Good afternoon, and welcome to the Sangamo BioSciences teleconference to discuss First Quarter 2015 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 Communications.

Thank you, Kevin. Good afternoon, and thank you, for joining Sangamo’s management team on our conference call to discuss the company’s first quarter 2015 financial results. 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; Philip Gregory, Senior Vice President of Research and Chief Scientific Officer; and Dale Ando, Vice President of Therapeutic 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 first quarter financial results, as well as our financial guidance for 2015. Geoff 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 that the projections and forward-looking statements that we will discuss during this conference call today 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 the 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 results 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.

Thanks, Liz, and thank you all for joining us for our conference call to discuss our first quarter results for 2015, as well as our recent progress and future plans for the development of our ZFP Therapeutics pipeline. We began this year, as we usually do, with a very busy JP Morgan week. However, this year was quite different from many other years, as there was a significant increase in interest in gene and genetically modified cell therapies from investors and large pharma. And for us, even more importantly, a granular understanding by these groups of the power and potential of genome editing. Our zinc finger nuclease platform, with its proven specificity and efficiency and growing clinical database, is and remains the gold standard in targeted genome editing. With our highly specific targeted technology platform, we have the potential to address a broad range of unmet medical needs with distinct technical and clinical advantages over other gene or large molecule therapies, as well as any other genome editing approach. More evidence of our leadership was on display earlier this year, when we announced the two IND Applications that had been filed with the US FDA in late 2014 for stem cell applications of our ZFN genome editing technology, were both accepted by the Agency and became active. This enables us to begin Phase 1 clinical trials of both of these programs. The first is our HIV stem cell program, which employs the same mRNA delivered ZFNs that have been successfully used in our T-cell program. The second is our collaborative program with Biogen for beta-thalassemia. Both clinical trials are partially supported by strategic partnership awards from CIRM, the California Institute for Regenerative Medicine. I look forward to providing more detail on the progress of both of these trials on future…

Thank you, Edward, and good afternoon, everyone. As you know, after the close of the market today, we released our financial results for the first quarter ended March 31, 2015, and I am pleased to review the highlights of those results with you now. Revenues in the first quarter of 2015 were $13.5 million compared to $8.1 million for the same period in 2014. First quarter 2015 revenues comprised revenue from Sangamo's collaboration agreements with Shire, Biogen and Sigma-Aldrich, enabling technology agreements, and $800,000 of revenue from research grants. The increase in collaboration agreement revenues was primarily due to our partnerships with Sigma-Aldrich and Biogen. The revenue recognized this quarter from our licensing agreement with Sigma-Aldrich was primarily based on a higher royalty rate on the first $5 million of net sales of ZFP modified cell lines for commercial production of protein pharmaceuticals. All future commercial license fees from the agreement with Sigma-Aldrich will be based on the primary royalty rate of 10.5% of net sales in sublicensing revenue. In the first quarter of 2015 Sangamo recognized $4.5 million of revenues related to research services performed under the collaboration agreement with Shire, and $1.5 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 $1.5 million of the Biogen upfront payment as revenue for the first quarter of 2015. Total operating expenses for the first quarter of 2015 were…

