Sana Biotechnology (SANA) is back on traders radar after Nature Biotechnology published new preclinical data on its fusogen platform, showing in vivo gene editing of hematopoietic stem cells without conditioning chemotherapy.

The Nature Biotechnology data has arrived after a big run up, with the share price at 4.35 and a roughly 163 percent year to date share price return signaling that optimism and speculative momentum are clearly building despite a still negative three year total shareholder return.

If this kind of platform news has you thinking about where the next breakout might come from, it is worth exploring healthcare stocks for more ideas in the space.

With the shares already having more than doubled this year and trading at a steep discount to bullish analyst targets, the key question now is whether Sana is a genuine buying opportunity or if markets are already pricing in future growth.

Price to Book Multiple of 5.9x: Is it justified?

At 4.35 per share, Sana trades at a rich valuation versus peers, with its 5.9x price to book ratio suggesting the market is already paying up for the story.

The price to book ratio compares a company’s market value to its net assets. This is a common yardstick for early stage biotechs that have little or no revenue.

In Sana’s case, paying 5.9 times book value while the business is unprofitable and expected to remain loss making implies investors are focusing heavily on potential future breakthroughs rather than current fundamentals.

The premium looks even starker against the US Biotechs industry average of 2.8x and a peer group average of 5.6x. This underlines that Sana is not a cheap way to access the theme.

Result: Price to book of 5.9x (OVERVALUED)

However, setbacks in clinical trials or weaker than expected data updates could quickly puncture sentiment and challenge the rich valuation that investors are currently paying.

Build Your Own Sana Biotechnology Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.

A great starting point for your Sana Biotechnology research is our analysis highlighting 1 key reward and 6 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.