Sangamo Therapeutics entered chapter 11 without a dollar of funded debt on its balance sheet, yet still arranged a $30 million debtor-in-possession loan to carry a genomic-medicine platform that ran out of cash before it could commercialize a single therapy. The Richmond, California gene-therapy pioneer filed a voluntary petition on June 23, 2026 in the U.S. Bankruptcy Court for the District of Delaware, case number 26-10989, to run a court-supervised Section 363 sale of substantially all of its assets.
The filing is anchored by two stalking-horse asset purchase agreements signed before the petition: a subsidiary of Eli Lilly agreed to pay $50 million in cash for Sangamo's capsid and platform technology, and Astellas Gene Therapies agreed to pay $25 million in cash plus up to $25 million in milestones for the company's Fabry disease program. Sangamo lined up both bids, the DIP facility, and a claims agent before it filed, setting up a fast auction process governed by lender and buyer milestones rather than a plan of reorganization.
$30M superpriority priming term loan from Northridge ATM, LLC ($10.5M interim)
Lead Stalking Horse
Merope Acquisition Sub, LLC (Eli Lilly subsidiary), $50M cash
Second Stalking Horse
Astellas Gene Therapies, Inc., $25M cash plus up to $25M milestones
Claims Agent
Kurtzman Carson Consultants, LLC dba Verita Global
Case Snapshot
Lost Collaborations and the Post-COVID Funding Squeeze
Sangamo has generated revenue almost entirely by licensing its zinc finger and genome-editing technology to larger drugmakers rather than by selling an approved product. Management attributes the distress to the loss of its principal collaboration revenue streams — partnerships with Biogen, Novartis, Kite, and Pfizer — layered on top of a broader contraction in biotech investment following the COVID-19 pandemic, according to the first day declaration of Chief Financial Officer Scott B. Willoughby. When those collaboration payments fell away, the company could not replace them with either new deals or capital-markets financing.
The distress was visible well before the petition. Sangamo moved to the OTCQB market in April 2026 after a Nasdaq delisting notice for failing the minimum bid price requirement, and its shares had lost roughly 99% of their value from peak. On June 8, 2026, the company publicly announced that it had retained a financial advisor to explore strategic alternatives, citing concerns about its financial resources and pipeline. Management ultimately concluded it could not secure a commercialization partner for the Fabry disease program outside of chapter 11.
Years of headcount reductions preceded the filing. Sangamo cut roughly 365 roles across 2023 and 2024 — about 110 positions in April 2023, 162 positions in November 2023, and 93 positions in a France restructuring — according to the first day declaration. A March 2026 reduction eliminated about 22 more roles and furloughed 14 employees, and a June 2026 reduction took the workforce from 128 to 77 full-time employees. The June cut accompanied a 40% workforce reduction disclosed alongside the bankruptcy and DIP request in the company's Form 8-K.
A Balance Sheet With No Funded Debt
Sangamo entered chapter 11 with an unusual capital structure for a distressed company: it reports no funded debt obligations and no prepetition secured debt. The DIP financing motion confirms there is no prepetition lender to prime and no secured creditor whose collateral position governs the case. The pressure on the estate comes entirely from operating liabilities and a depleted cash position.
At filing, the company reported approximately $5.5 million of cash on hand against roughly $19.2 million in trade payables, including amounts owed to contract manufacturers, according to the first day declaration. Lease and rent obligations totaled about $4.0 million, including deferred rent on the Brisbane, California facility, whose lease also carries a $1.5 million letter-of-credit obligation. Employee-related obligations included approximately $9.4 million in bonuses, $3.7 million in severance, $2.3 million in salary increases, and $0.9 million in COBRA coverage. Some reporting placed Sangamo's total liabilities in the range of $100 million to $500 million based on the petition, though the company did not itemize a single funded-debt instrument.
With no prepetition secured lender, no creditor holds collateral it can credit bid into the auction, so the sale runs on the stalking-horse milestones and the DIP budget rather than an existing lender's credit bid.
