Meet Gilead and Sangamo’s Next Big Cancer Collaboration

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Sangamo Therapeutics Inc. (NASDAQ: SGMO) shares saw a solid gain early Thursday after the company announced that it had entered into a worldwide partnership with a subsidiary of Gilead Sciences Inc. (NASDAQ: GILD). Specifically, Kite Pharma is collaborating with Sangamo’s zinc finger nuclease (ZFN) technology platform for the development of next-generation ex vivo cell therapies.

Under the terms of the agreement, Sangamo will receive an upfront payment of $150 million and is eligible to receive up to $3.01 billion in potential payments, aggregated across 10 or more products utilizing Sangamo’s technology, based on the achievement of certain research, development, regulatory and successful commercialization milestones.

Sangamo also would receive tiered royalties on sales of potential future products resulting from the collaboration. Kite will be responsible for all development, manufacturing and commercialization of products under the collaboration, and it will be responsible for agreed upon expenses incurred by Sangamo.

Essentially, Kite will use Sangamo’s ZFN technology to modify genes to develop next-generation cell therapies for autologous and allogeneic use in treating different cancers. Allogeneic cell therapies from healthy donor cells or from renewable stem cells would provide a potential treatment option that can be accessed directly within the oncology infusion center, thus reducing the time to infusion for patients.

John F. Milligan, PhD, Gilead’s president and CEO, commented:

The emergence of gene editing as a tool to edit immune cells holds promise in the development of therapies with potentially improved safety, efficacy and efficiency. We believe Sangamo’s zinc finger nucleases provide the optimal gene editing platform, and we look forward to working with Sangamo to accelerate our efforts to develop next-generation autologous cell therapies, as well as allogeneic treatments that can be accessed more conveniently in the hospital setting for people living with cancer.

Shares of Sangamo were last seen up about 17% at $25.90 on Thursday, with a consensus analyst price target of $19.80 and a 52-week trading range of $3.65 to $27.30.

Gilead traded down 0.7% at $80.14 a share, in a 52-week range of $64.30 to $89.54 and with a consensus price target of $88.77.