What happened

After the company reported interim results from an early-stage study evaluating its zinc-finger nuclease gene-editing approach in Hurler syndrome, shares of Sangamo Therapeutics (NASDAQ:SGMO) crashed 22.9% in February, according to S&P Global Market Intelligence.

So what

Sangamo Therapeutics has been developing gene-editing therapies based on zinc-finger proteins for over 20 years. The company uses zinc-finger proteins to deliver a cutting tool called Fok1 to a specific target of DNA to make a deletion or insertion. Unfortunately, the company's yet to prove that this approach works.

A man clasping his hands to his cheeks with his mouth wide open.


After reporting unconvincing data from an interim look at a study involving Hunter syndrome patients last fall, the company reported equally unconvincing interim results from a similar early-stage study involving Hurler syndrome last month. Both Hunter and Hurler syndromes are characterized by an inability to produce a digestive enzyme necessary to break down complex sugars. Unable to break those sugars down, they build up in these patients, causing life-threatening organ damage.

It was hoped that inserting a functional gene expressing the missing enzyme in the liver could functionally cure patients with these syndromes. Regrettably, interim results showed efficacy insufficient to validate the approach.

Check out the latest earnings call transcript for Sangamo Therapeutics.

Now what

Sangamo Therapeutics isn't giving up. It's exploring higher doses and parsing patient data in hopes of unlocking a winning solution. More data from both its Hunter and Hurler syndrome studies is expected.

Perhaps the companies future isn't in zinc-finger gene editing, though. Sangamo Therapeutics is working with Pfizer (NYSE:PFE) on a hemophilia A gene therapy that doesn't use zinc-finger proteins. Data from the first patients treated with hemophilia A therapy is expected this year.

The company's also working with Gilead Sciences (NASDAQ:GILD) on approaches that marry its experience in editing with Gilead Sciences chimeric-antigen receptor T-cell therapy experience. As a refresher, Gilead Sciences markets Yescarta, a CAR-T that reengineers a patients T-cells so that they can better battle lymphoma.

Additionally, Sangamo Therapeutics is working with Sanofi (NASDAQ:SNY) on therapies for beta thalassemia and sickle cell disease. Those studies are expected to make advances this year, too.

Overall, Sangamo Therapeutics has more work to do to prove itself in gene editing and its yet to have anything close to approval-worthy data in gene therapy. For this reason, it's a high-risk stock that most investors should avoid.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.