Sangamo Therapeutics has stacked up $18 million cash from Eli Lilly in a licensing deal that will let the pharma use the biotech's neurotropic adeno-associated virus capsid in efforts to develop a gene therapy for a central nervous system disease.
Lilly also has the right to add up to four more neurology targets to the agreement, according to an April 3 release. If Lilly chooses to use Sangamo’s tech for all five targets, the biotech could earn up to $1.4 billion in additional milestones plus tiered royalties on potential sales.
Lilly will be responsible for researching, developing, manufacturing and commercializing any gene therapies that come from the deal, according to the release, while Sangamo is in charge of transferring the company’s capsid to Lilly.
Sangamo’s capsid, STAC-BBB, has previously proven capable of penetrating the blood-brain barrier in nonhuman primates, according to the biotech.
“We are pleased to be sharing STAC-BBB with Lilly to advance potential treatments for neurological diseases with significant unmet medical needs,” Sangamo CEO Sandy Macrae, Ph.D., said in the release. “This marks the third agreement with a pharmaceutical company since we announced the discovery of STAC-BBB in March 2024 and demonstrates the continued industry interest in our capsid delivery technology.”
The prior two STAC-BBB deals include a $20 million upfront pact with Astellas in December 2024 and a $50 million upfront agreement with Genentech in August 2024.
Sangamo began the year with a stock crash driven by Pfizer terminating a hemophilia A gene therapy deal, which eliminated the up to $220 million in milestones the biotech could have earned. Sangamo said in November 2024 that the company only had enough money in the bank to last until the first quarter of 2025. It's not immediately clear how far Lilly’s $18 million cash payment will extend Sangamo’s runway.
This isn’t the first time Lilly has come through for Sangamo in a time of need. The Big Pharma’s subsidiary Prevail Therapeutics signed a capsid deal potentially worth more than $1 billion with Sangamo in July 2023, just after Biogen and Novartis tore up deals of their own with the genomic medicine company. The loss of those big-money deals had prompted Sangamo to lay off 27% of its staff.
The freshly inked deal comes as the gene therapy field faces a reckoning. Several examples include Roche's recent overhaul to its Spark gene therapy unit, which incurred an impairment charge of $2.4 billion. Pfizer also recently discontinued its hemophilia gene therapy Beqvez, and former gene therapy darling bluebird bio was offered a $29 million buyout from a pair of venture capital firms, a paltry sum compared to its onetime valuation of $10 billion.