Re-listening to the call to really take it all in.
As I listen, I hear the confidence of a company that believes they have a vast array of unique tools that enable them to pursue difficult diseases in ways that most others simply cannot, and far better than those that can.
We have seen this before: ‘Rolling Stones’ vs. ‘Boy Bands’, ‘Leading genomic medicines company’, etc.
The only thing is after needing to walk back comments related to MPS II and with nothing else made public to hang their hat on, their words rang a bit hollow.
Cue today, and SGMO, as someone already referenced, laid the smack down and then dropped the mic.
So I’m sitting here, and I’m thinking of valuations and buyouts, and the numbers that I come up with for what this company is on track to be worth just do not compute.
Random thoughts that come to mind:
CRSP – valued at $2B. Ex vivo gene editing capability with no human data. SGMO has demonstrated that they can edit precisely ex vivo, and has proof of concept in vivo.
Spark Therapeutics – valued at $4.8B in a buyout, primarily for gene therapy platform. Direct competitor in Hemo A space, along with BioMarin. Spark is clearly in 3rd place in this race.
BioMarin – valued at $16.3B. Primarily an ERT focused company whose revenues are at risk with the rise of gene therapy. Direct competitor in the Hemo A space. SGMO is behind from a data generation point of view, but initial data suggests SGMO could be better. BMRN has durability issues with steep drop off over time. SGMO dosed lower, drove expression much faster, and did not use prophylactic steroids.
Kite – sold for $11.9B as a leader in autologous CAR-T therapies. The future of this is space is allogeneic in nature, and SGMO technology has enabled Kite’s move from autologous therapies to allogenic therapies.
Juno – sold for $9B for autologous CAR-T therapies. See KITE.
Bluebird Bio – valued at $8.79B. Direct competitors in the Beta Thal and SCD space. Although early, initial data from SGMO in beta thal looks incredibly promising. Much better result than BLUE, though needs to be re-produced across multiple patients and show durability.
Biogen – Lost $17B worth of market cap on an amyloid beta Alzheimer’s trial failure
Shire – Sold for $62B – built an empire in rare diseases with ERT products.
Celgene paid $300M for Delina to pursue Treg based therapies back in 2017. You could argue that as this space garners more attention that that valuation would be higher if the acquisition were made today.
You can draw meaningful comparisons all day long between what SGMO has now demonstrated that they are capable of and companies much larger which either derive their revenue from a class of drugs which SGMO’s products are now capable of superseding (Shire, BMRN), are doing similar things (but possibly not as well – Spark, BioMarin, Blue), are pursuing grandiose ventures that represent the holy grail of the pharma industry for which SGMO tech could enable novel therapeutics (Biogen).
And then there are parallels to blazing new paths in CAR-TReg which is like the CAR-T of 2019/2020.
Yes, there is the caveat that with many of these comparisons that SGMO's early programs are partnered away, and that will certainly impact near term revenue and thus, for those looking only at the short term, valuation. That is fair. But if you look past this at the platforms that have just been validated, you can immediately see a Fabry gene therapy program that could run even faster and smoother than Hemo A now that they have the benefit of hindsight, and that is a $1B wholly owned indication. Take that one program and multiply by 4x to 8x depending on how conservative or aggressive you want to be once it matures. And that's just one follow on gene therapy indication that we already know about.
SM has always operated as if this company plans to remain independent. Now that we have gotten to see the data today we know why.
A big pharma’s resources coupled with SGMO tech would be like Kevin Durant going to the Golden State Warriors.
Except, to piggy back on the recent post about the need for a secondary, I no longer think that is a concern either. Plenty of cash will be lined up to fork over to SGMO should they desire to remain independent.
And that is the reason that I said:
"I see a mega buyout or a double digit $B market cap in SGMO's ~2 year future."
Whoever wants the keys to the kingdom will need to pay a King’s ransom to get them.
In the meantime, I’m once again happy to watch SGMO internally build out a juggernaut.
I simply don't think that I can overstate how important today's data was for SGMO.
I know that the last year has been trying and there has been plenty of infighting and people have their favorites and those here that they can't stand and I'm sure I've been on both sides of that for some, but here we are now, and honestly, who really cares about any of that anymore. SGMO is now very much on track and it is a beautiful thing to witness.
Congrats to all longs.