At MoneyShow Las Vegas May 14-16, biotech sector expert John McCamant was given the show’s “Stock Picker of the Year” award. Indeed, in 2017, the model portfolio of his The Medical Technology Stock Letter rose 65% while his trader’s portfolio rose 98%. Here’s a look at one of his current favorite stocks.
Sangamo Therapeutics (SGMO) released first quarter results and held a quarterly call. With the broadest gene editing/therapy clinical program around, SGMO is expected to deliver proof-of-concept clinical data across 7 gene therapy and gene editing programs over the next 18 months, with near term initial proof-of-concept (POC) results in MPS11 and Hemophilia A (both due late Summer) up first.
Sangamo ended the quarter with $235 million in cash, not including the $150 million from the KITE/GILD deal or the $215 million from a recent follow on offering — together totaling over $600 million.
Year end 2018 cash guidance of $485 million is sufficient to fund operations for an impressive five years, as the company is building new headquarters and manufacturing capacity.
More important, Sangamo intends to hold onto and internally develop some longer-term but potentially much larger programs (metabolic diseases, CNS and immunology).
There is a slew of steady progress at the company, creating the leader in the gene therapy, gene editing with by far the most-advanced clinical programs in the field.
In our view, the recent stock weakness is not at all due to the solid and improving fundamentals, but due to the secondary offering that broke deal price ($16.25) and the stock also fell below its 200-day moving average — both reasons for traders to sell. We recommend investors take advantage of this wide divergence of excellent fundamentals and an oversold stock.
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