Good day, everyone and thank you for standing by and welcome to the Sangamo Second Quarter Of 2021 Teleconference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session.

[Operator Instructions] I would now like to hand the conference over to your speaker today, the Head of the Corporate Communications, Ms. Aron Feingold, please go ahead..

Good afternoon and thank you for joining us today.

With me this afternoon on this call are several members of the Sangamo executive leadership team including Sandy Macrae, Chief Executive Officer; Mark McClung, Chief Business Officer; Prathyusha Duraibabu, Chief Financial Officer; Jason Buttno, Chief Scientific Officer, Rob Schott, Head of Development and Bettina Cockroft, Chief Medical Officer, slides from our corporate presentation can be found on our website.

sangamo.com under the Investors and Media section on the Events and Presentations page. This call includes forward-looking statements regarding Sangamo's current expectations these statements include but are not limited to, statements relating to potential value drivers clinical catalysts and advancement of our preclinical pipeline.

Plans and timelines for enrolling and conducting clinical trials and presenting clinical data, potential clinical data outcome, our 2021 financial guidance, our expectations regarding our financial performance and sufficiency of our cash resources and other statements that are not historical facts.

Actual results may differ materially from what we discuss today.

These statements are subject to certain risks and uncertainties that are discussed in our filings with the SEC, specifically our annual report on Form 10-K for the fiscal year ended December 31,2020 as supplemented by our quarterly report on Form 10-Q for the fiscal quarter year ended June 30, 2021.

The forward-looking statements stated today are made as of this date and we undertake no duty to update such information, except as required by law. On this call we discuss our non-GAAP operating expenses. Reconciliation of this measure to our GAAP operating expenses can be found in today's press release which is available on our website.

Now, I'd like to turn the call over to our CEO, Sandy Macrae..

Thank you and good afternoon to everyone on the call. This is an exciting time at Sangamo. As we look forward to multiple clinical catalysts over the next several quarters, representing potential near-term value drivers.

At the same time, we are advancing our promising preclinical pipeline, the focuses is on our differentiated CAR-Treg approach for autoimmune diseases and genome engineering for CNS diseases towards INDs [indiscernible] potential mid-term value drivers.

Beyond that we continue to invest in early-stage research to further mine value from our core zinc finger platform. We continue to make steady progress on our wholly owned Fabry disease Phase one two clinical study.

During the quarter, we do the fourth patient and based on initial safety data from patients dosed to date the safety monitoring committee endorsed dose escalating to the third dose as part of the study protocol.

We are currently screening patients for the third dose cohort and expected towards the first two patients in this third cohort, by the end of the year. We will make a decision on when to present initial data from this study depending on clinical timelines and we will publicly announce our plans when available.

In addition, we currently have three sites open and what we believe is the first inhuman CAR-Treg study and we plan to board the first patient at the end of this year. We're very excited about this study.

We believe this proof of concept study evaluating TX200 in kidney transplant rejection will help us understand CAR-Treg pharmacology and biology in humans. As well as advance process development knowledge. We hope this study establishes a foundation for a portfolio of wholly owned CAR-Treg therapies for autoimmune indications.

In the fourth quarter of this year, we and Pfizer expect to present two year results from the Phase one two ultra study in hemophilia A.

We look forward to having a clear understanding of durability through two years from the five patients in the high dose cohort from the Phase one two ultra study, as well as from the phase three data from additional patients and we expect to read out in 2022. Together, these data will be highly informative about the potential product profile.

In addition, each of this year, we and our partner Sanofi expect to share initial Phase one two data from our PRECISION one study at an upcoming medical meeting. The study is investigating SAR445136 for the treatment of sickle cell disease.

We expect to report interim efficacy and safety data, the first four patients those with the least three months of follow-up. Finally, Biogen recently selected a fourth neurological disease gene target under the collaboration agreement and we have begun early research activities on therapies addressing this target.

This quarter, our former General Counsel Gary Loeb made the personal decision to be signed out for another opportunity. We thank him and wish him well in his future. However, we are pleased today to announce that we have promoted Scott Willoughby to General Counsel and Corporate Secretary.

Scott has contributed significantly to Sangamo overseeing all corporate law and compliance matters since he joined us in March 2020. Scott has over 20 years of legal experience with expertise in corporate governance, SEC reporting, corporate finance compliance, mergers and acquisitions and transactions.

In addition to Scott's appointment, our executive team was recent strengthened by the appointment of our new Chief Financial Officer, Prathyusha Duraibabu.

Prathyusha has served as Sangamo's Principal Accounting officer for nearly two years, she has contributed significantly with a wealth of experience and her proven track record in optimizing financial strategy and operations driving operational organizational change and building diverse teams.

