- Part I research analyzed the overall investment thesis in Sangamo while emphasizing the Kite/Gilead partnership for zinc finger nuclease (“ZFN”) to enhance CAR-Ts.
- Part II featured the HIV franchise as a hidden asset to add further upside.
- Part III seeks to elucidate the prospects of amyotrophic lateral sclerosis (“ALS”).
The successful investor is usually an individual who is inherently interested in business problems. - The Father of Growth Investing (Philip Fisher)
In the past 3-month, the shares of Sangamo Therapeutics (NASDAQ:NASDAQ:SGMO) - a gene-editing bioscience focusing on the innovation and launch of novel medicines to treat cancers and life-threatening diseases - traded up more than 50%. Following the uptrend of other gene-editing stocks (like Crispr Therapeutics (NASDAQ:CRSP) that procured over 174% for subscribers of Integrated BioSci Investing), Sangamo exchanged hands $8.6 higher at $25.50. Of note, Sangamo shares appreciated due to the fundamentals developments, as featured in our parts I and II research. In this report, we’ll elucidate the underlying prospects of the ALS franchise.
Figure 1: Sangamo stock chart. (Source: StockCharts).
Harnessing the power of the ZFN gene-editing platform, Sangamo is brewing an enriched pipeline of medicines to service various markets (as depicted in figure 2). Notably, there are several collaborative relationships of interest. The most notable is the recently inked partnership with Kite Pharma (NASDAQ:KITE) - a Gilead Science (NASDAQ:GILD) acquisition that is one of our 2017 top performers - for the innovation of the off-the-shelf CAR-Ts. Moreover, Bioverativ (NASDAQ:BIVV) is working with Sangamo for the development of medicine to treat both hemoglobinopathies (sickle cell disease and beta-thalassemia). With Shire Plc (NASDAQ:SHPG), the firm is developing a cure for Huntington’s disease. Furthermore, the Pfizer (NYSE:PFE) deal entails the therapeutic innovation for Hemophilia A and ALS.
Figure 2: Therapeutic pipeline. (Source: Sangamo)
That being said, we’ll elucidate the underlying fundamentals of the ALS segment, which is another hidden asset to add further value to Sangamo. To better appreciate the prospects of ALS, we wish to go over key underlying science. The motor neuron degenerative disease (ALS) is a relentlessly-progressive and presently-incurable condition, characterized by muscle weakness, disability, and eventually death. As one of the most common forms of motor neuron disease, ALS is diagnosed based on the involvement of upper and/or lower motor neurons lesion. After diagnosis, patients usually die within three to five years. Nevertheless, there are people who live much longer: the world renown physicist (Stephen Hawking) is a prime example.
In terms of disease management, a multidisciplinary care approach (that focuses on symptomatic treatment and aims to preserve the pulmonary function) tends to deliver the best survival outcomes. For disease-modifying agents, there is limited option (with riluzole being the only drug to improve survival and to slow down progression but only to a modest degree). In specific, riluzole 50mg twice daily is recommended for patients. And, it delivers the most benefits to those having the definitive or probable ALS diagnosis with symptoms present for less than five years, the force vital capacity (“FVC”) >60%, and no tracheostomy. Contrarily, edaravone is recommended for patients with the disease for two years or less (and having an FVC of at least 80%). As shown, the demand for novel and more efficacious treatments are quite strong.
Notably, research suggested that the GGGGCC (G4C2) repeats expansion in a noncoding region of C9ORF72 is the most common cause (of the sporadic and familial forms of ALS). Accordingly, patients afflicted by ALS has the said disease allele (i.e. a copy of the gene) that expressed the G4C2 100X greater than normal individuals (as illustrated in figure 3). Using the ZFN transcription factors (“ZFN-TFs), Sangamo can disrupt/suppress the G4C2 sequences, thereby preventing the disease manifestation.
Figure 3: Mechanism of C90RF72 in causing neuronal degeneration (Source: Sangamo)
Per figure 4 below, ZFN-TFs are packaged inside the adeno-associated virus (“AAV”) that, in and of itself, will carry and transmit the ZFN-TFs to the inside motor neurons. The key is that ZFN-TFs will repress the tau DNA as well as the G4C2 repeats to keep the disease at bay. The aforesaid method of disease treatment is much more efficacious and safe, as it solves the problem at the root level.
Figure 4: ZFN to potentially treat ALS (Source: Sangamo investor presentation)
While there are different approaches to edit genes for therapeutic development, Sangamo utilizes the ZFN platform to power an enriched pipeline of promising medicines. In part I, we elucidated the ramifications of the Kite/Gilead partnership. We then featured the HIV franchise as a hidden asset in part II. In this article, we assessed the underlying prospects the ALS segment. Despite that Sangamo is a speculative bet, there is a favorable chance of a positive data that can double the share price; whereas, a negative binary can cause the stock to tumble over 60%. Hence, the rewards trump the risks to warrant this bet. Of note, there is a higher-level intelligence that we published in advanced for subscribers of Integrated BioSci Investing. In the said research, we elucidated this thesis in much greater details with specific data forecasting and market assessment.
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