targeted agents in patients who have CD33‑positive disease or a FLT3‑mutated disease (Mylotarg USPI; Rydapt USPI; Xospata USPI).
We leveraged this platform to identify the Protective Antigen targets for the SENTI-202 and SENTI-401 programs, thus demonstrating our ability to target both liquid and solid tumors.
We leveraged this platform to identify PA targets for the SENTI-202 and other internal programs, thus demonstrating our ability to target both liquid and solid tumors.
Development of targeted AML treatments is difficult due to the fact that the disease is highly heterogeneous, with more than 200 types of chromosome translocations and mutations having been identified in AML patients. Therapies targeting a single Tumor-Associated Antigen are therefore often insufficient to kill all of the cancer cell subsets in AML, leading to eventual disease relapse.
Development of targeted AML treatments is difficult because the disease is highly heterogeneous. More than 200 types of chromosome translocations and mutations have been identified in AML patients. Therapies targeting a single TAA are therefore often insufficient to kill all the cancer cell subsets in AML, leading to eventual disease relapse.
Leads are selected based on the co-expression of Tumor-Associated Antigens and Protective Antigens in healthy tissues, the localization of the Protective Antigens to the cell surface, Protective Antigen topology (presence of extracellular domain) and Protective Antigen-specific antibody availability. Prioritized Tumor-Associated Antigen and Protective Antigen pairs are further validated in primary cancer and primary healthy tissue samples.
Leads are selected based on the co-expression of TAAs and PAs in healthy tissues, the localization of the PAs to the cell surface, PA topology (presence of extracellular domain) and PA-specific antibody availability. Prioritized TAA and PA pairs are further validated in primary cancer and primary healthy tissue samples.
Smart Sensor: A Smart Sensor is a gene circuit, or combination of gene circuits, designed to precisely detect distinct cell types or disease environments, and thus distinguish between the “disease state” and “healthy state.” For example, Smart Sensors can be engineered to detect whether certain conditions, or disease biomarkers, are present before responding with a specific therapeutic response.
Existing cell and gene therapies cannot be modulated once they have been delivered into patients. 17 Table of Contents Smart Sensor: A Smart Sensor is a gene circuit, or combination of gene circuits, designed to precisely detect distinct cell types or disease environments, and thus distinguish between the “disease state” and “healthy state.” For example, Smart Sensors can be engineered to detect whether certain conditions, or disease biomarkers, are present before responding with a specific therapeutic response.
Thus, on-target, off-tumor killing effects of the therapy may lead to the ablation of hematopoietic stem, progenitor or myeloid cells. This off-tumor killing of HSCs leads to serious clinical sequelae including sepsis and febrile neutropenia contributing to morbidity and mortality.
Due to their nonrestrictive expression, most AML antigens are also expressed on healthy HSCs or myeloid cells. Thus, on-target, off-tumor killing effects of the therapy may lead to the ablation of hematopoietic stem, progenitor or myeloid cells. This off-tumor killing of HSCs leads to serious clinical sequelae including sepsis and febrile neutropenia contributing to morbidity and mortality.
If Spark does not exercise an option for a particular promoter profile prior to the expiration of the evaluation period for such promoter profile, we will retain all rights to the synthetic promoters developed under the Spark Agreement without any further obligations to Spark for such promoter profile. 35 Table of Contents Pursuant to the Spark Agreement, we received an upfront payment from Spark of $3 million.
If Spark Therapeutics does not exercise an option for a particular promoter profile prior to the expiration of the evaluation period for such promoter profile, we will retain all rights to the synthetic promoters developed under the Spark Agreement without any further obligations to Spark Therapeutics for such promoter profile.
Facilities We currently occupy approximately 40,000 square feet of office and research and development space in South San Francisco, CA under a lease that expires in April, 2027, with an option to extend for an additional eight years.
Facilities We currently occupy approximately 40,000 square feet of office and research and development space in South San Francisco, CA under a lease that expires in April, 2027, with an option to extend for an additional eight years. We also subleased our 92,000 square feet of manufacturing space under a sublease agreement to GeneFab that was executed in August 2023.
The effects of the IRA on our business and the healthcare industry in general is not yet known. In addition, President Biden has issued multiple executive orders that have sought to reduce prescription drug costs.
The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the IRA’s Medicare drug price negotiation program. The effects of the IRA on our business and the healthcare industry in general is not yet known. In addition, President Biden has issued multiple executive orders that have sought to reduce prescription drug costs.
Our platform has the potential to enable the development of multiple product candidates that harness the full breadth of our gene circuit platform beyond Logic Gating and Multi-Arming of off-the-shelf CAR-NK cells within oncology. Our additional discovery efforts are focused on a diverse set of cell and gene therapy applications outside of oncology.
We believe our platform can enable the development of multiple product candidates that harness the full breadth of our gene circuit platform beyond Logic Gating and Multi-Arming of CAR or TCR based cell therapies within oncology. Our additional discovery efforts are focused on a diverse set of cell and gene therapy applications outside of oncology.
Thus, the development of therapies targeting AML LSCs is sorely needed, but this has been challenging because LSC targets are often expressed on healthy cells, such as HSCs, leading to on-target, off-tumor treatment-induced toxicities. CAR Cell Therapy for AML The therapeutic administration of CAR cell therapies has considerably advanced the treatment of certain cancers, such as B-cell malignancies.
Thus, the development of therapies targeting AML LSCs is sorely needed, but this has been 8 Table of Contents challenging because LSC targets are often expressed on healthy cells, such as HSCs, leading to on-target, off-tumor treatment-induced toxicities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect our net losses to increase substantially as we: • continue to advance our gene circuit platform technologies; • continue preclinical development of our current and future product candidates and initiate additional preclinical studies; • commence clinical trials of our current and future product candidates; • establish our manufacturing capability, including developing our contract development and manufacturing organization relationships and building our internal manufacturing facilities; • acquire and license technologies aligned with our gene circuit platform technologies; • seek regulatory approval of our current and future product candidates; • expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, manufacturing and commercialization efforts; • continue to develop, maintain, expand, and defend our intellectual property portfolio; and • incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.
Biggest changeFurthermore, we do not expect to generate any revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development, preclinical studies, clinical trials, manufacturing and the regulatory approval process for our current and potential future product candidates. 47 Table of Contents We expect our net losses to increase substantially as we: • continue to advance our gene circuit platform technologies; • commence clinical trials of our current and future product candidates; • continue preclinical development of our current and future product candidates and initiate additional preclinical studies; • acquire and in-license technologies aligned with our gene circuit platform technologies; • seek regulatory approval of our current and future product candidates; • expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, and commercialization efforts; • continue to develop, maintain, expand, and defend our intellectual property portfolio; and • incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.
Further, relevant animal models and assays may not accurately predict the safety and efficacy of our product candidates in humans, and we may encounter significant challenges creating appropriate models and assays for demonstrating the safety and efficacy of our product candidates. In addition, our gene circuit technologies have potential safety risks.
Further, relevant animal models and assays may not accurately predict the safety and efficacy of our product candidates in humans, and we may encounter significant challenges creating appropriate models and assays for demonstrating the safety and efficacy of our product candidates. In addition, our gene circuit technologies may have potential safety risks.
If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or to continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing our product candidates.
If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or to continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing our product candidates.
Additionally, the development and commercialization of potential product candidates under our collaboration agreements could be substantially delayed, and our ability to receive future funding could be substantially impaired if one or more of our collaborators: • shifts its priorities and resources away from our collaborations due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit; • ceases development in therapeutic areas which are the subject of our collaboration; • fails to select a product candidate for advancement into preclinical development, clinical development, or subsequent clinical development into a marketed product; • changes the success criteria for a particular product candidate, thereby delaying or ceasing development of such product candidate; • significantly delays the initiation or conduct of certain activities which could delay our receipt of milestone payments tied to such activities, thereby impacting our ability to fund our own activities; • develops a product candidate that competes, either directly or indirectly, with our product candidates; • does not obtain the requisite regulatory approval of a product candidate; • does not successfully commercialize a product candidate; • encounters regulatory, resource or quality issues and is unable to meet demand requirements; • exercises its rights under the agreement to terminate the collaboration, or otherwise withdraws support for, or otherwise impairs development under the collaboration; 77 Table of Contents • disagrees on the research, development or commercialization of a product candidate resulting in a delay in milestones, royalty payments or termination of research and development activities for such product candidate; and • uses our proprietary information or intellectual property in such a way as to jeopardize our rights in such property.
Additionally, the development and commercialization of potential product candidates under our collaboration agreements could be substantially delayed, and our ability to receive future funding could be substantially impaired if one or more of our collaborators: • shifts its priorities and resources away from our collaborations due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit; • ceases development in therapeutic areas which are the subject of our collaboration; 68 Table of Contents • fails to select a product candidate for advancement into preclinical development, clinical development, or subsequent clinical development into a marketed product; • changes the success criteria for a particular product candidate, thereby delaying or ceasing development of such product candidate; • significantly delays the initiation or conduct of certain activities which could delay our receipt of milestone payments tied to such activities, thereby impacting our ability to fund our own activities; • develops a product candidate that competes, either directly or indirectly, with our product candidates; • does not obtain the requisite regulatory approval of a product candidate; • does not successfully commercialize a product candidate; • encounters regulatory, resource or quality issues and is unable to meet demand requirements; • exercises its rights under the agreement to terminate the collaboration, or otherwise withdraws support for, or otherwise impairs development under the collaboration; • disagrees on the research, development or commercialization of a product candidate resulting in a delay in milestones, royalty payments or termination of research and development activities for such product candidate; and • uses our proprietary information or intellectual property in such a way as to jeopardize our rights in such property.
Our internal computer systems and data processing and those of our third-party vendors, consultants, collaborators, contractors or partners, including future CROs may be vulnerable to a cyber-attack (including supply chain cyber-attacks), malicious intrusion, breakdown, destruction, loss of data privacy, actions or inactions by our employees or contractors that expose security vulnerabilities, theft or destruction of intellectual property or other confidential or proprietary information, business interruption or other significant security incidents.
Our internal computer systems and data processing and those of our third-party vendors, consultants, collaborators, contractors or partners, including future CROs may be vulnerable to a cyber-attack (including supply chain cyber-attacks), malicious intrusion, breakdown, destruction, loss of data privacy, actions or inactions by our employees or contractors that expose security vulnerabilities, theft or destruction of intellectual property or other confidential or proprietary information, business interruption or other significant security incidents or compromises.
Our existing license agreements impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us. For a more detailed description of our existing license agreements, see the section titled “ Business—Material License and Collaboration Agreements ” in this Form 10-K.
Our existing license agreements impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us. For a more detailed description of our existing license agreements, see the section titled “ Business— Our Material Agreements ” in this Form 10-K.
