This is the gene therapy story nobody wanted but everybody expected. Sangamo Therapeutics, which pioneered zinc finger nuclease technology and built one of the earliest gene editing pipelines in the industry, filed for Chapter 11 bankruptcy protection and is preparing to auction substantially all of its assets. The commercial path never materialized. Cash ran out. And now the most valuable asset—a Fabry disease gene therapy that is actively being submitted to the FDA for potential approval—goes to the auction block.
The twist: Eli Lilly and Astellas have already emerged as stalking horse bidders for key programs. For Lilly, winning the Sangamo Fabry asset would add zinc finger nuclease technology to a genetic medicine toolkit that already spans six other modalities acquired across 13 prior deals. That would make it the broadest genetic medicine portfolio in pharma. Separately, Lilly signed yet another China deal—a strategic research collaboration with Abbisko Therapeutics—making it the company’s 14th announced deal of 2026. Insilico Medicine and South Korea’s SK Biopharmaceuticals launched a $2.5 billion AI drug discovery partnership targeting CNS neuroimmune disorders. Ollin Biosciences raised $330 million for retinal disease. And a BIO International panel featuring former FDA, CDC, and NIH leaders delivered the most talked about session of the convention: “U.S. public health as we know it is gone. Can we rebuild a better system?”
Sangamo Files Chapter 11 as Its Most Valuable Asset Goes to Auction
What Happened: Sangamo Therapeutics filed for Chapter 11 bankruptcy protection on June 23 and is preparing to auction substantially all of its assets. Lilly and Astellas have emerged as stalking horse bidders for key programs.
The Fabry Program Is the Crown Jewel
The most valuable asset in the auction is a Fabry disease gene therapy that is currently being submitted for potential FDA approval. BioSpace reported: “As Sangamo runs out of cash, Eli Lilly and Astellas have emerged as stalking horse bidders for key assets, including a Fabry gene therapy currently being submitted for potential FDA approval.”
This is an unusual bankruptcy situation. Most biotechs that enter Chapter 11 have preclinical or early clinical assets. Sangamo has a program that is at the doorstep of regulatory filing. A drug that could be approved within months is being sold through an auction process. For the winning bidder, the upside is immediate: acquire a potentially approvable gene therapy at bankruptcy pricing and launch it with commercial infrastructure that Sangamo never had.
Fabry disease is a rare lysosomal storage disorder caused by a genetic deficiency in the enzyme alpha galactosidase A. Current treatments include enzyme replacement therapies (Sanofi’s Fabrazyme, Takeda’s Replagal) that require lifelong infusions every two weeks. A gene therapy that delivers a functional copy of the gene could potentially provide a one time curative treatment, eliminating the burden of chronic infusions and the progressive organ damage that occurs even with ongoing enzyme replacement.
What This Means for Lilly
For Lilly, the Sangamo Fabry program would add zinc finger nuclease technology to a genetic medicine toolkit that already includes lentiviral in vivo CAR T (Kelonia), circular RNA in vivo CAR T (Orna), non viral DNA delivery (Engage), AI designed recombinases (Profluent), and RNA exon editing (Ascidian). Each modality addresses genetic disease through a different mechanism. Zinc finger nucleases make precise cuts to DNA at specific genomic locations, enabling gene correction or gene insertion with a level of specificity that complements the broader editing approaches Lilly has acquired.
The strategic logic is consistent with everything Lilly has done this year: assemble the broadest possible toolkit for genetic medicine so the company can match the right technology to the right disease. Some genetic conditions are best addressed by permanent DNA editing (zinc finger nucleases, CRISPR). Others by reversible RNA modification (Ascidian). Others by in vivo cell engineering (Kelonia, Orna). Others by gene delivery without editing (Engage). By owning capabilities across the full spectrum, Lilly positions itself to develop genetic medicines for a wider range of diseases than any competitor.
