Sangamo Therapeutics, Inc. (SGMO) Q2 2011 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Sangamo BioSciences Teleconference to discuss Second Quarter 2011 Financial Results. This call is being recorded. I would now pass you over to the coordinator of this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications. Dr. Elizabeth Wolffe – Senior Director of Corporate Communications: Thank you very much. Good afternoon and thank you for joining Sangamo’s management team on our conference call to discuss the company's second quarter 2011 financial results. Present during this call are Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President, Research and Development; Dale Ando, Vice President, Therapeutic Development and Chief Medical Officer; and Philip Gregory, Vice President, Research and Chief Scientific Officer. Following this introduction, Edward will highlight recent activities, Ward will briefly review second quarter financial results for 2011 and our current financial guidance. And finally, Edward will summarize the status of our ongoing ZFP Therapeutic programs and our goals for the remainder of 2011. Following that, we'll open up the call for questions. As we begin, I'd like to remind everyone that 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 discuss 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 the 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 results of the company’s operations to differ materially from those contained in our projections or forward-looking statements. Now, I'd like to turn the call over to Edward. Edward Lanphier – President and Chief Executive Officer: Thank you, Liz. And thank you all for joining us for our conference call to discuss our second quarter results for 2011. Let me begin by briefly recapping a few of our recent highlights. Early in the quarter we completed an underwritten public offerings from $6.7 million share of our common stock, which resulted in an net proceeds to the company of approximately $15 million. This additional capital has significantly strengthened our balance sheet and enables us to more aggressively advance our preclinical and clinical programs as well as strengthening our position and flexibility in future therapeutic partnering discussions. The second quarter was also are particularly successful period of Sangamo from a research and development perspective, as well as for grants and publications. To highlight this latter, Sangamo scientists were awarded several high profiled grants to support research and preclinical studies using ZFP nucleases towards ZFN. In early July, a $7.9 million grant was awarded by the National Institute of Health to the Scripps Translational Science Institute to conduct the nation’s first ever heart-based disease in a dish research program in collaboration with Sangamo scientists. Our collaborator at Scripps led by Dr. Eric Topol will use induced pluripotent stem cells or iPS cells, which a stem cells that are created from mature cell types, such as skin cell to recreate a patients own heart cell. These cells can be grown in the laboratory and our ZFN-mediated genome editing technology will be used to specifically remove a region of the genome that is known to put a patient at risk for coronary heart disease. With only this region specifically removed, but the rest of the cells genes in common modified cells can be compared with the original iPS cell and the biological impact of the genetic change can be accurately observed. A second high profile collaboration was announced this quarter, the Martin Delaney Collaboratory project was created as part of an initiative by the NIH to fund the evaluation of new strategies for curing HIV infection. A team of institutions including Sangamo the Fred Hutchinson Cancer Research Center, City of Hope and the University of Washington were awarded $20 million to fund animal studies to evaluate dosing of our ZFN CCR5 modified stem cells as well as methods to directly attack reservoirs of HIV and eradicate the virus. These experiments directly complement out ongoing stem cell program in HIV, which is funded by the California Institute for Regenerative Medicine or CIRM. Both of these collaborations focus on important areas of research that will directly aid development of ZFP Therapeutics for significant unmet medical needs. In addition, the financial award represents and quantifies a growing appreciation of the power and potential of our ZFP Therapeutics platform. Sangamo also published a record number of scientific papers this quarter, several of them in high impact journals that generated significant attention and interest in both the pharmaceutical industry and academia. The publications include data published in the journal nature from our preclinical hemophilia B program. The study demonstrated permanent correction of the human factor IX gene in a mouse model of the disease, following a single systemic administration of our factor IX specific zinc finger nucleases. This ZFN gene correction process resulted in functionally relative levels of circulating factor IX protein in the blood stream capable of correcting the coagulation defect characteristic of hemophilia. This modification was permanent and was observed for the eight months of which the animals were tested. Notably, we achieved this with a single systemic injection of ZFNs, further establishing the broad therapeutic application of our technology to address other monogenic diseases. We are advancing this program into the next stage of preclinical development, which is a dog model of hemophilia. The second thing in the paper describes ZFN-mediated genome editing of human embryonic stem cells and iPS cells from Parkinson’s patients to either insert or remove mutations known to cause early onset Parkinson’s disease. These manipulations also enable disease in this study, just as we are doing in the NIH-funded heart disease collaboration. The cell lines that this approach enables are expected to lead to a better understanding of the roles of specific mutations in the development of Parkinson's and to the screening of improved disease modifying drugs. And even more recent publication described the use of our ZFN technology to generate Transgenic Pigs for human organ transplantation. Specifically, we demonstrated the using our ZFN technology, we could efficiently and specifically knock out or delete both copies of the porcine gene that we targeted. The study represents the significant advancement in the development of improved less immunogenic animal tissue as a source for transplant into humans. Transplantation of a variety of different organs and tissues is considered to be the best