Good day, ladies and gentlemen, and welcome to the Sangamo First Quarter 2019 Teleconference Conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call will be recorded. I would now like to introduce your host for today's conference McDavid Stilwell. Please go ahead.

Hello, thank you for joining us. As we begin, I'd like to point out that we posted our May corporate presentation to our website and will be referencing several of these slides today. 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. Forward looking statements include, but not limited to, statements related to potential therapeutic applications for Sangamo genomic editing platform, the potential ability of Sangamo's product candidates to provide clinical benefit to patients and most product candidate, development, and manufacturing plans, our expectations regarding cash performance and other statements that are not historical facts. 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 filed with the Securities and Exchange Commission, specifically in our recent annual report on Form 10-K and in our most recent quarterly report 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 ; Ed Conner, Chief Medical Officer; Ed Rebar, Chief Technology Officer. Again, during this call, we will refer to several products and update corporate presentation and those slides will found on the investor’s presentation page of investor’s media section of the site. And now I'd like to call over to Sandy.

Thank you, McDavid, and good, afternoon, to everyone on the call. Thank you for joining us. At Sangamo, we believe that our drug development is focused on cures rather than symptomatic treatments. For patients with serious conditions can receive a one-time treatment rather than frequent medicines and interventions. With these patients suffering from serious conditions have reach and told. This future is a promise of genomic medicine and we believe it is no. Our capabilities and experience have enabled us to build a genomic medicines company that has the ability to design the appropriate therapeutic approach to potentially treat the underlying causes of specific genetic diseases. Our genomic medicines pipeline encompasses four complementary approaches, gene therapy, ex vivo genome editing and gene regulation. We are developing products for conditions for the suite of proprietary genomic medicine technologies has the potential to make a difference, where we understand the underlying biology and whether it’s clear patients’ needs. In the beginning of April, we showed how the pieces of our genomic medicines pipeline are coming together in a way that we believe sets us apart from other gene therapy or gene editing companies who focus on just one tech crunch approach . As you know, we showed early promising clinical data from several of our new programs. We are particularly excited by these updates for a few reasons. One the dose just dependent response evidence of sustain factory methods and tolerability observed to date with SB-525 hemophilia A therapy in partnership with our friends at Pfizer show the potential efficacy and safety of AAV-6 based therapy. This is particularly important for our portfolio as a whole since three or four of technical approaches involve AAV-6 delivery. Two, the encouraging data for ex vivo gene-edited cell therapy counter ST-400 in beta thalassemia in…

Thank you, Sandy, and good afternoon, everyone. At Sangamo, we take considerable pride in not going to be applying current technologies to the development of cutting edge genomic medicines, but also establishing new capabilities through innovative research. This latter emphasis and in particular, our commitment to extending the frontier of therapeutic possibilities sets us apart from many of our peers, whose focus is much more narrowly high. Our commitment to cutting-edge research is reflecting in Sangamo’s impactful publication record as well as our strong presence at genomic medicines conferences and meetings. The most recent example of this commitment, Sangamo last week participated in the annual conference of the American Society of Gene and Cell therapy. The company had a significant presence at the conference with our progress featured in 10 presentations including eight podium talks and three symposia on topics of special interest in society. For my comments today, I will provide a brief overview highlights. I will start by describing the work of my colleague, Jeff Miller who has developed new insights into how to engineer highly specific ZFNs. He’s work was featured in a podium presentation on the first day of the conference. Japanese team that developed designed strategies that allow independent tuning of two key parameters that govern cleaner specificity, target affinity and catabolic rate, and use these methods to develops ZFNs that can achieve near complete on target modification with no detectable off target leverage. The extraordinary specificity of these reagents could provide a differentiated safety feature in the genome editing space. In second presentation, our partners from Sanofi, provide a new data on the types of edits generated by the new ZFNs for our T-Cell 11a [ph] programs. In the podium presentation scientists reclaim described the research skill clinical analysis of erythroid colonies derived from…

