Eli Lilly provides a $1.4 billion gene therapy contract to struggling Sangamo

Through its licensing deal with Eli Lilly, Sangamo Therapeutics received $18 million to let the pharma use its neurotropic adeno-associated virus capsid in central nervous system disease gene therapy development.
Lilly has the authorization to select four additional neurology targets from the agreement. Additionally, Sangamo Therapeutics stands to gain $1.4 billion in milestone payments and royalties at various revenue levels from the four potential targets that Lilly selects beyond the current five targets.
Lilly takes responsibility for research, development, production, and commercialization of gene therapies from this agreement alongside Sangamo, which retains the transfer responsibilities for capsid delivery to Lilly.
Nonhuman primate studies have established that STAC-BBB capsid technology produced by Sangamo successfully penetrates the blood-brain barrier according to the biotech’s findings.

Dr. Sandy Macrae, CEO of Sangamo, expressed his happiness about sharing STAC-BBB through the agreement with Lilly to help develop medical treatments targeting neurological diseases with major unmet needs in the official release. We have secured our third pharmaceutical agreement following the March 2024 announcement about STAC-BBB’s discovery, which reflects sustained interest from pharmaceutical businesses in our capsid delivery technology.
STAC-BBB has already secured two existing deals through Astellas in December 2024, followed by Genentech in August 2024, through both of which granted $20 million and $50 million upfront.
Sangamo experienced a stock market decline in January because Pfizer canceled its Hemophilia A gene therapy partnership, which would have yielded up to $220 million in performance-based payments. The November 2024 statement from Sangamo revealed that the company had funds to carry it through the first quarter of 2025. The nature of Lilly’s $18 million cash payment remains uncertain for extending Sangamo’s operating duration.
Sangamo has experienced similar successful help from Lilly before regarding critical situations. Big Pharma’s subsidiary Prevail Therapeutics organized a capsid agreement valued at over $1 billion with Sangamo in July 2023 as Biogen and Novartis abandoned their cooperations with the genomic medicine company at the same time. Sangamo initiated a major workforce reduction after it lost substantial expenditure from large-scale business partnerships.

Sangamo receives the new deal at a time when the gene therapy sector confronts its challenges. The Spark gene therapy division of Roche underwent major changes, which led to a $2.4 billion write-down of assets. Pfizer removed Beqvez, its hemophilia gene therapy, from its portfolio at the same time partners purchased bluebird bio for $29 million despite its previous $10 billion valuation.