Good day, and welcome to the Sangamo Therapeutics First Quarter 2024 Teleconference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Louise Wilkie, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for joining us on the call today. On this call are several members of the Sangamo executive leadership team, including Sandy Macrae, Chief Executive Officer; Prathyusha Duraibabu, Chief Financial Officer; Amy Pooler, Head of Research; Nathalie Dubois-Stringfellow, Chief Development Officer. Slides from our corporate presentation can be found on our website, sangamo.com, under the Presentations page of the Investors & Media section. This call includes forward-looking statements regarding Sangamo's current expectations. These statements include, but are not limited to, statements related to the therapeutic and commercial potential of our product candidates and engineered capsids, and the potential of our next-generation genome engineering technology. The anticipated plans and time lines of Sangamo and our collaborators for regulatory submissions, initiating and conducting clinical trials and presenting clinical data, advancement of our product candidates, anticipated regulatory submissions, advancement of preclinical programs to the clinic, our strategic reprioritization and reallocation of resources and the anticipated benefits thereof, plans to partner certain of our programs, the sufficiency of our resources, cash runway and plans to seek additional capital, upcoming catalysts and milestones and other statements that are not historical facts. Actual results may differ materially from what we discuss today. These statements are subject to certain risks and uncertainties that are discussed in our filings with the SEC, specifically on our annual report on Form 10-K for the fiscal year ended December 31, 2023, supplemented by our quarterly report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC. The forward-looking statements stated today are made as of this date, and we undertake no duty to update such information, except as required by law. Please note that all forward-looking statements about our future plans and expectations are subject to our ability to secure adequate additional funding. Now I'll turn the call over to our CEO, Sandy Macrae.

Thank you, Louise, and good afternoon to everyone joining the call. I'm very pleased to be speaking to you today from the American Society of Cell and Gene Therapy (sic) [ American Society of Gene & Cell Therapy ] Annual Meeting in Baltimore, where we have been presenting important preclinical data from our epigenetic regulators, AAV capsid delivery platform and next-generation genomic engineering platform. These data showcase both the depth of Sangamo's neurology pipeline and the power of our scientific capabilities, which we believe provides strong opportunities to advance programs ourselves and with potential partners. In order to progress these compelling programs, Sangamo must be well capitalized. The leadership team and I have been laser-focused on addressing our funding needs. In late March, we are pleased to announce a registered direct offering with institutional shareholders, including an important existing investor that raised approximately $24 million in gross proceeds. This was a significant development, and we are thankful for their support of our science and our mission. That was, however, the first step in our current journey to securing additional funding. I would like to emphasize that we are resolutely focused on building upon this foundation to position Sangamo for long-term success. That continues to be my #1 priority. Business development is an important part of these efforts, and I am pleased with the progress that is being made on this front. We are currently engaged in very encouraging conversations with multiple potential partners across our portfolio, including our Fabry disease program, our novel STAC-BBB engineered capsid, our preclinical neurology product candidates and our next-generation genome engineering capabilities. I understand your desire to hear more concrete news on this front, but we are unable to share more until any potential transaction is finalized. Be assured that we are encouraged by the…

[Operator Instructions] Our first question comes from the line of James Stamos at Jefferies.

This is James on for Maury Raycroft. Congrats on the progress. I just wanted to ask where are you with the preclinical and GLP tox studies with STAC-BBB? And what are your latest thoughts on which targets or indications would make the most sense to partner or keep in-house?

Thank you for your question. We have made -- one of the reasons that we like STAC-BBB so much is that our manufacturing team have been able to work with it and found that it is very manufacturable. They can take it so far up to 50-liter scale and are going higher that they can use the same purification and assay techniques and that it will -- that it feels like a capsid that will be able to give us great yield and also be able to use many of the processes and CMC work that really is underappreciated in the importance of capsid selection. We've said publicly that we are moving ahead with tau and with prion. You could imagine the amount of external interest in tau, not just because it's a high unmet medical need but because the capsid gives you the brain penetration and widespread delivery that's needed and our zinc-finger repressors are really unique in being able to almost switch off tau in the cells that they can get to. We are having many discussions with companies about our capsid and we'll choose wisely, I believe, which ones we partner and which ones we take forward ourselves. What we understand, and I want to say this again and repeat what I said in the chosen words is that we understand the need to bring in money to the company. And that's always a balance between the desire that we have to take things forward. And the money that's available from many of the partnerships, I'm sure we will achieve in the coming weeks.

