UPDATED: Sangamo bags PhII Alzheimer's drug in Ceregene buyout

Sangamo BioSciences has snapped up the gene therapy developer Ceregene in an all-stock deal, bagging a mid-stage Alzheimer's drug in the process shortly after the small biotech experienced a crippling clinical setback.

Richmond, CA-based Sangamo ($SGMO) is handing over 100,000 shares--valued at $10.16 each this morning--for the biotech and promising an unspecified payout on any revenue it earns from the Alzheimer's drug. That's a slightly lower value than the biotech's last venture round in 2010. The buyout comes about four months after the San Diego-based Ceregene reported that its lead drug--CERE-120--failed a Phase IIb trial for Parkinson's disease.

Genzyme had paid $25 million upfront in a $150 million pact on CERE-120 back in 2007, though a spokesperson for the Sanofi unit says the deal was terminated in 2010.

"Ceregene is a leader in development and manufacturing of AAV-based therapies with significant clinical development experience," said Sangamo CEO Edward Lanphier in a statement. "Since their inception in 2001, the company has safely treated over 115 subjects in four clinical trials. Sangamo has acquired all of Ceregene's AAV assets including CERE-110, AAV delivery of nerve growth factor to the brain for the treatment of Alzheimer's disease. CERE-110 is being evaluated in a fully enrolled and fully funded Phase II clinical trial."

Ceregene has been a low-profile player in the high-profile Alzheimer's disease arena. Five years ago, the company won a $5.4 million grant from the NIH to support the mid-stage study, recruiting 50 patients.

CERE-110 is designed to address the loss of cholinergic neurons. Sangamo reports that the subjects, half of whom were treated with CERE-110 and half with sham surgery, "are in the follow-up stage of the study which will evaluate the effect of treatment on established clinical end-points in cognitive function and quality of life. The results of this trial are expected in 2015."

Ceregene picked up $11.5 million in venture cash in 2010 in a round backed by Hamilton BioVentures, Alta Partners, MPM Capital and Investor Growth Capital.

- here's the press release