Thank you, Ward. As you have heard, we had a very positive first quarter, scientifically and financially, starting the year with approximately $227 million and ending the first quarter of 2015 with $226 million, which relative to our projected burn rate is a very strong cash position. As a consequence of the this balance sheet strength, funding from our collaborators and other revenue sources, we are in a very good position to complete our ongoing clinical trials and bring up to eight new products to IND by the end of 2016. As Ward also mentioned and as we have previously discussed, we are guiding to higher revenues and higher operating expenses this year, as we ramp up activities to move our own programs lysosomal storage disorders into the clinic. In addition, as we advance products through preclinical testing towards submission of multiple IND applications and subsequent clinical studies, we see a distinct advantage in building out our own internal capabilities in AAV and mRNA GMP manufacturing. This is something that we have been working on over - for over a year taking on additional facility space and actively recruiting personnel into our non-new technical operations group. Importantly, as we forward integrate into late-stage clinical development GMP manufacturing and ultimately commercialization, we are successfully leveraging the work and advancements that have been funded by our partnered programs and are able to use these advances to cost effectively accelerate the development of our own proprietary programs. So, as most of you know, we are largely focused on monogenic diseases, diseases in which there is no ambiguity between the mistake in a single gene and the resulting disease outcome. Initially, we have chosen to pursue proprietary programs in LSDs, many of which are currently being treated with frequent infusions of enzyme replacement therapies. These disorders provide opportunities for us to establish technical proof of concept relatively early in preclinical animal models and in small human clinical studies. In addition, our therapeutic approaches aimed at providing genetic cures for these monogenic diseases, require a relatively modest initial investment in GMP manufacturing infrastructure and ultimately commercial sales support. As I mentioned, I’ve asked Geoff to briefly describe our In Vivo Protein Replacement platform and its significant technical and clinical advantages, as well as the recent data that were presented on our LSD program at the WORLDSymposium meeting in February. Geoff?

Thanks Edward. Our ZFN mediated genome editing technology provides a powerful targeted approach, which enables us to modify genomic DNA sequences that are directly linked to a specific disease. We can do this in a couple of different ways. One approach is to target and directly modify the actual mistake in the disease related gene as we’ve performed and published for numerous gene targets. This approach clearly works well. In all cases, we have demonstrated highly efficient gene correction. However, the approach is, by definition, very target specific for each of the gene targets described, we designed a specific set of ZFNs to precisely edit within each different individual gene. A much more efficient and leverageable approach would permit us to add a correct therapeutic replacement gene into a Safe Harbor such as the albumin gene, as we are doing in our In Vivo Protein Replacement Platform or IVPRP, targeting the albumin locus in the liver has enabled us to develop a platform requiring single set of ZFNs. This gives us flexibility to develop potentially curative ZFP Therapeutics to address essentially any disease that is currently being treated using protein replacement therapy strategies. We developed the IVPRP approach with substantial funding from our Shire collaboration in hemophilia A & B, and are now using the same strategy in our own programs in lysosomal storage disorders or LSDs. As Edward mentioned, we have named the first two LSD targets, Hunter and Hurler syndromes, and we're working hard to file INDs for these indications by the end of the year. We picked the albumin gene as a Safe Harbor as it has all the properties that we desire. First, it’s very highly expressed, being the most abundant protein found in the serum. Adults produce about 80 grams of albumin every week, which…

Thanks Geoff. So, as you have heard 2015 is a very important year for Sangamo, as we advance programs in our therapeutic pipeline through a Phase 2 clinical trial in HIV, initiate two new clinical trials in stem cells for HIV and beta-thalassemia, and move several programs through final preclinical studies with the aim of filing three new IND applications by the end of the year. We understand that the vast majority of the activities that are part of this process are not particularly visible to the outside world and that this can be a source of some frustration. However, be assured that we are 110% focused on and committed to achieving these very important, but ambitious objectives. Needless to say, we are looking at one of the most exacting periods in gene and cell therapy, and in particular, in Sangamo’s history. And we look forward to keeping you updated on our progress. To that end, we will be presenting at the Bank of America/Merrill Lynch Healthcare Conference in Las Vegas on May 14, at the UBS Global Healthcare Conference in New York, as well as the Piper Jaffray Genome Rx Symposium focused on gene and cell therapies later in May. In June, we will also have presentations at the Jefferies Global Healthcare Conference and the JMP Securities Life Sciences Conference. On the research and development side, we will be presenting data from a variety of programs, and research collaborations in numerous monogenic diseases, HIV and cancer T-cell editing at the Annual Meeting of the American Society for Gene and Cell Therapy in New Orleans from May 13th through the 16th. This completes our prepared comments. I would now like to open up the call for your questions.

