Senti Biosciences Inc.
11/13/2025 | Press release | Distributed by Public on 11/13/2025 16:10
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Senti Biosciences, Inc. ("Senti") entered into a business combination agreement (the "Agreement") with Dynamics Special Purpose Corp. ("DYNS") on December 19, 2021. The transactions contemplated by the terms of the Agreement were completed on June 8, 2022 (the "Closing"), in conjunction with which DYNS changed its name to Senti Biosciences, Inc. (hereafter referred to, collectively with its subsidiary, as "Senti," the "Company," "we," "us," or "our," unless the context otherwise requires). The transactions contemplated in the Agreement are collectively referred to as the "Merger."
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q (this "Quarterly Report") as well as Senti's audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report") and filed with the Securities and Exchange Commission (the "SEC") on March 20, 2025. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly 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. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "explore," "intend," "estimate," "seek," and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Annual Report and Part II, Item 1A of this Quarterly Report filed with the U.S. Securities and Exchange Commission (the "SEC"). The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
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. Our mission is to create a new generation of smarter medicines that outsmart complex diseases using novel and unprecedented approaches. To accomplish this mission, we have built a synthetic biology platform that we believe may enable us to program next-generation cell and gene therapies with gene circuits. These gene circuits, which we 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. Using gene circuits, our 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.
We are applying our gene circuit technologies to develop a pipeline of medicines that use chimeric antigen receptor ("CAR") white blood cells with the goal of addressing major challenges and providing potentially lifesaving treatments for people living with cancer. Our lead product candidates utilize off-the-shelf healthy adult donor derived natural killer ("NK") cells to create CAR-NK cells outfitted with gene circuit technologies in several
oncology indications with high unmet need. In 2024, we initiated a clinical trial of SENTI-202 for blood cancers and our partner, Celest Therapeutics, (Shanghai) Co. Ltd., initiated a clinical trial for SENTI-301A for solid tumors manufactured using Celest Therapeutics' process, which has ceased enrolling patients due to the observance of dose limiting toxicities.
We have incurred net losses of $18.1 million and $28.9 million for the three months ended September 30, 2025 and 2024, respectively, and net losses to $47.0 million and $52.2 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $12.2 million and $48.3 million, respectively, and an accumulated deficit of $344.1 million and $297.1 million, respectively. Net cash flows used in operating activities were $36.6 million and $27.9 million during the nine months ended September 30, 2025 and 2024, 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. 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. 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;
•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 costs associated with operating as a public company.
Recent Developments
Transition of Interim Chief Financial Officer
On January 31, 2025, the Consulting Agreement between the Company and Yvonne Li, the Company's Interim Chief Financial Officer, expired in accordance with its terms. As such, effective January 31, 2025, Ms. Li was no longer the Company's principal financial officer and principal accounting officer. On February 5, 2025, the Company and Ms. Li entered into a new consulting agreement pursuant to which Ms. Li served as a consultant to the Company and cooperated with the Company's executive management team and other functional teams on an orderly transition of her responsibilities through March 31, 2025.
Appointment of Principal Financial Officer and Principal Accounting Officer
Following approval by the Board, Timothy Lu, M.D., Ph.D., our Chief Executive Officer, was appointed to serve as our interim principal financial officer and principal accounting officer, effective as of January 31, 2025,
until immediately following the Company's filing of the Annual Report, when Mr. Cross assumed responsibilities as the Company's principal financial officer and principal accounting officer as noted below.
Appointment of Chief Financial Officer
On February 23, 2025, following the approval by the Board, Jay Cross was appointed as our Chief Financial Officer, effective as of March 3, 2025. The Board also appointed Mr. Cross to serve as our principal financial officer and principal accounting officer, effective immediately following the filing of the Annual Report.
Conversion of Series A Redeemable Convertible Preferred Stock
On March 6, 2025, at our special meeting of stockholders (the "Special Meeting"), our stockholders approved the issuance of common stock in accordance with Nasdaq Listing Rule 5635 upon (i) conversion of Series A redeemable convertible preferred stock and (ii) the exercise of warrants to purchase shares of common stock. Subsequently, on March 10, 2025, we sent notices to our stockholders relating to the conversion of 21,157 shares of Series A redeemable convertible preferred stock into 21,157,000 shares of common stock, effective as of March 10, 2025.
