(Reuters) – U.S. drugmaker Gilead Sciences Inc will use Sangamo Therapeutics Inc’s gene-editing technology to develop cancer treatments in a deal potentially worth about $3 billion to Sangamo, the companies said on Thursday.
The deal is the latest by a major drugmaker looking to develop lucrative gene therapies that have the potential to treat ailments by directly targeting disease-causing genes.
Shares of California biotech firm Sangamo jumped more than 20 percent to a 17-year high of $27.30 on Thursday morning.
“These are indeed exciting times in the field of genome-editing and gene therapy,” Sangamo Chief Executive Officer Sandy Macrae said on a call with analysts.
In December, Luxturna, a treatment for a rare disease that causes blindness, became the first gene therapy for an inherited disease to get U.S. regulatory approval.
The treatment, developed by Philadelphia-based Spark Therapeutics Inc, is expected to be priced at $850,000.
Gilead subsidiary Kite Pharma will use Sangamo’s platform to target a class of proteins called zinc finger nucleases in order to edit the human genome, helping develop therapies for cancer.
Sangamo will receive $150 million upfront and is eligible for up to $3.01 billion in future payments tied to regulatory and other milestones.
Gilead snapped up Kite Pharma in a $12 billion deal last year as a way to get access to an emerging class of cancer immunotherapies called CAR-T and to offset slowing sales of its hepatitis C medicines.
Other firms specializing in CAR-T such as Juno Therapeutics have signed deals to use another kind of gene-editing technology called CRISPR.
Gilead said earlier this month it would pursue collaborations with companies for gene-editing technology.
“(Gilead) scoured the field,” said Curt Herberts, Sangamo’s chief business officer.
Companies with gene-editing platforms including Editas Medicine and CRISPR Therapeutics saw their shares jump after Gilead signaled interest in the technology.
Reporting by Manas Mishra in Bengaluru; Editing by Savio D’Souza and Sai Sachin Ravikumar