Sangamo Therapeutics Files for Chapter 11 Bankruptcy; Eli Lilly and Astellas Positioned as Lead Bidders for Key Assets
Key Insights
Sangamo Therapeutics, a three-decade-old gene editing pioneer, filed for Chapter 11 bankruptcy with $115 million in debt and just $5.5 million in cash remaining.
Eli Lilly has offered $50 million for Sangamo's core gene editing platforms and an experimental prion disease (search) treatment, while Astellas bid up to $50 million for a Fabry disease (search) gene therapy nearing regulatory approval.
The company's partnership model collapsed after Novartis, Biogen, and Pfizer terminated major collaborations, causing revenues to plummet from $176.2 million in 2023 to $39.6 million in 2025.
Sangamo Therapeutics, a Richmond, California-based biotechnology company that spent three decades pioneering zinc finger gene editing technology, filed for voluntary Chapter 11 bankruptcy protection on Tuesday in the U.S. Bankruptcy Court for the District of Delaware. The filing comes as the company, which never brought a product to market, held just $5.5 million in cash against $115 million in liabilities.
Even as Sangamo enters court protection, two pharmaceutical heavyweights have already positioned themselves to acquire its most valuable assets. Eli Lilly and Japanese drugmaker Astellas Pharma have agreed to serve as "stalking horse bidders," setting a floor for a court-supervised auction with combined bids worth up to $100 million.
The Asset Sale: What Lilly and Astellas Are Buying
Eli Lilly, through a subsidiary called Merope Acquisition Sub LLC, has offered $50 million for Sangamo's core gene editing technology platforms. These include tools designed to target and modify genes in the brain and nervous system, along with an experimental treatment for prion disease (search), a rare and fatal neurological condition. Lilly already held a licensing deal with Sangamo for capsid delivery technology signed in April 2025; the new acquisition agreement broadens that relationship significantly.
Astellas, through its Delaware subsidiary Gene Therapies Inc., has committed $25 million upfront, with an additional $25 million contingent on the Fabry disease (search) gene therapy clearing specific regulatory or commercial milestones. Fabry disease is a rare inherited metabolic disorder that causes progressive damage to the heart, kidneys, and nervous system. The therapy is reportedly nearing regulatory approval.
Both deals remain subject to higher bids and court approval, with the auction scheduled for next month in Delaware.
The Collapse of a Pioneer
Sangamo went public in 2000 and for most of its history relied on collaboration revenue from larger pharmaceutical partners. That model unraveled catastrophically.
According to a court declaration from Scott B. Willoughby, Sangamo's chief legal officer, Novartis and Biogen both terminated their agreements in June 2023, sending revenues plummeting from $176.2 million that year to $57.8 million in 2024. In December 2024, Pfizer terminated its hemophilia A (search) gene therapy partnership — a deal Sangamo had counted on for up to $220 million in milestone payments — sending the company's stock down 50% and effectively shutting it out of equity markets.
By 2025, revenues had fallen further to $39.6 million, representing a drop of more than 77% from 2023 levels. The company sustained net losses exceeding $478 million over the three-year period. Between 2025 and early 2026, Sangamo raised approximately $100 million through stock sales, but it was insufficient to stave off bankruptcy.
Creditors and Workforce Impact
Sangamo holds no secured debt. Its $115 million in liabilities includes trade payables, lease obligations, and unpaid employee compensation. Among the debts are $9.4 million in bonuses for 2024 and 2025 that were accrued but never paid. The largest single creditor is Brammer Bio LLC, a Thermo Fisher subsidiary based in Cambridge, Massachusetts, owed $8.76 million for contract manufacturing services. Boston Children's Hospital is listed as a creditor at $225,968.
The company cut 51 employees last week in connection with the bankruptcy filing. Seventy-seven employees remain, specifically selected by Lilly and Astellas for the asset purchases. Sangamo's restructuring banker is Raymond James, and its debtor-in-possession financing — a $30 million loan at 12% interest from Northridge ATM LLC — must be repaid by December 30.
The bankruptcy marks the end of an era for one of gene editing's earliest pioneers, a company that helped establish the scientific foundations of zinc finger technology but ultimately could not translate that promise into a sustainable commercial enterprise.