Amended and Restated 2022 Equity Incentive Plan ("2022 EIP")
On March 6, 2025, at the Special Meeting, our stockholders approved the Amended and Restated 2022 EIP, which (i) increased the number of shares of common stock available for issuance under the Company's 2022 EIP by an additional 4,300,000 shares, (ii) increased the number of shares that may be issued pursuant to incentive stock options to an aggregate number of shares reserved for issuance under the 2022 EIP as of the date that stockholders approved the 2022 EIP and (iii) extended the term of the plan to the tenth anniversary of the date that stockholders approved the 2022 EIP. The 2022 EIP was previously approved, subject to stockholder approval, by the Board.
Board Composition
On March 7, 2025, the Board approved the appointment of Feng Hsiung to the Board, pursuant to the terms of a letter agreement dated as of December 2, 2024, by and between us and Celadon. In connection with Mr. Hsiung's appointment, the Board approved an increase in the authorized number of members of the Board from six to seven members. Mr. Hsiung was appointed to fill the vacancy created by the foregoing increase in the size of the Board, as a Class III director, to serve in such capacity until the annual meeting of stockholders in 2028 or until his earlier resignation, death or removal.
On July 18, 2025, the Board approved the appointment of Bryan Baum to the Board, pursuant to the terms of a letter agreement dated as of December 2, 2024, by and between us and Celadon. In connection with Mr. Baum's appointment, the Board approved an increase in the authorized number of members of the Board from seven to eight members. Mr. Baum was appointed to fill the vacancy created by the foregoing increase in the size of the Board, as a Class II director of the Company, to serve in such capacity until the annual meeting of the Company's stockholders in 2027 or until his earlier resignation, death, or removal.
Audit Committee Appointment
Effective March 7, 2025, Brenda Cooperstone, who was previously appointed as a member of the Audit Committee of the Board (the "Audit Committee"), tendered her resignation as a member of the Audit Committee. Ms. Cooperstone continues to serve as a member of the Board and the Compensation Committee of the Board.
On March 7, 2025, upon the recommendation of its Nominating and Corporate Governance Committee, the Board unanimously appointed Feng Hsiung to serve as a member of the Audit Committee in addition to serving as a member of the Board, effectively immediately. In addition to the annual stock option grant and the annual cash retainers for serving as a member of the Board, Mr. Hsiung will be eligible to receive $7,500 annually for serving as a member of the Audit Committee.
Effective July 31, 2025, Ed Mathers, who was previously appointed as a member of the Audit Committee of the Board, tendered his resignation as a member of that committee. Mr. Mathers continues to serve as a member of the Board and as a member of the Nominating and Corporate Governance Committee and the Compensation Committee of the Board.
Effective July 31, 2025, the Board unanimously appointed Bryan Baum to serve as a member of the Audit Committee. Following this appointment, the Audit Committee is now comprised of Fran Schulz (Chair), Feng Hsiung and Bryan Baum.
Termination of Chardan Common Stock Purchase Agreement
On March 17, 2025, we provided notice to Chardan Capital Markets LLC ("Chardan") that we were terminating the Common Stock Purchase Agreement and Registration Rights Agreement, as amended and restated on July 16, 2024, between us and Chardan.
2025 ATM Agreement
On March 20, 2025, we entered into the 2025 ATM Agreement with Leerink Partners with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, up to a maximum aggregate offering price of $17.5 million of our common stock through Leerink Partners as our sales agent. Under 2025 ATM Agreement, we are not obligated to sell any shares, and either party may suspend or terminate the offering of common stock upon notice to the other party and subject to certain conditions. Leerink Partners will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon the our instructions, including any price, time or size limits specified by us. We pay Leerink Partners a commission of equal to 3.0% of the gross proceeds of any common shares sold, reimburse certain fees and disbursements and provide Leerink Partners with customary indemnification and contribution rights. For the nine months ended September 30, 2025, we sold 244,960 shares of common stock under the 2025 ATM Agreement at a weighted average price of $2.82 per share, resulting in gross proceeds of $0.7 million and net proceeds of less than $0.1 million after sales agent commissions and offering costs.
SENTI-202 Update
On April 28, 2025, we announced certain corporate updates including preliminary data from a Phase 1 clinical trial of SENTI-202, a potential first-in-class off-the-shelf Logic Gated selective CD33 OR FLT3 NOT EMCN chimeric antigen receptor natural killer investigational cell therapy, for the treatment of relapsed/refractory hematologic malignancies including acute myeloid leukemia.
