On November 1, 2023 Sangamo Therapeutics, Inc. (Nasdaq: SGMO), a genomic medicines company, reported recent business highlights, including progress on its strategic transformation and a corresponding restructuring of operations and workforce reduction, and reported third quarter 2023 financial results (Press release, Sangamo Therapeutics, NOV 1, 2023, View Source [SID1234636655]).

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"In 2020, we shared our refreshed company strategy which aims to both maximize the potential of our proprietary genomic editing and delivery technology, and to focus on areas where we believe we can apply that technology to be either first-in-class or best-in-class. The process of streamlining Sangamo’s pipeline has been accelerated within today’s challenging economic environment and we have had to make difficult decisions to defer further investments and seek collaboration partners or direct investment in both our Fabry gene therapy and CAR-Treg cell therapy programs," said Sandy Macrae, Chief Executive Officer of Sangamo. "As we work to unlock value in our clinical programs that is not currently reflected as part of Sangamo, we plan to do everything in our power to get these important assets into the hands of parties with the means to advance them towards patients. At the same time, we will continue to progress our promising epigenetic regulation programs for neurological diseases and hope to soon share a breakthrough in our capsid delivery capabilities, which we believe could open the door for many other high-value and unmet diseases to be addressed with our editing capabilities. We continue to seek ways to raise additional capital to strengthen our financial foundation."

The restructuring announced today represents a further step towards simplifying the Sangamo organization and focusing on our epigenetic regulation therapies treating neurological diseases and our novel AAV capsid delivery technologies. Sangamo is deferring new investments in its Fabry and CAR-Treg programs beyond what is currently committed and is actively seeking collaboration partners or direct investors in both. In addition, Sangamo expects to close its Brisbane, California facility in early 2024 to conserve cash resources, and will transition its headquarters to its Richmond, California facility as of January 1, 2024. As a result of this restructuring, Sangamo is reducing its US workforce by approximately 40%, or approximately 162 roles.

In connection with the restructuring, D. Mark McClung, Executive Vice President, Chief Operating Officer and Jason Fontenot, Senior Vice President, Chief Scientific Officer will be leaving the company on January 2, 2024. In the context of a streamlined and more focused organization, we are eliminating their roles. Until his departure, Mark will continue to lead our search for partners and investors in our Fabry and CAR-Treg programs. Amy Pooler, currently serving as Vice President, Neuroscience and Gregory Davis, currently serving as Vice President, Genome Engineering Design and Technology, have been appointed as Head of Research and Head of Technology, respectively, effective November 17, 2023.

The restructuring and workforce reductions, in combination with other potential cost reductions, are anticipated to reduce our non-GAAP annual operating expenses from approximately $240 million-$260 million in 2023 to approximately $115 million-$135 million in 2024, a decrease of approximately 50%. Sangamo expects to incur approximately $8 million-$10 million in one-time restructuring costs in the fourth quarter of 2023. Sangamo believes its cash, cash equivalents, and marketable securities as of September 30, 2023, in combination with the cost savings expected from the restructuring, workforce reduction and other potential cost reductions, will be sufficient to fund its planned operations into the third quarter of 2024.
Dr. Macrae continued: "I am grateful to all our employees for their commitment to Sangamo’s mission and the patients we seek to serve, and have special appreciation to all those who are leaving for their important contributions. Additionally, I would like to personally thank Mark for the wisdom, candor and leadership he has brought to Sangamo. He has been a trusted colleague and will be greatly missed. I would also like to thank Jason for his dedication, passion and leadership. He leaves a strong scientific legacy for which we will always be grateful."