treatment option for 1000 of patients ever year, whose organs are damaged or diseased. However, a major problem is that the supply of human organs and tissues available for transplantation, it insufficient to address the demand. Our work lays the foundation for the use of our validated ZFP technology platform to modify animals that will allow their organs to be used for human transporation. Finally, we published data on the use of SB-509 in animal models of stroke and ALS. We also had a major presence at the Annual Meeting of the American Society for Gene and Cell Therapy, where we and our collaborators gave over 20 presentations on a variety of preclinical and research-stage therapeutic programs, one of which the Factor 9 program was featured as part of our presidential symposium. On the business front our partner Sigma-Aldrich continues to aggressively market and develop our ZFN technology for research applications, including the launch of a new kit to facilitate genome editing in the mouse. And new human cell lines for breast cancer research. As well as an innovative collaboration to produce spider silk and silkworms. There is no doubt that our ZFP technology and its many applications are garnering a great deal of interest. Last, but certainly not least, earlier this month we appointed Dr. Geoff Nichol as Executive Vice President, Research and Development. In this newly created position Geoff will oversee and coordinate all of the company’s research and clinical development activities. Geoff has been directly and successfully involved in all aspects of drug discovery and development in both biotechnology and pharmaceutical companies including Medarex, Novartis and SmithKline Beecham. His 20 years of experience in drug development covers everything from program initiation to all phases of clinical testing to product approval and launch of multiple marketed drugs. In addition, his particular experience at Medarex were for a laser development of their novel, monoclonal antibody platform will be in valuable to Sangamo as we advance our existing ZFP Therapeutic programs and continue to expand and prioritize our therapeutic product development pipeline. We are in a very exciting stage of our growth and we look forward to his leadership as we move into our next phase of clinical and commercial development. Welcome Geoff. Geoff Nichol – Executive Vice President, Research and Development: Thanks Edward, it’s thrilled to be at Board. As I mentioned on our last call, we expect to announce important data from our clinical programs in the second half of 2011. However, before we go into more details on this, let me hand the call over to Ward for an update on our second quarter 2011 financial results as well as our financial guidance for the rest of 2011. Ward? Ward Wolff – Executive Vice President and Chief Financial Officer: Thank you, Edward. And good afternoon everyone. As you know, after the close of the market today we released our financial results for the second quarter ended June 30, 2011 and I'm pleased to review the highlights of those results. Revenues for the second quarter of 2011 were $1.5 million, compared to $6.5 million to the 2010 quarter. The second quarter 2011 revenues were primarily comprised of revenue from Sangamo’s collaboration agreements with Sigma-Aldrich and Dow AgroSciences, enabling technology agreements and research grants. The decrease in revenues between years was primarily due to the completion in July 2010 of the amortization period over which the $15 million, expanded commercial license fee received from Sigma in October 2009 was recognized as revenue under Generally Accepted Accounting Principles or GAAP. As a result, we recognized $5 million in associated deferred revenue in the prior-year second quarter in accordance with the amortization schedule that was completed in July of last year. Excluding this difference, the revenues for the second quarter of 2011 were relatively comparable to the 2010 quarter. Total operating expenses for the second quarter of 2011 were $11.8 million compared to $10.4 million for the same period in 2010. Research and development expenses were $8.1 million for the 2011 quarter and $7.1 million for the prior year quarter. General and administrative expenses were $3.7 million for the second quarter of 2011 compared to $3.3 million for the 2010 quarter. The increase in research and development was primarily due to increased clinical trial expenses related to our HIV and diabetic neuropathy studies. Stock-based compensation expense with $2 million for the quarter, with $900,000 in research and development and $1.1 million in general and administrative. For the second quarter of 2011 we reported a consolidated net loss of $10.3 million or $0.20 per share, compared to a net loss of $3.9 million or $0.09 per share for the second quarter of 2010. Again the principal difference impacting the net loss is the approximately $5 million in deferred revenue recognized in the 2010 quarter. Turning to the balance sheet, we ended the second quarter of 2011 with $92 million in cash, cash equivalents and marketable securities. As Edward indicated, we were pleased to have completed a $50 million common stock offering at the beginning in the second quarter. This financing provides additional capital to bring our ZFP Therapeutic programs to points of optimal value inflection, while strengthening our balance sheet as we evaluate partnership opportunities across our portfolio and maintaining our historical operating perspective of having multiple years of cash burn on hand. Speaking of our cash position, we reiterate our earlier guidance of having a cash and marketable securities balance at the end of 2011 in the range of $85 million to $90 million. Again, this is exclusive of any new funding from a partnership, but it does include anticipated milestones in 2011 from our existing partnership agreements. I also want to reiterate guidance from our first quarter call with respect to expected operating expenses and revenue for 2011. We expect 2011 operating expenses to be relatively flat compared to 2010 in the range of approximately $43 million to $47 million for the year, and revenues and related cash proceeds to be in the range of $10 million to $12 million this year. In summary, with respect to our finances and operating leverage to support our research and clinical development pipeline activities, I am very pleased to report that the second quarter results which track to our 2011 operating plan combined with the common stock offering have kept us in an excellent financial position. We look forward to keeping you updated on our progress. Thank you. And I will