What This Means for the Gene Therapy Sector
Sangamo’s bankruptcy carries lessons for the entire gene therapy field. The company spent more than two decades developing zinc finger nuclease technology. It built one of the earliest gene editing pipelines. It attracted partnerships and investment based on the promise of precision genetic medicine. But the development timelines were longer than expected, the manufacturing was more complex than traditional therapeutics, the regulatory pathway was more uncertain (as the REGENXBIO Duchenne safety signal and the AAV linked brain tumor case demonstrated this year), and the commercial model for one time curative therapies remains unresolved.
The gene therapies that have succeeded commercially—Novartis’s Zolgensma for SMA, Sarepta’s Elevidys for Duchenne, CSL’s Hemgenix for hemophilia B, Regeneron’s Otarmeni for hearing loss—either had large pharma backing or achieved early commercial milestones that provided revenue. Sangamo had neither. The bankruptcy is a cautionary tale for standalone gene therapy biotechs that lack a clear path to revenue or a partner with the patience and resources to sustain development through the extended timelines the modality requires.
Our Pro brief analyzes what the Sangamo bankruptcy tells us about the economics of gene therapy development, maps Lilly’s complete genetic medicine portfolio across seven modalities, and assesses the auction dynamics between Lilly and Astellas. [Details below.]
Lilly Signs Another China Deal with Abbisko Therapeutics
What Happened: Lilly entered a strategic research collaboration and license agreement with China’s Abbisko Therapeutics to discover and develop innovative medicines across multiple targets. Specific targets and financial terms were not disclosed.
This adds to Lilly’s growing China licensing portfolio alongside Hengrui (via Kailera, obesity), Haisco ($3 billion plus, five programs), and now Abbisko. It appears to be Lilly’s 14th announced deal of 2026.
The pace is extraordinary. Fourteen deals in under six months across at least nine therapeutic areas, eight modalities, and now three Chinese biotech partnerships. The Abbisko deal reinforces the pattern we have tracked throughout the year: Chinese biotechs are producing clinical stage assets at a quality level that commands attention from every major Western pharmaceutical company. BMS has Hengrui ($15.2 billion). Pfizer has Innovent ($10.5 billion). GSK has SiranBio ($1 billion). AbbVie has Haisco. Merck has Kelun Biotech. And Lilly now has Hengrui, Haisco, and Abbisko.
The COINS Act debate—whether to restrict U.S. outbound capital to Chinese biotech—continues in Congress. But the deal flow says the industry has made its decision: the clinical value of Chinese assets outweighs the geopolitical risk of partnering with Chinese companies. Each new deal makes the COINS Act harder to implement retroactively and raises the cost of restricting future transactions.
Insilico and SK Launch $2.5B AI Drug Discovery Partnership
What Happened: Insilico Medicine and South Korea’s SK Biopharmaceuticals announced a partnership worth more than $2.5 billion to discover AI enabled drug candidates targeting neuroimmune disorders of the central nervous system.
Why CNS Neuroimmune Is an Interesting AI Target
The central nervous system has been one of the most difficult therapeutic areas for drug development. Clinical trials are long, endpoints are complex, patient populations are heterogeneous, and the biological mechanisms underlying many neurological and psychiatric conditions are poorly understood. These characteristics have driven many pharmaceutical companies away from CNS over the past decade.
AI could change that calculus. The complexity that makes CNS drug development difficult for humans also makes it potentially well suited for computational approaches. AI platforms can analyze vast datasets of genomic, proteomic, and clinical data to identify novel targets and predict which molecules are most likely to engage those targets effectively. In neuroimmune disorders specifically—conditions where the immune system attacks the nervous system, including multiple sclerosis and related conditions—the interplay between immunology and neuroscience creates a biological complexity that AI is uniquely positioned to decode.
Insilico’s AI platform has attracted multiple pharma partnerships, including Servier ($888 million for oncology R&D) and several others. The SK Biopharmaceuticals deal adds a $2.5 billion commitment to CNS, making it one of the largest AI drug discovery collaborations ever announced and the largest focused specifically on neurological disease.
