Sangamo Therapeutics: Q1 Earnings Miss Masks Long-Term Value in Genomic Medicine

Sangamo Therapeutics (NASDAQ: SGMO) reported a net loss of $30.6 million for Q1 2025, a figure that sent shares down 12% on May 12. But investors would be wise to look past the short-term financial noise and focus on the company’s rapidly advancing genomic medicine pipeline, strategic partnerships, and undervalued stock. While the earnings miss may deter the faint of heart, it’s a fleeting distraction from a biotech poised to deliver transformative therapies for rare neurological diseases. Here’s why the Q1 stumble is a buying opportunity.

Clinical Pipeline Progression Outweighs Short-Term Losses

Sangamo’s genomic medicine programs are its crown jewels. The company’s lead asset, ST-920 (isaralgagene civaparvovec) for Fabry disease, is nearing a pivotal milestone: a Biologics License Application (BLA) submission expected in late 2025. The therapy has already shown promise in Phase 1/2 trials, with sustained enzyme activity and improved kidney function. Crucially, the FDA has agreed to an accelerated approval pathway, potentially fast-tracking ST-920 to market without the need for an additional registrational trial.

Meanwhile, SB-525—a gene therapy for hemophilia A—is in Phase 3 trials, leveraging Sangamo’s zinc finger epigenetic regulators to correct the underlying genetic defect. The therapy’s ability to achieve durable clotting factor levels has drawn interest from potential partners, even after Pfizer’s exit in 2024. With Sangamo now in control of SB-525’s rights, the door is open for new collaborations or a potential standalone launch.

Strategic Partnerships Fueling Growth

Sangamo’s financial resilience hinges on its partnerships. The $1.9 billion deal with Genentech, announced in August 2024, provides a $50 million upfront payment and up to $1.9 billion in milestones for programs targeting neurodegenerative diseases. This collaboration isn’t just a cash infusion—it’s a vote of confidence in Sangamo’s capsid discovery platform, which enables precise delivery of therapies across the blood-brain barrier.

Additionally, a $20 million upfront deal with Astellas in December 2024 underscores the utility of Sangamo’s STAC-BBB capsid for neurological targets. These partnerships are critical to offsetting R&D costs while advancing therapies that could redefine standards of care.

Valuation: Undervalued Post-Q1 Miss

At $0.70 per share, Sangamo’s stock is trading at a fraction of its potential. GuruFocus estimates its fair value at $1.24 for 2026, implying a 77% upside, while analysts’ average 12-month price target of $5.00 suggests a 614% premium. Even the most conservative estimates place the stock at $2.00, nearly tripling its current price.

Consider this: peers like CRISPR Therapeutics (CRSP) and Bluebird Bio (BLUE) trade at significantly higher multiples despite less advanced pipelines. Sangamo’s undervaluation is a rare opportunity to buy into a company with four late-stage programs (ST-920, SB-525, ST-503, and prion disease therapies) at a price that doesn’t reflect their potential.

Catalysts on the Horizon

The next 12 months will be a catalyst-rich period for Sangamo:
1. ST-920 BLA Submission (Late 2025): A regulatory win here could unlock $100+ million in near-term value.
2. ST-503 Phase 1/2 Data (Q4 2026): This therapy for small fiber neuropathy targets a $2B+ market with no FDA-approved treatments.
3. Genentech Milestones: Early data from partnered neurodegenerative programs could trigger multi-million-dollar payouts.

Conclusion: Buy the Dip, Build for the Future

Sangamo’s Q1 loss is a fleeting stumble in a long race to cure devastating diseases. With a pipeline rich in late-stage assets, strategic partnerships, and a valuation that ignores its genomic medicine potential, the stock is a once-in-a-decade opportunity. Investors should focus on the 50%+ upside embedded in GuruFocus’s fair value and the $5+ analyst target, not the noise of a single quarter.

The biotech sector is volatile, but Sangamo’s science is anything but. This is the time to buy—before the world catches up to what its therapies can achieve.

Disclosure: The author holds no position in Sangamo Therapeutics at the time of writing.