Sangamo Therapeutics, Inc. (NASDAQ: SGMO) is a pioneering genomic medicine company committed to translating groundbreaking science into transformative therapies for patients and families afflicted with serious neurological diseases. With a rich history of innovation and a steadfast focus on addressing unmet medical needs, Sangamo is positioning itself as a leader in the rapidly evolving landscape of genomic therapeutics.
Business Overview and History
Sangamo was founded in 1995 with the goal of harnessing the power of zinc finger proteins (ZFPs) to develop novel gene-editing and gene-regulation technologies. Initially, the company focused on developing its zinc finger technology for non-therapeutic applications such as research tools and agricultural products. Over time, Sangamo shifted its focus to developing therapeutic applications of its zinc finger technology, particularly in the area of rare diseases.
Throughout its history, Sangamo has entered into numerous collaboration agreements with pharmaceutical giants to leverage its zinc finger technology. In 2017, the company entered into an exclusive global collaboration and license agreement with Pfizer Inc. for the development and commercialization of a gene therapy product candidate for the treatment of hemophilia A. That same year, Sangamo formed another exclusive global collaboration and license agreement with Pfizer for the development of a gene therapy product to treat amyotrophic lateral sclerosis and frontotemporal lobar degeneration.
The company has also collaborated with other pharmaceutical companies such as Biogen, Novartis, and Kite Pharma to develop various therapeutic candidates. However, in 2023, Sangamo faced significant challenges, including a sustained decline in its stock price and market capitalization, as well as the termination of its collaboration agreements with Biogen and Novartis. This led to a restructuring of its operations, including a reduction in workforce and a significant reduction in its internal manufacturing and research footprints. The company also fully impaired its goodwill and indefinite-lived intangible assets and recorded significant impairment of its long-lived assets during this period.
Despite these setbacks, Sangamo has continued to make progress in advancing its therapeutic pipeline. The company has developed a novel adeno-associated virus capsid, STAC-BBB, that has demonstrated promising results in preclinical studies for delivering therapies to the central nervous system. In 2023, Sangamo announced a strategic transformation, repositioning itself as a neurology-focused genomic medicine company. This pivotal move has allowed Sangamo to concentrate its resources and expertise on developing innovative epigenetic regulation therapies and novel AAV capsid delivery solutions for neurological indications.
Financials
Sangamo's financial performance has been marked by a mix of successes and challenges. The company has historically relied on collaboration agreements and strategic partnerships to fund its research and development efforts, as well as revenue from license agreements and grants.
As of the company's most recent quarterly report in Q3 2024, Sangamo reported cash and cash equivalents of $39.2 million, which, combined with a $10 million milestone payment received from Genentech in October 2024, is expected to fund its planned operations into the first quarter of 2025. The company has been actively seeking additional capital through various means, including public or private equity offerings, royalty financing, and strategic collaborations, to support its ongoing initiatives.
For the third quarter of 2024, Sangamo reported revenues of $49,412,000, a net income of $10,672,000, operating cash flow of $11,759,000, and free cash flow of $11,644,000. It's important to note that this is the first quarter with available data, so year-over-year growth comparisons are not possible at this time.
The company's debt-to-equity ratio stands at 0.71, indicating a moderate level of leverage. Sangamo's current ratio and quick ratio are both 1.35, suggesting that the company has sufficient short-term assets to cover its short-term liabilities.
Despite these positive quarterly results, Sangamo continues to face financial challenges. The company has a history of operating losses and negative cash flows, which has raised substantial doubt about its ability to continue as a going concern. As a result, Sangamo is actively pursuing additional funding sources to support its operations and advance its pipeline.
Liquidity
Despite the company's liquidity concerns, Sangamo has made significant strides in advancing its pipeline. In 2024, the company entered into a transformative $50 million licensing agreement with Genentech, granting the latter exclusive rights to Sangamo's proprietary zinc finger repressors and its industry-leading STAC-BBB capsid technology for the development of neurological therapies. This deal not only provided much-needed capital but also validated the potential of Sangamo's platforms.
The company's cash runway remains unchanged and is sufficient to fund their planned operations into the first quarter of 2025, absent any potential funding from a Fabry partnership, hemophilia A milestone payments from Pfizer, or additional STAC-BBB collaboration agreements.
