It was just announced that Sangamo Therapeutics entered into a licensing agreement with Eli Lilly to advance a proprietary STAC-BBB AAV capsid. This is to be used by the big pharma to develop up to five potential neurological disorder disease targets. Specifically, it is looking to go after indications with unmet medical needs.
Eli Lilly is to get access to one initial target under this deal first. From there, it could obtain up to an additional four target indications, but only if it pays additional target license fees. This is a good deal for Sangamo, because it brings in an upfront cash payment of $18 million. It will help a lot, because before this deal, it had given guidance that its cash on hand would only be enough to fund its operations into Q2 of 2025.
With such a limited cash runway, it really needed this deal. Besides the upfront cash, it is going to be able to earn up to $1.4 billion in milestone payments should clinical advancement of such neurological disease targets by Eli Lilly be successful.
Sangamo unveiled this STAC-BBB AAV capsid back in March of 2024 and since then, there has been huge demand for it. Besides this deal established with Eli Lilly, it garnered a deal with Roche’s subsidiary Genentech to develop a tau target [typically for Alzheimer’s Disease] and a second neurology target utilizing this very same AAV capsid type. Plus, in this deal, the big pharma also obtained an exclusive license to use Sangamo’s proprietary Zinc-Finger repressors for a tau gene target and an undisclosed second neurology target. This deal brought in an upfront payment of $50 million, with the potential to earn up to $1.9 billion in development and commercial milestone payments. Plus, tiered royalties on net sales for products sold.
This is on top of another deal that occurred in December of 2024, whereby Astellas also obtained an exclusive license to the STAC-BBB capsid for up to five potential neurological disease targets. Sangamo made it pretty decent here again with respect to obtaining funds, because it received an upfront $20 million payment from this big pharma in consideration of this deal. If things go well for this program, then the small-cap could receive up to $1.3 billion in license target fees and milestone payments.
The key thing to note here is why all these big pharma companies want to get their hands on this STAC-BBB AAV. That’s because a major problem with gene therapies is the ability to deliver them in an efficient manner. It’s all about the science here, in that this capsid has proven the ability to be delivered in a robust manner in the central nervous system [CNS] via intravenous delivery. This could improve clinical outcomes in being able to treat patients with a wide variety of neurological disorders.
With the ability of this STAC-BBB AAV capsid to cross the blood-brain barrier, plus achieve widespread brain transduction in animal testing, it has become a highly wanted capsid. This was animal testing, and it remains to be seen whether or not it translates in the same manner in humans, but all these deals are a good outcome for Sangamo for the time being nonetheless.
Separately, this small-cap biotech is recovering from the fact that it lost its partnership with Pfizer in advancing the development of giroctocogene fitelparvovec for the treatment of patients with moderate-to-severe Hemophilia A. Pfizer chose to terminate the license agreement of this gene therapy and Sangamo is expected to retain full rights to this SB-525 program. There might possibly be hope yet for this, because it has expressed interest in finding another suitor to get this therapy to the finish line. However, there is no assurance that this will actually happen.
