Eli Lilly Inks $1.4B+ Deal with Sangamo, Boosting Gene Therapy Efforts

In a significant move for the gene therapy landscape, Eli Lilly has entered into a licensing agreement with Sangamo Therapeutics, potentially worth over $1.4 billion. The deal, announced on April 3, 2025, centers around Sangamo's proprietary adeno-associated virus (AAV) capsid technology, STAC-BBB, which has shown promise in crossing the blood-brain barrier.

Deal Structure and Financial Details

Lilly will pay Sangamo an upfront fee of $18 million for the rights to use the STAC-BBB capsid in developing genomic treatments for central nervous system (CNS) diseases. The agreement includes the option for Lilly to expand the collaboration to up to four additional neurology targets. If all milestones are met and all five potential targets are pursued, Sangamo could receive up to $1.4 billion in additional payments, plus tiered royalties on potential product sales.

Under the terms of the agreement, Lilly will be responsible for all research, preclinical and clinical development, regulatory activities, and commercialization of any resulting therapies. Sangamo's role will be limited to the initial technology transfer of the STAC-BBB capsid to Lilly.

Technological Significance and Previous Partnerships

The STAC-BBB capsid has demonstrated the ability to cross the blood-brain barrier and mediate robust transduction and transgene expression in non-human primate studies. This technology could potentially unlock new treatment avenues for CNS disorders, an area of significant unmet medical need.

Sangamo CEO Sandy Macrae highlighted that this marks the third agreement involving STAC-BBB since its discovery announcement in March 2024. Previous partnerships include a $20 million upfront deal with Astellas in December 2024 and a $50 million upfront agreement with Genentech in August 2024, underscoring the industry's interest in Sangamo's capsid delivery technology.

Implications for Sangamo and Industry Trends

This deal comes at a crucial time for Sangamo, which has faced financial challenges and setbacks in recent months. In December 2024, Pfizer terminated a hemophilia gene therapy partnership with Sangamo, despite the candidate meeting its primary endpoint in a Phase III trial. The company reported in November 2024 that it had only $39.2 million in cash and equivalents, enough to fund operations into the first quarter of 2025.

The agreement with Lilly provides Sangamo with much-needed financial support and validates its technology platform. However, it occurs against a backdrop of broader challenges in the gene therapy field. Recent developments include Roche's $2.4 billion impairment charge related to its Spark gene therapy unit, Pfizer's discontinuation of its hemophilia gene therapy Beqvez, and the potential acquisition of bluebird bio for a fraction of its former valuation.

As the pharmaceutical industry continues to navigate the complexities of gene therapy development, partnerships like the one between Lilly and Sangamo may play a crucial role in advancing the field and bringing innovative treatments to patients with difficult-to-treat neurological conditions.