Launching a broad new front in its long-running battle against dementia and other neurological diseases, Biogen Inc. has moved to license multiple Sangamo Therapeutics Inc. programs for $350 million up front plus up to $2.37 billion in development, regulatory and commercial milestone payments. The deal is initially focused on development of ST-501 for tauopathies including Alzheimer’s disease (AD), ST-502 for synucleinopathies including Parkinson’s disease and an undisclosed neuromuscular target. It also includes exclusive rights for nine additional undisclosed neurological targets that Biogen can elect over five years.

The collaboration is built around Sangamo’s genome regulation technology, zinc finger protein transcription factors (ZFP-TFs), delivered with adeno-associated virus vectors. It functions at the DNA level to selectively repress or activate the expression of specific genes. ST-501 is focused on suppressing tau mRNA/protein while ST-502 is designed to suppress alpha-synuclein. As of December 2019, INDs were planned for both candidates, with submission planned in 2021 for ST-501 and in 2022 for ST-502, according to Cortellis. However, Biogen's involvement could change those timelines.

Under terms of the deal, Sangamo will perform early research activities, the costs of which will be shared. The aim will be to develop the combination of CNS delivery vectors and ZFP-TFs targeting therapeutically relevant genes, the companies said. After that, Biogen will pick up the costs for the IND-enabling studies, clinical development, regulatory interactions and global commercialization, if warranted.

The $350 million up-front payment due to Sangamo upon closing of the transaction, which remains subject to antitrust review, is comprised of $125 million in the form of a license fee and $225 million from the sale of new Sangamo stock (NASDAQ:SGMO) at $9.21 per share. Publicly traded shares of Sangamo fell 3.3% on Feb. 27 to close at $6.66 amid a widespread market decline.

Shares of Biogen (NASDAQ:BIIB) fell 17.4% to $310.08 on Thursday. Investors in Biogen continue to await its submission of a regulatory application for the beta-amyloid targeting candidate aducanumab and an FDA decision on the experimental AD therapy to follow.

In February, a high-profile test of Roche Holding AG's gantenerumab and Eli Lilly and Co.'s solanezumab in people with autosomal dominant AD, a rare inherited form of the disease, found that neither drug significantly slowed rates of cognitive decline vs. placebo.

Further details of Biogen’s new deal with Sangamo will be discussed Friday, Feb. 28, during a Sangamo-hosted conference call starting at 8 a.m. ET.