Six years ago, Sangamo BioSciences Inc. licensed its zinc finger protein technology to Edwards Lifesciences Corp. for use in an angiogenesis program. Monday Sangamo said it is acquiring rights to that same angiogenesis program for continued development in ischemic diseases.
The companies began collaborating in 2000 under a license agreement that gave rights to DNA-binding protein technology to Edwards, a medical device firm that was making its first foray into therapeutics. By acquiring Edwards' ZFP portfolio, Sangamo brings together the VEGF-ZFP candidates from both companies under a single development program and better positions the program for future parting activities.
Under the terms of the acquisition, Edwards agreed to transfer all assets relating to zinc finger protein (ZFP) activation of the vascular endothelial growth factor (VEGF) gene in exchange for 1 million shares of Sangamo stock. That stock "represents 100 percent of the up-front cash," Edward Lanphier, founder, president and CEO of Richmond, Calif.-based Sangamo, said during a conference call, which allows Sangamo to conserve its cash "to fund the most promising clinical programs."
Sangamo's stock (NASDAQ:SGMO) closed at $7.56 Monday, up 11 cents.
The deal also resolves a disagreement between the firms regarding the scope of the ZFP license and rights to products in development, an outstanding issue "that could have been a distraction," Lanphier said.
For Sangamo, he added, the deal "could not have come at a better time."
Pharma firms are placing more value on technology platforms than previously, and owning all the rights to the ZFP platform makes Sangamo a much more attractive partner, Lanphier said.
From Edwards' perspective, the transaction provides a "focused, coordinated development of our respective ZFP therapeutic programs," said Don Bobo, vice president and general manager of Edwards, adding that the Irvine, Calif.-based firm is able to "retain a significant economic interest in the success of Sangamo."
In addition to the 1 million shares up front, Edwards is entitled to royalties if Sangamo - or a partner of Sangamo - reaches the market with a VEGF-ZFP product. Royalties would be paid at a rate of either 5 percent of net sales or 25 percent of royalty payments received by Sangamo by a sublicense, whichever is greater. Royalties will have a yearly cap of $20 million and an aggregate cap at $100 million.
Upon completion of the transaction, expected to occur by the end of the year, Sangamo's pipeline will include two clinical-stage programs and one late preclinical program from Edwards' VEGF-ZFP portfolio. Among those is EW-A-401, a drug based on the VEGF-ZFP transcription factor that has completed Phase I testing in patients with critical limb ischemia.
Results from one Phase I trial showed "quite encouraging" results, Bobo said, including "anecdotal improvements in amputation rates and wound healing and a very interesting and repeated observation involving mobilization of peripheral and bone marrow stem cells."
EW-A-401 virtually is identical to Sangamo's VEGF-ZFP candidate, SB-509, an injectable formulation of plasmid DNA that encodes a zinc finger DNA-binding protein transcription factor that is designed to up-regulate the VEGF-A gene. SB-509 recently began a 100-patient Phase II study in diabetic neuropathy, which is being funded in part by the Juvenile Diabetes Research Foundation.
Lanphier said an analysis of Sangamo's pipeline is expected to determine whether the company will proceed with both compounds separately or choose one to use across all indications.
Pending successful development, the first VEGF-ZFP product could reach the market as early as 2012.
Sangamo is using its ZFP platform to develop therapeutics against a number of diseases, including genetic disorders, and also is working on a three-year research collaboration with Dow AgroSciences LLC to use the zinc finger DNA-binding protein technology for developing products in plants and plant cultures. The deal with Indianapolis-based Dow, signed in October 2005, called for Sangamo to receive up to $27.5 million in up-front, investment, research funding and milestones, plus the chance to receive up to $25.3 more if the product goes beyond the original three-year term. (See BioWorld Today, Oct. 6, 2005.)
Sangamo reported a net loss of $2.8 million, or 8 cents per share, for the third quarter. As of Sept. 30, the company had cash, cash equivalents and investments totaling $57 million.