While we expect research analyst coverage, if no analysts commence coverage of us, the trading price and volume for shares of our common stock could be adversely affected. The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from our business operations.
While we expect research analyst coverage, if no analysts commence coverage of us, the trading price and volume for shares of our common stock could be adversely affected. The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may divert from our business operations.
We have used substantial funds to develop our gene circuit platform, SENTI-202, SENTI-301A, SENTI-401 and other potential product candidates, and we will require significant funds to continue to develop our platform and conduct further research and development, including preclinical studies and clinical trials. In addition, we expect to incur significant additional costs associated with operating as a public company.
We have used substantial funds to develop our gene circuit platform, SENTI-202, SENTI-301A, and other potential product candidates, and we will require significant funds to continue to develop our platform and conduct further research and development, including preclinical studies and clinical trials. In addition, we expect to incur significant additional costs associated with operating as a public company.
There can be no assurance that we, our service providers, collaborators, consultants, contractors or partners will be successful in efforts to detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks or breaches of systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive data.
There can be no assurance that we, our service providers, collaborators, consultants, contractors or partners will be successful in efforts to detect, prevent or fully recover systems or data from all breakdowns, service interruptions, attacks, compromises, or breaches of systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive data.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret, or securing title to an employee-or consultant-developed invention if a dispute arises, is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts in the United States and certain foreign jurisdictions disfavor or are unwilling to protect trade secrets.
Enforcing a claim that a party illegally disclosed or misappropriated a trade secret, or securing title to an employee-or consultant-developed trade secret if a dispute arises, is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts in the United States and certain foreign jurisdictions disfavor or are unwilling to protect trade secrets.
In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules are subject to oversight of institutional biosafety committees (“IBCs”), as set forth in the National Institutes of Health, or NIH, Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, NIH Guidelines.
In addition to the submission of an IND to the FDA before initiation of a clinical trial in the United States, certain human clinical trials involving recombinant or synthetic nucleic acid molecules are subject to oversight of institutional biosafety committees (“IBCs”), as set forth in the National Institutes of Health (“NIH”), Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, NIH Guidelines.
Loss of access to these facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations. Natural disasters or pandemics such as the COVID-19 outbreak could further disrupt our operations and have a material adverse effect on our business, financial condition, results of operations and prospects.
Loss of access to these facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations. Natural disasters or pandemics, such as the recent COVID-19 outbreak could further disrupt our operations and have a material adverse effect on our business, financial condition, results of operations and prospects.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
The following examples are illustrative: • others may be able to create gene circuit technologies that are similar to our technologies or our product candidates, but that are not covered by the claims of any patents that we own, license or control; • we or any strategic collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own, license or control; • we or our licensors might not have been the first to file patent applications covering certain of our owned and in-licensed inventions; • others may independently develop the same, similar, or alternative technologies without infringing, misappropriating or violating our owned or in-licensed intellectual property rights; • it is possible that our owned or in-licensed pending patent applications will not lead to issued patents; • issued patents that we own, in-license, or control may not provide us with any competitive advantages, or may be narrowed or held invalid or unenforceable, including as a result of legal challenges; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such trade secrets or know-how; and • the patents of others may have an adverse effect on our business.
The following examples are illustrative: • others may be able to create gene circuit technologies that are similar to our technologies or our product candidates, but that are not covered by the claims of any patents that we own, license or control; • we or any strategic collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own, license or control; • we or our licensors might not have been the first to file patent applications covering certain of our owned and in-licensed inventions; • others may independently develop the same, similar, or alternative technologies without infringing, misappropriating or violating our owned or in-licensed intellectual property rights; • it is possible that our owned or in-licensed pending patent applications will not lead to issued patents; • issued patents that we own, in-license, or control may not provide us with any competitive advantages, or may be narrowed or held invalid or unenforceable, including as a result of legal challenges; • our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such trade secrets or know-how; and 98 Table of Contents • the patents of others may have an adverse effect on our business.
While we have not yet initiated clinical trials for SENTI-202, SENTI-404, or any other product candidate, it is likely that there will be side effects associated with their use. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these side effects.
While we have not yet initiated clinical trials for SENTI-202, or any other product candidate, it is likely that there will be side effects associated with their use. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these side effects.
From time to time, we may publicly disclose interim, preliminary or topline data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial.
From time to time, we may publicly disclose interim, preliminary or topline data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
Our development programs may be delayed for a variety of reasons, including delays related to: • the FDA or other regulatory authorities requiring us to submit additional data or imposing other requirements before permitting us to initiate a clinical trial; • obtaining regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining IRB or ethics committee approval at each clinical trial site; • recruiting suitable patients to participate in a clinical trial; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • the FDA placing the clinical trial on hold; • subjects failing to enroll or remain in our trial at the rate we expect; • subjects choosing an alternative treatment for the indication for which we are developing or other product candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related adverse events; • any changes to our manufacturing process that may be necessary or desired; • adding new clinical trial sites; and • manufacturing sufficient quantities of our product candidates for use in clinical trials.
Our development programs may be delayed for a variety of reasons, including delays related to: • the FDA or other regulatory authorities requiring us to submit additional data or imposing other requirements before permitting us to initiate a clinical trial; • obtaining regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining IRB or ethics committee approval at each clinical trial site; • recruiting suitable patients to participate in a clinical trial; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • the FDA placing the clinical trial on hold; • subjects failing to enroll or remain in our trial at the rate we expect; • subjects choosing an alternative treatment for the indication for which we are developing or other product candidates, or participating in competing clinical trials; 99 Table of Contents • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related adverse events; • any changes to our manufacturing process that may be necessary or desired; • adding new clinical trial sites; and • manufacturing sufficient quantities of our product candidates for use in clinical trials.
Our business strategy for exploiting the potential of our gene circuit platform technology is dependent upon maintaining our current arrangements and establishing new arrangements with strategic partners, research collaborators and other third parties. We currently have collaboration agreements with Spark and BlueRock.
Our business strategy for exploiting the potential of our gene circuit platform technology is dependent upon maintaining our current arrangements and establishing new arrangements with strategic partners, research collaborators and other third parties. We currently have collaboration agreements with Spark, BlueRock and Celest.
If our facilities or the manufacturing facilities of our third-party contract manufacturers are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed.
If our headquarters or the manufacturing facilities of our third-party contract manufacturers are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed.
Risks Related to the Development and Clinical Testing of Our Product Candidates Our current product candidates are in preclinical development and have never been tested in humans. One or all of our current product candidates may fail in clinical development or suffer delays that materially and adversely affect their commercial viability.
Risks Related to the Development and Clinical Testing of Our Product Candidates Our current product candidates are in early clinical or preclinical development and have never been tested in humans. One or all of our current product candidates may fail in clinical development or suffer delays that materially and adversely affect their commercial viability.
If the topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition. 71 Table of Contents We and our collaborators may not achieve projected discovery and development milestones and other anticipated key events in the time frames that we or they announce, which could have an adverse impact on our business and could cause our stock price to decline.
If the topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition. 62 Table of Contents We and our collaborators may not achieve projected discovery and development milestones and other anticipated key events in the time frames that we or they announce, which could have an adverse impact on our business and could cause our stock price to decline.
The U.S. government also has the right to take title to these inventions made through government funded programs if we, or the applicable licensor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.
The U.S. government has the right to take title to these inventions made through government funded programs if we, or the applicable licensor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.
As a result, the interim, preliminary or topline results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
As a result, the interim, preliminary or topline results that we report may differ from future results of the same study or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
If such a change occurs for a product candidate that is already in clinical testing, the change may require us to perform both comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.
If such a change occurs for a product candidate that is already in clinical testing, the change may require us to perform comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.
As our current and potential future product candidates enter and advance through preclinical studies and any clinical trials, we will need to expand our development, regulatory and manufacturing capabilities or contract with other organizations to provide these capabilities for us.
As our current and potential future product candidates enter and advance through preclinical studies and any clinical trials, we will need to expand our development and regulatory capabilities or contract with other organizations to provide these capabilities for us.
If any of our current or potential future product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities.
If any of our current or potential future product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our development, regulatory, marketing and sales capabilities.
We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority.
We may also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority.
Also, the global COVID-19 pandemic and government measures taken in response have also had a significant impact on businesses and commerce worldwide. In connection with COVID-19, we implemented work-from-home policies for most employees.
Also, the global COVID-19 pandemic and government measures taken in response had a significant impact on businesses and commerce worldwide. In connection with COVID-19, we implemented work-from-home policies for most employees.
Any failure by us or our service providers, collaborators, consultants, contractors or partners to detect, prevent, respond to or mitigate security breaches or improper access to, use of, or inappropriate disclosure of any of this information or other confidential or sensitive information, including patients’ personal data, or the perception that any such failure has occurred, could result in claims, litigation, regulatory investigations and other proceedings, significant liability under state, federal and international law, and other financial, legal or reputational harm to us.
Any failure by us or our service providers, collaborators, consultants, contractors or partners to detect, prevent, respond to or mitigate security breaches, incidents, compromises, or improper access to, use of, or inappropriate disclosure of any of this information or other confidential or sensitive information, including patients’ personal data, or the perception that any such failure has occurred, could result in claims, litigation, regulatory investigations and other proceedings, significant liability under state, federal and international law, and other financial, legal or reputational harm to us.
As of the date of this Form 10-K, we have issued 400,000 shares of common stock to Chardan under the Purchase Agreement, including 100,000 shares issued to Chardan as consideration for its execution and delivery of the Purchase Agreement.
As of the date of this Form 10-K, we have issued 1,400,000 shares of common stock to Chardan under the Purchase Agreement, including 100,000 shares issued to Chardan as consideration for its execution and delivery of the Purchase Agreement.
