Sangamo and Lilly Strike $1.4 Billion Gene Therapy Deal to Tackle Neurological Diseases
Sangamo Therapeutics (SGMO) announced a new licensing agreement with Eli Lilly that sent its shares up as much as 23% in premarket trading this morning, before giving back gains alongside the broader market pullback. The agreement gives Lilly access to Sangamo’s proprietary STAC-BBB capsid technology, designed to deliver gene therapies across the blood-brain barrier for central nervous system (CNS) disorders.
Under the terms of the deal, Sangamo will receive an $18 million upfront payment and is eligible for up to $1.4 billion in additional target selection fees and milestone-based payments. The license initially covers one CNS target, with Lilly holding the option to expand to four additional targets in exchange for added fees. If successful, the agreement could also generate tiered royalties for Sangamo based on eventual product sales.
The STAC-BBB capsid platform has demonstrated strong blood-brain barrier penetration and effective neuronal transduction in non-human primate models, positioning it as a promising delivery vehicle for systemically administered genomic medicines targeting the brain. The capsid’s design addresses a key limitation in CNS gene therapy, where delivery efficiency and safety have historically been challenging.
Lilly will take over full responsibility for research, preclinical and clinical development, regulatory strategy, manufacturing, and global commercialization of any therapies developed using the licensed capsids. Sangamo will oversee the initial technology transfer and will support early-stage integration.
This marks the third industry partnership centered on STAC-BBB since its discovery was announced in March 2024, highlighting growing biopharma interest in Sangamo’s gene delivery tools. The company has previously emphasized the capsid’s potential to move beyond current intrathecal approaches and enable more scalable, less invasive treatment strategies for neurological diseases.
Sangamo, whose platform also includes zinc finger epigenetic regulators and a range of internal and partnered programs, is focused on conditions with high unmet need, particularly in the neurology space. CEO Sandy Macrae noted the deal with Lilly as further validation of STAC-BBB’s potential to play a transformative role in next-generation gene therapy.
Though shares cooled following the early morning rally, the agreement reinforces Sangamo’s ability to generate non-dilutive capital and partner with major pharmaceutical players, even as it continues to navigate a challenging biotech funding environment. Investors are likely to watch closely for updates on clinical timelines from Lilly, as well as potential expansion into the additional targets covered under the agreement.
