Case HIV – Jana Vieren

What do you think Sangamo should do regarding the HIV program? Should it license the
technology to a large pharmaceutical? Should it form a joint venture with another biotech or
pharma company? if so, who?

Sangamo was clearly very dependent on partners’ funding to pursue its research programs. The only
cash resources of the company are currently funds given from partners. The process of the clinical
tests are extremely costly. Large partners were also more likely to succeed in the clinical testing
processes because of the manufacturing capabilities, marketing and sales capabilities that Sangamo
lacks. Partners with established relationships may thus be very helpful in gene editing. On the other
hand, the technology that Sangamo possesses can be applied to a wide array of diseases. Thus if the
HIV program would be successful, it would make Sangamo more visible which could help the
company help to attract even better partnerships in the future.

My opinion is that Sangamo should not go solo. The project is very expensive and contains a lot of
risks. Tackling HIV might be more challenging technologically than tackling a disease like hemophilia.
HIV is not a genetic disease; the cure works by altering the cell surface in such a way as to make it
impossible for HIV to penetrate. Which means, however, that it took almost total penetration of the
gene editing technology to cure and stop the disease. Currently, they still need to find a way to
modify almost all the genes for the therapy to be a permanent treatment. Secondly, Sangamo lacks
the capabilities to bring the product to the market and bringing the treatment to developing
countries will be hard and expensive. Although Sangamo would earn the reputation for curing HIV by
going solo if the program succeeds, I am convinced that there are too many challenges to tackle for
Sangamo when doing this project on its own.

I am also not sharing the opinion of licensing the technology to a large pharmaceutical although it
would be the fastest and cheapest way to earn revenues from the technology. If Sangamo license its
technology to a large pharmaceutical, the company would be giving up considerable control over its
technology. Additionally, Sangamo might probably earn less of the profit and might not be attributed
as the company that developed the cure. Finally, Sangamo would not learn clinical testing capabilities
and would not get the recognition that it deserves.

I think the best option for Sangamo is to form a joint venture with a large biotech or pharmaceutical
firm. The profits will probably be shared fifty-fifty but the company would gain more reputation than
licensing the technology. If Sangamo is working with a partner, it enables the company to share the
costs and risks that come along with the HIV program. Sangamo might also learn valuable capabilities
from the partner in this way, the company would gain more knowledge than licensing the
technology. The partners that Sangamo are able to form a joint venture with, have already a lot of
expertise in clinical resting phases. This increases the probability that the treatment will get through
the clinical testing process. Finally, the treatment might be developed and commercialized faster.

The partner that Sangamo should form a joint venture with is the other biotech company. Sangamo
has a resource fit with Biogen Idec. The company has direct sales operations in about 30 countries
and uses distribution partners to reach another 60 countries. The company is well established in
marketing and sales infrastructure. The reason why I choose Biogen Idec over Shire AG is because of
the fact that Shire AG has already acquired very well-known companies such as ViroPharma, Janssen
Pharmaceuticals etc. The partner is probably better known than Sangamo and people may attribute
success to Shire AG instead of to the new joint venture.