The commencement or completion of these clinical trials could be substantially delayed or prevented by many factors, including: • further discussions with the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials, including the endpoint measures required for regulatory approval and our statistical plan; • the limited number of, and competition for, suitable study sites and investigators to conduct our clinical trials, many of which may already be engaged in other clinical trial programs with similar patients, including some that may be for the same indications as our product candidates; • any delay or failure to obtain timely approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; 73 Table of Contents • delay or failure to manufacture sufficient quantities or inability to produce quantities of consistent quality, purity and potency of the product candidate for our clinical trials; • delay or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites or contact research organizations (“CROs”), the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain institutional review board (“IRB”) or ethics committee approval to conduct a clinical trial at a prospective site; • the FDA or other comparable foreign regulatory authorities may require us to submit additional data or impose other requirements before permitting us to initiate a clinical trial; • slower than expected rates of patient recruitment and enrollment; • failure of patients to complete the clinical trial; • the inability to enroll a sufficient number of patients in studies to ensure adequate statistical power to detect statistically significant treatment effects; • unforeseen safety issues, including severe or unexpected drug-related adverse events experienced by patients, including possible deaths; • lack of efficacy or failure to measure a statistically significant clinical benefit within the dose range with an acceptable safety margin during clinical trials; • termination of our clinical trials by one or more clinical trial sites; • inability or unwillingness of patients or clinical investigators to follow our clinical trial protocols; • inability to monitor patients adequately during or after treatment by us or our CROs; • our CROs or clinical trial sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a study; • inability to address any noncompliance with regulatory requirements or safety concerns that arise during the course of a clinical trial; • the impact of, and delays related to, health epidemics such as the COVID-19 pandemic; • the need to suspend, repeat or terminate clinical trials as a result of non-compliance with regulatory requirements, inconclusive or negative results or unforeseen complications in testing; and • the suspension or termination of our clinical trials upon a breach or pursuant to the terms of any agreement with, or for any other reason by, any future strategic collaborator that has responsibility for the clinical development of any of our product candidates. 74 Table of Contents Changes in regulatory requirements, policies and guidelines may also occur and we may need to significantly modify our clinical development plans to reflect these changes with appropriate regulatory authorities.
The commencement or completion of these clinical trials could be substantially delayed or prevented by many factors, including: • further discussions with the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials, including the endpoint measures required for regulatory approval and our statistical plan; • the limited number of, and competition for, suitable study sites and investigators to conduct our clinical trials, many of which may already be engaged in other clinical trial programs with similar patients, including some that may be for the same indications as our product candidates; • any delay or failure to obtain timely approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; 64 Table of Contents • delay or failure to manufacture sufficient quantities or inability to produce quantities of consistent quality, purity and potency of the product candidate for our clinical trials; • delay or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain institutional review board (“IRB”) or ethics committee approval to conduct a clinical trial at a prospective site; • the FDA or other comparable foreign regulatory authorities may require us to submit additional data or impose other requirements before permitting us to initiate a clinical trial; • slower than expected rates of patient recruitment and enrollment; • failure of patients to complete the clinical trial; • the inability to enroll a sufficient number of patients in studies to ensure adequate statistical power to detect statistically significant treatment effects; • unforeseen safety issues, including severe or unexpected drug-related adverse events experienced by patients, including possible deaths; • lack of efficacy or failure to measure a statistically significant clinical benefit within the dose range with an acceptable safety margin during clinical trials; • termination of our clinical trials by one or more clinical trial sites; • inability or unwillingness of patients or clinical investigators to follow our clinical trial protocols; • inability to monitor patients adequately during or after treatment by us or our CROs; • our CROs or clinical trial sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a study; • inability to address any noncompliance with regulatory requirements or safety concerns that arise during the course of a clinical trial; • the impact of, and delays related to, health epidemics such as the COVID-19 pandemic; • the need to suspend, repeat or terminate clinical trials as a result of non-compliance with regulatory requirements, inconclusive or negative results or unforeseen complications in testing; and • the suspension or termination of our clinical trials upon a breach or pursuant to the terms of any agreement with, or for any other reason by, any future strategic collaborator that has responsibility for the clinical development of any of our product candidates. 65 Table of Contents Changes in regulatory requirements, policies and guidelines may also occur and we may need to significantly modify our clinical development plans to reflect these changes with appropriate regulatory authorities.
In addition, on August 5, 2022, out board of directors adopted the 2022 Inducement Plan, pursuant to which an aggregate of 2,000,000 shares of our common stock have been reserved for issuance.
In addition, on August 5, 2022, our board of directors adopted the 2022 Inducement Plan, pursuant to which an aggregate of 2,000,000 shares of our common stock have been reserved for issuance.
Even if we identify investigational therapies that initially show promise, we may fail to successfully develop and commercialize such products for many reasons, including the following: • the research methodology used may not be successful in identifying potential investigational therapies; • competitors may develop alternatives that render our investigational therapies obsolete; • investigational therapies we develop may nevertheless be covered by third parties’ patents or other exclusive rights; • an investigational therapy may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • it may take greater human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio; • an investigational therapy may not be capable of being produced in clinical or commercial quantities at an acceptable cost, or at all; and • an approved product may not be accepted as safe and effective by trial participants, the medical community or third-party payors.
Even if we identify investigational therapies that initially show promise, we may fail to successfully develop and commercialize such products for many reasons, including the following: • the research methodology used may not be successful in identifying potential investigational therapies; • competitors may develop alternatives that render our investigational therapies obsolete; • investigational therapies we develop may be covered by third parties’ patents or other exclusive rights; • an investigational therapy may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • it may take greater human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio; • an investigational therapy may not be capable of being produced in clinical or commercial quantities at an acceptable cost, or at all; and • an approved product may not be accepted as safe and effective by patients, the medical community or third-party payors.
These transactions would entail numerous operational and financial risks, including: • exposure to unknown liabilities; • disruption of our business and diversion of our management’s time and attention in order to negotiate and manage a collaboration or develop acquired products, product candidates or technologies; • incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs; • higher-than-expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses; • difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business; 78 Table of Contents • impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership; and • the inability to retain key employees of any acquired business.
These transactions would entail numerous operational and financial risks, including: • exposure to unknown liabilities; • disruption of our business and diversion of our management’s time and attention in order to negotiate and manage a collaboration or develop acquired products, product candidates or technologies; • incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs; • higher-than-expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses; • difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business; • impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership; and • the inability to retain key employees of any acquired business.
As of the date of this Annual Report on Form 10-K, the market price of our common stock is below $10.00 per share, which was the price per share of Class A common stock sold in the initial public offering of our predecessor, DYNS, the per share price of the 5,060,000 shares of our Common Stock sold to certain investors in connection with our PIPE financing and also the per share value of the consideration issued to former stockholders of Senti Sub I, Inc.
As of the date of this Annual Report on Form 10-K, the market price of our common stock is below $10.00 per share, which was the price per share of common stock sold in the initial public offering of our predecessor, DYNS, the per share price of the 5,060,000 shares of our Common Stock sold to certain investors in connection with our PIPE financing and also the per share value of the consideration issued to former stockholders of Senti Sub I, Inc.
Even if regulatory approval is obtained for a product candidate, including SENTI-202 or SENTI-401, we may not generate or sustain revenue from sales of approved products.
Even if regulatory approval is obtained for a product candidate, including SENTI-202, we may not generate or sustain revenue from sales of approved products.
Doing business internationally involves a number of risks, including but not limited to: • multiple, conflicting and changing laws and regulations such as those relating to privacy, data protection and cybersecurity, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; • failure by us to obtain and maintain regulatory approvals for the commercialization of our product candidates in various countries; • rejection or qualification of foreign clinical trial data by the competent authorities of other countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining, maintaining, protecting and enforcing our intellectual property rights; • difficulties in staffing and managing foreign operations; • complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; • limits in our ability to penetrate international markets; 85 Table of Contents • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease (including the COVID-19 pandemic), boycotts, curtailment of trade and other business restrictions; • certain expenses including, among others, expenses for travel, translation and insurance; and • regulatory and compliance risks that relate to anti-corruption compliance and record-keeping that may fall within the purview of the U.S.
Doing business internationally involves a number of risks, including but not limited to: • multiple, conflicting and changing laws and regulations such as those relating to privacy, data protection and cybersecurity, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses; • failure by us to obtain and maintain regulatory approvals for the commercialization of our product candidates in various countries; • rejection or qualification of foreign clinical trial data by the competent authorities of other countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining, maintaining, protecting and enforcing our intellectual property rights; • difficulties in staffing and managing foreign operations; • complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; • limits in our ability to penetrate international markets; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; • certain expenses including, among others, expenses for travel, translation and insurance; and • regulatory and compliance risks that relate to anti-corruption compliance and record-keeping that may fall within the purview of the U.S.
Pursuant to our Bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers 124 Table of Contents or employees to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our Charter or our Bylaws (including their interpretation, validity or enforceability); or (iv) any action asserting a claim governed by the internal affairs doctrine.
Pursuant to our Bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or employees to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our Charter or our Bylaws (including their interpretation, validity or enforceability); or (iv) any action asserting a claim governed by the internal affairs doctrine.
Our issuance of additional shares of common stock or other equity securities of equal or senior rank would, all else being equal, have the following effects: • the amount of cash available per share, including for payment of dividends in the future, may decrease; 122 Table of Contents • the relative voting strength of each previously outstanding share of common stock would be diminished; and • the market price of shares of our common stock may decline.
Our issuance of additional shares of 114 Table of Contents common stock or other equity securities of equal or senior rank would, all else being equal, have the following effects: • the amount of cash available per share, including for payment of dividends in the future, may decrease; • the relative voting strength of each previously outstanding share of common stock would be diminished; and • the market price of shares of our common stock may decline.
We may focus our efforts and resources on potential product candidates or other potential programs that ultimately prove to be unsuccessful. 69 Table of Contents The market, physicians, patients, regulators and potential investors may not be receptive to our current or potential future product candidates and may be skeptical of the viability and benefits of our gene circuit pipeline technology because it is based on a relatively novel and complex technology.
We may focus our efforts and resources on potential product candidates or other potential programs that ultimately prove to be unsuccessful. 60 Table of Contents The market, physicians, patients, regulators and potential investors may not be receptive to our current or potential future product candidates and may be skeptical of the viability and benefits of our gene circuit pipeline technology because it is based on a relatively novel and complex technology.
Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our product candidates or the manufacturing facilities in which they are made, the facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminants are discovered in our product candidates or the manufacturing facilities in which they are made, the facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMP and cGTP could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of potential future collaborators; • subjecting third-party manufacturing facilities or our potential future manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of product candidates; and 80 Table of Contents • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Failure 72 Table of Contents to execute on our manufacturing requirements and comply with cGMP and cGTP could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of potential future collaborators; • subjecting third-party manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
If it becomes necessary for us to issue and sell to Chardan under the Purchase Agreement more than the 8,727,049 shares of common stock we registered pursuant to the Purchase Agreement, in order to receive aggregate gross proceeds equal to $50.0 million under the Purchase Agreement, we will have to file with the SEC one or more additional registration statements to register under the Securities Act the resale by Chardan of any such additional shares of common stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional shares of our common stock under the Purchase Agreement.
If it becomes necessary for us to issue and sell to Chardan under the Purchase Agreement more than the 8,727,049 shares of common stock we registered pursuant to the Purchase Agreement, in order to receive aggregate gross proceeds equal to $50.0 million under the Purchase Agreement, we will have to file with the SEC one or more additional registration statements to register under the Securities Act the 53 Table of Contents resale by Chardan of any such additional shares of common stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional shares of our common stock under the Purchase Agreement.
