Good afternoon and welcome to the Sangamo Therapeutics Teleconference to discuss Fourth Quarter and Full-year 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 referencing an accompanying slide presentation, a link to the slide presentation may be found 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 discussed during this conference 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 are not undertaking an obligation to provide updates in the future. Actual results may differ substantially from what we discussed 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 the 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; Stephane Boissel, Executive Vice President of Corporate Strategy; Adrian Woolfson, Executive Vice President and Head of Research and Development; and Ed Conner, Chief Medical Officer. Again, we'll refer to a slide presentation during this call and those slides are to be found on the Events and Presentations page of the Investors and Media section of the site. And now I would like to turn the call over to Sandy.

Thank you, McDavid, and good afternoon to everyone on the call. Thank you for joining us. At Sangamo, we are focused on the development of novel genomic medicines using scientific expertise we have developed for over two decades. We have five active clinical trials and with the end of this year, we’ll have a total of nine programs in the clinic. Our pipeline of therapeutic genomic medicine candidates currently in clinical development encompass three complementary approaches: Gene therapy, Ex Vivo Genome Medicine and In Vivo Genome Medicine. We are sometime asked by Sangamo, a company best known for Genome Medicine, includes the gene therapy program in its clinical development portfolio. The answer is simple, we believe that the application of a variety of mutually compatible approaches to the proper treating genetic diseases is both necessary and appropriate. Our use of gene therapy is one sense programmatic. We have a deep knowledge of AUD delivered in vivo genome therapy as a result of the extensive work that we carried out over the last two decades. And it’s also scientifically and medically appropriate and the indications where we've elected to use this approach. In these programs, we use AAV vectors to deliver a therapeutic gene to the nucleus of hepatocytes. The new gene design [indiscernible] liver specific promoter. Our gene therapy programs include Hemophilia A program, which is being developed in collaboration with Pfizer. And from which we expect data later this year. We use gene therapy for Hemophilia A because our scientists created a contract that performed well pre-clinically, and because gene therapy has a well-defined path forward with the favorable probability of technical, regulatory and commercial success. Our second gene therapy program is in Fabry disease. Following the recent FDA acceptance of our IND, we're on track to enter the…

Thanks, Sandy, and good afternoon, everyone. We believe that the MPS II and MPS I data presented at WORLDSymposium on February 7 are congress and complementary and together provide preliminary evidence of in vivo human genome editing. Several lines of evidence support this conclusion. Mainly, first, we detected evidence of gene integration via RT-qPCR analysis of liver biopsy samples in both MPS II patients who received a mid-dose of SB-913. Second, in patients six, who has treated at the high dose in the MPS II study, the substantial increase in plasma IDS activity was observed. Up to a level as high as 60% abnormal. Third, we saw evidence suggesting a dose response across below medium and high doses in the MPS II trial. And fourth, we observed leukocyte IDUA activity increases within the normal range in the three MPS I patients treated in EMPOWERS Study as well as evidence of dose dependency. As discussed at WORLDS, these interim data marked the first in series of readouts from these two studies, which we expect in 2019. We are looking forward to analyzing IDS activity measurements in the high dose cohort which includes the three expansion patients from the CHAMPIONS Study. For EMPOWERS, we are eagerly awaiting longer term data. Most importantly, for both studies, we look forward to ERT withdrawal data across all dose ranges. These data are an important step in validating our in vivo ZFN mediated genome editing technology in the clinic and build the foundation for the future development of our in vivo genome editing programs. It is encouraging that our first generation platform demonstrated this activity. As Sandy mentioned earlier, we have developed a second generation ZFN technology, which is a modified version of our first generation reagents. New ZFN constructs were designed, amongst to other things,…

