Good morning, and welcome to the Sangamo Therapeutics Teleconference to discuss the First Quarter 2018 Financial Results. This call is being recorded. I will now pass you over to the coordinator of this event, McDavid Stilwell, Vice President of Corporate Communications and Investor Relations.

Good morning, and thank you for joining us. As we begin, I'd like to point out that we’ll be referring to a slide presentation today. You may find a link to the slide presentation on our website, sangamo.com, on the Events and Presentations page of the Investors and Media section of the site. I'd also like to remind everyone that the projections and forward-looking statements that we discuss during the 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 documents that the company files with the Securities and Exchange Commission, specifically, our annual report on Form 10-K and our quarterly reports on Form 10-Q. 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. Forward-looking statements stated today are made as of this date, and Sangamo undertakes no duty to update such information, except as required under applicable law. With me this morning on this call are several members of Sangamo senior management, including Sandy Macrae, Chief Executive Officer; Kathy Yi, Chief Financial Officer; Ed Conner, Chief Medical Officer; Michael Holmes, Chief Technology Officer, and Heather Turner, Senior Vice President and General Counsel. And again, we will refer to a slide presentation during this call. Those slides are to be found on the Events and Presentations page of the Investors and Media section of our site. Now, I'll turn the call over to Sandy.

Thank you, McDavid, and good morning. Since our last conference call, we have made strong progress across several key priorities for the year. We completed enrollment to the first two cohorts of the hemophilia A gene therapy and MPS II in vivo genome editing clinical trials and expect to present initial efficacy data from these studies in late summer. We have expanded our leadership team with several key appointments. We opened our first CTA to expand our clinical development to the UK, and we received an $8 million CIRM grant for the Study of ST-400 beta-thalassemia trial. But most significantly, we executed a global oncology cell therapy collaboration with Kite, Gilead, which included $150 million upfront payment. And then last month, we further strengthened our balance sheet with a follow-on equity offering raising net proceeds of approximately $216 million. We now have a very strong cash position of close to $600 million. Kathy will provide further details later in this call. But first I'd like to reflect on what such financial strength means for Sangamo. Realizing the full potential gene editing technology will be our journey and the genome editing applications we are evaluating now are just the beginning. We intend to manage Sangamo for long-term success and that means we will make the investments needed to advance in the opportunities that are in front of us now and be prepared for those we believe will come as a future of genomic therapies continues to unfold rapidly. We will invest to develop products that we own ourselves through to commercialization, particularly in the therapeutic areas of focus and rare diseases in liver, CNS, and immunology. We will invest to continue to advance our technology platform and look to retain more of a value of our research and development. Our financial…

Thank you, Sandy and good morning. We’ve provided details of our first quarter financial results in the press release we issued earlier this morning. And I'll be happy later in the call to answer any questions you have [Technical Difficulty] Sangamo is the strongest it has ever been financially. We’re well capitalized with the quarter end cash balance of $234.9 million and including both the oncology Kite, Gilead $150 million upfront and the approximately $216 million of net proceeds from our follow-on offering that we recently completed in April. We have approximately $600 million in cash and cash equivalents on our balance sheet. With our strong financial position, we must focus on execution of our current clinical programs and we are excited by the potential of clinical trial readouts over the next 18 months from seven development programs. Before I turn to financial guidance for 2018, I’d like to take a moment to discuss our corporate strategy, in particular, how we plan to invest shareholder capital and product development of our proprietary product portfolio and in collaboration with partners. Our strategy is to retain and develop product candidates ourselves in certain therapeutic areas that meet key criteria, including having breakthrough potential for unmet needs where development and commercialization are financially and operationally feasible and where we see synergies across our product candidates and therapeutic approaches. As we told you on our last call, we have identified three therapeutic areas where we're excited about investing for Sangamo’s proprietary programs. First, in inherited metabolic diseases, where our lead products candidates are focused on in vivo genome editing for MPS I and MPS II and also AAV cDNA gene therapies for Fabry disease. Our strong balance sheet ensures that we will have the resources to advance these programs to registration studies and potentially…

Thank you, Kathy. And good morning, everyone. Before I dive into the clinical update, I'd like to reiterate our strategy for data readout in advance of our expected initial efficacy data disclosure in late summer. As we've said before, we plan to release data from each program and we believe it has had time to mature and is clinically meaningful and reliable. The first two programs to read out will be our SB-525, hemophilia A gene therapy and our SB-913 MPS II genome editing programs. We expect to present topline safety and efficacy data for the first two dose cohorts from each program in the late summer. Turning to slide 19, the SB-525 hemophilia A program which is being developed in collaboration with Pfizer is based on our AAV cDNA gene therapy approach to deliver a functional copy of the factory [ph] gene to the nucleus of liver cells. The goal for SB-525is to produce stable, consistent and therapeutic levels of factory protein from the liver and into the bloodstream. The literature and experts in the field stated the factor levels above 12% of normal are sufficient to prevent bleeding. Our target for factor levels in the blood are to be well above this 12% threshold, but less than 150% of normal at levels above 150% of normal may present a risk of thrombosis. We currently have eight sites open for this Phase 1/2 trial in four patient’s dose in the first two dose cohorts of the study. We anticipate dosing the next patient soon. Again, we expect to release topline efficacy data from the SB-525 program in late summer. Next, turning to slide 21, our SB-913 MPS II in vivo genome editing program uses our zinc finger nucleus technology to target a precise sequence in the liver cells DNA…

