Sangamo Therapeutics, Inc. (SGMO) Earnings Call Transcript & Summary

Good afternoon.

All right. Good afternoon. Okay. Sandy, I'll give you 1 second. Well, good afternoon, everyone. My name is Aspen Mori. I'm the U.S. biopharma tier -- team here at BofA. Welcome to day 3 of Virtual Vegas Health Care Conference, and thanks for dialing in. I'm lucky to be joined today by the team at Sangamo and specifically have Sandy Macrae, CEO of the company, on. Sandy, it sounds like you're there. I'll turn it over to you to do some opening remarks I understand that you'd like to share. And then maybe after that, we can squeeze into some Q&A. Oh, and also, the slides for anyone listening are available on Sangamo's website. With that, Sandy, it's all you.

Good afternoon, and thank you all for dialing in. These really are strange times we're in, and I appreciate you all finding time to listen to Sangamo from your homes and offices throughout the world. I'm going to talk you through our corporate presentation, and then I'd be very happy to answer questions, and I will try whenever possible to refer you to the slides that are available. Of course, we want to guide you to our forward-looking statements. But if I take you to Slide 3 and the Sangamo Therapeutics mission, committed to translating groundbreaking science into genomic medicines that transform patients' lives. And all 3 parts of that are important. We really believe we have groundbreaking science. The zinc finger technology is fascinating and has such potential. Genomic medicines are the future, and we need to understand how they'll be used and in what diseases. Because when they're used wisely, they will transform patients' lives. On Slide 4, we talk about the suite of technologies that we have developed, our genomic medicines. And although it looks like there's 4, there's actually a commonality between them all. They will use gene technology and molecular biology. They use vectors. They use the IND-enabling studies. They use the clinical studies. That means there's a greater commonality than there is a difference between them. But Sangamo has made a deliberate decision despite being the leading genome editing company to include gene regulation in our portfolio, and we do that because that's about now. It's about things that we can bring to patients quickly, effectively, and it will make a real difference while we develop the gene editing, gene regulation and cell therapy that clearly is a future for us and for our industry. And if you look at Slide 5, you can see how the various studies and projects that we're doing parse out between them. But I want to take you to Slide 6, and Slide 6 talks about our portfolio. Our portfolio, I'm emphasizing the word our here. Our portfolio is both things that we have advanced through other people, through Sanofi, Pfizer, Gilead, Takeda, Biogen and things that Sangamo itself will take forward because all of them are our portfolio, and all of them will get to patients better because of the choices we have made. But beyond this portfolio slide that you see, our whole range of genes, pieces of DNA that Sangamo can [ lead ] zinc fingers on. And what really fascinated me after the Biogen deal was that although tau for Alzheimer's and synuclein for Parkinson's were things that we've worked on for some period of time, the majority of the targets that Biogen were attracted to were things that Sangamo hadn't thought of, and they were things that were an invisible pipeline that Sangamo has. Because when I ask the analysts, they all say -- we haven't given you any credit for this, and I'm trying to express a part of Sangamo that is this capability to have an infinite pipeline, and many genes and many targets that are just not present on this slide. But this slide also has more conventional meaning. It shows a robust preclinical Phase I and II, and now with Pfizer moving ahead into clinic, a Phase III portfolio that we are immensely proud of and will drive forward to create a fully integrated product-focused company. If I could ask you to go to Slide 7. Partnership is important to us, and we want to say that we will partner proudly and we will partner professionally. We will partner with the companies that are the right ones, whether it's Gilead in oncology or Biogen in Alzheimer's. They are the experts in the area. We have an enormous amount of incoming interest in our technology, and we will choose wisely which partner is the right one to take forward because we feel an obligation both to our science and to the patients that are waiting for these diseases to be addressed. The economics are appealing, both in the near-term upfronts but also in the long-term revenue that will come to Sangamo. These medicines are remarkably valuable. These companies are very professional. These companies know how to take medicines in the areas they're expert in through to patients, and that is the advantage of Sangamo partnering pieces of the genome that we aren't otherwise developing. But let's just take a moment and understand Biogen. We have been saying for some time that we would form a CNS partnership. And we ran a process with 5 companies interested, of which 2 got to term sheets. And Biogen were the clear winners, not simply because they had -- they wanted to pay the most, but because Biogen's essence, who they are, is about CNS diseases and particularly about Alzheimer's. And if you look at what they gave us, it is $350 million, which coming at the moment that the COVID crisis hit us all, really changes the fate of Sangamo. And I know that many of my comparator companies are in more difficult places at the moment, and we are very glad to have Biogen come and help us and move us forward like they have. So if I then go to Slide 9 and talk about gene therapy. Gene therapy is now, and it's remarkable how much has happened in the space of gene therapy in the past 4 years that I've been here. We have a really interesting pipeline of hemophilia, Fabry, PKU and then [ A180 ] and then a series of other diseases that we think we can address with our simple gene therapy. There is a limit to this pipeline, though, and that's because there are only so many diseases that are big enough to merit the investment. One hopes and prays that society will find other ways to do the more rare diseases. But for companies, you need to look at the prevalence of the disease and many other [ areas ]. And that's why we feel that our investment in gene therapy is for now and will be the bridge to take us back to gene and genome editing, to cell therapy, to gene regulation, where Sangamo really has a unique technology. On Slide 10, I talk about our partnership with Pfizer. We are delighted with it. They are everything you didn't think a partner could be. They are thoughtful, receptive, patient-focused, and they tell us they are intending to move into Phase III in October. And this is -- sorry, the lead-in study started in October, and the main study is planned to move ahead as quickly as possible. All of us are struggling with COVID. Clinical studies will be impacted by COVID. And the readiness is all -- it's about preparing for it. It's about getting ready that when the clinical sites start up, that we or Pfizer are ready to move in. And then moving to Slide 11 and ST-920 for Fabry. We have enrolled patients, and my clinical operations staff are doing a fantastic job, are all ready to dose a patient. We made a deliberate decision that dosing in the middle of a COVID epidemic, pandemic was not the right thing to do. And so we're ready once the institutions open up again and are ready to have patients come in and be dosed with this, that we will dose the first patient. We are guiding that we will report the results of the study in 2021. We are guiding that we will dose all 3 cohorts before we talk about it. We're guiding that the first reports of this study will be the biochemistry, and the rest will follow afterwards. Because if you look at Slide 12, safety is everything. Safety is everything in these studies, but the rest of the objectives will try and differentiate our product. I'm often asked how we differ from AVROBIO or from Freeline, and I would ask you to wait and let's see what the clinical data is. We are encouraged and others are encouraged by the preclinical data. But in the end, it's all about the clinical benefit. Slide 13 talks about our ex vivo gene editing cell therapy. Ex vivo editing allows you to control the process. And on Slide 14, we talk about our partnership with Sanofi. We've shown in the beta-thalassemia patients that we can edit appropriately at the BCL11A locus, and we have treated 5 patients, and we'll treat the sixth patient when we understand the long-term consequence of that editing, when we see the sickle cell data that Sanofi is leading. This process is a complicated mix of editing capability, which we're confident in, the locus you choose, which we're sure is the right one. And the process development, sorting the patient, accruing the cells, editing them, growing the cells up and choosing which patient you go back to that we're all learning about. The bluebird data took 5 years between the first patient and the commercial version that they have. So it's not surprising that all of us will have to learn. The CRISPR data is exciting and interesting, but it's only a single patient in beta-thalassemia. All of us need to learn how the right way forward for this is. I'm confident we'll move ahead, and I'm really encouraged by the enthusiasm that the team at Sanofi have for driving this forward. On Slide 15, we talk about Kite and the CD19 allogeneic. Today, Allogene showed some data that is encouraging, but that isn't the final solution for allogeneic sizing cells. We believe that the version that we're producing with Kite is a really exciting way forward. We also believe that the investment we're putting into iPSCs and the relationship we announced recently with Mogrify will allow us to produce allogeneic cells that will open this kind of technology to many other indications, which is why we're so excited by CAR-T Regs and why we were determined to acquire TxCell in 2018. CAR-T Regs are fascinating. They don't need to know which is the antigen responsible. They need to know a localizing antigen. They need to know what will take you to the myelin sheath. They don't need to know what causes multiple sclerosis. Because when the CAR-T Reg gets there, it is activated and it does its business. And so we have an initial study with TX200 for solid organ transplant where we look at HLA-A2 mismatches and that we're encouraged by that because in renal transplant, there are regular biopsies of the kidneys, which will allow us to determine that the T-Regs are localized, activated and persist. And if we can show that, it's a gateway to many other autoimmune indications, whether it's MS or Crohn's or whether it's the really important diseases of Type 1, of rheumatoid and of hepatitis. And finally, we have in vivo editing, and this is -- goes to the heart of who Sangamo is. And the Biogen deal really was genome editing. And I know you always think of genome editing as making cuts in DNA, and I'm going to expand that to it's not just -- imagine a piece of text, and it's not just removing a word. It's sometimes highlighting it and sometimes making it smaller or sometimes making it larger. And that's what the transcription factors, which are the source of zinc fingers, and they're the things that control most of the expression of all of our genes. And so a very natural way to control DNA. And what we'd like -- and if I would guide you to Slide 21. What we like about it is by controlling the DNA, you don't need to worry about which form of RNA you use. You don't need to worry about is it monomeric or polymeric protein because a whole range of diseases, tau, Parkinson's, Huntington's, ALS, Prion disease, we have shown that we can turn down the expression of the DNA and make fundamental differences to disease. And while we've partnered Huntington's tau and synuclein, I want to guide you to look at this slide, and this is Prion disease, and a remarkable collaboration we have with the Broad Institute, where we show -- and this was work that is very new and very quickly generated. We have shown that we can turn down Prion expression using zinc finger transcription factors, and we can show that we only turn down the gene itself. So look to the right, the blue beam, the on-target repression, the graph to the right showing that it's only 1 gene that's done. This is Sangamo solely owned. This could make a fundamental difference to a dreadful disease. So what I want to tell you on the next slide, on 23, is that we have a robust pipeline that we own, we have an invisible pipeline that we partner, and we have a real sense of mission for making Sangamo the first truly genomic medicine company. And underpinning that on the next slide, we know that we need to be in control of manufacturing. In Brisbane, we have, by the end of the year, GMP facilities for AAV. Next year, we will have GMP facility for gene therapy both in Brisbane, in California and in Valbonne in France. And we know we do it with other people, and so we have very good relationships with what used to be [ ThermoBio ] and is now Thermo Fisher. So we have thought this through and taken Sangamo's manufacturing strategy from a control of now and local to commercial and working with world-class CDMOs. So what I want to leave you with is that we are a genomic medicine company, building value with gene therapy, making sure we do the best-in-class ex vivo gene-edited cell therapy and taking our company and the science through to in vivo genome editing and genome regulation. Our technology is remarkable, and we value the chance to show you just how clearly we understand how ZFPs work. We're working across a range of diseases, some of which are rare. But increasingly, they are high value, high medical need ones. We have GMP facility, and we know how we're going to manufacture. And we have a very strong balance sheet and 5 validating biopharma partnerships. And each time the pharma companies come, they choose Sangamo. So I'll stop there. I'll be very happy to answer any questions.