Great. That's very helpful. And just to go on to like some of the more specialized parts of your ASGCT presentation. Can you talk about the importance of targeting the pons and motor neurons in Alzheimer's? And are there any other companies that you're aware of that have the ability to target these sites?

I think -- thank you for your question. It's really been a remarkable ASGCT, and the field moves closer to these tools being able to address such important disease. Amy, can you talk a little bit about this? I know this is one of your passions.

Yes, I would love to thank you for the great question. What's really important here is being able to target brain regions that would be traditionally challenging to target using something like a direct injection approach. The pons being part of the brainstem is not a region that you would necessarily want to reach using a direct injection guided approach even for the most severe diseases. So we were so excited to see the biodistribution that was able to be achieved with the STAC-BBB capsid, especially for what it means for the tau program. The pons is critical in progressive supranuclear palsy, but also other tauopathies like Alzheimer's disease. In addition, as you noticed, the motor cortex, which is part of the frontal cortex, we use this as an example of how STAC-BBB was able to transduce those cortical neurons. Really, we believe that this kind of widespread brain targeting is critical for halting or slowing the progression of the disease.

Thanks, Amy.

Our next question comes from Gena Wang of Barclays.

I have 2. The first one also is about the STAC-BBB. It seems like a very exciting new capsid. What is the highest dose you used in nonhuman primates? And what is the limiting dose toxicity there? And then the second question quickly regarding the Hem A. I know it's your partner, Pfizer is in charge, but just wondering for the mid-'24 Phase III update, would that be just a press release from Pfizer? And then for the $220 million milestone payment, the first milestone is that the drug approval? And is that the big portion of the $220 million?

Gena, thank you for your questions. And I know you've been following Hem A for a great deal of time. So it's good to be coming closer to the point where it gets to registration and approval. So let me do the -- let me pass this on to two people. Amy, can you talk about the dose that we've used and whether there was any toxicity, please?

Yes, absolutely. We -- as part of the STAC-BBB study that we've discussed yesterday, and we also will discuss later today at the poster session at ASGCT, we performed a dose-range finding study with our tau and zinc -- clinical lead zinc finger. And we did 3 different doses and the top dose was 1e14. We are really happy to see that with the histopathology results that we didn't see any dose-limiting toxicity and really no findings in the brain, the spinal cord or the liver of these peripheral organs. So really, really positive and encouraging data.

Gena, does that answer your question? Is there any follow-up?

Yes, like more thinking other than the dose finding, like what is the highest dose you tested for the safety toxicology perspective?

1e14. So 1e14...

That's 1e14. Okay...

Is the highest we've -- so we went there in the efficacy study that we just reported. And we really saw nothing -- sorry, we saw nothing that would give us any concern when we will now go into the GMP tox study, which is the only thing remaining to complete the IND-enabling studies for that. But we will clearly start at a lower dose in the clinical study because that's the right thing to do, and that's what the agency will ask us to do. But thus far, we've -- it's a very clean capsid, which is great, great news. And then can we talk about Hem A, Nathalie? I know you've been speaking to your friends at Pfizer regularly.

Sure, sure. Yes, we're very excited that the mid-2024 pivotal readout in Hem A is coming up soon. We -- the partnership allows for $220 million in potential milestone and 14% to 20% royalty on potential sale. But the specific amount of each milestone is not publicly disclosed, but this could start as early as the start of 2025 if the pivotal readout is positive and if Pfizer would like to see regulatory approval to the program.

And Gena, just to reflect on that, we're limited in what we can see. When you sign these deals, there's always an agreement about who talks about what. But the regulatory milestones, which are -- we get one for the U.S., one for Europe and one for Japan are not for approval, they're for submission of the package. And then the commercial milestones, which are for first patient dosed rather than for reaching a certain sales threshold. So they're very, very favorable milestones that will fund the company in '25 and '26.

Yes. I need to mention that the significant portion of the $220 million is near term, and we could also choose to monetize them now.

