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

All right. Thanks again for tuning in to the JPMorgan Healthcare Conference. I'm Eric Joseph, senior biotech analyst. And our next presenting company is Sangamo Therapeutics. With us to talk to a little -- talk to us a little bit about the company is CEO, Sandy Macrae. [Operator Instructions] With that, Sandy, thanks again for joining us this afternoon.

Thank you, Eric. And I'm going to put the presentation up. And I'm going to ask you all to follow along, and I'll try and remember to say the numbers of the slide to help you do it. So thank you for joining us for the Sangamo presentation. If there's 3 things I want you to take away from this presentation, it's how much Sangamo has achieved in 2020, our focus on delivery in '21, and the promise of this remarkable company. On the next slide, you can see our forward-looking statements, which, as always, I'd ask you to make sure to refer to. If we move to Slide 3, it talks about the essence of Sangamo. It's about novel science, cutting-edge science, a remarkable platform. It's about clinical-stage programs that are driven forward now in Phase III, Phase II, that are Sangamo proprietary programs and ones we share with our partners. And it's about the infrastructure of the company that makes us more than a scientific promise that talks about manufacturing, finance, IT, all the parts of a company that will allow us to be successful. And when you put all that together, we believe you get a genomic medicine company that's committed to translating groundbreaking science into medicines that transform the lives of patients with serious disease. And that mission of promise of Sangamo is reflected in our pipeline, and I'm going to try and orientate you to the Slide 4 here. And if you could turn your eyes to the right-hand side of the slide and Phase III and -- just to say Phase III is a very proud moment for a company like Sangamo. We've moved into Phase III with our partner, Pfizer, for hemophilia A. And then as you scan to the left, in Phase I/II, we have our Fabry disease product wholly owned, which has dosed patients and will read out at the end of the year. And through our partner, Sanofi, we have program in beta-thalassemia and sickle disease. And Sanofi have committed to sharing the results of the sickle cell program again at the end of the year. And then to the left of that are programs that are in preclinical stage. And with each presentation I've given this, we move closer and closer to the clinic and closer to patients and closer to the market. And there's 2 that I would like to highlight here. The first is our solid organ transplant study, TX200, which will be the first CAR-Treg in humans and will be a moment of great potential for the company. And also in the hands of our partner, Kite-Gilead, is the oncology CAR-T for CD19, KITE-037, and they're committed that they will submit an IND this year and that they'll be in the clinic this year. And behind that are a range of other projects, some partnered, some Sangamo-owned, reflecting the wealth of possibility from the Sangamo platform. The foundational study in MPS, as you all know, did not meet expectations. And the R&D focus that we have is on account of the potential to either be first-in-class or best-in-class. And that is why MPS II is not on this slide and is not listed as a clinical candidate at this time. We'll only move it forward if we feel it will become best-in-class or first-in-class. Next slide, Slide 5. So let's start with the first of those 3 promises from the start of the presentation. 2020, we delivered multiple accomplishments in the year of the pandemic. You're all aware, I'm sure, of our Biogen and Novartis collaboration, and I'll talk more about them later. But the money, the $425 million that we brought in, underpins the future and the ability of Sangamo to develop its clinical programs. As I said, Pfizer have initiated a Phase III trial in hemophilia, and Sangamo has initiated our Phase II trial in Fabry disease. Our manufacturing, wholly owned manufacturing, progresses. We have completed GMP manufacturing for AAV in our facility in Brisbane, California. And finally, in 2020, we built a very strong cash position, $695 million as of September 30. All of this happened during the pandemic. And I am so proud of the scientific staff and the manufacturing staff who never missed a beat and go into the labs each day and of the many Sangamo employees who stay safely at home and Zoom from dawn till dusk. And they do it because of that mission statement of taking groundbreaking science and making it into medicines for patients. Slide 6 talks about the expected focus within Sangamo. And as I said, it's all about delivery. The Fabry disease program, ST-920, will continue enrollment, and we hope to have all 3 cohorts enrolled. And we'll present the data by the end of '21. The solid organ transplant, the Treg program, TX200, will initiate the Phase I/II trial in the second half of the year. And that will be a fundamental moment because it's a great investment for Sangamo and something that we believe is part of the future of the company. And finally, we will expand the manufacturing beyond AAV to cell therapy and provide cell therapy manufacturing facilities both in California and at our facility in France. Slide 7 talks about our partnerships. And we are so proud to work with such great companies. And there's probably 3 things that I want to take out of this slide. The obvious one, the one everyone talks about, is the financial benefits. Since I joined Sangamo, we've raised $815 million in cash and many billion dollars in potential milestones. But more important to me is the fact that each one of these companies brings a deep expertise in their area. If you want to do Alzheimer's, Biogen is a great company. Pfizer understands hemophilia. Novartis understands autism spectrum disorders, et cetera. And they allow our technology to be applied to important diseases, and they allow the assets to move into patients as quickly as possible. But there's a third piece to these partnerships, which is the validation that they bring. I will try and convince you today of why we think Sangamo