Good afternoon, and welcome to the Sangamo BioSciences teleconference to discuss fourth quarter and full year 2014 financial results. This call is being recorded. I will now pass you over to the coordinator of this event, Dr. Elizabeth Wolffe, Vice President of Corporate Communication..

Thank you, operator. Good afternoon, and thank you for joining Sangamo’s management team on our conference call to discuss the company’s fourth quarter and full year 2014 financial results.

Also present during this call are several members of Sangamo senior management, including Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Philip Gregory, Senior Vice President of Research and Chief Scientific Officer; and Dale Ando, Vice President of Development and Chief Medical Officer.

Following this introduction, Edward will highlight recent activities and the significant events from the past quarter. Ward will then briefly review fourth quarter and full year financial results for 2014, as well as our financial guidance for 2015.

Philip will provide an update on our ZFP therapeutic programs, and finally, Edward will update you on our goals for 2015 and beyond. Following that, we will open up the call for questions.

As we begin, I’d like to remind everyone the projections and forward-looking statements that we discuss during this conference call are based upon the information that we currently have available. This information will likely change over time.

By discussing our current perception of the market and the future performance of Sangamo with you today, we are not undertaking an obligation to provide updates in the future. Actual results may differ substantially from what we discussed today, and no one should assume at a later date that our comments from today are still valid.

We alert you to be aware of risks that are detailed in documents that the company files with the Securities and Exchange Commission, specifically our Quarterly Reports on Form 10-Q and our Annual Report on Form 10-K.

These documents include important factors that could cause the actual of the company’s operations to differ materially from those contained in our projections of forward-looking statements. Now, I’d like to turn the call over to Edward..

Thank you, Liz, and thank you all for joining us for our conference call to discuss our fourth quarter and full year results for 2014, as well as our near and mid-term plans for the development of our ZFP therapeutics pipeline. The fourth quarter is characteristically a busy time of year for Sangamo, and 2014 was no different.

Specifically, we filed two of the three new investigational new drug, or IND, applications that we submitted this year in the fourth quarter. The most recent was for our beta thalassemia program that we are developing in collaboration with Biogen Idec.

As we noted in the press release that we issued last week, with the acceptance of the IND by the FDA, we can now begin clinical trials of our novel and potentially curative approach. As you know, we are using ZFN genome editing technology to knock out a gene in long-lasting hematopoietic stem progenitor cells, or HSPCs.

The aim is to provide, in a single treatment, a lasting therapeutic solution or a potential cure for both beta thalassemia and sickle cell disease. We are now working hard to open clinical sites, which, amongst other things, requires obtaining IRB approvals, and our goal is to initiate this multicenter Phase I/II clinical trial as soon as possible.

The trial is designed to primarily assess safety and tolerability. However, as we will be enrolling and treating transfusion-dependent beta thalassemia patients, we will also be evaluating measures of efficacy.

I’ve asked Philip Gregory, our chief scientific officer, to provide you with more details about the approach that we are taking in this program later in the call. In collaboration with City of Hope, they also filed an IND to begin an investigator-sponsored trial as part of our HIV program.

This program uses exactly the same approach as in beta thalassemia. However, in this instance, the target of our ZFN genome editing technology is a knockout of the CCR5 gene in HSPCs.

As you know, we have already generated substantial clinical data in T-cells on safety and tolerability, as well as the antiviral effects of this genome editing strategy and its impact on viral reservoir, and we are very excited to extend this work into stem cells.

Currently, the FDA is reviewing some additional information provided by our colleagues at City of Hope, and I expect to be able to provide an update in the near future. We remain on track to initiate this Phase I/II clinical trial in the first half of this year.

Speaking of HIV, we continue to make progress in our T-cell program, and I am pleased to report that we accrued all of the subjects in our 1401 study in 2014.

This study represents the third IND application that we filed last year, as we incorporated a number of process modifications including mRNA delivery of the zinc finger nucleases to generate the modified autologous T-cell product.

