Sangamo stock drops 50% drop in shares during premarket trading on Tuesday following Pfizer’s (NYSE: PFE) announcement to terminate their partnership on developing a gene therapy for hemophilia A (HemoA).
Sangamo stock drops
With Pfizer’s withdrawal, Sangamo has regained full rights to the HemoA therapy. The company has pledged to explore options for advancing the program, including potential new collaboration opportunities.
However, this decision pushes back Sangamo’s market entry timeline. Pfizer had initially planned to submit data for regulatory approval by early 2025, a goal now delayed.
Why Pfizer Walked Away
Pfizer’s decision follows a detailed evaluation of clinical trial data and feedback from experts. The company cited slow patient adoption of hemophilia A gene therapies, particularly among those with moderate to severe conditions. Pfizer emphasized the need to prioritize treatments with greater commercial and patient impact.
Earlier trial results from Pfizer indicated that the therapy reduced annual bleeding episodes for patients. Despite this, the limited demand for gene therapies in this market influenced Pfizer’s decision.
Transition Plan and Future Outlook
The collaboration agreement between Sangamo and Pfizer will officially conclude on April 21, 2025. Until then, ongoing clinical trial participants will continue to receive monitoring as planned.
Hemophilia A affects around 25 out of every 100,000 male births globally. The condition, caused by a genetic defect, hampers clotting factor production, leading to excessive bleeding during injuries or surgeries.
Sangamo Focuses on Fabry Disease
Sangamo remains committed to advancing its therapy for Fabry disease. The company aims to submit this therapy, known as ST-920, for regulatory approval in late 2025. Analysts from Barclays (LON: BARC) highlighted the potential for significant upside through near-term licensing deals for this program.
Market Reactions and Analyst Opinions
Analysts offered mixed reactions to Pfizer’s decision:
Barclays reaffirmed its Overweight rating on Sangamo, describing the stock’s sell-off as “overdone” due to the limited valuation assigned to the HemoA program.
TD Cowen analysts expressed disappointment, attributing Pfizer’s decision to the commercial challenges faced by Biomarin’s Roctavian, another HemoA gene therapy. Roctavian’s launch reportedly indicated a minimal market for therapies with 5-10 years of efficacy.
Conclusion
While Pfizer’s exit presents significant challenges for Sangamo’s HemoA program, the company’s focus on advancing other treatments like its Fabry disease therapy provides hope for recovery. Investors remain cautious, but analysts see opportunities for upside in Sangamo’s broader pipeline.
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