Dated August 2019, the FDA recently released updated guidelines for developing drugs for the treatment of Fabry Disease (https://www.fda.gov/media/129690/download).
One key aspect is the ability to use a biopsy and the associated biomarkers to gain otherwise early approvals for new compounds. We point this out specifically as MTSL Recommendation Sangamo has a Fabry’s gene therapy program, ST-920, that is about to treat its first patient. And although the first full set of data will not be available until the end of 2020, the construct and compound is based on the same AAV6 vector being used in SB-525, SGMO’s gene therapy for hemophilia A being developed with Pfizer. As updated SB-525 data will be presented at ASH in early December, positive data might lead to a read-through to ST-920. We expect a strong ‘525 update at ASH; hence, those results plus the new accelerated FDA guidelines for Fabry’s treatment are also bullish for SGMO.
SGMO – Sangamo With Pfizer Will Win The Race For Hem A GT – BUY
In its Q3 quarterly update, management outlined upcoming catalysts, with a focus on the ASH meeting (12/7-10) and the first Sangamo Investor Day (12/17), plus several other clinical trials. Though a bit early, we will be the first analysts to predict that SB-525 will become the frontrunner in the race for hemophilia A gene therapy dominance. If we are correct, for that reason alone, not to mention the top pipeline in the gene editing/therapy field, SGMO is undervalued. Furthermore, SB-920, the Company’s gene therapy for Fabry’s disease is based on the exact same construct as ‘525, and the initial patient will receive treatment by year-end. BUY.
ASH Update Will Substaintially Differentiate SB-525
Although the patient numbers are still small, the comparisons with hem A GT leader BMRN become easier as patient exposure increases. Although the Company (and partner PFE) are embargoed until the conference, behind the scenes progress is occurring at a high level as Pfizer takes over the program and heads towards pivotal/registration studies. PFE has already announced they completed the IND and manufacturing process transfer for SB-525 from SGMO to PFE, and in October they enrolled the first patient in their Phase III lead-in trial. Pfizer also announced that they expect to begin dosing H1:20. In our view, this provides another positive read to the upcoming SB-525 results at ASH. As a reminder of the last update back in August, the first two high dose SB-525 patients showed efficacy for 24 and 19 weeks respectively (~6 and 5 months). ASH will include results in five patients in the high dose cohort (3e13vg/kg) and exposure of up to 11 months or approximately twice as long as the last update in at least one patient.
SGMO will present Abstract #2060 titled “Updated Follow-up of the Alta Study, a Phase 1/2, Open Label, Adaptive, Dose-Ranging Study to Assess the Safety and Tolerability of SB-525 Gene Therapy in Adult Patients with Severe Hemophilia A”. Data showing rapid kinetics, durability and very low variability, elimination of FVIII replacement we believe will show that SGMO/PFE have a differentiated product. The poster will also show durability of Factor VIII levels, bleeding rates, factor usage, and safety, for all patients (n=5) in the high dose cohort (3e13 vg/kg). As of the time of the abstract submission, SGMO was able to say at that time that four patients had achieved FVIII levels within the normal range. No bleeding events were reported up to 24 weeks post-administration. The patients did not require FVIII replacement therapy after the initial prophylactic period of up to ~3 weeks post-SB-525 administration.
In a nutshell, SB-525 will be the leader in hem A gene therapy – a blockbuster market – for the following reasons:
- well tolerated at highest dose
- no bleeding events
- no FVIII usage required
- degree of correction into normal range
- transient benign ALT rise rapidly corrected, does not change F8 levels
- at least half the dose of BMRN’s ValRox
- FVIII levels all within normal range
- consistency of effect
- no sign of diminution
ST-920 AAV6 Construct Identical To ‘525
The STAAR study is screening now and is expected to treat the first patient in Fabry’s disease before the end of the year (https://clinicaltrials.gov/ct2/show/NCT04046224?term=Sangamo+Fabry's&rank=1).
Al though we may not see initial results (including biospies) until about a year from now, as patient exposure and reconstitution take place, we believe positive SB-525 results at ASH bode favorably for ‘920. On the Q3 call, management noted the expansion of STAAR to four centers in the US and also announced they submitted a CTA in the UK to expand the trial and facilitate enrollment. Importantly, SGMO is encouraged by draft FDA guidance that incorporates the use of a biopsy for possibly approval, and that may result in SB-920 being the first Fabry’s gene therapy on the market. Still completely ignored by investors to this point, in our view ASH and the upcoming analyst meeting will begin to change that in a good way. Additionally, during Q3 the FDA granted Orphan Drug Designation to ST-920 for the treatment of Fabry disease.
ST-400 Trial Treats More Severe Beta-Thal
At least three patients have been enrolled in the trial and up to five will be treated by ASH. Following the dosing of a third patient in the THALES study, Sangamo received a $6 million milestone from Sanofi and received another $2.1 million from the California Institute for Regenerative Medicine (CIRM). Enrollment of all 6 patients in the Phase I/II study is expected to be completed in 2019. SGMO believe that the THALES study may distinguish ST-400 from CRSP/VRTX TD beta-thal data (due to be presented at ASH) in that the SNY/SGMO study requires more severely anemic patient enrollment than the former. For example, THALES patients need to be severe enough and have at least 8 transfusions per year. Competitive study allows enrollment with significantly less (4 transfusions per year). The genotype and phenotypes of trial patients will offer a glimpse of the differences between CRSP and ZFNs.
CAR-Treg Submitted CTA
Patients should be started in 2020 in kidney transplants – infusion with TS200 will correct mismatched subjects. Another major asset in a rapidly growing and competitive class that, we believe, SGMO has a leadership position.
Last but certainly not least, KITE/GILD is planning to initiate a clinical study of KITE-037, an allogeneic anti-CD19 CAR-T cell product, in 2020.
Beginning with ASH, Sangamo is entering a period of multiple clinical updates with the broadest and deepest gene therapy/editing pipeline around. In our view, SGMO with partner PFE will win the race in hemophilia A gene therapy with SB-525. Next, the Fabry’s gene therapy that is similar to ‘525 will begin its successful clinical and subsequent commercial journey. While the Company often denies being for sale, we believe that eventually one day Sangamo will be a part of either PFE or GILD.
SGMO is a BUY under 20 with a TARGET PRICE of 30