SGMO - Sangamo: Hemophilia A Program With Pfizer Key To Success

2023-03-23 02:52:15 ET

Summary

• Final results from the phase 3 AFFINE trial using giroctocogene fitelparvovec for the treatment of patients with Hemophilia A are expected in the 1st half of 2024.
• If phase 3 trial is successful, Pfizer will be able to file BLA to the FDA of giroctocogene fitelparvovec for the treatment of patients with Hemophilia A 2nd half 2024.
• Proof of concept was established using isaralgagene civaparvovec for the treatment of patients with Fabry Disease in a phase 1/2 study.
• A phase 3 trial, using isaralgagene civaparvovec for the treatment of patients with Fabry Disease, is expected to be initiated by the end of 2023.

Sangamo Therapeutics ( SGMO ) is a great speculative biotech play to look into. The reason why I believe it is important to go over this biotech is because it has potential largely based on its advancement of giroctocogene fitelparvovec for the treatment of patients with Hemophilia A. Dosing has been resumed for the pivotal phase 3 AFFINE study with its partner Pfizer ( PFE ) and dosing is expected to be completed by Q1 of 2023. This sets up results to be released from this phase 3 trial by the 1st half of 2024. If the data readout goes well, then Pfizer will file a Biologics Licensing Application (BLA) to the FDA of this treatment for patients with Hemophilia A in the 2nd half of 2024. I still believe to this day that this is the most important program in Sangamo's pipeline. It has potential with other clinical candidates, but this is a very crucial one. Another reason why I believe it is good to go over this biotech is because of an update on a data release from the phase 1/2 study using isaralgagene civaparvovec for the treatment of patients with Fabry Disease. Not only were positive results reported from this early-stage study, but a phase 3 trial of this particular program is expected to be initiated by the end of 2023.

Giroctocogene Fitelparvovec For The Treatment Of Patients With Hemophilia A

The main clinical program in the pipeline to go over involves the use of giroctocogene fitelparvovec, which is being developed for the treatment of patients with Hemophilia A. Hemophilia A is a rare bleeding disorder that is caused by a deficiency of a functional plasma known as clotting factor VIII. Without this protein in place, patients tend to bleed often with no cause. The main form of treatment is patients getting infusion treatments, which must be done on a routine basis. That's because these patients need to keep enough Factor VIII to keep bleeding episodes/symptoms to a minimum. It is expected that the global Hemophilia market could reach $18.88 billion by 2028 . What I just stated is the entire Hemophilia market, including both Hemophilia A and Hemophilia B. However, Hemophilia A is the larger market opportunity as such, it would take more of the $18.88 billion market opportunity share highlighted directly above. This is a program which has already been partnered out with Pfizer . Sangamo Therapeutics and Pfizer had made a deal to advance SB-525 for the treatment of patients with Hemophilia A. Sangamo had already received an upfront payment of $70 million upon establishing this partnership. It can also potentially receive up to $300 million in milestone payments for development and commercialization of giroctocogene fitelparvovec. It could also receive $175 million for any other product dealing with Hemophilia A.

Pfizer initiated a phase 3 study known as AFFINE , using giroctocogene fitelparvovec for the treatment of patients with Hemophilia A, back in October of 2020. More specifically, they dosed the first patient for this late-stage study at this time. The hope is that giroctocogene fitelparvovec could be given to patients as a potential one-time cure for Hemophilia A. The AFFINE phase 3 single-arm global study is evaluating this gene therapy for this specific disease. The primary endpoint of this study is going to be annual bleed rate [ABR] through 12 months following treatment with giroctocogene fitelparvovec, compared to ABR achieved with patients on Factor VIII (FVIII) replacement therapy from the phase 3 lead-in study period. Patients will be analyzed over a 5-year treatment period. Things were coming along well until the FDA placed the phase 3 AFFINE study on a clinical hold until the review of a proposed protocol amendment. This hold was bad, but not that bad. That's because 50% of the patients enrolled received their dose of giroctocogene fitelparvovec gene therapy for Hemophilia A. The bad news was that the trial was paused, which meant no new patients could be enrolled or treated. The reason for the hold was that some patients may have had FVIII levels that exceeded 150%. Again, Pfizer was told that the FDA placed this AFFINE trial on clinical hold. While the hold was bad for the time period it occurred, a good thing is that the FDA lifted the clinical hold of the phase 3 AFFINE trial of giroctocogene fitelparvovec for treatment of Hemophilia A patients many months later. The restart of this late-stage study with this gene therapy was noted in May of 2022. Having said that, Pfizer chose to keep the pause going for a bit longer. Why is that? That's because before it starts back up this study it wants to make sure that the right protocol amendments are in place. Ultimately, the clinical hold on this AFFINE trial was lifted and thus this program is back on the right track. Speaking of which, dosing of this entire trial is expected to be completed by end of Q1 of 2023. This is an important milestone to be reached, because then it sets up for results from the AFFINE study to be released by the 1st half of 2024. If the primary endpoint of this late-stage study is met, then that sets up the opportunity for Sangamo's partner Pfizer to file a BLA of giroctocogene fitelparvovec for the treatment of patients with Hemophilia A in the 2nd half of 2024.

