Please ensure Javascript is enabled for purposes of website accessibility

Why Sangamo Therapeutics Crashed Today

By Keith Speights – Updated Apr 18, 2019 at 5:05PM

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

More disappointing results for a gene-editing candidate caused the biotech stock to tank.

What happened

Shares of Sangamo Therapeutics (SGMO -3.11%) 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.

Keith Speights owns shares of Pfizer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Sangamo Therapeutics Stock Quote
Sangamo Therapeutics
$3.43 (-3.11%) $0.11

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

Related Articles

Premium Investing Services

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