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SANGAMO THERAPEUTICS, INC (SGMO)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 revenue surged to $49.4M, driven by $49.2M Genentech collaboration revenue; GAAP net income turned positive at $10.7M ($0.04 diluted EPS), versus a $104.2M loss in Q3 2023 and $36.1M loss in Q2 2024 .
  • FDA alignment provides a clear Accelerated Approval pathway for ST‑920 (Fabry) using 52‑week eGFR slope from the ongoing Phase 1/2 STAAR study, pulling forward a potential BLA submission to H2 2025 and obviating an additional registrational study—an upside catalyst .
  • Pfizer’s hemophilia A AFFINE Phase 3 topline met primary and secondary endpoints; detailed data at ASH (Dec 9) and regulatory discussions underway, supporting potential near‑term milestones/royalties for SGMO .
  • FY 2024 GAAP opex guidance was raised to $150–$170M from $145–$165M (Q1), while non‑GAAP opex remained $125–$145M; cash runway guided into Q1 2025 aided by Genentech payments, though financing risk remains a key watch item .
  • Wall Street consensus EPS/revenue estimates from S&P Global were unavailable at the time of this analysis; estimate comparison not possible (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Clear FDA Accelerated Approval path for ST‑920 with 52‑week eGFR slope as the intermediate endpoint; BLA readiness underway and H2 2025 filing targeted, eliminating a costly registrational study and accelerating timelines ~3 years .
  • Business development execution: $50M received from Genentech (upfront and milestone), validating STAC‑BBB capsid and zinc finger repressors; interest in additional capsid collaborations continues .
  • Q3 profitability inflection: Revenue $49.4M, income from operations $10.6M, GAAP net income $10.7M; non‑GAAP opex fell to $34.2M (from $59.3M YoY), reflecting disciplined cost management and restructuring benefits .

What Went Wrong

  • Cash remains constrained: $39.2M at 9/30/24, with management reiterating runway only into Q1 2025 and emphasizing the need to secure additional funding/partners to continue as a going concern .
  • Revenue quality is highly collaboration‑dependent (Genentech recognition), with underlying platform monetization/partner milestones critical to sustaining operations; Kite revenue declined $5.5M and other licenses declined $3.7M YoY .
  • Persistent financing/operating risks: management’s forward‑looking statements explicitly flag potential inability to obtain funding/partnerships, risk of ceasing operations, and macro pressures on clinical and regulatory timelines .

Financial Results

Quarterly Trends (oldest → newest)

MetricQ1 2024Q2 2024Q3 2024
Revenues ($USD Thousands)$481 $356 $49,412
Net Income (Loss) ($USD Thousands)$(49,089) $(36,128) $10,672
Diluted EPS ($USD)$(0.27) $(0.18) $0.04
Total Operating Expenses ($USD Thousands)$52,007 $37,440 $38,781
Cash & Cash Equivalents ($USD Thousands)$54,417 $27,786 $39,201

Year-over-Year Comparison

MetricQ3 2023Q3 2024
Revenues ($USD Thousands)$9,398 $49,412
Net Income (Loss) ($USD Thousands)$(104,163) $10,672
Diluted EPS ($USD)$(0.59) $0.04
Total Operating Expenses ($USD Thousands)$115,806 $38,781

Q3 2024 Revenue Breakdown

SourceAmount ($USD Thousands)Notes
Genentech Collaboration Revenue$49,200 Upfront/milestone recognition in quarter
Kite Collaboration (decline)$(5,500) Agreement expired April 2024
Other License Agreements (decline)$(3,700) Year-over-year decrease

KPIs (Clinical/Operational)

KPIValueContext
ST‑920 Patients Dosed (STAAR)33 Dosing completed April 2024
Patients Withdrawn from ERT18 All remain off ERT as of Nov 12
Longest Follow-up (ST‑920)~4 years Durability noted
Accelerated Approval BasiseGFR slope at 52 weeks 104‑week to verify benefit
Potential BLA Submission (ST‑920)H2 2025 Under Accelerated Approval path
Q3 Non‑GAAP Opex ($USD Millions)$34.2 Excludes D&A, SBC, impairments

