What happened

Shares of Sangamo Therapeutics (NASDAQ:SGMO) were sinking 11.7% lower as of 3:28 p.m. EST on Tuesday. This marked the second consecutive day of double-digit-percentage declines for the biotech stock after Sangamo announced preliminary results on Monday from a phase 1/2 clinical study evaluating experimental gene-editing therapy ST-400 in treating rare blood disease transfusion-dependent beta thalassemia (TDT).

So what

Those preliminary results were for the first three patients in Sangamo's Thales clinical trial targeting beta thalassemia. The good news was that all three patients receiving ST-400 quickly experienced reconstitution of their hematopoietic stem cells after gene editing as well as demonstrating neutrophil engraftment -- the first day where the patients' neutrophil counts were at least 500 cells per microliter for three consecutive days.

DNA helixes with a physician in the background pointing to a DNA strand with a bright light shining on the spot.

Image source: Getty Images.

The not-so-good news related to the adverse effects experienced by the patients. One patient experienced a serious adverse event with hypersensitivity during the ST-400 infusion, although the issue resolved by the end of the infusion. Also, another patient's fetal hemoglobin levels increased by less than 1 gram per deciliter through week 26 of the study. The goal of ST-400 is to boost fetal hemoglobin levels enough to minimize the negative effects of beta thalassemia.

University of Minnesota Associate Professor Angela Smith, a principal investigator of the Thales study, noted that "the full effects of the treatment may take as long as 12 to 18 months or more to manifest." She added, "Longer-term follow-up, including from additional patients, will be necessary to understand the safety profile and potential clinical benefit of ST-400 in beta-thalassemia."

Adrian Woolfson, Sangamo's head of research and development, stated, "Our understanding of ST-400 will continue to evolve as we follow the progress of these and additional patients in the coming year, and those dosed in Sanofi's BIVV003 clinical trial, which is evaluating the same gene-editing approach in sickle cell disease."

This cautious language from both Smith and Woolfson underscores the tentative nature of the preliminary results.

Now what

Investors will have to wait a while to learn just how much promise ST-400 holds. Sangamo expects to announce additional study results late next year after enrollment in the Thales study is completed and after all six patients in the study have been observed for longer periods.

Sangamo's last week or so has demonstrated the volatility associated with biotech stocks, especially those with no approved drugs on the market. Sangamo jumped last week on positive results from another study (of hemophilia gene therapy SB-525) but gave up those gains and then some on the news for ST-400.