Good afternoon, and welcome to the Sangamo Therapeutics Teleconference to discuss Second 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.

Hello, 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. And you may find a link to the slide presentation on our website, www.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 this call are based upon the information that we have available today. This information will likely change over time. By discussing the future performance of Sangamo with you today, we’re 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. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions 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. The 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 afternoon 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; Ed Rebar, Chief Technology Officer, Heather Turner, Senior Vice President and General Counsel, and Gary Lee, Vice President of Cell Therapy. Again, we will refer to a slide presentation during this call, and those slides are to be found on the Investors and Media section of our site. And now I’d like to turn the call over to Sandy.

Thank you, McDavid, and good afternoon to everyone on the call. Thank you for joining us. Time flies; it’s hard to believe we are already in the middle of the summer hosting our second quarter call. Sangamo continues to evolve into a medicine company, dedicated to the development of novel genomic therapies that have the potential to transform patients’ lives. This transformation is a process and our progress is becoming more and more visible. On today’s call, we will highlight specific achievements in clinical development in research and in our corporate strategy, all emblematic of our evolution. In this clinical update, Ed Conner will discuss the positive preliminary results that we announced this afternoon from our clinical trial evaluating SB-525 gene therapy for hemophilia A. This is the first efficacy data emerged from the new Sangamo and the first efficacy data from a program using AAV6. Another important data point for Sangamo will fall on September 5 at SSIEM, where we present preliminary results of our first two cohorts of the clinical trial evaluating our SB-913 in vivo genome editing therapy for MPS II. In the last few years, technology development at Sangamo has evolved to serve therapeutic ends. And Ed Rebar, our recently appointed CTO, will discuss key technical parameters required for safe and effective genome editing. He’ll also provide his viewpoint of our recently published studies about gene editing. We’ve been emphasizing our interests in building an immunology cell therapy expertise. Our intention was to build to de novo or to acquire through collaboration, the cell therapy capability to lead the field of CAR-Treg development for immunology. Our proposed acquisition of TxCell solidifies our leadership position in this emerging field, accelerating our timelines to clinical development by up to two years. We plan to develop CAR-Tregs first in the solid organ transplant setting and later for the treatment of highly prevalent auto immune diseases. TxCell is a high performing team and their intention upon closing is to allow them to continue to function as a subsidiary of Sangamo. Later in the call, Kathy Yi will provide an update on our finances, including the impact of the TxCell acquisition. And for now I’ll turn the call to Ed Conner, our Chief Medical Officer.

Thanks, Sandy, and good afternoon, everyone. I’m pleased with the progress the Clinical Development Group has made since our first quarter call, and I’d like to spend some time discussing latest developments from two of our lead clinical programs; our SB-525 gene therapy candidate for hemophilia A and SB-913 in vivo genome editing candidate for MPS II. Earlier this afternoon we announced preliminary safety and efficacy results from the Phase 1/2 alpha study for hemophilia A. And I’m pleased to discuss some of the top line information from the press release on this call. We’re excited by the results we have seen so far, and we and Pfizer intend to present the detailed dataset later this year at the ASH 2018 annual meeting. ASH has stringent and embargo requirements, and so until then we will only discuss a few highlights in order to preserve the opportunity to present at the conference. The alpha study is an open-label dose ranging clinical trial designed to assess the safety and tolerability of SB-525 investigational gene therapy in adult subjects with severe hemophilia A. To-date five patients have been treated at three dose levels, two patients per cohort. Turning to Slide 15 for the top line summary. SB-525 has been generally well tolerated with no treatment related serious adverse events. The fifth patient in the study, the first treated at the third dose level has achieved therapeutic factor rate activity levels. Epidemiologic data indicate that factor rate activity above 12% of normal is associated with substantial reduction or elimination of spontaneous believes in factor usage. A dose dependent effect has been observed in the study, with patients in the second cohort reporting reduced use of factor replacement after receiving steady drug. There have been no use of tapering courses of oral steroids. Next steps…

Thanks, Ed. I’d just like to take a moment to introduce Ed Rebar our Chief Technology Officer. Ed received his PhD for MIT, he studied methods for designing zinc finger proteins to target novel sequences. In that 20 years he’s been here at Sangamo, Ed has led the development and optimization of our core Zinc Finger Technology. In the field of genome editing, he has recognizes a leader and a strong voice for setting very high standards for editing technologies being developed for therapeutic use. We are delighted to have Ed service our CTO. Ed?

