Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is one of the biggest movers in the biotechnology sector this week on the news that the company has entered into a partnership with Kite, a company that’s owned by Gilead Company (NASDAQ:GILD).

The deal comes on the back of a spate of fresh biotechnology deals that have hit press over the last week or so and in terms of raw numbers it’s certainly one of the largest of the group.

As might be expected, both companies are picking up a volume spike on the back of the development and this has translated to some share price movement in each.

Here’s what happened.

Sangamo has developed a platform that harnesses what’s called zinc finger nuclease (ZFN) technology to modify genes. The science behind this one is pretty complicated, but essentially it can be broken down as follows: the modified genes can be used to develop cell therapies rooted in allogeneic stem cells, or cells not from the patient. These stem cells can be introduced to patients suffering from various cancer types and can, theoretically, provide a far more effective treatment with a far reduced necessity for toxic infusion than is the case with both the current standard of care chemotherapy treatments in this sector and for many immunotherapy treatments.

So what does the deal involve?

Sangamo will receive an upfront payment of $150 million and is eligible to receive up to $3.01 billion in potential payments. These payments will be aggregated across 10 or more products utilizing Sangamo’s technology, based on the achievement of certain research, development, regulatory and successful commercialization milestones.

As is generally the case with these sorts of arrangements, Sangamo will also receive tiered royalties on sales of potential future products resulting from the collaboration and Kite will be responsible for all development, manufacturing and commercialization of products under the collaboration.

So what comes next?

This is one of the latest developments in a major space in the healthcare sector right now and comes on the back of a number of other companies playing their respective hands over the last twelve months or so – Pfizer, Juno, Novartis and more.

Markets are going to be looking closely at this Sangamo development, then, so as to get an idea of whether the two companies (Kite and Sangamo) can use this collaboration to keep up with competitors.

Right now, the response has been positive, implying that markets do feel that this partnership stands the two companies in good stead to do exactly that. On the back of the news, Sangamo ran to the tune of more than 14%, trading for a close price at $25.50 a piece and a market capitalization of $2.15 billion.

In another key move in the biotechnology space, Novo Nordisk A/S (ADR) (NYSE:NVO) just put out some data from the first of ten phase III trials that the company has set up to investigate the potential for using oral semaglutide for the treatment of adults with type 2 diabetes.

As per the announcement detailing the release, the trial met its primary objective through the demonstrating of significant and superior improvements in HbA1c (long-term blood sugar), which is a gold standard metric in this space, for all three doses of oral semaglutide compared to placebo.

Looking at the numbers specifically, the 14 mg dose also demonstrated significant and superior weight loss versus placebo but did not reach statistical significance for the 7 mg and 3 mg doses. Reductions in HbA1c of 0.8%, 1.3% and 1.5% were recorded compared to a reduction of 0.1% in people treated with placebo from a mean baseline of 8.0%.

The key takeaway from this one is that the American Diabetes Association (ADA) treatment target of HbA1c below 7.0% was achieved by 59%, 72% and 80% of people on semaglutide compared to 34% of the people treated with placebo.

This suggests the potential for some real strength as the program matures towards a conclusion.

Of course, it’s still relatively early, with another nine of these trials still to complete.

That said, it’s a strong start and it’s one that’s going to draw some real attention to this asset over the coming twelve months and beyond.

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