Well, thank you Ed, and thank you to everyone online for dialing into our call today. Today, I'd like to provide with updates on some of our lead preclinical programs that are making their way into the clinic. And in particular, I'd like to highlight our cell therapy platform. Sangamo has a distinguished history of employing zinc finger nuclease in vivo genome editing technologies in the clinic, and each day back to our – the time of our HIV studies in the mid-2000's. So first I'll mention our exciting work in multiplex ex-vivo gene editing is being performed by Kite, Gilead to generate allogeneic CAR-T cells. The use of multiplex gene editing in the generation of these agents, place to the high editing efficiency and specificity both cystophans, which we believe make some uniquely well suited for it’s partners. Kite-Gilead recently announced that the first asset to enter the clinic from this partnership will be an allergenic NTCD-19 CAR-T agents, KITE-037 they intend to file IND in the latter half of the year. Building further on our unique strengths in this field of multiplex ex-vivo editing. We're also exploring the development of an entirely new class of therapeutics know as CAR-Tregs. But these are regulatory T-cells that are being genetically modified with a chimeric antigen receptor to endow the cells with both antigen and tissues specificity. But we believe that CAR-Treg cell therapy will prove to be both as exciting and as an important terminology and also immune diseases as CAR-T cell therapies have turned out to be from oncology. But our first clinical program Treg program, TX200, which we acquired as part of the TxCell acquisition, will test these new therapeutic agents in the context of keeping organ transplantation and this will represent the first time the CAR-Treg cellular…

Thank you, Adrian, and good afternoon everyone. Detailed financial results for the fourth quarter and full year 2018 were included in the press release that we issued earlier this afternoon. And Q4 results are summarized on slide 24. I will briefly review the most important components of our financials today and also discuss primary drivers of our growth and the investments for 2019. We ended the fourth quarter with a strong balance sheet of $400.5 million in cash, cash equipment and investments. Our 2019 operating expense guidance is in the range of $210 million to $220 million and we project our current cash position to provide at least two years of runway. As discussed earlier by Ed, we're excited about the future progress achieved in all clinical programs this year and anticipate the data readouts from hemo A and beta-thal as well as the entry of Fabry into the clinic. While we continue to invest in expanding our capability and developing our future pipeline, we also plan to be prudent in our future capital allocations and investments. We recently moved into the Brisbane facility and expect to complete the manufacturing and process development portion of the built out by middle of this year. While this expansion is critical from our talent recruitment and capability perspective, we're excited about the AD manufacturing capabilities in this facility and expanding capacity to supply clinical materials for our future pipeline. We also expect to continue to maintain capacity at our CMO while building out our own internal manufacturing capability. Turning to our financials for the full year of 2018, the consolidated net loss was $68.3 million or $0.70 per share compared to consolidated net loss of $54.6 million or $0.70 per share for the full year of 2017. Revenues were $84.5 million for the full year of 2018 compared to $36.6 million in 2017. The increase in revenue was primarily related to our collaboration and license agreements with Kite Gilead and Pfizer. The total operating expenses were $106.6 million for 2018 compared to $92.9 million in 2017. The increase in operating expense was primarily related to manufacturing and R&D expenses related to the advancement of our clinical program. As a final, comment in the fourth quarter of 2018, we successfully completed the TxCell acquisition for aggregate purchase consideration of approximately $80.4 million. We continue to be excited about developing the next generation CAR-Treg cell therapy and expect the clinical trial initiations in 2019. And with that, I'll now turn the call over to Sandy for closing remarks.

Thank you, Kathy. We're excited about progress we have made across our key therapeutic programs. During the past few years as our focus has been on giving up our operations and moving our programs into the clinic, we are now seeing clinical data emerging from these programs. And this is the potential to validate our new therapeutic approaches to utilize our differentiated technologies, new series of high unmet medical needs. With our manufacturing facility in Brisbane and continued contracting with our CMO we're preparing for the future. Looking forward to bringing you further data throughout the year, which will continue to define how to develop our genomic medicines across all therapeutic portfolio. We'll now turn to your questions. Operator?

[Operator Instructions] And our first question is from Qian Wang from Bank of America Merrill Lynch. Your line is now open.