The broader AI drug discovery landscape continues to expand. Isomorphic Labs ($2.7 billion in total funding, protein design with Lilly and Novartis). Lilly/Profluent ($2.25 billion, AI gene editing). Anthropic’s pharma ecosystem (five of the top ten pharma companies working with Claude). Alnylam/Inceptive (RNA sequence optimization). And now Insilico/SK at $2.5 billion for CNS. Each deal targets a different therapeutic area and a different type of biological problem, reinforcing that AI drug discovery is fragmenting into specialized platforms rather than converging toward a single approach.
Ollin Biosciences Raises $330M for Retinal Disease
What Happened: Ollin Biosciences raised $330 million in an oversubscribed Series B to fund global Phase 3 studies of OLN324 for retinal disease. STAT reported this is one of the largest ophthalmology focused venture rounds in recent years.
Why This Matters: Retinal diseases including age related macular degeneration and diabetic retinopathy represent multi billion dollar markets where anti VEGF therapies (Regeneron’s Eylea, Roche’s Vabysmo) dominate but leave substantial room for improvement. Current anti VEGF treatments require frequent intravitreal injections—injections directly into the eye—every four to twelve weeks depending on the drug and the patient. The treatment burden drives adherence challenges similar to what we see in other chronic biologic therapies: patients who find the injection schedule burdensome eventually reduce their treatment frequency, leading to disease progression that could have been prevented.
A next generation retinal therapy that improves durability (longer intervals between injections), efficacy (better visual outcomes), or both would have enormous commercial potential. The $330 million oversubscribed round signals strong investor conviction that OLN324 has the clinical profile to compete in this space. Phase 3 studies will determine whether the promise translates to registrational data.
BIO Panel: “U.S. Public Health as We Know It Is Gone”
The most talked about session at BIO International this week was not a deal announcement or a pipeline presentation. It was a policy panel featuring former leaders of the FDA, CDC, and NIH who delivered a blunt assessment of what has happened to U.S. public health infrastructure.
BioSpace described the panel as discussing “the dismantling of the Department of Health and Human Services” and reported the central question: “U.S. public health as we know it is gone. Can we rebuild a better system?”
Former officials spoke plainly about institutional damage: the FDA operating without permanent leadership across every critical center, career staff departures eroding institutional knowledge, the Ebola PHEIC response complicated by leadership vacuums, and the CNPV program’s uncertain future without the commissioner who created it. Industry leaders raised concerns about regulatory predictability—the foundation that every drug development decision depends on.
The session was reportedly the most attended policy discussion at the convention. In a week dominated by deal announcements ($10.9 billion AbbVie/Apogee, Sangamo bankruptcy auction, multiple licensing deals), the BIO audience chose to fill the room for a conversation about whether the regulatory infrastructure that makes all those deals possible is still functioning. The answer, from people who ran those agencies, was sobering.
Strategic Themes
1. Sangamo’s Bankruptcy Is a Cautionary Tale and an Opportunity Simultaneously
The cautionary tale: even pioneering science does not guarantee commercial viability. Sangamo spent decades building zinc finger nuclease technology and still ran out of capital before generating revenue. The opportunity: a potentially approvable Fabry gene therapy is available at bankruptcy pricing. For Lilly or Astellas, the acquisition cost of a near filing asset through a Chapter 11 auction will be a fraction of what the program would have cost to acquire before bankruptcy. The biotech ecosystem’s willingness to let innovative companies fail—and then redistribute their most valuable assets to companies with the resources to commercialize them—is both brutal and efficient.
2. Lilly at 14 Deals Has Assembled the Broadest Genetic Medicine Platform in Pharma
If Lilly wins the Sangamo Fabry asset, the company will have genetic medicine capabilities spanning zinc finger nucleases, lentiviral in vivo CAR T, circular RNA in vivo CAR T, non viral DNA delivery, AI designed recombinases, and RNA exon editing. No other pharmaceutical company has this breadth. The December 7 Investment Community Meeting will need to explain how all of these technologies fit together into a coherent genetic medicine strategy and which disease areas Lilly plans to prioritize.
