Sangamo Bankruptcy Auction
Sangamo Therapeutics Enters Chapter 11 Bankruptcy, Plans Asset Auction with Lilly and Astellas
Key Points
Sangamo has engaged MERU, LLC as its financial advisor and Raymond James & Associates as its investment banker to evaluate strategic options, and has appointed Kurtzman Carson Consultants LLC as noticing and claims agent, with legal representation from Richards, Layton & Finger and Cooley LLP.
Lilly and Astellas have entered into asset sale agreements and will serve as stalking horse bidders: Lilly for Sangamo’s capsid delivery platform, zinc finger platform, MINT platform and ST-506 prion program, and Astellas for the Fabry disease program ST-920; assets such as ST-503, giroctocogene fitelparvovec for hemophilia A, and Sangamo’s cell therapy and Treg assets are not included in either stalking horse bid and will remain available to bidders at the auction.
Sangamo has secured a commitment for debtor-in-possession (DIP) financing to support ongoing operations during the Chapter 11 proceedings.
The Chapter 11 filing contemplates a court-supervised reorganization that will include the auction of substantially all Sangamo assets, anchored by the Lilly and Astellas stalking horse bids, as part of value-maximizing efforts for stakeholders.
Sangamo Therapeutics filed for Chapter 11 bankruptcy protection on June 23, 2026, in the U.S. Bankruptcy Court for the District of Delaware, listing estimated assets and liabilities between $100 million and $500 million TipRanks. The genomic medicine company, which saw its stock lose 99% of its value over five years, will auction off substantially all of its assets while supported by $30 million in debtor-in-possession financing Citybiz.
CEO Dr. Sandy Macrae said the filing "provides a clear framework to pursue value-maximizing transactions" for stakeholders. Eli Lilly and Astellas Pharma will serve as the opening bidders — known as stalking horse bidders — anchoring the court-supervised auction with combined offers worth up to $100 million MarketScreener.
Lilly and Astellas Lock In Bids for Core Platforms
Eli Lilly agreed to pay $50 million, plus assumed liabilities, for Sangamo's capsid delivery platform, zinc finger platform, MINT platform, and the ST-506 prion disease program MarketScreener. These tools represent Sangamo's most advanced genomic engineering technology, used to precisely edit or regulate genes inside the body.
Astellas is bidding $25 million upfront plus up to $25 million in future milestone payments for ST-920, a gene therapy for Fabry disease MarketScreener. Sangamo had already started a rolling Biologics License Application for ST-920 with the FDA in December 2025, meaning the therapy could reach patients as early as 2027 if Astellas completes the submission. Assets not covered by either bid — including the hemophilia A therapy giroctocogene fitelparvovec and the ST-503 chronic pain program — remain open for competing offers at auction.
A Two-Year Cash Burn Led Straight to Bankruptcy Court
Sangamo's collapse followed years of spending far more than it earned. In 2025, the company posted revenue of $39.6 million against operating expenses of $160.8 million TipRanks. By Q1 2026, revenue had fallen to just $1.44 million — far below analyst forecasts of $11.63 million — and the company's cash was only expected to last into Q3 2026.
A major blow came when Pfizer terminated its hemophilia A collaboration, forcing Sangamo to carry more development costs alone Citybiz. A 2025 deal with Lilly involving its STAC-BBB capsid technology was worth up to $1.4 billion on paper, but most payments were back-loaded and did not arrive fast enough to stop the bleeding. Nasdaq suspended the stock on May 5, 2026, after shares fell below the $1.00 minimum bid requirement for too long.
40% of Workforce Cut as Auction Process Begins
Sangamo is eliminating 51 U.S. jobs — about 40% of its workforce — leaving roughly 77 employees to manage the company through the bankruptcy process TipRanks. Severance costs are estimated between $3 million and $4 million. The company has hired MERU, LLC as its financial advisor and Raymond James & Associates as its investment banker to run the asset sale.
Legal representation comes from Richards, Layton & Finger and Cooley LLP, with Kurtzman Carson Consultants handling court notices and claims Citybiz. Under Section 363 of the U.S. Bankruptcy Code, the Lilly and Astellas bids set a price floor. Any outside party can submit a higher competing offer for any of the assets before the court closes the auction.
Sangamo's Fall Reflects Broader Gene Therapy Reckoning
Sangamo's bankruptcy is being watched as a warning sign for the gene therapy sector. Industry analysts describe the company as a case of "over-platforming" — building too many early-stage programs without enough commercial products to fund them TipRanks. Shares fell 54% in pre-market trading on June 23 alone, capping a five-year decline that erased nearly all shareholder value.
The filing reflects a wider trend of biotech companies turning to Chapter 11 to shed debt and transfer promising science to larger, better-funded partners. For patients with Fabry disease or prion disorders, the move to Astellas and Lilly ownership may actually improve the odds that these therapies reach the market. The stalking horse structure gives Big Pharma a discount compared to normal acquisitions, while giving Sangamo's programs a path forward MarketScreener.
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