Thank you, Sandy, and good afternoon. Let me begin by saying how excited I am to stepping into this role at this important juncture. The prospects of creating onetime curative treatments for currently intractable diseases have never been greater. However, realizing the full potential of these opportunities will require an ability has developed editing reagents are sufficiently precise sufficient and specific. As a reminder, we defined physician as the ability to target discrete clinically relevant to create sequence within the genome. Efficiencies the degree of modification to achieve that site and specificity indicates our preference for modifying only the desired target site and nowhere else. At Sangamo, we take pride in having developed those in vivo genome editing platforms to provide great performance with respect to these key capabilities. Recently, Sangamo presented results that exemplify two of the stabilities, efficiency and specificity at the Fassett Genome Engineering Conference in Florence, Italy. In that presentation, we demonstrated the ability of ZFNs to modify targeted focus both virtual completion and with no evidence of off target cleavage, using clinically relevant target cells and delivery conditions. A summary of the critical study is provided on Slide 25. In this work, a ZFN is designed to create the gene for T-cells receptor alpha achieved 97% disruption is gauged by two assays. Sequencing of these targeted locus and antibody-based assay for gene expression. With a specificity analysis of the same samples reviewing no off-target cleavage down to a detection threshold of less than 0.1%. I would like to take a moment here to underscore the rigor of our specificity assessments. Since a finding of no off-targets is meaningful only if you have searched for them with intelligence and within the context of high on-target modification. Our specificity assessments were performed in two stages. First, we…

Thank you, Ed, and good afternoon, everyone. We issued a press release earlier today that included detailed financial results for the second quarter of 2018 which are summarized on Slide 28. Revenue for the current quarter was $21.4 million, which reflects the upfront payment from the Kite-Gilead on oncology collaboration and represents an increase of $13.2 million from the prior year. Total net loss for the second quarter of 2018 was $16.6 million or $0.17 per share compared to $12.5 million or $0.17 per share for the same period in 2017. We ended the current quarter with $574 million in cash, cash equivalents and investments. With the completion of our proposed TxCell acquisition expected by the fourth quarter of this year, along with other transaction and integration-related cost, we expect to end this year with the least to $380 million in cash. As Sandy discussed earlier in the call, we have plenty to invest in immunology as part of our three therapeutic areas strategy. And believe with this acquisition, we are accelerating our autoimmune pipeline. TxCell has developed expertise in Treg cell cultivation and manufacturing and will be ready to enter the clinic next year. We believe the potential future value of this asset is far greater than the purchase price of EUR 32 million and assembling the necessary assets and capability of ourself de novo would have taken far more resources in a much more longer timeline. We have also invested heavily to upgrade our infrastructure over the past year. And expect to integration of TxCell into Sangamo’s business operations to progress smoothly. We are excited to welcome the TxCell team to the Sangamo family and look forward to working with them to build our immunology pipeline. Our other investments in inherited metabolic disease and CNS continues to present significant value creation opportunities for future pipeline. We’re planning to continue to invest in these areas and our future operating expenses are expected to increase. In addition, our construction project in Brisbane for our corporate headquarters is going well, and we expect to occupy by the end of this year. Finally, our operating expense this year is heavily influenced by the TxCell transaction closing date. Therefore, we plan to provide updated guidance on operating expense in cash run rate on a future quarterly earnings call. We believe we’re in a strong financial position to fund our clinical development programs during next the milestone as well as execute on the TxCell acquisition. And with that, I’ll now turn the call over to Sandy for closing remarks.

Thank you, Kathy. I’m delighted with all that the team has accomplished this summer and excited for us to come in the second half of the year. Our clinical group is making steady progress across our clinical programs, and we are so excited for the data now available for SB-525 and will soon be for SB-913. The preliminary readouts in these programs will inform the development of our pipeline and review potential new opportunities where we may apply our technology. Our zinc finger transcription factor and ZFN platforms are in capable hands of Ed Rebar and him Technology Group. And I’m confident that they will continue to set the therapeutic standards and precision, efficiency and specificity for genomic medicines. We believe our proposed acquisition of TxCell not only accelerates our immunology strategy over the next two years, but will act as a cornerstone to generate significant long-term value for both patients and shareholders for years to come. We’ll now turn to your questions. Operator?

[Operator Instructions] Our first question comes from the line of Maury Raycroft with Jefferies. Your line is now open.

Good afternoon, Maury.

Hi, good afternoon, and congrats on the update. My first question is just, if you can contextualize the top line data, what is it mean in light of recent data we’ve seen from an efficacy and safety perspective?

So as we said, we will be presenting full details of this conference at the end of the year. And so we have to be very careful about the embargo that these conferences have. So there’s not much more that we can say. Ed, do you want to reflect on what we had recently in this field?

