QuickView: Sangamo BioSciences

The recent surge in the share price seems to reflect increased optimism ahead of Phase II readouts of SB-728-T, Sangamo’s potentially paradigm-shifting approach for treating HIV/AIDS. While investors are focused on this data, Sangamo’s ZFP Therapeutics pipeline includes several potentially disruptive therapies addressing other diseases.

Preliminary Phase II SB-728-T data expected in H113
SB-728-T employs SGMO’s ZFP nuclease (ZFN) regulation platform to disrupt CCR5 (a major HIV entry co-receptor) on the HIV patient’s own CD4+ T-cells ex-vivo (outside the body); the modified cells are then reintroduced into the patient. 12-month Phase I data (n=9) suggested the treatment could lessen HIV viral load and increase CD4+ cells counts, effectively reconstituting patients’ immune systems. Preliminary results from c 20-pt Phase II study in CCR5-delta-32 heterozygotes and an 18-pt Phase I/II study, which includes cyclophosphamide to enhance T-cell engraftment, are expected in H113. Viral load reductions or sustained CD4+ increases should support this potentially more durable form of treating HIV/AIDS.

In vivo protein replacement platform for monogenic diseases
Sangamo’s in vivo protein replacement (IVPR) platform for monogenic diseases aims to modify genes at the DNA level in vivo, to generate highly durable treatment responses (a potential advantage vs RNAi/antisense drugs given DNA’s lower turnover vs RNA). Promising preclinical data in Haemophilia B (partnered with Shire) were recently presented at ASH. In lysosomal storage diseases, the platform could reduce the need for expensive recurring enzyme replacement therapies.

Risk mitigation through non-therapeutic partnerships
Sangamo’s licencees for its ZFP technology include Sigma-Aldrich and Dow AgroSciences. Revenues (guided to $20-24m in 2013) should help offset therapeutics’ R&D costs. Sangamo ended 2012 with $76m in net cash and expects to finish 2013 with over $55m. This should be sufficient for Sangamo to execute on its plans to bring seven candidates (including a hemoglobinopathy treatment and a Shire-partnered Huntington’s disease therapy) to IND stage by 2015.

EV of $403m; all eyes on SB-728-T data
Sangamo’s returns in the near term will be driven by upcoming data points for SB-728-T. Given the $13bn size of the HIV/AIDS drug market and SB-728-T’s potential to compete with HAART, added signs of efficacy should lead to further upside, and lead into partnership negotiations ahead of Phase III trials.

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