On June 18, 2025, we announced that the FDA has granted Orphan Drug Designation to SENTI-202 for the treatment of relapsed/refractory hematologic malignancies including acute myeloid leukemia.
On August 5, 2025, we announced the determination of the recommended Phase 2 dose ("RP2D") for SENTI-202 following completion of the dose-escalation portion of the ongoing Phase 1 clinical trial. The RP2D was established at 1.5 × 10⁹ CAR-positive NK cells per dose, administered on Days 0, 7, and 14 of a 28-day cycle following lymphodepletion. The safety profile observed to date has been manageable, and the maximum tolerated dose was not reached. Enrollment is ongoing in the expansion cohort at the RP2D, with topline data expected before the end of 2025.
SN301A Update
We have collaborated with Celest Therapeutics (Shanghai) Co. Ltd. (Celest) to evaluate SN301A in a single center Investigator Sponsored Trial in China. SN301A is a Celest product which incorporates our SENTI-301A gene circuit into Celest's CAR-NK cells, which are made using Celest's manufacturing platform in China, which is distinct from our manufacturing process. Based on the observation of certain dose limiting toxicities in the SN301A
Investigator Sponsored Trial, enrollment has been stopped. We are evaluating next steps with SENTI-301A/SN301A as part of ongoing pipeline prioritization.
GeneFab Sublease Default
GeneFab is currently in default under the GeneFab Sublease and has not indicated when it will pay us the full amount of overdue rent payments. We are working with GeneFab on a plan to address the nonpayment. As of September 30, 2025, GeneFab owed us $4.7 million in past-due sublease rent payments, of which $1.0 million was received in October 2025.
On September 28, 2025, we received a notice of default from the landlord of the Alameda lease stating that, as of September 26, 2025, we were in default (the "Default") for nonpayment of rent in the amount of approximately $0.4 million (the "Default Amount"). Our obligations under the Alameda lease are expected to be substantially funded by sublease payments from GeneFab. As of September 30, 2025, the Alameda lease had not been terminated, and we continue to recognize the right-of-use asset and lease liability associated with the Alameda lease. We are currently in discussions with the landlord to cure the Default.
Components of Results of Operations
Operating Expenses
Our operating expenses consist of research and development expenses, and general and administrative expenses.
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 preclinical studies;
•the cost of consultants engaged in research and development, regulatory, and clinical related services
•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 third-party manufacturing organizations, or 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 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 project or product candidate 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.
Our direct external development program expenses reflect external costs attributable to our preclinical development candidates selected for further development as well as INDs and clinical development activities. Such
expenses include third-party contract costs relating to manufacturing, clinical trial activities, translational medicine and toxicology activities. We do not allocate internal research and development costs which include personnel, facility costs, laboratory consumables and discovery and research related activities associated with our pipeline because these costs are deployed across multiple programs and our platform, and, as such, are not separately classified.
Research and development expenses consisted of the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| External services and supplies | $ | 6,743 | $ | 5,284 | $ | 19,257 | $ | 15,519 | |||||||||||||||
| Personnel-related expenses, including stock-based compensation | 2,378 | 1,685 | 6,298 | 6,306 | |||||||||||||||||||
| Facilities and other | 1,395 | 1,686 | 4,271 | 4,759 | |||||||||||||||||||
| Total | $ | 10,516 | $ | 8,655 | $ | 29,826 | $ | 26,584 | |||||||||||||||
Research and development activities are central to our business model. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our preclinical development programs. Product candidates in clinical development generally have higher development costs than those in preclinical stages of development, primarily due to the increased size and duration of clinical trials. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical development of any of our product candidates. However, we expect that our research and development expenses and manufacturing costs will increase 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. This 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;
•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.
A change in the outcome of any of these variables may significantly impact the costs and timing associated with the development of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.
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, insurance and an allocation of facility-related costs.