As we have discussed in previous calls, this is the delivery method that we currently use for all of our ex vivo applications as there are several advantages to mRNA delivery over the use of viral vectors, including the ability to retreat subjects, which is part of what we will be evaluating in the 1401 study.

We expect to complete treatment of all subjects on the 1401 trial early this year and present initial data by the end of 2015. In addition, our long term collaborators at the University of Pennsylvania, Pablo Tebas and Carl June, expect to open their investigator-sponsored SB-728-T Phase II clinical study very soon.

The Penn study is complementary to our 1401 study in that it is evaluating a single treatment, but it incorporates similar engraftment enhancement strategies.

As we have said before, with positive data from these studies, we believe that we will have a clear path to pivotal studies, for which we will seek a partner for further development and commoditization. Turning to our preclinical programs, we presented important data at major scientific and medical meetings in the fourth quarter.

These included the annual meeting of the Society for Neuroscience, or SFN, which featured our Huntington’s Disease studies in a society-sponsored press conference and at the annual meeting of the American Hematological Society, or ASH.

At ASH, one of our senior scientists was an invited speaker in a session called “Taking it to the Clinic, Genome Editing for Blood Disorders.” He presented data from our Biogen partner in hemoglobinopathies program as well as new data from our in vivo protein replacement platform, or IVPRP, strategy.

These included data from nonhuman primate studies carried out as part of our Shire-partnered hemophilia program and new data from our proprietary lysosomal storage disorders, or LSD, programs. Again, I’ve asked Philip to provide more details later in the call on our IVPRP and the data presented at these meetings.

Like our approach to beta thalassemia, IVPRP applications are designed to provide a cure, not just treat symptoms. As the data to date suggests, our IVPRP is broadly applicable and therefore highly disruptive for a range of monogenic diseases that are currently treated by enzyme replacement therapies, or ERTs, which require repeat administration.

On that note, in early January, we announced that the first two targets in our proprietary LSD programs will be for Hunter and Hurler syndromes. Our goal is to file IND applications for both of these indications by the end of this year.

As I said, the IVPRP is highly leverageable and we plan to develop ZFP therapeutics to address additional LSDs as part of our plan to file two to four IND applications each year going forward. Finally, we continue to develop our internal manufacturing and delivery capabilities in order to leverage and maximize the value of our platform.

Last month, we announced that we had in license technology to enable systemic delivery of our zinc finger nucleases using messenger RNA, or mRNA as part of our strategy to continue to expand the application of our ZFP technology into new therapeutic opportunities and develop the next generation of ZFP therapeutics.

Nucleic acid delivery technologies has significantly matured over the past several years and while these are early days and these programs are still part of our research portfolio, we see this strategy as an entry into an entirely new set of in vivo therapeutic genome editing targets.

Again, Philip will briefly address this approach later on the call. So, as you can see, we had a busy end to 2014 and beginning 2015 with important progress in our ZFP therapeutic pipeline. Our ongoing collaboration agreements and last year’s financing have had an important positive impact on our financial picture.

And on that note, let me hand the call over to Ward for an update on our fourth quarter and full year 2014 financial results as well as our financial guidance for 2015.

Ward?.

Thank you, Edward, and good afternoon everyone. As you know, after the close of the market today, we released our financial results for the fourth quarter ended December 31, 2014, and I am pleased to review the highlights of those results with you now.

Revenues in the fourth quarter of 2014 were $15 million compared to $6.9 million for the same period in 2013. Fourth quarter 2014 revenues comprise revenue from Sangamo’s collaboration agreements with Shire, Biogen Idec, Sigma-Aldrich, and Dow Agrisciences, enabling technology agreements, and approximately $400,000 of revenue from research grants.

The increase in collaboration agreement revenues was primarily due to our partnerships with Shire and Biogen.

