Lilly bets US $1.4B on Sangamo in licensing pact

USA – Sangamo Therapeutics, which has faced severe setbacks after losing Pfizer as a partner, has received a much-needed cash injection in the form of a US $1.4 billion licensing deal with Eli Lilly.

This pivotal agreement, which includes an upfront fee of US $18 million, grants Lilly the rights to deploy Sangamo’s proprietary neurotropic adeno-associated virus (AAV) capsid, STAC-BBB, across one neurological disease target—with an option to expand the program to cover four additional targets.

STAC-BBB stands out as a critical innovation among millions of candidates. Out of a staggering 100 million capsids screened, STAC-BBB was selected for its remarkable ability to cross into the central nervous system (CNS) via intravenous administration and deliver genetic sequences directly to nerve cells.

In non-human primate studies, this capsid achieved a 700-fold higher expression of messenger RNA compared to conventional AAV vectors, highlighting its potent capacity for neuronal transduction.

Additionally, the design of STAC-BBB includes a “de-targeting” mechanism to minimize off-target effects by reducing gene delivery to peripheral tissues, thereby enhancing the specificity of gene therapies in the CNS.

The deal with Lilly comes on the heels of a major setback for Sangamo. In December, Pfizer returned rights to its experimental gene therapy for hemophilia A, giroctocogene fitelparvovec, despite encouraging phase 3 results.

This move is widely attributed to the market’s slow uptake of BioMarin’s competing gene therapy, Roctavian (valoctocogene roxaparvovec).

This withdrawal severely impacted Sangamo’s financial position, prompting the company to pivot its focus toward other innovative therapies.

In recent years, Sangamo has had to downsize its workforce and curtail several research programs, including those related to its zinc finger gene-editing technology and a gene therapy for sickle cell disease.

The new licensing agreement with Lilly is a critical lifeline for Sangamo. The Richmond, California-based company ended 2024 with cash reserves of just under US $42 million—a significant drop from US $81 million the previous year.

This placed it in a precarious financial position, with funds projected to support operations only into the middle of the second quarter of 2025.

This deal, therefore, not only provides immediate financial relief but also enables Sangamo to continue advancing its lead drug candidates, such as sonelokimab for inflammatory diseases, and to pursue novel AAV capsid platforms for neurological applications.

This agreement is the third major partnership for Sangamo’s STAC-BBB technology. Prior deals include a partnership with Astellas Gene Therapies, which began with a US $20 million upfront fee and a total potential deal value of US $1.3 billion.

A subsequent deal with Roche included an initial payment of US $50 million in a transaction valued at over US $1.9 billion.

In addition, Lilly has an existing collaboration with Sangamo through its subsidiary, Prevail Therapeutics, a deal worth up to US $1 billion signed in 2023 focusing on multiple undisclosed neurological targets.