Sangamo Thera enters critical deal with Lilly

Struggling US genomic medicines company Sangamo Therapeutics (Nasdaq: SGMO) has been offered a lifeline via a licensing deal with pharma major Eli Lilly (NYSE: LLY), sending its share up 24% to $0.77.

The accord will allow Lilly to leverage Sangamo’s novel proprietary neurotropic adeno-associated virus (AAV) capsid, STAC-BBB, which has demonstrated potent blood-brain barrier penetration and neuronal transduction in nonhuman primates. Lilly will acquire worldwide exclusive license to utilize the STAC-BBB capsid for one initial target, with the right to add up to four additional targets after paying additional licensed target fees, to deliver their intravenously administered genomic medicines to treat certain diseases of the central nervous system.

In return, Sangamo will receive an $18 million upfront license fee from Lilly and is eligible to earn up to $1.4 billion in additional licensed target fees and milestone payments across the five potential neurology disease targets, as well as tiered royalties on potential net sales of such products, subject to certain specified reductions.