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Total Operating ExpensesFY 2024$145–$165M (Q1 guide) $150–$170M (Q2/Q3) Raised
Non‑GAAP Total Operating ExpensesFY 2024$125–$145M (Q1) $125–$145M (Q2/Q3) Maintained
Cash RunwayCorporateInto Q3 2024 (Q1) Into Q1 2025 (post‑Genentech) Extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024)Previous Mentions (Q2 2024)Current Period (Q3 2024)Trend
Fabry (ST‑920) Regulatory PathAbbreviated path; PRIME/ILAP; planning for Phase 2b; 33 dosed; 14 off ERT EMA meeting with FDA in attendance; statistically significant eGFR rise in 18 patients; 17 off ERT FDA Accelerated Approval via 52‑week eGFR slope; BLA readiness; 18 off ERT; H2 2025 filing Strongly positive, accelerated
Hemophilia A (Pfizer AFFINE)Pivotal readout mid‑2024; BLA/MAA early 2025 potential Topline met primary/secondary; regulatory discussions planned ASH platform presentation; regulatory discussions ongoing; milestones potential Positive toward submission
Genentech Capsid/ZFR DealBD interest; STAC‑BBB data showcased; pursuing partners $50M near‑term payments; up to $1.9B milestones; capsid diligence $50M received; further BD for STAC‑BBB underway Validating; funding lever
Cash Runway/FinancingInto Q3 2024; pursuing BD and cost reductions Expect runway into Q1 2025 with Genentech Runway into Q1 2025; continued need for funding/partners Improved but still a risk
Neurology Pipeline (Nav1.7, Prion)Nav1.7 IND Q4 2024; Prion CTA Q4 2025 IND‑enabling/CTA‑enabling progress ST‑503 IND submitted (Nav1.7); prion CTA timeline intact Advancing

Management Commentary

  • “Sangamo has transformed from a Phase I/II company to a pre‑BLA company…We are delighted to have such a clear regulatory pathway…filing in the second half of 2025.” — CEO Sandy Macrae .
  • “No confirmatory study has been asked for or is required…We anticipate…submitting the full 2‑year data set a year later.” — CEO Sandy Macrae on Accelerated Approval confirmation .
  • “We have received $50 million in upfront license fees and milestone payments from Genentech, which extended our cash runway…We are currently advancing business development discussions with additional potential collaborators.” — CEO and team .
  • “Our cash runway remains unchanged and is sufficient to fund our planned operations into the first quarter of 2025…” — CEO .

Q&A Highlights

  • Fabry endpoints and FDA expectations: eGFR slope at 52 weeks as intermediate endpoint; 104‑week data to verify benefit; no confirmatory study required—clarifies approval mechanics and label strategy .
  • Partnership strategy: refreshed Fabry partnership dialogue post‑FDA alignment; focus on doing the “right deal” to enable filing in H2 2025 and launch in H1 2026 .
  • Genentech economics and timing: $50M received; portion recognized in quarter; further capsid/cargo BD opportunities pursued .
  • Hemophilia A commercialization confidence: Pfizer in regulatory discussions; SGMO eligible for up to $220M milestones and 14–20% royalties contingent on approval/commercialization .
  • Patient‑reported outcomes in Fabry: broad improvement narratives (pain, sweating, activities) and durable biomarker changes alongside eGFR slope .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q3 2024 were unavailable at the time of retrieval due to request limits; therefore, no comparison to estimates is provided in this recap [GetEstimates error].
  • When available, results should be compared to S&P Global Wall Street consensus; absent that, investors should note the magnitude of SGMO’s collaboration‑driven revenue recognition and positive EPS as key surprises relative to prior quarters.

Key Takeaways for Investors

  • FDA Accelerated Approval path for ST‑920 materially de‑risks Fabry regulatory trajectory and pulls forward commercialization timelines—expect heightened partnership interest and a potential H2 2025 BLA filing .
  • The Q3 profit inflection was driven by Genentech revenue recognition; sustainability hinges on continued BD execution and milestone pacing (Pfizer AFFINE, additional capsid deals) .
  • Watch near‑term catalysts: ASH Hemophilia A data (Dec 9), Fabry 52‑week eGFR dataset in H1 2025, and any Fabry partnership announcement—each could be stock‑moving events .
  • Funding risk remains: cash into Q1 2025 with explicit going‑concern language; timely BD/milestone inflows are critical to bridge execution across 2025 .
  • Non‑GAAP opex discipline is evident; maintaining lean cost base supports optionality while advancing ST‑503 and prion programs to important 2025 milestones .
  • Hemophilia A may provide a multi‑year non‑dilutive funding foundation via regulatory/commercial milestones and royalties if Pfizer advances to filing/approval .
  • Position sizing should reflect binary event risk inherent to gene therapy/regulatory pathways and dependency on external partners; monitor disclosure cadence closely via SEC/press releases .

Supporting Documents and Data

  • Q3 2024 8‑K (Item 2.02) and Exhibit 99.1 press release (financials, business highlights) .
  • Q3 2024 earnings call transcript (prepared remarks and Q&A) .
  • Other Q3‑relevant press releases: FDA Accelerated Approval alignment (Oct 22, 2024) .
  • Prior quarters’ earnings materials: Q2 2024 press release/transcript ; Q1 2024 8‑K press release/transcript .