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. The company was mum Feb. 28 on whether Biogen's involvement could change those timelines.

Preclinical data presented by Sangamo in 2019 demonstrated "significant reduction of tau expression in the nonhuman primate brain following administration of targeted ZFP-TFs," Sangamo's head of R&D, Adrian Woolfson, said during a Friday conference call. Last year, Sangamo showed that more than half of the ZFP-TFs tested reduced the total alpha-synuclein levels by greater than 50% in ex vivo cell culture system, Woolfson said.

Following news of the deal and Sangamo's earnings call highlighting the deal, company shares (NASDAQ:SGMO) climbed 28% to $8.53 on Feb. 28, despite a widespread market decline. Shares of Biogen (NASDAQ:BIIB) were more muted, falling 1.7% to $308.39 on Friday.

SVB Leerink analyst Marc Goodman called the collaboration a "creative transaction" giving Biogen a "new approach to develop products in neuroscience areas that the company knows very well." Despite liking such deals, which "deepen Biogen’s footprint in its core focused area," he said, "we look forward to the company adding some lower risk assets to the pipeline as well."

Under terms of the proposed agreement, Brisbane, Calif.-based 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 an anticipated closing of the transaction in the second quarter of 2020, comprises $125 million in the form of a license fee and $225 million in proceeds from the purchase by Biogen of about 24 million shares of Sangamo stock at a price of $9.21 per share.

The $2.37 billion in other development, regulatory and commercial milestone payments, includes up to $925 million in pre-approval milestones and up to $1.4 billion in first commercial sale and other sales-based milestone payments, Sangamo President and CEO Sandy Macrae said. Sangamo will also be eligible to receive tiered, high, single-digit to subteen double-digit royalties from Biogen on potential net commercial sales of products arising from the collaboration.

As the Sangamo deal takes off, 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 addition to aducanumab, Cambridge, Mass.-based Biogen continues to advance what its R&D chief and chief medical officer, Al Sandrock, called "a broad Alzheimer's disease portfolio," including a phase III study of the beta-amyloid antagonist BAN-2401; BIIB-080, a tau-targeted antisense oligonucleotide in phase I; BIIB-076, an anti-tau antibody in phase I; and gosuranemab, an anti-tau antibody in phase II. "As we continue to develop our Alzheimer's portfolio, we aim to expand into even earlier patient populations to potentially prevent the clinical onset of the disease," he said, during the company's latest earnings call, Jan. 30.

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