Shares of penny stock biotech company Sangamo Therapeutics (SGMO) dropped over 60% in Monday’s after-hours trading. The decline followed Pfizer’s (PFE) decision to terminate their partnership to develop a gene therapy for hemophilia A, a rare bleeding disorder affecting about 25 in every 100,000 male births globally. The agreement between Sangamo and Pfizer is set to end on April 21, 2025.
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The decision to end the agreement came as a surprise to Sangamo, especially since Pfizer had previously indicated plans to submit applications to the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) for approval in early 2025.
However, Pfizer cited limited market interest in a gene therapy for hemophilia A, given the availability of several approved treatments. Notably, BioMarin Pharmaceutical (BMRN) has developed a gene therapy for the condition, but its commercial success has been relatively modest.
Sangamo to Regain Rights and Explore New Options
The termination will enable Sangamo to reclaim full rights to develop and commercialize the therapy. The company plans to explore strategic options to advance this therapy, which may involve seeking a new collaboration partner.
Moreover, Sangamo is focused on advancing its other therapies, including a treatment for Fabry disease, a genetic disorder caused by a deficiency in an enzyme required to break down fats. This treatment is expected to be submitted for approval in the second half of 2025.
Is SGMO a Good Stock to Buy?
Turning to Wall Street, SGMO has a Moderate Buy consensus rating based on three Buys and three Holds assigned in the last three months. At $6, the average Sangamo price target implies a 156.41% upside potential. Shares of the company have gained about 333% year-to-date.
Is Pfizer a Buy, Sell, or Hold?
Turning to Wall Street, PFE stock has a Moderate Buy consensus rating based on eight Buys, 10 Holds, and one Sell assigned in the last three months. At $31.56, the average Pfizer price target implies a 19.45% upside potential. Shares of the company have declined 2.6% year-to-date.