Recent Business Highlights

Program Highlights

Neurology Epigenetic Regulation Programs – Progressed IND-enabling activities for Nav1.7; presented updated preclinical data at Prion 2023; presented preclinical data on zinc finger activators at the European Society of Gene and Cell Therapy (ESGCT); made significant progress in identifying new, potentially transformative AAV delivery capsids.
•Progressed IND enabling activities for the Nav1.7 program to treat chronic neuropathic pain. Continue to expect an IND submission for this program in 2024.
•Presented data from the prion disease program at the Prion 2023 Conference in October 2023, showing in animal models that Sangamo’s zinc finger repressors significantly reduce expression of the prion protein in the brain, extend lifespan and limit the formation of toxic prion aggregates.
•Presented an oral presentation at ESGCT in October 2023, showing that our zinc finger activators can be designed to restore normal gene and protein expression of SCN2A in vitro and in vivo to potentially address neurodevelopmental disorders such as autism spectrum disorder and intellectual disability.
•Presented data on Shank3 gene activation mediated by zinc finger transcriptional activators as a potential therapeutic approach for Phelan-McDermid Syndrome at ESGCT.
•Continued to advance identification and selection of engineered AAV capsids for enhanced central nervous system delivery through both intrathecal and intravenous delivery. Anticipate sharing nonhuman primate data from our capsid development efforts in early 2024.
Fabry Disease – Dosed total of 25 patients in Phase 1/2 STAAR study; all patients dosed to date continue to demonstrate sustained, elevated α-Gal A levels for up to three years for the longest treated patient; received Regenerative Medicine Advanced Therapy (RMAT) Designation from U.S. FDA; enrolled sufficient patients in the Phase 1/2 study believed to provide a preliminary assessment of safety and efficacy; deferring Phase 3 planning investments and actively seeking partners and investment.
•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 25 patients dosed to date, including 14 at the planned Phase 3 dose of 5×1013 vg/kg.
•All patients dosed to date continue to demonstrate sustained, elevated α-Gal A levels, with 12 patients having achieved at least one year of follow-up and the longest treated patient having achieved three years of follow-up.
•All 11 patients who were withdrawn from enzyme replacement therapy (ERT) remain off ERT, for up to 24 months for the longest withdrawn patient.
•Treated patients continue to report improvements in their quality of life, some even over and above the benefits they were experiencing on ERT.
•Received U.S. FDA RMAT designation for isaralgagene civaparvovec, which aims to expedite the review of new therapeutics that are intended to address an unmet need in patients with serious conditions. The U.S. FDA has previously granted isaralgagene civaparvovec both Orphan Drug and Fast Track Designations.
•Stopping further screening and enrollment in the Phase 1/2 STAAR study, after successfully enrolling sufficient patients believed to provide a preliminary assessment of efficacy and safety in the Phase 1/2 study.

•Expect to complete dosing of the remaining enrolled patients in the first half of 2024.
•Anticipate presenting updated Phase 1/2 clinical data at a medical meeting in early 2024.
•Deferring additional investments in Phase 3 planning until collaboration partnership or Phase 3 trial financing is secured.
CAR-Tregs – Received approval for accelerated dosing protocol for Phase 1/2 STEADFAST study from European regulatory authorities; dosed the first patient in the second dose cohort; successfully manufactured product candidate for third and new fourth dose levels; presented updated preclinical data at ESGCT; seeking a collaboration partner or direct investment in CAR-Tregs.
•Dosed the first patient in the second cohort of 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 four patients dosed to date.
•Received all necessary regulatory and ethics approvals for an accelerated dose escalation protocol from European regulatory authorities that could allow dosing to advance more quickly through the cohorts and which allows for a new and highest fourth dose cohort, compared to the three cohorts in the previously approved study protocol. The new, fourth cohort dose will be 18-fold higher than the first cohort starting dose.
•Completed manufacturing of the dose for the patient in the third cohort, who recently received a kidney transplant. Dosing of this fifth patient is expected in the fourth quarter of 2023, pending approval from the Safety Monitoring Committee.
•Completed manufacturing of the dose for the first patient in the fourth and highest dose cohort, who recently received a kidney transplant. Dosing of this sixth patient is expected in January 2024, pending approval from the Safety Monitoring Committee – which would accelerate dosing plans by 18 months compared to the previously approved study protocol.
•Presented preclinical data at ESGCT demonstrating the potential of autologous MOG-CAR-Tregs to provide a long-lasting treatment option for multiple sclerosis and updated animal model data demonstrating the promise of IL23R-CAR-Tregs in the potential treatment of Crohn’s disease.
•Actively seeking a potential collaboration partner or direct external investment in the CAR-Treg cell therapy programs. Expect to provide an update on these efforts in the first quarter of 2024.
•Deferring new investments until a collaboration partner or external investment is secured.
Hemophilia A (Pfizer) – dosing complete in Phase 3 AFFINE trial; pivotal data read-out expected in mid-2024; BLA and MAA submissions anticipated in second half of 2024.
•Pfizer has advised us that dosing 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 if the pivotal readout is supportive.
•Expect to present updated data with Pfizer from the Phase 1/2 ALTA study of giroctocogene fitelparvovec in an oral presentation at the 65th American Society for Hematology Annual Meeting and Exposition on December 11, 2023.

