Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is a genomic medicine company committed to translating its pioneering science into transformative therapies for patients suffering from devastating neurological disorders. With a sharpened focus on neurology, Sangamo is leveraging its proprietary zinc finger epigenetic regulators and novel adeno-associated virus (AAV) capsid delivery technology to develop a robust pipeline of innovative product candidates.
Business Overview
Sangamo was founded in 1995 and has established itself as a leader in the field of genomic medicine. The company's technology platforms, including its zinc finger protein (ZFP) engineering capabilities and AAV capsid engineering, have enabled the development of a diverse pipeline targeting a range of neurological indications.Sangamo's strategic transformation in 2023 has positioned the company to dedicate its resources and expertise towards addressing serious neurological diseases. The company's neurology-focused pipeline includes programs targeting chronic neuropathic pain, prion disease, tauopathies, and other devastating central nervous system (CNS) disorders. Sangamo's novel AAV capsid, STAC-BBB, has demonstrated industry-leading blood-brain barrier penetration and brain transduction in preclinical studies, unlocking the potential to deliver its potent epigenetic regulation therapies to the CNS.
Financials
Sangamo's financial performance in recent years has been impacted by the termination of several key collaboration agreements, including with Biogen MA, Inc. and Novartis Institutes for BioMedical Research, Inc. in 2023. For the year ended December 31, 2023, the company reported annual revenue of $176.2 million, a decrease from $217.5 million in the prior year. Net loss for the year was $257.8 million, compared to a net loss of $192.3 million in 2022.The company's operating cash flow for the year ended December 31, 2023 was negative $224.8 million, and free cash flow was negative $246.0 million. These declines were primarily driven by the termination of the aforementioned collaborations and the company's increased investment in its neurology-focused research and development efforts.
As of March 31, 2024, Sangamo had cash and cash equivalents of $54.4 million. Based on the company's current operating plan, this cash position is expected to fund its planned operations only into the third quarter of 2024. Sangamo is actively seeking additional capital through various means, including public or private equity or debt financing, royalty financing, and strategic collaborations, to support the advancement of its pipeline and ensure the company's long-term sustainability.
Neurology Pipeline and Technology Platforms
Sangamo's neurology pipeline is anchored by two key focus areas: the development of epigenetic regulation therapies for serious neurological diseases and the advancement of its novel AAV capsid delivery technology.Epigenetic Regulation Therapies
Sangamo's epigenetic regulation programs leverage its proprietary zinc finger technology to precisely modulate gene expression, with the potential to address a wide range of neurological disorders. The company's lead epigenetic regulation program targets chronic neuropathic pain, with an investigational new drug (IND) submission expected in the fourth quarter of 2024, subject to securing adequate funding.Sangamo is also advancing epigenetic regulation programs for prion disease and tauopathies, such as Alzheimer's disease. The company's novel STAC-BBB capsid has demonstrated the ability to effectively deliver its zinc finger payloads to the central nervous system, resulting in potent and widespread repression of target genes in preclinical studies. Sangamo plans to submit a clinical trial authorization (CTA) for its prion disease program in the fourth quarter of 2025 and an IND for its tau program as early as the fourth quarter of 2025, again subject to securing sufficient funding.
Novel AAV Capsid Delivery Technology
Sangamo's STAC-BBB capsid has emerged as a key differentiator for the company's neurology pipeline. In preclinical studies, STAC-BBB demonstrated industry-leading blood-brain barrier penetration and neuronal transduction, with 700-fold higher transgene expression in neurons compared to the benchmark AAV9 capsid. This remarkable delivery capability, combined with Sangamo's potent epigenetic regulation payloads, has the potential to unlock new treatment possibilities for devastating neurological diseases.The company is actively engaged in business development discussions with potential partners regarding the STAC-BBB capsid and its broader AAV capsid engineering platform, known as SIFTER. Sangamo believes these technologies could provide significant non-dilutive funding opportunities to support the advancement of its neurology programs.
Next-Generation Genome Engineering
Sangamo has also made important advancements in its next-generation genome engineering capabilities, including the discovery of its Modular Integrase (MINT) platform. This novel technology, derived from the company's expertise in protein-DNA interactions, enables the precise integration of large DNA sequences into the genome, potentially allowing for the correction of diverse disease-causing mutations with a single medicine.The MINT platform has garnered significant interest from potential partners, and Sangamo is actively engaged in discussions regarding potential collaborations and licensing opportunities for this transformative technology, which could provide additional non-dilutive funding to support the company's operations.