Northridge ATM DIP and the Sale Runway
To fund operations through the sale, Sangamo obtained a $30 million superpriority, priming senior secured DIP term loan from Northridge ATM, LLC and its affiliates or designees. The filings disclose no relationship between Northridge and either the company's equity or the stalking-horse bidders. The DIP financing motion sought up to $10.5 million of interim availability upon entry of the interim order, with the balance available after a final hearing. The facility matures December 30, 2026.
Judge Craig T. Goldblatt entered the interim DIP order on June 25, 2026, with a final hearing to follow. The interim order approved an Initial Exit Fee of 5.0% of the interim DIP loans, fully earned and non-refundable, along with a commitment fee and a work fee set in the DIP term sheet. The order grants liens on substantially all assets and proceeds plus superpriority administrative status, subject to a carve-out that includes a $50,000 wind-down amount and U.S. Trustee fees. Use of DIP proceeds and cash collateral is limited to an approved budget, with a permitted variance of no more than 15% on net operating cash flow measured on a cumulative four-week rolling basis and weekly testing after the first updated budget.
Two Stalking Horses: Merope and Astellas
Sangamo's asset sale and bidding procedures motion splits substantially all of the company's assets between two stalking-horse bidders, each targeting a different part of the platform. The structure lets Lilly acquire the underlying delivery technology while Astellas takes the most advanced clinical program.
The Merope bid. Merope Acquisition Sub, LLC, a subsidiary of Eli Lilly, agreed to pay $50 million in cash plus the assumption of certain liabilities for Sangamo's core technology, building on Lilly's existing relationship with the company. The acquired assets include proprietary capsids such as STAC-150 and STAC-BBB and their variants, proprietary capsid receptors and related technology, the ZFP, MINT, and SIFTER technology platforms, and the prion disease program, along with estate avoidance actions arising from or relating to the acquired technology. The Merope agreement carries an outside date of September 30, 2026, and permits Merope to credit bid its bid protections at any auction or sale if those amounts become payable. Paul, Weiss, Rifkind, Wharton & Garrison advised Lilly on the bid.
The Astellas bid. Astellas Gene Therapies, Inc. agreed to pay $25 million in cash plus up to $25 million in potential milestone payments, together with the assumption of certain liabilities, for all assets, properties, and rights related to or used in Sangamo's Fabry disease program. The Fabry program, its most clinically advanced asset, is the same program for which Sangamo spent a year seeking a partner before the filing. The bidding procedures motion seeks approval of customary break-up fee and expense-reimbursement protections for both stalking horses, with the specific dollar amounts set in the respective agreements rather than the motion body, and asks for authority to designate additional stalking-horse bidders for any remaining assets.
The company ran a multi-year marketing process before landing these bids. Bank of America presented the Fabry program to five interested parties across 2022 through 2024, and Evercore contacted more than twenty counterparties in 2024 through 2026, holding nine management presentations, advancing seven parties to formal diligence, and receiving three term sheets, according to the bidding procedures motion. After the petition, Raymond James had contacted roughly 162 potential strategic and financial parties and 21 potential DIP parties, with 28 parties — 23 potential purchasers and five potential DIP lenders — under confidentiality agreements as of filing. Reporting framed the outcome as Lilly and Astellas circling a distressed pioneer whose technology outlasted its balance sheet.
Merope Milestones and the Bidding Procedures Timeline
The Merope agreement requires entry of an order approving the bidding procedures within seven days of the petition date, and missing that deadline is a termination event under the agreement. To meet that schedule, Sangamo moved to shorten notice on the bidding procedures motion and requested a hearing on or before June 30, 2026.
The court ultimately noticed the bidding procedures hearing for July 15, 2026 at 11:00 a.m. Eastern in Wilmington, with an objection deadline of July 8, 2026. That gap between the seven-day milestone and the noticed hearing date is an early procedural pressure point, because the Merope agreement's termination rights hinge on the bidding-procedures timeline. As of June 30, 2026, no official committee of unsecured creditors had been appointed, and no plan, disclosure statement, or substantive objection had been filed, though multiple parties had entered appearances, including Brammer Bio and Fisher Scientific.
