A large biotech is partnering with a firm developing cell and gene therapies on treatments for neurological diseases like Alzheimers and Parkinsons.

Cambridge, Massachusetts-based Biogen said Thursday afternoon after markets closed that it had partnered with Brisbane, California-based Sangamo Therapeutics in a deal that could be worth up to $2.7 billion. The partnership will initially focus on two preclinical Sangamo gene therapy candidates ST-501 for tauopathies such as Alzheimers and ST-502 for synucleinopathies like Parkinsons disease, plus an undisclosed neuromuscular target. It also includes exclusive rights for up to nine other undisclosed neurological targets.

Biogen will pay Sangamo $350 million upfront, which includes a license fee and equity investment, while Sangamo will be eligible for up to $2.37 billion in milestone payments, plus royalties.

Shares of Sangamo were up more than 28% on the Nasdaq after markets opened Friday. The company had also announced its fourth quarter and full year 2019 financial results. Biogens shares were down 2.6%.

Sangamo had reached out to multiple companies in a competitive process. While declining to say how many companies the biotech had spoken to, Sangamo head of corporate strategy Stephane Boissel said in a phone interview that it had put together multiple term sheets.

Its a combination of economics, but also the expertise of that partner in that particular field, Boissel said, referring to why the company had chosen Biogen. Biogen, in the pharma world, is probably the best franchise when it comes to neurology.

Adrian Woolfson, Sangamos executive vice president for research and development, said in the same call that it was also because of an appreciation for Biogens enthusiasm and energy.

I think its fair to say we had a very good chemistry with them at a personal level when we went to meet with them in Boston, and we seemed to get along very well, Woolfson said.

Sangamo has existing partnerships with a number of other firms, including Pfizer and Gilead Sciences.

Biogens moves into Alzheimers disease have not been without controversy. The company plans to file for Food and Drug Administration approval of aducanumab, a monoclonal antibody targeting the amyloid beta protein that has long dominated Alzheimers research. The company initially halted the Phase III development program for the drug when it was predicted to fail, but revived it when a post-hoc analysis indicated potential efficacy. Investors have remained skeptical.

Still, that did not come up in the minds of Sangamos executives, Boissel said. While emphasizing that he could not compare the two companies approaches, Woolfson added that gene therapies are potentially better ways to address neurological diseases like Alzheimers because they can switch off genes completely rather than being limited to taking out specific proteins, as monoclonal antibodies are.

ST-501 targets tau, another protein that has been researched as a potential therapeutic target in Alzheimers. ST-501 and ST-502 use adeno-associated viral vectors to deliver zinc finger protein transcription factors (ZFP-TFs), a form of gene therapy that Sangamo said in its quarterly earnings presentation is ideally suited to neurological disorders due to its ability to up- or down-regulate gene expression.

Boissel did not disclose specific timelines for ST-501 and ST-502, but noted that the next steps in their development will be preclinical studies to enable them to enter the clinic.

Photo: John Tlumacki, The Boston Globe, via Getty Images

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Biogen teams up with Sangamo in gene therapy deal worth up to $2.7B - MedCity News