Good morning and welcome to the Sangamo BioSciences Teleconference to Discuss the Collaboration with Biogen Idec to develop the ZFP Therapeutics to treat hemoglobinopathies which was announced this morning. This call is being recorded. I will now pass you over to the coordinator of this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communication. You may begin ma’am.

Thank you, Kevin. Good morning and thank you for joining Sangamo’s management team on our conference call to discuss the company’s recent agreement with Biogen Idec to develop ZFP Therapeutics for the potential cure of hemoglobinopathies. Also present during this call are several members of Sangamo’s senior management, including Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President of Research and Development; and Philip Gregory, Vice President of Research and Chief Scientific Officer. Following this introduction Edward will provide more details about this morning’s announcement of our agreement with Biogen Idec, of plans and timelines for this program and the implications for our business going forward. Following that we will 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 overtime. 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 which 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 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.

Thank you, Liz. Good morning everyone and thank you all for joining us so bright and early for our conference to discuss this morning’s announcement of our collaboration with Biogen Idec to develop ZFP Therapeutics that have the potential not just to treat but to cure hemoglobinopathies, such as sickle cell disease and beta-thalassemia. I will provide more details about the disease and specific therapeutic approaches that we have partnered with Biogen in a few minutes but first let me give you a little more background on the scope and terms of the agreement and the broader benefit for Sangamo in the development of our ZFP Therapeutic pipeline. As we described in this morning’s press release and accompanying Form 8-K the agreement with Biogen Idec is focused on the use of our ZFP technology platform to provide a potential curative treatment for hemoglobinopathies, specifically sickle cell and beta-thal. These are conditions that result from defects in beta-globin, the gene editing codes, an essential component of the oxygen-carrying proteins of red blood cells or RBCs. As you will hear later these are serious conditions that currently have sub-optimal treatment at best. And we believe that for a number of reasons our approach can potentially provide a cure for both diseases. Regarding the agreement we announced this morning we have granted Biogen an exclusive worldwide license to our technology platform and intellectual property for the treatment of hemoglobinopathies. The agreement includes certain gene targets that enable either the direct correction of mutations in the beta-globin gene or the expression of proteins that enable a person to compensate for these mutations. Sangamo will be responsible for all research and development activities through the first clinical trial in beta-thalassemia or the sickle-cell disease program. Both companies will perform activities to enable submission of an…

(Operator Instructions). Our first question comes from Charles Duncan with Piper Jaffray.

Hey, good morning, folks and congratulations on what looks to be a really great deal.

Thanks Charles.

So, Ed I wanted to ask you a question, just kind of philosophical regarding gene therapy platforms and I appreciate your biases but can you help me understand the diligence process and what may have compelled BIIB to work with Sangamo versus some other Boston-based companies which really may have been more convenient

Well, sure. Yeah, I mean taking it up to a higher level looking at different strategies there are probably two that are most visible in the field right now in cell modification. So gene therapy in autologous stem cells for beta-thalassemia and sickle cell disease, our approach of genome editing using ZFNs and another approach employing viral vectors, specifically lentiviral vector. And I'd say at 30,000 feet there are quite similar in term of the objectives. I think when you drill down there are important differences and I would argue that those very important differences were very important in establishing this agreement or the decisions that were made. But let me ask Philip maybe to comment a little more specifically on maybe to compare and contrast between the respective platforms.

Sure. So good morning, Charles. So as you know lentiviral vectors which are the classical gene therapy approach operate by randomly inserting a corrective gene into the stem cell genome. So this process results in the necessary introduction of this corrected cassette but because one can’t control where that integration occurs there remains the risk, that important genes for both for stem cell function, possibly genes associated with the transformation of those cells could be targets for the integration. And so there is a risk of insertional mutagenesis, this inherits to the usable lenti platform. And for me I think that's probably the biggest delta or the biggest differentiation between the highly targeted approaches that the Sangamo platform enables, this ability to select a location in the stem cell genome and to target specifically that location and the proposed strategy for thalassemia that we've outlined the target here is the BCL11A gene and we're able to target that gene specifically using an approach that just transiently expresses the reagents’ necessary to knockout that gene. So it’s a very hit-and-run approach if you will. We can provide the reagents. They target one specific location but what gets returned to the patient no longer contains the operable activity to grow, it doesn't contain the zinc finger. And so I think that's really the biggest differentiation between the two that we have the ability to target one specific site. We can do that using mRNA delivery of the zinc fingers and provides a very transient delivery approach and there is very little or no collateral damage to those stem cells. We can really ensure that those cells go back into the patient with just the mutation that we're interested in.