Thank you, Ed. And good morning. Next week we will attend ASGCT, the Annual Meeting of the American Society of Gene & Cell Therapy. Each year at this meeting our scientists present selections of recent research and technology development. This year we have three podium clocks [ph] and four poster presentations. Several of our technology presentations showcase recent enhancements – sorry ZFN genome editing platform and build upon the precision, efficiency and specificity framework for evaluating therapeutic genome editing technology. As a reminder, precision is the ability to target a specific, clinically relevant nucleotide or sequence down to a single base pair. ZFNs can be engineered to target any nucleotide in the genome. The efficiency describes the level of modification achieved at the desired target site. With ZFNs we can now routinely hit greater than 90% efficiency, even as high as 99.5% efficiency. Specificity is a term used to describe the degree of off-target editing. We understand how off-target cleavage occurs via non-specific finding between the ZFN and the DNA backbone. We are able to engineer away these elements from the ZFN and the result is that off- target cleavage falls to levels that are undetectable by state of the art assays. I encourage anyone interested in therapeutic genome editing to continue to ask thing about and others in the field about all three of these parameters. Next week at ASGCT, Rush Kolber [ph] will present initial results of this research - of his research into rationale enhancement to increase ZFN in vivo activity levels. Rush shows that with changes to the AAV ZFN expression construct backbone into the DNA binding and nucleus domains [ph] ZFN coding sequences we can achieve 10 to 30 fold increase in activity level. We believe these are impressive results - impressive improvements that may…

Thank you, Mike. Sangamo’s had some inflection point, capitalized by exciting upcoming clinical trial readouts from seven different programs using a divest range of technological approaches. We are rapidly advancing additional research programs for a proprietary pipeline, as well as in collaboration with partners. We are making enormous progress industrializing our ZFN platform, so our best technology is readily available to internal and external researchers. And we are successful recruiting new talent throughout the company to ensure that Sangamo is geared financially and operationally to continue to lead the field of genomic therapeutic development. We'll now turn to you for your questions. Operator?

Thank you. [Operator Instructions] Our first question comes from Ritu Baral with Cowen. Your line is now open.

Good morning, guys. Thanks for taking the questions. Can you talk to the follow up period for the hemophilia A patients and the MPS II patients that we will have upon data release? And do you expect stabilization of expression within this period?

Ritu, good morning. How are you?

Good morning.

It's an important question. Let me hand over to Ed our CMO to try and address this.

Sure. So it will be based on when the - it will be based on when the patients are enrolled in the respective studies that you mentioned. And as we mentioned during the call, we want to ensure that the data had time to mature and that we are able to report on meaningful and reliable data. But just trying to be – maybe being a bit more philosophical here. I've spoken with many of you about the danger of coming out with data too early, when it's - when the levels are still settling. We've also reflected together on the fact that between the other companies that have shown data in haemophilia A, there aren’t that many data points for us all to know how long it takes for this to settle and how long the data will take to evolve. And so this is a growing field. We believe that by waiting until late summer we have the best chance of having data that is meaningful and will give you the best chance to understand the quality of our medicine.

Fair enough. And just a quick follow up, can you give us very sort of high level MPS II safety from cohort I? I mean, it sounds very positive, does it generally resemble the first patient that you’ve seen, any other considerations there?

Yes, so we presented data at the World Meeting which was back in February that demonstrated the first dose cohort was well tolerated.

And the…

It was – sorry.

Do they generally - the additional patients, can we assume that they generally resemble that presentation in the first patient - from the first patient?

Yes. I mean, - yes, so the patients in the second cohort, again the study continues and we continue to enroll patients. So we haven't commented on the safety except as I said the first dose cohort for the MPS II study. But as the study continues you know, you can make your assumptions based on that.

Got it. Thanks for taking the questions.

Thank you.

Thank you. Our next question comes from Gena Wang with Barclays. Your line is now open.

Good morning, Gena.

Hey, good morning. This actually Xiaobin [ph] dialing in for Gena. Thank you for taking our question. Maybe first a quick one on hemophilia A. So you mentioned that you are about to enrol the next patient very soon. So would the patient be treated by the first dose? So what's the rationale sort of to continue to dose escalate and can you also share a little more about your target profile based on existing data?

So we said we will continue to dose escalate. We will wait until the data reads out to give us a proper impression of the therapeutic dose, and the study continues.

Got it. Maybe also just a couple quick financial questions, maybe for Kathy. So for the Kite upfront milestone, how would you book it? Would you amortize it and what would be the time period that we should use? And also can you help us bridge your current cash position and your OpEx guidance to your year-end cash position? It seems that if you just minus the OpEx for the remaining of the year, so you get to the $485 million cash position. How should we think about the revenue and CapEx?