In particular, 4,878,972 of the Founder Shares registered for resale in our prospectus dated August 8, 2022 filed pursuant to Rule 424(b)(3) (Registration No. 333-265873), as supplemented from time to time (the “Prior Resale Prospectus”), were purchased at an effective price of $0.004 per share, and 871,028 of the shares of our common stock held by the Anchor Investors and registered for resale in the Prior Resale Prospectus were issued solely in consideration for the Anchor Investors’ agreement not to redeem their 121 Table of Contents shares of Class A common stock as described above.
In particular, 4,878,972 of the Founder Shares registered for resale in our prospectus dated August 8, 2022 filed pursuant to Rule 424(b)(3) (Registration No. 333-265873), as supplemented from time to time (the “Prior Resale Prospectus”), were purchased at an effective price of $0.004 per share, and 871,028 of the shares of our common stock held by the Anchor Investors and registered for resale in the Prior Resale Prospectus were issued solely in consideration for the Anchor Investors’ agreement not to redeem their shares of Class A common stock as described above.
If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to use, we may be subject to significant penalties, including administrative, civil, and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual imprisonment, reputational harm, and curtailment or restructuring of our operations, as well as additional reporting 116 Table of Contents obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to use, we may be subject to significant penalties, including administrative, civil, and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual imprisonment, reputational harm, and curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
As a result, we cannot be sure that we will be able to submit IND or similar applications for our proposed clinical programs on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials for any of our product candidates to begin.
As a result, we cannot be sure that we will be able to submit IND or similar applications for our proposed clinical programs on the timelines we expect, if at all, and we cannot be sure that our submission of additional INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials for our product candidates to begin.
For example, if the NOT GATE gene circuit, as described below, engineered into one of our product candidates, such as SENTI-202, does not provide a clinically sufficient level of inhibition, it may kill healthy cells that it has been designed to preserve or may cause systemic immune cytotoxicity.
For example, if the NOT GATE gene circuit, engineered into one of our product candidates, such as SENTI-202, does not provide a clinically sufficient level of inhibition, it may kill healthy cells that it has been designed to preserve or may cause systemic immune cytotoxicity.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a 86 Table of Contents material adverse effect on our business and financial condition, including the imposition of significant criminal, civil and administrative fines or other sanctions, such as monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government-funded healthcare programs, such as Medicare and Medicaid, integrity obligations, reputational harm and the curtailment or restructuring of our operations.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material adverse effect on our business and financial condition, including the imposition of significant criminal, civil and administrative fines or other sanctions, such as monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government-funded healthcare programs, such as Medicare and Medicaid, integrity obligations, reputational harm and the curtailment or restructuring of our operations.
Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through 75 Table of Contents protests and other means. To the extent the activities of these groups are successful, our research and development activities may be interrupted or delayed.
Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through 66 Table of Contents protests and other means. To the extent the activities of these groups are successful, our research and development activities may be interrupted or delayed.
If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected. Our research, development and manufacturing involve the use of hazardous materials and various chemicals. We maintain quantities of various flammable and toxic chemicals in our facilities that are required for our research, development and manufacturing activities.
If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected. Our research, development and manufacturing involve the use of hazardous materials and various chemicals. We maintain quantities of various flammable and toxic chemicals that are required for our research, development and manufacturing activities.
Department of Health and Human Services, as represented by the National Cancer Institute, or NCI, for intellectual property relevant to our product candidates. For a more detailed description of the license agreements with NCI, see the section titled “ Business—Material License and Collaboration Agreements ” in this Form 10-K.
Department of Health and Human Services, as represented by the National Cancer Institute, or NCI, for intellectual property relevant to our product candidates. For a more detailed description of the license agreements with NCI, see the section titled “ Business—Agreements ” in this Form 10-K.
Any such action could negatively affect our results of operations and cash flows. 60 Table of Contents Members of our management team have limited experience in managing the day-to-day operations of a public company and, as a result, we may incur additional expenses associated with the management of our company.
Any such action could negatively affect our results of operations and cash flows. 51 Table of Contents Members of our management team have limited experience in managing the day-to-day operations of a public company and, as a result, we may incur additional expenses associated with the management of our company.
Furthermore, if we or any future collaborator succeeds in developing any products, we anticipate marketing them in the European Union and other jurisdictions in addition to the United States. If approved, we or any future collaborator may hire sales representatives and conduct physician and patient association outreach activities outside of the United States.
Furthermore, if we or any future collaborator succeeds in developing any products, we anticipate marketing them in the European Union and other jurisdictions in addition to the United States, including China. If approved, we or any future collaborator may hire sales representatives and conduct physician and patient association outreach activities outside of the United States, including China.
These investigators, CROs and consultants will not be our employees and we will have limited control over the amount of time and resources that they dedicate to our programs. Some of these third parties may terminate their engagements with us at any time.
These investigators, CROs, testing laboratories, and consultants will not be our employees and we will have limited control over the amount of time and resources that they dedicate to our programs. Some of these third parties may terminate their engagements with us at any time.
Additionally, even if such regulatory authorities agree with 70 Table of Contents the design and implementation of the clinical trials set forth in an IND or clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future.
Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or 61 Table of Contents clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future.
An adverse determination in any such submission, proceeding or litigation could prevent the issuance of, reduce the scope of, invalidate or render 92 Table of Contents unenforceable our owned or in-licensed patent rights, result in the loss of exclusivity, limit our ability to stop others from using or commercializing similar or identical platforms and product candidates, or allow third parties to compete directly with us without payment to us.
An adverse determination in any such submission, proceeding or litigation could prevent the issuance of, reduce the scope of, invalidate or render unenforceable our owned or in-licensed patent rights, result in the loss of exclusivity, limit our ability to stop others from using or commercializing similar or identical platforms and product candidates, or allow third parties to compete directly with us without payment to us.
Additionally, we, and our service providers, collaborators, consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other information to host or otherwise process some of our anticipated future clinical data and that of users, develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes.
Additionally, we, and our service providers, collaborators, 78 Table of Contents consultants, contractors or partners, do or will collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect and share personal information, health information and other information to host or otherwise process some of our anticipated future clinical data and that of users, develop our products, to operate our business, for clinical trial purposes, for legal and marketing purposes, and for other business-related purposes.
We and any third-party manufacturers we may contract with must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as cGMP and cGTP.
GeneFab and any other third-party manufacturers we may contract with must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as cGMP and cGTP.
All of our current product candidates are in preclinical development and their risk of failure is high. It is impossible to predict when or if our candidates or any potential future product candidates will prove effective in humans or will receive regulatory approval.
All of our current product candidates are in preclinical or early clinical development and their risk of failure is high. It is impossible to predict when or if our candidates or any potential future product candidates will prove effective in humans or will receive regulatory approval.
Our Bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain state law litigation that may be initiated by our stockholders and the U.S. federal district courts as the exclusive forum for certain securities law actions, which could limit our stockholders’ ability to litigate disputes with us in a different judicial forum and increase the costs for our stockholders to pursue certain claims against us.
Our Bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain state law litigation that may be initiated by our stockholders and the U.S. federal district courts as the exclusive forum 116 Table of Contents for certain securities law actions, which could limit our stockholders’ ability to litigate disputes with us in a different judicial forum and increase the costs for our stockholders to pursue certain claims against us.
Risks Related to Our Business and Operations If the market opportunities for our current and potential future product candidates, including SENTI 202 and SENTI-401, are smaller than we believe they are, our future product revenues may be adversely affected, and our business may suffer.
Risks Related to Our Business and Operations If the market opportunities for our current and potential future product candidates, including SENTI-202 and SENTI-301A, are smaller than we believe they are, our future product revenues may be adversely affected, and our business may suffer.
If disputes over intellectual property that we license in the future prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the affected product candidates, which would have a material adverse effect on our business, financial condition, results of operations and prospects.
If disputes over intellectual property that we license in the future prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the 88 Table of Contents affected product candidates, which would have a material adverse effect on our business, financial condition, results of operations and prospects.
For example, third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and any future product candidates and practicing our proprietary technology, and any issued patents may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that otherwise may exist for our product candidate and any future product candidates.
For example, third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and any future product candidates and practicing our proprietary technology, and any issued patents may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that 83 Table of Contents otherwise may exist for our product candidate and any future product candidates.
Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates 98 Table of Contents or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. 112 Table of Contents The FDA and other regulatory authorities have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory authorities have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by preclinical stage biotechnology companies such as ours. We may not be able to access the financial resources to continue development of, or to enter into any collaborations for, any of our current or potential future product candidates.
Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by early clinical stage biotechnology companies such as ours. We may not be able to access the financial resources to continue development of, or to enter into any collaborations for, any of our current or potential future product candidates.
Any regulatory approvals that we or potential future collaborators obtain for any of our current or potential future product candidates will be subject to limitations on the approved indicated uses for which a product may be marketed or may be subject to the conditions of approval, or contain requirements for potentially costly post- 111 Table of Contents marketing testing, and surveillance to monitor the safety and efficacy of such product candidate.
Any regulatory approvals that we or potential future collaborators obtain for any of our current or potential future product candidates will be subject to limitations on the approved indicated uses for which a product may be marketed or may be subject to the conditions of approval, or contain requirements for potentially costly post-marketing testing, and surveillance to monitor the safety and efficacy of such product candidate.
The enrollment of patients depends on many factors, including: • the severity of the disease under investigation; • the patient eligibility criteria defined in the clinical trial protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity and availability of clinical trial sites for prospective patients; • willingness of physicians to refer their patients to our clinical trials; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; 72 Table of Contents • clinicians’ and patients’ perceptions as to the potential risks and benefits of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient informed consents; • patient eligibility and exclusion criteria for the trials; • ability to monitor patients adequately during and after treatment; • the risk that patients enrolled in clinical trials will drop out of the trials before completion; and • factors we may not be able to control, such as current or potential pandemics, including the ongoing COVID-19 pandemic, that may limit the availability of patients, principal investigators or staff or clinical sites to participate in our clinical trials.
The enrollment of patients depends on many factors, including: • the severity of the disease under investigation; • the patient eligibility criteria defined in the clinical trial protocol; • the size of the patient population required for analysis of the trial’s primary endpoints; • the proximity and availability of clinical trial sites for prospective patients; • willingness of physicians to refer their patients to our clinical trials; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; 63 Table of Contents • clinicians’ and patients’ perceptions as to the potential risks and benefits of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient informed consents; • patient eligibility and exclusion criteria for the trials; • ability to monitor patients adequately during and after treatment; • the risk that patients enrolled in clinical trials will drop out of the trials before completion; and • factors we may not be able to control, such as potential pandemics that may limit the availability of patients, principal investigators or staff or clinical sites to participate in our clinical trials.
