Paul Weiss has entered the Sangamo Therapeutics restructuring sequence after the genomic medicine company moved from a strategic alternatives review into voluntary Chapter 11 proceedings in Delaware.
The development places Eli Lilly and Company inside a court-supervised Section 363 auction process, with the stalking horse agreement setting an opening position but not ending the competitive sale route for Sangamo’s assets.
Paul Weiss is advising Lilly on its pending acquisition of selected Sangamo assets under Section 363 of the U.S. Bankruptcy Code. Lilly has agreed to acquire Sangamo’s capsid delivery platform, zinc finger platform, modular integrase platform and prion disease program, subject to closing conditions and no higher bidder emerging during the Chapter 11 process.
The Paul Weiss team is led by Chelsea Darnell, Krishna Veeraraghavan, Jeffrey Osterman, Meggin Bednarczyk and Jacob Adlerstein, with support from David Clements, Lauren Bilzin, Douglas Keeton, Scott Sontag, Matthew Friestedt, Sally Ye and Audrey Paquet.
Sangamo has also entered a separate asset sale agreement with Astellas Pharma Inc. for its Fabry disease program, isaralgagene civaparvovec, also known as ST-920. The Chapter 11 case has been filed in the U.S. Bankruptcy Court for the District of Delaware under Case No. 26-10989, with the court expected to oversee the auction of substantially all Sangamo assets.
Northridge ATM, LLC has committed debtor-in-possession financing, subject to court approval, to support ordinary-course operations during the case. Sangamo’s legal advisers are Cooley LLP and Richards, Layton & Finger, PA, with MERU, LLC acting as financial adviser, Raymond James as restructuring banker and Verita Global as noticing and claims agent.
The practitioner consequence is that distressed life sciences transactions now demand a single legal view across insolvency, intellectual property, regulatory continuity, employee incentives and litigation risk.
Solicitors and in-house counsel reviewing similar asset sales need to test whether the technology platform rights are clearly separated, whether excluded programmes remain available to other bidders, whether licence chains survive assignment, and whether bid protections can withstand scrutiny from creditors or rival purchasers.
Buyers gain the potential advantage of acquiring assets free and clear of liens, but only if the sale order, bidding procedures and asset perimeter are strong enough to survive challenge.
The U.S. Bankruptcy Court for the District of Delaware must now decide whether Sangamo’s proposed bidding procedures, DIP financing and sale route give Lilly, Astellas and any competing bidder a fair process before any asset transfer is approved.