Sangamo Therapeutics will eliminate more than a quarter (27%) of its U.S. workforce—some 120 jobs—and refocus its pipeline on three specialties, as the genomic medicine developer works to bounce back from being jilted last month by two biopharma giants that ended collaborations worth potentially several billion dollars.
Among the 120 who are losing their jobs is R. Andrew Ramelmeier, PhD, executive vice president, technical operations, whose termination takes effect on July 10. Ramelmeier will be succeeded by Phillip Ramsey, now vice president, effective May 29.
Sangamo said it notified the affected employees Wednesday of the job cuts, which the company estimated will cost it approximately $5 million to $7 million in one-time expenses to be incurred in the second and third quarters.
However, Sangamo expects to save approximately $31 million annually from the job reduction and other cost cuts.
“Today’s environment necessitates careful choices when deciding how many programs to take forward at once,” Sangamo CEO Sandy Macrae, PhD, said in a statement. “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 preclinical assets, shrink parts of our infrastructure and redeploy investments towards realizing the full potential of what we believe are our most valuable programs.”
Going forward, Sangamo said, it will concentrate its development efforts on three areas. One is its wholly-owned neurology epigenetic regulation portfolio, anchored on a pair of preclinical zinc finger (ZF) transcription factor programs:
- Its flagship program, to treat chronic neuropathic pain program by targeting the sodium ion channel Nav 1.7, for which the first data is set to be published in May at the American Society for Cell and Gene Therapy (ASGCT) 26th Annual Meeting in Los Angeles. An IND is expected to be filed in 2024.
- One to treat Prion disease, for which Sangamo expects to file an IND submission in 2025.
Kidney transplant cell therapy
Another key area of pipeline development will be its wholly-owned autologous chimeric antigen receptor-modified regulatory T-cell (CAR-Treg) therapy TX200, being developed for the prevention of immune-mediated rejection in human leukocyte antigen A2 (HLA-A2) mismatched kidney transplantation from a living donor.
Sangamo advanced TX200 into the clinic last year, dosing its first two patients in its Phase I/II STEADFAST trial (NCT04817774). During Q1, Sangamo successfully dosed the third patient, and received positive regulatory feedback from two European authorities needed to accelerate dose escalation. By year’s end, Sangamo plans to share initial data from cohort 1 of the STEADFAST trial.
The company said it has decided to prioritize its near-term autologous portfolio, and transfer all remaining allogeneic research activities to France, and cease cell therapy manufacturing in the United States—where Sangamo recently built a cell therapy manufacturing facility in Brisbane, CA.
Sangamo’s third program of focus is its Fabry disease candidate Isaralgagene civaparvovec (formerly ST-920), a liver-targeted AAV gene therapy. The company said it will meet with FDA officials on the design of a proposed Phase III study this summer, with the expectation that it can begin the pivotal study by year’s end and dose its first patient early in 2024.
For now, Isaralgagene civaparvovec is under study in the Phase I/II STAAR trial (NCT04046224), in which 20 patients have been dosed to date (three of them during Q1). Sangamo said it expects to conclude dosing by year’s end.
Investors appeared unfazed by the job and cost cuts. Sangamo shares barely budged in trading Thursday, dipping about 1% to $1.60 from $1.61 on Wednesday. However, shares rose 5% in after-hours trading Thursday, to $1,68.
Pair of setbacks
Sangamo hopes to recover from a pair of setbacks stemming from what the company disclosed in a regulatory filing was the end of two collaborations with biopharma giants dating back to 2020.
On March 13, Novartis Institutes for BioMedical Research told Sangamo it was ending their partnership to develop gene regulation therapies for treating three neurodevelopment disorders. Novartis paid an upfront $75 million licensing fee to Sangamo, which stood to gain up to $720 million in milestone payments, plus royalties on net commercial sales.
Four days later, Biogen gave Sangamo notice it was ending its alliance to research and develop gene regulation therapies to treat neurological diseases. Biogen paid Sangamo $350 million upfront, including a license fee and an equity investment in Sangamo—which had been eligible to receive up to $2.37 billion in potential milestones, plus royalties on net commercial sales.
Since Sangamo received notices of termination from Biogen and Novartis, it has paused further development of affected collaboration programs pending the identification of a suitable capsid for delivery. Sangamo added that it has continued to advance the identification and selection of engineered adeno-associated virus (AAV) capsids for enhanced central nervous system delivery.
Sangamo believes its $241 million in available cash, cash equivalents, and marketable securities as of March 31, plus the money it expects to save, will be enough to fund its planned operations for at least the next 12 months.
Sangamo’s cash, cash equivalents, and marketable securities have dropped 22% from the $307.5 million reported as of December 31, 2022.