Pipeline and Partnerships
Sangamo's pipeline is anchored by its neurology-focused programs, which leverage the company's expertise in epigenetic regulation and novel AAV capsid delivery. The lead candidate, ST-503, is an investigational therapy for the treatment of intractable neuropathic pain, which the company plans to advance into a Phase I/II clinical trial in the middle of 2025, pending IND clearance. Sangamo has already submitted its first ever IND application for this neurology indication.
Additionally, Sangamo is progressing its program targeting prion disease, which utilizes its proprietary STAC-BBB capsid for improved central nervous system (CNS) delivery. The company expects to submit a clinical trial authorization (CTA) for this program in the fourth quarter of 2025.
Sangamo's partnerships have played a crucial role in the advancement of its pipeline. The company's collaboration with Pfizer for the development of giroctocogene fitelparvovec, an investigational gene therapy for hemophilia A, has been a significant focus. In 2024, Pfizer presented positive data from the Phase 3 AFFINE trial, which demonstrated the therapy's ability to significantly reduce annualized bleeding rates and factor VIII replacement therapy consumption in patients. Pfizer plans to present detailed data from this trial at the upcoming American Society for Hematology (ASH) Annual Meeting in December and is currently discussing the Phase III data with regulatory authorities. Sangamo is eligible to receive up to $220 million in milestone payments and royalties from this program upon the achievement of certain regulatory and commercial milestones, if approved and commercialized.
Furthermore, Sangamo's wholly owned Fabry disease program, ST-920, has been a key priority. In 2024, the company announced a significant regulatory milestone, as the FDA agreed to allow the use of eGFR slope at 52 weeks as the primary basis for accelerated approval, eliminating the need for an additional registrational study. This pathway has the potential to bring ST-920 to the market several years earlier than previously anticipated. Specifically, the FDA has confirmed that eGFR slope data at 52 weeks from all patients in the ongoing Phase I/II STAR study can serve as the primary basis for approval under the accelerated approval pathway. This accelerates the estimated time to potential approval by approximately 3 years compared to the previous plan. Sangamo expects to submit the Fabry disease Biologics License Application (BLA) in the second half of 2025.
Risks and Challenges
Sangamo's journey has not been without its fair share of challenges. The company has historically incurred significant operating losses, and its ability to continue as a going concern remains a concern. The company's reliance on collaborations and strategic partnerships to fund its operations introduces additional risks, as the loss of a key partner or the termination of an agreement could have a substantial impact on its financial position and ability to execute its plans.
The highly competitive and rapidly evolving nature of the genomic medicine industry also poses risks to Sangamo. The company must navigate the complex regulatory landscape, successfully navigate clinical trials, and demonstrate the safety and efficacy of its therapies to secure regulatory approvals and commercialization.
Furthermore, Sangamo's transition to a neurology-focused genomic medicine company presents both opportunities and challenges. The company must effectively allocate its resources, execute on its strategic initiatives, and establish a strong position in the highly competitive neurological therapeutics market.
Outlook and Conclusion
Sangamo Therapeutics stands at a pivotal juncture in its evolution, poised to capitalize on the transformative potential of its genomic medicine platforms. The company's strategic shift to a neurology-focused approach, coupled with its progress in key programs like Fabry disease and hemophilia A, suggest a future of significant possibilities.
The company's neurology pipeline is centered around two key areas: 1) the development of epigenetic regulation therapies to treat neurological disorders, and 2) the development of novel engineered adeno-associated virus (AAV) capsids for targeted delivery of their therapies to the central nervous system. Sangamo believes its zinc finger epigenetic regulators are well-suited to address devastating neurology disorders, and its capsid engineering platform has demonstrated the ability to expand delivery beyond currently available intrathecal delivery capsids, including in the central nervous system.
As Sangamo continues to navigate the challenges of securing adequate funding, advancing its pipeline, and navigating the competitive landscape, the company's proven track record of innovation and its commitment to addressing unmet medical needs position it as a genomic medicine powerhouse with the potential to deliver life-changing therapies to patients in need. The coming years will be critical for Sangamo as it seeks to translate its scientific breakthroughs into approved therapies and commercial success.