Sangamo BioSciences Inc.
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Strong Buy
Cantor Fitz-"SGMO Scores - Dow Agro/Mons deal Relies on ZFP. Dow/SGMO tech ahead of schedule and more powerful than anticipated. Game changing. New Industry Std. Not Linear but "Market Disruptive". SIGNIFICANTLY UNDERVALUED. $17 target. BUY"Cantor Fitzgerlald
Company Update S EPTEMBER 14, 2007L IFE SCIENCESEquity Research Pamela Bassett, DMDmo Biosciences Inc. (SGMO-$11.08)Rating: BUY Target Price: $17.00 Sangamo Scores - Dow AgroSciences/Monsanto Collaboration Relies on ZFP Tech .o As we highlighted in our note last week (Dow AgroSciences Signals Sangamo Alliance Positive Progress- BUY, September 5, 2007), regarding the Sangamo/Dow AgroSciences alliance, the positive progress we anticipated was confirmed today in the conference call following the Dow AgroSciences/Monsanto collaboration announced before the market open this morning.o During the call, Dow confirmed that progress involving its collaboration around Sangamo's ZFP technology platform for gene regulation and modification of plants and plant cell cultures — the actionable step toward creating new products after the genes are identified and validated — is ahead of schedule and more powerful than anticipated.o Both Monsanto and Dow characterize their collaboration, which brings together their respective biotechnology platforms to create the first eight-gene stack offering, branded SmartStax, as the new industry-standard.o We think the transformative nature of the integrated DowAgro technology platform — highly reliant on Sangamo's ZFP technology, in our view — positions the company to achieve sustainable top-line and bottom-line growth involving the world's largest and most lucrative markets — food/agro, bioenergy and bioindustrials — that will flow through to Sangamo.o We remind investors that technology-driven growth is not linear — it is market-disruptive and we consider the integration of Sangamo's ZFP technology into Dow's platform game-changing. We think SGMO is significantly undervalued and reiterate our BUY rating.Company Description Sangamo Biosciences (www.sangamo.com) utilizes its proprietary zinc finger transcription factor technology to develop human therapeutics, protein therapeutics manufacturing and agricultural products and has partnered with industry leaders across all of its programs. Sangamo receives research funding and may receive milestone payments and royalties on product sales. Sangamo's headquarters is located in Richmond, California. Risks Sangamo currently has numerous preclinical programs that could enter clinical development over the next 12 to 18 months and could require increased financial and human resources to manage this growth. Should Sangamo be unsuccessful in attracting future partners for these programs, development could be stalled or Sangamo may be required to find other funding sources including additional equity offerings that could dilute current shareholders. If Sangamo's current clinical programs are not successful, this could significantly diminish the company's ability to attract future partners for its therapeutic products. Since Sangamo has limited experience conducting clinical trials, if the company is unable to attract partners, its therapeutic product programs could encounter increased regulatory uncertainty. Further, Sangamo is dependent upon its relationships with collaborative partners and their interest and ability to commercialize products based upon Sangamo technology for its future revenue. There are no current commercial products based upon ZFP technology; therefore, market acceptance of such products is unknown. Sangamo product candidates could face significant competition in the future, which could diminish its revenue potential. Additionally, Sangamo is dependent upon its patent estate to create product value for its customers. The company could also face competitive opposition and be required to defend its intellectual property that could involve litigation and expenses.
EPS 1Q 2Q 3Q 4Q 2004A (0.12)A (0.13)A (0.18)A (0.12)A 2005A (0.14)A (0.13)A (0.14)A (0.10)A2006A (0.09)A (0.11)A (0.08)A (0.26)A2007E (0.15)A (0.15)A (0.13)E (0.13)EFY 2004A 2005A 2006A 2007E EPS (0.55)A (0.51)A (0.55)A (0.56)EP/E NM NM NM NMNote: Sum of quarterly EPS may not equal full-year total due to rounding and/or change in share count
Current Statistics Market Cap ($Mil) $439.4 Avg. Daily Trading Volume (3 mo.): 487,470 Shares Out (Mil): 39.658 Float Shares (Mil): 33.540 Institutional Holdings: 50.1% Technology Value (TV): $394.815 Cash (Mil): $44.585 Short Interest (Mil): 2.835
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| Msg # | Subject | Author | Recs | Date Posted |
| 872 | ROB.... Cantor Fitz-"SGMO Scores - Dow Agro/Mons deal Relies on ZFP. Dow/SGMO tech ahead of schedule and more powerful than anticipated. Game changing. New Industry Std. Not Linear but "Market Disruptive". SIGNIFICANTLY UNDERVALUED. $17 target. BUY" | ickypicky | 9/25/2007 8:00:41 PM | |
