Why Sangamo Biosciences Inc. Shares Surged

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What: Shares of Sangamo Biosciences (NASDAQ: SGMO  ) , a clinical-stage biopharmaceutical company utilizing zinc finger DNA-binding proteins to regulate and modify human genes, soared as much as 23% after announcing positive early results in HIV treatment utilizing experimental therapy SB-728-T.

So what: According to the results of Sangamo's study, which were also published in The New England Journal of Medicine, Sangamo's SB-728-T demonstrated stable control of HIV replication in a small cohort of patients, with heightened efficacy noted when patients were first infused with Bristol-Myers Squibb's (NYSE: BMY  ) Cytoxan, a chemotherapy agent. Best of all, this success was achieved without the aid of antiretroviral therapy. Sangamo's HIV therapy works by preventing the CCR5 protein from being expressed and instead mimics a natural mutation in the body (CCR5 delta-32), which can protect the body from the most common strain of HIV. The goal here being to stop HIV from entering T-cells in the first place and replicating.

In addition, Sangamo announced that it has developed a new method for modifying patients' genes through messenger RNA as opposed to using a deactivated virus as it's been doing up to this point. The reason for the shift is that antibodies eventually build up an immunity to the deactivated virus, whereas mRNA will not run into that same problem. Sangamo plans to test this new mRNA delivery on an additional 12 subjects as it, at the same time, attempts to perfect its dosing of Cytoxan in patients to maximize effect and minimize its adverse side effects.

Now what: We are extremely early in the nine-inning game that is the drug-development process, but this is certainly exciting news that has the potential to revolutionize the way we treat HIV infection. Furthermore, it adds to the research excitement surrounding its zinc finger DNA-binding platform considering that it signed a collaborative agreement with Biogen Idec (NASDAQ: BIIB  ) in January that could be worth up to $320 million including upfront cash and all milestone, development, and regulatory payments. Perhaps the only thing I find a bit worrisome is the $1.5 billion valuation following early stage results. While impressive, I'd like to see a much larger patient pool tested for confirmation before I'd be willing to support a valuation north of $1 billion. I will, however, not be shy about encouraging you to get Sangamo on your watchlist.

Sangamo may be soaring today, but it'll probably be hard-pressed to keep up with this top stock when all is said and done
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  • Report this Comment On March 06, 2014, at 8:13 PM, skeyewater wrote:

    Motley Fool seems to be demonstrating they are not experts in this subject matter, here and in another posting. In this one, they are erroneously merging the results of two studies, one a clinical trial by an outside investigator, and then there are several other studies by Sangamo that were released. The clinical study validated Sangamo's earlier work and "cured" one patient, called a heterozygote, who has a single mutation of CCR-5 delta 32. If I have my facts right, this was the second time this has occurred. People with a double mutation are HIV free. The Sangamo studies should be available in more depth via webcast from CROI 2014 in a couple of days.

    Here are the main points of Sangamo studies:

    1. In a super small cohort 2 out of 3 who were preconditioned with 1g cytoxan are off drugs indefinitely for now after Sangamo's gene therapy.

    2. New 12 patient study with dosage between 1-2 g cytoxan will be done before seeking a collaboration.

    3. They are moving from adenovirus to mRNA for method of insertion, mRNA can be done repeatedly. The 12 patient study will include this. They could actually keep re-treating w/o Cytoxan potentially until viral loads manageable if they wanted.

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