Thank you, Ed and good afternoon everyone. We issued detailed financial results for our first quarter 2019 in the press release issued earlier this afternoon as well as in the 10-Q filed today. We ended the current quarter with $351.6 million in cash, cash equivalents, and investments. In April, we completed an offering with net proceeds of $136.2 million, which in combination with our current cash will further extend our run rate to the end of 2021. We anticipate using the net proceeds from the offering for working capital and other general corporate including to put our own and our product candidates and research programs as well as building out our manufacturing capabilities and other business enrollment activity. For the first quarter of 2019, the consolidated net loss was $42.2 million or $0.41 per share compared to a net loss of $20.2 million or $0.23 per share for the same period in 2018. Revenues for the first quarter 2018 were $8.1 million compared to $12.6 million for the same period in 2018. This current quarter revenues were primarily driven by our collaboration agreements with Kite, Gilead, Sanofi, and Pfizer. Total operating expenses for first quarter of 2019 were $52 million compared to $33.6 million for the same period in 2018. As anticipated, this increase in total operating expenses reflects the company's growth through the acquisition of TxCell, increased headcount in support of clinical development programs, and manufacturing investment. We are maintaining our previous 2018 operating expense guidance expected to be in the range of $210 million to $220 million, and we believe we are in a strong financial position to fund our program to their X value inflection milestone. And with that, I'll now turn the call over to Sandy for closing remarks.

Thank you, Kathy. Over the past months, we've made significant progress in the creation of a clinical stage company. The leverages are differentiated, multi-dimensional suite of genomic medicine technologies, and the science I've just spoke about on this call. We have produced promising clinical data from our lead candidates. We continue to produce compelling preclinical data which mainly to development programs in challenging diseases which affect huge numbers of people. We have shown manufacturing capabilities in place which will help us carry forward and optimize our clinical studies. We have a strong balance sheet and four strategic biopharma partnerships. And most importantly, we're committed to realizing the vision of genomic medicine for patients who need it most. We'll now turn to your questions.

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

And our next question comes from the line of Whitney Ijem with Guggenheim Securities. Your line is now open.

Hi, this is Evan Wang on for Whitney Ijem. Thanks for taking the question. So the first question I have is, related to actually SB-525 and the comments on accelerated approval. Has the agencies seen the data and if so, what kind of feedback have you got recently on the data and what are their current thoughts on accelerated approval?

So, we're -- Thank you for your question, we're very early in the data, we have -- we've shown you data from eight patients, now we're starting to treat the expansion cohort. We will work very closely with our colleagues at Pfizer. And they would be responsible for initiating the Phase 3 study in the regulatory interactions, with close support from Sangamo. So we haven't shared the data with them. It's very encouraging and we hope to show you more, later in the year.

Actually I have one more follow-up on beta cell. Just wondering -- also the decision process around sharing that initial patient data in April, and as a follow-up, is there any reason to expect differential efficacy on a fetal hemoglobin basis between a beta-thalassemia sickle cell?

Thanks for the question the-- we felt it wasn't an important results. We felt it was important to share with patients of prospective patients that the first VIII infusion and re-infusion had gone well. And we hope that it would give them encouragement to be part of this program, we want to be clear that it’s early data. And we have a second patient that's going through the process. And we will come back to you with patient with set of data later in the year.

Thank you.

Thank you very much.

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

Hi. This is actually Xiaobin Gao dialing in for Gena. Thank you for taking our questions. It's the first one on hemophilia A, can you share little more thoughts on the rationale behind fast kinetics factor VIII expression? Or do you think that the first two patients have already reached the statistics in your prior update?

So thank you for your question. I think this is this reflects much, we're all learning both gene therapy at the moment. The discussion we've had with the number of people goes along the sold in each of the eight patients, whose data we've shown, and they seem to reach a plateau within six or eight weeks, perhaps. And there are other companies this takes 26 weeks to reach a peak. At with our other companies' data and it seems to drift slowly downwards as far as we've seen the data, as opposed to ours being consistent and remarkably flat. And our scientists believe what we can't prove, I shared, that the two events are related to that the rapid and customization of circulation of the vendor this is stability. And we've seen -- we saw this rapid uptake as well and in non-human primates. And we hope that predicts against long-term reliability of the treatment, because that's what patients want. Of course this is a long-term disease. So the benefit from early effectiveness, but the think we want most is to know that they will get the benefit from the gene therapy for a long time in for years into the future. And we hope that the first signs of the Sangamo data are showing not. And we look forward to sharing more days this later in the year.

Got it, and just one more question on the Fabry disease, I think if that's a preclinical data look quite promising, but then just so one scale your thoughts about the translation from mouse to humans for a zinc finger protein, it seem that in the liver you have like more than 200-fold over expression but in kidney, so it's -- it was only three-fold. How should we think about the conversion?

