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Sangamo Therapeutics, Inc.

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Msg  135171 of 136503  at  10/21/2019 7:52:32 PM  by

bct1192


The 'make a deal' fallacy

Amidst the frustration of a low SP and fear of dilution at anywhere near these levels, a common refrain is echoed on this board:
 
SGMO needs to make a deal.  Half a loaf is better than no loaf.
 
Lest we forget, SGMO has already made many deals.
 
SGMO is already partnered with Pfizer in Hemo A and ALS/FTLD.
 
SGMO is already partnered with Sanofi in Beta Thal and SCD.
 
SGMO is already partnered with Kite/Gilead in Oncology.
 
SGMO is already partnered with Takeda in Huntington's disease.
 
SGMO already has all of these potentially very lucrative partnerships on the books (well, less Takeda, as that is probably worth nothing other than proof of concept), yet the SP still flounders.
 
So it begs the question - for those advocating 'more deals' - why aren't the current deals enough, and what do you expect about any new deal at this stage that could possibly move the needle and keep it moved?
 
Quite frankly, the deals done thus far, outside of PFE, have disappeared after the point of inception, not to be heard from again for years.  In fact, we're just now starting to see data from Beta Thal on a deal that, if I recall correctly, originated in 2014.
 
This is one of the primary reasons that for me, the type of deal (if one is struck) along with who it is struck with are incredibly important factors to any deal should one materialize now.
 
Personally, I think any deal struck for new programs in CNS and/or autoimmune diseases, should they occur, would be short lived value drivers.  Yes, they may come with up front payments attached, but we would then be obligated to spend money and direct resources towards these new endeavors that would effectively go 'dark' for a few years again, and we'll be back to where we currently are.
 
While we admittedly have been lacking for real positive news flow to hang our hat on since the initial Hemo A data came out in April, I submit that SGMO has done enough deals for deals sake already.
 
The PFE Hemo A deal is really close to being handed over to PFE.  I don't know what to expect in terms of real $$, but I do expect some portion of the available milestone payments to be realized on that transition.  I am also sure that SGMO already knows what this payment will be.
 
I think the same can be said for Beta Thal, and SCD, being a little bit further out, but in a similar type of situation.
 
And then we have an elephant in the room that is not bought up too often these days because we don't know exactly what the products will look like, but once Kite brings forward some SGMO specific CAR-T products, I suspect things here will get really exciting.
 
IMO, at this stage, a deal for the sake of a deal is unnecessary.  I think the big question is what strategic opportunities does the company want to pursue and retain and, in turn, what of their portfolio gets potentially neglected as a result?
 
The company strongly believes in the potential of their CAR-Treg platform.  I personally think this has the greatest risk/reward profile and is very synergistic to their work with Kite.  I love the idea of retaining this and pursuing this in house.
 
But it comes at a cost.  How do we pay for and supply the resources to bring this forward when it likely won't show a material benefit to the company for 2-3 years time?
 
To this end, I think we sort of know the answer, but are getting some mixed messaging:
 
What do we do with the gene therapy platform, Fabry, and all of the undisclosed targets?
 
The company says gene therapy is not the primary focus of the company with one breath, but then says they plan to bring Fabry forward to commercialization on their own.
 
Is this gamesmanship?  Or reality?  Or a bit of both?
 
I agree with some of the other comments here today - PFE has shown the benefit of their involvement through the swift and smooth clinical execution the of Hemo A program.
 
Yes, we could retain Fabry as wholly owned.  Yes, there will be more direct reward for that specific indication at the end of that rainbow for us if we do that.
 
But if I look at the big picture - the only deal that IMO makes sense to make right now because it expands the near term potential for success to more targets than we can realistically pursue on our own and thus moves the needle in a material way that will elevate the SP and keep it there - is an expanded gene therapy deal with PFE into additional indications.
 
So, I say, give me a gene therapy deal, or no deal at all!  (But please give me a gene therapy deal)
 
Thoughts?


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Msg # Subject Author Recs Date Posted
135178 Re: shammrock...you still selling puts? lol..eom SFV 0 10/22/2019 12:35:43 AM


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