In addition to seeking patent protection for certain aspects of our current or future technologies and product candidates, we rely on trade secrets, including confidential and unpatented know-how, technology and other proprietary information, to maintain our competitive position and to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
In addition to seeking patent protection for certain aspects of our current or future technologies and product candidates, we rely on trade secrets, including confidential and unpatented know-how, technology and other 95 Table of Contents proprietary information, to maintain our competitive position and to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
It is possible that none of the product candidates we may develop will obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them. We have very limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA and other regulatory authorities.
It is possible that none of the product candidates we 100 Table of Contents may develop will obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them. We have very limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA and other regulatory authorities.
Competition to hire from this limited candidate pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
Competition to hire from this limited candidate pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous 75 Table of Contents pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
If any of our product candidates is approved for marketing and commercialization in the future and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third 84 Table of Contents parties to perform these functions on acceptable terms, we will be unable to successfully commercialize any such future products.
If any of our product candidates is approved for marketing and commercialization in the future and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to successfully commercialize any such future products.
Extensions of patent term may be available, but there is no guarantee that we would have patents eligible for extension, or that we would succeed in obtaining any particular extension, and no guarantee any such extension 97 Table of Contents would confer a patent term for a sufficient period of time to exclude others from commercializing product candidates similar or identical to ours.
Extensions of patent term may be available, but there is no guarantee that we would have patents eligible for extension, or that we would succeed in obtaining any particular extension, and no guarantee any such extension would confer a patent term for a sufficient period of time to exclude others from commercializing product candidates similar or identical to ours.
If any of the above occur, our ability to operate our business and our results of operations could be adversely affected. If we fail to comply with U.S. and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive and subject us to other penalties that could materially harm our business.
If any of the above occur, our ability to operate our business and our results of operations could be adversely affected. 108 Table of Contents If we fail to comply with U.S. and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive and subject us to other penalties that could materially harm our business.
In some instances, we may be required to indemnify our licensors for the costs associated with any such adversarial proceedings or litigation. Third parties may assert infringement claims against us, our licensors or our strategic collaborators based on existing patents or patents that may be granted in the future, regardless of their merit.
In some instances, we may be required to indemnify our licensors for the costs associated with any such adversarial 93 Table of Contents proceedings or litigation. Third parties may assert infringement claims against us, our licensors or our strategic collaborators based on existing patents or patents that may be granted in the future, regardless of their merit.
Moreover, issued patents do not guarantee the right to practice our technology in relation to the commercialization of our products. Issued patents 91 Table of Contents only allow us to block—in some cases—potential competitors from practicing the claimed inventions of the issued patents. The issuance, scope, validity, enforceability and commercial value of our pending patent rights are uncertain.
Moreover, issued patents do not guarantee the right to practice our technology in relation to the commercialization of our products. Issued patents only allow us to block—in some cases—potential competitors from practicing the claimed inventions of the issued patents. The issuance, scope, validity, enforceability and commercial value of our pending patent rights are uncertain.
From time to time, we consider strategic transactions, such as collaborations, regional partnerships for the co-development and/or co-commercialization of our product candidates in selected territories, acquisitions of companies, asset purchases, joint ventures, out- or in-licensing of product candidates or technologies and biomanufacturing partnerships involving our manufacturing facilities and gene circuit platform technology.
From time to time, we consider strategic transactions, such as collaborations, regional partnerships for the co-development and/or co-commercialization of our product candidates in selected territories, acquisitions of companies, asset purchases, joint ventures, out- or in-licensing of product candidates or technologies and partnerships involving our gene circuit platform technology.
Recent volatility in capital markets and lower market prices for our securities may affect our ability to access new capital through sales of shares of our common stock or issuance of indebtedness, which may harm our 89 Table of Contents liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets.
Recent volatility in capital markets and lower market prices for our securities may affect our ability to access new capital through sales of shares of our common stock or issuance of indebtedness, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets.
We may need to share our 104 Table of Contents proprietary information, including trade secrets, with future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
We may need to share our proprietary information, including trade secrets, with future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with: • additional foreign regulatory requirements; • foreign exchange fluctuations; • compliance with foreign manufacturing, customs, shipment and storage requirements; • cultural differences in medical practice and clinical research; and • diminished protection of intellectual property in some countries.
Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with: • additional foreign regulatory requirements; • foreign exchange fluctuations; • compliance with foreign manufacturing, customs, shipment and storage requirements; 102 Table of Contents • cultural differences in medical practice and clinical research; and • diminished protection of intellectual property in some countries.

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Item 2. Properties

Properties — owned and leased real estate

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Within this space, we have begun the build-out of a cell therapy manufacturing facility designed to meet cGMP with the goal of providing clinical and commercial-scale manufacturing for multiple off-the-shelf chimeric antigen receptor (CAR) natural killer (NK) cell product candidates. Item 3.
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We completed the build-out of a cell therapy manufacturing facility designed to meet cGMP in the Alameda facility in June 2023, and in August 2023, we subleased our the Alameda cGMP facility to GeneFab as part of our transaction with GeneFab.
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Legal Proceedings From time to time we may become involved in legal proceedings to claims arising in the ordinary course of our business. We are not currently a party to any such material legal proceedings. Item 4. Mine Safety Disclosures None. 128 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is currently listed on The Nasdaq Global Market under the symbol “SNTI.” Prior to the consummation of the Merger, our common stock was listed on The Nasdaq Global Market under the symbol “DYNS.” Holders As of March 15, 2023, there were 153 holders of record of our common stock.
Biggest changePrior to the consummation of the Merger, our common stock was listed on The Nasdaq Global Market under the symbol “DYNS.” Holders As of March 18, 2024, there were 63 holders of record of our common stock.
Recent Sales of Unregistered Securities Pursuant to Chardan’s committed equity facility, we issued and sold 300,000 shares of our common stock to Chardan at a weighted average price of $2.35 per share during the three months ended December 31, 2022. We used the net proceeds from these sales for general corporate purposes.
Recent Sales of Unregistered Securities Pursuant to Chardan’s committed equity facility, we issued and sold 1,000,000 shares of our common stock to Chardan at a weighted average price of $0.51 per share during the year ended December 31, 2023. We used the net proceeds from these sales for general corporate purposes.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our Board at such time. Our ability to declare dividends may also be limited by restrictive covenants pursuant to any future debt financing agreements.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our board of directors at such time.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Our ability to declare dividends may also be limited by restrictive covenants pursuant to any future debt financing agreements. Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Added
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is currently listed on The Nasdaq Capital Market under the symbol “SNTI”, and was previously traded under the same symbol on The Nasdaq Global Market.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFood and Drug Administration (“FDA”) or other regulatory authorities regarding the scope or design of our clinical trials; • delays in enrolling research subjects in clinical trials; • high drop-out rates of research subjects; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials; • Chemistry, manufacturing and control (“CMC”) challenges associated with manufacturing and scaling up biologic product candidates to ensure consistent quality, stability, purity and potency among different batches used in clinical trials; • greater-than-anticipated clinical trial costs; • poor potency or effectiveness of our product candidates during clinical trials; 133 Table of Contents • unfavorable FDA or other regulatory authority inspection and review of a clinical trial or manufacturing site; • delays as a result of the COVID-19 pandemic or events associated with the pandemic; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policies and guidelines; and • the FDA or other regulatory authorities interpret our data differently than we do.
Biggest changeThis is due to numerous risks and uncertainties, including the following: • negative or inconclusive results from our preclinical studies or clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical studies or clinical trials or abandon any or all of our programs; • product-related side effects experienced by participants in our clinical trials or by individuals using therapeutics similar to our product candidates; 126 Tab l e of Contents • delays in submitting IND applications or comparable foreign applications, or delays or failures to obtain the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or other regulatory authorities regarding the scope or design of our clinical trials • delays in enrolling research subjects in clinical trials; • high drop-out rates of research subjects; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials; • Chemistry, manufacturing and control (“CMC”) challenges associated with manufacturing and scaling up biologic product candidates to ensure consistent quality, stability, purity and potency among different batches used in clinical trials; • greater-than-anticipated clinical trial costs; • poor potency or effectiveness of our product candidates during clinical trials; • unfavorable FDA or other regulatory authority inspection and review of a clinical trial or manufacturing site; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policies and guidelines; and • the FDA or other regulatory authorities interpret our data differently than we do.
Other material changes comprised of $14.1 million increase in operating lease liabilities, $2.2 million increase in accounts payable and accrued expenses and other current liabilities offset by $1.3 million increase in prepaid expenses and other assets and as well as a $1.0 million decrease in deferred revenue.
Other material changes comprised of $14.1 million increase in operating lease liabilities, $2.2 million increase in accounts payable and accrued expenses and other current liabilities offset by $1.3 million increase in prepaid expenses and other current assets and as well as a $1.0 million decrease in deferred revenue.
Investing Activities For the year ended December 31, 2022, net cash used in investing activities of $82.0 million was due to $40.6 million purchases of short-term investments and $41.4 million purchases of property and equipment.
For the year ended December 31, 2022, net cash used in investing activities of $82.0 million was due to $40.6 million in purchases of short-term investments and $41.4 million in purchases of property and equipment.
Off-Balance Sheet Arrangements During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.
During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules and regulations of the SEC.
Our future capital requirements will depend on many factors, including: • the scope, rate of progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our product candidates; • the number and development requirements of product candidates that we may pursue, and other indications for our current product candidates that we may pursue; • the costs, timing and outcome of regulatory review of our product candidates; • the scope and costs of constructing and operating our planned cGMP facility and any commercial manufacturing activities; • the cost associated with commercializing any approved product candidates; • the cost and timing of developing our ability to establish sales and marketing capabilities, if any; • the costs of preparing, filing and prosecuting patent applications, maintaining, enforcing and protecting our intellectual property rights, defending intellectual property-related claims and obtaining licenses to third-party intellectual property; • the timing and amount of any milestone and royalty payments we are required to make under our present or future license agreements; • our ability to establish and maintain collaborations on favorable terms, if at all; and • the extent to which we acquire or in-license other product candidates and technologies and associated intellectual property.
Our future capital requirements will depend on many factors, including: • the scope, rate of progress, results and costs of drug discovery, clinical and preclinical development, laboratory testing and clinical trials for our product candidates; • the number and development requirements of product candidates that we may pursue, and other indications for our current product candidates that we may pursue; • the costs, timing and outcome of regulatory review of our product candidates; • the scope and costs of constructing and operating our planned cGMP facility and any commercial manufacturing activities; 133 • the cost associated with commercializing any approved product candidates; • the cost and timing of developing our ability to establish sales and marketing capabilities, if any; • the costs of preparing, filing and prosecuting patent applications, maintaining, enforcing and protecting our intellectual property rights, defending intellectual property-related claims and obtaining licenses to third-party intellectual property; • the timing and amount of any milestone and royalty payments we are required to make under our present or future license agreements; • our ability to establish and maintain collaborations on favorable terms, if at all; and • the extent to which we acquire or in-license other product candidates and technologies and associated intellectual property.