In the fourth quarter of 2014, Sangamo recognized $6.9 million of revenues related to research services provided under the collaboration agreement with Shire and $2.4 million of revenues related to research services performed under the collaboration agreement with Biogen.

In addition, pursuant to the agreements entered into with Shire in January 2012 and Biogen in January 2014, Sangamo received upfront payments of $13 million and $20 million respectively.

These payments are being recognized as revenue on a straight line amortization basis over the initial six-year research term for Shire and approximately 40 months for Biogen. The company recognized $0.5 million of the Shire upfront payment and $1.6 million of the Biogen upfront payment as revenue for the fourth quarter of 2014.

Total operating expenses for the fourth quarter of 2014 were $19.4 million compared to $15 million for the same period in 2013. Research and development expenses were $15 million in the fourth quarter of 2014 compared to $10.8 million for the fourth quarter of 2013.

The increase was primarily due to increases in external research associated with our preclinical programs and personnel related expenses including stock based compensation. General and administrative expenses were $4.3 million in the fourth quarter of 2014, compared to $4.2 million for the same period in 2013.

Noncash stock based compensation expense was $3 million for the quarter, with $1.6 million in research and development and $1.4 million in general and administrative.

For the fourth quarter of 2014, the company reported a consolidated net loss of $4.3 million or $0.06 per share, compared to a net loss of $8.1 million or $0.13 per share for the fourth quarter of 2013.

For the full year 2014, revenues were $45.9 million, compared to $24.1 million in 2013, with the increase primarily due to revenues from our collaboration agreements with Shire and Biogen.

Total operating expenses were $72.7 million in 2014, compared to $50.8 million in 2013, with the increase primarily attributed to external research related to our research programs under collaboration with Shire and Biogen, as well as our proprietary programs.

The net loss for the full year 2014 was $26.4 million or $0.39 per share, compared to a net loss of $26.6 million or $0.48 per share for 2013. Turning to the balance sheet, Sangamo ended the fourth quarter of 2014 with $226.6 million in cash, cash equivalents, short term investments and interest receivable.

Our net cash used in operating activities was $2.9 million for the fourth quarter, resulting in $5.8 million net cash used in operating activities for the full year 2014.

Our ending cash position exceeded our financial guidance for 2014, which was to end the year with at least $220 million in cash and equivalents, while our revenues and operating expenses came in within the ranges to which we previously guided.

Regarding our financial guidance for 2015, we expect to end the year with at least $180 million in cash and equivalents and short-term investments.

The year-end cash guidance is inclusive of research funding and milestone payments from Shire and Biogen, as well as funding from grants awarded by CIRM, California’s stem cell agency, for the research and development of our beta thalassemia and HIV stem cell programs, but exclusive of any new funding from the collaboration, partnership, equity financings, or other sources.

We expect revenues to be in the range of $60 million to $70 million in 2015. Revenues include partial recognition of upfront payments, reimbursement of research services, and milestone payments from Shire and Biogen. We also expect the revenue to be ramping during the year, consistent with the trends of the last couple of years.

We expect to incur operating expenses of $100 million to $110 million for the full year of 2015.

The increase in 2015 operating expenses over 2014 is primarily attributed to our progress in development of our proprietary ZFP therapeutic programs, our partnered clinical and preclinical programs with Shire and Biogen, and expansion of our manufacturing capabilities.

I am pleased to say that the company is in a solid financial position as we begin 2015. We look forward to an exciting and busy year this year as we advance our ZFP therapeutic pipeline. Thank you. I will now turn the call back over to Edward..

Thank you, Ward. As you have heard, we ended 2014 with approximately $227 million and are guiding to ending 2015 with at least $180 million in cash. This assumes no additional financing activity or agreements beyond our existing collaborations.

As Ward mentioned, with the progress that we have made advancing our ZFP therapeutic pipeline, including bringing two new programs into the clinic, we expect our operating expenses to increase this year.

