The transformation of zinc-finger nucleases from an outdated also-ran to a gene-editing technology that could be at least the equal of trendy Crispr has been remarkable, and yesterday’s deal sees Biogen become the latest to buy into the technique’s leading exponent, Sangamo.
The $350m that has changed hands on signing puts the neurology-focused tie-up among the industry’s biggest deals struck without a single patient having been treated. Biogen already has form here, having given $1bn to Ionis under a 2018 preclinical CNS tie-up, while Sangamo has now received a combined $698m for assets that at the point of being partnered had never seen a human subject.
Biogen and Sangamo have long worked together, having in 2014 struck one of these preclinical alliances, focusing on sickle cell disease and beta-thalassaemia. That cell therapy asset is now in phase I/II trials, after Biogen spun it into the Bioverativ business now owned by Sanofi.
But it was Sangamo’s 2017 tie-up with Pfizer, covering haemophilia A, that marked the watershed for zinc-finger nucleases (Sangamo’s gene therapy gets Pfizer stamp of approval, May 11, 2017). This was also a watershed for Sangamo itself, marking the start of a 10-month period in which its stock surged 450% to peak at $26.35.
$9.21 per share
Perhaps such a precedent makes yesterday’s Biogen deal seem less impressive. Its $225m equity element is being done at just $9.21 per share, but then Sangamo has fallen considerably from its March 2018 peak; today the shares opened up 30%.
This should not detract from the fact that it represents a considerable bet by Biogen. The group’s focus will initially fall on three Sangamo assets to which it gains exclusive rights: ST-501 and ST-502, an anti-tau and α-synuclein gene therapy for Alzheimer’s and Parkinson’s diseases respectively, plus an undisclosed CNS asset.
The overall CNS focus of this alliance also seems unusual, given how many of the preclinical deals that have attracted the most up-front cash have centred on oncology. Notably, however, perhaps the most valuable preclinical CNS alliance also featured Biogen, which gave Ionis $375m in cash and bought an amazing $625m of equity under a 2018 tie-up covering a range of disorders.
|Selected deals signed at the preclinical stage|
|Project||Paying company||Source company||Deal date||Cash fee ($m)||Equity stake ($m)||Combined up-front ($m)|
|Neurological diseases||Biogen||Ionis||20 Apr 2018||375||625||1,000|
|RTA 404||Abbott||Reata||12 Dec 2011||400||0||400|
|ST-501, ST-502 + undisclosed||Biogen||Sangamo||27 Feb 2020||125||225||350|
|ASP0892||Astellas||Immunomic||9 Oct 2015||300||0||300|
|JTX-2011||Celgene||Jounce||19 Jul 2016||225||36||261|
|Undisclosed||Celgene||Forma||1 Apr 2014||225||0||225|
|ADU-S100||Novartis||Aduro||30 Mar 2015||200||25||225|
|Alzheimer's research||Abbvie||Alector||24 Oct 2017||205||0||205|
|Immuno-oncology||Celgene||Agios||17 May 2016||200||0||200|
|mRNA cancer vaccines||Merck & Co||Moderna||29 Jun 2016||200||0||200|
|Bispecific Mabs||Incyte||Merus||21 Dec 2016||120||80||200|
|KITE-037||Gilead||Sangamo||22 Feb 2018||150||50||200|
|Undisclosed||Baxalta||Symphogen||4 Jan 2016||175||0||175|
|Immuno-oncology||Celgene||Nurix||16 Sep 2015||150||17||167|
|XmAb14045||Novartis||Xencor||28 Jun 2016||150||0||150|
|Source: EvaluatePharma & company filings.|
With Biogen’s growing dependence on aducanumab, its focus on the CNS and increasing desire to spend big on business development are understandable.
But the other side of the equation is no less remarkable. Sangamo, which in the wake of the hype about Crispr gene editing looked like it was being left behind with its outdated zinc-finger technology, has now used precisely that technology to bring in $698m of cash – without using it to treat a single patient.
To date only two of its partnered gene therapy assets, in haemophilia A and beta-thalassaemia/sickle cell disease, have entered the clinic. A third, Gilead’s zinc-finger edited allogeneic anti-CD19 Car, KITE-037, should get there this year.
No doubt the Biogen-partnered projects will now be advanced quickly. A $350m bet will need clinical backing sooner rather than later.