Sangamo BioSciences signs definitive agreement to buy Ceregene

Sangamo BioSciences, Inc. (Nasdaq: SGMO) announced that it signed a definitive agreement to acquire Ceregene, Inc., a privately held biotechnology company focused on developing adeno-associated virus (AAV) gene therapies. Sangamo will host a teleconference at 8:30 am ET tomorrow, Tuesday, August 27, 2013, to discuss the acquisition and provide a general business overview.

"Ceregene is a leader in development and manufacturing of AAV-based therapies with significant clinical development experience," said Edward Lanphier, Sangamo's president and CEO. "Since their inception in 2001, the company has safely treated over 115 subjects in four clinical trials. Sangamo has acquired all of Ceregene's AAV assets including CERE-110, AAV delivery of nerve growth factor (NGF) to the brain for the treatment of Alzheimer's disease. CERE-110 is being evaluated in a fully enrolled and fully funded Phase 2 clinical trial. In addition to the AAV platform, the assets also include one of the world's largest databases of AAV GMP manufacturing know-how, toxicology data, and safety data from their human clinical trials, which will be an invaluable resource as we advance our ZFP Therapeutics."

Under the terms of the definitive agreement Sangamo will issue to the stockholders of Ceregene 100,000 shares of Sangamo's common stock, which represents less than 0.2 percent of Sangamo's total shares outstanding.  In addition, Sangamo has agreed to make contingent earn-out payments to the stockholders of Ceregene based upon revenues generated from license or sales transaction of certain existing products of Ceregene. The acquisition is expected to close in September 2013, subject to customary closing conditions. The Company does not expect the acquisition, including the ongoing Phase 2 clinical trial, to have any impact on its financial guidance regarding 2013 operating expenses or yearend cash.  A more detailed description of the terms of the definitive agreement is available in the Form 8-K filed by the Company with the Securities and Exchange Commission on this date.

Sangamo will receive over 120 issued, pending or in-licensed patents that include patent families covering the AAV vector platform and manufacturing methods, therapeutic transgenes, and technology for direct administration of AAV to the brain.  Sangamo will also have access to GMP master cell banks, materials and manufacturing know-how that will expand its capabilities in AAV manufacturing as well as a database of preclinical efficacy and toxicology studies and other documentation supporting Ceregene's Investigational New Drug (IND) applications. These materials provide valuable reference materials for Sangamo in the preparation and filing of IND applications for its in vivo ZFP Therapeutics^®, particularly those that target the brain. In addition, Sangamo will acquire all of Ceregene's preclinical and clinical therapeutic programs including its ongoing double-blind, placebo-controlled Phase 2 trial to evaluate its NGF-AAV (CERE-110) in Alzheimer's disease (AD) and the proprietary needle device for brain delivery of AAV with supporting regulatory documentation and clinical experience.

In 2008, Ceregene, and its collaborators at the Alzheimer's Disease Cooperative Study (ADCS), based at the University of California, San Diego (UCSD), were awarded a $5.4 million grant from the National Institute of Aging of the National Institutes of Health (NIH) to support the double-blind, placebo-controlled, Phase 2 clinical trial of CERE-110 in 50 subjects with mild to moderate AD. Using AAV to produce a steady supply of NGF in a specific area of the brain, the treatment is designed to address the loss of cholinergic neurons which is associated with memory loss and cognitive decline in AD. The trial is fully enrolled and the subjects, half of whom were treated with CERE-110 and half with sham surgery (placebo), are in the follow-up stage of the study which will evaluate the effect of treatment on established clinical end-points in cognitive function and quality of life. The results of this trial are expected in 2015. 

"Over 5 million people in the U.S. live with Alzheimer's, which is a devastating disease for both patients and their families, and more effective treatment options are needed," stated Geoff Nichol, M.B. Ch.B., Sangamo's executive vice president of research and development. "Early data from the CERE-110 program are encouraging. Clinical data from a Phase 1 study demonstrate that CERE-110 can be safely injected into a specific area of the brain and preclinical studies suggest that treatment can produce levels of NGF that protect cholinergic neurons. The award granted by the NIH to fund the Phase 2 trial, and participation of the ADCS, a pre-eminent research consortium for testing new treatments for Alzheimer's, demonstrate strong support for the  development of this novel therapeutic."