Gilead Sciences has formed a broad alliance with Sangamo Therapeutics this morning, continuing an aggressive push into cellular immunotherapy that began late last year.
Gilead (NASDAQ: GILD) will pay Sangamo (NASDAQ: SGMO) $150 million up front in cash in the deal, through which Gilead will tap Sangamo’s gene editing techniques to try to develop a variety of next-generation cell therapies for cancer.
The wide-ranging alliance includes “10 or more” possible products, and up to $3.01 billion in downstream payments, or “biobucks,” for Sangamo should all of them hit a variety of milestones, the companies said in a statement. The alliance is formed specifically with Kite Pharma, now a division of Gilead.
The alliance continues Gilead’s dealmaking spree in CAR-T, a method of cancer treatment in which a patient’s immune cells are removed, modified, and re-infused into the body to find and kill cancer. Gilead’s run began when it paid nearly $12 billion for Kite in August, just months before the FDA approved the non-Hodgkin lymphoma cell therapy axicabtagene ciloleucel (Yescarta) Kite had developed. In December, Gilead followed that up by paying $567 million for privately held Cell Design Labs, working on next-gen CAR-T techniques, in December.
Gilead’s push is part of a growing battle with Celgene (NASDAQ: CELG) and Novartis (NYSE: NVS), which have all thrown large amounts of cash into the CAR-T field. Over the past year, Novartis won FDA approval of a separate CAR-T therapy, and Celgene bought Juno Therapeutics, another CAR-T developer. Celgene is also aligned with Bluebird Bio (NASDAQ: BLUE) on a CAR-T treatment for multiple myeloma.
The race is now on between these companies to prove CAR-T can succeed commercially and broaden its reach. Currently, CAR-T is available for patients with just a few types of blood cancers who are running out of options. But the hope is over time the technology will improve, work in more common solid tumors, and lead to fewer dangerous side effects. Cell Design Labs, for instance, was engineering cells meant to be better able to recognize cancer, and in turn, spare healthy tissue, which Gilead believes could lead to new therapies for a broader range of cancers.
Gene editing is seen as a tool to help with this effort. Since 2015, two different CAR-T developers have tapped into CRISPR-Cas9, a different, newer technology than Sangamo’s. Novartis cut a 2015 deal with CRISPR drug developer Intellia Therapeutics (NASDAQ: NTLA). That year, Juno, before it was acquired by Celgene, formed a similar pact with Editas Medicine (NASDAQ: EDIT).
Gilead has chosen a different gene editing technology, Sangamo’s zinc finger nucleases, for the same purpose. In a statement, Gilead CEO John Milligan called zinc fingers, the first gene editing system to be tested in humans, “the optimal gene editing platform” and that the technology could help develop therapies “with potentially improved safety, efficacy, and efficiency.” Gilead hopes to develop both next-generation “autologous” treatments, which use a patient’s own cells, and “allogeneic” ones, which use T cells drawn from the blood of any donor. The two FDA-approved CAR-T therapies are autologous and involve a multi-week process to produce. Allogeneic treatments, either from healthy donor cells or renewable stem cells, Gilead said, could be carried out directly within a cancer center and take far less time. They should also be less costly to produce.
Sangamo shares climbed 10 percent, to $24.45 apiece, in pre-market trading on Thursday.