now turn call back over to Edward. Edward Lanphier – President and Chief Executive Officer: Thanks Ward. As you’ve heard we continue to manage our cash burn and with $92 million in cash at the end of the second quarter and our expected second half revenues will remain on track to meet our financial objective of ending 2011 with at least $85 million to $90 million in cash and cash equivalents. As I mentioned earlier we have a very substantive second half of 2011 ahead of us. During which we expect to present clinical data from our lead ZFP Therapeutic programs which represent a two branches of our technology platform gene regulation and Genome engineering. SB-509 is an example of our zinc finger technology for gene regulation. Specifically the activation of the vascular endothelial growth factor-A gene or VEGF-A. As you know the ZFP Therapeutic is currently being evaluated in a Phase 2b clinical trial. SB-509-901 in subjects with moderate severity diabetic neuropathy or DN and we expect to present top-line efficacy data from this study in the fourth quarter of this year. Just to remind you DN is a major complication of diabetes and a growing problem. Current treatments include painkillers and antidepressants, which only addressed the painful symptoms of the disease not the underlying or damage. SB-509 is a first-in-class disease modifying approach to DN and in previous clinical trial has been shown to a have a significant effect on both nerve and blood vessel growth. The 901 trail is a double-blind placebo controlled repeat dosing study in a 170 subjects randomized one-to-one between the placebo and treatment arms. The design of this trial was informed by our prior Phase 2 studies, which evaluated the drug and subjects with severity of DN symptoms ranging from mild to severe. Collectively these daily provided us with a valuable confirmatory evidence for a neuro regenerative mechanism of actions as well as the clear strategy for selecting a drug responsive population around approvable endpoints for the SB-509 901 study. Specifically, we are collecting data on endpoints, which have been used as primary and secondary endpoints and previous pivotal studies of neuroprotective drug candidates. These include nerve conduction velocity and the sural nerve or sural NCV, the neurological impairment score in the lower limb or NISLL which is a scoring method to quality the standard neurological exam and intraepidermal nerve fiber densities or IENFD a direct histological measure of nerves. We anticipate the top line efficacy data will be presented in a press release in the fourth quarter of this year and that a full data analysis will be presented at a relevant clinical meeting in 2012. As we have indicated before, if these data are positive our plan is to move this program forward in pivotal trials with the corporate partner. We look forward to reporting the outcome of this study to you later this year. Data will also presented later this year from our SB-728-T studies are lead the up end gene – genome editing clinical program which we’re developing for the treatment of HIV Aids. Our product vision for this ZFP Therapeutic is to provide ZFN CCR5 modified I'm sorry, ZFN modified CCR5 negative CD4-T-cell that are protected from viral infection as they longer express a function of CCR5 receptor capable of mounting an effective anti-HIV immune response, thereby enabling a functional cure for HIV. Sangamo has two ongoing clinical trials of this therapeutic approach. Our Phase I dose escalation trial SB-728-902 in HIV subjects which were taking anti-retroviral medication for HAART and are thus aviremic and a Phase 1/2 trial SB-728-1002 in treatment naïve HIV infected or viremic subjects. In addition, an investigator sponsored Phase I trial is being conducted by Dr. Carl June at the University of Pennsylvania in aviremic subjects. At the 2011 conference on retroviral and opportunistic infections or CROI in early March, Dr. June presented preliminary data from the first two dose cohorts of our 902 trial, which enrolled so called immunological non-responders or subjects with CD4 counts below 500 cells per microliter. And the University of Pennsylvania trial, which enrolled subjects to CD4 counts were above 500 cells per microliter All subjects in these two studies were on HAART and therefore averimic. In summary, the data presented at CROI demonstrated that infusion of ZFN CCR5 modified T-cell was well tolerated, the cells engrafted persisted and trafficked normally. There was also evidence that the modified cell population expanded particularly inside such as the gut mucosa where one would expect to find a reservoir of HIV infection that cannot be eliminated by HAART. Importantly, we observe the direct improvement in immunological health in these averimic subjects as demonstrated by unprecedented increases in the total CD4 counts and the CD4, CD8 ratios. While preliminary these results were the best that we could have anticipated and provide a mechanistic proof-of-concept that ZFN, CCR5 modification makes T-cells HIV resistant and enable selective expansion in the presence of the virus. These data generated significant interest at CROI and markedly increased the disability of this approach. I am therefore pleased to announce today that we plans present additional data from all those in cohorts of the subjects in our SB-728-902 trial at the 51st Interscience Conference on Antimicrobial Agents and Chemotherapy or ICAAC, which will be held in Chicago from September 17thto the 20th this year. We also plan to present preliminary data from our SB-728-1002 trial at another scientific meeting later this year. We look forward to keeping you updated on this exciting and important program. In conclusion, while our first half activities evidenced significant progress towards our goal of established ZFP Therapeutics as a new and a highly differentiated class of human therapeutics. We anticipate a transformational second half of the year as we release important data from our major clinical programs. We look forward to keeping you informed on our – of our progress. In addition to the presentation of data from our SB – from our HIV SB-728-902 clinical trial in mid-September at ICAAC, we will be presenting at the 2011 Wedbush Securities Life Sciences Management Access Conference in New York City in August and a three investor conferences in September. The Stifel Nicolaus Annual Healthcare Conference in Boston, the UBS Global Life Sciences Conference and the JMP Securities Conference, which both are – which are both being held in New York. This completes our prepared comments. I would now like to open up the call for your questions.