General and administrative expenses consisted of the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in thousands) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| External services and supplies | $ | 1,072 | $ | 1,674 | $ | 4,564 | $ | 4,480 | |||||||||||||||
| Personnel-related expenses, including stock-based compensation | 3,035 | 1,927 | 8,804 | 6,074 | |||||||||||||||||||
| Facilities and other | 1,648 | 2,245 | 4,881 | 5,579 | |||||||||||||||||||
| Depreciation and amortization | 677 | 714 | 2,068 | 2,155 | |||||||||||||||||||
| Total | $ | 6,432 | $ | 6,560 | $ | 20,317 | $ | 18,288 | |||||||||||||||
Other Income (expense), net
Interest Income
Interest income consists of interest earned on our cash and cash equivalents, and restricted cash held during the year.
GeneFab sublease Income (expense)- related party
GeneFab sublease Income (expense) - related party represents income from our sublease agreements with GeneFab. In the third quarter of 2025, we determined that collectibility of certain rent payments under our related-
party sublease with GeneFab were no longer probable. As a result, we reversed $3.3 million of previously recognized sublease income in accordance with ASC 842 and will recognize future lease income only as payments are received. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 5- Operating Leases" in this Quarterly Report for details.
Other income (expense), net
Other income (expense) primarily consists of income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics, partially offset by miscellaneous tax and other expense items.
Change in Fair Value of GeneFab Option - related party
The change in fair value of the GeneFab Option consists of the remeasurement to fair value of the derivative liability related to the option provided to GeneFab to acquire up to $20.0 million in shares of our common stock at a purchase price of $10.18670 per share. As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Option was zero. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 10-Fair Value Measurements" in this Quarterly Report for details.
Change in Fair Value of GeneFab Economic Share - related party
The change in fair value of GeneFab Economic Share is a result of the change in the equity value of GeneFab and the volatility at each reporting period. As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 10-Fair Value Measurements" in this Quarterly Report for details.
Change in Fair Value of GeneFab Note Receivable - related party
The change in fair value of GeneFab Note Receivable consists of the remeasurement to fair value at each reporting period of the deferred consideration due from GeneFab for which we have elected the fair value option. As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasure its fair value. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 3-GeneFab Transaction" in this Quarterly Report for details.
Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024
The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:
| Three Months Ended September 30, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands) | (unaudited) | (unaudited) | |||||||||||||||
| Operating expenses: | |||||||||||||||||
|
Research and development (including related party costs of $3,417 and $3,790 for the three months ended September 30, 2025 and 2024, respectively)
|
$ | 10,516 | $ | 8,655 | $ | 1,861 | |||||||||||
| General and administrative | 6,432 | 6,560 | (128) | ||||||||||||||
| Total operating expenses | 16,948 | 15,215 | 1,733 | ||||||||||||||
| Loss from operations | (16,948) | (15,215) | (1,733) | ||||||||||||||
|
Other income (expense):
|
|||||||||||||||||
| Interest income | 166 | 150 | 16 | ||||||||||||||
| GeneFab sublease income (expense) - related party | (1,567) | 1,657 | (3,224) | ||||||||||||||
| Other income (expense), net | 223 | (11) | 234 | ||||||||||||||
| Change in fair value of GeneFab Option - related party | - | 2,386 | (2,386) | ||||||||||||||
| Change in fair value of GeneFab Economic Share - related party | - | (398) | 398 | ||||||||||||||
| Change in fair value of GeneFab Note Receivable - related party | - | (17,435) | 17,435 | ||||||||||||||
|
Total other expense, net
|
(1,178) | (13,651) | 12,473 | ||||||||||||||
| Net loss | $ | (18,126) | $ | (28,866) | $ | 10,740 | |||||||||||
Research and development expenses. Research and development expenses were $10.5 million and $8.7 million for the three months ended September 30, 2025 and 2024, respectively. The increase of $1.8 million was primarily due to an increase of $1.4 million in external services and supplies cost and an increase of $0.7 million in personnel-related expenses, offset by a decrease of $0.3 million in facilities and other costs.
General and administrative expenses. General and administrative expenses were $6.4 million and $6.6 million for the three months ended September 30, 2025 and 2024, respectively. The decrease of $0.2 million was primarily due to a decrease of $0.7 million in external services and supplies cost and a decrease of $0.6 million in facilities and other costs, partially offset by an increase of $1.1 million in personnel-related expenses.
Interest income.Interest income was $0.2 million for both the three months ended September 30, 2025 and 2024.
GeneFab sublease income (expense) - related party. The decrease of $3.2 million was primarily due to a $3.3 million reversal of previously recognized sublease income in accordance with ASC 842. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 5- Operating Leases" in this Quarterly Report for details.
