Sangamo Therapeutics Inc ( SGMO ) shares are surging in Thursday’s after-hours session after the company announced a new agreement with pharmaceutical giant Eli Lilly And Co ( LLY ) .

What Happened: Sangamo Therapeutics ( SGMO ) entered into a license agreement with Eli Lilly ( LLY ), granting the company a worldwide exclusive license to leverage the company’s novel proprietary neurotropic adeno-associated virus (AAV) capsid, STAC-BBB.

Sangamo noted that STAC-BBB has demonstrated potent blood-brain barrier penetration and neuronal transduction in nonhuman primates.

The genomic medicine company said the license allows Eli Lilly ( LLY ) to utilize the STAC-BBB capsid for one initial target. Eli Lilly ( LLY ) has the right to add up to four additional targets, but will be required to pay additional license fees.

Sangamo will receive an upfront payment of $18 million and is eligible to earn up to $1.4 billion in additional license fees and milestone payments.

“We believe STAC-BBB, our industry-leading intravenously delivered AAV capsid, has the potential to play an important role in the treatment landscape by addressing longstanding challenges associated with delivering therapies to the central nervous system,” said Sandy Macrae, CEO of Sangamo.

“We are pleased to be sharing STAC-BBB with Lilly to advance potential treatments for neurological diseases with significant unmet medical needs. This marks the third agreement with a pharmaceutical company since we announced the discovery of STAC-BBB in March 2024 and demonstrates the continued industry interest in our capsid delivery technology.”

Sangamo will be responsible for completing a technology transfer related to the STAC-BBB capsid. Lilly will be responsible for all research, preclinical and clinical development, regulatory interactions, manufacturing and global commercialization of any resulting gene therapy products.

SGMO Price Action: Sangamo shares were up 26.13% after hours, trading at 78 cents at the time of publication Thursday, according to Benzinga Pro.