Yes. So Gena, the closer we get to the -- when the data is revealed and then when Pfizer submits this, we have the option of monetizing those royalties but we can also choose to wait and use them to fund '25 and '26. And what will meet that decision is the nondilutive funding from business development that we do now will tell us whether we need to make that decision. We are -- I know that there's a concern from people that followed us for a long time about our near-term cash runway. We feel that we are fortunate to be able to do both capsid deals, Fabry deals, technology deals, and to have this large amount of cash next year that we can bring forward, if necessary.

Our next question comes from Patrick Trucchio of H.C. Wainwright.

This is Luis Santos for Patrick. Congratulations on the recent progress and your presence -- your impressive presence at ASGCT. I am interested in knowing if you already guided to the tau program and if it's going to be in Alzheimer's, do you know which patients you're going to be treating and which other indications you are going to push forward here with the tau program? And then I have a follow-up question.

So thank you for your question. We haven't guided on that. There's been an enormous amount of interest in our presentation yesterday at ASGCT. It clearly was, I think, the most remarkable presentation of all of the many people that are moving forward in blood-brain barrier penetrant capsids. We feel that the tau asset, the cargo that's within it, doubles down, makes this even more interesting. The role of tau in Alzheimer's, I think, is becoming increasingly clear. The Biogen data is very encouraging. The idea that it's the thing that is relevant to the clinical stages of tau or Alzheimer's rather than in the early presymptomatic ones makes this a much more easy lift. However, we are very conscious that Alzheimer's studies are large programs and that we need to make sure that we either do ourselves well or partner with someone who has a real expertise in Alzheimer's.

On a follow-up that was helpful. On the follow-up on the -- on partnerships, but for the MINT platform, you mentioned that there are business development opportunities there. Do you have any potential collaborators in mind? And what diseases would you be targeting?

The MINT integrase is remarkable. The presentation at ASGCT was just 57 minutes ago. And there was a lot of excitement in the room about it. We have already been -- we've been speaking to people for 3 months on this. And I want to put the business development discussions into perspective. We had the regulatory clarity for Fabry just in February. We had the capsid results just in March. We finally taken MINT to a place that we feel we can share it in May. So I understand the desire for signed deals, but the results are going to lead to them have only come out over the past 2 or 3 months, which is -- means that at the moment, you could imagine our business development group is incredibly busy in talking to lots of people about this. Now integrase is something that is -- has the potential for really disruptive genomic engineering. It's the kind of thing that David Liu when he was asked, said was his dream of what the ideal genomic medicine was, which was an integration that could be engineered to go to your site of choice and put in pieces of gene-sized pieces of DNA that would replace all of the mutations downstream. And the team at Sangamo because of their expertise in understanding the interaction between proteins and DNA from the zinc-finger platform have been able to do this remarkable engineering and the whole AlphaFold and understanding artificial intelligence of how you understand proteins has helped us. We feel that this is something that Sangamo can use, but it also is -- has attracted great interest from the hardcore science pharma companies that you could imagine who all see this as the future of genomic engineering. And so we have a responsibility to put it in as many people's hands as possible. I think you will hear more about this MINT platform for some time to come.

Our next question comes from the line of Luca Issi at RBC.

Great. This is Lisa on for Luca. I just want to ask another question on the MINT technology. Just wondering if you can give us a sense of what kind of targets here would be good candidates. For instance, would it be possible to integrate something like a full-length CFTR gene, which is around roughly 190 kilobases? Or should we think about something larger like full-length dystrophin, which is measuring closer to over 2,000 kilobases? Just any color here would be helpful.

So yes, you asked really important and interesting questions. And as always, with Sangamo, we've thought about that size because as you know, zinc fingers are an eight of the size of CRISPR and even the small [ mammoth ] CRISPRs are 4x as big as the zinc finger. And that's important because of delivery. It's the same with MINT because we've tried to keep the technology as small as possible. So as we could put both the integrase and a cargo in an AAV. Now when you get to the size of some of the genes that you're talking about, you end -- it comes down to what kind of delivery you're using. My dream for MINT is to be able to drop a cDNA copy of the gene or of the exons that are mutated into intron 1 of the genome. It would then be run off of the promoter, have all the locus control elements. And it would alleviate the requirement to edit all the individual mutations that usually are the cause of genomic disease. Now to put in a whole genomic copies would be unnecessary, I would argue. And then we need to look at what are the diseases where the CDNA is packageable into the delivery mechanisms that are available because the MINT should be size-agnostic and has so far shown great potential. Amy, is there anything else? Amy, I'm aware that you're on the line and more -- and as our Head of Research, perhaps you have other things to add to that?