Other income (expense), net.The increase in other income of $0.2 million was primarily due to income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics which commenced in October 2024.
Change in fair value of GeneFab Option - related party. As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Option was zero due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed. For the three months ended September 30, 2025, there was no change in fair value for the GeneFab Option.
Change in fair value of GeneFab Economic Share - related party. As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the
events triggering the payment underlying the GeneFab Economic Share. For the three months ended September 30, 2025, there was no change in fair value for the GeneFab Economic Share.
Change in Fair Value of GeneFab Note Receivable - related party. As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasure the fair value.
Comparison of the Nine Months Ended September 30, 2025 and 2024
| Nine Months Ended September 30, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands) | (unaudited) | (unaudited) | |||||||||||||||
| Operating expenses: | |||||||||||||||||
|
Research and development (including related party costs of $11,073 and $11,059 for the nine months ended September 30, 2025 and 2024, respectively)
|
$ | 29,826 | $ | 26,584 | $ | 3,242 | |||||||||||
| General and administrative | 20,317 | 18,288 | 2,029 | ||||||||||||||
| Total operating expenses | 50,143 | 44,872 | 5,271 | ||||||||||||||
| Loss from operations | (50,143) | (44,872) | (5,271) | ||||||||||||||
|
Other income (expense):
|
|||||||||||||||||
| Interest income | 830 | 718 | 112 | ||||||||||||||
|
GeneFab sublease income - related party
|
1,732 | 4,705 | (2,973) | ||||||||||||||
| Other income (expense), net | 610 | (6) | 616 | ||||||||||||||
| Change in fair value of GeneFab Option - related party | - | 6,331 | (6,331) | ||||||||||||||
| Change in fair value of GeneFab Economic Share - related party | - | (1,816) | 1,816 | ||||||||||||||
| Change in fair value of GeneFab Note Receivable - related party | - | (17,240) | 17,240 | ||||||||||||||
| Total other income (expense), net | 3,172 | (7,308) | 10,480 | ||||||||||||||
| Net loss | $ | (46,971) | $ | (52,180) | $ | 5,209 | |||||||||||
Research and development expenses. Research and development expenses were $29.8 million and $26.6 million for the nine months ended September 30, 2025 and 2024, respectively. The increase of $3.2 million was primarily due to an increase of $3.7 million in external services and supplies cost, partially offset by $0.5 million in facilities and other cost.
General and administrative expenses. General and administrative expenses were $20.3 million and $18.3 million for the nine months ended September 30, 2025 and 2024, respectively. The increase of $2.0 million was primarily due to an increase of $2.7 million in personnel-related expense, partially offset by a decrease of $0.7 million in facilities and other costs.
Interest income.Interest income was $0.8 million and $0.7 million for the nine months ended September 30, 2025 and 2024, respectively. The increase is attributed to higher average cash balances in the relevant periods.
GeneFab sublease income - related party. The decrease of $3.0 million was primarily due to a $3.3 million reversal of previously recognized sublease income in accordance with ASC 842, offset by increased sublease income from a portion of our HQ lease, which started on June 12, 2024. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 5- Operating Leases" in this Quarterly Report for details.
Other income (expense), net.The increase in other income of $0.6 million was primarily due to income from the sublease of a portion of our headquarters space to BKPBIOTECH and JLSA2 Therapeutics which commenced in October 2024.
Change in fair value of GeneFab Option - related party. As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Option was zero due to the probability that a suitable license agreement, which is a condition of GeneFab obtaining the Option, would not be signed. For the nine months ended September 30, 2025, there was no change in fair value for the GeneFab Option.
Change in fair value of GeneFab Economic Share - related party. As of September 30, 2025 and December 31, 2024, we determined that the fair value of the GeneFab Economic Share was zero due to the low probability of the events triggering the payment underlying the GeneFab Economic Share. For the nine months ended September 30, 2025, there was no change in fair value for the GeneFab Economic Share.
Change in Fair Value of GeneFab Note Receivable - related party. As of December 31, 2024, the GeneFab Note Receivable was waived and we no longer remeasure the fair value.
Liquidity and Capital Resources
Sources of Liquidity
We do not have any products approved for sale and have not generated any revenue from product sales or otherwise. We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of September 30, 2025, we had $12.2 million in cash and cash equivalents, and an accumulated deficit of $344.1 million.