Professional Retentions and the Verita Claims Agent
Sangamo assembled a heavyweight advisory roster for a company its size. Cooley LLP serves as lead debtor's counsel, with a team including Cullen Drescher Speckhart, Lauren A. Reichardt, Olya Antle, and Robert L. Eisenbach III, and Richards, Layton & Finger acts as Delaware counsel. Raymond James is the postpetition investment banker, following the prepetition processes run by Evercore and Bank of America. The two buyers brought their own counsel to the deal, with Paul, Weiss advising Lilly and Merope, and Covington & Burling with McCarter & English advising Astellas, while Norton Rose Fulbright and Ice Miller appeared for DIP lender Northridge, according to the case's Delaware filings.
Kurtzman Carson Consultants, LLC dba Verita Global serves as claims and noticing agent under a retention application that provides for a $35,000 retainer and an effective date as of the petition date. No general bar date had been set as of June 30, 2026; the eventual claims process will run through Verita as the noticing agent of record.
Key Timeline
Date
Event
April 6, 2000
Sangamo completes its initial public offering
2023–2024
Staged restructurings cut approximately 365 roles
April 2026
Shares move to OTCQB after Nasdaq delisting notice
May 29, 2026
Board appoints Restructuring Committee
June 8, 2026
Company announces exploration of strategic alternatives
June 2026
Reduction takes workforce from 128 to 77 full-time employees
June 23, 2026
Chapter 11 petition filed; first-day motions and both stalking-horse agreements filed
Management attributes the filing to the loss of its principal collaboration revenue streams — partnerships with Biogen, Novartis, Kite, and Pfizer — and a broader contraction in biotech investment after the COVID-19 pandemic. With about $5.5 million of cash left and no commercial product, the company concluded it could not find a commercialization partner for its Fabry disease program outside of bankruptcy.
Who is buying Sangamo's assets?
Two stalking-horse bidders signed agreements before the petition. Merope Acquisition Sub, LLC, a subsidiary of Eli Lilly, agreed to pay $50 million in cash for the capsid and platform technology and the prion program, while Astellas Gene Therapies agreed to pay $25 million in cash plus up to $25 million in milestones for the Fabry disease program. Both bids are subject to higher and better offers at a court-supervised auction.
Did Sangamo have any secured debt?
No. Sangamo reported no funded debt obligations and no prepetition secured debt. Its liabilities consist of trade payables, lease obligations, and employee-related amounts, and it financed the case with a new $30 million DIP term loan from Northridge ATM, LLC rather than a priming facility from an existing lender.
Who is the claims agent for Sangamo Therapeutics?
Kurtzman Carson Consultants, LLC dba Verita Global serves as the claims and noticing agent under a retention application providing a $35,000 retainer effective as of the petition date. As of June 30, 2026, the court had not yet set a general claims bar date.
before it filed https://www.fiercebiotech.com/biotech/sangamo-puts-substantially-all-assets-sale-bankruptcy-lines-lilly-and-astellas-buyers
zinc finger and genome-editing technology https://www.genengnews.com/topics/genome-editing/gene-editing-pioneer-sangamo-files-for-chapter-11-bankruptcy-agrees-to-sell-assets/
moved to the OTCQB market https://www.streetinsider.com/Corporate+News/Sangamo+Therapeutics+moves+to+OTCQB+after+Nasdaq+delisting+notice/26388579.html
publicly announced https://markets.businessinsider.com/news/stocks/sangamo-therapeutics-announces-exploration-of-strategic-alternatives-to-maximize-value-for-stakeholders-1036231749?op=1
a 40% workforce reduction https://investor.sangamo.com/static-files/ddd9eb95-7345-456b-a701-d6e7b349557d
did not itemize a single funded-debt instrument https://news.bloomberglaw.com/bankruptcy-law/sangamo-therapeutics-files-for-chapter-11-bankruptcy-in-delaware
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.