Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Sangamo Biosciences Inc. Shares Slumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sangamo Biosciences (NASDAQ: SGMO  ) , a clinical-stage biopharmaceutical company focused on developing zinc-finger DNA-binding proteins to alter genes, fell as much as 11% after reporting first-quarter earnings results after the closing bell last night.

So what: For the quarter, Sangamo reported a 76% increase in revenue, hitting $8.1 million, driven by collaborative revenue derived from three agreements. Net loss, however, widened slightly to $7.6 million, or $0.12 per share -- from $6.9 million, or $0.13 per share, in the prior-year period -- as research and development expenses jumped to $12 million from $8.2 million. Comparatively speaking, Sangamo was only expected to produce $7 million in revenue and a loss of $0.13 per share. The company also guided full-year revenue to $45 million-$50 million, which is in line with estimates.

Now what: With the company's results more or less in line with or above estimates, you're probably wondering what has investors so down. The culprit appears to be a wider net loss (Sangamo had more shares outstanding this quarter) and merely in-line full-year revenue estimates when investors were clearly expecting more. To me, Sangamo's revenue estimates are decent given that it comes entirely from collaborative revenue. However, following such a huge run higher, investors would also like to see demonstrable progress with the company's clinical pipeline, since amortized revenue won't last forever. I consider Sangamo's proprietary technology intriguing, and I have it on my own watchlist on that accord alone; but as an investment I'd suggest sticking to the sidelines until we have considerably more concrete later-stage data to wrap our hands around.

Sangamo shares have soared over the past year, but even it could struggle to keep pace with this top stock over the long run
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2948089, ~/Articles/ArticleHandler.aspx, 8/30/2015 10:48:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated 2 days ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
SGMO $7.85 Up +0.10 +1.29%
Sangamo Bioscience… CAPS Rating: ***