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Sangamo Biosciences Inc. Message Board

  • Rob_Cos Rob_Cos Sep 29, 2007 4:07 PM Flag

    SGMO mentioned prominiently in IBD's lead Health & Sciences story in newspaper&online!!!

    This Genetics story with prominient SGMO mention is the LEAD STORY in the Weekly "Health and Medicine" section of Investor's Business Daily, Page A8 in Monday's Edition out today. Also highlighted on the FRONT PAGE of the paper!!!

    Needed this post and 2 replies to fit it on YHOO but easier to read version is here:

    September 28, 2007


    Companies that deal in genetic and molecular technologies have spent much of the decade teasing investors with strong stock run-ups, only to...
    Companies that deal in genetic and molecular technologies have spent much of the decade teasing investors with strong stock run-ups, only to deflate them later with sharp declines.

    So it might be wise to view the sector's latest run-up with a healthy dose of caution.

    On Thursday, the 31 stocks in IBD's genetics group reached their highest point in 5 1/2 years. Though the group fell back a day later amid the broader market sell-off, it's still up about 16% since the end of July.

    It's a diverse sector that includes companies that develop everything from gene-based proteins and RNAi technology to reagents and molecular diagnostic tools.

    One common denominator is that all of the firms devote at least part of their research to genetics. Most also benefit from Wall Street's bullishness on the potential of medicine that goes beyond traditional chemical-based science.

    The group's biggest player by market cap, Invitrogen, (IVGN) has benefited more than most. Its shares hit a 2 1/2-year high of 83.75 on Wednesday and are up 43% for 2007.

    The Carlsbad, Calif.-based company operates in a variety of areas, including research tools, drug discovery and biological products.

    Though Invitrogen has turned in two straight quarters of double-digit sales and profit growth, the company eyes lower sales during the second half of the year.

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    • Other recent gainers in the genetics group include 3SBio, (SSRX) a Chinese biopharmaceutical firm; Human Genome Sciences, (HGSI) a developer of gene-based protein and antibody drugs; and Myriad Genetics, (MYGN) which analyzes genes and their mutations to develop treatments for cancer, Alzheimer's disease and AIDS.

      Myriad's stock briefly hit 52.90 on Friday, its highest point since January 2002. Shares are up by two-thirds this year.

      Shares got a big shot in the arm on Sept. 24 when Banc of America Securities analyst William Ho raised his target price for Myriad, citing revenue growth from the firm's predictive medicine business.

      In a note, Ho wrote that Myriad is undervalued relative to its peers. He pointed to strength in the company's Myriad Genetic Laboratories unit, which commercializes genetic tests to predict the risk of developing breast, ovarian and colorectal cancers as well as melanoma.

      "Myriad Genetic Laboratories is a leader in molecular diagnostics and is fundamentally a solid business," Ho wrote. "This is a highly profitable, high-margin business."

      Though Myriad has yet to turn a profit, it has grown sales by at least 22% in each of the last 12 quarters. Analysts expect its first yearly profit in 2010.

    • Profit growth is expected to slow to single digits in the fourth quarter as well as in the first two quarters of 2008.

      That kind of growth won't spin anyone's head around. Still, Invitrogen is considered a solid bet in a turbulent sector where most companies are losing money.

      Banc of America Securities analyst Jon Wood wrote in an August report that "organic revenue growth in the midsingle digits, sustainable operating margin improvement and incremental capital efficiencies may not appear overly exciting, but we believe such goals are achievable and support a valuation substantially above current levels."

      Meanwhile, Invitrogen continues to rebound from a tough 2006, when its earnings declined and the stock hit a two-year low.

      One problem last year was fallout from the company's earlier focus on external growth, says analyst Alastair Mackay of GARP Research & Securities.

      "They're a company that had planned to grow rapidly through targeted acquisitions," said Mackay. "Some did very well and some did not."

      Invitrogen has since moved to a different model.

      "In 2007 they realigned to a policy of internal growth and concentration on core markets like high-value, high-margin reagents, and it seems to be a positive move," Mackay said. "We think they're going to see significant growth over the next few years."

      Mackay also follows Sangamo BioSciences, (SGMO) which develops DNA-binding proteins for therapeutic gene regulation and modification. The stock hit a six-year high of 14.45 on Wednesday and has more than doubled in 2007.

      Sangamo designs zinc fingers, which can bind to DNA and form a large number of different sequence-specific binding sites.

      Its zinc finger protein program is in phase two clinical trials for evaluation of safety and clinical effect in patients with diabetic neuropathy, and in phase one trials for peripheral artery disease. Sangamo is also developing sequence-specific zinc finger nucleus technologies for gene modification.

      The firm has gotten a boost from a collaboration with Dow AgroSciences, which has licensed Sangamo's technology for agricultural use.

      "I take it the stock is up on anticipation of an announcement that there will be further milestone payments from Dow AgroSciences," said Mackay, whose employer, GARP, has an affiliated hedge fund with positions in Sangamo.

      In addition, he says, a pair of Dow AgroSciences execs recently commented favorably on Sangamo's technology and the progress of the collaboration.

      "There's an overall sense of confidence in their progress on the clinical front and in commercial collaborations," Mackay said.

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