Cowen Shines Light on Sangamo Biosciences, Inc. Restructuring Agreement with Shire


In a research report released Friday, Cowen’s healthcare analyst Ritu Baral shed some light on Sangamo Biosciences, Inc. (NASDAQ:SGMO), after the company announced a restructuring of its Shire collaboration, wherein SGMO is regaining rights to the hemophilia A and B programs, and Shire is retaining rights to the Huntington’s disease program and one other as yet unnamed program.

Baral noted, “We have mixed feelings on the restructuring: on one hand, we have questioned Shire’s commitment to the program given ongoing delays in the IND filing. On the other hand, we foresee a competitive landscape for hemophilia gene therapy/editing therapies by the time SGMO’s IVPRP program could be approved, at which point a commercially experienced partner would be an advantage.”

Furthermore, “Shire has opted to maintain the Huntington’s partnership with SGMO, and now owes lower royalties to SGMO on what we view as one of the most promising of SGMO’s ZFP programs. SGMO indicates the decision was made on a purely strategic basis (likely related to its Baxalta bid), and that it ‘payed’ for return of the programs with the lower Huntington’s royalties.”

The analyst reiterated an Outperform rating on Sangamo Biosciences shares, while no price target was provided.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ritu Baral has a total average return of 19.6% and a 49.7% success rate. Baral has a -41.5% average return when recommending SGMO, and is ranked #79 out of 3747 analysts.

All the 6 analysts polled by TipRanks rate Sangamo Biosciences stock a Buy. With a return potential of 213.7%, the stock’s consensus target price stands at $20.80.

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  • Barry L

    Trading the revenues potential of Huntington’s ($1.5 Billion peak sales estimate). For ALL Hemo factors Factors 7, 8, 9, 10, with a total estimated peal sales potential of $11 to $14 Billion by 2020.
    Sounds like a fair deal to me, Also SHIRE lost one future target pick in the deal.
    The next partner, be it Shire getting a shot at bidding, Will not pay $13 million upfront.
    What Major Biotech would nopt want a piece of that Mega Blockbuster, “breakthrough” “curative” program.
    Let the bidding begin:)
    The next 6 to 8 months going to be very exciting for investors in SGMO.
    What is a “functional cure” and an eventual “cure” for HIV worth.
    California currently spends $12.5 BILLION per year treating HIV patients.
    17,500 HIV positive patients die each year attributed to HIV related issues.
    Be prepared to be surprised.