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Revisting Sangamo Therapeutics

Mar. 07, 2021 3:08 PM ETSangamo Therapeutics, Inc. (SGMO)10 Comments


  • Today, we revisit Sangamo Therapeutics, which is a nice sum of the parts story given multiple drug candidates and partnerships with several drug giants.
  • The company recently gave a corporate update and posted fourth quarter results.
  • We updated our investment thesis on Sangamo in the paragraphs below.
  • I do much more than just articles at The Biotech Forum: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

It has been nearly five months since we last revisited Sangamo Therapeutics (NASDAQ:SGMO). This is a name we get frequent questions about. Over the past month we have seen a quick rise in interest rates leading to sell-offs in some high beta parts of the market.

The SPDR Biotech ETF (XBI) has seen better than a 15% pull back over the past month. The shares of Sangamo are off more than 20% over that time span. Given that, it seems a good time to circle back on this name. An analysis incorporating recent results and news follows below.

Company Overview:

Sangamo Therapeutics, Inc. (SGMO) is a pioneer in the research and development of zinc finger proteins (ZFPs). It is based in California and still is in the clinical stage of development.

Sangamo ZFP technology: Potential to access hundreds of genomic targets in CNS

ZFP-TFs target upstream at the source of mutant protein isoforms and complexes

Source: February Company Presentation

The company has four platform technologies that have produced one late-stage partnered candidate, two-earlier stage partnered assets, and two wholly owned earlier-stage compounds. With the recent pullback, the shares trade just below $11.50 a share and sport an approximate market capitalization just north of $1.6 billion.

Robust set of genomic medicines addressing rare disease, CNS, oncology and

Source: February Company Presentation

Recent Developments:

There hasn't been a lot of news around the company's pipeline since our last article on October 13th. On December 7th, Sangamo reported results from a development effort it is partnered with Pfizer (PFE) on developing a treatment of Hemophilia A that should allow it to move on to key Phase 3 studies.

In addition, the company posted fourth quarter results on February 24th. We update the current status of its balance sheet based on that report in the section below. Two days later, Sangamo presented at the 10th annual SVB Leerink Healthcare conference. It is from that presentation we can give a quick synopsis of recent accomplishments and what lies ahead in 2021.

Live Chat on The Biotech Forum has been dominated by discussion of these type of buy-write opportunities over the past several months. To see what I and the other season biotech investors are targeting as trading ideas real-time, just join our community at The Biotech Forum by clicking HERE.

This article was written by

Bret Jensen profile picture

Bret Jensen has over 13 years as a market analyst, helping investors find big winners in the biotech sector. Bret specializes in high beta sectors with potentially large investor returns.

Bret leads the investing group Learn more.

Analyst’s Disclosure: I am/we are long SGMO, XBI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

It makes no sense to cap your upside at $12 until August, bad advice IMO. If one wants to enter at a lower price, sell the March, or April $11 puts on a dip. If/ when long, wait for a positive event and a higher price to sell calls. I only sell calls into a run like SGMO had a few months ago. People using and recommending options should read "Options as a Strategic Investment".
Delmar Price profile picture
Sangamo management is good!
antiqueman profile picture
Good article. I like the company but not in this "difficult" and weakening market. No earnings, only stage one and two. Months away from approval and Stage 3. Will buy it a $5 a share in next few months.
charged profile picture
@antiqueman I don’t see it going to $5 but if it does there will be many buyers including all their partners.
If u like dead money SGMO is a homerun. Sadly long but small position
lionbark profile picture
I'm a fan of the work SGMO is doing and like their huge list of collaborations and indications. But the fact that SGMO has significantly underperformed the broader XBI index over the past few weeks is a red flag to me. IMO, this is the long-awaited rotation into value, and almost all speculative growth stocks will continue to suffer. And SGMO's underperformance lately, coupled with the negative news from BLUE and QURE dampening enthusiasm for genomics, makes me think that it will not be one of the few biotechs that break the trend. Whether the price drop is a fair reflection of SGMO's value or not, it seems to me that holders are fighting Mr. Market right now, and that's a tough fight.

Watching and waiting for a catalyst.
Bret, appreciate your expertise. Looking for your opinion on the following statement:

The market is rewarding drug cos that can successfully commercialize products even in niche areas. The market is losing interest in companies with an exciting platform years off.

Is this assessment correct?
Is this a relatively new development based on IPO financing or has it more or less always been this way?
Bret Jensen profile picture
@Jeff McGinn Reading too much into recent market action imho
Mini Ice Age profile picture
Thanks Bret, I will continue to add to my SGMO position, for a long term hold.
07 Mar. 2021
Thanks for your evaluation. Think of buying a little bit more to lower my entry price
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