However, with our ongoing funding and future milestones from our collaborations with Shire and Biogen, and CIRM research awards, our current balance sheet provides a very solid basis from which to work and will enable us to complete our ongoing clinical trials and to file numerous IND applications by the end of 2015.

These include both programs partnered and funded by Shire and Biogen as well as our proprietary programs in Hunters and Hurler syndrome that have significantly benefited from our partner-funded work. So, let’s turn to those programs.

I’ve asked Philip to briefly outline the approach that we are taking forward with Biogen for both beta thalassemia and sickle cell disease, to summarize the data that we presented at the annual meetings of both ASH and SFN, and to highlight why we believe that our approaches to treatment of these diseases have significant advantage over currently available therapies and those under development.

I’ve also asked him to outline the reasons why mRNA delivery is such a good fit for our technology and potential avenues for expansion of its applications in vivo.

Philip?.

Thanks, Edward. As Edward mentioned, we are excited to be in a position to begin a clinical trial in our Biogen-partnered beta thalassemia program, and we believe that our strategy to develop a one-time, lasting therapy has significant advantages over both existing therapies and those currently under development.

Let me provide some background on the diseases that we’re addressing in our collaboration with Biogen. Both beta thalassemia and sickle cell disease are results of mutations in the gene encoding beta globin, a subunit of the hemoglobin protein that is found in red blood cells, or RBCs, and enables them to carry oxygen from the lungs to the tissues.

The gene defect responsible for beta thalassemia results in poor production of RBCs, leading to life-threatening anemia; enlarged spleen, liver, and heart; and bone abnormalities.

Beta thalassemia major is a severe form of thalassemia that requires regular, often monthly, blood transfusions and subsequent iron chelation therapy to treat the resulting iron overload.

Both diseases have been treated by a bone marrow transplant of hematopoietic stem and progenitor cells, or HSPCs, from a matched donor, a so-called allogeneic transplant.

However, this therapy is quite limited due to the scarcity of matched donors and the significant and serious risk of graft versus host disease after transplantation of the foreign cells.

The ultimate goal of our ZFP therapeutic approach, which is based on our highly specific ZFN genome editing platform, is to provide a safe, lasting therapeutic solution for both sickle cell disease and beta thalassemia.

We make use of the fact that these patients actually already have a normal, functional copy of a form of hemoglobin in their genome, fetal globin, which can be substituted for the mistake-carrying adult beta globin. Neither sickle cell disease nor beta thalassemia patients are born with symptoms of disease.

This is because during early development, a fetal form of hemoglobin is made using a separate beta-like globin gene called gamma, or fetal, globin. This fetal form of hemoglobin fully protects patients from developing disease symptoms.

However, in infancy, production of fetal globin is turned off and is replaced by expression of the adult type beta globin that, in these patients, is defective, and symptoms of disease soon appear. It is well-established that the persistence of fetal hemoglobin beyond the newborn stage lessens the severity of both of these disorders in adults.

The goal of our therapy is to enable continued production of fetal globin in the adult and thus ameliorate the disease in all patients. Our proprietary ZFN-based genome editing technology enables multiple approaches to the correction of beta thalassemia and sickle cell disease that are precise and highly specific.

In the approach that we are using for beta thalassemia, we are mobilizing and collecting HSPCs from the blood of beta thalassemia patients and treating those cells with ZFNs designed to knock out a key regulator of the biological switch from fetal to adult beta globin expression, the gene encoding BCL-11A.

Without BCL-11A expression, the switch to the use of the mutated adult beta globin gene does not happen. Instead, efficacious fetal hemoglobin continues to be made, resulting in the production of increased levels of functional hemoglobin and RBCs.

Unlike conventional gene therapy approaches that rely on random insertion of replacement genes and powerful promoters to drive their expression, our approach is a precise and highly targeted modification that adds nothing into the genome, and thus eliminates the risk of insertional mutagenesis.

