By Mackenzie Tatananni

Sangamo Therapeutics stock sank Tuesday after the genomic medicine company said Pfizer had withdrawn from an agreement to develop a hemophilia drug.

Shares of the California-based biotech plummeted 50% to $1.17. It was the largest same-day percentage decrease since a 66% drop in November 2008, according to Dow Jones Market Data.

Sangamo said its collaboration with Pfizer had come to an end after the big pharmaceutical company decided to halt development of an investigational candidate for a gene therapy. The biotech said it "intends to explore all options to advance the program," including seeking a new partner.

The companies joined forces in 2017 to pursue treatments for hemophilia A, a bleeding disorder caused by a genetic mutation. They co-developed a therapy candidate called giroctocogene fitelparvovec that aimed to deliver a functional copy of the defective gene to the liver so liver cells could produce clotting factor.

In July, Pfizer reported positive top-line results for a Phase 3 trial meant to evaluate the safety of a single infusion of giroctocogene fitelparvovec.

Sangamo CEO Sandy Macrae noted the treatment's life-changing potential for hemophilia A patients in a news release Tuesday. "Following positive results from the Phase 3 AFFINE trial, we believe it is well positioned for regulatory submissions and potential commercialization," she said.

She expressed surprise over Pfizer's decision to end the collaboration, "especially given the compelling pivotal clinical trial data."

Analysts had expected Pfizer to file a Biologics License Application for the treatment in early 2025. A BLA is a request to the Food and Drug Administration to allow a biologic to be sold across state lines.

With the termination of the partnership, Pfizer indicated to Sangamo that it would no longer proceed with the BLA submission or seek to commercialize the treatment.

The license agreement with Pfizer will terminate on April 21, Sangamo said, at which point Pfizer will be required to return the program to Sangamo. "All trial participants will continue to be monitored as planned during the transition period," Sangamo explained.

Truist Securities analysts led by Nicole Germino called the development "disappointing," given that Sangamo management had highlighted that the BLA filing would "trigger a meaningful payment to help cash runway."

"We note that cash remains an overhang despite recent collaborations," the analysts wrote, referring to a licensing agreement Sangamo reached with Astellas Pharma on Dec. 19.

Despite the latest developments, Truist maintained a Buy rating and price target of $7 for the stock. The shares have gained 330% this year.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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December 31, 2024 10:19 ET (15:19 GMT)

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