Ed, do you want to…

Yes. Sure. Happy to take that. So yes, I mean we're extremely encouraged by the urine data on the Fabry program. And as Sandy mentioned earlier on the call, now with the data that we have in hand from the Hem A program on ASIC [ph], we understand the genetics in dosing of them that fit very well. So, we are very confident going into the Fabry program, which we look to initiate later in this year. I think with regards to your question, about the different levels of enzyme and different tissues obviously mouse system is going to behave differently in humans. In terms of a review of the literature, you know that there appears to be portfolio -- review of the literature for mouse data that you do have to get to super physiologic levels in order to get greater tissue penetrants, and we're hopeful then that will result in better clinical outcomes.

Got it. Thank you so much.

Thank you. And our next question comes from the line of Maury Raycroft with Jefferies. Your line is now open.

Hi, this is David [ph] for Maury. Thank you for taking my questions. First question is on the Zinc Finger Nucleases 2.0 second generation for the MPS I and MPS II. So can you provide any color in terms of the dosing strategies for this in the Phase 1/2 clinical trial, based on your pre-clinical data as well as conversation with regulators? Do you think you can start treating patients a high dose or do you think that you have to do some sort of just escalation for those patients? Thank you.

So your question just is -- what's the interaction been with the agency that translating from 1.0 to 2.0 our second-generation with Zinc Fingers. I don't think we share that exact dosing yet. So far conversation with agency has been very positive and we look forward to getting more clarity on the dosing regimen.

Okay, thanks. Then a just a follow-up question so you've -- show some pretty compelling data for the zinc finger translation -- translating repression in top of the in non-human primates. Can you talk about your timeline to move the program into the clinic? And then are you thinking -- and also about partnering in the program with certain partners did the activities on it? Thank you.

Ed, do you want to comment.

Well, we have not given any time line in term of consulting that [indiscernible] very little we can say today. And tau is become more interesting place. Yes, definitely. And by the time it will be ready for clinical development, we hope that the values program that we see passive and active immunotherapy targeting tau in a way answer some of the question, that tau hypothesis is calculating.

And we hope, you understand we can’t comment on partnerships or relationships with other companies.

Okay, thank you.

Thank you and our next question comes from the line of Ritu Baral with Cowen. Your line is now open.

Hi, guys, thanks for taking the question. Glad to see the first presentation of the Huntington's program at SGCT this year. Can you guys talk to where that is? When it might be entering the clinic and I guess how does Takeda view it versus Shire which obviously opted in relative interest in how fast to move that forward and what's left to be done before it does get moved into the clinic.

So with programs that are in the hands of the partner now they are responsible for getting updates like. I cam from Takeda, as my previous company and I am very pleased to they are -- I know about their passion for newer sights, so I think it's in -- good hands. And we have spoken to them since the merger was completed and heard from then there your passion for Huntington's disease. So we -- I think you should look forward to hearing more from them on this subject.

Got it. And my follow-up question is just on Fabry and Fabry gene therapy. How do you see -- how do you see the unmet need in Fabry, given the current treatment options and also other gene therapy approaches moving forward in Fabry disease. If you think about clinical appeal, clinical profile et cetera.

Ed?

Yes, there is still a very significant unmet need. We actually had a couple of patients come by Sangamo two, three weeks ago, and these are individuals who have taken the enzyme replacement therapy for long periods of time. And while they have had some benefits in terms of renal function, they still have significant symptoms with regards to neuropathic pain and GI symptoms and obviously there are associated cardiac issues that did occur as well, but they really are addressed by ERT. So we are with the Fabry program, knowingly the kinetics now of APB6. With the data that have on SB-525 having a very potent construct, we are very excited to know this program and the clients and I think it still remain the critical unmet need for these patients.

Got it. Thanks for taking the question.

Thank you. And our next question comes from the line of Jim Birchenough with Wells Fargo Securities. Your line is now open.

Hi, thanks for taking the questions. This is Yanan in for Jim. So firstly, on hemophilia A, what kind of interest have you been getting since the data announcement in terms of potential enrollment? And are you going to announce the first patient treatment in the expansion cohort?

So, thank you we did, on this call, say that the first patient had been treated in the expansion cohort and that we have the rest lined up and it's been -- patients have been.

There has been extremely strong interest and we're delighted to have a pipeline of patients lined up to slot in. Logistically, they have to spend the night and they save seat to reserve their spot in their seat, but we have a clear line of patients who are very, very strongly interested as our investigators and we'll plan to continue enrolling that study. We have -- we've worked often, just like I said, we booked Fabry patients and we have had several patients from hemophilia patients and they are very knowledgeable community and we watch carefully -- watch companies and are seeing what analysts like you see. And so they were really quite excited to see the Sangamo data and our sense is, they will watch and wait and decide which of the agents is the right one for them to take in the long run.