Yes, I mean, I think as we’ve said all along, immunogenicity and then immune reactions are very important in gene therapy targeted deliver. And not just because of the consequence for liver cells, but because of the impact potentially on the gene product itself that you’re trying to produce. So obviously, there’s been a recent news where we are looking forward to hearing more about some of the details that at a medical conference, but it’s too premature at this point given the limited data that’s been released.

And we want to make sure that we can curtail data and context of others with more patient weeks and months of exposure.

That’s right, absolutely.

Got it. And maybe a follow-up. If you can provide any perspective on, whether the doses that were using non-human primates, if those are corresponding to what you’re seeing in the human data? And potentially for – the Cohort III patient is at the highest dose. Is that patient at a plateau state and should that patient remain above that 12%, a normal? Or I guess at what point is that patient – I know, it’s been pretty recent since…

So, Maury, I know you want to know more. We give you as soon as we can and the conference allows it. I think I’m not sure it’s useful now to go back and look at the primate data. Now we’re in humans, we’ll have human data as to the other companies. And you can be looking for the levels that we achieved within the therapeutic, the consistency and the lack of an immune response. Those are the kind of things we hope to be able to share more with you coming at the end of the year.

Got it. And maybe one more quick one then, just based on the data that you have. Are you sharing it with KOLs? And could this potentially enhance enrollment? And could we see a ramp-up with the enrollment rate?

Let’s let Ed answer that one.

So to be clear enrollment has remained on track the whole year. We have a pipeline of patients available to continue forward and so we’re very confident that we’ll continue to enroll on time on this program.

Okay, perfect. Thank you, congrats again. I’ll hope back in the queue.

Thank you.

Our next question comes from Ritu Baral with Cowen. Your line is now open.

Hi, guys. This is Irina for Ritu. Thanks for taking my question. I was just wondering if you could comment on a general level on the expression levels that you guys intend to aim for with the SB-525 program. And more precisely are you just targeting decent therapeutic levels or do you plan to try to pursue the normal expression level window of above 50%? And then, I have one more.

So if you can imagine that there’s a range in all of us and all of us around this call. And so that’s why we are saying, we’ll be in a therapeutic range. And that there is epidemiological data that everyone quotes and there’s way around that says, it’s almost about 12% that it should be very effective. We’ve talked and we talked to many of you over the years. And you know our opinion, has always been over 12 not too high, and consistent and avoiding immunological response. And so those are the characteristics that we think are more important.

And maybe just as a quick follow-up. In that case, how do you think about buffering for any potential waning effects over time?

It’s clearly important. And we have some data with our patients over time and we’re very encouraged by the consistency that we have seen. But we want to collect more data and the late-breaking and publication of this later this year will allow us to incorporate more data.

Sure, that’s fair. And then my last question, just wondering, will the ASH presentation include data detail just from these five patients that you’ve treated so far? Or do you expect to be able to introduce maybe an additional a patient or two by then into the data set? And thank you very much.

Yes. So we are enrolling another patient or we expect to enroll another patient later this month and the expectation is that we would include data on that patient as well. Hence, there may be potential for more patients, but as we said on the call, the SMC will meet after that sixth patient has been dosed.

Thank you very much, guys.

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

Gena, how are you?

Hey, this is actually Xiaobin dialing for Gena. [Indiscernible] Maybe just a question about the use of different course of oral that there is no use. Just wondering like did you see any cytotoxics in your responses? And then also the second question would be about the future expansion of any dose that you selected, so just wondering what would be your criteria and would you continue to dose escalate?

Understanding our patients and their safe treatment is really important to us. So Ed, can you talk to that?

Yes. So that’s right, so there were no tapering, of course, they have steroids because there were no cytotoxic immune effects that were observed. We – have occasionally protocol reactively treated patients with a dose or two of steroids as we await and repeat liver function test, but as those have come back normal, we have stopped the steroids. So we are very pleased with what we’ve seen thus far with regards to safety across all of the dose cohorts treated.

Got it. And regarding to potential expansion and dose escalation?

Yes, it will be discussion that we have with our Safety Monitoring Committee. Again, after the sixth patient is treated, and we will look at a variety of factors and make a determination regarding dose expansion. Does that answer your questions?

Yes, yes. I guess just maybe a quick question for the MPS II program. Just want to – if you have any update understanding about the potential, the impact from your therapeutics on the CNS aspect. I know that you got that interesting mouse data. Do you expect to see any effect in the patient as well?

