On March 17, 2023 Novartis Institutes for BioMedical Research, Inc. ("Novartis") notified Sangamo Therapeutics, Inc. ("Sangamo") of its termination for convenience, effective June 11, 2023 (the "Novartis Termination Date"), of the Collaboration and License Agreement (the "Novartis Agreement") by and between Novartis and Sangamo dated July 27, 2020, pursuant to which Novartis and Sangamo were engaged in programs to research gene regulation therapies to treat three neurodevelopment disorders (Filing, Sangamo Therapeutics, MAR 17, 2023, View Source [SID1234628991]). Novartis has indicated to Sangamo that the termination relates to a recent strategic review. 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 pre-clinical pipeline of therapies to treat patients suffering from central nervous system ("CNS") disorders.
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Under the Novartis Agreement, Sangamo granted to Novartis an exclusive, royalty bearing and worldwide license, under its relevant patents and know-how, to develop, manufacture and commercialize certain of its zinc finger protein transcription factors ("ZFP-TFs"), also known as zinc finger transcriptional regulators ("ZF-TRs"), targeted to three undisclosed genes that are associated with neurodevelopmental disorders, including autism spectrum disorder and intellectual disability. Over the three-year collaboration period, which was scheduled to expire under the Novartis Agreement on July 27, 2023 in conjunction with Sangamo’s planned delivery to Novartis of ZFP-TFs for each of the three programs, Sangamo has performed early research activities for each gene target and manufactured the ZPF-TFs required for such research, the costs of which have been fully reimbursed by Novartis. Subject to certain exceptions, Sangamo has been prohibited from developing, manufacturing or commercializing any therapy targeting any of the three genes that were the subject of the collaboration, and this prohibition will terminate as of the Novartis Termination Date.
Under the Novartis Agreement, Novartis paid Sangamo a $75 million upfront license fee and Sangamo was eligible to earn from Novartis up to $720 million in milestone payments as well as tiered high single-digit to sub-teen double-digit royalties on sales of products arising from the collaboration. As of the Novartis Termination Date, the Novartis Agreement will be terminated in its entirety and Sangamo will not be entitled to any milestone payments or royalties from Novartis. In addition, as of the Novartis Termination Date, Novartis will have no further obligations to develop or to reimburse the costs of any of the neurodevelopmental disorder programs under the Novartis Agreement.
Termination of Collaboration and License Agreement with Biogen
On March 17, 2023, Biogen MA, Inc. and its affiliate, Biogen International GmbH (together, "Biogen") notified Sangamo of its termination for convenience, effective June 15, 2023 (the "Biogen Termination Date"), of the Collaboration and License Agreement (the "Biogen Agreement") by and between Biogen and Sangamo dated February 26, 2020, pursuant to which Biogen and Sangamo were engaged in programs to research and develop gene regulation therapies to treat neurological diseases. Biogen has indicated to Sangamo that the termination relates to a recent strategic review. Sangamo will investigate alternative options to advance the neurological disease programs that were subject to the Biogen Agreement, including potential development internally or with a collaboration partner, dependent on the outcome of a broader strategic review of its pre-clinical pipeline of therapies to treat patients suffering from central nervous system ("CNS") disorders.
Under the Biogen Agreement, Sangamo granted to Biogen an exclusive, royalty bearing and worldwide license, under its relevant patents and know-how, to develop, manufacture and commercialize certain zinc finger protein ("ZFP") and/or AAV-based products directed to up to 12 neurological disease gene targets selected by Biogen. Biogen selected four of these: Sangamo’s ST-501 product candidate to treat tauopathies, Sangamo’s ST-502 product candidate to treat synucleinopathies including Parkinson’s disease, a third product candidate targeting Type 1 Myotonic Dystrophy (DM1), a neuromuscular disease, and a fourth undisclosed neurological disease gene target. For each gene target selected by Biogen, Sangamo performed early research activities, costs for which were shared by the companies, aimed at the development of the combination of proprietary CNS delivery vectors and ZFP-TFs (or potential other ZFP products) targeting therapeutically relevant genes. For three of the four product candidates, Sangamo had achieved predetermined proof of mechanism objectives and had advanced research activities to late-stage preclinical testing with lead candidates. Sangamo’s research activities for all targets were scheduled to conclude no later than April 2027. Subject to certain exceptions, Sangamo has been prohibited from developing, manufacturing or commercializing any therapy directed to the targets selected by Biogen, and this prohibition will terminate as of the Biogen Termination Date.
Upon effectiveness of the Biogen Agreement, Biogen paid Sangamo a $125 million upfront license fee. Concurrently with the execution of the Biogen Agreement, Biogen and Sangamo entered into a stock purchase agreement pursuant to which Biogen purchased 24,420,157 shares of Sangamo’s common stock for an aggregate purchase price of $225 million. Sangamo was eligible to earn from Biogen up to $2.37 billion in milestone payments, assuming selection by Biogen of all 12 collaboration targets allowed under the Biogen Agreement, as well as tiered high single-digit to sub-teen royalties on sales of products arising from the collaboration. As of the Biogen Termination Date, the Biogen Agreement will be terminated in its
entirety and Sangamo will not be entitled to any milestone payments or royalties from Biogen. In addition, as of the Biogen Termination Date, Biogen will have no further obligations to develop or to reimburse the costs of any of the neurological disease programs under the Biogen Agreement.
As previously disclosed in Sangamo’s Annual Report on Form 10-K for the year ended December 31, 2022 (the "Form 10-K"), Sangamo believes that its available cash, cash equivalents, and marketable securities will be adequate to fund its operations for at least 12 months from the date of its consolidated financial statements included in the Form 10-K, and does not expect the termination of the Novartis Agreement and Biogen Agreement to impact this estimate.