Clinical Programs
Fabry Disease
Sangamo's lead clinical program is its investigational gene therapy, isaralgagene civaparvovec, for the treatment of Fabry disease. The company has completed dosing of all 33 patients in the Phase 1/2 STAAR study, with one additional patient having been able to stop enzyme replacement therapy (ERT) to date, for a total of 14 patients withdrawn from ERT.In February 2024, Sangamo presented updated clinical data at the 20th Annual WORLD Symposium, showcasing sustained benefit and a differentiated safety profile for isaralgagene civaparvovec. Importantly, the company has aligned with the U.S. Food and Drug Administration (FDA) on an abbreviated pathway to potential approval, which could enable a more rapid, efficient, and cost-effective development process. Sangamo is currently engaged in active discussions with potential collaboration partners for the Fabry disease program.
Hemophilia A
Sangamo's partner, Pfizer Inc., is leading the development of giroctocogene fitelparvovec, an investigational gene therapy for patients with moderately severe to severe hemophilia A. The Phase 3 AFFINE trial is progressing, with dosing of all patients now complete. A pivotal readout is expected in mid-2024, and Pfizer anticipates submitting a biologics license application and a marketing authorization application in early 2025 if the results are supportive.Sangamo is eligible to receive up to $220 million in potential milestone payments from Pfizer upon the achievement of certain regulatory and commercial milestones for giroctocogene fitelparvovec. Additionally, the company is entitled to royalties of 14% to 20% on potential sales of the product, subject to certain reductions.
Liquidity
As of March 31, 2024, Sangamo had cash and cash equivalents of $54.4 million. Based on the company's current operating plan, this cash position is expected to fund its planned operations only into the third quarter of 2024. Sangamo has been actively seeking substantial additional capital through various means, including public or private equity or debt financing, royalty financing, and strategic collaborations, to support the advancement of its pipeline and ensure the company's long-term sustainability.In March 2024, Sangamo completed a registered direct offering with institutional investors, raising approximately $21.8 million in net proceeds. While this was a significant development, the company will still need substantial additional capital to continue operating as a going concern and to fund its operations.
Sangamo's history of significant losses, negative cash flows from operations, and limited liquidity resources have resulted in management's assessment that there is substantial doubt about the company's ability to continue as a going concern for at least the next 12 months from the date the Condensed Consolidated Financial Statements were issued. The company has explored, and continues to explore, whether filing for bankruptcy protection is in the best interest of the company and its stakeholders.
Risks and Challenges
Sangamo faces several risks and challenges that could impact its ability to execute on its strategic plan and deliver value to shareholders. These include:- Substantial doubt about the company's ability to continue as a going concern due to its limited cash resources and need for significant additional funding.
- Reliance on successful development and commercialization of its product candidates, which are still in preclinical or early clinical stages and may never receive regulatory approval.
- Intense competition in the genomic medicine and neurology therapeutic areas, with rival technologies and products that may be superior or commercialized more quickly.
- Complexities and risks associated with manufacturing genomic medicines, including potential supply chain disruptions and regulatory hurdles.
- Ability to obtain, maintain, and enforce necessary intellectual property protections for its technologies and product candidates.
- Potential for third-party patent infringement claims and the associated costs and uncertainties of litigation.
- Challenges in hiring, integrating, and retaining key personnel in a competitive talent market.
- Potential macroeconomic and market conditions that could adversely impact the company's ability to raise additional capital.
- Risk of Nasdaq delisting due to the company's failure to maintain a minimum closing bid price for its common stock.
Conclusion
Sangamo Therapeutics is at a critical juncture, with a sharpened focus on developing transformative genomic medicine therapies for devastating neurological disorders. The company's proprietary zinc finger epigenetic regulators and novel AAV capsid delivery technology have the potential to unlock new treatment possibilities for patients suffering from chronic neuropathic pain, prion disease, tauopathies, and other CNS conditions.However, Sangamo's ability to execute on its strategic plan and advance its promising pipeline is heavily dependent on its ability to secure substantial additional capital in the near term. The company's going concern status and the need for significant funding to continue operations present significant risks that must be carefully navigated. Sangamo's success will hinge on its ability to forge strategic partnerships, access non-dilutive funding sources, and ultimately deliver on the transformative potential of its groundbreaking science.