10-K: Sangamo Therapeutics Shifts Focus to Neurology, Announces Promising Preclinical Data

Sangamo Therapeutics is restructuring to focus on neurology, highlighting a novel AAV capsid for brain delivery and advancing preclinical programs.

Summary

• Sangamo Therapeutics is undergoing a strategic transformation to focus on developing genomic medicines for neurological diseases.
• The company is prioritizing preclinical programs in chronic neuropathic pain, prion disease, and tauopathies, with IND submissions expected in late 2024 and 2025, subject to funding.
• A novel AAV capsid, STAC-BBB, has shown promising results in crossing the blood-brain barrier in non-human primates, with 700-fold higher transgene expression than AAV9.
• The company is deferring new investments in its Fabry disease gene therapy and CAR-Treg cell therapy programs unless a collaboration partner or external investment is secured.
• A pivotal readout for the Phase 3 AFFINE trial of giroctocogene fitelparvovec for hemophilia A is expected in mid-2024, with a potential BLA submission in early 2025.
• Sangamo has received approximately $817 million in upfront fees and milestone payments to date and has the opportunity to earn up to $1.9 billion in potential future milestone payments from ongoing collaborations.
• The company's cash, cash equivalents, and marketable securities are expected to fund operations only into the third quarter of 2024, raising substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 4

Explanation: While the preclinical data is promising, the company's financial situation and the need for a significant capital raise create substantial uncertainty and risk.

Positives

• The STAC-BBB capsid shows industry-leading brain tropism and enrichment in non-human primates.
• Preclinical data supports the further development of AAV-delivered ZFRs for the potential treatment of prion disease.
• The FDA has advised that a single study with up to 25 patients may be an acceptable pathway to BLA submission for isaralgagene civaparvovec.
• The EMA granted PRIME eligibility to isaralgagene civaparvovec, which includes enhanced regulatory support and scientific guidance.
• The U.K. Medicines and Healthcare products Regulatory Agency granted Innovative Licensing and Access Pathway to isaralgagene civaparvovec.

Negatives

• The company's cash, cash equivalents, and marketable securities are expected to fund operations only into the third quarter of 2024.
• Sangamo has been unsuccessful in securing additional capital to date.
• The company is deferring new investments in its Fabry disease gene therapy and CAR-Treg cell therapy programs unless a collaboration partner or external investment is secured.
• The company is planning to close its facilities in Brisbane, California and Valbonne, France in 2024.

Risks

• There is substantial doubt about the company's ability to continue as a going concern.
• The company needs substantial additional funding to execute its operating plan.
• The company may be required to cease operations entirely, liquidate all or a portion of its assets, and/or seek protection under the U.S. Bankruptcy Code if it cannot secure additional funding.
• Future sales and issuances of equity securities would result in substantial dilution to existing stockholders.
• The company is early in its research and development efforts for its core preclinical neurology programs.
• Manufacturing genomic medicines is complex, expensive, highly regulated, and risky.
• The market price of the company's common stock has been and will likely continue to be volatile.

Future Outlook

The company is actively seeking substantial additional capital to fund its operations and support its research and development endeavors. The company expects to continue to incur additional operating losses for the next several years as it continues to develop its preclinical core neurology therapeutic programs and capsid engineering platform.

Management Comments

• The company believes its zinc finger epigenetic regulators are ideally suited to potentially address devastating neurology disorders.
• The company believes its capsid engineering platform has demonstrated the ability to expand delivery beyond currently available intrathecal delivery capsids, including in the central nervous system.
• The company believes that STAC-BBB is manufacturable at commercial scale using standard cell culture and purification processes, is soluble using known excipients, and can be characterized using available analytics.

Industry Context

The company is operating in the highly competitive fields of gene therapy, cell therapy, and genome engineering, facing competition from other biopharmaceutical companies, academic institutions, and government agencies. The company is also competing with other companies developing rival technologies and products that are superior to or are commercialized more quickly than its technologies and product candidates.

Comparison to Industry Standards

• The company's STAC-BBB capsid demonstrated 700-fold higher transgene expression in the brain compared to the benchmark capsid AAV9, outperforming other known neurotropic capsids.
• The company's approach to base editing using a compact ZF architecture is a novel approach in the genomic medicine space.
• The company's targeted integrases program aims to develop a platform for highly efficient gene integration without cutting the human genome, which is a different approach than RNA-guided systems like CRISPR/Cas.

Management Changes

Stakeholder Impact

• Shareholders face significant risk of loss due to the company's financial instability and potential bankruptcy.
• Employees are affected by workforce reductions and uncertainty about the company's future.
• Patients may experience delays in the development of new therapies due to the company's financial challenges.
• Collaborators and partners may be impacted by the company's restructuring and strategic changes.

Next Steps

• The company expects an IND submission for Nav1.7 in the fourth quarter of 2024.
• The company expects a CTA submission for the prion disease program in the fourth quarter of 2025.
• The company expects an IND submission for tauopathies as early as the fourth quarter of 2025.
• The company expects to complete dosing in the Phase 1/2 STEADFAST study in the first half of 2024.
• The company expects a pivotal readout for the Phase 3 AFFINE trial of giroctocogene fitelparvovec in the middle of 2024.
• The company expects to complete the dosing of remaining enrolled patients in the Phase 1/2 STAAR study in the first half of 2024.

Key Dates

Keywords

genomic medicine, neurology, AAV capsid, epigenetic regulation, zinc finger, gene therapy, cell therapy, clinical trials, preclinical programs, STAC-BBB, hemophilia A, Fabry disease, CAR-Treg, capital raise