No, that's fantastic explanation, Sandy. I would just add that there are specific genes as well that are involved in some neurological disorders, and I'm thinking of things like Rett syndrome or MECP2 needs to be fine-tuned at a very specific level, something like an integrase where you could integrate in perhaps the healthy copy of exon 1 or even a bigger portion of the gene so that it's under control of the endogenous promoter could be really transformative for a disease like that. So I think it's incredibly exciting to see what are the opportunities around this new MINT platform.

Our next question comes from Ritu Baral of TD Cowen.

Just a quick question on the Fabry program. Actually, you've dosed 33 patients, and we saw the data at World plus you have the Phase III path going forward, agreed upon with FDA. What is the next data update that we're going to get from that? And also, I guess, is there a data point or a follow-up point in a subset of patients that's gating to potential business development around -- or out-licensing of this program?

Thank you, Ritu. I'm going to pass this on to Nathalie, but I'll just remind you again, the whole business development conversation around Fabry changed with Peter's new way of thinking about this at the agency and the conversations that we had in February. And so it's like a new conversation we're having with potential partners. But Nathalie, can you address some of the technical pieces, please?

Yes, sure. So we've completed the dosing of all the patients in the Phase I/II, so for a total of 33 patients. We continue to analyze the data, but this -- the body of data that we have thus far is not gate-limiting for any partnership and any of the Phase IIb preparation or registrational trial preparation. So the -- we continue to analyze the data, but we -- and I agree with the FDA that we have enough data to move on to a Phase IIb. And that's what we're discussing with partners, potential partners.

Sandy, when you say that the discussion has changed, are you talking about the structure of the deal that is in Sangamo's best interest? Like is it -- do you think it could be like a [ Coco ] going forward? Or is it just really sort of valuation terms that are different now?

I think it's much simpler than that, Ritu. There was a concern that there wasn't clarity about what the regulators were wanting. And there was this worry that we've all talked about that it was going to be a head-to-head against ERT. And the agency now seeing -- know it's a simple single study and that we can -- that we can -- they've named the number of patients and they've said we can come back halfway through the study and show them the data we've got, if we feel it's compelling. I think that has completely changed how the various companies are going to. And I think great credit to Peter. He is walking the talk in this, and we have benefited greatly from it as being almost like a poster child for what it is approval of a rare disease gene therapy is. And if I may, Ritu, we've started the -- we've initiated the conversations with the Europeans, and uniquely, the FDA is volunteering to send one of their staff with us to that conversation because we feel that it's the way forward for these kind of therapies is for a common approach to them. And I think it reflects the support that we have from the FDA in these discussions.

Our next question comes from the line of Nicole Germino of Truist.

This is [ Bill ] on for Nicole. We have a question that's given the uptake for Roctavian, what is the read through the potential uptake for Fabry disease gene therapy?

So thank you for your question. So the Roctavian launch, I know, has been a subject of great debate. We can't comment on how BioMarin launched it. All I know is the reason that we chose Pfizer to be our partner is I have great confidence. And when Pfizer chooses to launch something, they do it well and effectively. And that follows through to our choice of partners for Fabry disease. There are several companies, and there are some that are more obvious as being great commercialization engines and great launch companies. What I can tell you is in our conversations with these companies, we have had notes from the patient support groups who have been very keen to make sure that the pharma partners understand how supportive they are of the results that they have seen in our Fabry program because you and I will talk about the biochemistry and the biopsies. What the patients have said is how much better they feel on it, how delighted they are to be off of ERT. So now we have 14 patients off of ERT and the 4 that are remaining on the ERT in the study have already booked when they're going to come off of the therapy. So this has enormous support from the patients. And I think that is what is going to make it the -- a very successful launch for the partner that can take it forward and make a difference.

And if I may add, we also have RMAT and PRIME, which are designation that really [ analyze ] an unmet medical need for Fabry. So the Fabry patients, even though can have access to ERT, are not satisfied with the current medicine and standard of care.

Thank you very much. At this time, I'm showing no further questions. And I would now like to turn the call back to Louise Wilkie for closing remarks.

Thank you very much, and thanks to everyone for joining us on the call today. We look forward to speaking to you soon.

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Thank you.