Shares of Sangamo Therapeutics (SGMO) are under pressure after the company presented interim data from two clinical trials evaluating two of its zinc finger nuclease candidates in patients with mucopolysaccharidosis, or MPS. In a report by STAT's Adam Feuerstein following the announcement, Sangamo's CEO Sandy Macrae was quoted as saying the results from low and middle doses were "not good enough." Commenting on the results, Wells Fargo analyst Jim Birchenough argued that the selloff in Sangamo’s shares is "overdone" as he believes individual patient validation with significant iduronate-2-sulfatase enzyme production in one of two high dose MPS II patients and evidence of enzyme production in MPS I is "encouraging."
STUDY RESULTS: On Thursday, Sangamo Therapeutics presented interim data from the Phase 1/2 EMPOWERS Study evaluating the SB-318 zinc finger nuclease in vivo genome editing product candidate in patients with MPS Type I, along with interim results of the CHAMPIONS Study evaluating SB-913 for MPS II. Sangamo believes data from these two studies provide complementary evidence supportive of a favorable safety profile and of the activity of the ZFN in vivo genome editing technology used in both SB-318 and SB-913. The primary objective of the CHAMPIONS Study is the safety and tolerability of SB-913, and secondary objectives include evaluation of change from baseline in plasma IDS activity and urine GAG levels. Safety data on eight patients were collected and analyzed. Small increases in IDS enzyme activity compared to baseline were recorded in the two patients receiving the mid-dose and in one patient receiving the high-dose. At 24 weeks these measurements remained within the expected range for baseline values. A more substantial increase in plasma IDS activity was measured in the second patient in the high dose cohort, with levels rising to approximately 50 nmol/hour/mL by week 6 following SB-913 administration. The plasma IDS activity levels subsequently decreased in the context of development of a mild transaminitis — a known risk of AAV-based therapies — due to a suspected immune response. As of the most recent observation, the patient's plasma IDS activity measured 14 nmol/hour/mL, above the baseline value but below the normal range. Baseline urine GAG measurements for all six patients were in a range considered at or slightly above normal, except for heparan sulfate which was elevated in all patients at baseline. At 24 weeks, urine GAG results did not show a meaningful change. The primary objective of the EMPOWERS Study is to determine the safety and tolerability of SB-318, and secondary objectives include evaluation of change from baseline in IDUA activity and urine GAG levels. Administration of SB-318 was generally well tolerated. The results suggest a dose-dependent increase in leukocyte IDUA activity, with activity levels rising above baseline and in the normal range. Plasma IDUA activity was unchanged from baseline in all three patients. Baseline urine GAG measurements for the three patients in the EMPOWERS Study were in a range considered to be at or slightly above normal. In the limited duration data set available at the time of the WORLDSymposium presentation, urine GAG measurements show no meaningful change. Concurrent with the press release regarding the data, STAT's Adam Feuerstein quoted Sandy Macrae, Sangamo's CEO, as having said: "First and foremost, we must think about the patients we're treating, which is why it's fair to conclude that the results we're showing from our low and middle doses are not good enough."
SANGAMO SELLOFF 'OVERDONE': Following Sangamo's update for in-vivo gene editing in MPS type I and II, Wells Fargo's Birchenough lowered his price target on the stock to $24 from $39. While overall results are "disappointing" in terms of markers of sustainable efficacy and suggest further optimization required of gene editing efficiency and delivery, the analyst argued that individual patient validation with significant iduronate-2-sulfatase enzyme production in one of two high dose MPS II patients and evidence of enzyme production in MPS I is "encouraging." Overall, Birchenough told investors he believes Sangamo's shares are "oversold" on the news and recommended buying on the weakness. He reiterated an Outperform rating on the stock.
CRISPR SELLOFF 'UNFOUNDED': In a research note of his own, Piper Jaffray analyst Edward Tenthoff noted that Crispr Therapeutics (CRSP) and the broader gene editing space are also selling off in reaction to Sangamo's presentation of interim data, which showed no meaningful changes in IDS or GAG levels in six patients after 23 weeks. However, the analyst pointed out that he does not see read-through to Crispr, and believes CTX001 ex vivo approach and biological rational of targeting fetal hemoglobin de-risk and differentiate Crispr. Further, he added that he would be a buyer on the "unfounded" selloff in shares. Tenthoff reiterated an Overweight rating and $75 price target on Crispr Therapeutics' stock.
PRICE ACTION: In afternoon trading, shares of Sangamo have plunged over 31% to $8.29, while Crispr's stock has slipped about 7% to $30.42. Also lower, Editas Medicine (EDIT) and Intellia Therapeutics (NTLA) have each slid almost 7% to $19.72 and $12.90, respectively. Both companies are investigating using genome editing technology for disease treatments.