Furthermore, by performing our ZFN BCL-11A knockout in hematopoietic stem cells that are isolated and return to the same patient, a so-called autologous transplant, our approach can be used to treat the vast majority of patients, eliminating both the need for a matched donor and the risk of acute and chronic graft versus host disease, which has limited the use of BMT as a treatment for the hemoglobinopathies.

Our open IND enables us to begin a trial in transfusion-dependent patients with beta thalassemia major.

While the primary objective of the study is to evaluate safety and tolerability, we will also collect data on hematological and immunological reconstitution post the transplant, effects on laboratory markers of thalassemia, impact of therapy on RBC transfusion frequency, and on the iron burden in the subjects one year after infusion.

Also at the end of 2014, we presented very important proof of concept data at ASH from our in vivo protein replacement program, or IVPRP, which is designed to provide curative therapies for a wide range of monogenic diseases, including hemophilia and LSDs.

With this targeted approach, we can precisely insert a therapeutic gene - for example, the factor nine gene for hemophilia B or the enzyme for Hunter syndrome - into a small proportion of the [albumin] genes in a patient’s liver.

We believe that this will enable patients to make a continuous supply of replacement enzyme rather than having to be treated repeatedly with recombinant enzyme injections. If successful, our approach may result in an engineered genetic cure.

The data presented at ASH built on our previously published work in mouse models and demonstrate scale up into larger animals with efficient, dose-dependent ZFN activity at the albumin locus in non-human primates, yielding correspondingly therapeutic levels of factor nine, with no significant alteration in circulating albumin level.

Studies in mice also demonstrate that we are able to achieve stable factor nine production from the IVPRP for over one year. This raises a point that we feel is key in our approach relative to conventional in vivo gene therapy for diseases such as hemophilia and LSDs.

These strategies all use AAV to encode and deliver a replacement gene to liver cells. AAV is non-integrating, so when that cell divides, the AAV is diluted, as it is shared between the two daughter cells. Thus, as the liver grows or turns over, we expect that AAV will be washed out and expression of the gene that it encodes will diminish.

In contrast, with the IVPRP, we are making a permanent change by placing the replacement gene into the albumin locus, so when those cells divide, the levels of expression of the replacement gene remain stable.

In most of the diseases, the population in greatest need is small children, and so we expect that this stability will be critical to achieving a long-lasting therapeutic effect from a single administration over the lifetime of the patient.

Turning to our proprietary IVPRP applications in Hunter and Hurler syndromes, we also presented data that demonstrated the efficient production, secretion, and tissue uptake of functional iduronate 2-sulfitase and alpha-L-iduronadase, the two enzymes that are deficient in Hunter and Hurler syndromes, respectively.

These data are important as they demonstrate that these proteins produced by the IVPRP are functional, enzymatically active, and are secreted into the bloodstream in a form that can be taken up by other tissues, which is important for lysosomal enzymes that need to function inside cells throughout the body.

Later this week, we will present an update on these data at the 11th Annual World Symposium, a forum dedicated to research and clinical applications related to lysosomal diseases. As Edward mentioned earlier, we continue to develop delivery options for our ZFP therapeutics to enable us to maximize the value of our ZFN genome editing platform.

We already use mRNA coupled with electroporation as an effective delivery method in our ex vivo genome editing programs because, although mRNA is rapidly turned over in cells and tissues, ZFNs need to be present only transiently to enable permanent changes in the genome. The use of mRNA has certain advantages over viral vectors, including re-dosing.

We recently announced that we have begun to in license technology that will enable us to formulate mRNA for use in vivo.

The goal is to expand the use of our ZFN technology into new applications such as knockout of well-established repression targets in the liver, the idea being that one could dose the ZFNs to effect, that is, to administer the ZFNs in several treatments until a sufficient level of permanent genome editing is obtained to achieve a lifelong therapeutic outcome.

