Seeking Alpha
Special situations, event-driven, medium-term horizon, biotech
Profile| Send Message|
( followers)  

On September 17-20 the 51st Interscience Conference On Antimicrobial Agents and Chemotherapy meeting will take place in Chicago. Conference attendees have always referred to this meeting by its abbreviation; ICAAC, pronounced “ick-ack." It’s considered to be the premier meeting on infectious diseases and antimicrobial agents and is organized by the American Society for Microbiology.

A brief background that provides some context for Sangamo’s (NASDAQ:SGMO) exciting, game changing, human clinical trial presentations at ICAAC:

Many individuals reading this will be unfamiliar with the SCID-Hu mouse. It stands for Severe Combined ImmunoDeficiency – Human / Mouse. These amazing little animals have been transplanted with functioning human immune systems, enabling researchers to conduct “human” clinical studies in an inexpensive and expedited manor. Many of you may remember the “boy in the bubble” who suffered from the same immune deficiency as these mice. Because these mice are born without a functioning immune system, they do not reject the human tissues and cells that get transplanted into them, enabling these mice to becoming the host to a functioning human immune system.

One of Sangamo’s collaborators, Paula Cannon Ph.D., from the USC Keck School of Medicine, recently utilized this model to examine the efficacy of transforming human stem cells (CD34 cells) making them resistant to HIV by deleting their CCR5 receptors. She utilized Sangamo’s Zinc Finger Nucleases (SB-728) to accomplish this. The desired outcome would be HIV resistant immune cells derived or differentiated from these stem cells.

Click to enlarge

When these mice were infected with HIV an amazing feat was accomplished as the second slide demonstrates. The mice went through what is termed a normal seroconversion process, becoming infected and developing high levels of the HIV virus as measured by a very sensitive assay, polymerase chain reaction (PCR). Here is where any comparison to the normal disease process abruptly ends. The mice that received the transformed CD34’s and their resulting HIV resistant T-cells eliminated all viruses from the mice immune systems as the line chart indicating their viral load below (-ZFN-) clearly demonstrates. The bar chart (second slide, righthand chart) demonstrates how these transformed immune cells traffic to important immune sites demonstrating their normal functioning. Keep in mind you are looking at data from human immune system cells.

Click to enlarge

Back To IACCA

Sangamo and its collaborators will present the results of a recent human clinical trial in a Late Breaker on Sept. 19. Late Breakers (for those of you who have not attended one of these scientific meetings) are usually the last public session of the meeting and are reserved for cutting edge, exciting, news-worthy advancements that could not be submitted earlier because the research was still ongoing. Thus "late breaking news." These presentations are highly coveted slots and competition for them is intense. The details of this presentation are also embargoed so no abstract of this presentation is currently posted on the ICAAC web site. But we do have the very revealing title used here with ICAAC’s permission of Sangamo’s Late Breaker presentation:

“HAART Treatment Interruption Following Adoptive Transfer of Zinc Finger Nuclease (ZFN) Modified Autologous CD4 T- Cells (SB-728-T) to HIV-Infected Subjects Demonstrates Durable Engraftment and Suppression of Viral Load”

So what is Sangamo's exciting breaking news announcement? If we break down this title it becomes clearly evident. “HAART (Highly Active Anti-Retroviral Treatment) Treatment Interruption (interrupt antiviral therapies) Following Adoptive Transfer of Zinc Finger Nuclease (ZFN) Modified Autologous CD4 T- Cells (SB-728-T) to HIV-Infected Subjects (Remove the HIV+ patients CD4 T-cells, transform them into HIV resistant CCR5 receptor negative cells utilizing Sangamo’s SB-728-T Zinc Finger Nucelase and re-infuse them back into the trial subject) Demonstrates (results) Durable Engraftment (transformed cells survived and moved around the immune system and organs in a normal manor) and (late breaking news here) Suppression of Viral Load.

These clinical trial participants were removed from their antivirals, their viral load was allowed to rise and the Sangamo altered T-cells were able to suppress viral load. Not just reduce it, but suppress it. Which is exactly what the chart above demonstrates in the SCID-Hu Mouse model.

This is the ultimate test of any therapy attempting to confront HIV. The success demonstrated here is a game changer for the entire pharmaceutical industry. Anyone with drugs in distribution or treatments in development for this affliction has just received a new bar to judge the entire paradigm against.

The Sangamo therapy will be expensive and that price point will only make economic sense if there is a comparable reduction or elimination in the cost of antiviral therapy for those who receive it. This is the first indication that life without toxic and debilitating long term antiviral therapy is possible. It also makes the pricing of Sangamo’s therapy a lot easier to digest for insurance companies and Medicare. This makes Sangamo a much more attractive partner to any large pharmaceutical. This study is a tipping point for everyone with an HIV antiviral franchise. If you want to continue making money in the largest HIV markets then you need to partner with Sangamo. If you are tired of making money in this market than all you need to do is continue developing the next multi-combinations of 3, 4 or 5 antivirals in one pill.

Am I reading too much into this? Unless Sangamo’s collaborators intentionally went way out of their way to mislead the entire scientist community at this meeting and its organizers, then no. Such a folly would severely damage their scientific reputations and make it more difficult to be published and accepted for presentations at similar meetings in the future. It would have a dire and detrimental impact on the chances for any future governmental contracts or grants. It would also ignore the fact that the scientists at Sangamo and their collaborators are incredible, highly respected, world-renowned researchers.

Just a few weeks ago a storm of media attention surrounded Dr. Carl June who had just announced that his University of Pennsylvania team had successfully cured two patients suffering with CLL or Chronic Lymphoid Leukemia. This was accomplished utilizing cells that had been transformed with an altered form of HIV producing a vector to target these individual cancers. There is an excellent audio interview of how they accomplished that here. These individuals were weeks away from death and are now living normal healthy lives. Dr. June and his team are the first to successfully focus the immune system on a specific disease-causing target, marshaling the immune system to remove it, while setting up those same cells to perform immune surveillance, guaranteeing that the disease does not return. That all but guarantees Dr. June the Nobel Prize for Medicine within the next couple of years. (Video here) This caliber of scientist does not print anything they can’t prove; much less generate misleading titles for their presentations at the most prestigious microbiology meeting of the year.

Dr. June is also the Senior Researcher on this Sangamo study.

What are the implications for Sangamo’s near term share price? Given this amazing result and the other positive results to be released on Sept 17 and 19 at the same meeting, I expect to see the share price ramp up dramatically in the next two weeks with a big spike on Monday Sept 20. They have another positive catalyst in the releases of top-line clinical results from the Phase IIb study in diabetic neuropathy utilizing its VEGF-A treatment, SB-509. That data will be released before the end of this year. That should set this stock on a steady upward trajectory for the remainder of 2011.

Source: Sangamo's Late Breaking, Game Changing News At ICAAC