Despite late-stage hemophilia win, Sangamo remains in do-or-die situation
Despite late-stage hemophilia win, Sangamo remains in do-or-die situation
Sangamo Therapeutics and Pfizer announced last week that their co-developed investigational gene therapy to treat hemophilia A, giroctocogene fitelparvovec, showed positive topline results in a late-stage trial. While it’s good news for the genomic medicine company, Sangamo remains in a tenuous financial position with what little cash it has quickly running out.
Despite last week’s positive Phase III data readout, the company’s stock price still trades well below $1 per share and an analysis from Seeking Alpha noted that Sangamo is almost out of cash and potentially “at risk of bankruptcy.” According to Sangamo’s first-quarter 2024 financial results, it had around $54.4 million in cash and cash equivalents as of March 31, 2024, only enough to fund operations into the third quarter.
“For small, mid-cap biotech companies, the rule of thumb is that these companies should have about two years of cash just to make the cash issue not a constant near-term issue for them,” Maury Raycroft, an equity analyst at Jefferies, told BioSpace. “Sangamo being down to a few months of cash now that we’re in the third quarter, it really depresses the stock.”
Raycroft said Sangamo got to where it currently is by investing heavily in research and development, which can be a recurring expense every quarter. He also noted that it hasn’t had a major deal since inking a pact with Biogen in 2020, getting $350 million upfront to develop assets for neurological diseases—a partnership that was discontinued last year.
Sangamo previously had several programs that “weren’t going to be commercially successful” or generated concerns about commercial viability, Patrick Trucchio, senior healthcare analyst at H.C Wainright, told BioSpace.
While the lack of cash is a serious challenge for the biotech, Trucchio noted that having positive late-stage hemophilia A data could be Sangamo’s saving grace—at least for the time being.
Ultimately, the R&D spending plus a lack of cash has created a “do-or-die” situation for Sangamo made worse by a “history of burning cash and not being able to get a drug approved yet,” according to Seeking Alpha.