3. AI Drug Discovery Capital Is Flowing at Institutional Scale
The Insilico/SK $2.5 billion deal joins Isomorphic Labs, Lilly/Profluent, and the Anthropic pharma ecosystem as multi billion dollar commitments to AI drug discovery. The capital flowing into AI reflects a conviction across the industry that computational approaches can reduce the time, cost, and failure rate of drug development. Each deal targets a different therapeutic area and a different type of biological problem—protein design, gene editing, CNS neuroimmune, RNA optimization, broad workflow AI—reinforcing that the field is fragmenting into specialized platforms rather than converging on a single solution. The returns on these investments are still years away, but the commitment scale is already institutional.
4. The BIO Panel Said What the Industry Is Thinking About the FDA
No permanent commissioner. No permanent CDER director. No permanent CBER director. Five CDER heads in one year. Fewer than half of senior leaders from six months ago remaining. The Ebola PHEIC response managed by acting appointees with no institutional tenure. Former agency heads standing on a BIO stage and saying “it is gone” captures a sentiment that has been building throughout 2026 but that industry executives have been reluctant to state publicly. Roche’s chairman called tariffs “blackmail.” Now former regulators are calling the public health system dismantled. The candor is increasing as the consequences become harder to ignore.
Frequently Asked Questions
What happened to Sangamo?
Filed for Chapter 11 bankruptcy. Preparing to auction all assets. Lilly and Astellas are stalking horse bidders for key programs including a Fabry disease gene therapy being submitted for FDA approval.
What is the Fabry program?
A gene therapy for Fabry disease, a rare genetic disorder currently treated with lifelong enzyme replacement infusions. The program is at the FDA filing stage, making it one of the rare bankruptcy situations where an approvable drug is on the auction block.
What is Lilly’s 14th deal?
A strategic research collaboration with China’s Abbisko Therapeutics across multiple targets. Terms undisclosed. Adds to Lilly’s China portfolio alongside Hengrui (via Kailera) and Haisco ($3B+).
What is the Insilico/SK deal?
A $2.5 billion AI drug discovery partnership targeting neuroimmune disorders of the CNS. One of the largest AI drug discovery deals ever announced and the largest focused on neurological disease.
What was the BIO panel about?
Former FDA, CDC, and NIH leaders discussed the state of U.S. public health infrastructure. BioSpace described it as addressing “the dismantling of HHS” and asking whether the system can be rebuilt. The most attended policy session at the convention.
When does the Medicare GLP 1 Bridge launch?
July 1. Six days out. Both Lilly (Foundayo, Zepbound) and Novo (oral Wegovy, injectable Wegovy) products are covered at $50 per month copay.
BioMed Nexus Pro — What Institutional Subscribers Are Reading Today
Sangamo’s Lesson. We analyze what the bankruptcy tells us about the economics of gene therapy development, why standalone gene therapy biotechs face structural disadvantages without large pharma backing, and how the auction dynamics between Lilly and Astellas are likely to play out.
Lilly’s Genetic Medicine Toolkit. We map the complete portfolio across seven modalities (zinc finger nucleases, lentiviral CAR T, circular RNA CAR T, non viral delivery, AI recombinases, RNA exon editing, and the potential Sangamo addition), and assess how the breadth creates competitive advantages in genetic disease drug development.
AI Drug Discovery. We compile the full capital stack at $9 billion plus in disclosed commitments, analyze how the Insilico/SK deal adds CNS to a landscape dominated by oncology and metabolic disease, and assess which AI platforms are most likely to produce approved drugs first.
Plus: Ollin ophthalmology analysis, BIO panel institutional impact assessment, Abbisko China deal context, Revolution filing watch, and the updated catalyst calendar through H2 2026.
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