Thank you. (Operator Instructions) Our first question comes from Charles Duncan from JMP Securities. Charles Duncan – JMP Securities: Hi guys, congratulations on a nice quarter progress. Thanks for taking my questions. Edward, I wanted to ask you about the HIV program, you mentioned I guess the averimic you have a little bit more data at ICAAC. Can you give us a little bit more color on what you would like to see out of that data? And then why did you split that with the presentation on 1002 later on in the quarter?

Well, I think I’ll give you a quick answer and then ask Dale to maybe comment further. I think the categories of data that we presented at CROI will be consistent with the same sort of categories that we will be discussing at ICAAC. So first and foremost the safety of these modified cells. Secondly, the pharmacokinetics the trafficking and engraftment of these cells. Third, on the basic immunological impact of these modified cells on the host immune system. And lastly in the environment of treatment interruptions on impact on of these cells in the presence of virus. I think those of the main categories that you should expect to see. Dale, you want to amplify on any of that?

Well I agree that these are major parameters and we’ll have a more complete data set than what was presented at CROI. Charles Duncan – JMP Securities: Okay. And then if we could hop over to 509. Could you help us understand what the guidance includes in terms of planned expenses? Would you anticipate spending any additional R&D dollars on diabetic neuropathy irrespective of the outcome? And then secondly, if the outcome of the trial is not clearly supportive of moving forward, which you see that as reading on the value of the gene regulation, technology platform or perhaps could that be a function of the complexity of the syndrome in which you’re studying?

