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

Hi everyone, this is Marty Auster. I'm the lead SMID-Cap Biotech Analyst here at Crédit Suisse. I think -- I was mistaken, the last presentation thinking he was the last final one of the day. I believe this is the final presentation of the day. I am happy to have Sangamo Therapeutics here with us today. I'm going to hand it over now to Sandy Macrae. Thank you, Sandy. Take it away.

Thank you. So if I can now share my screen. And make it -- there we go. So thank you. And during today's presentation, I'll be making forward-looking statements. So please refer to our latest filings with the SEC. And we are Sangamo. We're Sangamo Therapeutics, where we're committed to translating groundbreaking science into genomic medicines that transform patients' lives. And all those parts are important. It's about the science. It's about making medicines. And it's about making medicines for an important purpose. And Sangamo was blessed that it has a wonderful range of genomic technologies that it can apply to important problems. You all know us as a zinc finger company. But as we have developed those editing technologies, it's allowed us to be very good at molecular biology, at cell delivery and at AAV. And therefore, we can do gene therapy, gene-edited cell therapy, which is the next step to solve delivery. But our goal is to find that takes us into genomic engineering, which includes both editing and genome regulation. And that means that we have a really interesting spread of diseases that we can address. Starting with the gene therapies. I'll talk to you about and that are about now and about the pragmatic approach to genomic medicines, taking us through genomic editing or gene-edited cell therapy, where you take the cell out, you edit it and you turn it to the patient to what must be the final goal, which is genomic engineering in-vivo, that's what patients want. They want the simplest solution for important diseases. And this results in the pipeline that we can describe now. I'm so proud of our -- that we're in Phase III with hemophilia A with our friends at Pfizer. I'm so proud that we are in Phase I/II with Fabry disease. And I'm delighted by the spread of preclinical assets that are moving forward in important diseases, Huntington's, Prion disease, ALS, inflammatory bowel disease. These are significant diseases that we feel can be addressed well with genomic medicines. But I'm also pleased with the fact that we partner with other [indiscernible]. And if you look at the spread of partnerships that Sangamo has created, 6 blue chip companies, 6 companies that you would have chosen for each of their areas. 6 companies that have the biology, the clinicians, the commercial norms to take forward our medicine, our technology into areas where we just couldn't compete, and we have to rely on others to take it forward. And the money is wonderful. And we've raised approximately $850 million thus far with our partnerships, but it's the fact that Biogen know about Alzheimer's. That Gilead know about CAR-T and oncology. That Pfizer will be the company that will be able to negotiate pricing and reimbursement for hemophilia A. It is so important that we do it with others. And what's very delightful to those of us at Sangamo is each -- is that moment when each of their scientists come and look at our technology and choose Sangamo and choose zinc finger technology because they see it as better, and they see it us as best in class. And that inspires our scientists and allows us to drive forward with our own internal programs. And let's talk to you a little about them. We do gene therapy because it's the most dearest of the various genomic medicines. We do it because we can get into the liver because the current delivery methods with AAV takes you to the liver. And we do it because we can address important diseases. And our lead program, as I said, is in Phase III with Pfizer. And giroctocogene fitelparvovec, as it is well known, is well tolerated in patients, and Pfizer have driven forward and moved into Phase III. We have 5 patients in the high-dose cohort. They've been treated for up to 85 -- the lead ones have been treated for up to 85 weeks. We talk about the geometric means and the levels of Factor VIII, but what's most important if you were a patient is that you've had no bleeding events and you no longer have to take Factor. And for those patients that has revolutionized their life, we cannot imagine those of us that don't have hemophilia how their life was dominated by how they could access Factor, where was the nearest fridge, how often they had to take it. And the patients when they come in and talk to us, talk about how much their life has been changed by this. So Pfizer in their recent R&D Day have talked about AFFINE, which is their global Phase III study, and I am delighted they are taking forward. To -- for a company our size, to be able to run a global Phase III study as only Pfizer can do. We've heard their vaccine results today. And it's a kind of Phase III drive and operational excellence that Pfizer has that will allow the Sangamo product to get to patients as quickly as possible. There's been a lot of questions to do in the breakout sessions