On April 26, 2023 Sangamo Therapeutics, Inc. (Nasdaq: SGMO), a genomic medicines company, reported recent business highlights, including a strategic pipeline prioritization and restructuring, and reported certain preliminary first quarter 2023 financial results (Press release, Sangamo Therapeutics, APR 26, 2023, View Source [SID1234630543]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"This quarter, Sangamo continued to advance its clinical and pre-clinical pipeline. Our Phase 1/2 Fabry study continues to enroll and dose patients, alongside preparations for a potential Phase 3 trial expected to commence by the end of 2023. We successfully dosed the third patient with TX200, our CAR-Treg therapy in kidney transplantation, and received positive regulatory feedback from the first two European authorities required to accelerate the dose escalation. We are also excited to unveil Nav 1.7 as the prioritized target in our wholly owned neurology epigenetic regulation pipeline," said Sandy Macrae, Chief Executive Officer of Sangamo. "Today’s environment necessitates careful choices when deciding how many programs to take forward at once. We are therefore announcing a sharpened strategic focus, prioritizing our investments in our most promising programs. This has led to difficult, but necessary, decisions to step away from certain pre-clinical assets, shrink parts of our infrastructure and redeploy investments towards realizing the full potential of what we believe are our most valuable programs."
The restructuring announced today is the result of a strategic decision to increase focus on three key areas: Nav 1.7 and Prion as cornerstones to the neurology epigenetic regulation portfolio; Fabry Phase 3 readiness; and the TX200 CAR-Treg clinical study, alongside a broader rightsizing of resources and investments across the company. Additionally, Sangamo expects to significantly reduce its internal manufacturing and allogeneic research footprints in California. As a result of this restructuring, Sangamo is reducing its US workforce by approximately 27%, or approximately 120 roles. These actions are in addition to the previously announced portfolio prioritization which resulted in the decision to seek a partner for our sickle cell disease program. In addition, R. Andrew Ramelmeier, Ph.D., Executive Vice President, Technical Operations will be leaving the company on July 10, 2023. Phillip Ramsey, currently serving as Vice President, Technical Development, has been appointed as Head of Technical Operations effective May 29, 2023.
The restructuring plus other planned cost reduction initiatives are expected to result in annualized savings of approximately $31 million. Sangamo believes its available cash, cash equivalents and marketable securities as of March 31, 2023, in combination with the other expected cost reductions, will be sufficient to fund its planned operations for at least the next 12 months. Sangamo expects to incur approximately $5 million – $7 million in one-time restructuring costs in the second and third quarters of 2023. Sangamo is assessing ways to further reduce annual operating expenses, consistent with the prioritized objectives and progress of the company.
"I am grateful to all our employees for their commitment to Sangamo and dedication to patients, and have special gratitude to those who are leaving for all they have done to advance our mission. Additionally, I would like to personally thank Andy for the passion, dedication and leadership he has brought to Sangamo. He leaves a great legacy of technical excellence and I wish him well in the future."
Recent Business Highlights
Neurology Epigenetic Regulation Programs – Unveiled Nav1.7 program to treat chronic neuropathic pain as flagship program in prioritized wholly owned neurology pipeline; made strategic decision to pause further development of other pre-clinical programs following conclusion of collaborations with Biogen and Novartis.
•Announced Nav1.7 to treat chronic neuropathic pain as flagship program in Sangamo’s newly prioritized wholly owned neurology pipeline, with an IND submission expected in 2024. First data from this program expected to be published via a platform presentation at the upcoming American Society for Cell and Gene Therapy (ASGCT) (Free ASGCT Whitepaper) 26th Annual Meeting in Los Angeles in May 2023.
•Advanced wholly owned prion disease program, with an IND submission anticipated in 2025.
•Continued to advance identification and selection of engineered AAV capsids for enhanced central nervous system delivery.
•Following a strategic portfolio evaluation, decided to pause further development of programs previously partnered with Biogen and Novartis, pending the identification of a suitable capsid for delivery for those specific indications.
Fabry disease – Dosed three additional patients in Phase 1/2 STAAR study; advancing Phase 3 trial design planning in anticipation of FDA meeting in the summer; expect to begin pivotal trial by end of 2023.
•Dosed three additional patients in the dose expansion phase of the Phase 1/2 STAAR study evaluating isaralgagene civaparvovec, our wholly owned gene therapy product for the treatment of Fabry disease, for a total of 20 patients dosed to date. We expect dosing to conclude by the end of 2023.
•Plan to meet with the FDA on proposed Phase 3 study design in the summer and anticipate commencement of the pivotal trial in the second half of 2023, with dosing of the first patient expected to start as early as the first part of 2024.
Renal Transplant Rejection – Dosed third patient in cohort 1; preparations for higher dose cohort underway; efforts to accelerate dose escalation advancing through regulatory reviews; prioritizing near-term autologous portfolio, resulting in the relocation of allogeneic development and manufacturing activities.
•Dosed third patient in cohort 1 in the Phase 1/2 STEADFAST study evaluating TX200, our wholly owned autologous CAR-Treg cell therapy treating patients receiving an HLA-A2 mismatched kidney from a living donor.
•The product candidate continues to be generally well tolerated in all three patients dosed to date.
•Received positive regulatory feedback for accelerated dose escalation protocol from two European agencies to date.
•Plan to share initial data from cohort 1 by the end of 2023.
•Intend to prioritize near-term autologous portfolio, resulting in decision to transition all remaining allogeneic research activities from Sangamo US to Sangamo France, and to cease cell therapy manufacturing in California.
Hemophilia A (Pfizer) – Dosing of patients in Phase 3 AFFINE trial to support primary analysis complete; pivotal data read-out expected in mid-2024; BLA and MAA submissions anticipated in second half of 2024.