[Operator Instructions] Our first question comes from Charles Duncan with Piper Jaffray.

Hi, guys. Thanks for taking my question, also the update on the IVPRP, and congrats on the good revenue and research support in the quarter. Edward, I wanted to ask you a question around the IVPRP. You mentioned the LSDs and given the mice data that was recently presented. I'm wondering what kind of work needs to be completed to move those programs into the clinic, or at least to filing an IND?

Well, I'm fortunate and you're fortunate that I'm surrounded by my colleagues who are spending every moment of everyday working on that. I don't really know how granular we're going to be in terms of this experiment and that experiment and so on. I will say that - I'll start off and then Geoff or Philip or Dale, are more than welcome to comment. I will say that, we are - the Shire programs, particularly the factor IX program, as we said in the script have given us absolute clear path towards what needs to be done from a CMC perspective, from a toxicology perspective, from an efficacy perspective. And we had very productive and robust interactions with the Agency across all of these areas. So I would just simply say that well - because I said in the script, it's not terribly visible and I know that can be that lack of granularity or sort of week-to-week month-to-month sort of where are you in the process can be a bit frustrating. We are working, and I think I'll add intelligently, on that list of tasks. And so let me just say Geoff or Philip or Dale, is there anything on a more granular basis that’s worth adding here?

Charles, it's a good question. But I would just reiterate that there is an experienced cove effect here. Obviously we've been working on the IVPRP with hemophilia A & B for some time now. So this has certainly given us a great deal of guidance to apply as we move forward with the subsequent programs, which are sort of based on kind of plug-and-play approach as we’ve described with the same albumin target, but what we need to do is swap out the sequence for the actual corrected enzyme that we want and protein that we want to express from that locus.

Okay. And I appreciate not being able to be overly granular on a lot of these details, but I guess, would you characterize the work as more Gantt chart type work that needs to be done or there is significant experiments where there is technical risk that you are looking for to getting the results from?

Well, you’re probably not going to like my answer again anymore here, but I'd say when you are eight years into commercial sales of a therapeutic, you still have exposed to technical risk. So yes, we are Gantt charting the hell out of everything and we all look at it on a hourly, if not more frequent basis, and we all ask each other how we can chop time out of that and leverage our balance sheet in doing that, and all the things you'd want to know that we're doing. But I'm certainly - my colleagues going to sit here and tell you that these things are risk-free and so on. Do we have to change any laws of thermodynamics? No. But this is not the 19th time that something like this has been done. This is inventive and important science. I don't know if anybody else wants to add to that.

And I think that pretty much…

My colleagues are pleased that I didn’t tell you that it was just a connect the dots exercise.

Yes, I mean, this approach while it's extremely appealing is, let's face it, it is new to the world. So that everything needs to be seen in that light. But the good news is that we have significant experience here acquired over the past few years, and that is enormously helpful to help us to manage some of those inventive steps.

And then one last question, I’ll hope back in the queue, regarding the IVPRP program. Clearly this is potentially a paradigm shift, given the current - or over the current standard of care, but also some of those that are contemplated with some of the gene therapy programs. Edward, I’m sure that you’ve given some thought to this, but could you share with us some of your early thoughts on the commercial model and how you might - should you realize success with say Hunter’s or Hurler’s establish clinical value and drive financial benefit from that?

Well, as you and I - and Charles, you and I have discussed this and it's an important, important topic, and we would consume a great deal of this period on this. I think that one of the things that I will reiterate - I'll just do two things. One, I think these are areas given the - as we said before, the unambiguous relationship between the disease and the properly expressed protein that we can establish clinical POC [ph] rapidly, and that's one of the things that we believe is a real advantage of what we're doing. In terms of monetization and commercial value realization, that’s a complex subject and one that is evolving. And I think there is going to be more than one model for these potentially curative outcomes. But I will say this, whatever model - and we’ve spend a lot of time on this. But whatever model ultimately for any of the given program that is adopted it has to make sense for three basic constituencies. It has to make sense for the patient. The patient has to see great value and benefit in this. It has to make sense to the reimbursement organizations. They have to see real differential value in the replacement of these kinds of curative outcomes for alternative therapies. And third, it has to make sense for the inventive company. And as time goes on, the balance and that multi-variable equation will be worked out. But I'm going to stop there and we'll have to take it up over some time.

