Sangamo- Early-Stage Progress in Gene Therapy – Yahoo Finance

Sangamo Therapeutics(SGMO) announced the official closing of the global deal withBiogen(BIIB) for gene regulation therapies in neurology, explains biotechnology sector expertJohn McCamant, editor ofThe Medical Technology Stock Letter.

More from John McCamant: Ziopharm: Catalysts in T-Cell Therapy

With roughly $650 million in cash post-deal, SGMO is trading just above its cash positive despite having the broadest pipeline in the gene therapy/editing/regulation field.

Of all things in the press release, management mentioned the cash would be used to progress the pipeline, plus the potential filing of a BLA for SB525 for hemophilia A.

Impressive Terms For Early Stage

As a reminder, Biogen paid Sangamo $350 million upfront, including a $125 million license fee and an equity investment in Sangamo stock of $225 million (@$9.21 per share).

Sangamo is also eligible to receive up to $2.37 billion in potential milestones, including $925 million on pre-approval milestones and $1.335 billion on first product sales (that does not include the royalties that are also part of the deal).

In the blockbuster markets being developed such as Alzheimers and Parkinsons diseases, SGMO will earn high-single-to-low double digit royalties on potential sales. This is a pre-IND stage deal remarkable financial terms for this early stage of development.

Hem A Update On Schedule

Pfizer(PFE) cancelled its R&D Day that was set for March due to the virus, but the Company will hold a quarterly earnings call on April 28. There is some chance that Pfizer updates investors with some of the highlights it was preparing for the R&D Day, including the SB-525 program with Sangamo.

Either way, SGMO will still be updating investors when the two longest treated patients in the ALTA study hit their 12-18 month follow-up for the duration of Factor VIII production, sometime this summer.

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The 12-18 month durability data is key for SGMO given that BMRNs first 12-18 month durability data was the turning point for Wall Streets belief in their gene therapy. Sangamo is a buy under $20 with a target price of $30.

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Sangamo- Early-Stage Progress in Gene Therapy - Yahoo Finance