Please ensure Javascript is enabled for purposes of website accessibility

Why Sangamo Therapeutics Stock Is Tanking Today

By George Budwell - Sep 5, 2018 at 3:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sangamo's landmark gene-editing trial fails to impress.

What happened

Shares of Sangamo Therapeutics (SGMO -4.56%) fell by as much as 24.7% today on heavy volume. The company's shares are nosediving in response to a somewhat disappointing interim update for its zinc-finger nuclease gene therapy, SB-913, as a possible treatment for the rare metabolic disorder known as Hunter syndrome (aka "mucopolysaccharidosis type II"). The update took place at the 2018 Annual Symposium of the Society for the Study of Inborn Errors of Metabolism, being held in Athens, Greece.

Hunter syndrome is an inherited lysosomal storage disorder resulting from an insufficient level of an enzyme called iduronate-2-sulfatase (IDS for short). This key catabolic enzyme breaks down glycosaminoglycans (GAGs). Low levels of IDS thus result in a buildup of GAGs in the body, leading to enlarged organs that can't function properly.

A researcher in a lab coat pointing to a projection of a DNA molecule

Image Source: Getty Images.

So what

This trial marks the first time a gene-editing technique has been assessed inside a patient. As such, investors were clearly banking on stellar safety and efficacy results. Sangamo, however, noted that the trial's handlers were unable to quantify plasma IDS activity following treatment, because the level of quantification of the current assay was inadequate. So, while the marked reductions in GAGs observed in the study are certainly encouraging, this trial simply can't offer direct evidence of SB-913's efficacy as things stand now.

Now what

Sangamo hopes to rectify this glaring weakness by conducting another study in which Shire's enzyme-replacement therapy, Elaprase, is gradually replaced by treatment with SB-913. This way, researchers will have a better understanding of SB-913's therapeutic effect in this devastating genetic disorder. Sangamo also noted that it is working on improving the sensitivity of the IDS assay to allow for more precise measurements.

Unfortunately, these dual efforts will take a good bit of time to bear fruit. Investors, therefore, might have to wait another year or so to truly understand the real-world prospects of in vivo genome editing.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sangamo Therapeutics Stock Quote
Sangamo Therapeutics
SGMO
$3.77 (-4.56%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.