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

Hi. My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. It's with great pleasure that I'd like to introduce Sandy Macrae, the CEO of Sangamo. Thanks for joining us today, Sandy.

It's my pleasure.

And we're going to do a fireside chat conversation. So maybe to kick it off, if you can give an introduction to Sangamo for people who might not be familiar with the story.

So Sangamo is a fascinating company. It's -- we're known as a zinc finger company, but we truly have evolved to become a genomic medicine company. And in this time of COVID and all the challenges that we are facing, the health of Sangamo is great. We are productive. We have things everywhere from preclinical to Phase III, and we are ready to face the future.

Great. And there's a lot of interest right now in your SB-525 hem A program in partnership with Pfizer. You guys are going to have data coming out pretty soon at the WFH meeting. Based on the title, we're expecting durability data for the 5 high-dose patients. Maybe if you can talk about -- a little bit about what we should expect to see in that...

So I'm sorry to have to disappoint you because as the product heads into the hands of Pfizer, I have to allow them to make all announcements and pronouncements on it. And in these contracts with pharma partners -- and Sangamo is blessed in having partners with Pfizer, Sanofi, Takeda, Gilead, Biogen. The contract always stipulates who talks about it. And with Pfizer, they talk about it. So I talk regularly to the people at Pfizer. We know that their pre study is up and going. We know that their Phase III study is ready to go and ready to recruit. But we're going to let them talk about the data in -- later this month and we're going to let them put it in context of the work that BioMarin has done and reported on.

Understood, understood. I guess just as an aside, we will mention what we're thinking could be there. So we're thinking there could be 12- to 18-month data, which could provide some perspective into durability and potentially consistency across those 5 high-dose patients. So definitely looking for...

I think that's very fair, Maury. The patients have progressed. Time has continued despite everything else, and those patients are in that 12- to 18-month window. So let's all wait and see the data that Pfizer would present. We talk to them. We review slides. We work with them. But I want to be very careful to maintain the contract we have with them and allow them to take it forward from here.

Understood, understood. And maybe, I guess, one more question on hemophilia just with that relationship with Pfizer, at the end of 2019, completed the tech transfer to them. So going forward, what exactly is your involvement in the process there?

So we continue to have joint steering committees, but we are absolutely clear that it's their call on the final design of the Phase III study. It's their call on where they'll manufacture future supplies. And they respect us. We have a great relationship with them. We have [ Sinai North ] that is just about to transition to them. But this is a Pfizer project. And I am so pleased that I have Pfizer leading the charge in this one. They know how to register a drug. They know how to launch a drug. They know how to get it to reimbursement. So they're the right group to take it forward.

Got it. And are you providing any perspective on data that came out recently? So BioMarin had an update the other day, showed that ABR went up at their 4-year data. I guess do you have any perspective on that, that you could share?

It's so hard to be the company in the lead when you hear the hoofbeats of the companies behind. You have to describe the field. You have to be the first people that say what's important. And so JJ and his team have done a good job, and we respect what they've done. But we believe that patients want a choice, and we believe that the Sangamo/Pfizer product offers them a choice, and we believe we're not far behind. And it's a very unusual product. This one is unusual for 2 points. The first is that this isn't about patients dying and it isn't about no alternatives. The patients can take factor, and they can wait and watch. This is about a population that have had problems with hep B or HIV in the factor. It happens. So there will be -- this is a population that are -- do a fantastic job of looking after each other so they know what's happened. And so there's also a sufficient number of them. The reimbursement groups have to make an important decision. This isn't about an ultra-rare disease, like LUXTURNA with Spark, where there were so few patients that there was no way that -- and the study was so compelling, to be very honest, so there was no way the reimbursement people were going to stand in the way of it. For hemophilia A, it's an important decision for thousands of patients, and we are so pleased that Pfizer is the company that would be doing this.

Got it. Okay. That's helpful. And so moving on to Fabry disease with ST-920. Maybe if you can just give us a status update on that program. How many patients have been screened, potentially provide screen failure rate? And how many patients have you enrolled?

