Novartis Pays $75M to Get Hands on Sangamo’s Zinc Fingers for Drug R&D

Xconomy San Francisco — 

Another biopharma has signed up to use Sangamo Therapeutics’ gene editing technology to develop therapies that can address disease by heightening or depressing a gene’s activity level.

Sangamo on Thursday announced that Novartis (NYSE: NVS) had agreed to shell out $75 million up front to leverage the biotech’s genome regulation technology to treat certain neurodevelopmental conditions. Brisbane, CA-based Sangamo could earn up to $720 million in milestone payments, plus royalties on any products that emerge from the deal.

The Sangamo (NASDAQ: SGMO) tech uses proteins known as zinc finger nucleases that bind DNA to edit genes. Novartis says it wants to use Sangamo’s ability to regulate such genes by delivering zinc finger protein transcription factors (ZPF-TFs), which are designed to dial up or down the expression of certain genes, to enhance the expression of certain genes associated with disorders that disrupt the growth and development of the brain and central nervous system. The three-year deal gets the Swiss biopharma exclusive rights to transcription factors engineered by Sangamo scientists to target three undisclosed genes associated with such disorders.

The companies wouldn’t disclose the targets included in the alliance, but said the collaboration is focused on genes that have been linked to autism spectrum disorder and intellectual disability.

Under the terms of the deal, Sangamo will conduct early research activities for each gene target and make the ZPF-TFs required for that research, work for which Novartis will cover the costs. Novartis will handle the therapies’ development and commercialization. Of the potential additional payments for which Sangamo is eligible, up to $420 million are tied to the therapies’ development and up to $300 million to commercial milestones. The alliance bars Sangamo from targeting any of the three genes that are the subject of the collaboration with its own therapies.

Novartis also gets the option to license certain Sangamo adeno-associated viruses—which the biotech uses to deliver its investigational genome regulating therapies—to use in the development of therapies involved in the collaboration. The biopharma company may extend the agreement by up to two years, according to a Sangamo filing.

The idea behind the potential one-time treatments is to address the root cause of the conditions rather than the health problems they cause. It’s not yet unclear how many people could be helped by the therapies that the companies plan to develop.

Many genes have been associated with intellectual disability, which is the most common type of developmental disability. But many such conditions are believed to stem from a complex mix of factors.

Though research shows changes in more than 1,000 genes have been reported to be associated with autism spectrum disorder, for example, for many such mutations it’s unclear how much the changes contribute to the cause of the condition, according to the National Institutes of Health. Non-genetic factors are believed to contribute significantly to the risk of ASD development. But for 2 percent to 4 percent of people with the disorder, certain rare mutations are thought to be its primary cause.

Mutations to the ADNP gene, for example, cause a set of signs and symptoms that include autism and intellectual disability. Typically, only one gene is involved in cases of ASD believed to be caused by a certain mutation, according to the NIH.

“There is a lot of exciting research ahead, and it is too early to talk about specific indications and number of patients these potential therapies can reach,” Sangamo’s head of business development, Melita Sun Jung, told Xconomy via email.

The pact with Novartis is the second major deal the California company has inked this year. In February Sangamo signed a deal with Cambridge, MA-based neuroscience drug developer Biogen (NASDAQ: BIIB) that earned it $350 million in cash and equity up front. In exchange, Biogen got the rights to investigational genome regulating treatments for neurodegenerative conditions including Alzheimer’s and Parkinson’s diseases.