Sangamo stock crashes 50% after Pfizer terminates HemoA gene therapy deal

Investing.com -- Sangamo Therapeutics Inc (NASDAQ:SGMO) announced on Monday that Pfizer (NYSE:PFE) has ended their partnership to co-develop a gene therapy for hemophilia A (HemoA), sending Sangamo’s shares crashing 50% in premarket trading Tuesday.

Following the termination, Sangamo regained the rights to develop the therapy and stated it would explore all possibilities to move the program forward, including seeking a new collaboration partner.

The end of the agreement delays Sangamo’s pathway to market, as Pfizer had been expected to submit data for potential regulatory approval of the therapy in early 2025.

Pfizer stated the decision followed a comprehensive review of clinical trial data, feedback from experts, and slow adoption of hemophilia A gene therapies among patients with moderate to severe disease. The company noted that interest in additional gene therapy options for this patient group is currently limited.

"We believe it is best to re-dedicate our time and resources to those assets and treatments that will have the greatest impact on patients and the greatest chance of commercial success," Pfizer added.

Earlier this year, Pfizer disclosed late-stage trial results showing the therapy reduced annual bleeding episodes in patients with the condition.

The collaboration and license agreement will officially end on April 21, 2025, Sangamo said. Until then, trial participants will continue to be monitored as planned during the transition.

Hemophilia A affects approximately 25 in every 100,000 male births globally. The disorder results from a genetic defect that impairs the production of clotting factors, causing severe bleeding during injuries or surgeries.

Sangamo also noted it remains committed to advancing its therapy for Fabry disease, aiming to submit it for regulatory approval in the latter half of 2025.

Barclays (LON:BARC) analysts said Pfizer’s announcement sent a bearish view on hemophilia gene therapy commercial opportunity for Sangamo, but they view the stock sell-off as “overdone since limited valuation was assigned to HemoA program.”

The bank reiterated an Overweight rating on the stock, noting it expects a meaningful upside from near-term licensing deal on ST-920 in Fabry Disease.

Separately, TD Cowen analysts said they are “disappointed” in Pfizer’s unexpected decision, “given the competitive and likely approvable clinical data profile.”

“We believe PFE likely discontinued giro development given the commercial failure of Biomarin's HemeA GTx Roctavian, whose launch suggests an extremely limited market for a HemeA GTx with 5-10 years of efficacy,” they added.