As consideration for Chardan’s commitment to purchase shares of our common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, we issued 100,000 shares of our common stock to Chardan and paid a $0.4 million document preparation fee.
As consideration for Chardan’s commitment to purchase shares of our common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, we issued 100,000 shares of our common stock to Chardan and paid a $0.4 million document 131 preparation fee.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation expense, for personnel in executive, finance and other administrative functions. Other significant costs include legal fees relating to corporate matters, professional fees for accounting and consulting services and an allocation of facility-related costs.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation, for personnel in executive, finance and other administrative functions. Other significant costs include legal fees relating to corporate matters, professional fees for accounting and consulting services and an allocation of facility-related costs.
We expect to remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Dynamics Initial Public Offering (“IPO”) (which occurred on May 25, 2021), (b) in which we have total annual revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter and our net sales for the year exceed 142 Table of Contents $100 million; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding, rolling three-year period.
We expect to remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Dynamics Initial Public Offering (“IPO”) (which occurred on May 25, 2021), (b) in which we have total annual revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter and our net sales for the year exceed $100 million; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding, rolling three-year period.
Change in Fair Value of Contingent Earnout Liability The change in fair value of the contingent earnout liability that was accounted for as a liability as of the date of the Merger, and is remeasured to fair value at each reporting period, resulting in a non-cash gain or loss.
Change in Fair Value of Contingent Earnout Liability The change in fair value of the contingent earnout liability that was accounted for as a liability as of the date of the Merger is remeasured to fair value at each reporting period, resulting in a non-cash gain or loss.
During the year ended December 31, 2021, we entered into a three-year collaboration and option agreement with BlueRock Therapeutics LP (“BlueRock”) under which the Company granted BlueRock an option to execute an exclusive or non-exclusive license to develop, manufacture and commercialize cell therapy products (See Part II, Item 8, Notes to Consolidated Financial Statements, Note 15 - Related Parties for details into the BlueRock agreement).
During the year ended December 31, 2021, we entered into a three-year collaboration and option agreement with BlueRock Therapeutics LP (“BlueRock”) under which the Company granted BlueRock an option to execute an exclusive or non-exclusive license to develop, manufacture and commercialize cell therapy products (See Part II, Item 8, Notes to Consolidated Financial Statements, Note 16 - Related Parties for details into the BlueRock agreement).
In consideration for the option, the Company is responsible for up to $10.0 million in research and development costs and expenses associated with the collaboration plan incurred over the three-year term. We have also entered into license agreements under which we are obligated to make annual maintenance payments of $0.1 million and specified milestone and royalty payments.
In consideration for the option, the Company is responsible for up to $10.0 million in research and development costs and expenses associated with the collaboration plan incurred over the three-year term. We have also entered into license agreements under which we are obligated to make annual maintenance payments of $0.2 million and specified milestone and royalty payments.
Following the closing of the Merger, former holders of Legacy Senti common stock and preferred stock may receive up to 2,000,000 additional shares of the Company’s common stock in the aggregate, in two equal tranches of 1,000,000 shares of common stock per tranche. Refer to Note 8, Stockholders’ Equity (Deficit), for further details of the contingent earnout.
Following the closing of the Merger, former holders of Legacy Senti common stock and preferred stock may receive up to 2,000,000 additional shares of the Company’s common stock in the aggregate, in two equal tranches of 1,000,000 shares of common stock per tranche. Refer to Note 9, Stockholders’ Equity (Deficit), for further details of the contingent earnout.
Milestone and royalty payment obligations under these agreements are contingent upon future events, such as our achievement of specified development, regulatory, and sales milestones, or generating product sales. As of December 31, 2022, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales.
Milestone and royalty payment obligations under these agreements are contingent upon future events, such as our achievement of specified development, regulatory, and sales milestones, or generating product sales. As of December 31, 2023, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales.
In accordance with ASC 815-40, Derivatives and Hedging , as certain terms of the Contingent Earnout Shares were not indexed to the common stock, they were accounted for as a liability at the Reverse Recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss.
In accordance with ASC 815, as certain terms of the Contingent Earnout Shares were not indexed to the common stock, they were accounted for as a liability at the Reverse Recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss.
We define our critical accounting policies as those under U.S. GAAP that require us to make subjective estimates and judgments about 139 Table of Contents matters that are inherently uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.
We define our critical accounting policies as those under U.S. GAAP that require us to make subjective estimates and judgments about matters that are inherently uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.
Should we fail to raise capital or enter into such agreements as, and when, 136 Table of Contents needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of our product candidates or delay our efforts to expand our product pipeline.
Should we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of our product candidates or delay our efforts to expand our product pipeline.
As of March 22, 2023, the issuance date of the consolidated financial statements for the year ended December 31, 2022, the Company concluded that substantial doubt existed about the Company’s ability to continue as a going concern beyond twelve months from the issuance date of the annual consolidated financial statements.
As of March 21, 2024, the issuance date of the consolidated financial statements for the year ended December 31, 2023, the Company concluded that substantial doubt existed about the Company’s ability to continue as a going concern beyond twelve months from the issuance date of the annual consolidated financial statements.
(formerly known as Dynamics Special Purpose Corp.) and its consolidated subsidiaries following the Company’s Merger. 129 Table of Contents Cautionary Statement Regarding Forward-Looking Statements In This Annual Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.
(formerly known as Dynamics Special Purpose Corp.) and its consolidated subsidiaries following the Company’s Merger. 122 Tab l e of Contents Cautionary Statement Regarding Forward-Looking Statements This Annual Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP.
Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting 134 principles, or GAAP.
We will remain a smaller reporting company if (1) the market value of our common stock held by non-affiliates is less than $250 million as of the last business day of the second fiscal quarter, or (2) our annual revenues in our most recent fiscal year completed before the last business day of our second fiscal quarter are less than $100 million and the market value of our common stock held by non-affiliates is less than $700 million as of the last business day of the second fiscal quarter.
We will remain a smaller reporting company if (1) the market value of our common stock held by non-affiliates is less than $250 million as of the last business day of the second fiscal quarter, or (2) our annual revenues in our most recent fiscal year completed before the last business day of our second fiscal quarter are less than $100 million and the market value of our common stock held by non-affiliates is less than $700 million as of the last business day of the second fiscal quarter. 136 Segment Information We have one business activity and operate in one reportable segment.
The expected increase in expenses will be driven in large part by our ongoing activities, if and as we: • continue to advance our gene circuit platform technologies; • continue preclinical development of our current and future product candidates and initiate additional preclinical studies; • commence clinical studies of our current and future product candidates; • establish our manufacturing capability, including developing our contract development and manufacturing relationships, and building our internal manufacturing facilities; • acquire and license technologies aligned with our gene circuit platform technologies; 130 Table of Contents • seek regulatory approval of our current and future product candidates; • expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, manufacturing and commercialization efforts; • continue to develop, grow, maintain, enforce and defend our intellectual property portfolio; and • incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.
The expected increase in expenses will be driven in large part by our ongoing activities, if and as we: • continue to advance our gene circuit platform technologies; • continue preclinical development of our current and future product candidates and initiate additional preclinical studies; • fund clinical development of our current product candidates; • commence clinical studies of our future product candidates; • fund manufacturing of our current and future product candidates; 123 Tab l e of Contents • seek regulatory approval of our current and future product candidates; • expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, manufacturing and commercialization efforts; • continue to develop, grow, maintain, enforce and defend our intellectual property portfolio; and • incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.
As of December 31, 2022, we had $98.6 million in cash, cash equivalents, and short-term investments, and an accumulated deficit of $173.3 million, respectively. We will need substantial additional funding to support our continuing operations and pursue our development strategy.
As of December 31, 2023, we had $35.9 million in cash, cash equivalents, and short-term investments, and an accumulated deficit of $244.3 million, respectively. We will need substantial additional funding to support our continuing operations and pursue our development strategy.
For the years ended December 31, 2022 and 2021, we generated revenue from grants of $1.0 million and $0.5 million, respectively. The increase of $0.5 million was primarily due to the recognition of revenue related to the SBIR SENTI-202 grant funding which began in FY 2021. Research and development expenses .
For the years ended December 31, 2023 and 2022, we generated revenue from grants of $0.6 million and $1.0 million, respectively. The decrease of $0.4 million was primarily due to the recognition of revenue related to the SBIR SENTI-202 grant funding which was completed in FY 2023. Research and development expenses .
Financing Activities For the year ended December 31, 2022, net cash provided by financing activities of $118.6 million was primarily due to $112.0 million proceeds received from Merger and related PIPE financing activities, net of transaction cost, $5.2 million from issuance of convertible notes, $0.7 million from issuance of common stock under Common Stock Purchase Agreement, $0.5 million from the issuance of common stock upon exercise of stock options and $0.2 million from the issuance of common stock under Employee Stock Purchase Plan (ESPP). 137 Table of Contents For the year ended December 31, 2021, net cash provided by financing activities of $68.4 million was primarily due to proceeds received of $67.0 million from the issuance of our Series B redeemable convertible preferred stock and $1.5 million from the issuance of common stock upon exercise of stock options.
For the year ended December 31, 2022, net cash provided by financing activities of $118.6 million was primarily due to $112.0 million proceeds received from Merger and related PIPE financing activities, net of transaction cost, $5.2 million from issuance of convertible notes, $0.7 million from issuance of common stock under Common Stock Purchase Agreement, $0.5 million from the issuance of common stock upon exercise of stock options and $0.2 million from the issuance of common stock under Employee Stock Purchase Plan (ESPP).
In light of these concerns, our independent registered public accounting firm included in its opinion for the year ended December 31, 2022 an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern beyond twelve months from March 22, 2023. Recent Developments Merger with Dynamics Special Purpose Corp.
In light of these concerns, our independent registered public accounting firm included in its opinion for the year ended December 31, 2023 an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern beyond twelve months from March 21, 2024.
Accounting standards require that management evaluate whether we have adequate financial resources to continue as a going concern beyond twelve months after the date that these consolidated financial statements are available to be issued.
Accounting standards require that management evaluate whether we have adequate financial resources to continue as a going concern beyond twelve months after the date that these consolidated financial statements are available to be issued. Management has determined that additional funds will be needed to continue as a going concern for the period defined in the accounting standards.