Two separate questions Charles, first as we said our plan is to move forward and announce data from the SB-509-901 trial in the fourth quarter of this year that will be top-line data. And with those data, assuming the positive, we’ll move forward in discussions that are well anticipated in terms of potential corporate partnerships. We will have the normal follow-on of that through a day 360 for the safety and any long-term follow-up. But our plan is to move forward with SB-509 in a partnered situation. And so we do not expect to initiate new studies apps in our partner in that area. Second part of the question was does this – is this a referendum or again no more so then any other drug modality around any other target or disease indication. I think it’s very clear that we can do build zinc finger transcription factors, both activators and repressors to numerous targets. We know we can activate, we know we can repress it really becomes a function as any clinical development plan. Do we have the right target for the right disease indication in the right clinical trial. So, I think while we’re optimistic about the outcome of SB-509, good, bad or indifferent, it’s not a referendum on the platform, I think the platform is well established. Charles Duncan – JMP Securities: I agree, if I could ask another question regarding stock-based compensation expense in 2Q, can you give us a sense of the amount of that expense that was incurred?

Sure Charles. The expense for the quarter was $2 million and further broken down $1.1 million in G&A and $900,000 in R&D. Charles Duncan – JMP Securities: Final question is for Geoff the new guy. I know this is probably a little unfair, because you’re sitting there with your new colleagues. But, can you give us a sense as to what the key driver was to you joining Sangamo and if there are any parallels that you see between say the Medarex technology platform and its breadth of utility and that of Sangamo’s I mean, what was your real reason for getting involved here at this stage of (indiscernible)?

Not now Charles I have to tell you I promise Geoff right upfront that we weren’t going to feed him to the I can’t fed him with or I said sharks or dogs or lions whichever you guys would like to characterized. Geoff, you want to bite on that one?

Yeah Charles, that’s a good question. Sangamo has a very promising platform technology and superficially that is similar to Medarex. Perhaps the antibody technology is little more mature but, essentially at Medarex quite aside from the platform we were also breaking very new ground immunotherapy. And I sense exactly the same sense of scientific commitment as well as competence and enthusiasm here at Sangamo as I sensed at Medarex. And those are the primary reasons why I'm here. Charles Duncan – JMP Securities: Thanks for the added color.

Thanks Charles.

