Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Better Buy: Editas Medicine vs. Sangamo Therapeutics

By Keith Speights - Dec 2, 2018 at 9:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Gene editing comes in different flavors. Which of these gene-editing biotech stocks is tastier?

Editas Medicine ( EDIT -7.69% ) and Sangamo Therapeutics ( SGMO -4.14% ) have quite a bit in common. Both biotechs are pioneers of gene editing. Both have attracted partnerships with big drugmakers. Both stocks soared earlier in 2018. And both Editas and Sangamo gave up all of those gains and then some.

But these biotechs remain intriguing candidates for investors looking to the future. Which stock is the better choice now? Here's how Editas Medicine and Sangamo Therapeutics compare.

Hand holding scissors removing part of DNA.

Image source: Getty Images.

The case for Editas Medicine

Promising technology targeting diseases with a significant unmet medical need. That's the argument for investing in Editas Medicine in a nutshell.

The promising technology for Editas is CRISPR, which stands for clustered regularly interspaced short palindromic repeats. This gene-editing approach has been called "the biggest biotech discovery of the century." And Editas Medicine ranks as one of the leading biotechs developing CRISPR-based therapies.

Editas licensed patents from Broad Institute for CRISPR-Cas9 and CRISPR-Cpf1 enzymes that hold the potential to directly edit close to 95% of the human genome. Those patents have been successfully defended in the U.S., which puts Editas in a great position from an intellectual property perspective.

The biotech's lead candidate, EDIT-101, is a CRISPR gene-editing therapy targeting Leber congenital amaurosis type 10 (LCA10), the top cause of inherited childhood blindness that currently has no approved treatment. Editas and partner Allergan filed an application with the FDA in October to begin a phase 1/2 clinical study of EDIT-101.

Editas plans to leverage its expertise gained with EDIT-101 to treat other rare genetic eye diseases as well. The company is conducting preclinical testing using a similar approach to target Usher syndrome type 2a (USH2A).

Celgene is working with Editas to develop engineered T cells for fighting cancer. The two biotechs have several product candidates that could advance through the pipeline.

Editas is also excited about the potential for its CRISPR gene-editing therapies targeting the genetic blood disorders sickle cell disease and beta-thalassemia. The biotech is presenting preclinical data for these therapies at the upcoming American Society of Hematology (ASH) annual meeting.

The case for Sangamo Therapeutics

The main investing thesis for Sangamo Therapeutics is similar to the one for Editas. Sangamo is using different technologies, but they're promising -- and they target diseases with significant unmet medical need.

Sangamo uses zinc-finger nuclease (ZFN) technology to edit genes. It's the oldest gene-editing approach, which means that it's had more time to build confidence in the scientific community. While several biotechs are using CRISPR, Sangamo is the only one focused on ZFN.

The company claims three ZFN gene-editing therapies in phase 1/2 clinical testing. One targets hemophilia type B, while the other two focus on the rare genetic metabolic diseases mucopolysaccharidosis type I (MPS I) and mucopolysaccharidosis type II (MPS II).

Bioverativ, which was acquired by Sanofi earlier this year, teamed up with Sangamo to develop ZFN-based cell therapies for treating beta thalassemia and sickle cell disease. Gilead Sciences is also working with Sangamo on preclinical testing of cell therapies for treating cancer.

Unlike Editas, Sangamo also is developing gene therapies, which insert a gene into cells to correct genetic mutations rather than editing the genes. Pfizer partnered with Sangamo on hemophilia A gene therapy SB-525, which has some promising preliminary results from a phase 1/2 clinical study in August.

Sangamo has several preclinical programs in its pipeline focused on other rare diseases as well. It's developing a gene-editing therapy targeting neurodegenerative disorders called tauopathies. The biotech is conducting preclinical testing for a cell therapy to be used in solid-organ transplants. And it's evaluating an experimental gene therapy for treating Fabry disease.  

Better buy

Which of these two biotech stocks is the better buy? The right answer for most investors is...neither of them.

It's still very early for both Editas and Sangamo. There's no guarantee that either company will be successful. Too much could go wrong. Sangamo, for example, has already reported disappointing results for its MPS II gene-editing therapy. Editas faces worries about potential risks with CRISPR

But I think that both Editas and Sangamo should be on the radar screens for aggressive investors. Sangamo is farther along and has more shots on goal, so some investors might prefer to play the odds and go with it. My personal pick is Editas because I think it probably has the broader range of genomic targets -- in other words, more potential diseases its technology could treat.

Either biotech stock is a risky bet, but either bet could also pay off in a huge way down the road. I'm betting on Editas for now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sangamo Therapeutics Stock Quote
Sangamo Therapeutics
SGMO
$8.10 (-4.14%) $0.35
Editas Medicine, Inc. Stock Quote
Editas Medicine, Inc.
EDIT
$27.72 (-7.69%) $-2.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.