Research and Development Expenses Research and development costs consist primarily of costs incurred for the discovery and preclinical development of our product candidates, which include: • employee-related expenses, including salaries, related benefits, and stock-based compensation expenses for employees engaged in research and development functions; • expenses incurred in connection with research, laboratory consumables and preclinical studies; • the cost of consultants engaged in research and development related services and the cost to manufacture drug products for use in our preclinical studies and trials; • facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies; • costs related to regulatory compliance; and • the cost of annual license fees.
Research and Development Expenses Research and development costs consist primarily of costs incurred for the discovery, preclinical and clinical development of our product candidates, which include: • employee-related expenses, including salaries, related benefits, and stock-based compensation expenses for employees engaged in research and development functions; • expenses incurred in connection with research, laboratory consumables and clinical and preclinical studies; • the cost of consultants engaged in research and development, regulatory, and clinical related services 125 Tab l e of Contents • the cost to develop our manufacturing process and manufacturing product candidates for use in our research, preclinical studies and clinical trials, including under agreements with third parties, such as consultants, contractors and CMOs; • facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies; • costs related to regulatory compliance; and • the cost of annual license fees.
We expect to continue to incur significant losses for the foreseeable future. We anticipate that our expenses and operating losses will increase substantially over the foreseeable future.
We anticipate that our expenses and operating losses will increase substantially over the foreseeable future.
Operating Expenses Our operating expenses consist of research and development expenses and general and administrative expenses.
Operating Expenses Our operating expenses consist of research and development expenses, general and administrative expenses, and impairment of long-lived assets.
Cash Flows The following table sets forth a summary of our cash flows for each of the periods indicated (in thousands): Years Ended December 31, 2022 2021 Net cash from operating activities $ (34,896) $ (34,635) Net cash from investing activities (81,959) (5,543) Net cash from financing activities 118,551 68,435 Net change in cash and cash equivalents $ 1,696 $ 28,257 Operating Activities For the year ended December 31, 2022, net cash used in operating activities of $34.9 million was primarily due to our loss of $58.2 million with non-cash adjustments of $16.4 million for stock-based compensation expense, $9.5 million for the change in fair value of the contingent earnout liability, $3.9 million for depreciation and amortization of operating lease right-of-use-assets, $1.3 million for gain on extinguishment of convertible notes and $0.4 million for accretion of discount on short-term investments.
Cash Flows The following table sets forth a summary of our cash flows for each of the periods indicated (in thousands): Years Ended December 31, 2023 2022 Net cash from operating activities $ (52,395) $ (34,896) Net cash from investing activities 30,077 (81,959) Net cash from financing activities 779 118,551 Net change in cash and cash equivalents $ (21,539) $ 1,696 Operating Activities For the year ended December 31, 2023, net cash used in operating activities of $52.4 million was primarily due to our loss of $71.1 million with non-cash expense adjustments of $26.0 million for impairment of long-lived assets, $9.7 million for stock-based compensation expense, and $5.4 million for depreciation and amortization of operating lease right-of-use-assets offset by non-cash gains of $21.9 million gain on disposal of business to GeneFab $3.3 million gain from change in fair value of the GeneFab Option, $1.1 million for accretion of discount on short-term investments, $0.6 million gain for the change in fair value of the GeneFab receivable, and $0.2 million gain for the change in fair value of contingent earnout liability.
Contingent Earnout Liability In connection with the Reverse Recapitalization, Legacy Senti equity holders are entitled to receive as additional merger consideration up to 2,000,000 shares of our common stock in the aggregate, in two equal tranches of 1,000,000 shares of common stock per tranche, for no consideration upon the occurrence of certain triggering events, including a change of control event.
The fair value of the liability was determined using a Black-Scholes option pricing model incorporating assumptions such as the fair value of our common stock, the risk-free rate, volatility, expected term and dividend yield. 135 Contingent Earnout Liability In connection with the Reverse Recapitalization, Legacy Senti equity holders are entitled to receive as additional merger consideration up to 2,000,000 shares of our common stock in the aggregate, in two equal tranches of 1,000,000 shares of common stock per tranche, for no consideration upon the occurrence of certain triggering events, including a change of control event.
The increase of $12.1 million was primarily due to an increase of $5.8 million in personnel-related expenses, which includes a $2.7 million increase in stock-based compensation expense, $3.4 million in professional services costs and $2.6 million in facility costs. 135 Table of Contents General and administrative expenses .
The increase of $4.0 million was primarily due to an increase of $1.9 million in personnel-related expenses, which includes a $0.8 million decrease in stock-based compensation expense, an increase of $1.7 million in professional services costs and an increase of $0.3 million in other research and development expenses. 130 General and administrative expenses .
Research and development expenses were $34.1 million and $22.0 million for the years ended December 31, 2022 and 2021, respectively.
Research and development expenses were $32.2 million and $28.1 million for the years ended December 31, 2023 and 2022, respectively.
The increase of $19.6 million was primarily due to increases of $18.1 million in personnel-related expenses, which includes an $11.4 million increase in stock-based compensation expense, an increase in insurance of $1.7 million and $0.2 million in other corporate expenses, partially offset by a decrease of $0.2 million related to professional, legal and accounting services expenses and a decrease of $0.1 million in facility costs.
The decrease of $1.0 million was primarily due to a decrease of $4.4 million in personnel-related expenses, which includes a $3.1 million decrease in stock-based compensation expense, partially offset by an increase of $1.7 million in depreciation and amortization expenses, an increase of $1.2 million in facility costs and an increase in insurance of $0.5 million. Impairment of long-lived assets.
Other than the issuance of the commitment shares of the Company’s common stock to Chardan, we issued 300,000 shares of Class A common stock as of December 31, 2022 aggregating to net proceeds of $0.7 million under the Common Stock Purchase Agreement.
Other than the issuance of the commitment shares of the Company’s common stock to Chardan, we issued 1,300,000 shares of Class A common stock through December 31, 2023, for aggregate net proceeds of $1.2 million under the Common Stock Purchase Agreement. There were 1,000,000 issued during the year ended December 31, 2023 for aggregate net proceeds of $0.5 million.
General and administrative expenses were $40.8 million and $21.3 million for the years ended December 31, 2022 and 2021, respectively.
General and administrative expenses were $37.2 million and $38.2 million for the years ended December 31, 2023 and 2022, respectively.
If we are unable to raise capital when needed, or on attractive terms, we could be forced to delay, reduce or eliminate our research or drug development programs or any future commercialization efforts.
In order to improve our liquidity, management is actively pursuing additional financing. We will need to obtain substantial additional funding for continuing operations. If we are unable to raise capital when needed, or on attractive terms, we could be forced to delay, reduce or eliminate our research or drug development programs or any future commercialization efforts.
Change in fair value of contingent earnout liability . For the year ended December 31, 2022, the increase of $9.5 million resulted from a non-cash gain related to the remeasurement of the contingent earnout liability. Gain on extinguishment of convertible notes. For the year ended December 31, 2022, we recognized a gain of $1.3 million upon extinguishment of convertible notes.
For the year ended December 31, 2022, we recognized a gain of $1.3 million upon extinguishment of convertible notes. Change in fair value of GeneFab Note Receivable - related party.
Overview Senti is a preclinical biotechnology company developing next-generation cell and gene therapies engineered with its gene circuit platform technologies to fight challenging diseases. Senti’s mission is to create a new generation of smarter therapies that can outmaneuver complex diseases in ways previously not implemented by conventional medicines.
Overview Senti is an early clinical stage biotechnology company developing next-generation cell and gene therapies engineered with its gene circuit platform technologies for patients living with incurable diseases. Senti’s mission is to create a new generation of smarter therapies that can outsmart complex diseases using novel and unprecedented approaches.
Liquidity and Capital Resources Sources of Liquidity From inception to December 31, 2022, we raised aggregate gross proceeds of $158.1 million from the issuance of shares of our redeemable convertible preferred stock and the issuance of convertible notes and in connection with the Merger and PIPE Financing, the Company received $140.7 million in proceeds, including the Bayer convertible note cancellation and exchange.
Liquidity and Capital Resources Sources of Liquidity From inception to December 31, 2023, we raised aggregate gross proceeds of $300.1 million from the Merger and PIPE Financing, the issuance of shares of our common stock, the issuance of shares of our redeemable convertible preferred stock, the issuance of convertible notes, and to a lesser extent, through collaboration agreements and governmental grants.
Research and development expenses consisted of the following (in thousands): Years Ended December 31, 2022 2021 Personnel-related expenses, including share-based compensation expense $ 13,528 $ 7,687 External services and supplies 12,394 9,041 Office and facilities 7,324 4,680 Other 821 549 Total $ 34,067 $ 21,957 Research and development activities are central to our business model.
Research and development expenses consisted of the following (in thousands): Years Ended December 31, 2023 2022 External services and supplies $ 13,247 $ 11,524 Personnel-related expenses, including share-based compensation expense 10,508 8,570 Office and facilities 7,316 7,274 Other 1,079 777 Total $ 32,150 $ 28,145 Research and development activities are central to our business model.
The lease will expire in 2032 with future undiscounted operating lease payments of $46.0 million over an initial lease period of eleven years. See Note 6 - Operating Leases for details on our lease obligations. In 2021, we began construction of the cGMP facility.
Contractual Obligations and Commitments On June 3, 2021, we entered into a lease agreement for a new cGMP facility in Alameda, California to support planned initial clinical trials for our product candidates. The lease will expire in 2032 with future undiscounted operating lease payments of $46.0 million over an initial lease period of eleven years.
For the years ended December 31, 2022 and 2021, we generated revenue from contracts and license agreements of $3.3 million and $2.3 million, respectively.
For the years ended December 31, 2023 and 2022, we generated revenue from contracts and license agreements of $2.0 million and $3.3 million, respectively. The decrease of $1.3 million was primarily due to decline in services provided under the Spark collaboration agreement. Grant income .
To accomplish this mission, Senti has built a synthetic biology platform that it believes may enable it to program next-generation cell and gene therapies with what it refers to as “gene circuits.” These gene circuits, which Senti created from novel and proprietary combinations of genetic parts, are designed to reprogram cells with biological logic to sense inputs, compute decisions and respond to their respective cellular environments.
These gene circuits, which Senti created from novel and proprietary combinations of DNA sequences, are designed to reprogram cells with biological logic to sense inputs, compute decisions and respond to their respective cellular environments.
We have incurred net losses of $58.2 million and $55.3 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, we had cash, cash equivalents, and short-term investments, of $98.6 million and $56.0 million, respectively, and an accumulated deficit of $173.3 million and $115.1 million, respectively.