Thank you. That's great to know. And on the ST-400 program, just wondering the second patient treated, are you able to disclose the genotype. And also if we learn more about this program in a future data releases, what kind of data package, do you plan on sharing, for example as the percent of hemophilia -- sorry hemoglobin F expressing cells or the percent of white blood cells being edited. Are we going to be able to see those type of detail in future data releases?

Absolutely we will. So the second patient is in the process and we will reveal as much data as possible as it -- at the right time throughout the year. There are obvious places that we can do it, and we will give you as much information we can, because I know this is an important area for everyone's analysis of the area of thalassemia. I know, we haven't said what kind of patient, the second patient was.

Okay. And so…

Actually, the next update will be in Q4 of that program.

Yes, that's correct.

Got it. So, for Fabry's program, would you be able to talk about potential primary endpoints and secondary endpoints for the study?

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Great. Sir, lastly for the MPS programs, would you -- when would you be able to share the liver biopsy data from patient 6, and then in terms of the proportion of liver cells that has the vector in them. Would we be able to see that kind of a data, because I think even with the generation-2 product, probably the proportion of the cells modified at a similar does would be the same. Although I'm sure the efficiency of editing is going to be increased because of the new engineering.

So, thank you for your question. What said we'll do is we'll gather this data throughout the year and will present it together later on in the year. Your analysis of the number of cells are edited being dependent on the dose is probably correct, and so the -- what the second generation brings, we believe, is an increase in efficiency for each cell that has got a zinc finger in, it increases the probability of editing. So, we look forward to sharing as much data as we can towards end of this year.

Got it. Thank you, Sandy.

Thank you. And our next question comes from the line of Qian Wang with Bank of America Merrill Lynch. Your line is now open.

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So, thank you for your question. Yes, we'd love that product back, but it safely in the hands of Takeda. Your question was if that the ratio between the two values?

Right.

Right. Can you speak anything to that?

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And this is the second program now where we can show unused specific and antisense specific as well. Correct?

Yeah. As Sandy points out, I mentioned that our less targeted therapy takes advantage of a similar concept, where we – we’re selectively recognizing and repressing the expansion.

So, you think it maybe a more generalized of technology?

Yes. I think this is a great example. The second example right shows that what we achieved with Huntington's wasn't sort of a one-off deal. We think that we have something that should be generally helpful.

And then our hemophilia A, I know that you guys are on the expansion phase right now. Can you disclose like how many patients have you dosed so far, and potentially use that you are going to present the data at a medical conference, and when could that be and how many data can we see?

So we will show you when it comes, I'm sure it will be at ASH, and we have treated one patient, we have said, we have not said further anymore been treated. We had -- as I said the excitement in the patient community has allowed us to lineup the other patients. And everything is a simple matter of logistics, these patients have normal lives and they need to dedicate a couple of nights in hospital and the hospital needs to find who's the most top in the bed. So they are excited, we are excited and the investigators are very positive about those results.

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Okay. Got it. And if I may, I know you guys are starting from looking at more CNS programs and have you decided what product administration were you actually considering?

We haven't discussed that, there are many different routes that we could choose, whether it's direct injection, [indiscernible] even intravenous, and we are exploring all of these. And in some cases it's disease specific, for some diseases demand that you get to certain parts of the brain, and our numbers are less specific, less fussy. So, delivery is an important part of what we do and we have a clever very young man here who is leading our Vector Group, and who is looking at that ways of adapting vectors to enhance our chances to get into the CNS.

Okay. And if I may, my last question is about manufacturing. So when I come back from the ASCCP conference I think we feel is that you have to start the manufacturing process as early as possible. I just wondered for your hemophilia A, for example, or Fabry or beta cell like how much for your manufacturing process are and how much more would you needed in order to be in a late stage or even early stage.

Question is, how important is it to do manufacturing early?

Yeah. Like how material process are?

Yeah. Well, we should start as soon as possible, but we are giving any details as to the specific of where we are with the manufacturing process. What we can say that at one point, these process would be to concern to file and manufacturing of that part of legislation on steady will go beyond those concern -- we done beyond concern.

But if I may lead the witness the -- our emphasis on manufacturing internally and externally.

