Spurned by Big Pharma collaborators, Sangamo lays off 27% of US staff in latest refocus

A month after being abandoned by Biogen and Novartis in quick succession, Sangamo Therapeutics is now laying off around 120 employees as the genomic medicines biotech refocuses on three key areas.

The significant reduction in head count is equivalent to 27% of the company’s U.S. workforce. The shrunken business will focus on Sangamo’s neurology epigenetic regulation portfolio as well as a phase 3-ready Fabry disease asset and a CAR-Treg in phase 1. It follows the company’s move to shelve the late-stage development of its sickle cell disease drug in February—a year after Sanofi handed back the asset.

The latest restructuring will also see the biotech “significantly reduce its internal manufacturing and allogeneic [cell therapy] research footprints in California,” the company explained in its first-quarter earnings release.

The restructuring comes in the shadow of Sangamo’s announcement last month that it had lost two partners in quick succession, with Biogen and Novartis walking away from partnerships collectively worth billions of dollars in milestones. Novartis turned down the opportunity to receive the zinc finger protein transcription factors resulting from the companies’ autism spectrum disorder and intellectual disability collaboration. Just days later, Biogen told Sangamo that it was terminating their partnership spanning tauopathies, Parkinson’s disease and myotonic dystrophy along with the $2.37 billion milestone payments up for grabs.

Sangamo CEO Sandy Macrae didn’t attribute the Big Pharmas’ decisions for the latest reorganization, instead explaining that “today’s environment necessitates careful choices when deciding how many programs to take forward at once.”

“We are therefore announcing a sharpened strategic focus, prioritizing our investments in our most promising programs,” Macrae said in the earnings release. “This has led to difficult, but necessary, decisions to step away from certain pre-clinical assets, shrink parts of our infrastructure and redeploy investments towards realizing the full potential of what we believe are our most valuable programs.”

The reorganization is expected to claw back around $31 million in annualized savings. The $241 million lump of cash, equivalents and securities Sangamo had on hand as of the end of March is significantly lighter than the $307.5 million it entered the year with, but the biotech estimates it should last for at least 12 months.

More ominously for those employees who’ve kept hold of their jobs, Sangamo added that it’s “assessing ways to further reduce annual operating expenses, consistent with the prioritized objectives and progress of the company.”

In the wake of Biogen and Novartis’ decisions, Sangamo decided to halt all preclinical work bar its wholly owned neurology pipeline. This includes the Nav1.7 program to treat chronic neuropathic pain, which the company expects to request a phase 1 trial for next year, as well as a prion disease program, which it hopes to enter into human trials in 2025. The company will continue to identify engineered adeno-associated virus capsids that can enhance delivery in the central nervous system.

When it comes to the Fabry disease candidate, isaralgagene civaparvovec, the company is continuing to dose more patients in the phase 1/2 STAAR study, while hoping to launch a phase 3 by the end of the year, subject to an anticipated FDA meeting in the summer.

Finally, data from a phase 1 trial of the CAR-Treg cell therapy, dubbed TX200, is due to read out by the end of the year. The autologous therapy is being administered to patients receiving an HLA-A2 mismatched kidney from a living donor.

Pfizer is also running a phase 3 trial of giroctocogene fitelparvovec, a gene therapy licensed from Sangamo for patients with moderately severe to severe hemophilia A. The study is due to read out next year.