In contrast, conventional RNA-based approaches such as Antisense and RNAi must be chronically administered to maintain a therapeutic effect. MRNA delivery in vivo potentially expands the application of ZFN genome editing to numerous therapeutic knockout targets such as PCSK9, which encodes a protein involved in cholesterol homeostasis.

Knocking out PCSK9 gene is expected to lower levels of low-density lipoprotein cholesterol, or bad cholesterol, which is considered a risk factor for cardiovascular disease. Our mRNA in vivo delivery work is still in the research stage, but I’m looking forward to updating you on our progress in the future.

Last but not least, we also presented data from our Huntington’s disease, or HD, program at SFN. Unlike the other programs that I’ve talked about thus far, this is a gene regulation application of our ZFPs.

We have shown before that these highly specific ZFP regulators can selectively repress expression of the mutant form of the Huntington gene, which causes the disease, while leaving the normal gene largely unchanged in both patient derived cells and in several mouse models.

Importantly, the data also demonstrate these selective effects over the full range of mutations relevant to human disease. We are delivering these ZFP therapeutics directly to the brain using AAV.

In this case, as there is little turnover of neurons in the brain, we expect to maintain relatively stable levels of our ZFP therapeutic over the patient’s lifetime. As HD progresses, there are various changes in the brain, one of which is the accumulation of Huntington protein aggregates.

Importantly, in animal models of the disease, the ZFP therapeutic not only prevented formation of these aggregates, if administered at early time points, but also reversed aggregate formation when administered at later time points.

In addition, compared to controls, ZFP treatment reverses physical indications of disease as manifest in a statistically significant reduction in clasping behavior, which mimics the motor symptoms of the human disease.

These data were very well received as this ability to selectively target and repress expression of the mutant Huntington across the full range of patient relevant mutations has not been observed using any other approach, and there is no cure for this devastating progressive neurological disease.

We have also been invited to present the data at the 10th Annual Huntington’s Disease Therapeutics Conference later this month. We remain on track to file an IND for this program sometime at the end of 2015 or the beginning of 2016. And with that, I’ll turn the call back over to Edward..

Thanks, Philip. As you can see, we expect 2015 to be a year of very significant progress in delivering on the power of ZFP therapeutics. We will complete our ongoing 1401 Phase II clinical trial in our SB-728-T HIV/AIDS program and our goal is to begin the Phase I/II clinical trial of this same approach in HSPCs in the first half of this year.

With positive data from these studies, we plan to partner the HIV program for further development and commoditization.

We expect to have initial data from the 1401 study later in the year and we will provide an update on data from ongoing clinical studies in this program at this year’s Conference on Retroviruses and Opportunistic Infections, or CROI, in February.

We also expect to initiate our multicenter Phase I/II clinical study in beta thalassemia in the first half of 2015. While this program is partnered with Biogen, Sangamo is responsible for carrying out the first human clinical trial.

We should also note that Biogen will take the lead role in prosecution of the sickle cell disease IND application filing and trial. We have ambitious goals for our pipeline progress in 2015. This year, our goal is to file INDs for our factor nine hemophilia B program and our Huntington’s program partnered with Shire.

Although, as I have said before, as evidenced by the timing around our factor eight hemophilia A IND submission, ultimately, we don’t control that timing. In addition, our goal is to file two INDs for our proprietary IVPRP LSD programs in Hunter and Hurler syndrome by the end of 2015.

We also expect that data from the CERE110 Phase II Alzheimer’s study that will be acquired from Ceregene will read out this year.

We have leveraged the work funded by our partner programs and advancements across our platform to develop our proprietary programs that are focused on monogenic diseases in which proof of concept can be obtained relatively quickly and in small clinical studies that require modest initial investment in manufacturing infrastructure.

We view these programs as one of several potential paths to further growth and forward integration into late-stage clinical development and commercialization. And finally, on the financial side, we are in very good shape. We ended 2014 with approximately $227 million and expect to end 2015 with cash and cash equivalents of at least $180 million.