Third Quarter 2023 Financial Results

Consolidated net loss for the third quarter ended September 30, 2023 was $104.2 million, or $0.59 per share, compared to a net loss of $53.2 million, or $0.34 per share, for the same period in 2022, primarily due to a non-cash charge relating to impairment of long-lived asset of $44.8 million, which was a result of continued decline in our stock price and related market capitalization, initiation of actions to seek external financing and reprioritize certain research and development programs, and continued decline in equity values in the biotechnology industry.
Revenues
Revenues for the third quarter ended September 30, 2023 were $9.4 million, compared to $26.5 million for the same period in 2022.
The decrease of $17.1 million in revenues was primarily attributed to a decrease of $9.6 million and $9.1 million in revenue relating to our collaboration agreements with Novartis and Biogen, respectively, due to the termination of these collaboration agreements in June 2023, and a decrease of $1.4 million in revenue relating to our collaboration agreement with Kite, reflecting a reduction in collaboration activities during the quarter. These decreases were partially offset by an increase of $3.0 million in revenue relating to our other license agreements.

Total operating expenses on a GAAP basis for the third quarter ended September 30, 2023 were $115.8 million, compared to $81.3 million for the same period in 2022. GAAP operating expenses for the third quarter ended September 30, 2023 included a non-cash charge relating to impairment of long-lived asset of $44.8 million, as described above. Non-GAAP operating expenses, which exclude impairment charges and stock-based compensation expense, for the third quarter ended September 30, 2023 were $64.8 million, compared to $73.5 million for the same period in 2022.
The decrease in total operating expenses on a non-GAAP basis was primarily attributable to lower compensation and other personnel costs mainly due to lower headcount as a result of restructuring of operations and corresponding reduction in workforce announced in April 2023, and decrease in manufacturing and lab supply expenses due to deferral and reprioritization of certain research and development programs. These decreases were partially offset by higher facilities and infrastructure related costs, and higher external expenses as we advance our clinical and preclinical pipeline.
Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents and marketable securities as of September 30, 2023 were $132.1 million, compared to $307.5 million as of December 31, 2022. As of September 30, 2023, we have raised approximately $15.1 million in net proceeds under our at-the-market offering program since January 1, 2023. We believe that our available cash, cash equivalents and marketable securities as of September 30, 2023, in combination with the cost savings expected from the restructuring, workforce reduction and other potential cost reductions, will be sufficient to fund our planned operations into the third quarter of 2024.
Updated Financial Guidance for 2023
•GAAP operating expenses, including impairment of goodwill, indefinite-lived intangible assets, and long-lived assets, and stock-based compensation expense, for the full year 2023 are now estimated to be in the range of approximately $422 million to $442 million, reflecting the additional non-cash impairment charges recorded in the third quarter. The previous GAAP operating expenses guidance provided on August 8, 2023 was in the range of approximately $378 million to $398 million.
•We continue to estimate non-GAAP operating expenses to be in the range of approximately $240 million to $260 million, which remains unchanged from the last update on April 26, 2023. Estimated non-GAAP operating expenses exclude impairment of goodwill of $38.1 million, impairment of indefinite-lived intangible assets of $51.3 million, impairment of long-lived assets of $65.2 million, and stock-based compensation expense of $28.0 million.
Upcoming Events
Sangamo plans to participate in the following events:
Investor Conferences
•Truist Securities BioPharma Symposium, November 8-9, 2023
•Jefferies London Healthcare Conference, November 14-16, 2023
•EvercoreISI HealthCONx, November 28-30, 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 Third Quarter 2023 Results

The Sangamo management team will discuss these results on a conference call tomorrow, Thursday, November 2, 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.