- In a deal potentially worth billions of dollars, Biogen and gene-editing company Sangamo Therapeutics are exploring whether the latter's technology can treat a range of neurological conditions, including Alzheimer's disease, by regulating DNA.
- Deal terms leave Sangamo responsible for early research activities, with costs split between the two biotechs. Biogen will then take control of development once the drugs are close to in-human testing. The big biotech agreed to pay Sangamo $350 million upfront, and lined up nearly $2.4 billion in various milestones.
- Once the deal closes, Biogen gains exclusive rights to three drugs and retains the ability to nominate up to nine additional undisclosed targets over a period of five years. Among the first three targets is a drug for diseases related to a protein called tau, such as Alzheimer's, a drug for diseases related to a protein called synuclein, such as Parkinson's disease, and a drug for an undisclosed neuromuscular disease.
The big bet on Sangamo's technology comes as Biogen is preparing to ask regulators to approve its experimental drug for Alzheimer's.
Though the company appears confident in the drug's chances, researchers and analysts remain torn about whether it is approvable — or even works as intended. Late-stage clinical results were mixed, and made more challenging to interpret because of the data analyses Biogen conducted. Optimistic sell-side analysts estimate the drug, known as aducanumab, has a 50% probability of success.
Without aducanumab, Wall Street doesn't see nearly as much value in Biogen's pipeline of neuroscience drugs, which are often viewed as high-risk bets given that brain drugs often fail in clinical testing. Notably, Biogen lost more than $20 billion in market valuation when it looked as though aducanumab wouldn't succeed in those late-stage studies.
Thursday's deal could therefore be interpreted as Biogen trying to hedge the uncertainties surrounding both its Alzheimer's drug and larger pipeline. At the same time, the collaboration furthers Biogen's commitment to develop drugs for neurological diseases, an area from which some of its peers have retreated in recent years.
Biogen's desire to explore the application of Sangamo's technology broadly, though, comes at a rich price for a deal involving candidates currently in preclinical testing. The $350 million upfront payment to Sangamo is broken up into a $125 million license fee and a $225 million purchase of new Sangamo stock. Biogen is buying approximately 24 million shares at $9.21 per share, according to a statement.
One of Sangamo's calling cards is its zinc finger protein technology. The company claims this technology can break double-stranded DNA at the site where genes are causing disease, opening it up for a corrective set of DNA to be introduced.
Sangamo's most advanced drugs target hemophilia, sickle cell disease and a rare disorder known as Fabry disease, among other illnesses. The California-based biotech also counts Pfizer, Sanofi and Takeda as partners.
In addition to milestones, Sangamo may also receive tiered, high single-digit to sub-teen double-digit royalties on net commercial sales from products that come from the collaboration.
Sangamo shares were up more than 30% Friday morning, trading at about $8.80 apiece. Biogen shares barely moved in after-hours trading Thursday, and were down slightly Friday.