So I’m glad you agree that the mouse data is interesting, and it’s encouraging. These are adult patients that we are treating, so the chance of them showing a CNS benefit is very small. We don’t expect to see anything. We’re encouraged, as Ed said, by the fact that both the European authorities and the American authorities have allowed us to move into children; so starting with adolescents then moving into children, once we can confirm the safety in the adult population and some form of efficacy. So I think that’s a very encouraging sign from the authorities that they understand that it’s the children that will have the greatest benefit, that are pleased with the package that Sangamo has put together and they are helping us find a path to get to the patients with the most need as quickly as possible.

Got it. Thank you so much.

Our next question comes from Jim Birchenough with Wells Fargo. Your line is now open.

Good afternoon.

Hi, guys. Good afternoon and congrats on all the progress. Maybe starting with SB-913, the expert call this past week was very helpful. But one thing, I was still left wondering is, what’s the typical lag from achieving therapeutic IDS levels to seeing reductions in urinary GAG? Is that something you’ve got feedbacks from your investigators from? Just as we’re thinking about at what point shall we look for that dynamics to occur?

So most of what’s known about GAG is when you’re starting or stopping ERT. And what you see when you start ERT is very rapid decline in GAG over a period of probably two to three weeks, and then, sort of a slow measurable decline as patients remain on ERT. But it’s also known as that when patients come off ERT is that you see GAG levels start to rise in a period of about two to four weeks. And so as we talk about discontinuing ERT, we should be able to measure effects within that timeframe that I just talked about.

And then just again on SB-913 given the rapid uptake by cells of IDA, is there any way to measure tissue IDS levels in your study either directly or indirectly?

So we’re not taking tissue biopsies. I mean, it has been done in the past, but the – it was done in the past to correlate with tissue GAGs, which are essentially the measurement of overall glycosaminoglycans load in the body. And so really measurements of GAG in the urine is a very helpful, useful and clinically validated surrogate for what your tissue and cellular GAG levels are.

Great. And then, maybe just back to SB-525, trying to ask some questions maybe a different way. I guess there is a concern that what might be deemed our target goal for Sangamo may be different than what competitors are targeting? And I guess, perhaps, just if you could give us a sense as to whether the threshold from advancing is to achieve competitive factory activity with other more advanced programs? Or if you thinking about it differently? Thanks.

So Jim, it’s really important question and it’s one that whole field is thinking about. And the reactions we’ve seen over the past few days to BioMarin data and the Spark data says that none of us really or can be entirely sure of what the right values. And we learn from what they have said and what they are aiming for? And we’ve watched one of the companies values slight down and there what they’re aiming for, move with that. And we watch another company having to address immune reactions. And so Ed and I are very clear about is what we’re looking for is something that is greater than that 12% that we sent. And also, that is designed for the patients. So that it’s consistent, it’s not in a generating immune reactions and it’s predictable. Ed?

Yes. And I think to add to that it’s not only about an individual patient but about a population of patients. And that’s why, long-term data is so important. It’s not just about reaching a mean threshold it’s about reaching and important clinical threshold in nature every patient that you’re treating. So I would just add that.

Great. Well, thanks for taking the question.

Our next question comes from Qian Wang with Bank of America. Your line is now open.

Hi. Hey, how are you? Thank you for taking my question. So I have a couple, if I may. And first one is on Hem A. So you mentioned about the potential of dosing or expansion just wondering what kind of criteria you’re think about, especially I mean, given the competitive environment, but maybe you want to move fast? And we do want see like a stabilizing levels of all six patient before you make that decision? Or even more durability? I just wondering thinking about when could we hear about that, that decision is going to be sometime second – third quarter or fourth quarter?

So you can be sure that we will always be moving as quickly as possible, but there is a clear way to this is decided.

Yes, I mean, it is based on the things that we’re just talking about. It’s not just levels, its consistency, its overall safety. We are very pleased with what we seen thus far and we look forward to presenting all the data SMC. But obviously, that’s decision that we will share after that meeting has occurred and as we talked about it will be going over or we would be presenting the details at the ASH meeting at the end of this year.

The most important thing to us is Sangamo’s patient safety. It’s not a competition around numbers with other commercial entities, its making sure that what we provide to patients is effective and safe.

Okay, great. I have a follow-up for the steroid use. Can you just confirm your criteria on comparing to the others? And also, have you seen – I know that you don’t see any significant signals, but did you see any dose-response and in light of what’s Spark have shown, will you guys be cautiously trying to prophylactic for potential higher dose? And also, wondering whether you have engaged any conversation with your partner to think about potential threshold data Phase 3?

