What: News that Sangamo BioSciences (NASDAQ:SGMO) plans to kick-off a phase 1 study to evaluate a gene-editing treatment for hemophilia B sent shares higher by 18% today.
So what: Sangamo BioSciences is a clinical stage company developing gene-editing therapies to address a variety of disease.
Currently, Sangamo BioSciences' most developed program focuses on treating HIV, but following the company's announcement, investors may want to consider the potential that gene editing may have in treating hemophilia B, too.
Previously, Sangamo BioSciences had licensed research into applying its technology to hemophilia B to Shire, but the company has since reacquired rights to that program with a goal of moving it into human trials soon.
Since a key advisory committee has given its OK to Sangamo BioSciences' phase 1 study protocol, Sangamo BioSciences plans to file an investigational new drug application for its hemophilia B candidate by the end of this year and to begin enrolling patients in its phase 1 trial early next year.
Now what: Up until now, Sangamo BioSciences' biggest opportunity has been in addressing HIV. It's currently conducting phase 2 trials of SB-728-T as a way to mimic natural HIV immunity by altering genes so that they produce non-working CCR5 proteins used by HIV to infect cells.
Adding a hemophilia B program to the mix opens up an additional commercial market for Sangamo BioSciences to target, which diversifies some risk. However, investors should recognize that Sangamo BioSciences is losing a lot of money (including $12 million in Q2 alone) and that losses will climb once the hemophilia B trials begin.
Since Sangamo BioSciences is years away from potentially having a commercial product on the market and losses are expected to mount, it's a high risk investment that investors should approach cautiously -- at least until there's positive data to back up today's enthusiasm.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.