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 (SGMO 3.53%), 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 (BMY 1.63%) 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 (BIIB 1.05%) 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.