It so pleasing to promote from within talented individuals and I look forward to Scott and Prathyusha's leadership. And with that, I will turn the call over to Prathyusha for a financial update..

Thank you Sandy, and good afternoon. It has been my pleasure to serve as Sangamo's Chief Financial Officer for the past two months and I look forward to continued interactions with all of you as we progress our business forward.

Our financial results for this quarter available in the press release issued this afternoon, which can be found on our website. This quarter, we continue to invest in the advancement of our clinical programs, our preclinical research pipeline and expanding our in-house manufacturing capabilities.

We ended the quarter with approximately $579 million in cash, cash equivalents and marketable securities. We believe that our balance sheet remains strong and will allow us to reach several important R&D milestones including the potential submission of a BLA for our hemophilia A product candidate.

Turning to 2021 full year guidance; we would like to reiterate the guidance we provided in our prior call, we continue to expect non-GAAP operating expenses, which exclude estimated non-cash stock-based compensation expense of approximately $30 million to be in the range of $255 million to $275 million for the year.

We will now turn it over to the operator to open the line for questions, operator..

Thank you. [Operator Instructions] And our first question is from Maury Raycroft of Jefferies. Please go ahead..

Hi, this is Kevin [ph] on the line for Maury, today, thank you for taking my questions.

So for TX200, there were some prior disclosures, I think from TX cell it's discussed use of Fox v3 and use of lentivirus and there are a number of CAR-Treg competitor is moving forward in the space, on the technical side what should investors be focused on, when trying to appreciate differentiation Sangamo's approach with TX200 versus what competitors are doing..

Thank you for your question. I think this is one that would be best answered by Jason, our Chief Scientific Officer, Jason.

Yes.

Thank you Sandy, so Sangamo, the partnership that Sangamo started with TxCell with the acquisition of like CTxCell group brought together our extraordinary genomic engineering platform with the expertise that TxCell has built in Treg biology over the years and that work has only grown and matured over the last years as we've continued to push forward our TX200 program as well as programs that we are advancing behind that for multiple sclerosis and inflammatory bowel disease.

In addition to that we are very invested in moving from an autologous cell therapies to allogeneic cell therapies through the use of our zinc finger genomic engineering platform and through our partnership with Mogrify and our internal work on iPSCs.

So the real differentiator for me between what Sangamo is doing and what these new entrants into the field are is simply the breadth of expertise that we have and the time that we've invested here and we're super excited about the programs and the potential to really transform the treatment of autoimmune disease..

Great, thanks. And then just on the AV side. So when considering discussion on AV safety and awaiting the immune system Sangamo has been an innovator there, are there any new developments on the AV side that you can talk about particularly with AVs that can be used with your neuro programs..

So, thank you for that question too. We continue to invest in a group within Jason's organizations that are looking at optimizing the AV use with the CNS. We spoke about this year at GCT and we'll talk about it as the data evolves.

We have some very smart scientists doing this and we are of the opinion that delivery is so important for genomic engineering, it goes hand in hand with the molecular biology of the zinc fingers and we look forward to sharing more data in the months to come..

Great. Thanks for taking my questions..

And our next question is from Yanan Zhu of Wells Fargo Securities, please go ahead..

Hi, thanks for taking my questions. So, a question on the Fabry disease program, I guess I'm wondering in for you to determine a dose to move into the dose expansion what data point or data points would you pay attention to and what kind of a follow-up would you require in order to make that call.

And also each dose level has only two patients do you feel you have enough data point to make a determination of those for the expansion and lastly, how many patients do you think you would enroll into the dose expansion study. Thank you..

Thank you and important questions about a study that is we're very passionate but so can I turn this to Mark and then get Rob to add in from a clinical point, let's start with Mark..

Yes, so thanks for your question. A lot of these questions are related to the trial. I mean, as you probably are aware, the star study is primary endpoint of safety and tolerability.

The secondary endpoints are pharmacodynamics of ALPHA Gal A and the presence of the substrates in the plasma over time as well as the impact on eventual on ERT administration, what I'll do is maybe hand it over to Rob, to answer the specific questions in terms of where we're at with the dosing cohorts and how we will progress into the expansion cohort, Rob..

Yes, thank you very good question. We have announced that these DMS be the basically the Data Safety and Monitoring Board has met and has endorsed our moving to the third dose cohort, so we have to fill the safety requirements in additional requirements for the independent the MST to allow us to proceed to our highest dose cohort.

We're not disclosing at this point the specifics of that, but we are moving to that cohort and plans to dose, the next two patients in the cohort this year and we'll be sharing data along the clinical timelines that are appropriate.

But again, the most important piece of information that we're sharing with respect to your question is that the DMSP approved unanimously the dose cohort..