about the regulatory requirements. What's most important for that is that the Phase III study looks like the Phase II study and is a reproducible result and can easily be described by the regulators, and that's where I'm the work in the line with Pfizer to produce the necessary results. And Pfizer guaranteed that they will have pivotal data readout from their final study in 2022, which then segues us to Fabry's disease. And because we have now got experience with AAV6, and we understand the dosing, we understand how to watch for liver function test abnormalities, we understand how well tolerated it is with patients. It took us into Fabry disease. Again, something where we dose an AAV into the liver, and we replace an enzyme, in this case, alpha-Gal, that is missing in this excellent monogenic disease. We believe that by providing alpha-Gal in the liver, which will then be released into plasma, which will then be taken up by the tissues, we can deal with the accumulation of Gb3 and once you have Gb3, that causes damage in these patients in their kidney and in their liver -- sorry, and in their heart. Why do we think this is important? We think that the onetime infusion with no preconditioning regime, no cell apheresis and then giving back, ST-920 may provide continuous potentially lifelong expression of endogenously expressed alpha-Gal, and it has the potential to preserve renal function and reduce cardiac morbidity. Preclinical studies with this showed that we could get enormous levels of expression. And we look forward to seeing what that looks like in patients. I have learned over the course of my time at Sangamo that we need to just wait and see what it does in patients. And we are -- we have great hope. And when we bring Fabry patients into the company or watch them on video, what they say is, how important this is for them that they do not want to be having ERT on a weekly or biweekly basis, that what we're looking for is some way to takeaway this burden of illness, and we hope that ST-920 may provide this. The study as always is about assessing safety and tolerability. We forget how few gene therapy studies there have been and how important it is to make sure it is safe and well tolerated by the patient. But what we'll be looking for is the pharmacodynamics of alpha-Gal A, the effect on ERT, the effect on renal function, and we'll be watching to see how it benefits the patients. I'm often asked about what patients were going to ERT, Fabry patients [Audio Gap] make sure some patients are naive, some patients that are ERT treated and others have been on ERT and come off. We hope eventually to describe all of these, but we're going to wait, and we're going to describe the results of this dose escalation study, 2 patients at a time in 3 cohorts, low, medium and high, and we hope to describe this at the end of '21. Let's move on now to in the -- ex-vivo gene-edited cell therapy. Why do we do this? We do it because we can control the liver. Because we can take the cells out of the patient, we can edit them in a controlled manner, and we can give them back, and it's a way to ensure quality control. And we're very pleased with this slew of targets and projects that we have for gene-edited cell therapy. The leading edge of this is the work we're doing with Sanofi. It started with Biogen, went to Bioverativ and it's now with Sanofi. We use the BCL11A locus and editing that to increase fetal hemoglobin. And we have already described some of the patients with thalassemia in the Thales study, and Sanofi themselves are leading the PRECIZN study evaluating the asset for sickle cell disease. Again, we're collecting this data, and we want to try and present it to you as a whole once we have sufficient patients for you and us to be able to understand the benefit of the treatment. We look forward to describing this with our friends at Sanofi in 2021, and we ask for your patience before we show this data. Sickle cell is an awful disease. As a physician, I have treated patients in the emergency room and the dreadful pain they go through and how difficult it is for them to find the treatment. It would be wonderful if we and Sanofi can find a solution. And I'm delighted that we have Sanofi as a partner because this is a global disease with outreach into patients and people that don't have much access to medicine. And I know how important this is to Sanofi. So we look forward to working with them to take this forward. Our next adventure in cell therapy was with Kite-Gilead, with KITE-037, which is the allogeneic anti-CD19 CAR-T. This is a really important partnership to us and to our friends at Gilead and Kite, where we -- and Kite has set, they expect to submit an investigational new drug application by the end of this year and to initiate a clinical trial next year. We're already working on new targets for Kite-Gilead, and we really feel that we have a substantial important relationship with them that will allow us to be part of the oncology field without actually being -- having to convert Sangamo to an oncology company. It is so much more effective for us to provide the technology. And Kite-Gilead with their expertise in oncology to transit forward. When we signed that partnership with Kite-Gilead, we