Thanks, Sandy. I appreciate that background of the company. I want to touch on some of your clinical programs. But before that, maybe you can just give us a quick overview on how Sangamo is doing during this COVID pandemic, specifically interested in the R&D activities and ongoing medical studies.

Thank you. It's an important question. As the CEO, one feels an enormous responsibility for the safety of your staff, and I couldn't be happy with how it's going. The labs at Brisbane and Richmond are up and functioning. And by just teasing out when people go in, we've been able to get up to almost normal productivity. The labs in Valbonne never missed a beat, and the team there have done some remarkable things. What's been fascinating is those of us who aren't in the labs, whether it's G&A functions or managerial functions, we're actually functioning probably even more than we did when we were going to the office. The days are longer. We work happily on Zoom. The only piece that we need to wait for are the new clinical studies, and that's one where we decided we need to do the right thing. We can't be asking doctors to step away from COVID and do clinical studies, and that will come back soon, and we will be pleased that we made the right decision.

It's helpful. So why don't we shift gears over now to the hemophilia A program? I know that's your most advanced program, and you partnered with Pfizer on that. I'm wondering how are you viewing the competitive landscape there between the other gene therapies in development by BioMarin and Roche and maybe how you see the market sorting out a little bit longer term.

So one of the things that is almost part of the contract with these companies when we partner is who can talk about this. And so it's very clear that this is something for Pfizer to talk about. I haven't seen Roche's data for a very, very long time. BioMarin I know are pushing ahead and great credit to them. The hardest thing to do is to be the first company. Pfizer are clear that they are confident they are committed to this and that they're ready to move it to Phase III. Pfizer are clear that patients will be able to choose based on the data between the compounds. We get hemophilia patients in to us and they are clear that they're going to watch and wait and make the right decision. So I think it isn't about being the first to the market. It's about having the best product, and we just all need to wait and watch the clinical data.

Okay. That's fair. And then I guess maybe this is a question for Pfizer, but if you're able to answer this, how do you see the Phase III study differing from some of the earlier Phase I/II studies for the hem A program?

That's very much a Pfizer question, and I would ask you to talk with them.

Okay. No problem. Then maybe we can turn over to the Fabry asset then. I guess, I wondered if you're able, could you talk about how you see that gene therapy serving the Fabry patients and specifically what the specific need in that market is, maybe what subset of patients you think are -- it's most relevant for.

