Random Stock of the Week: SGMO
Sangamo BioSciences (SGMO) is a clinical stage biotech. Its pipeline is based on zinc finger nuclease and zinc finger transcription factors - ZFP TF. The most advanced clinical study is a phase 2b for a ZFP TF DNA plasmid, SB-509, which up-regulates the gene for vascular endothelial growth factor (VEGF)–A. SGMO is exploring a number of indications for SB-509, however the lead indication is for the treatment of diabetic neuropathy or DN.
So far results from the ZFP TF clinical experience have been relatively positive. A previous Ph2 clinical trial failed to meet an endpoint but the company dug into the data and identified a subset of patients that the drug appears to work in. Those patients suffer from moderate to severe DN; patients with mild DN were not eligible for the current Ph2b trial. Results from this trial are expected later this year - possibly as soon as August.
The Ph2b trial is randomized, double-blind, and placebo-controlled, with a number of "approvable" endpoints. So if this trial is successful, the company should have no problem designing their Ph3 with a likely path towards approval. Positive results from this trial may also yield a partner for the SB-509 program. The trial would also likely further validate the company's TF technology, resulting in partners for the company's plasmid technology in general or in other indications (the company has a broad IP portfolio including claims that cover other (e.g. ex-DN) indications and uses of the technology - SGMO already has some partnerships for non-therapeutic use.
Technically, the stock suffered since the issuance of new stock in April, just after the release of the latest 10K. Although a regulatory approval decision is likely a few years away, with a market cap of around $300Mio and with $80Mio in cash, given the potential of the ZFP (any successful drug would likely be a blockbuster - DN is an unmet medical need), and considering the upcoming first results of the phase 2b, there may be a bold move here.
