Bullish indicating open at $55-$60, IPO prices at $37
RICHMOND, Calif. - Sangamo Therapeutics, Inc. (NASDAQ:SGMO), a genomic medicine company with a market capitalization of $140 million, has entered into a significant licensing agreement with pharmaceutical giant Eli Lilly and Company (NYSE:LLY), granting Lilly exclusive rights to utilize Sangamo’s proprietary neurotropic adeno-associated virus (AAV) capsid, STAC-BBB. According to InvestingPro analysis, Sangamo’s stock is currently trading below its Fair Value, making this deal particularly significant for investors. The STAC-BBB capsid is designed to penetrate the blood-brain barrier and deliver gene therapies to the central nervous system.
The deal, announced today, includes an $18 million upfront license fee paid to Sangamo, with the potential for the California-based biotech to receive up to $1.4 billion in additional fees and milestone payments for five potential disease targets. This agreement comes at a crucial time, as InvestingPro data shows the company has been experiencing significant cash burn, with revenue declining by 67% in the last twelve months. If successful, Sangamo will also earn tiered royalties on net sales of any resulting products, with some reductions specified in the agreement.
Under the terms of the partnership, Sangamo will complete a technology transfer of the STAC-BBB capsid to Lilly, which will then take on the responsibility for research, development, regulatory interactions, manufacturing, and commercialization of any gene therapy products that arise from this collaboration.
Sangamo’s CEO, Sandy Macrae, expressed confidence in the STAC-BBB capsid’s potential to address challenges associated with delivering therapies to the central nervous system. This licensing agreement with Lilly marks the third of its kind since Sangamo unveiled STAC-BBB in March 2024, highlighting the industry’s interest in the company’s delivery technology.
The collaboration aims to develop treatments for neurological diseases that currently have significant unmet medical needs. However, the success of this partnership and the development of the gene therapies will depend on future research outcomes, regulatory approvals, and market acceptance.
This agreement is based on a press release statement and is a forward-looking statement subject to various risks and uncertainties. There can be no assurance that Sangamo will receive the full amount of the potential fees and milestone payments or that the products developed under this agreement will obtain regulatory approval. InvestingPro analysis reveals that Sangamo currently operates with weak financial health metrics and negative gross profit margins, highlighting the importance of successful execution of this partnership. Investors can access the comprehensive Pro Research Report, available for over 1,400 US stocks, for detailed analysis of Sangamo’s financial position and growth prospects.
In other recent news, Sangamo Therapeutics reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of -0.11, which narrowly missed analyst expectations of -0.10. The company also reported revenue of $7.55 million, falling short of the anticipated $10.32 million. Despite these figures, Sangamo has made significant strides in reducing operating expenses by nearly 50% year-over-year. In terms of strategic developments, the company has secured an FDA pathway for accelerated approval in its Fabry disease program and raised over $100 million in 2024 to bolster its financial stability.
Truist Securities maintained a Buy rating on Sangamo, citing the company’s progress in developing treatments for chronic neuropathic pain and prion disease, with potential partnerships on the horizon. Meanwhile, Jefferies adjusted its price target for Sangamo to $2.00 from $3.00, while also maintaining a Buy rating. The adjustment reflects Sangamo’s ongoing negotiations for a business development partnership related to the Fabry disease program and its efforts to extend its cash runway.
Sangamo is in advanced talks to finalize a third STAC-BBB deal, which could provide additional financial support. The company expects to release data from its neuro pipeline, including iSFN and prion programs, by the fourth quarter of 2026. These developments highlight Sangamo’s strategic focus on securing partnerships and financial resources to advance its pipeline and address profitability challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.