H.C. Wainwright initiated coverage of Sangamo Therapeutics (NASDAQ:SGMO) with a “buy” rating and $16 price target. The stock closed at $11.02 on Aug. 23.
Analyst Debjit Chattopadhyay writes that the prevailing view on Sangamo is centered around the company’s in vivo Zinc-Finger-Nuclease (ZFN)-based gene editing, which has significant limitations in its current iteration, and is not reflected in HCW’s model.
“Our alternative assessment of the company focuses on its recent success with canonical gene transfer in Hemophilia A (HemA), partnered with Pfizer, and its potential read through to its Fabry program, which position Sangamo in a different light, in our view,” he added.
While the stock is up about 16% since unveiling preliminary HemA data on April 2, “we believe there remains additional upside in the story as the Street recalibrates its view with an eye towards an expansive pipeline that leverages the company’s core competence in ZFN-based genome editing, but in an ex vivo environment, with potentially more predictable and controllable deliverables,” Mr. Chattopadhyay said.
He said the ex vivo editing platform includes, but is not limited to a Sanofi partnered effort targeting prevalent hemoglobinopathies and a Gilead partnered allo-CAR-T endeavor. “This amalgamation of approaches and indications has the hallmarks of a successful enterprise,” he added.