Hi. Good afternoon. Thank you very much for taking my questions. So if I may just a couple. First of all, just on the MPS II program I know you guys are starting the ZFN 2.0 prior soon and you just speak to what you talk design do you have? And what time could we expect the clinical data updates? And a follow-up on that is, you said potentially you could trigger the pivotal trial in 2020 and what kind of data do you need to see? Have you spoken requirements with FDA yet? Thank you.

Thank you for the question. Most important questions. Can I maybe pass this on to Adrian, our new Head of R&D to address both of these?

Thank you, Sandy. Yes. So we're very enthusiastic about this new study. We believe that the second generations zinc finger agents might just be able to take us slightly further into the therapeutic vendors to realize the full power and there this technology. To answer your question specifically, the design is a new study will recapitulate essentially, the design both the first generation study in MPS II. The data that will trigger and bend towards Phase III will be based upon the usual parameters or combinations of the data that evolves out of the existing first generation studies in both MPS I and MPS II. And also the new data are pertaining to safety obviously, but also enzyme activity evidenced in integration. and the ultimate throughput, we know at this point specifically be able to say we need the full house or one of the other we will watch the data as it evolves and will make a decision where when we feel we have enough data to do that.

If I may I can have another follow-up?

Sure.

Yes. Thanks. So, you are dosing your patients for beta-thalassemia and you said we potentially would expect data on the fetal-globin expression as well as the total hemoglobin. I'm wondering how long of the follow-up that we can see? And potentially can we see any data points on transfusion independence? Thank you.

Adrian will you answer to this one?

So we're very excited about our ST-400 program in beta-thalassemia and we will have data readouts throughout the course of the year. Predominantly that will include obviously initial safety as well as fetal hemoglobin and overall hemoglobin values. As with all our programs, we -- the data will come in and we'll present it as is appropriate.

Thank you. Our next question is from Ritu Baral from Cowen. Your line is now open.

Hey guys. Thanks for taking the question. I do have a follow-up to the last question. Just about what you need to move to pivotal? Do you have an idea right now about how many patients that you want to treat or they need to treat with the second-gen product before you'll have enough, I guess, critical mass of data to move into a pivotal portion? And how long you need to follow them for? And then I have a follow-up just on the second-gen potency?

Yes potency, yes, I don't think today we want to discuss specific about that those are really internal, kind of, go, no-go that we're in the process of the funding, but I think I can say that it should become fairly clearly to us when we look at the totality of the data. If we begin to see a really robust increases in enzyme activity, we don't really know what level of activity is necessary to get the clinical effect, but we will triangulate between any existing data and the new data and make a decision based upon what we're seeing.

And we said before and I think we even had this conversation with you, but enzyme to being able to stop ERT is important. And we'll be learning about that from the many patients the three patients and the expansion cohort -- the two patients in cohorts three for MPS II and the three patients in MPS I. For the next coming months, they will all be withdrawing from ERT and will then what the power of utility of the first-generation CF enzyme. And then as Adrian says we will gather data from the second-generation. Again, we'll be moving those patients to ERT withdrawal. But throughout the process of the treatment, we will learn from the expression of enzyme and safety of that treatment. So, lots of data to come and it will be in the whole that we will make the decision to move forward.

Got it. And then my follow-up is just on the increase potency that used in the second-gen. You said five to 34, where is that coming from? Is that optimization of the vector that leads to better transaction? Is that the promoter the actual -- is it the actual zinc finger construct in enzyme what are the--?

Yes. So, on -- it's Adrian. So, the data is in-vitro data and the modifications that we've made are twofold really or two-pronged categories. The first is a modification to the vector itself which impact expression at the transfer this includes, for example, modification to the three and five prime untranslated onto other changes. And then we've also made some changes to the zinc finger themselves, obviously, one of the huge advantages of zinc finger or rather platform is that we can redefine that protein and we've done some nice work to tune-up the phosphate residues and get rid of some of the stickiness which you occasionally see non-specific interactions zinc phosphate backbone and the positive this chart side train residues in-vitro. And we've also done some cheating in the cast select, the thought on neutralize it. So, -- and we're able to uniquely chain between these two different sites. We've also made some additional changes to residues within the alpha galactosidase themselves which contact the template and those changes have contributed to some of the positive effects that we've seen with the second generations technology. And it also enabled us to diagnosis to a common snip which occurs in 20% of patients. So, the combination of the changes to the vector and to the zinc finger itself through protein engineering together enable us to get this projected increase in activity in the clinic.