looked around for what was the next cell therapy, and it became clear to us that CAR-T Regs was the next cutting-edge, was the next thing forward. Why do I like CAR-T Regs? I like them because you don't need to know the causative antigen, you need to know a targeting antigen. What do I mean by that? You need to know what will get you into the myelin sheath for multiple sclerosis rather than know what causes the multiple sclerosis. They are tissue-targeted, antigen activated and expanded. And once they've been activated, there are multiple mechanisms of immune regulation. While the -- many of the talents or the experiments that we've done in the T cells for oncology are similar. They also have their own special sauce that you need to understand, and that's why we chose to acquire TxCell because they really understand the world of T-regs. When we decide on where we're going forward at Sangamo, I set the research group 2 challenges. It has to be innovative, and that only we can do it because our zinc fingers are genomic engineering expertise, and it has to be adjacent. We cannot cover all of the fields, as mentioned. So it has to be things like this that are adjacent to the T-cells for oncology and take us into a space that we can build on what we've done before, yet apply our technology, giving us a unique advantage. Our first clinical trial in T-regs will be TX200 for solid organ transplantation. And let me explain why we chose that. There are about 80,000 renal transplants per year and about 20% of them, 20% to 25% of them are HLA-A2 mismatched. So in the cartoon on the right, what that really means is that there's a patient that HLA-A2 negative that gets a kidney transplant from an HLA-A2 donor, that's positive. When we create a CAR-Treg against the HLA-A2 antigen, we will have that -- those CAR-Tregs guided directly to the kidney, which is the only place in that patient's body that is HLA-A2 positive. And while that they're addressing the mismatch for A2, they'll also be activated and addressing all of the -- any of the other mismatches that, that patients transplanted kidney has. And we hope that they will regulate the immune system in a targeted manner, promote tolerance and help preserve graft function. And we expect the STEADFAST study will be initiated in '21. What does the study look like? So before the transplant, we apherese the patient, take out their T-regs and genetically modify them. They then have their transplant. And following the transplant, we infuse in a single infusion their CAR-Tregs designed to bind to the HLA-A2 graft. As always, it's about safety and tolerability. But this will allow some important critical questions on CAR-Treg pharmacology and biology. The transplanted kidney is placed near to the surface and is often biopsied as part of the usual medical care. And that allows us to be able to observe that the T-regs travel to the kidney, were activated in the kidney and then survived in the kidney, and it would tell us a lot about the pharmacology and biology of CAR-Tregs. At the same time, we hope that it will give benefit to these patients. And hopefully, at some point, they will be able to come off their immune tolerance. Studies with polyclonal T-regs that are ongoing and are reporting as we speak, have started to suggest that there really is a benefit for T-regs in transplant, and we look forward to driving that forward. Because if you look at the right at the cartoon, there are so many diseases that we can take the T-reg platform into that are not rare diseases or the crowded ultrarare-disease battle in the liver that many of the gene therapy companies are doing at the moment that take us into clear blue water where Sangamo has both adjacency and experience, innovation because of our expertise and because of the editing that we can do. And a clear unmet medical need. Let's switch now to neurology. And I'm sure you're all aware of the Biogen and the [indiscernible] deals that we recently signed. They brought nearly $500 million to Sangamo. And it really is a transformative piece of business development. This is a process that we started 18 months ago. And the competition to get access to Sangamo's technology was fierce and led to deals that will fund the company up to important milestones, such as the Pfizer Phase III readout. We have a range of products that we have partnered with Pfizer, Takeda, Biogen and Novartis. But let me tell you just how broadly our CNS portfolio can be thought of. The one that is about Novartis and Biogen is about Pan-Allele ZFP transcription factors. So let me just back up a little and explain what that means. Transcription factors do not cause double-stranded brokes. What they do is they land near the promoter of a gene, and they turn it off or turn it on depending on what we attach to them. And that's useful for things like Tau, synuclein, Crohn disease, where we want to reduce the neurodegeneration or some of the autism spectrum disorders where we want to turn off the expression. In that piece, I think it's -- still think of as remarkable signs, we can also do an allele-selective, where it's important to leave once-in-a-while type chromosome, allele is functioning and turn off the mutant one. And we've now shown that we can do this