Eli Lilly has entered into a licensing agreement with Sangamo Therapeutics for its proprietary adeno-associated virus (AAV) capsid technology designed to cross the blood-brain barrier, providing Sangamo with much-needed financial support while expanding Lilly's capabilities in central nervous system (CNS) therapeutics.
The deal, announced Thursday, grants Lilly rights to Sangamo's STAC-BBB capsid technology for $18 million upfront, with potential milestone payments that could exceed $1.4 billion. The agreement also includes tiered royalties on net sales of any products developed using the technology.
Strategic Value of STAC-BBB Technology
STAC-BBB represents a significant advancement in gene therapy delivery systems. According to Sangamo, the proprietary AAV capsid has demonstrated the ability to cross the blood-brain barrier in non-human primate studies, mediating robust transduction and transgene expression throughout the brain. The technology can also induce targeted, potent epigenetic repression across brain tissues.
Delivering therapeutic payloads across the blood-brain barrier has long been a significant challenge in treating neurological disorders. Conventional therapies often struggle to reach sufficient concentrations in brain tissue, limiting their efficacy against CNS diseases.
"The blood-brain barrier presents one of the most significant obstacles in developing effective treatments for neurological diseases," said a Sangamo representative. "Our STAC-BBB technology has shown promising results in preclinical studies for overcoming this challenge."
Deal Structure and Development Responsibilities
Under the terms of the agreement, Lilly will initially license the capsid technology for one target, with options to expand to four additional targets. Each additional target would trigger further licensing fees for Sangamo.
Following the technology transfer, Lilly will assume full responsibility for all research, preclinical and clinical development activities. The pharmaceutical giant will also handle regulatory submissions and global commercialization of any resulting therapies.
While Lilly has not disclosed specific disease targets, the company indicated it plans to use the technology to deliver genomic medicines "to treat certain diseases of the central nervous system."
Financial Lifeline for Sangamo
The deal represents a critical financial lifeline for Sangamo, which has faced significant challenges in recent months. In November 2024, the biotech reported having only $39.2 million in cash, cash equivalents, and marketable securities—sufficient to fund operations only into the first quarter of 2025.
Sangamo's financial situation became more precarious in December 2024 when Pfizer terminated their partnership on the hemophilia gene therapy giroctocogene fitelparvovec, despite the candidate meeting its primary endpoint in Phase III trials. The termination becomes effective this month.
Lilly's Expanding Gene Therapy Portfolio
For Lilly, the Sangamo deal represents the latest in a series of strategic partnerships aimed at expanding its therapeutic capabilities. In February alone, the pharmaceutical company signed agreements with South Korea's OliX Pharmaceuticals for small interfering RNA therapeutics and Australia's AdvanCell for radiopharmaceutical applications.
The addition of Sangamo's blood-brain barrier penetrating technology complements Lilly's growing interest in genomic medicines and CNS therapeutics.
Market and Clinical Implications
The collaboration highlights the growing importance of delivery technologies in the advancement of gene therapies. While gene editing and gene therapy approaches have shown promise in treating various diseases, delivering these complex therapeutics to the appropriate tissues—particularly in the CNS—remains a significant hurdle.
Industry analysts note that successful delivery systems like STAC-BBB could dramatically expand the range of treatable neurological conditions using genomic medicines. Potential applications could include neurodegenerative diseases such as Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis (ALS), though Lilly has not confirmed specific targets.
Future Outlook
The partnership between Lilly and Sangamo represents a significant vote of confidence in the potential of STAC-BBB technology. For Sangamo, beyond the immediate financial benefits, the deal validates their platform technology and may attract additional partners.
For patients with CNS disorders, the collaboration offers hope that new, more effective treatments may be on the horizon. If successful, the technology could enable more precise targeting of disease mechanisms within the brain while potentially reducing systemic side effects.
As Lilly advances its development programs using the STAC-BBB technology, the scientific and medical communities will be watching closely to see which neurological conditions the company prioritizes and how effectively the delivery system performs in human clinical trials.