Was that snip present in any of the patients treated with the first-gen either at II or I?

Yes, if we look across all our programs, there were total of five patients who had the snip that it excluded them from participation. I want to say that explicitly, again, patients with the snip were excluded from the clinical trial which we could part the challenge of recruitment for this clinical trial we didn't talk about. We now can go back to those patients that were excluded because of the snip and offer them a chance to involve in the second-generation trial.

Right and obviously that will give us a better head start when we're occurring this second-generation study with those patients known to us.

Got it. And the stickiness that you referred to Adrian, I guess, the improvement in recognition and reduction in non-specific. Is that going to improve the safety aspect or was there stickiness impairing potency?

So, the stickiness is a thing that we've talked about -- Ed Rebar has talked about a lot about the non-specific binding between phosphate residues and the accretive sheet and the negatively charged part of the DNA. And that largely reduces non-specific binding and off-target cutting. So, the impact of that part is largely about reducing off-target rather than increasing efficacy.

Got it. Okay. Thanks for taking all the questions.

Our pleasure.

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

This is actually Sherwin [ph] dialing in for Gena. Thank you so much for taking our questions. Couple from us. First question, just want to confirm that based on your slides; do you still plan to enroll of the adolescence cohort for MPS II. If not what's the reason? Then for the second question, so you mentioned the Allo CD19 CAR-T, of course it run by your partner, just wondered if you can speak to the aspect about the persistence of Allo CD19 CAR-T and if there is any defined implemented in the product? A – Sandy Macrae: So we have an agreement with our friends at Kite, Gilead that they'd comment on the CAR-T product. So you will understand that we pass on that question. But for the first one -- first part I'll hand it over to Ed. A – Ed Conner: Yes so for the adolescence, we plan on including them in the DFN 2.0 trial. A – Sandy Macrae: And just to be clear after those patients are treated. A – Ed Conner: We feel that we're moving so we've said previously that we will understand the two dataset from the first generation trial was efficacy and safety and the ERT withdraw. And we feel that as we're then going to move into the second generation it is the right thing to do to offer the second-generation to the adolescence and children rather than treat them with the first generation.

Right.

Great. A – Sandy Macrae: I'm sure you would agree.

Got it, thank you so much.

Thank you. Our next question is from Jim Birchenough from Wells Fargo Securities. Your line is now open. Q – Jim Birchenough: Hi guys, congrats on all the progress with the science here. Few questions. I guess just first in terms of optimizing the in vivo genome editing. Are you looking at unproductive editing? And specifically I'm wondering if you can look at Intel without the idea of gene insertion whether those are occurring and is there some way to avoid that? us that something you can look at? A – Ed Conner: Yes it is something we can look at. And actually, we believe that we actually have the stasis gene editing reagents of our time. I think -- there's some plans about specificity as Chris bought, but it all -- if you take the on target into account, we feel that we really doing an extremely well with regard to safety not to target and if these are ideally suited for these partners. We can measure in those with cassettes and we are confident that the off target is extremely known now, but both reduction -- actually the first generation even more so now with the second-generation.