Okay, got it. Got it. Thanks for the color..

And our next question is from Geoff Meacham. Bank of America. Please go ahead..

Hey guys, it's Aspen on for Geoff. Thanks for taking the questions.

So just going to follow up on the last question, can you remind us on the dose levels of three dose levels for Fabry, I know obviously in some other gene therapy trials in the past, yes, the lower doses were in play is adequate and higher dose kind of address the level of efficacy, some other companies looking for a different programs, I guess I'm trying to get a sense of it is, is that what we're seeing here or was this dose escalation always kind of part of the plan and you know if based on the dose escalation is the primary driver the alpha gal levels that you're looking at to see.

Yes. Thank you..

So, let me say this and I know this must be so frustrating for all of you we have not revealed the dose cycles we're going in other than this 3 cohorts.

We have learned a great deal from the hemophilia A study of both the kind of levels that are appropriate and it's always patient [indiscernible] about starting at a dose that gives the patient some hope of benefit versus being prudent for something that is the first time it's ever going in to human and we are immensely grateful for patients coming and taking that first dose not knowing until we see the results for those been any benefit to them.

So we're going to have 3 doses and we hope to be able to describe the dose effect across the 3 doses..

Okay, thanks. And maybe just one quick follow-up. So the FDA's listening and outcome I think in early September AAV maybe just help us frame what your expectations for that are, if you'll be at all involved in that meeting..

We have a group of our staff that will be attending virtually or in person that meeting. Each company has those so few patients with AAV. And the agency has the greatest store of knowledge on the safety and efficacy of AAV and so I I'm looking forward to the meeting and looking forward to hearing the things of the agency fees across many programs.

So as we can all learn and the patients can be protected as much as possible..

Okay, great. Thanks, Sandy..

And our next question is from Gena Wang of Barclays. Please go ahead..

Thank you. My first question was a follow-up on the Fabry disease program and just wanted to ask the exactly what kind of a level, if you can give a little bit more quantitative answer regarding what volumes are looking for to define as right dose for example the Lyso Gb3 are we talking about over 50% reduction or even below ERT level.

So this is the first question. Second question is a hemophilia A program. Just wondering if 2-year effect A level had some decline do you expect FTE will ask for longer than one year follow-up for the Phase 3 study..

Good afternoon, Gena. So let me answer those questions in reverse order. The Pfizer is handling the communication and the regulatory interactions are on the affiliates and I am so pleased that our baby has been looked after Pfizer and I know that they will do a great job and helping those regulatory conversations.

I want Mark to join us discuss that with what we're looking for to determine success..

Sorry.

Apologies, the program goal is to, to look for a predictable durable expression of the alpha Gal A enzyme and then to see whether or not the results in accumulation of the substrates of Gb3 and it's soluble derivative Lyso Gb3 go down, we've not commented on the amounts that we, that we're expecting to see, as Sandy mentioned we've dosed the first four patients, we're moving into screening for the third dose cohort which is terrific and hopefully we'll have an update for you by the end of the year in terms of when you might start seeing some of that data..

I'm sorry, just wondering, I understand you cannot talk about the first two cohort data, but just wondering what is your goal to determine okay, that's the right dose..

We've not commented on that Gena, I mean I know some of the other companies have commented on that percent substrate reduction.

EPRO Bio has done that, but we've, our belief is obviously you'd want to see a fairly significant reduction in the substrate because that seems to linked to the improvement or the in the decline of the EGFR, which is really important for patients..

Okay, that's fair. Thank you..

But Gena, I want to strike a note of caution issue interpret the EPRA Bio data.

The reduction in Gb3 will depend, and life of Gb3 would depend where you start, so if you have a high level of Lyso Gb3 and your compound is effective, you get a reduction, if your Lyso Gb3 is already at a low level due to ERT yield addition, it will do a reduction, the dramatic graph that EPRA Bio shows is an artifact of the patient that they recruited..

Okay, thank you..

And our next question is from Ritu Baral of Cowen. Please go ahead..

Hi guys, I want to just follow up on Fabry again, can you tell us about the safety findings, can I ask if what has been observed and learned in the cohorts to date and the preclinical, I guess investigation to date, what is it tell you about and the safety of the program and not just the standard AV liver or complement issues but also cardiac safety with in the Fabry population just given competitive programs have shown signals, is this something worth reading patients out for or is this something that could be unique to various programs and then I have a follow-up..

So, let me answer that slightly tangentially, it's remarkable because we have dosed with AV6 across a number of programs and other than the occasional and immune response allergy response or the occasional AOT, considering how much virus we're giving is remarkably safe, these viruses are - the safety of them is very encouraging.

The second thing is that we do not determine the safety ourselves, but have a DSMB that overviews all of the safety and allows us to carry on.