We will need substantial additional funding to support our continuing operations and pursue our development strategy. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, if at all. 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 substantial doubt exists about our ability to continue as a going concern, we may also be required to sell or license to other parties' rights to develop or commercialize our product candidates that we would prefer to retain.
From inception to September 30, 2025, we raised aggregate gross proceeds of $356.9 million from the merger in 2022, the issuance of shares of common stock, the issuance of shares of redeemable convertible preferred stock, the issuance of convertible notes, and, to a lesser extent, through collaboration agreements and governmental grants and loans.
On August 31, 2022, we entered into an Amended & Restated Purchase Agreement with Chardan (the "A&R Purchase Agreement"). Pursuant to the A&R Purchase Agreement, we had the right, in our sole discretion, to sell to Chardan up to the lesser of: (i) $50.0 million of shares of our common stock; and (ii) 872,704 shares of common stock at 97% of the volume weighted average price ("VWAP") of the common stock calculated in accordance with the A&R Purchase Agreement, over a period of 36 months subject to certain limitations and conditions contained in the A&R Purchase Agreement. Sales and timing of any sales of common stock were solely at our election, and we were under no obligation to sell any securities to Chardan under the A&R Purchase Agreement. 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 A&R Purchase Agreement, upon execution of the A&R Purchase Agreement, we issued 10,000 shares of our common stock to Chardan and paid a $0.4 million document preparation fee. For the nine months ended September 30, 2024, we sold 3,593 shares of common stock under the A&R Purchase Agreement. On March 17, 2025, we terminated the A&R Purchase Agreement. Prior to termination, we issued 384,313 shares of common stock to Chardan under the A&R Purchase Agreement, for aggregate net proceeds of $3.0 million.
On March 20, 2025, we entered into the 2025 ATM Agreement with Leerink Partners with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, up to a maximum aggregate offering price of $17.5 million of our common stock through Leerink Partners as our sales
agent. Under 2025 ATM Agreement, we are not obligated to sell any shares, and either party may suspend or terminate the offering of common stock upon notice to the other party and subject to certain conditions. Leerink Partners will use commercially reasonable efforts, consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Global Market, to sell shares from time to time based upon the our instructions, including any price, time or size limits specified by us. We pay Leerink Partners a commission equal to 3.0% of the gross proceeds of any common shares sold, reimburse certain fees and disbursements and provide Leerink Partners with customary indemnification and contribution rights. For the nine months ended September 30, 2025, we sold 244,960 shares of common stock under the 2025 ATM Agreement at a weighted average price of $2.82 per share, resulting in gross proceeds of $0.7 million and net proceeds of less than $0.1 million after sales agent commissions and offering costs.
The agreement with CIRM, as described in Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 4-Other Financial Statement information" in this Quarterly Report is expected to provide us in total a grant of $8.0 million, subject to achievement of certain operational milestones. The CIRM Grant will help support the ongoing clinical development of SENTI-202.
In December 2024, we issued 21,157 shares of Series A redeemable convertible preferred stock and accompanying warrants to purchase up to 31,735,500 shares of common stock for an aggregate offering price of 47.6 million. On March 10, 2025, we converted the outstanding shares of Series A redeemable convertible preferred stock into an aggregate of 21,157,000 shares of common stock, at the conversion price of $2.25 per share.
Cash Flows
We derived the following summary of our condensed consolidated cash flows for the periods indicated from Part I, Item 1, "Financial Information-Condensed Consolidated Financial Statements (Unaudited)" in this Quarterly Report:
| Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | (unaudited) | (unaudited) | ||||||||||||
| Net cash provided by (used in): | ||||||||||||||
| Operating activities | $ | (36,569) | $ | (27,893) | ||||||||||
| Investing activities | (184) | 45 | ||||||||||||
| Financing activities | 721 | 2,440 | ||||||||||||
| Net change in cash, cash equivalents and restricted cash | $ | (36,032) | $ | (25,408) | ||||||||||
Operating Activities
For the nine months ended September 30, 2025, net cash used in operating activities of $36.6 million was primarily due to our loss of $47.0 million with non-cash adjustments of $2.7 million for depreciation and $4.3 million for stock-based compensation expense. Other material changes included a $4.6 million decrease in GeneFab prepaid expenses - related party, a $1.7 million decrease in operating lease right-of-use assets, and a $3.4 million decrease in operating lease liabilities.