But I think Jim's asking a very specific question of whether we can drive portion of the transgene over Intel. A – Ed Conner: You can actually -- where you can favor a whole model that’s a suite combination. I mean there are a few ways to do that which have been discussed as it start that with Victoria the one beating while we were something like thinking about at the moment we don't have a specific way to your question is how could we specifically buy systems to save to favor a recombination over indoor generation we don't have a specific method to do that at the moment. But you can... Q – Jim Birchenough: I guess the question was really to the extent you could look at Intels off targets, I was just wondering if you could look at Intel's in the albumin gene locus to see whether you're getting editing without the transgene insertion and if you can optimize to avoid that? A – Sandy Macrae: It's a good question. And some time ago, we looked in animals and so our ratio of Intel's to insertion. And that led to the current protocol which has 1:1:8 as the ratio of transgene to ZFN. So you drive the equation by putting in more transgene. I think this is something that will come back to a look at again with the new generation of ZFN's. It may be something around timing of transgene generation compared to ZFN cutting or it maybe just simply again the ratio of amount to each. Once we start to see editing, we can start to then approve on the -- your question very well -- very presented -- there is one that that you discussed. Q – Jim Birchenough: And then just maybe on the ex vivo gene editing, should we assume that some of the advances that have been made in the transplant protocol in sickle cell disease as an example things like pre-transfusion and recruitment of sales that those have been optimized in your program with Sanofi? A – Sandy Macrae: Yes so Sanofi specifically for sickle cell is responsible for that Phase I, II studies. But yes, all current standard of care medical interventions are being included both in beta-thalassemia as well as sickle cell protocols.

Great. Well thanks for taking the questions.

Thanks.

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

Hi, everyone. Good afternoon. Thanks for taking my questions. First question is just on the NexGen program is that a plug-and-play type situation where that could be incorporated into the Hem B and MPS I studies? And I guess what are the plans to do that?

Good question. We feel it's prudent to do it with one initially so that's probably what driving ahead with MPS II and part of the reason for choosing MPS II is a pragmatic as the team had already had discussions with the regulatory authorities and we're ready to go with that. Part of that we will be watching the results of the MPS II MPS I and Hem B first generation studies. At the same time as during the trial in MPS and second-generation collect no data. And the team are looking at what would be the trigger points to start the other studies with the second-generation.

Got it. It's helpful. And specific question for MPS II. I'm just curious for the cells that you harvested from the patient biopsies and I know you did RT-qPCR on them, but I'm wondering if you stand in any of those cells? And if you get a sense is the amount of IDS that was produced in a few of the cells. I guess, if you stay intracellular are those cells overloaded with IDS?

So we haven't done that kind of study the amount of tissue we get in these patients is very small. If you imagine that these patients are often smaller because of the disease. And these are not therapeutic biopsies, but clinical trial biopsies. So we try and use the very smallest needle and the amount of tissue we get is perhaps half of the nip of your pen. And when we do the PCR, it was on something like 100,000 or 200,000 cells. So we done very little capability to define histological examination.

Okay, okay. And then last question is just the Treg program and the publication which looks pretty cool. I'm just wondering for that the antigen the HLA-A2 antigen that you're targeting. Is that sequence in Epiduo proprietary and can you talk about higher optimizing and going from us to humans with the antigen targeting?

Yes, thank you for that question and it's excellent question. So rather not at this point discuss the details of the IP around our targets. So with regard to your second question it was the...

The optimization models in humans.

Optimization medicine. So moving from a mouse model to a human is that. And I think the answer to that question is that really one of the key purposes about TX200 program is exactly that enable us to sort of -- for the first time ever really to test the hypothesis the Treg hypothesis, Treg in humans and to see how efficiently we can translate what we're seeing in these animal models and we showed some of the data earlier in to humans. And I think this is the first step which will pave the way forward for us so then move into some larger indications like for example Crohn's disease multiple sclerosis and obvious. So I think the answer is we need to see. We expect it to translate. We're confident that it will. Obviously there's been some data from [Indiscernible] studies with regard to safety that we believe we're in a completely different place when it comes to efficacy obviously. So this is something I can -- which is the case of wait and watch. And we will remote pretty quickly. And that will really provide us with an important foundation for future work.

But even this morning we reviewed the landscape of Treg companies and this seems to be the groundswell of new companies interested in the space which is why we feel that the acquisition of the TXL was so important. Because what we saw when we visited was the very special product development they have and they ability to purify Treg and that will turn out we think to be as important as the antigen capability.

And we still expect if I may continue Sandy any annualized talk to be is expected to be the first company to put [Indiscernible] in the clinic this year. But we see more and more into that technology so we can expect let's say more in the future. But we're [Indiscernible] and we expect to be keeping that investing as early as possible.

