Eli Lilly Extends Lifeline to Sangamo Therapeutics with $1.4B Gene Therapy Deal

Sangamo Therapeutics has secured a potentially lucrative licensing agreement with pharmaceutical giant Eli Lilly, providing a much-needed financial boost to the struggling biotech company. The deal, announced on April 3, 2025, centers around Sangamo's proprietary neurotropic adeno-associated virus (AAV) capsid technology and could be worth up to $1.4 billion.

Deal Structure and Financial Terms

Under the terms of the agreement, Eli Lilly will pay Sangamo an upfront sum of $18 million for the rights to use the biotech's STAC-BBB capsid in developing a gene therapy for an undisclosed central nervous system (CNS) disease. The deal also includes the option for Lilly to expand the collaboration to include up to four additional neurology targets.

If Lilly exercises its rights for all five potential targets, Sangamo stands to earn up to $1.4 billion in milestone payments, along with tiered royalties on any future product sales. This structure provides Sangamo with immediate cash infusion and the potential for significant long-term revenue.

Technology Transfer and Development Responsibilities

As part of the collaboration, Sangamo will be responsible for transferring its STAC-BBB capsid technology to Eli Lilly. The pharmaceutical company will then take on the full spectrum of research, development, manufacturing, and commercialization activities for any gene therapies resulting from the partnership.

Sangamo's STAC-BBB capsid has demonstrated the ability to penetrate the blood-brain barrier in preclinical studies with nonhuman primates, making it a promising vehicle for delivering gene therapies to the central nervous system.

Industry Context and Sangamo's Financial Situation

This deal comes at a critical time for Sangamo, which has been facing financial difficulties and setbacks in recent months. The company started 2025 with a significant stock price drop following Pfizer's decision to terminate a hemophilia A gene therapy collaboration, which eliminated up to $220 million in potential milestone payments for Sangamo.

Prior to this new agreement, Sangamo had reported in November 2024 that its cash reserves would only last until the first quarter of 2025. While the $18 million upfront payment from Lilly provides some immediate relief, it remains unclear how significantly this will extend Sangamo's financial runway.

The Lilly deal marks the third agreement for Sangamo's STAC-BBB technology since its announcement in March 2024, following earlier partnerships with Astellas and Genentech. These collaborations underscore the industry's continued interest in Sangamo's capsid delivery technology, despite the company's recent challenges.