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Here's Why Sangamo Therapeutics Rose as Much as 13.7% Today

By Maxx Chatsko - Feb 7, 2018 at 3:33PM

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Multiple updates pushed the stock to new 52-week highs.

What happened

Shares of biopharma darling Sangamo Therapeutics (SGMO -1.37%) rose nearly 13% today after the company announced two updates in the last 24 hours. First, it announced initial safety data from its pioneering gene-editing clinical trial in a rare metabolic disease known as Hunter syndrome. The first two patients to be dosed with the therapy have tolerated it well, with "no concerning safety issues related to the drug."

Second, Sangamo Therapeutics and Case Western Reserve University announced an $11 million award from the National Institutes of Health (NIH) to study using gene editing to engineer T cells to eradicate HIV. The news releases pushed the stock to a new 52-week high. As of 3:22 p.m. EST, the stock had settled to an intraday high with a 13.7% gain.

A man holds a white arrow pointing up.

Image source: Getty Images.

So what

The preliminary safety update may not sound like much, but the news was welcomed by investors. Why? Gene editing is a new frontier in medicine -- the company's trial is the first to use it in the United States -- so there's an open question about the overall safety of the approach. Sangamo Therapeutics is primarily using zinc finger nucleases, which work a bit differently than the much-ballyhooed competing tech known as CRISPR. It beat the latter to the clinic, at any rate.

The NIH grant is also welcome news because, hey, who doesn't like free money? It will be used to test a gene-knockout approach, shown to be safely tolerated in patients, which Sangamo Therapeutics tested in previous clinical trials. The company's press release also ended with a quick swipe at CRISPR gene-editing tools, stating that "no observation of development of anti-zinc finger nuclease antibodies" has been noted in previous clinical trials. That's a subtle reminder that CRISPR therapies may elicit an immune response in humans.

The new trial will begin sometime in 2018 and will evaluate up to 20 patients by the time it's completed.

Now what

It's certainly a good time to be a gene-editing company. And since Sangamo Therapeutics was the first out of the gate and into the clinic, the company's shares are garnering a lot of attention from Wall Street and investors. While the company has momentum right now, there's a long way to go before the therapeutic approach proves it belongs on the market -- just something for investors to keep in mind.

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