So let me come to that through a slightly tangential route. The -- we were all set to dose our first patient when COVID appeared. And the question I've had all day at the conference is, how has COVID affected you? And I sit on the Board of BIO, and we have this conference call on every Friday, which is just such a sweet call. And there's about 30, 35 CEOs on it, and all of us are in the same position. All of us are struggling to do the right thing to lead our organizations well. And all of us are struggling to get our clinical trials started because the physicians in our hospitals should be addressing COVID and the hospital administrator should be protecting patients from coming into the hospital environment. So I'm going to give you 3 points of information on our COVID result -- or COVID approach. One is our labs are up and running. We have a wonderful point-by-point SOP that says who can come in, when they come in. And they're coming in early in the morning and late at night, so we're up at 90-or-more percent efficiency in the labs and in the manufacturing. The office staff are even more effective, and we've all realized we can work from home. I'm sure you are finding the same thing that actually, you can do many things via Zoom. And we are very effective, and we won't go back into the building for the office staff until we can be convinced that we're going to be as effective in the office as we are at home. The one that's difficult is the clinical trials. The ongoing clinical trials are fine and well looked after. We were about to dose the first Fabry patient. We have patients enrolled. So they passed all screening tests, and we just are going to wait to dose them at the right time. The investigators are keen, the patients are keen, but their institutions are saying it's not the right time for us. And we have to respect that, and we'll go back into the clinical trial when the institutions are ready. It's inappropriate for us to push it forward quicker than that.

Got it. And are you saying -- providing any numbers on the number of patients enrolled?

So I'm guided by McDavid that I'm saying patients, which is more than 2. And it's a small number, but it's more than 2 that we have enrolled. And the other thing that I want to help people understand is we -- because of the funding we have, and we'll come to that later I'm sure, we're not going to reveal the data cohort by cohort. We're going to wait until we dose all 3 cohorts, which means that the urgency of getting that first patient in is less of an event for the analyst community. What we'll do is we wait to have dosed the low, middle and high cohorts, and we'll report hopefully later on in 2021 the dose response curve and give you all confidence in the result in Fabry patients, separate biochemical results. It will be some point in '21. And that depends on the opening of the COVID trials and the cadence of the recruitment.

Got it. And you mentioned the biochemical results as being something that's in the initial readout. What exactly does that entail?

I'm sure you've been close to early translational medicine studies. We measure everything. We measure as many things as we can, but it's alpha-Gal that's the most important. And yet, if you look at the alpha-Gal of AVROBIO, they -- we also at first thought that's just not good enough, and yet, when we look to the Gb3 results, they had an effect on Gb2. So I think what we are -- what we have to understand is we don't know enough about what the right level of alpha-Gal plasma is to convert to an effect on the organs and an effect on function. So we hope at some point later in next year to tell you all about the effect on biochemistry, on alpha-Gal, in the 3 cohorts of patients. And then the following year probably, we will then talk about biopsies of the organs and other evidence of effects on function.

Got it. And have you done any modeling to get to some estimates on how much you'll need?

We're always thinking about that. And when we did the MPS trials, that was one of the things that we did. And it was surprising how little -- when you get [ in RT ], you get a huge spike and then a rapid drop and then very little for the rest of the 2 weeks or however long between infusions. And if you translate that into how much is being pushed into the tissues, it's a small amount. Now what we are hoping is by having a constant amount day after day after day over the whole 2 weeks, it leads to a different equilibrium with the tissues and a different benefit to the tissues. And that's what I think we're seeing with AVROBIO. But until we do the same experiment and show it works from the liver, we won't be able to address that. AVROBIO -- like I said about BioMarin, the first company in this learns a lot and the rest of us gain from it. So hats off to AVROBIO. But on the other hand, we believe that a constant production from the liver at the levels we saw in the mouse would be very, very useful. And we believe that, that will lead to tissue benefit that we'll see in Gb3, and we believe that we'll see a nice benefit, which we don't think requires you to cross the blood-brain barrier. We think it's a vasculitis. And the evidence and the advice from all the experts we've spoken to says it's a vasculitis that we should be able to address by circulating enzyme.

