Sangamo Therapeutics Inc (NASDAQ: SGMO) is climbing in the market this morning. However, if you’re looking for press releases or SEC filings from the company, you’re out of luck. There’s none out there.
That doesn’t mean that this climb in value is without a catalyst. In fact, there’s a very good reason for the gains. Today, we’ll talk about:
- Why SGMO is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why SGMO Is Climbing
As mentioned above, Sangamo Therapeutics is having a great start to the trading session this morning. However, with no news released by the company, some investors are scratching their heads, wondering why the stock is climbing.
The reason has to do with an acquisition of another company. In a press release issued early this morning, Roche announced that it would be acquiring Spark Therapeutics. The moves sent Spark Therapeutics on a run for the top with its stock (ONCE) more than doubling in value. So, what does this have to do with SGMO?
Well, ONCE and SGMO are relatively similar companies as far as product goes. Both companies are working on gene therapies. These novel gene therapies are targeting some of the world’s toughest-to-treat ailments.
Considering this, the price for the acquisition of ONCE came in at $4.3 billion. This is important as the strong 122% premium shows the value that big money is placing on gene therapies that are showing positive clinical results.
Moreover, the similarities between SGMO and ONCE are striking, not only with treatment style but with targeted indications. So, investors are excited as the acquisition of Spark Therapeutics validated the work that both of these companies are doing.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Sangamo Therapeutics, there was no company specific news. However, the news from ONCE, a company very similar sparked interest.
After all, with a big player in the biotech space acquiring a competitor at a heavy premium, questions raise about the potential acquisition of SGMO. So, it’s not surprising to see that investors are pushing the stock toward the top.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:10), SGMO is trading at $9.63 per share after a gain of $0.80 per share or 9.06% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SGMO. In particular, we’re interested in following the story surrounding the company’s continued gene therapy work and watching to see if a big player snaps the company up. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
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