After losing two Big Pharma partners in quick succession this spring, Sangamo Therapeutics has snagged a deal with Eli Lilly’s Prevail Therapeutics centering around its preclinical neurology adeno-associated virus (AAV) capsids.
Under the terms of the freshly inked deal, Lilly’s gene therapy subsidiary Prevail will assess certain AAV capsids developed by Sangamo and then has the option to exclusively license these capsids for multiple undisclosed neurological targets.
Prevail is set to pay Sangamo an undisclosed upfront payment for providing the capsids for evaluation. If the Lilly unit moves forward with certain capsids, it would take the lead on all further development, manufacturing and commercialization activities. If Prevail decides to exercise its option for all targets and a Prevail product is approved in the U.S. and Europe for each target, Sangamo could receive developmental milestones of up to $415 million and commercial payments of up to $775 million, plus tiered royalties.
The new deal is a stroke of good luck for Sangamo, which was abandoned by former Big Pharma partners Biogen and Novartis earlier this year. In March, Novartis walked away from the opportunity to receive the zinc finger protein transcription factors resulting from the companies’ autism spectrum disorder and intellectual disability collaboration. Just days later, Biogen told Sangamo that it was terminating their partnership spanning tauopathies, Parkinson’s disease and myotonic dystrophy along with the potential $2.37 billion milestone payments tied to the deal.
Shortly after both collaborations dissolved, Sangamo laid off about 120 employees—or 27% of the company’s U.S. workforce—and announced that it would refocus on three key areas: its neurology epigenetic regulation portfolio, a phase 3-ready Fabry disease asset and a CAR-Treg in phase 1.
As part of the refocus, the California-based company halted all preclinical work except on its wholly owned neurology pipeline. The genomic medicine biotech continued to identify engineered AAV capsids designed to improve delivery in the central nervous system—capsids that drew Prevail in.
The capsids have shown potential for efficient delivery of investigatory gene therapy constructs to the central nervous system in preclinical models after being administrated into the cerebrospinal fluid, according to Sangamo. The company hopes the capsids can be used to improve therapeutic delivery in a range of previously inaccessible areas.