Why Sangamo Therapeutics Stock Is Spiking Today

What happened

Shares of the gene therapy company Sangamo Therapeutics (NASDAQ: SGMO) rose by as much as 14.6% today on heavier than normal volume. The catalyst?

Sangamo's shares are trading upward in sympathy with nearly all major gene therapy companies today. Investors seem to be piling into this particular cohort of stocks in response to Sarepta Therapeutics' (NASDAQ: SRPT) stunning early-stage gene therapy results released yesterday.

A hand wearing a latex glove removing a segment of DNA with a pair of forceps.

Image Source: Getty Images.

Since racing higher in early-morning trading, Sangamo's shares have settled down to some degree, and are currently up by a more modest 8.36%, as of 1 pm EDT.

So what

The long and short of it is that investors are clearly intrigued by the prospects of gene therapy to significantly improve the outlook for a whole range of deadly diseases. And for good reason. Sarepta's preliminary trial results for its gene therapy designed to improve muscle function in patients with Duchenne muscular dystrophy far surpassed expectations, implying that this field may finally be coming of age.

And Sangamo, for its part, has the potential to could become an integral part of this gene therapy revival based on the prospects for its promising zinc finger nuclease gene-editing platform and next-generation gene delivery vehicles.

Now what

We're likely to see even more positive trial results for several different forms of gene therapy and genomic editing. However, there will obviously be some winners and some losers in this emerging field. As such, investors need to consider whether Sangamo's therapeutic platform has what it takes to stay ahead of the field.

My view is that Sangamo's recent licensing deals with biopharma heavyweights Pfizer and Gilead Sciences go a long way toward validating the company's gene therapy platform. These two titans of the industry, after all, had the pick of the litter due to their enormous resources, and they both chose Sangamo. So, if I had to pick just one gene therapy/gene-editing stock to buy, Sangamo would definitely be a top contender.

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George Budwell owns shares of Pfizer. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool has a disclosure policy.