•Dosing of patients to support primary analysis is complete in the Phase 3 AFFINE trial of giroctocogene fitelparvovec, an investigational gene therapy we are developing with Pfizer for patients with moderately severe to severe hemophilia A.
•A pivotal readout is expected in mid-2024, with Pfizer anticipating BLA and MAA submissions in the second half of 2024.
American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper) 26th Annual Meeting – 14 Sangamo abstracts accepted.
•A total of 14 Sangamo abstracts were accepted for presentation at ASGCT (Free ASGCT Whitepaper) on May 16-20, 2023, in Los Angeles, California, including pre-clinical updates from our prioritized neurology programs Nav 1.7 and Prion, innovations in our epigenetic regulation platform and advances in our AAV capsid engineering program.
Preliminary First Quarter 2023 Financial Results
Sangamo is in the process of completing its customary quarter-end close and review procedures, including the evaluation of non-cash charges related to impairment of long-lived assets, as of and for the quarter ended March 31, 2023, and the final results for this period could materially differ from the preliminary expected results disclosed in this press release. Sangamo’s full first quarter 2023 financial results will be reflected in a Quarterly Report on Form 10-Q which is expected to be filed no later than May 10, 2023. The financial performance measures presented in this press release for the first quarter of 2023 are forward-looking statements, preliminary estimates and unaudited, based on management’s initial review of the information presented, and are thus inherently uncertain and subject to change as Sangamo completes its end-of-period reporting process and related activities for the first quarter of 2023. During the course of the review of Sangamo’s condensed consolidated financial statements and related notes as of and for the quarter ended March 31, 2023, Sangamo’s independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary estimates presented herein. Additional information and disclosures would be required for a more complete understanding of Sangamo’s financial position and results of operations as of and for the quarter ended March 31, 2023. Accordingly, undue reliance should not be placed on this preliminary information.
Revenues
Revenues for the first quarter ended March 31, 2023, are estimated to be approximately $158.0 million, compared to $28.2 million for the same period in 2022.
The estimated increase of $129.8 million in revenues is primarily attributable to an increase of $121.1 million in revenue relating to our collaboration agreement with Biogen, mainly due to the impact of termination related contract modification, and an increase of $6.0 million in revenue relating to our collaboration agreement with Kite, mainly due to a reduction in the estimated project costs, which resulted in an adjustment to the measure of proportional cumulative performance.
Operating Expenses
Total operating expenses on a GAAP basis for the first quarter ended March 31, 2023, are estimated to be in the range of $120 million to $140 million, compared to $73.5 million for the same period in 2022.
The total estimated operating expenses on a GAAP basis for the quarter included certain non-cash charges such as impairment of goodwill of $38.1 million, and impairment of long-lived assets of up to $20 million. These estimated charges are a result of the termination of our collaboration agreements with Biogen and Novartis, a sustained decline in our stock price and related market capitalization and a general decline in equity values in the biotechnology industry.
Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents and marketable securities as of March 31, 2023 were $241.0 million, compared to $307.5 million as of December 31, 2022.
Sangamo believes its available cash, cash equivalents and marketable securities as of March 31, 2023, in combination with the other expected cost reductions, will be sufficient to fund its planned operations for at least the next 12 months.
Financial Guidance for 2023 Updated
In line with the business announcements outlined, we are revising our full-year operating expense guidance as follows:
•GAAP operating expenses, including goodwill and long-lived assets impairment charges and stock-based compensation expense, are estimated to be in the range of approximately $315 million to $335 million (updated on April 26, 2023). The previous GAAP operating expenses guidance provided on February 22, 2023 was in the range of approximately $310 million to $330 million.
•Non-GAAP operating expenses are estimated to be in the range of approximately $240 million to $260 million (updated on April 26, 2023). Estimated non-GAAP operating expenses exclude impairment of goodwill of $38 million, impairment of long-lived assets of up to $20 million and stock-based compensation expense of $35 million. The previous non-GAAP operating expenses guidance provided on February 22, 2023 was in the range of approximately $275 million to $295 million.
Upcoming Events
Sangamo plans to participate in the following events:
Scientific / Medical Conferences
•ASGCT 26th Annual Meeting, Los Angeles, California, May 16-20, 2023
Investor Conferences
•2023 Bank of America Global Healthcare Conference, May 9, 2023
•2023 RBC Global Healthcare Conference, May 17, 2023
•7th Annual Barclays Gene Editing and Gene Therapy Summit, May 24, 2023
•Stifel 2023 Tailoring Genes: Genetic Medicines Day, May 30, 2023
•Jefferies Global Healthcare Conference, June 8, 2023
•2023 Wedbush Pacgrow Healthcare Conference, August 8-9, 2023
•2023 Wells Fargo Healthcare Conference, September 6-8, 2023
Access links for available webcasts for these investor conferences will be available on the Sangamo website in the Investors and Media section under Events. Available materials will be found on the Sangamo website after the event under Presentations.
Conference Call to Discuss Business Updates and Preliminary First Quarter 2023 Results
The Sangamo management team will discuss these business updates and preliminary results on a conference call tomorrow, Thursday, April 27, 2023, at 8:30 a.m. Eastern Time.
Participants should register for, and access, the call using this link. While not required, it is recommended you join 10 minutes prior to the event start. Once registered, participants will be given the option to either dial into the call with the number and unique passcode provided or to use the dial-out option to connect their phone instantly.
An updated corporate presentation is available in the Investors and Media section under Presentations.
The link to access the live webcast can also be found on the Sangamo website in the Investors and Media section under Events. A replay will be available following the conference call, accessible at the same link.