Interesting. And AVROBIO, I believe they're supposed to have a data update pretty soon. Are there particular data points within that update that you're going to be looking for? And what are your thoughts on that?

As I said, we learn from every single data point we put out. And I've been asked recently on a BIO call whether we should all be sharing data, whether we could all learn from each other's data. And that's an interesting question. Every time one of us publishes, whether it's BioMarin or AVROBIO or Sangamo, the rest of us scurry around and look at the results and trying to think what does that tell us about our problem. So the thing I'm most interested with AVROBIO is persistence. I'm interested in Gb3 and in particular tissue types because, at the moment, it's only general kidney [ mush ] Gb3. I want to know what it looks like in podocytes. So I want to know what it looks in specific cells within kidney. And I want to know about safety of the patients because the whole cell therapy piece is important and useful for patients that are really having serious disease, like patients with -- in oncology with significant cancer because they have to go through a conditioning, an apheresis and all the rest of the process that has significant consequences to them. And therefore, it's all a matter of balance between benefit and risk. And for AVROBIO, there is -- they're carrying a risk so they need to show benefit, whereas with Sangamo and the gene therapy companies, we are -- we have less risk and so we need to show a similar benefit.

All right. And for the data, you mentioned -- I think you said later in 2021. I just wanted to be clear that that's going to be the initial update, probably second half of 2021.

I think that's likely no. Who knows what's going to happen for the rest of this year? It's going to be a fun roller-coaster of a year between COVID playing out and the election and all the other bits in between. But we are determined to start treating patients and we -- if everything goes to our plan, we will be revealing data towards the end of next year.

Got it. Okay. And when could you provide more clarity on the biopsy plans, too? I think we've discussed that a little bit in the past.

When is the right time?

Okay.

Maury, it's an interesting question because you and I would love everyone to do biopsies. I've done biopsies. They're not easy and they're not without consequence. And they require a pact with the patient that they understand that it's the right thing to do. My view is that until I see efficacy determined by biochemistry, I won't be doing biopsies. So when I see effectiveness in biochemistry, that's when I'll start to do biopsies. They really are important things that we shouldn't think of trivially. And I know you don't do that, but the procedure is not without consequences. Therefore, we should do them carefully.

Right. I agree. And for -- I guess moving on to ST-400 in beta-thal and maybe BIVV003 in SCD. Maybe if you can just give a status update on those 2 programs and if we could potentially see data from those programs.

Yes, happy to do so. So we work very well with Sanofi. It's another good, well-run partnership. And Sanofi continue to recruit within sickle. We have 5 patients that are dosed within thalassemia. We've decided we won't dose the sixth one until we see them run out, let the sickle cell data catch up and then talk about it hopefully at the latter part of the year. Sanofi appear very committed to this program. And we all know Sanofi have gone through a series of strategic reviews and decisions, but they remain committed to this program. And one has to then think about what can you do to make this better because bluebird took 5 years of process improvement to get their program where it is. We think that our editing is working well, and all we need now to do is work out are there changes that we need to make or improvements we need to make to the process we've got. How you mobilize the cells, how you increase or how you electroporate them, how you grow them up and expand them and then which patient should take, all of these things are variables, and we are close to where we need to be. And with the thalassemia data, we can make it better. And let's wait and see what the sickle cell data looks like because that's a completely different disease.

Got it. And for that process, I guess, which variable are you focused on? Or what's the -- what do you...

I am lucky to have the whole of Sanofi process development working on my behalf, and please don't tell them I said that. But we are delighted with the brains and capability that Sanofi have applied to this. They are really focused on making this a successful product. And all of the above are under inspection as ways to make it better.

How long does the process take?

We haven't disclosed that.

Okay, okay. And so could there be a data update this year then?