Yeah. What we've said -- we've said on the manufacturing strategy that it was obviously a very critical aspect of our strategy and we have to two different situation, we have gene therapy on one hand and cell therapy on the other hand. From gene therapy we are currently completing the building of our manufacturing site here in Richmond in California and that site will be responsible for smaller-scale manufacturing of gene therapy product going forward. And for larger scale manufacturing both Phase III and commercial we will rely on the Brammer Bio agreement that we signed last month. And when it comes to cell therapy, we are currently relying on Treg cell CMOs and we've announced earlier that we have to chance that situation on that day likely, we're going to index few years our own manufacturing capacity, again for our small-scale manufacturing i.e. Phase I, II trials.

So the great thing about Pfizer leading that Phase III manufacturing for Hem is that is easily back to other gene therapy programs in the future. We don't expect a huge amount of the redo of this scale-up process, for example …

As we will learn from them.

Yeah. Exactly.

Okay. Great. Thank you.

Thank you. [Operator Instructions] And our next question comes from the line of Eric Joseph with JPMorgan. Your line is now open.

Hey, thanks for taking the questions. Just a couple of them Fabry. First, I'm just wondering how we should be thinking about those escalation in the upcoming Phase 1 trial and whether there based on the safety data that you've seen today with 5.5 kind of it a path to an abbreviated dose escalation schema or whether there's any kind of unique say the safety considerations between hemophilia and Fabry disease. And then secondly, also wondering how you might be thinking about the -- how your CEU is going a factor into the Phase 1 portion whether there might be a period of year to withdrawal or ways and means of distinguishing tau m protein versus ST-920. Thanks.

So let me answer the first part and I'll pass the second one to Ed. You're absolutely right. We learned a lot from hemophilia A. We pumped up recent program, took a little longer than we all would have wanted was that we had to learn the translation factor between mouse, monkey and human and we now know that. Patient safety is the most important thing in all our clinical trials. So, we and the agency want every program to start carefully and prudently. So patients are looked after in these trials. We have learned about the -- one thing that's been really encouraging in the 525 trial has been the -- have few patients suffered any form of immunological reaction. We've learned that sometimes that they will have a simple and viral reaction if we can resolve with paracetamol and Tylenol or acetaminophen in this country. And we learned that the transaminase event is rare. So, already, we're beginning to have a better feel of the vector and are very pleased with the trend there. And then within this trial part, the second question with Fabry.

Yes. So ERT withdrawal is something that will be looked at. As part of the inclusion criteria, we're able to enroll both the patients who are on ERT and treatment-naive patients.

Okay, got it, thanks. And just going back to the point of dose escalation, should we be thinking about as kind of the standard escalating process similar to what we've seen today or --

Yes, as Sandy mentioned, the Safety Monitoring Committee will convene dose escalation will be based on safety review. And safety is paramount. We also are excited again based on the translation of 86 non-human primate’s humans that we've seen in -- as the 525. And at the starting dose that there is the potential for benefit with production of -- or there is the potential for benefit of production of alpha-Gal A based on the experimental data that we've seen pre-clinically, and mouse and non-human primate data.

Okay, great. Thanks for taking my question guys.

Sure. And thanks, Eric.

Thank you. And we do have a follow-up question from the line of Jim Birchenough with Wells Fargo Securities. Your line is now open.

Hi, thanks for taking the follow-up. This is Yanan again. I just have one quick technical question on ST-400 program, so just trying to think about what we expect for non-beta zero -- beta zero patients. The question is by adding the BCL11A enhancer focus and activating HBF, would you also suppress any residual beta expression, which is not an issue in the beta zero patient, but now in zero-zero patient, would you see that as a potential outcome.

So, I don't know the answer to that question, but can I just check, I understand the question are you seeing that reduction of fetal hemoglobin per se results and reduction in the fetal hemoglobin with some feedback mechanism.

Right, the increase in the fetal hemoglobin in these two through a feedback these to decrease in the residual beta.

It's an interesting question. As you know, there is all kinds of very important in type feedback loops within the production. What I can see that's important is that there are patients who had hereditary persistence of Fetal Hemoglobin and beta thalassemia that walk happily around where the fetal hemoglobin has abrogated that they have thalassemia, so if there is a balance forms, it seems that in the normal human situation that isn't appropriate, but we will look for that carefully and more for happens.

Got it. That's very helpful. Thank you, Sandy again.

Thank you. And that does conclude today's question and answer session. I would now like to turn the call back to Sandy Macrae for any further remarks.

Thank you very much for all your questions and we look forward to talking to you over the course of the year.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. And everyone have a great day.