After many years of fits & starts, 2020 will be the right year for Sangamo Therapeutics (SGMO), my top speculative idea for 2020, suggests John McCamant, biotech stock expert and editor of The Medical Technology Stock Letter.
The scope and depth of Sangamo’s R&D pipeline, clinical, technological and manufacturing leadership in the gene therapy/editing/regulation arena will be on broad display this year.
While SB-525 — for hemophilia A — is about 2 years behind ValRox from Biomarin (BMRN) in the lucrative hem A market, the overall value proposition and potential to disrupt+differentiate is becoming clearer each clinical update.
The IND transfer to Pfizer (PFE) is complete and they are currently enrolling a Phase III lead-in study with the Phase III to start in early 2020. Pfizer is a global powerhouse that has poured more money into gene therapy than anyone around — and taking the lead on SB-525 based upon what they know is a strong foreshadow that it has the potential to be best in class.
In our view, the 12-18 month that will be presented in 2020 will be very important as this is the time frame when ValRox has a significant drop in Factor VIII levels.
The profile of SB-525 (e.g., dose, expression, manufacturing, etc.) and learning curve to date vastly de-risks SGMO's other gene therapy programs, including the approved IND in Fabry disease and in Phenylketonuria (PKU).
PKU is an inborn error of metabolism that results in decreased metabolism of the amino acid phenylalanine. Untreated, PKU can lead to intellectual disability, seizures, behavioral problems, and mental disorders.)
After hem A, Fabry and PKU are relatively lower-risk clinical approaches than gene editing/regulation. All three diseases are excellent markets for gene therapies as they are currently treated with expensive weekly or multi-weekly enzyme or protein infusions based that a single gene therapy treatment can replace.
SGMO is a leader in developing CAR-TREGS which have the potential to treat autoimmune disease by tackling the disease at its source with a one-time treatment. Autoimmune disease is a huge market opportunity and the company is actively pursuing both Crohn’s disease and multiple sclerosis (MS).
Sngamo is also making significant progress with their CNS development programs and is currently targeting Alzheimer’s, Parkinson’s, Huntington’s, ALS and Prion diseases. I strongly believe SGMO shares will have a remarkable comeback. We urge biotech investors to buy for a big move in 2020 as my best high risk/high reward recommendation.
(Editor's note: John McCamant's Top Pick in 2019 was The Medicines Company (MDCO); the stock is up 343% following a takeover announcement by Novartis (NVS). The biotech expert notes, "The takeover will prove to be an astute acquisition at a very attractive price. The roughly $10 billion price tag is a reminder of the high value placed on innovation in biotechnology.")
