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Sangamo Biosciences Inc. Message Board

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  • Rob_Cos Rob_Cos Aug 20, 2007 11:26 AM Flag

    Piper Jaff raise tgt to $14 Jul 30...


    Sangamo is pioneering the development of Zinc-Finger Proteins to treat disease.


    Sangamo dominates intellectual property and scientific "know-how" in the field of zinc finger proteins (ZFPs). ZFPs are a naturally occurring family of proteins that serve as binding domains for transcription factors to regulate gene expression. ZFPs can be designed to precisely target any gene in the genome. ZFPs transcription factors can be engineered to either activate or repress genes of interest, thereby offering tremendous flexibility in treating disease. The ability to induce gene expression is unique to the ZFP approach and can potentially treat diseases that are not addressable by any other means.

    Sangamo is focused on developing ZFP technology for therapeutic intervention. The company's lead drug is SB-509, a ZFP drug that turns on expression of VEGF in order to promote nerve growth for the treatment of diabetic neuropathy. The company presented encouraging Phase Ib data at the ADA meeting in June and will provide updated data through early next year. Sangamo is conducting 2 Phase II trials in diabetic neuropathy and blocked nerve with data likely available in 2H:08. Based on that data, we expect Sangamo will likely partner SB-509 in late 2008/early 2009.

    The company also reacquired the rights to EW-A-401 from Edward's Life Sciences earlier this year. EW-A-401 is the same ZFP drug that targets VEGF as SB-509, however, applied with the purpose of revascularization in peripheral artery disease. We expect Sangamo to provide an update on the development plans for this drug later this year.

    Sangamo is also developing ZFP technology to modify the DNA of disease genes. The company intends to file an IND on its CCR5 gene disruption program for the potential treatment of HIV later this year. In collaboration with the City of Hope Hospital, Sangamo also hopes to file an IND to render therapeutic T-cells resistant to steroids for the treatment of glioblastoma.

    In our opinion, Sangamo has done an excellent job of partnering non-core applications of ZFP technology in order to fund the company while retaining all therapeutic rights. In June, Sangamo entered into a strategic alliance with Sigma-Aldrich to develop research reagents based on ZFP technology. The company is also working with Dow AgroSciences on applying ZFP technology to plant genetics. Sangamo is also working with the LifeScan division of Johnson & Johnson to develop cells lines for diabetes research.
    ZFP technology has also been used in collaborations with industry leaders such as Pfizer, Amgen, Genentech, Novo Nordisk and others to engineer cell lines to optimize protein production.

    We reiterate our Outperform rating and are increasing our 12-month price target from $12.50 to $14 per share. Our new price target is based on a projected enterprise value of $500 million (up from $400 million) to which we add mid-'08E cash of $65 million. We continue to value the Phase II diabetic neuropathy and PAD programs at $200 million each and are adding $100 million for the CCR5 HIV program, which we anticipate will enter the clinic this year. At this point, we assign no value for the glioblastoma program until more feasibility data is available. With the successful follow-on offering and Sigma Aldrich partnership, we estimate Sangamo now holds proforma cash of $88 million.

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