MW Sangamo Therapeutics' stock falls the most in 16 years after Pfizer ends Hemophilia pact

By Ciara Linnane

Move means small-cap won't receive an expected payout in the first quarter, creating a cash overhang

Sangamo Therapeutics Inc.'s stock tumbled 53% Tuesday to put it on track for its second-biggest one-day percentage decline, after Pfizer Inc. terminated a Hemophilia A gene-therapy partnership.

The move was the worst since the stock closed down 65.5% on Nov. 11, 2008, when another product candidate failed in a mid-stage trial.

Richmond, Calif.-based Sangamo said late Monday it would regain rights to develop and commercialize its treatment called giroctocogene fitelparvovec, which it had licensed to Pfizer. The partnership will end on April 21, 2025.

Pfizer $(PFE)$ told Sangamo it no longer plans to seek a biologics license application or marketing authorization for the treatment, which the company was expecting would happen in the first quarter.

"While we were surprised and extremely disappointed by Pfizer's decision to end our collaboration so close to the anticipated BLA and MAA submissions, especially given the compelling pivotal clinical trial data, we appreciate their collaboration in leading a robust and successful clinical development program and for advancing the asset to this important stage," Sangamo (SGMO) Chief Executive Sandy Macrae said in prepared remarks.

The therapy achieved positive data in a Phase 3 trial, according to a July statement, meeting its primary and secondary endpoints.

"While disappointing given that the management had highlighted that the BLA filing would trigger a meaningful payment to help cash runway, without a meaningful cash infusion on 1Q25, we note that cash remains an overhang despite recent collaborations," Truist analysts said in a note to clients.

The Phase 3 data "looked competitive" and Sangamo would have been eligible for up to $220 million in regulatory and commercial milestones plus tiered royalties of 14% to 20% of sales, Truist said in an earlier note.

For now, the company is planning to push ahead with the development of the treatment, and will seek "the right partner with the focus and understanding of the genomic medicine commercial environment to bring this medicine to patients," said Macrae.

At the same time, the company will push ahead with other pipeline candidates, including its Fabry disease program, for which it is hoping to submit a BLA in the second half of 2025. Fabry disease is a rare genetic disorder where individuals lack an enzyme that's key to breaking down fats.

Hemophilia is an inherited, rare blood disorder in which the patient lacks a protein needed for normal blood clotting. Hemophilia A occurs in about 25 in 100,000 male births worldwide, and about 55% to 75% of those will have a moderate to severe form of the disease. The disorder lasts an entire lifetime and requires constant monitoring and therapy.

The disease is famously associated with Tsarevich Alexei Nikolaevich, the great-grandson of Queen Victoria and heir to the Russian throne. The prince suffered prolonged bouts of bleeding whenever he cut himself because of the illness, which he inherited from his grandmother, a known carrier.

Pfizer has several programs investigating treatments for people living with hemophilia.

In April, the FDA approved Pfizer's Beqvez, a one-time gene therapy for patients with hemophilia B.

In July, the company reported positive results from a phase 3 trial of a gene therapy called giroctocogene fitelparvovec, which met all of its goals in treating adults with moderately severe to severe hemophilia A.

See now: Pfizer announces positive results from late-stage trial of hemophilia A treatment

Sangamo's stock has almost doubled in 2024, while the SPDR S&P Biotech ETF XBI has gained 1% and the S&P 500 SPX has gained 24%.

-Ciara Linnane

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December 31, 2024 11:22 ET (16:22 GMT)

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