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Last week proved to be a challenging one for Sangamo Therapeutics. The gene-based therapy biotech company recently announced that it had suffered the loss of two major partners in a short spell.
Both Biogen and Novartis terminated their partnerships with Sangamo, collectively valued in the billions of dollars, dealing a significant blow to the biotech’s pipeline and future potential.
The abrupt and consecutive nature of these departures presents a challenging obstacle for the California-based biotech firm, which will have to reevaluate its strategy moving forward.
In a dream-shattering move, the Novartis Institutes for BioMedical Research was the first to pull the plug on its collaborative deal worth nearly a billion with Sangamo. The titan Swiss drug maker notified Sangamo of this decision on March 17, essentially terminating the global collaboration agreement that both companies had signed in 2020.
The original agreement saw Novartis shell out $75 million upfront. In addition, the Swiss pharma company would also commit to potential milestones of up to $720 million to utilize Sangamo’s zinc finger protein transcription factors (ZFP-TFs) on three genes linked to neurodevelopmental conditions — most notably intellectual disability and autism spectrum disorder.
Novartis told Sangamo Therapeutics that the termination will take effect on June 11, 2023, while indicating that the move is linked to a recent strategic review the company carried out. This includes reviews of its partnerships and drug pricing, including one of its priciest medications approved by the FDA.
The agreement termination statement read in part:
“Sangamo will investigate alternative options to advance the neurodevelopmental disorder programs that were subject to the Novartis Agreement, including potential development internally or with a collaboration partner, dependent on the outcome of a broader strategic review of its preclinical pipeline of therapies to treat patients suffering from central nervous system disorders.”
The deal was centered mainly on Novartis leveraging Sangamo Therapeutics’ exclusive genome technologies based on zinc finger protein transcription factors to research and develop hyper-targeted therapies for a trio of neurodegenerative disorders. More specifically, Novartis focused the agreement on developing ZFP-TFs-driven treatments for intellectual disability, autism spectrum disorder, and other conditions related to neurologic development.
The collaborative agreement between Sangamo and Novartis, which involved the delivery of ZFP-TFs for three programs, was set to conclude in July. However, Novartis declined to accept the delivery, prompting Sangamo to reevaluate its options.
Sangamo Therapeutics must now decide whether to pursue a new partnership or continue to develop the programs independently based on the results of its strategic review of preclinical therapies designed to address central nervous system disorders.
The California-based biotech firm is not the only Novartis collaborator to face the same fate. The Switzerland-based drug conglomerate informed Sangamo that the move to walk away from the deal has to do with the company’s recent sweeping strategic review.
Novartis has already severed its ties with at least two strategic collaborators, largely thanks to the same review. In late February, the company discontinued its plans with Intellia Therapeutics to develop an ex vivo sickle cell program. Novartis dropped Pliant Therapeutics’ nonalcoholic steatohepatitis asset (NASH) program a day later.
As fate would have it, Sangamo was prime to receive unfavorable news of its lucrative partnerships in March, the first being the termination of its collaboration with Novartis.
However, before Sangamo could announce the bad news to its investors, it received another setback: Biogen informed Sangamo that it would sever their collaborative agreement in June.
As reported by Healthcare Weekly Magazine, Biogen and Sangamo Therapeutics entered into the collaborative partnership in 2020 with a hefty upfront payment of $125 million and a commitment of up to $2.37 billion in milestones to work on as many as 12 neurological disease gene targets.
Upon entering their agreement, Biogen and Sangamo announced a comprehensive global licensing collaboration to develop and commercialize several drugs. The so-called Big Biotech collaboration was geared towards developing ST-502 for synucleinopathies, including Parkinson’s disease, and ST-501 for tauopathies like Alzheimer’s disease.
In addition, Sangamo and Biogen agreed to collaborate on several undisclosed therapy targets, including a neuromuscular target, as well as up to nine more neurological disease targets. These therapies would utilize Sangamo’s proprietary zinc finger protein (ZFP) technology, delivered through adeno-associated virus (AAV), to adjust the expression of crucial genes involved in various neurological disorders.
The two companies split the costs, and Sangamo successfully achieved proof-of-mechanism objectives for three candidates. Unfortunately, Biogen has decided not to continue with the collaboration, but the Cambridge, Massachusetts-based biotech company is not new to controversy.
As with the case of Novartis, Biogen has communicated to Sangamo that the cessation of their collaboration is due to a strategic review. Sangamo Therapeutics will contemplate its subsequent actions as part of its comprehensive assessment of its preclinical pipeline.
Sangamo’s pipeline is being evaluated in the context of its possible cash flow challenges. The company withdrew its fundraising plans in early March after evaluating the prevailing market conditions. Sangamo anticipates its existing cash reserves will keep the company afloat for at least 12 months.
The shares of the Brisbane, CA-based biotech company plummeted 10% to hit below $1.82 before the markets opened a day after the termination announcements. It currently trades at under $1.7 a share, but things are poised to improve as Sangamo has announced a series of positive clinical trial results — most recently for Phase 1/2 STAAR Study in Fabry Disease and gene therapy for hemophilia A.
Sangamo Therapeutics is a biopharmaceutical company in the clinical stage that boasts a strong portfolio of genomic medicines. Through innovative science, including our in-house zinc finger genome engineering technology and manufacturing capabilities, Sangamo strives to develop novel genomic therapies for patients facing ailments for which current treatment options are insufficient or non-existent.