sgmo-20210331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________

FORM 10-Q

________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-30171

________________________________________________

SANGAMO THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

________________________________________________

Delaware

68-0359556

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

7000 Marina Blvd., Brisbane, California, 94005

(Address of principal executive offices) (Zip Code)

(510) 970-6000

(Registrant’s telephone number, including area code)

________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SGMO

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2021, 143,881,477 shares of the issuer’s common stock, par value $0.01 per share, were outstanding.

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INDEX

SANGAMO THERAPEUTICS, INC.


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 20 20	5
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 20 20	6
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 20 20	7
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 20 20	8
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 20 20	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40

SIGNATURES		41

Unless otherwise indicated or the context suggests otherwise, references in this Quarterly Report on Form 10-Q, or Quarterly Report, to “Sangamo,” “the Company,” “we,” “us,” and “our” refer to Sangamo Therapeutics, Inc. and our subsidiaries, including Sangamo Therapeutics France S.A.S. and Sangamo Therapeutics UK Ltd.

Any third-party trade names, trademarks and service marks appearing in this Quarterly Report are the property of their respective holders.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements relate to our future events, including our anticipated operations, research, development, manufacturing and commercialization activities, clinical trials, operating results and financial condition. Forward-looking statements may include, but are not limited to, statements about:

•our strategy;

•anticipated research and development of product candidates and potential commercialization of any resulting approved products;

•the initiation, scope, rate of progress, enrollment, anticipated results and timing of our preclinical studies and clinical trials and those of our collaborators and strategic partners;

•the therapeutic and commercial potential of our product candidates, including the durability of therapeutic effects;

•the therapeutic and commercial potential of technologies used by us in our product candidates, including our gene therapy and cell therapy technologies, our zinc finger protein technology platform, zinc finger nucleases and zinc finger protein transcription factors;

•our ability to establish and maintain collaborations and strategic partnerships and realize the expected benefits of such arrangements;

•anticipated revenues from existing and new collaborations and the timing thereof;

•our estimates regarding the impact of the COVID-19 pandemic on our business and operations and the business and operations of our collaborators, including clinical trials and manufacturing, and our ability to manage such impacts;

•our research and development and other expenses;

•our ability to obtain adequate preclinical and clinical supplies of our product candidates from current and potential new suppliers and manufacturers or from our own in-house manufacturing facilities;

•the ability of Sangamo and our collaborators and strategic partners to obtain and maintain regulatory approvals for product candidates and the timing and costs associated with obtaining regulatory approvals;

•our ability to comply with, and the impact of, regulatory requirements, obligations and restrictions on our business and operations;

•our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others, including our ability to obtain rights to the gene transfer technologies required to develop and commercialize our product candidates;

•competitive developments, including the impact on our competitive position of rival products and product candidates and our ability to meet competition from rival products and product candidates;

•our estimates regarding the sufficiency of our cash resources and our expenses, capital requirements and need for additional financing, and our ability to obtain additional financing;

•our ability to manage the growth of our business;

•our projected operating and financial performance;

•our operational and legal risks; and

•our plans, objectives, expectations and intentions and any other statements that are not historical facts.

In some cases, you can identify forward-looking statements by use of future dates or by terms such as: “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “seeks,” “should,” “will,” “likely,” “ongoing,” “project,” “assume,” “target,” “forecast,” “guidance,” “objective,” “aim,” “goal” and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events, are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, without limitation:

•We are a clinical-stage biotechnology company with no approved products or product revenues. Our success depends substantially on clinical trial results demonstrating safety and efficacy of our product candidates and durability of therapeutic effects to the satisfaction of regulatory authorities. Obtaining positive clinical trial results and regulatory approvals is expensive, lengthy, challenging and unpredictable and may never occur for any product candidates.

•Many of our product candidates are based on novel zinc finger protein technologies that have yet to yield any approved commercially viable therapeutic products.

•We have incurred significant operating losses since inception and anticipate continued losses for the foreseeable future. We may never become profitable.

•We require additional capital to fund our operations and continue operating as a viable business. This additional capital may not be available to us on favorable terms or at all.

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•We rely heavily on collaborations with larger biopharmaceutical companies to generate revenues and develop, obtain regulatory approvals for and commercialize many of our product candidates. If conflicts arise with our collaborators or if the collaborations terminate for any reason, our revenues and product development efforts would be negatively impacted.