It's a good and important question. And in the work that we do, there will be concentric circles of patients that are appropriate for this. For now, it's the patients that have the most medical need. But as this treatment is shown to be effective, it will move into patients with milder disease who will benefit -- where the risk/benefit is appropriate. When we bring Fabry patients in to talk to us, what is striking is that they still are not -- their medical need is not met. They still complain about pain, sweating, skin changes. They still die early of renal disease and cardiac disease and cardio -- vascular disease. And so I think there is a great opportunity for all of us to give them a more significant benefit. We dismiss easily that they have to go for regular infusions. And perhaps in this world of COVID when our lives are entrained by exterior circumstances, we could understand more why having to go for a regular infusion of something is just not what you want to do. So I don't think this is simply a convenience play, but I do think that plays into and I do think we need to show a benefit. I think the data from AVROBIO are interesting, and what they showed, to my mind, is that there is a biochemical benefit that is surprisingly small but leads to a Gb3 benefit in the kidney, and it really does speak to us all understanding the pharmacokinetics of these diseases and how best to understand them and measure them and that we are now moving into completely new territory. Now AVROBIO's work is great. But if the patient has to go through a period of preconditioning and a bone marrow transplant, it's a solution for now. It's not a solution for long term. Patients want something simple that is safe and leads them to an easy clinical solution.

And when do you think we should get the next data from the STAAR risk study? Maybe you can let us know what kind of data we should expect exactly.

So we're talking about biochemical data, and we're talking about it at the -- in '21, and it all depends how quickly the studies open. But we are guiding everyone that we won't talk about the study until we have dosed all of the cohorts, and then it will be biochemical data first before the biopsy data later.

Okay. Why don't we shift over to -- maybe you can probably talk about your zinc finger programs for gene editing. What do you think is next in that program there?

So zinc fingers are remarkably flexible in whether they are editing cells, turning down gene subscription or eventually editing within the -- in vivo. They have such a range of things they can do. They are natural human proteins. They are circulating in your body. They're the commonest transcription factor, and that gives us confidence that they will be appropriate for in vivo editing. I think using bacterial proteins like CRISPR will be very effective, clear whether they are the right editing technology for in vivo. These are cutting -- all of them is -- are cutting-edge science. We just need to do the experiments to understand what can happen and what is safe.

Okay. Maybe taking a step back. So you mentioned on your prepared remarks that you have a bunch of partnerships with larger pharma biotech companies. Maybe you could talk about how you think about Sangamo's partnership strategy and maybe how you see it playing out in the long term with maybe the percentage of internal assets -- internal wholly owned assets versus some of those that are partnered with your biotech pharma peers.

Yes. It's a good question, and it's one of these 1% problems that we have that people want to use our tech that we don't have the -- we didn't plan to advance. So when I look at Sangamo's pipeline slide, the things that we own now are things that we are driving forward with. The COGS we get, though, are -- there's 2 targets or 5 targets that we want to edit. Can you help us with it? And I'm not giving things away. I'm adding to the value of Sangamo. I will keep things that make a sensible, congruent story. And we'll keep things that we can drive forward and that we have the expertise -- for example, the clinical staff, the development staff, even the commercial staff. I will take forward things where it makes sensible to commercialize either a product or, most likely, a group of products. And the rest, when I'm offered a chance to take our technology to make it into medicines for other people, I will be very open to that as long as we have the capacity in our very early technology group.

Okay. Great. We're just about to push up on time, but maybe one last question on turning over to manufacturing. Could you give us -- you mentioned on your prepared remarks about a little bit on the time line for the -- your in-house manufacturing facilities for gene cell therapy. Maybe you could help us understand how that aligns with the clinical programs that it will be supplying and maybe longer term on the commercial side as well.

So my Head of Manufacturing is constantly planning his time lines around what we need and what he will be able to do. We have a wonderful relationship with Thermo Fisher, which means that for the products that we currently have in clinical development, we have plans that will allow for the manufacturing of everything they'll need for late phase development and commercialization. Increasingly, though, for the things that are moving into clinic, we will do it ourself. And we are able to do at Phase II, even Phase III, supplies for our products. So it just gives us that additional flexibility. And for every product, we have a plan that says when Sangamo will manufacture it and when it will transition to commercial scale, and I think that's the only way to do it. Perhaps eventually, we will have a Phase III commercial manufacturing facility. But for now, we will use our manufacturing resources wisely and apply them to the right problem.

Great. Thanks, Sandy. With that, we're over time. Thank you for taking time to speak with us today. And I guess with that, we can end the call.

My pleasure. Be well.

Take care. Bye.