Well, I think it's fair to say that we feel the cellular therapy CAR-Treg as seen as the frontier really and I'm really delighted as we always to be the people actually pushing us forward and give the first company to actually take this concept into the present system.

Very good. Looking forward to it. Thank you very much.

Thank you. [Operator Instructions] And our next question is from Whitney Ijem from Guggenheim Securities.

Hi. This is Evan Wang on for Whitney Ijem. You just had a question on HLA with respect to timing I guess with the third cohort completely enrolled. What is a timing of SMC opinion and if you need to enroll higher dose will you provide us updates on that? And then I have a follow-up.

So the SMC typically meets eight weeks after the second patient is does we expect that meeting to occur in the spring. And we will certainly update on actions following that as it's appropriate.

Okay. And with respect to the Fabry program, I guess what are you expectations for the competitive program?

Yeah, I mean, that's very good question and so obviously occurred at feel. But yeah, we got to remember the standardized testing this kind of thing for many years, but the reasons why we believe we can be competitive as Sandy said we feel that gene therapy is part of the portfolio of approaches including gene editing and genome editing. And there is a question if whether we can be best-in-class and we believe looking at the profile of what we're saying pre-clinically, without going into details about what we expect from study, I think there's a good chance that we have everything to play for here and that we have best-in-class potential where we need to see the nature obviously.

And our expectation is to be the next gene therapy [indiscernible].

Yes.

And we're uniquely placed, we feel we're fairly uniquely placed and having that balance of gene therapy which is tractable, practical clinical development with ex vivo editing where just something where you can control the quality and the QC before you give the sales back to the patient, to sales back to the patient with really cutting edge frontier science on vivo editing and it's not balance of risk and benefit and clinical benefits I think is the big advantage that Sangamo has.

Thank you.

Thank you. Our next question from Eric Joseph from JP Morgan. Your line is now open.

Hi, good afternoon and thanks for taking the questions. Just a couple on the 2.0 program from us. I just want to clarify whether there any adaptations to the AAV vector design as part of 2.0 that you're seeking or that you've -- and I thought the order increase adding efficiency. And just as a follow-up to that. I guess just going back to the biopsy -- liver biopsy now as we did in the MPS programs, I know you that looked at transgene insertion by PCR, but did you also look I think bigger concern levels by PCR and BC proportion increases in cell proximity as you that way? Thanks.

So, if I could ask you that, and I'm not sure I fully understand the second question. But for the first question about AAV. It is something that we're working on and we got some really interesting results that suggest that we can carry these transactions even better, that's already for this generation, but we feel it's a fortune as any pharmaceutical, biopharma company would do constantly improving the next generation. So that's for the future. And then the second question that you asked was around the liver biopsy. As I said we have very little tissue and all we can comment on it was the presence of the transgene, transgene currently around and in the correct place of our give focus so that's all we can say.

I'm speaking on the statement, how we can improve the efficiency of editing in vivo. And I think the nice thing about Sangamo is that what we have what I'll call multiple levers that we can use to get there. And our second generation is I think is one of them. But we have some other approaches too -- but a nice portfolio of approaches so that we believe that we have preliminary evidence as we stated that we have edited the human genome in vivo for the time. And yes, as of today just with the preliminary data we have, we might need a little bit more efficacy to get into the clinical range, we may be there we may not be, we don’t know. The data is still maturing, it's still evolving. And we'll know much better over the next few months, but I think the important point is that we have levers to take us to the next level of efficacy. And the first lever you're going to see in the comment is the second generation and I think we expect that that has a good chance of getting us there. And we have many others options beyond that as well.

Okay. That’s helpful. Thanks.

Thank you, Eric.

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Sandy Macrae for closing remarks.

We'd just like to thank you all. It's exciting fundamentally for Sangamo and we're grateful for your continued support. And we'll wish you a good rest of the afternoon.

Ladies and gentlemen, thank you for participation in today's conference. This concludes the program. You may now disconnect.