Sangamo Therapeutics Inc (NASDAQ: SGMO) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has entered into a collaboration agreement, leading to excitement among investors and sending the stock screaming for the top. Today, we’ll talk about the news, what we’re seeing from SGMO as a result, and what we’ll be watching for ahead.
SGMO Announces Collaboration Agreement
As mentioned above, Sangamo Therapeutics is having an overwhelmingly strong day int he market today after announcing that it has entered into a collaboration. In a press release issued this morning, the company announced that it has entered into a worldwide collaboration agreement with Kite, A Gilead Pharmaceuticals (GILD) subsidiary. Under the collaboration agreement, the SGMO zinc finger nclease (ZFN) technology platform will be used for the development of next-generation ex vivo cell therapies in oncology.
According to the release, Kite will use the ZFN technology developed by SGMO to modify genes in an effort to develop next-generation cell therapies for autologous and allogenic use in treating different cancers. The agreement stipulates that Sangamo will receive an upfront payment of $150 million and is eligible to receive up to $3.01 billion in potential payments based on the achievement of certain research, development, regulatory and commercial milestones. The company is also eligible to receive tiered royalties on the sale of products generated through this collaboration. Finally, Kite will be responsible for the development, manufacturing and commercialization of products as well as for agreed upon expenses incurred by the Sangamo.
In a statement, Sandy Macrae, President and CEO at SGMO, had the following to offer:
This collaboration between Kite and Sangamo brings together two leading platforms to develop best-in-class cell therapies in oncology… We are excited by Kite’s commitment to driving innovation in this field and look forward to working together to realize the full promise of cell therapy in treating cancer.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. Not only will this collaboration drive immediate revenue for the company, it is also likely to be the source of strong revenue in the future with very little risk to Sangamo in the process. So, it’s no surprise to see that the stock is making a run for the top in the market today. Currently (9:40), SGMO is trading at $26.88 per share after a gain of $4.67 per share or 21.06% 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 collaboration with Kite as this could be an incredible driver of revenue in the future. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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