There is a good chance at success for this phase 3 AFFINE trial using giroctocogene fitelparvovec for the treatment of patients with Hemophilia A. Why? That's because Sangamo already had established some pretty compelling clinical proof of concept in using this treatment for this specific patient population. This positive data comes from the phase 1/2 Alta study. Such an update on data was released back in December of 2021, where it was noted that 5 patients in the highest dose 3e13 vg/kg cohort had mean factor VIII (FVIII) activity of 25.4% via chromogenic clotting assay. Consider, that the primary endpoint noted above for the phase 3 AFFINE study is annualized bleed rate [ABR]. Well, the ABR for each year on average as follows:

• 0.0 in the first year (year one)
• 1.4 (total duration of follow up with cutoff date of October 1, 2021)

This shows that the therapy did a good job at reducing the ABR for all these Hemophilia A patients. All bleeding events didn't happen until after 69 weeks post treatment with giroctocogene fitelparvovec. Two patients in the other cohorts did have to eventually receive exogenous FVIII treatment for their disease. However, no patients in the highest dose of this study needed to resume prophylaxis at all. Again, it is a good thing if these patients never have to go back on prophylaxis.

Financials

According to the 10-K SEC Filing , Sangamo Therapeutics had cash, cash equivalents and marketable securities of $307.5 million as of December 31, 2022. The reason for the cash on hand is that this biotech had to tap into the use of its at-the-market offering program from January 1, 2022, all the way to this most recent earnings announcement. It will definitely need to raise more cash and thus shareholders could be diluted further. Why is that the case? It is because it expects to burn through about $310 million to $330 million in cash in 2023. In addition, it only states that it has enough cash to fund its operations for at least the next 12 months from the date of the 10-K SEC Filing, which was filed on February 23, 2023. Unless there is a major announcement in terms of news, it is likely that it will have to raise cash at this very low stock price of around $2.92 per share. In addition, it will likely have to sell additional shares under its at-the-market offering program as well to make sure it has enough cash to get through the major 2024 catalyst, which is the release of final results from the phase 3 AFFINE study using giroctocogene fitelparvovec for the treatment of patients with Hemophilia A. It was going to raise cash this month, but chose to hold off for the time being because of market conditions. This means it is going to need to raise funds in the coming months, so this is an item to keep an eye on in the near-term.

Risks To Business

There are several risks that traders/investors should be aware of before investing in this biotech. The first major risk to consider would be with respect to the ongoing phase 3 AFFINE study, which is using giroctocogene fitelparvovec for the treatment of patients with Hemophilia A. The reason why this remains a huge risk is because there is no guarantee the final results will be positive. In addition, not only must the results show clinical benefit, but they must be good enough in that Pfizer will be able to file a Biologics Licensing Application (BLA) of giroctocogene fitelparvovec to the FDA. From there, other risks would be whether or not the FDA will accept the BLA and if it will ultimately approve this gene therapy for the treatment of patients with Hemophilia A. A second risk to consider would be with respect to the ongoing phase 1/2 study using isaralgagene civaparvovec for the treatment of patients with Fabry Disease. While preliminary results have turned out to be good, there is no guarantee that a similar outcome will be achieved in a phase 3 study. Speaking of which, a late-stage study using isaralgagene civaparvovec for the treatment of patients with Fabry Disease is not expected to be initiated until the end of this year. A final risk to consider would be with respect to the low cash on hand that Sangamo has. Especially in light of it losing two early-stage preclinical partnerships with Novartis ( NVS ) and Biogen ( BIIB ). In losing these partnerships, it will definitely need to raise cash in the coming months, thus shareholders will be diluted.

Conclusion

The final conclusion is that Sangamo Therapeutics is a good speculative biotech play to keep an eye on. The key to success for this company is to get its Hemophilia A drug giroctocogene fitelparvovec to the finish line with Pfizer. Results from the ongoing phase 3 AFFINE trial are expected to be released by the 1st half of 2024. If the primary endpoint is met, then Pfizer will be able to file a BLA to the FDA of this gene therapy for the Hemophilia A in the 2nd half of 2024. I would say that this biotech needs a win on this front as it is running out of cash. At least it has established proof of concept with its other gene therapy isaralgagene civaparvovec for the treatment of patients with Fabry Disease in a phase 1/2 study. If it can use its cash to advance this program, then this might be another good shot on goal to go after. With a few catalysts expected in 2024, plus the proof of concept established in using isaralgagene civaparvovec for the treatment of patients with Fabry Disease, these are the reasons why I believe that Sangamo Therapeutics stock is a good speculative biotech play to look into.

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