•Biotechnology and genomic medicine are highly competitive businesses. Our competitors may develop rival technologies and products that are superior to or are commercialized more quickly than our technologies and product candidates.

•Manufacturing genomic medicines is complex, expensive, highly regulated and risky. We currently rely heavily on third-party manufacturers and have limited experience manufacturing products ourselves. Manufacturing challenges may result in unexpected costs, supply interruptions and harm and delay to our product development efforts.

•Even if we obtain regulatory approvals for our product candidates, our approved products may not gain market acceptance among physicians and patients and adequate coverage and reimbursement from third-party payors and may not demonstrate commercial viability.

•We may not be able to obtain, maintain and enforce necessary and desirable intellectual property protections for our technologies and product candidates in all desired jurisdictions, which could adversely affect the value of our technologies and our product development efforts and could increase the risks of costly, lengthy and distracting litigation with unpredictable results.

•Our success depends on hiring, integrating and retaining additional highly qualified skilled employees and retaining current key executives and employees, which may be challenging given that competition for these individuals is intense.

•The evolving COVID-19 pandemic could continue to adversely impact our business and operations and the business and operations of our collaborators, manufacturers and other business partners. If such impacts become material, our revenues and product development efforts could be negatively impacted.

•The market price of our common stock has been and will likely continue to be volatile, and you could lose all or part of any investment in our common stock

Additional discussion of the risks, uncertainties and other factors described above, as well as other risks and uncertainties material to our business, can be found under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on February 24, 2021, and we encourage you to refer to that additional discussion. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our plans, objectives, estimates, expectations and intentions only as of the date of this filing. You should read this report completely and with the understanding that our actual future results and the timing of events may be materially different from what we expect, and we cannot otherwise guarantee that any forward-looking statement will be realized. We hereby qualify all of our forward-looking statements by these cautionary statements.

Except as required by law, we undertake no obligation to update or supplement any forward-looking statements publicly, or to update or supplement the reasons that actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. You are advised, however, to consult any further disclosures we make on related subjects.

This report includes discussion of certain clinical studies and trials relating to various product candidates. These studies typically are part of a larger body of clinical data relating to such product candidates, and the discussion herein should be considered in the context of the larger body of data. In addition, clinical data are subject to differing interpretations, and even when we view data as sufficient to support the safety and/or effectiveness of a product candidate, regulatory authorities may not share our views and may require additional data or may deny approval altogether.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SANGAMO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands)


	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	122,975	$	131,329
Marketable securities	464,109		510,094
Interest receivable	974		1,035
Accounts receivable	6,746		5,224
Prepaid expenses and other current assets	12,140		11,986
Total current assets	606,944		659,668
Marketable securities, non-current	42,431		50,530
Property and equipment, net	45,222		41,324
Intangible assets	55,583		58,128
Goodwill	40,994		42,798
Operating lease right-of-use assets	70,324		71,045
Other non-current assets	14,097		13,557
Restricted cash	1,500		1,500
Total assets	$	877,095	$	938,550
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	11,638	$	12,553
Accrued compensation and employee benefits	13,077		20,738
Other accrued liabilities	13,760		18,612
Deferred revenues	94,364		91,644
Total current liabilities	132,839		143,547
Deferred revenues, non-current	222,278		245,045
Long-term portion of lease liabilities	38,463		38,396
Deferred income tax	6,870		7,185
Other non-current liabilities	7,228		7,011
Total liabilities	407,678		441,184
Commitments
Stockholders’ equity:
Preferred stock	—		—
Common stock	1,437		1,421
Additional paid-in capital	1,292,118		1,269,375
Accumulated deficit	(823,914)		(777,981)
Accumulated other comprehensive income	714		5,419
Total Sangamo Therapeutics, Inc. stockholders’ equity	470,355		498,234
Non-controlling interest	(938)		(868)
Total stockholders’ equity	469,417		497,366
Total liabilities and stockholders’ equity	$	877,095	$	938,550

See accompanying Notes to Condensed Consolidated Financial Statements.

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SANGAMO THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except per share amounts)


	Three Months Ended March 31,
	2021		2020
Revenues	$	26,280	$	13,076
Operating expenses:
Research and development	56,434		41,479
General and administrative	16,148		16,119
Total operating expenses	72,582		57,598
Loss from operations	(46,302)		(44,522)
Interest and other income, net	625		1,548
Loss before taxes	(45,677)		(42,974)
Income tax expense	262