No problem. Thanks for the added color. Looking forward to the progress.

Thanks.

Our next question comes from Cory Kasimov with JPMorgan.

Hi, good afternoon guys, and thank you for taking my questions. I've got a few for you around the beta-thal program. I guess two easy ones first. When do you expect to start Phase 1, 2 trial and how many patients do you plan to enroll? And then I'm curious about how you are thinking about the expected kinetics of the therapy. I think investors will naturally try to compare with what Bluebird has demonstrated thus far with their lentiviral approach and I'm wondering if you think that’s appropriate for people to do? Thanks.

Sure, Cory. Thanks for the questions. So, one of the things to say right upfront is that this is a partnered program with Biogen. And so the kind of guidance that I'm going to be able to give is more limited, but we’ve certainly said that our goal is to open the study, initiate the study in the first half of this year, and that continues to be our objective. And we fully expect to accrue and treat patients in the second half of this year. In terms of the total size of the study, I think we've publicly said that that's around 10 subjects on the study. But in terms of overall guidance and so on, I think I'm going to limit my comments to that. I guess I’ll - Philip, maybe ask you to start with and then Dale and Geoff pile on, if you will, in terms of kinetics and endpoints transfusion dependence, what we expect to see here.

Yes, sure. So on the science side, obviously there is an attraction to try and to compare the two approaches. And at some level, you think that would be relatively easy to do. The one difference is that in the studies by Bluebird and others, the transgene is identifiable as a separate protein to an endogenous protein that’s expressed normally in these subjects. And so that makes it a little bit difficult for us to say that we have, for example, a target number of grams of our transgene that we're putting in. Don't forget in thalassemia patients, essentially the only cells that survive from the patient's own stem cells that are going through erythropoiesis are the ones that elevate fetal globin and that's our strategy for reconstituting full erythropoiesis. So we tend to think about this a little differently. We think about how the approach will correct the erythropoietic deficit on a personal basis. And so making sure that a cell that has undergone the appropriate genetic modification that we instill making sure that will correct erythropoiesis in the progenesis [ph] of that cell. And then we think about how to make sure that enough of those cells engraft into the subject. And so that's how we think about how our approach will - through the early stages of clinical development. But I'll pause here and see if Geoff or Dale want to add some color.

Geoff, anything else?

No, I think that we've - clearly the approach that we're going to be taking in terms of the bone marrow transplant is similar to other gene therapy approaches, including the Bluebird approach. The effect of the gamma-globin is again similar to a corrected beta-globin to essentially allow a population of altered stem cells, the ones that we put in once engrafted to successfully erythropoiesis under the kind of very accelerated drive that these beta-thalassemia patients have, because they've got a lot of stem cells making almost no proteins. So they've got that revs going, the rev counter is almost in the red zone. And if we can just get a few - certainly if you look at some of the data from our transplant studies in mice as well as in humans historically, you probably don't need more than say the order of 10 plus or minus percent of those cells with the revs up in the red zone to actually be able to significantly correct the hemoglobin. So that's the theory on which we are operating. I think the rest will be down to actual clinical results.

And so Cory, the only thing I would add is so from a - with that said, from an efficacy perspective and as you heard, I think there are likely at least mechanistically to be, I'll say equivalent kinds of approaches where they are starkly different is in the mechanism. One being an integrating vector and one being a transient expression of zinc finger nuclease. And so I think at the end of the day if the outcomes from an efficacy perspective are largely equivalent, I think the differentiations may well be around the ultimate safety of these products.