Okay. So let me address the Kite, Gilead upfront. As you know, the HSR did not clear until April, which is in Q2, and we are going through it right now analyzing the impact of the ASC 606 accounting guidance on to this upfront revenue, which basically in prior periods - prior accounting guidance we took a very straight line approach of dividing that, amortizing that revenue over our – a straight line method. But going forward, we have to analyze the performance period and how much of the revenue we can account for the performance that has been delivered against that obligation. So it will be something that we have to analyze in the upcoming quarter and we will provide more information at that time. So did I answer your question, did I address your question on revenues?

Yes. Then about the guidance…

Yeah. On the second point regarding operating expenses and cash guidance, you're right, it's roughly in line with how we think about - what we're going to spend - recognize as operating expense and how that ties back to our cash guidance, it's roughly in line. But remember, as we are building a huge facility in Brisbane, the cash impact of that will be something that we have to monitor towards the end of this year.

Got it. Thank you so much.

Thank you for your question.

Thank you. Our next question comes from Maury Raycroft with Jefferies. Your line is now open.

Maury, good morning.

Hi, good morning. Good morning, Sandy and team. Thanks for taking my questions and congrats on the progress. To start sort of a similar line question is what Gene Wang just asked for hemophilia A, but I am wondering for MPS II, so you dose the initial patients with 5E12 and then you've got the next cohort with 1E13 and now you're looking to dose two more patients at 5E13 or do you plan on dosing more patients at 1E13?

So, this is Ed. We aren't commenting on dose expansion or dose escalation for the MPS II or that grade [ph] studies.

Okay. And then for MPS II, if you can just remind me what the protocol is for steroid use and if you can comment on tapering for the four patients treated so far and it's possible for you to see - if possible if you can comment on any benefits - any benefits you're seeing on efficacy that relates to the tapering?

So not commenting on efficacy. As we talked about will release efficacy and safety data late summer. With regard to the prednisone [ph] dose, it's a 20-week steroid taper starts at 60 milligrams and fairly rapidly tapers down to a relatively low level.

Got it. Okay. And just also for when to expect data, will that be or should we expect that at a medical meeting or do you plan on doing a press release around MPS II and in hemophilia A?

Hi, Maury. It’s McDavid. We've got our eyes on a few different venues for the actual presentation at a medical congress in the late summer for both programs and will likely top line release in advance of that.

Got it. Okay. Thank you very much.

Thank you. [Operator Instructions] Our next question comes from Jim Birchenough with Wells Fargo. Your line is now open.

Morning, Jim.

Morning, guys. Thanks for hosting the call. Just want I understand in the slide deck it speaks to maybe your topline data and now we're talking about late summer. So just trying to understand what's happened recently and whether there has been an efficacy assessment and you're electing to move forward or whether you're waiting for data to get more mature or you expect a better yield from an efficacy assessment?

Jim, it's the latter and is in discussion with the lawyers about what's the middle of the year and for summer and what’s the late summer. And so we're aiming for late summer, nothing has changed. There's no delay in the programs as we describe them. It was just– when is the middle of the year and when is the summer.

Got it. Okay. And then just a lot of time appropriately spent on delivery and optimizing delivery. Is there a provision in the protocol to look earlier for evidence of transfection and have you looked at - are there any biopsies to look at that question to assess delivery, as well as other aspects of the gene editing itself. And do we have any early evidence that any of this is getting towards anything?

So you can imagine liver biopsies a significant thing that we can only do rarely in patients. And so we will look first for efficacy by enzyme life, deliver biopsy comes towards the end of the patient’s intensive study, rather than it being an early indicator.

And just to add to that with the enzyme levels, we're very fortunate because the - we're very fortunate from an assessment standpoint because the enzyme replacement therapy levels are basically of the patients need of production prior to their next dose. The half life of enzyme replacement therapy is quite short hours, and so even 24 to 48 hours afterwards is the only enzyme the patients are producing is what they would have produced on their own. So this allows us then to measure enzyme levels just prior to their next dose of receiving diarchy [ph]. So we then have a strong ability to detect changes.

And Jim I want to just reemphasize something Ed said in his talk. I know you understand. We've done this experiment in Vitro [ph] in most monkeys and human. We've done it in vivo in mouse and Monkey. Each time the zinc fingers if you have enough concentration to sell the edit and the gene gets incorporated and transcribed. And so really what we’re testing here is enough - just enough of our AV6 tape them to the liver and the human in vivo experiment for that production, it isn’t as much a test of the editing, it's a test of the delivery.

And maybe just one final question if you'll allow me. Obviously a lot of focus on Huntington's gene silencing, recently you've got a program which Shire any update there and maybe harder to answer. But any implications of the Takeda, Shire deal on that Huntington program is there any provision where it might return to you? Thanks.

So and having come from Takeda before joining Sangamo. It's fascinating how complicated the world is. I know neuroscience has always been a big thing for Takeda, so I'm sure it's only good news. We hear from Shire that the trial - I misspoke there, that the program progress's.

Got it. Well, thanks for taking the questions.

Our pleasure, Jim.

Thank you. I show no further questions in queue. So I'd like to turn the conference back over for closing remarks.

Thank you so much for joining us this morning. Have a good day.