For the nine months ended September 30, 2024, net cash used in operating activities of $27.9 million was primarily due to our loss of $52.2 million with non-cash adjustments of $17.2 million loss from change in fair value of the GeneFab Note Receivable, $6.3 million gain from change in fair value of the GeneFab Option, $1.8 million loss from change in fair value of GeneFab Economic Share, $2.9 million for depreciation and $1.2 million for stock-based compensation expense. Other material changes were comprised of $10.9 million decrease in GeneFab prepaid expenses, $1.1 million decrease in prepaid expenses and other assets, $0.1 million increase in other liabilities, net of
current portion, offset by $3.1 million decrease in accounts payable and accrued expenses and $3.0 million decrease in operating lease liabilities.
Investing Activities
For the nine months ended September 30, 2025, net cash used in investing activities of $0.2 million was primarily due to purchases of property and equipment.
For the nine months ended September 30, 2024, net cash provided by investing activities was nominal.
Financing Activities
For the nine months ended September 30, 2025, net cash provided by financing activities was $0.7 million, primarily due to $2.5 million received under the CIRM Grant and proceeds from issuance of common stock related to the ATM Agreement, net of commissions of $0.7 million, offset by the payment of issuance costs of $2.5 million.
For the nine months ended September 30, 2024, net cash provided by financing activities was primarily due to $2.4 million proceeds received under the CIRM Grant.
Funding Requirements
We concluded that substantial doubt about our ability to continue as a going concern continues to exist and that our cash and cash equivalents of $12.2 million as of September 30, 2025, are not sufficient for us to continue as a going concern for at least one year from the issuance date of the condensed consolidated financial statements. Additional funds will be necessary to maintain current operations and to continue research and development activities. Our continued existence is dependent upon management's ability to raise capital, collect amounts owed to us under existing agreements and ultimately develop profitable operations. While management is devoting substantially all of its efforts to developing our business, raising capital and collecting amounts owed to us under existing agreements, there can be no assurance that our efforts will be successful. Moreover, no assurance can be given that management's actions will result in raising additional financing or profitable operations.
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;
•our ability to collect amounts owed to us by our sublessee, GeneFab;
•the scope and costs of 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.
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. Although management continues to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.
Contractual Obligations and Commitments
Our obligations under the Alameda lease are expected to be substantially funded by sublease payments from GeneFab. GeneFab is currently in default under the GeneFab Sublease and has not indicated when it will pay us the full amount of overdue rent payments, but we are working with GeneFab on a plan to address the nonpayment. As of September 30, 2025, GeneFab owed us $4.7 million in past-due sublease rent payments, of which $1.0 million was received in October 2025.
In addition, on September 28, 2025, we received a notice of default from the landlord on our Alameda lease stating that, as of September 26, 2025, we were in default (the "Default") for nonpayment of rent in the amount of approximately $0.4 million (the "Default Amount"). We are currently in discussions with the landlord to cure the default. As of September 30, 2025, the Alameda lease has not been terminated, and we continue to recognize the right-of-use asset and lease liability associated with the Alameda lease.
There were no other material changes outside of the ordinary course of business in our contractual obligations as of September 30, 2025, from those as of December 31, 2024 as reported in our Annual Report.
Off-Balance Sheet Arrangements
For 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.
Critical Accounting Estimates
For the nine months ended September 30, 2025, there have been no material changes to our critical accounting policies and estimates compared to those disclosed in Part II, Item 7 of our Annual Report.
Emerging Growth Company Status
The JOBS Act permits an emerging growth company to take advantage of an extended transition to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We are an "emerging growth company" as defined in Section 2(a) of the Securities Act, and have elected to not take advantage of the benefits of this extended transition 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.
Smaller Reporting Company Status
We are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. 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.
Segment Information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. Our CODM (Chief Executive Officer) views our operations and manages the business as a single operating segment, which is the research and development of our gene circuit platform. Refer to Part I, Item 1. "Condensed Consolidated Financial Statements (Unaudited)-Notes to Condensed Consolidated Financial Statements (Unaudited) -Note 14-Segment Reporting" in this Quarterly Report for additional information related to operating segment. All long-lived assets are located in the United States. We do not currently generate any revenue.
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