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Sangamo Therapeutics Rose despite Q2 Sales Miss, Higher Losses


Nov. 20 2020, Updated 4:35 p.m. ET

SGMO stock trending higher today

Sangamo Therapeutics (SGMO) stock soared on August 9 and reported gains in excess of 16.0% in afternoon trading. The company reported its second-quarter earnings results on August 8 after the markets closed. Sangamo Therapeutics reported second-quarter sales of $21.42 million, which just missed analysts’ estimate of $21.44 million in sales.

The company reported higher net losses compared to the second quarter of 2017. Still, its stock has trended higher today, triggered by the release of positive preliminary data from its Phase 1/2 Alta study. This study evaluates SB-525 gene therapy for the treatment of hemophilia A. However, SGMO’s net loss declined on a sequential basis, and the company reported solid YoY (year-over-year) sales growth.

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Q2 2018 results highlights

Sangamo Therapeutics’ (SGMO) sales have risen ~160.0% on a YoY basis. This sales growth was mainly led by its collaborations and agreements with Pfizer (PFE) for hemophilia A, Sanofi’s (SNY) subsidiary Bioverativ, and Gilead Sciences’ (GILD) subsidiary Kite for gene-edited cell therapies in the specialty area of oncology.

Sangamo Therapeutics reported a decline in earnings and reported a net loss of $16.6 million, compared its net loss of $12.5 million in the second quarter of 2017. The higher losses resulted from higher operating expenses in the quarter, as the company invested in clinical studies, manufacturing capacity expansion, and overall company growth.

Preliminary data highlights for Phase 1/2 Alta study

Sangamo Therapeutics (SGMO) announced positive preliminary data for its Phase 1/2 Alta study. Developed in collaboration with Pfizer, this study evaluates SB-525 gene therapy candidates for the treatment of hemophilia A.

According to Ed Connor, Sangamo Therapeutics’ chief medical officer, “To-date five patients have been treated at three dose levels, two patients per cohort.”

The study data showed that the treatment was well tolerated by the patients and that no serious adverse events were reported. Sangamo Therapeutics announced that the next steps for the study involved the treatment of six patients scheduled for later in August. Sangamo Therapeutics and Pfizer stated that they expect to release the full study data at the ASH[1. American Society of Hematology] 2018 annual meeting in December.

Sangamo Therapeutics’ fiscal 2018 guidance

During its second-quarter earnings release on August 8, Sangamo Therapeutics (SGMO) updated its cash guidance for fiscal 2018. The company expects to report cash, cash equivalents, marketable securities, and interest receivable of not less than $380.0 million by the end of fiscal 2018. These items include recent financing and research funding.

SGMO added that it expects to provide updated operating expense guidance for fiscal 2018 in its upcoming quarterly earnings. The company’s operating expenses are heavily influenced by its recent acquisition of TxCell, accelerating its aim to advance in the immunology cell therapy market. However, the company believes the acquisition’s future asset value is much higher than the company’s acquisition price of 32.0 million euros.

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