Before I hand it over to Ed, I would just make sure we’ve got your questions. So is – are we planning to use prophylaxis? Did we see any – because we didn’t use any different courses of steroids? Did we see any dose-response in anyway? And what were the criteria for us using steroids? Ed can you help with some of these with continuing operations all about them.

Yes, sure. So I guess first is prophylaxis use of steroids. We’ve seen nothing today, from a safety perspective, that would indicate that we should be doing that at this or future cohorts. With regards to a dose-dependent effect, we did comment on that, that we saw that in the second cohort where patients reported reduce use of factor replacement after receiving study drug.

Did you see dose response for steroid?

No.

No. The liver enzyme for example with response not…

No. We didn’t see any dose response with liver enzymes.

Okay. And have you engaged any conversation with your partner? About the…

We talked to our partner very frequently. It’s a terrific alliance. We’re very fortunate to be working with them, and we’re in communication very, very frequently.

If I may have a last one. As MPS. So basically, I think according to the KOLs I mean, the most informational conclusion could be drawn after the ERT withdrawn right? Have you – what kind of considerations are you talking about for potential removal of that? Can we potentially see those data in SSIEM meeting?

So we will meet with investigators after the SMC convenes, now that the six patients have been treated. And then, we’ll discuss with them about withdrawal of ERT for their individual patients.

Okay. Thank you.

Thank you very much.

Our next question comes from Eric Joseph with JPMorgan. Your line is now open.

Good afternoon, thanks for taking the questions. I joined a little bit late. So I’m sorry if you touched on this earlier. But just a point of clarification on Champions in the MPS II study. Well, patients have discontinued ERT at the time of SB-19 infusion? Is there – just trying to get a clarification whether there’s sort of an overlap year period. What sort of triggers withdrawal of ERT and post-withdrawal, what interim it allows prior to resumption?

We can help you with that. Ed, I think he’s looking for description of the study.

Yes, so patients don’t have to be on ERT, but all patients are on ERT coming into the study. As you would expect, this is the only commercially available therapy that exists. So patients coming into the study or on ERT and remain on ERT until it is withdrawn and the data again will be discussed with the individual investigators after the Safety Monitoring Committee convene after the six patients data are in. And then, discussion will occur about ERT withdrawal at that time.

Okay. It’s sounds good. And then, as part of that discussion obviously – I would imagine, sort of how to think about rescue therapeutic I guess, we need on a patient-by-patient basis or?

Yes, and again, in patients who are not on the study but patients who are taking ERT generally, once you remove ERT, typically what happens is after about 10 days, they start to feel fatigue. But within two to four weeks, the urine GAG level starts to rise, so if you we’re to theorize about rescue criteria if that’s what you want to call it, you have would have a market that will you allow you to restart therapy if it was appropriate to do so. Does that answer your question?

Thank you with pleasure.

[Operator Instructions] We have a follow-up question Jim Birchenough from Wells Fargo. Your line is now open.

Just two quick question. So first, I guess, as you’re measuring IDS enzyme levels, how do we discern between exogenously supplied enzyme from ERT and that’s produced endogenously by your therapy?

So I’m going pass on to Ed, but we have spent – we have really spent some time looking at the PK/PD modeling of this and the kind of clinical – as you would for clinical pharmacology of the drug? And Ed, quite different isn’t it?

It is, but to answer to your question Jim, the half life of ERT is minutes to hours. Single dose administration is literally right around an hour. So what we do in the clinical study is because these patients are dosed weekly, we measure their IDS activity levels right before they receive their does of ERT, so they are in trough levels and essentially have no detectable IDS activity that’s been contributed from there ERT the week before. So this allows us then to measure what is the production from the liver from SB-913.

Got it. So we will seeing trough level measurement of trough level. That’s helpful.

Exactly, exactly because – yes, exactly.

And then just one other question on I understand you can’t if you going to be presenting this at a medical meeting you won’t be able to say anything but you mentioned the novelty of AAV6 as a vector and so. Can you say in terms of the screening for neutralizing antibodies whether there was anything surprising good or bad that you saw in terms of AAV6 neutralizing antibody?

We’ve looked across all of the antibodies and so far they’re all very similar there about 30% of the patients across the whole populations. And because we’re doing and MPS I, MPS II and human B patients that we screen and human A, and if you average them all, it’s about 30%.

And yes, what we’ve seen is, consistent with the published at gemological literature on that.

Got it. Thanks for taking the call.

Thank you. I’m not showing any further questions in queue at this time. I’d like to turn the call back to management for closing remarks.

Thank you very much and thank you all for joining us, it’s very encouraging day for Sangamo and we look forward to talk with you all again soon.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program and you may now disconnect. Everyone, have a great day.