As of December 31, 2023 and 2022, we had cash, cash equivalents, and short-term investments, of $35.9 million and $98.6 million, respectively, and an accumulated deficit of $244.3 million and $173.3 million, respectively. Net cash flows used in operating activities were $52.4 million and $34.9 million during the years ended December 31, 2023 and 2022, respectively.
Gain on Extinguishment of Convertible Notes Our convertible note was extinguished as part of the Merger and the change in fair value was recorded in earnings. 134 Table of Contents Change in Preferred Stock Tranche Liability Our preferred stock tranche liability had been accounted for at fair value with changes in the fair value recorded in earnings at each reporting period through settlement on May 14, 2021.
Gain on Extinguishment of Convertible Notes Our convertible note was extinguished as part of the Merger and the change in fair value was recorded in earnings.
For the year ended December 31, 2021, net cash used in investing activities of $5.5 million respectively, was entirely due to purchases of property and equipment.
Investing Activities For the year ended December 31, 2023, net cash provided by investing activities of $30.1 million was due to $60.0 million in proceeds from maturities of short-term investments and $0.1 million in proceeds from the sale of property and equipment, offset by $18.0 million in purchases of short-term investments and $12.0 million in purchases of property and equipment.
For the year ended December 31, 2021, net cash used in operating activities of $34.6 million was primarily due to our net loss of $55.3 million with non-cash adjustments of $14.7 million for an increase in our preferred stock tranche liability, $3.0 million for depreciation and amortization of operating lease right-of-use assets and $2.3 million for stock-based compensation expense, as well as a $1.8 million increase in deferred revenue, $2.0 million for an increase in accounts payable and accrued expenses and other current liabilities, offset by a decrease of $1.1 million in operating lease liabilities, an increase of $1.6 million in prepaid and other assets and an increase of $0.4 million in accounts receivable.
For the year ended December 31, 2022, net cash used in operating activities of $34.9 million was primarily due to our loss of $58.2 million with non-cash adjustments of $16.4 million for stock-based compensation expense, $9.5 million for the change in fair value of the contingent earnout liability, $3.9 million for depreciation and amortization of operating lease right-of-use-assets, $1.3 million for gain on extinguishment of convertible notes and $0.4 million for accretion of discount on short-term investments.
Our internal resources, employees and infrastructure are not directly tied to any one research or product candidate discovery project and are typically deployed across multiple projects. As such, we do not maintain information regarding these costs incurred for these early-stage research and product candidate discovery programs on a project-specific basis.
As such, we do not maintain information regarding these costs incurred for these early-stage research and product candidate discovery programs on a project-specific basis. Our direct external development program expenses reflect external costs attributable to our preclinical development candidates selected for further development as well as investigational new drug applications (“INDs”) and clinical development activities.
We have not historically tracked research and development expenses by program, with the exception of third-party research projects. We have various ongoing early-stage research and product candidate discovery projects and going forward, we expect to have various products undergoing clinical trials.
We have not historically tracked research and development expenses by program, with the exception of third-party research projects. Our internal resources, employees and infrastructure are not directly tied to any one research or product candidate project and are typically deployed across multiple projects.
Our direct external development program expenses reflect external costs attributable to our preclinical development candidates selected for further development as well as investigational new drug applications (“INDs”) 132 Table of Contents and clinical development. Such expenses include third-party contract costs relating to manufacturing, clinical trial activities, translational medicine and toxicology activities.
Such expenses include third-party contract costs relating to manufacturing, clinical trial activities, translational medicine and toxicology activities.
Net cash flows used in operating activities were $34.9 million and $34.6 million during the years ended December 31, 2022 and 2021, respectively. Substantially all of our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
Substantially all of our net losses resulted from costs incurred in connection with our research and development programs, from general and administrative costs associated with our operations , and impairment of the Company’s long-lived assets . We expect to continue to incur significant losses for the foreseeable future.
However, we expect that our research and development expenses and manufacturing costs will increase substantially in connection with our planned preclinical and clinical development activities in the near term and in the future. The successful development of our current and future product candidates is highly uncertain.
The successful development of our current and future product candidates is highly uncertain.
Removed
Senti’s gene circuit platform technologies can be applied in a modality-agnostic manner, with applicability to natural killer (NK) cells, T cells, tumor-infiltrating lymphocytes (“TILs”), stem cells including Hematopoietic Stem Cells (“HSCs”), in vivo gene therapy and messenger ribonucleic acid (mRNA). All of Senti’s current product candidates are in preclinical development.
Added
To accomplish this mission, Senti has built a synthetic biology platform that it believes may enable it to program next-generation cell and gene therapies with gene circuits.
Removed
Senti’s lead product candidates utilize allogeneic chimeric antigen receptor (“CAR”) NK cells outfitted with its gene circuit technologies in several oncology indications with currently high unmet needs. Senti expects to file investigational new drug applications (“INDs”) for multiple product candidates starting in 2023.
Added
Using gene circuits, Senti’s product candidates are designed to precisely kill cancer cells, spare healthy cells, increase specificity to target cells and control the expression of drugs even after administration.
Removed
In addition, in 2021, we began construction on a dedicated in-house, state-of-the-art current good manufacturing practices “cGMP” facility to support clinical and commercial-scale production of multiple allogeneic NK cell product candidates. We anticipate that this facility will become operational in time to support initial clinical trials for our lead product candidates.
Added
Senti is applying its gene circuit technologies to develop a pipeline of medicines that use off-the-shelf chimeric antigen receptor natural killer (“CAR-NK”) cells with the goal of addressing major challenges and providing potentially lifesaving treatments for people living with cancer.
Removed
Our manufacturing facility is designed to leverage the latest cell therapy process technologies as we strive to maximize scalability and minimize cost of goods.
Added
Senti’s lead product candidates utilize off-the-shelf healthy adult donor derived NK cells to create CAR-NK cells outfitted with its gene circuit technologies in several oncology indications with high unmet need. We have incurred net losses of $71.1 million and $58.2 million for the years ended December 31, 2023 and 2022, respectively.
Removed
On June 8, 2022 (the “Closing Date”), Dynamics Special Purpose Acquisition Corp. (“Dynamics” or “DYNS”) consummated a merger pursuant to which Explore Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and wholly owned subsidiary of Dynamics, merged with and into Senti Sub I, Inc.
Added
Recent Developments On August 7, 2023, we completed a transaction with GeneFab, LLC (“GeneFab”), a contract manufacturing and synthetic biology biofoundry focused on next-generation cell and gene therapies.
Removed
(formerly named Senti Biosciences, Inc.) (“Legacy Senti”), with Legacy Senti surviving as a wholly-owned subsidiary of Dynamics (such transactions, the “Merger,” and, collectively with the other transactions described in the merger agreement (as defined below, the “Reverse Recapitalization”). As a result of the Merger, Dynamics was renamed Senti Biosciences, Inc.
Added
We sold, assigned and transferred rights, title and interest in certain of our assets and contractual rights, including all of our equipment at our facilities in Alameda and certain of our intellectual property related to the schematics for and design of the Alameda facility.
Removed
Pursuant to the terms of the merger agreement, at the effective time of the Merger (the “Effective Time”), (1) each outstanding share of common stock of Legacy Senti was cancelled and converted into the right to receive approximately 0.1957 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), and (2) each outstanding share of preferred stock of Legacy Senti was cancelled and converted into the aggregate number of shares of Common Stock that would be issued upon conversion of the shares of Legacy Senti preferred stock based on the applicable conversion ratio immediately prior to the Effective Time, multiplied by approximately 0.1957, resulting in the issuance of a total of 23,163,614 shares of Common Stock.
Added
We subleased our recently constructed 92,000 square foot current good manufacturing practice facility in Alameda, California to GeneFab which will support the clinical manufacturing of our CAR-NK programs, including SENTI-202. The transaction provided us with additional capital in the form of a note receivable and rights to future manufacturing and research activities and reduced longer term operating expenses.
Removed
Prior holders of shares of Legacy Senti common stock and Legacy Senti preferred stock also received the contingent right to receive certain Earnout Shares (as defined below), for each share owned by each such Legacy Senti stockholder that was outstanding immediately prior to the closing of the Merger (the “Closing”).
Added
In connection with the transaction, we are entitled to receive total consideration of $37.8 million before the end of 2025, of which $18.9 million was due at closing and was netted against prepayment owed by us for manufacturing and research activities to GeneFab.
Removed
In addition, certain investors purchased an aggregate of 5,060,000 shares of Common Stock (such investors, the “PIPE Investors”) in a private placement that closed concurrently with the Closing for an aggregate purchase price of $50.6 million (the “PIPE Financing”). Additionally, at the Closing, 14,915,963 shares of Common Stock were issued to Dynamics stockholders (reflecting actual redemptions by Dynamics public stockholders).
Added
The remaining $18.9 million will be paid to us in installments in 2024 and 2025, subject to satisfaction of certain conditions.
Removed
Additionally, an unsecured convertible promissory note in the aggregate principal amount of $5,175,000 that was previously issued by Senti to Bayer Healthcare LLC for a purchase price of $5,175,000 on May 19, 2022 was automatically cancelled and exchanged for 517,500 shares of Common Stock.
Added
The Company determined that the $18.9 million for future manufacturing and research activities, inclusive of the volume discount provided, was executed at market terms and does not result in any impact to the total consideration received from GeneFab for the disposal of the business.
Removed
Pursuant to the terms of the merger agreement, at the Effective Time of the Merger, options to purchase shares of Legacy Senti common stock were converted into options to purchase an aggregate of 1,667,546 shares of Common Stock.
Added
We also agreed to grant a license to GeneFab under certain of our intellectual property rights to conduct manufacturing services and to research, develop, manufacture and commercialize products outside of oncology, pursuant to a license agreement under negotiation.
Removed
Following the Closing Date, former holders of Legacy Senti common stock and preferred stock may receive up to 2,000,000 additional shares of Common Stock (“Earnout Shares”) in the aggregate in two equal tranches if the 131 Table of Contents volume-weighted average closing sale price of our Common Stock is greater than or equal to $15.00 and $20.00, respectively, for any 20 trading days within any 30 consecutive trading day period.
Added
GeneFab was provided an option to purchase up to 19,633,444 shares (i.e. up to $20.0 million worth) of our common stock at an exercise price of $1.01867 (the “GeneFab Option”). The GeneFab Option becomes exercisable upon the execution of the license agreement, no later than August 7, 2026.
Removed
The first and second tranche term is two and three years, respectively, from the closing of the Merger.
Added
The GeneFab Option may be exercised in installments of common stock equal to no more than 19.9% of our outstanding shares of common stock as of the closing date of the transaction.
Removed
If there is a change of control within the three-year following the closing of the Merger that results in a per share price equal to or in excess of the $15.00 and $20.00 share price milestones not previously met, then Company shall issue the earnout shares to the holders of Legacy Senti common stock and preferred stock.

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