We look forward to keeping you informed of our progress. We will be presenting at the Leerink Global Healthcare Conference later this week, and at the Cowen & Company 35th Annual Healthcare Conference in early March in Boston.

In May, we have been invited to present at the Deutsche Bank Healthcare Conference in New York and the 2015 Bank of America Merrill Lynch Healthcare Conference in Las Vegas.

As far as updates from our therapeutic programs go, as we mentioned, we will be presenting data from our LSD programs tomorrow at the 11th Annual World Symposium, our HD data in an invited presentation at the 10th Annual Huntington’s Disease Therapeutic Conference, and will provide updates from our ongoing HIV clinical trials at CROI later in February.

In addition, we will have our usual significant presence at the annual meeting of the American Society for Gene and Cell Therapy in May. This completes our prepared comments. I would now like to open the call up for your questions..

[Operator instructions.] The first question comes from Charles Duncan..

I guess a couple of quick ones on HIV.

I don’t know if you can answer this, Ed, but for the 1401 study that’s going to read out this year, what level of efficacy are you going to look for to catalyze adequate partnering interest?.

Well, I think it’s too early to say what will catalyze partnering interest. I can tell you that the discussions we’ve had with several partners, and we keep updated on this, is a function not only of reduction in viral load but it’s a function of durability of that reduction and then the long term reduction of the viral reservoir.

So it’s really a combination of those three elements that I think are of greatest interest to companies, particularly in the context of antiretroviral therapies that have a good effect in terms of acute viral load control, but have no effect on viral reservoir.

So it’s a multidimensional answer, and one that I think we’re looking for in both the ongoing studies as well as the 1401 study..

So it sounds like maybe we shouldn’t expect, the week after the data, for a partnership to materialize?.

Well, I think that’s a reasonable thing to say. [laughs] Thank you for being so reasonable..

And then how much of the discussions do you think depend on the City of Hope trial and the new Penn study? I assume they’re going to play into the discussion..

I think that’s a good question, and again, it’s a qualitative versus quantitative answer.

I know I’m looking forward to data from the City of Hope study, but I can tell you, I think the principal driver, the vast majority, and again, this is qualitative, not quantitative, but the vast majority of the driver around the discussions we’re having are really based upon the T-cell program that we’re conducting and the data we’re generating in the previous studies as well as the 1401 study..

The next question comes from Ritu Baral from Cowen..

A question on your beta thalassemia study.

Can you give us any more detail as to the design, number of patients, where you might be enrolling, what sort of centers, etc.? And how do you think of the bogey in that trial, given the landscape of beta thalassemia gene editing and gene therapy right now?.

I’ll give you a high level comment, and I’ll ask Philip or Dale if they want to add anything at this point. Our plan is to present in some detail the specifics that you’re asking for after the first patients have been treated, and we’ll come back and talk about that at that time and give a little bit more color on that.

In terms of the level of efficacy or the bogey that we’re looking for in terms of fetal production, Philip, maybe you could talk a little bit about what we’ve previously presented, or what we’ve talked about in that?.

Sure.

So, we believe, based on our preclinical studies and data that actually identified BCL-11A as a critical master regulator of the fetal to adult switch that on a per-cell basis, a cell that carries the genetic signature that we can generate will express sufficient fetal globin to functionally restore the erythropoiesis and the ability to make red blood cells.

And so from our perspective, the challenge, if you will, and we’ve already presented, I should say, at ASH, I guess now almost two years ago, the ability to do that, modification at a very high frequency on a full clinical scale.

So the challenge is then transplanting those cells into patients with sufficient numbers to achieve the desired outcome and that number is really driven by the chimeric transplant literature which suggests that chimeric patients that have 10% to 20% of their bone marrow deriving from normal [unintelligible] cells that have been transplanted in, thus efficient to drive 80% to 90% of the erythroid cells in those patients, being sort of derived from those cells.