And the only thing I'd add and this is getting even more into the [LEEDS] trial is that we've demonstrated that we can do this process at clinical scale because of the efficiencies that we are able to achieve with mRNA, transient mRNA delivery to 300 million cells, so at clinical scale. And I think that's a critical, critical piece in terms of successful translation.

That's helpful, Phil and Ed. Let me ask you one last question perhaps for Ward. In addition to the upfront milestones you mentioned about $200 million or excuse me, $300 million in milestones for both programs. Can you give us a rough breakdown of development versus regulatory and commercial? And also with regard to that Phase 1 $7.5 million milestone, is that for the start or completion and could that be earned in 2014?

So Charles I would love to give you all of those details but I am compelled not to disclose much more than, let me rephrase that, any more than what was in the 8-K this morning. So I'd encourage everybody as they would like additional color or depth on the financial terms to look at the 8-K. With that said I am going to repeat the guidance or the new information that's there. One $20 million upfront and the scope of the license and such as defined in the 8-K is what I had said on the call. Biogen will fund all Sangamo’s internal and external R&D cost for the beta-thal program through the initial human clinical trial. The parties will determine respective responsibilities in a similar way for the sickle cell program. The milestones that I've pointed out, the Phase 1 milestones of $7.5 million for both the -- for the beta-thal program and $7.5 million for the sickle cell program are Phase 1 milestones. To be more specific on exactly the timing of those Phase 1 milestones, I am unable to do at this time, Charles but I did highlight that I think those are the most likely near-term milestones for the agreement. And then in total the agreement is approximately $315 million, including those downstream milestones associated with clinical development and regulatory milestones as well as commercial and sales milestones. Those are not broken out by program. I've not been able to break them out by program here but they are broken out by program in the agreement. And then as I mentioned there is an escalating tiered double-digit -- we're starting at double-digit royalties going forward. And lastly I think the material term I highlighted was our retention of a co-promote option in the United States for both programs.

Thanks for the added color. Congrats on the deal.

Thanks, Charles.

(Operator Instructions). Our next question comes from Heather Behanna with JMP Securities.

Congratulations on the news this morning. I just have a follow-up question, I am not sure how much you can say as far as, the co-promote, if you could just, if you could give us any color just so what would trigger that co-promote at what stage of development? And then more just sort of a big picture of what you guys are thinking of what would sort of be, as you think moving forward with this partnership what would sort of trigger you guys to want to trigger that option?

Yeah. Well, Heather good morning. You concluded that the question from my perspective with exactly the right word, it’s an option for us. And it’s an important option for us as we think about building our business and continuing to think about value creation and shareholder value. So it’s an option for us, it’s not a near-term option that we have to trigger. I can't get into the specifics at this point of the timing of that and so on. And if you allow me at this point, suffice it to say it’s something that is important to us, it’s important to us as we continue to evolve our business and I intend to speak next week at JPMorgan a little more about our strategies for forward integration, our strategies for proprietary product development. So if you'll let me off the hook at this point I'm a little bit restricted in terms of what I can say specifically about this deal but I'll be talking more broadly about our business development plans next week.

Fair enough. I'll let you go this week. Thank you so much for that color.

Fair enough. Thank you.

And I am not showing any further questions at this time. I'd like to turn the conference back over to our host for closing remarks.

Great. We would like to thank you for joining us. And we look forward to speaking with you again when we release our fourth quarter and year-end financial information in mid-February. We will also be attending the 32nd Annual JPMorgan Healthcare Conference next week. And I know that we'll have a chance to speak with many of you then. We'll also be available later today if you have any follow-up questions. Thanks very much.

Ladies and gentlemen this does conclude today's presentation. You may now disconnect and have a wonderful day.