What happened

After reporting preliminary results for its hemophilia A therapy that excited investors in August, Sangamo Therapeutics (SGMO -1.26%) has backed away from plans to present the data at the fast-approaching American Society of Hematology (ASH) conference in December.

Its decision increases the concern that Sangamo Therapeutics is falling too far behind competitors developing their own gene therapies for this indication. As a result, J.P. Morgan downgraded the clinical-stage biotech to neutral, which prompted a 11.9% retreat in the company's shares Wednesday.

So what

Best known for cornering the market for zinc-finger nuclease (ZFN) gene editing research, Sangamo Therapeutics is working with Pfizer (PFE) on SB-525, a gene therapy that uses adeno-associated viral vectors to restore a patient's ability to produce clotting factor VIII, the missing protein responsible for causing hemophilia A.

A man holds his head in his hands while staring at a declining share price chart.


This past summer, Sangamo Therapeutics reported data from its early-stage dose-escalation study showing that one patient receiving the highest dose of SB-525 achieved therapeutic factor VIII activity. The company didn't reveal much more detail than that, but management did say at the time that it and Pfizer "expect to present detailed data from the Alta study at a hematology conference in the fourth quarter."

On Nov. 9, management abandoned that plan, telling investors during its third-quarter earnings conference call: "We and Pfizer now plan to present safety and efficacy data from the Alta study only after dose escalation is complete and the clinical trial is progressing to the cohort expansion phase. Accordingly, we made the decision last month not to submit a late-breaking abstract this year to ASH."

Now what

The decision not to submit a late-breaker abstract to ASH was made in October, after independent trial monitors recommended adding yet another higher-dose cohort to the trial following a review of safety and tolerability data for SB-525 in five patients.

Sangamo Therapeutics says that a dose-dependent response is being witnessed in the trial, and monitors' willingness to increase dosing shows they're not seeing anything worrisome on the safety front. Nevertheless, it also may suggest that not much in the way of meaningful efficacy has been witnessed from the approach either.

Hemophilia A is a blockbuster indication, and because competitors are developing their own gene therapies for it, it's important that companies only advance the dose most likely to succeed into pivotal trials. Therefore, the decision to play it close to the vest could be the right long-term move. Regardless, uncertainty on the timing of additional SB-525 results makes it wise to approach Sangamo Therapeutics stock cautiously for now.