I imagine that free line has a DSMB or some safety monitoring committee that could have judge their cardiac events and given then cancel on whether or not, they could then advance, we have had very clear unanimous response from our DSMB..

Got it. That is very helpful. And then just because manufacturing build out is prominently featured in the update, how should we be thinking about CapEx allocation for the manufacturing build out across selling programs..

Prathyusha, your thoughts on that..

Our manufacturing build that is going to be based on what they need across the different programs and we will assess it in the next six months to 18 months..

Got it, okay..

I'm so glad we invested in manufacturing, 18 months, two years ago and they are, they have completed every manufacturing, they are on track to do cell therapies manufacturing in Brisbane and [indiscernible] by the end of the year.

And the reason I say that is, there is between idea and clinical material and manufacturing is over a year no matter who does it and the, there is a queue you know, the CMO store manufacturing slots, but more importantly if you look at what's happened with other AEV companies, it's about quality of manufacturing is the most important regulatory discussion and I feel by having our research group side by side with our manufacturing group to do process development, we have the best chance, all the best product and the process is the product and so I think it was a wise investment we made..

Got it.

And then, Sandy, I just want to triangulate your comments into the slides that were sent around today, especially in relation to the Biogen collaboration, you had mentioned progress in the Biogen program with the, with an undisclosed target, I want to make sure it's that like on slide 22 you have alpha Synuclein Tauopathies and undisclosed you're referring specifically to that undisclosed neurology target or should we be thinking about progress in, one of the three..

Jason, can you help us and tangle that how many targets are on the go now in Biogen?.

We now have - sorry about that.

We now have four targets in the Biogen collaboration, we're thrilled to see them progressing, it's great to be working with a partner like Biogen, I think that the, the fact that we are progressing on all of these targets is a reflection of just how much confidence the Biogen team has in the work that Sangamo team is doing to support these programs.

So I'm really looking forward to when Biogen can tell everyone, more about the targets and about the work that we're doing and when it's appropriate, we will certainly be able to, to publish the work that we've been doing to support the team..

And Jason before you go back on, back on mute, we had, we recently had a very positive meeting with Jay and the team..

Yes. Yet another example of the work that we're doing in the CNS and another example of what I think is one of the really differentiated aspects of our platform both from a functionality point of view and in our ability to use zinc finger transcriptional activators and transcriptional oppressors to modify cells in a therapeutically relevant way.

So we're really excited about that collaboration as well and we're looking forward to the output of both of those collaborations and kind of building on the expertise in the CNS area that is supporting both of those programs, we are also advancing some internal effort in the CNS and we'll be talking about those when it's appropriate, as well..

Got it. You've got two undisclosed neurology targets with Biogen along with 502 alpha synuclein and 501 Tauopathies, correct..

Correct, correct..

Got it. Thank you..

Welcome..

And for the last and final question from Ben Burnett of Stifel. Please go ahead..

Hi, this is Kellie Briza on for Ben Burnett, thanks for taking our question. We have a question around TX200 and I was just wondering if you could elaborate on how the CAR is designed and if you've disclosed it co-stimulatory domain, as well as what do you expect expansion connects to be in the transplant setting relative to what is new in oncology.

Thank you..

Jason, we haven't said much on this.

Can you give whatever guidance you can?.

Yes. So I am not sure if we have disclosed the construct for our CAR, but needless to say we are leveraging the learnings from the oncology field and the advancements that have been made in cell therapy and oncology is what we are building upon, you know without that work, that there would not be the CAR-Treg programs that we're advancing.

That being said, there are some very different biology at work within regulatory T cells and that's where the work that the TxCell team did and then since the acquisition the Sangamo team have been doing over the years to really understand the optimal CAR construct and the optimal ways to purify ourselves and expand ourselves in advance of infusing in to patient, but it's all really paying off, because this is work that is specific to T-regs and there were things that were not obvious based on the oncology experience and that deep understanding of the T-reg biology is what we're bringing to bear on the TX200 program and we're really excited to see it move forward..

Thank you.

I was wondering also if you would be able to give any details when you expect to disclose proof of concept data for this study?.

Let me have - let me help you with that which is do you happen to guidance. Yes, we haven't guided and we'll do that as soon as soon as it's appropriate. It's the, the first thing that we're testing is the safety obviously and when we have data available, we will certainly share it, but that we haven't disclosed that at the moment..

Thank you..

Thank you, everyone. And at this point, I would like to turn it over to Aron Feingold, the Head of the Corporate Communications..

Thank you once again for joining us today and for your questions. We look forward to keeping you updated on our future developments..

And this concludes today's conference call. Thank you everyone for your participation. You may now all disconnect. Thank you so much..