It's in Sanofi's hands particularly for sickle. I hope they'll be disclosing something later this year, but it's really in their hands.

Okay. And let's see. For the CAR-Treg program, I think there's a lot of potential with that, very interesting. Can you give a status update on it? And...

Yes. I'm delighted to because it's -- we feel it's a future that hasn't got much attention. We feel it's great because CAR-Tregs go to the localizing antigen, not the causative antigen. So we all know that myelin sheaths is where the inflammation happens in MS. We don't know what the cause of MS is. And so if we can take a Treg there, we can activate it there, and then we can resolve the inflammation no matter what the cause is. So we have a program that's moving ahead with renal transplant, which is great because it allows us to -- in the process of renal transplant, they do biopsy kidneys so we can see that the Tregs are localized, that they are activated and that they survive. And that will inform all the rest of our programs. I realize we're coming to the end of this interview, and I just want to take a moment to talk about Biogen, if you wouldn't mind, Maury.

Go ahead.

So that's a fantastic deal, and it's a fantastic deal for patients because Biogen are one of the world experts in Alzheimer's. And therefore, handing our tau program to them make sure it gets to patients as quickly as possible. But it's a program that's interesting in another way. We got $350 million, so -- which adds to our $363 million, which gives us 3 years of runway, more. But we got it for 8 of 10 targets we had never thought about, considered. And I just want to change the perception. We are not giving things away. We are adding things to our pipeline. We are adding genes that we wouldn't have thought about to the pipeline so as others who believe in those genes and want to take them to patients can take them forward. So the sizable pipeline expands every time we do one of these deals, and we will do others like this. It might not be as big as Biogen, but they will have that same essence where we work with people that are experts to make sure we monetize the genome for Sangamo. We partner with people that know what they're doing and will get it to patients as quickly as possible. It really is a moment where Sangamo should not stay and stand in the way, and we should make -- take advantage of our technology to get it to patients.

Got it. And for that deal, from my understanding, I think part of it was related to the AAVs. Maybe if you could just talk a little bit about that. How important was that as part of the deal? And you've also -- you have collaborations with Pfizer as well. Are you using the same [ aid ]?

So we've been talking to people for 2 years about CNS partnership. And they were all excited by tau, but they were all thinking, fretting about whether there was a way to deliver it. And increasingly, over time, our data encouraged people that there will be a solution. There was work that David Ojala presented at ASGCT looking at capsid evolution, where we increased by 10- to 20-fold the ability to transduce neurons, and that was, in the end, essential. In the end, there was 5 companies competing for the tau program. There was 2 term sheets that got right to the end, and we were negotiating right up to the very last moment. And every time that there's a competition for cellular technology or every time people look at editing or transcription control, they choose Sangamo. And that's the bit that I think is really important.

Got it. And let's see. For Sanofi, I had a question on that one. So they sold their Regeneron stake, have a lot of cash available now. I'm just wondering if you have any thoughts on that. I know you guys have a good relationship with them. Just any thoughts on what they might do next.

Let's wait and see. Let's hope they report this year. Let's hope that we all get confidence with this program. And I think there's -- I'm certain there's a way forward there. The editing is working. It's just a matter of tuning the process development.

Got it. And Sandy, I guess to close it out, what are key events ahead over the next 6 to 12 months that investors should be focused on and what's important for Sangamo?

So I think the most important thing is that -- is not, for us, the next 6 months are important anymore. It's the next 3 years are sorted for with the Biogen money and the funding that we have to keep Sangamo going. So we do not need to give early readouts of work that isn't completed. But in this coming year, you will hear more about hemophilia A, you will hear more about sickle, you will hear about the start of the first Treg trial we'll start here, the start of our Fabry trial. You'll hear hopefully about other deals, and you'll see that it's a company that has got a rich pipeline that we will build on as others come to us and look for our -- to use our incredible technology.

Understood. Okay. Well, thank you very much for joining us today, Sandy. It's great...

It's a pleasure, Maury. And I hope you and your family stay well.

Thank you. You too. Okay. Take care.