Okay. Thank you guys. I appreciate it.

Yes.

Our next question comes from Liana Moussatos with Wedbush.

My question.

Hi Liana.

Hi Edward. You mentioned releasing data from the 1401 trial later this year. Could you tell us what kind of endpoints and numbers of patients and types of data we should expect, and will any of it be granular, since that's the favorite word today?

It is the favorite word today, isn't it? Well, let's see. I think what we have guided to is initial data by the end of the year. I'm looking around the room for head nods. I think what we said is the 1401 study from an mRNA delivery perspective is nine subjects and we've said that’s fully accrued. The endpoints are absolutely the same ones that we've always talked about, obviously safety, but the critical endpoints are viral load control during treatment interruption, and then subsequent durability of that viral load control. I am going to pause and this time I'm going to look at Dr. Ando and see if he wants to add or subtract.

That’s CD4 in America [ph].

Yes, the additional endpoint is CD4. The pentamers what we refer to is the marked modified cells. Those are all I'm going to say important but secondary endpoints relative to viral load control.

Thank you very much.

You bet. Thanks.

[Operator Instructions] Our next question comes from Ritu Baral with Cowen.

Hi, thanks for taking my question. It’s Allie [ph] on for Ritu.

Hi Allie [ph].

Just a follow-up on the Shire question. It seems like there is still a fair amount of work to do before you file an IND, and you kind of guided to 2015 filing. Would you anticipate that would be towards the latter half of the year?

Well, Allie [ph], I'm reluctant to answer the question because the assumptions of the question, I'm not sure where they come from. But yes what we've guided to is the IND by the end of the year.

Okay, good. Thank you.

Sure.

Our next question comes from Ryan Martins with Jefferies.

Hi thanks. Just want to ask a question around manufacturing. I know you said you’re obviously make some investments there. Can you talk about the system you’re using and maybe some more color on what you’re thinking about manufacturing?

Yes, I'm just looking around the room to see how much we've ever talked about in terms of the systems. We haven't? Well, I'm getting a lot of head nod, headshaking. So Ryan, we are doing a lot right now in terms of investing in both, personnel and facilities in process development, in assay development, in infrastructure towards GMP, full GMP capabilities internally. And that both actually as well as philosophically I think is an important core competency that we establish as we forward integrate into our own programs and so on. And we're doing that around two fundamental delivery platforms; one, AAV, and two, around mRNA delivery. We have discussed in the past that we are working with three basic AAV stereotypes, AAV 2 which was part of the acquisition through Ceregene, and then AAV 5 and AAV 6 that we've in-licensed. Full pause, anything else that we’ve discussed? I don't think I'm going to get into specifics on the manufacturing process, particularly as it relates to AAV. There are well less than three established methods for that. And so you’ve got 50-50 shot. But we are well down the path here in terms of CMC and GMP production on the AAV side of things.

Okay, thanks. And then maybe one, actually you may have been asked this on [indiscernible] initiation of the beta-thalassemia trial, did you say when that was?

Say it again. Well down the path on what.

On beta-thalassemia.

I'm sorry I missed the question. Say it again, Ryan?

I was just asking about beta-thalassemia. I think you may have been asked this before, but timeline for initiation of your trial and IND accepted this?

Sorry, yes. Well, we expect - and again this is Biogen partnered program, so I'm not going to get into too much detail. But I think what we have said in the past is we expect to open that study, initiate that study in the second quarter of this year and begin treating patients in the second half.

Okay. Thank you.

Sure. Thanks Ryan.

And this concludes the question-and-answer portion of today's conference. I'd like to turn it back over to our host for closing remarks.

Great. Thanks. We’d like to thank you for joining us, and we look forward to speaking with you again when we release our second quarter 2015 financial information. We will be available later today if you have any follow-up questions. Thanks very much.