RICHMOND, CA—Sangamo Therapeutics, Inc. (NASDAQ:SGMO), a biopharmaceutical company, has filed an application with the Delaware Court of Chancery to validate a recent amendment to its certificate of incorporation which increased its authorized common stock. The move comes after a class action complaint challenged the validity of the amendment, despite approval by a majority of votes at the company's annual meeting.
On June 4, 2024, Sangamo's stockholders approved an amendment to increase the number of authorized shares from 640 million to 960 million. The proxy statement for the 2024 Annual Meeting stated that the amendment required a majority of votes cast for approval, aligning with the Delaware General Corporation Law effective August 1, 2023.
However, a lawsuit filed on June 3, 2024, by Pomerantz LLP and Fields Kupka & Shukurov LLP on behalf of a purported stockholder asserted that the amendment should have stipulated a majority of outstanding shares standard. Despite the fact that the amendment received a majority from both the votes cast at the meeting and the outstanding shares as of the record date, the complaint alleged the amendment and subsequent common stock issuances were not validly authorized.
To address the uncertainty and confirm the amendment's validity, Sangamo submitted a Section 205 Application to the Court of Chancery on August 29, 2024. This provision allows the court to ratify potentially defective corporate acts. In response, the court directed Sangamo to file a Form 8-K providing details of the application and to notify stockholders of a final hearing set for December 12, 2024.
Stockholders wishing to express a position on the application may either appear at the hearing or submit a written statement prior to the event. The court has set a deadline of November 12, 2024, for any opposition filings.
This legal step underscores Sangamo's efforts to ensure its corporate actions comply with legal standards and underscores the company's commitment to its stockholders' interests. The outcome of the hearing will determine the definitive status of the common stock increase amendment. This information is based on a press release statement.
In other recent news, Sangamo Therapeutics reported their second quarter financial results, highlighting a significant licensing agreement with Genentech. This deal could potentially total $1.9 billion in milestone payments, extending Sangamo's financial stability into the first quarter of 2025. The company also reported positive results from their Phase 3 AFFINE trial for hemophilia A and promising data from their Fabry disease program.
In addition, Sangamo is actively pursuing additional funding opportunities and partnerships to further their neurology and gene therapy programs. The company is also exploring various indications for their partnership with Genentech beyond tau indications. They have expressed confidence in their data and Pfizer (NYSE:PFE)'s ability to advance the hemophilia A program.
However, Sangamo did not provide specific details on the timing or renegotiation of potential milestone payments with Pfizer for their hemophilia A program. The company is also seeking partners for their STAC BBB capsid technology, which has shown promise in neuron transduction and liver de-targeting.
InvestingPro Insights
As Sangamo Therapeutics navigates its legal challenges regarding the amendment to increase authorized common stock, investors should be aware of the company's current financial position. According to InvestingPro data, Sangamo's market capitalization stands at $163.29 million, reflecting its current market valuation amidst these corporate governance issues.
InvestingPro Tips highlight that Sangamo is "quickly burning through cash" and "not profitable over the last twelve months." These factors may explain the company's move to increase its authorized shares, potentially to raise additional capital. The company's revenue for the last twelve months as of Q2 2024 was $12.28 million, with a significant revenue decline of -94.38% over the same period.
Despite these challenges, it's worth noting that Sangamo has seen a "strong return over the last three months," with a price total return of 146.12% in that period. This recent stock performance could indicate investor optimism about the company's future prospects or potential resolution of its current legal issues.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for Sangamo Therapeutics, providing a more comprehensive view of the company's financial health and market position.
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