Sangamo Therapeutics Inc. (NASDAQ: SGMO) saw its shares skyrocket early on Thursday after a critical business update. Although the company did recently report its first-quarter results, this is not what’s driving the stock. Instead the company’s recent collaboration with Pfizer Inc. (NYSE: PFE) is pushing shares much higher on the day.
The two companies announced an exclusive, global collaboration and license agreement for the development and commercialization of gene therapy programs for hemophilia A, including SB-525, one of Sangamo’s four lead product candidates, which Sangamo expects will enter the clinic this quarter.
Under the terms of the agreement, Sangamo will receive a $70 million upfront payment from Pfizer. Sangamo will be responsible for conducting the SB-525 Phase 1/2 clinical study and certain manufacturing activities. Pfizer will be operationally and financially responsible for subsequent research, development, manufacturing and commercialization activities for SB-525 and additional products, if any.
Sangamo is eligible to receive potential milestone payments of up to $475 million, including up to $300 million for the development and commercialization of SB-525 and up to $175 million for additional hemophilia A gene therapy product candidates. Sangamo has a total market cap of $$470 million.
Mikael Dolsten, MD, PhD, President of Worldwide Research and Development at Pfizer, commented:
Sangamo brings deep scientific and technical expertise across multiple genomic platforms, and we look forward to working together to advance this potentially transformative treatment for patients living with Hemophilia A. Pfizer has made significant investments in gene therapy over the last few years and we are building an industry-leading expertise in recombinant adeno-associated virus (rAAV) vector design and manufacturing. We believe SB-525 has the potential to be a best-in-class therapy that may provide patients with stable and durable levels of Factor VIII protein with a single administration treatment.
Shares of Sangamo were trading up 50% at $6.55 on Thursday, with a consensus analyst price target of $6.67 and a 52-week trading range of $2.65 to $7.60.
Pfizer shares traded at $33.02, in a 52-week range of $29.83 to $37.39. The consensus price target is $37.89.