for Huntington's and C9ORFd. But there are so many more things we can do. We can do epigenetic editing where we demethylate and reactivate chromosomes, which is important for Rett syndrome or fragile X. We can uniquely access mitochondrion. And there's a whole range of mitochondriopathies, where zinc fingers can access them and the other editing technologies can. And finally, our T-reg platform moves us into CNS with our work on multiple sclerosis where we'll access more and a backup product and take us into the [indiscernible] myelination and neuro inflammation. It truly is a unique spread of CNS targets that allows us to make a difference to what I believe are very important medical conditions. It's where I started my pharmaceutical industrial training, and it's where I think there is such an opportunity to do good. And they're given in a very simple way. They're given almost like gene therapy, where they can be either administered intravenously, intrathecally or intracisternal ventricle or even direct into the brain. And once it's in the cell, they express and release the transcription factor. And that's important because transcription factors don't require double-standard regs and double-stranded regs require cycling of the cell, which is much greater in the CNS. We like them as well because many people identify proteins that result in neurodegenerative diseases, but there are many forms of the protein, polymeric, phospho-related, that nobody quite knows which is the right one or forms of the RNA, which can be sense, antisense, mis-spliced. Therefore, going right back to the source to the DNA, where it's 1 mutant only allows us to address Alzheimer's, Parkinson's, Huntington, ALS, Prion disease. Our lead product, the thing that anchor this whole project was Tau, and we are convinced that there is a coordination between Tau and Alzheimer's disease. Now we're going to show you a few slides that we are now -- our way to look at transcription factors. If you give us a bit of DNA, we tile it. We produce a series of transcription factors, zinc finger transcription factors across the whole of the area. We assess them for their ability to turn down the mRNA. We look at them in cells and show in the left that we can show remarkable repression, but even more is the specificity, a single-gene specificity. And then we take it into animals and show in animals that we can choose a zinc finger that will have variable amounts of repression of the gene. And then we take that into humans. So you have to make a new set of ZF, zinc finger transcription factors for humans because it's very species-specific. And again, we can show that we can turn it down in both the RNA and the protein. We can turn it down in mice, and we can turn it down in monkeys. And this is work that is really unique and makes us and Biogen very excited about the potential for zinc finger transcription factors to ameliorate the damage caused by Tau accumulation. But what I am so liked in this deal that we did with Biogen was the fact that we could demonstrate the same effect with synuclein for Parkinson's disease. And that we could do it within 3 months. So within 3 months of starting the project, we had tiled the area and shown that we could repress synuclein in Parkinson's disease. And the combination of Tau and synuclein led Biogen to sign the deal with Sangamo. So I've talked a lot about our science, but we also understand that it's important to have infrastructure. And we have made significant investments in our GMP manufacturing. What you can see here is our facility in Brisbane. And we have both AAV manufacturing, which will be completed next month. And then in the coming year, we will complete cell therapy in Brisbane and later in '21 in our facility in France. We feel having control of our own destiny is important. And that really is about having the process development near to the GMP manufacturing. But our solution to manufacturing is a blended approach. We have a great relationship with CDMO Thermo Fisher, which used to be Brammer Bio. And that allows us to flex between external manufacturing and what we can do in-house. So in conclusion, I hope I've been able to convince you that we're creating a genomic medicine company, building value with gene therapy, ex vivo genome -- gene-edited cell therapy, in vivo genome editing and genome regulation technology. We are convinced that our technology is precise, efficient and specific and is backed by robust patent estate. We have moved the company from rare diseases to large indications across inherited metabolic diseases; immunology, CNS, hematology and oncology. We do some of them ourselves. We do some of them with others. And it's a simple strategic choice about how we can get our medicines to patients as quickly as possible. We have an in-house manufacturing facility and dedicated CDMO capacity, which provides us manufacturing scale for clinical and commercial supply. We have a very strong balance sheet and validation by our pharma partners. We're in a very good place at Sangamo, and we're very grateful for your support.

Sandy, thank you very much for joining us today. I really appreciate it. Have a great rest of your day. And a good conference. Thanks.

Thank you very much.