Thank you, sir. Our next question comes from Liana Moussatos with Wedbush Securities. Liana Moussatos – Wedbush Securities: Thank you for taking my question. For the SB-509-901 study results that are coming out in Q4. What would you consider to be the minimum for you to consider going forward with the program when you’re mentioning the sural NCV the NISLL and the histology end points. What's the minimum you’d want to see in order for you to take it forward?

So, I’ll let Dale respond in terms of on the technical side in terms of magnitudes and so on but from a business perspective again it’s relatively binary here. The data are going to be and Dale can discuss them but those are really be used in our discussions with potential partners. And that’s what will drive the program into the next stage of development. Dale you want to talk about maybe some of the parameters around the end points.

Yeah. So we are really looking is for clinical relevants and the change in these parameters and the hallmark of this is really what how these parameters change in a typical moderate severity diabetic patient of the course of the year. So for sural NCV that’s about one meters per second. For NISLL that’s about one unit on the NISLL score. And the nerve fiber density is approximately 0.9, fibers per millimeters generally accepted one fiber per millimeter change. So we would like to see improvements in the sural NCV and decreases in the NISLL by one and increases nerve fiber density by one. So in general these are the changes that would occur in the opposite direction in terms of deterioration in a year and we would like to be able to say that we could – will be free treatments over the course of a 120 days reverse, these end points that would represent a years worth of worsening in the diabetic patient. Liana Moussatos – Wedbush Securities: Thank you.

Thanks Liana.

Thank you. Our next question comes from Ed Tenthoff with Piper Jaffray. Ed Tenthoff – Piper Jaffray: Great. Thank you very much. And Edward and everyone congratulations on all the scientific progress in the quarter in the new higher?

Thanks Ed. Ed Tenthoff – Piper Jaffray: And it can be taking a step back obviously it’s going to be a very busy back half and I wish all the best was the clinical data. Maybe you can tell me a little bit more about the commercialization strategy around your peers, I know we’ve talked about this over the years Edward, in terms of the broad applicability and all of the scientific process – progress that’s being made. But tell me more about how you intend to commercialize and monetize this good science?

Well Ed, it’s a longest conversation, the shortest conversation and as you say we’ve had it. Let me give it to you in sort of two plains. The applications of the technology will either be direct and injectable pharmaceuticals or they will be used to modify a cell that will be pharmaceutical. So those are the two principle product profile of the products of our platform. And then our business model is to move forward at points of clear value inflection with partners who have a deep even passion and interest in the disease indication and in the area have the requisite downstream infrastructure for development and marketing. That’s certainly our near-term plan, longer term we do hope with success to forward integrate, probably in areas of – of rare diseases or often diseases, but that’s a way down and predicated on success in the formal – in the more former partnering activities. Ed Tenthoff – Piper Jaffray: Good, thank you and looking forward to that data.

Thank you.

Thank you, sir. Our next question comes from Joseph Schwartz with Leerink Swann. Joseph Schwartz – Leerink Swann: Hi, thanks for taking the question. I was wondering if you could and this is a housekeeping question, break out your revenues from Dow and Sigma. It looks like they declined around 50%, I am wondering what the main drivers, I know the Sigma portion can consist of reagents, celluloid and transgenic animals, so some clarity within any of those buckets would be helpful?

Sure. I mean, just to reiterate what Ward said in the prepared remarks. Last year we were still amortizing the upfront fees from the initial, from the second license agreement. So that was a part of the revenues last year that’s accounted for the – the primary difference quarter-over-quarter. Ward any additional color on that?

