Sangamo Therapeutics seeks bankruptcy-era asset sales, with Eli Lilly and Astellas lined up as stalking-horse bidders

Sangamo Therapeutics is moving toward a bankruptcy-era process designed to sell its assets in an orderly way, according to a report published Tuesday. The company said it has entered into asset sale agreements with Eli Lilly and Co. and Astellas Pharma Inc., and it intends to complete the transactions through a voluntary Chapter 11 reorganization.

Chapter 11 is the U.S. bankruptcy code that allows a company to reorganize while continuing to operate, typically paired with court-supervised steps that can include asset sales and bids. For companies facing financial stress, the goal is often to preserve business value while attracting offers from potential buyers.

Under the structure described in the report, Lilly and Astellas would serve as “stalking horse” bidders. In deal terms, a stalking horse bid is an initial offer approved early in a court-supervised sale process, providing a benchmark price and helping set the terms for other bidders that may later appear.

Sangamo’s stated objective, per the report, is to maximize business value for all stakeholders through this process. In a typical stalking horse setup, the initial bidders may receive certain protections such as reimbursement of specific expenses if a competing higher bid succeeds, though the details of those protections were not included in the portion of the report provided here.

The announcement ties directly to how the parties anticipate the timeline and mechanics of the sale. Because Sangamo is planning to use Chapter 11, final approval and closing would be expected to depend on court proceedings and any additional bids that may emerge before the sale is finalized.

For Lilly, the interest indicates continued attention to acquiring or integrating pipeline assets and platform capabilities, particularly in areas where therapeutic candidates may be at risk without additional capital. For Astellas, the bid structure suggests it is seeking to secure exposure to Sangamo’s technology or product candidates through a controlled process rather than waiting for a negotiated acquisition outside of bankruptcy protection.

The report did not provide granular information on what specific assets are being sold, the purchase price, or whether the agreements cover particular programs, milestones, or licensing rights. It also did not specify whether Sangamo expects to keep operating during the Chapter 11 process, what court filings have already been made, or what conditions could cause any of the proposed transactions to change.