What happened

Shares of Sangamo Therapeutics (SGMO -3.67%) had crashed 30.3% as of 3:35 p.m. EST on Thursday after dropping as much as 47.9% earlier in the day. The biotech announced interim results on Thursday morning from its phase 1/2 clinical study of SB-318 in treating rare genetic disease mucopolysaccharidosis type I (MPS I). SB-318 uses the zinc-finger nuclease (ZFN) gene-editing approach to modify genetic mutations.

The good news from Sangamo's study was that the ZFN gene-editing therapy appeared to be safe. The bad news is that it doesn't appear to be making a big enough difference to provide a clinical benefit to patients.

Arrows on ground and below target

Image source: Getty Images.

So what

Sangamo already announced disappointing interim results for SB-913 in treating MPS II in September. At the time, the biotech reported that researchers weren't able to quantify plasma iduronate-2-sulfatase (IDS) activity following treatment. MPS II is caused by a lack of the plasma IDS enzyme. 

The latest interim results for SB-318 in treating MPS I echoed Sangamo's findings for SB-913. MPS I is caused the accumulation of glycosaminoglycans (GAGs) resulting from a lack of the alpha-L-iduronidase (IDUA) enzyme. Although Sangamo stated that the results suggested a dose-dependent increase in leukocyte IDUA activity, no significant change from baseline was observed in plasma IDUA activity.

What does all of this mean for SB-318? Sangamo CEO Sandy Macrae put it succinctly: "It's working and it's not sufficient for a clinical benefit." That's not encouraging news for Sangamo's gene-editing program.

Check out he latest Sangamo earnings call transcript.

Now what

The bottom line for Sangamo is that additional data will be needed to determine whether or not SB-913 or SB-318 can benefit patients. Sangamo said that later this year, it expects to report data from analyses of liver biopsies as well as additional data from a higher dosage of SB-913 given to five patients. The biotech also plans to have second-generation ZFNs that could be more effective ready for clinical testing later in 2019.

In addition, Sangamo should announce results this year from a couple of other studies involving programs that don't involve gene editing. The biotech is partnering with Pfizer on a phase 1/2 study of gene therapy SB-525 in treating hemophilia A. Sangamo is also working with Sanofi on early-stage testing of another gene therapy, ST-400, in treating rare blood disorder beta-thalassemia.

Sangamo's latest update certainly muddies the waters for anyone considering buying shares of the biotech. For now, Sangamo remains a high-risk stock that won't appeal to most investors.