No, as I mentioned Joe in the call that we did have the 5 million a year ago quarter that did not repeat this year, so that was a factor. We still use the both Dow and Sigma provide significant revenues on a full year basis. Historically, our revenue stream has been somewhat backend loaded, because some of our minimum royalty payments and what not come in – in Q4. And some of that relates to Dow, but also relates to some of the Sigma royalties which tend to ramp up that during the year. So, I look at this quarter somewhat as I said being relatively comparable to a year ago. And, it’s a function of that to some extent the grant revenue and the timing and all that. But, we’re still comfortable as I mentioned with this $10 million to $12 million for the full year. Joseph Schwartz – Leerink Swann: Okay. And how long do you think it will be before we see ZFN and humans with hemophilia or other monogenic diseases given that seems like an ideal application of the technology, but I know that 7 to 8 took a while as you worked under that turn and, those sorts of aspects. Would you expect to be able to go faster now, yet or how should I guess, how long do you think we could or how long do you think before we could see one of these drugs in an agent in actual patients?

Well…. Joseph Schwartz – Leerink Swann: (indiscernible)

Good question, Joe. As you pointed out the zinc fingers are in the clinic around CCR5. And, that’s in T-cells we are also working in hematopoietic stem cells In that area. And, the recent factor 9 data again using ZFN from a systemic deliver perspective that gotten a lot of visibility and on this call we updated and said we’re moving forward into the next preclinical development model which is the dog model. There are numerous monogenic diseases that we have previously discussed and even published and presented around from many of which were done it ASGT this year. So, in the area sickle cell disease and other monogenic diseases. We don’t have any specific guidance today about clinical start-ups in those areas. But, certainly the experience that we have in from the CCR5 we’re moving that to the clinic gives us a significant leg up and moving new Zinc Finger Nucleases into the clinic. Joseph Schwartz – Leerink Swann: Okay. And then lastly, can you give us any greater sense of the timing of the SB-509 Phase 2 data in the first quarter, when is the last patient come out and how you’re analyzing that is it on a rolling basis, any thoughts on how long it will need to crunch the data?

Well, obviously like we have very, very, very specific definitive thoughts on that, but the guidance that we’re comfortable with is that we will present via press release the top-line efficacy data for all 170 subjects at day 180 in a press release in the fourth quarter. Joseph Schwartz – Leerink Swann: Okay. Thank you.

Thanks, Joe.

Thank you. (Operator Instructions) Our next question comes from Alastair Mackay from GARP Research. Alastair Mackay – GARP Research: Hi, I had two small follow-up questions. Dale, one is that when you went through the end points for SB-509-901, where though or those formal predefined end points or are you speaking more informally in terms of what you’re hoping and expecting to see.

Yes, as in any double-blind placebo-controlled study we have to predetermine the end points and power the studies to those particular end points. So, this is, these are predefined and have been bringing to the protocol since beginning. Alastair Mackay – GARP Research: Great, thanks. And then the follow-up on something Joe was saying the hemophilia the factor 9 studies and the other monogenic studies with the added confidence that you have in the ZFN agents as opposed to the ZFP agents. One thing that I wonder about is the absence of discussion of partnering activities with respect to some of these monogenic diseases especially in light of the prospects for more rapid development under an orphan program. Edward, can you comment on that?

All I need to say that I think it’s in a stud question and that our business model given the breadth of the platform and it’s generality and ability to deploy to numerous targets allows us to think about those kinds of focused partnerships. The way doesn’t really take much of the table in terms of our future upside. So, it’s in a stud question Alastair and one that as I sort of alluded to during the script that factor 9 data that was presented as the late breaker at action in December of last year was published in nature just this last quarter and was the subject of a presidential symposium at ASGCT as garnered an enormous amount of attention and your question is on point. Alastair Mackay – GARP Research: Okay, thank you.

Thank you, sir. I would now like to turn it back to Edward Lanphier for further comments. Edward Lanphier – President and Chief Executive Officer: Thank you. We’d like to thank you for joining us and we look forward to speaking with you again when we release our third quarter financial information. We will be available later today if there are any follow-up questions. Thanks very much.

Thank you. Ladies and gentlemen this does conclude your conference today. You may now all disconnect. Thank you for your participation. Have a wonderful day.