Big Money Saving Lives

This week we have an exciting write-up on a company in the biotechnology industry.  Many novel little companies are working to solve some of the world’s largest health problems… and today’s company is no different.

The next exciting company to put on your radar is Sangamo Biosciences (NasdaqGM: SGMO)

 

QUICK FACTS

Ticker                                        SGMO

Industry                                     Biotechnology

Recent Price                              $5.85

Market Cap                                $306m

Shares Outstanding                    52.3m

Average Volume                         167,065

Dividend Yield                            N/A

Website                                    www.sangamo.com

 

BUSINESS ANALYSIS

Sangamo Biosciences (SGMO) is a biopharmaceutical company specializing in DNA-binding proteins.  Essentially, the company is working to make the science fiction of gene modification a reality.

 

They’ve developed Zinc Finger DNA-binding proteins which can be used to force certain genes to turn on or off.  Sangamo has a lot of Zinc Finger irons in the fire.  They’re developing treatments for diabetic neuropathy, lateral sclerosis, spinal cord injuries, traumatic brain injuries, and even stroke.

The company even has a promising Zinc finger modified T-cell product for the treatment of HIV/AIDs.

Look, any way you slice it their technology is complex.  However, as they develop new and radical treatments for some of the world’s largest health problems the rewards they could uncover are huge!

Researchers are excited about the potential of Zinc Finger DNA-binding protein treatments.  Jay A. Levy, the head of the Laboratory for Tumor and AIDS Virus Research at the University of California said, “It’s a terrific way of looking for a long-term functional cure for the virus.  This approach shows the most promise of any that I know of.”

 

FINANCIAL ANALYSIS

SGMO is a biotech company, and they’re still in the process of proving their biotechnology really works.  As a result they have very small revenue from collaboration agreements and research grants.  It’s nothing to write home about.

The really big money will be made once one of their products is approved by the FDA!

The key to companies like this is comparing their Cash and Marketable Securities to any Debt that’s due.  One quick look at the latest financial statements and we see the company has over $45 million in cash and securities, and no long term debt.  Now a little more digging and we learn the company just completed a $50 million fundraising in April.

So their real cash balance is probably closer to $95 million – A fantastic position to be in!

 

KEY METRICS ANALYSIS

Trailing P/E                                          N/A

Price / Sales                                        19.1

Return on Assets                                 -28.9%

Insider ownership                                  5.7%

Short Ratio                                          18.3x

Current Ratio                                       14.2x

Total Debt To Equity                              N/A

 

RECENT EVENTS

In January the company finished up phase 2b of SB-509 testing.  That’s the drug treating moderate or severe diabetic neuropathy.  This study was undertaken to establish finalized dose and treatment schedules.  Sangamo will announce results in the second half of 2011.  Once results are in, the company can look towards potentially partnering with other drug companies.

On April 13, 2011, Sangamo finished an offering of 6.7 million shares raising over $50.2 million in cash.

 

MANAGEMENT TEAM

Edward O Lanphier II – CEO & President

H Ward Wolff – CFO & Sr. Vice president

Dale Ando, M.D. – Vice President of Therapeutic Development and CMO

Philip Gregory, D. Phil – Vice President of Research and CSO

David Ichikawa – Senior Vice President of Business Development

 

STOCK ANALYSIS

 

 

 

 

 

 

 

Chart courtesy of stockcharts.com

SGMO stock has been in a downtrend for the last few weeks along with the overall market.  Just this week the stock broke below the 200-day moving average and the 50 day moving average is in a downslope.

SGMO’s 52-week low was $2.81 and the 52-week high was $9.15.  Right now the stock is trading at $5.95.  The 50-day moving average is near $7.01 a share and the 200-day moving average is at $6.01.  The company has a market cap of $306 million and 52.3 million shares outstanding.

 

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