And so actually the transplant barrier is not fantastically high, but we obviously need to make sure we get enough of those cells to engraft.

And so as we thought about the design of this study, one aspect is the number of cells that we have that carry the desired signature, so the number of BCL-11A mutated cells, and the second is how to condition the patients appropriately to achieve that degree of transplant and chimerism..

So you’re thinking more in terms of engraftment success versus overall hemoglobin F levels at this point?.

Yeah, so that’s how I think about it, because I’m sort of from the genome editing side, and so I think about how many edited cells we have and getting those cells to engraft. And at least in the studies we’ve done preclinically, cells that have that signature essentially always provide sufficient fetal globin to drive normal erythropoiesis.

So I think that the genetic signature, we think is, if you will, fully [unintelligible] to correct the disease. And so I view this as a transplant problem. You could also view this as what are the levels of hemoglobin that you have to alter to archive a therapeutic effect.

Dale do you want to comment on that?.

Most of these patients will have hemoglobins of six or so, so it will take an increment of about three to four [grams] to get them to therapeutic level that we’re trying to shoot for with the [unintelligible] cell transfusions.

This is a really complicated equation, because it includes the production of the cells, the half-life of the cells, and reaching a new steady state. So nobody really has any good idea of how to extrapolate that from the tissue culture to the in vivo situation.

So I think the engraftment of 10% to 15% is enough to actually cure thalassemia using an allo transplant is sort of the number we’re looking at..

The next question comes from Ryan Martins from Jefferies..

I was going to ask a similar question.

As a proportion of total hemoglobin, what proportion do you think fetal hemoglobin needs to be when you have it engrafted, etc.?.

The way I view that is it’s more a function of the percentage engraftment than the total F levels, if you will. In beta thalassemia patients, essentially all of their self-derived blood cells by definition have activated F. Otherwise, they wouldn’t have made it through erythropoiesis.

I don’t mean to be cagey here, but it’s a slightly strange setting, because we’re not putting in a separate trans-gene that you can measure. It’s a slightly strange number to give. And that’s why we’ve really focused on that engraftment number, that we think that the genetics that we’re generating are fully penetrant.

And so the question is, how many of those cells do we need to engraft to achieve a therapeutic level of erythropoiesis. And as Dale just mentioned, we think that’s going to be in the 10% to 15% range..

And maybe one question on the guidance for revenues.

Is that assuming IND filing for factor nine in Huntington’s?.

We haven’t specifically indicated that, but we’re modeling based on what we think is a conservative end of the spectrum for that. But yes, you can assume that there is some assumption in there with respect to IND filings..

Your next question comes from Cory Kasimov of JPMorgan..

How quickly do you think you can get proof of concept data from the beta thalassemia trial? I know we’re getting a little bit ahead of ourselves there.

And then I guess the second part of that, who controls the data release? Since you guys are running the trial, can you just release the data as you see fit? Or does Biogen play a role there?.

I’ll take the latter part first, and then Philip and Dale can answer the second. No, this is a partnered program, so it will definitely be a conversation with Biogen as to when and where we present data from both the beta thalassemia study as well as the future data from the sickle cell study.

Philip or Dale, you want to take the first part of that?.

So with respect to speed, I think that the best analogue out there is probably the Blue Bird data with respect to transplant and erythropoiesis from the transplanted cells.

And so we don’t believe that the ZFN approach should be any different in that regard, and so that’s certainly the working hypothesis here, although obviously no one’s put a ZFN modified stem cell into a thalassemia patient before. So there could be a difference in the kinetics, although we don’t anticipate that..

[Operator instructions.] And there appear to be no further questions..

We’d like to thank you for joining us, and we look forward to speaking with you again when we release our first quarter 2015 financial information. We’ll be available later today if there are any follow up questions. Thank you..