is such a company with such promise. But you can be assured that each one of these companies dug deeply into our science and the diligence that will ensure that they made the right decision. And I would love to share with you that moment where their scientists realized the potential of our technology and the excitement and urgency that, that moment brings. And on Slide 8, we talk about those moments of scientific excitement being translated into clinical reality. The Pfizer study is now in Phase III. Kite will be moving to Phase I/II in '21. And Sanofi will report the results of the sickle cell disease and reflect on the beta-thalassemia study at the end of this year. So it's investment in our science leading to clinical development, leading to progressing to patients. Let's take a moment and going deeper into the proprietary programs. And the first one is the STAAR study, which is ST-920 in Fabry disease. And I'm often asked about what kind of patients we're approaching. So these are either patients in ERT, ERT-naive or patients who've stopped ERT for some period of time. Clearly, those on ERT are the most likely to be recruited because they are the most common, prevalent for a patient. Obviously, the primary objective of the study is safety and tolerability. And at the end of the year, we will talk about the pharmacodynamics and those clinical markers that will be easy to measure in the short term. Additional biopsy and ERT withdrawal data will come in the following year. We have dosed the first 2 patients, which is a great achievement in the time of COVID. And we have line of sight of patients to come, and we've been approved to move forward into cohort 2. And data will come at the end of '21. So why do I like this study? I like it because Fabry is an important disease. Only 45% of Fabry patients are treated at the moment. So it's a disease that still could benefit from additional medical help. As you all know, the alpha-Gal enzyme is missing because of mutation in the GLA gene. And that leads to accumulation of Gb3 and lyso-Gb3 and disturbance and destruction of organs such as the heart, the kidney and the lungs. We believe that ST-920, the patient promise, is a onetime IV infusion without preconditioning and allowing continuous, long-term expression of endogenously expressed alpha-Gal that allows -- that should give the potential to deliver preserved renal function, reduced cardiac mortality and decreased nephropathy. We look forward to showing you the results in this study at the end of this year. Moving to the next slide. I'd like to take a moment to talk about CAR-Tregs. And before I get into the detail of the study, there's, I think, a couple of important reflections. Why do like CAR-Tregs? We did the deal with Kite-Gilead for CAR-T and we looked around for an adjacency because that's how we will expand our technology application by moving into adjacencies where we have innovative potential. CAR-Tregs are important because they depend on localizing antigen, not causative antigen. You go to the myelin sheath. You don't need to know what causes multiples sclerosis. But the second thing that's been interesting about this conference is although people want to hear about hemophilia A and about Fabry, there has been a growing understanding and excitement about the importance of the CAR-Tregs for Sangamo and almost like a company within a company. On Slide 13, you can see our TX200 study and, on the right, a cartoon describing how patients that are HLA-A2 negative get a transplant of kidney that's HLA-A2 positive. And the only place where that antigen exists is in the kidney. And therefore, giving them a CAR-Treg direct to the HLA-A2 should only go to the kidney and it should provide immune tolerance at that site. And the advantage of this study is kidneys are regularly biopsied. So not only it's a benefit to the patient but it informs and teaches us the other Tregs. Because we see the single organ transplant autologous study is just the first step, we're already developing allogeneic, either editing down to allogeneic or IP -- creating iPSC cells that then become Tregs. It takes us into multiple sclerosis and inflammatory bowel disease, and we're working hard on those programs at the moment. But you can see the list of other areas that if this succeeds, it opens up a whole range of autoimmune diseases, where edited Tregs with a CAR allogeneic, off-the-shelf could make an enormous difference. The next slide talks about our partner programs. So I'm looking at Slide 16, giroctocogene fitelparvovec, SB-525, transitioned to Pfizer. And Pfizer has initiated a Phase III study. They've already dosed patients in October, and they're planning to dose 63 patients. We're all aware of what Pfizer have done in COVID vaccine and how quickly they did the trial and how effective they were. And I'm delighted to have that machine working for us to drive forward. They are excited by this asset, and they look forward to showing data in '22 and registering the product soon afterwards. And the thing that they see is the data from the Alta study, which was the Sangamo-run study. What they like is that the Factor VIII level is still within the therapeutic range. But what's more important in all of these translational medicine studies is the benefit to the patient. The patient had no bleeds in the first year. There was one target joint bleed, which these patients always get. And they haven't had to require factor use. And on Slide 18, you can see the safety profile. It's remarkable how well tolerated such a large dose of viruses. Other than the one SAE of a transient allergic reaction that resolved within 12 hours, it's been really well received. And there's been no use of corticosteroids after week 52. So we're pleased with this, and we look forward to sharing the results with Pfizer of the Phase III study. I think it's going to take a larger number of patients for us really to understand the profile of this product and compare it to the competition. On Slide 19, we talk about our partnership with Sanofi. Their PRECIZN study continues to enroll and to treat patients, and they expect the first clinical data readout at the end of this year. At the same time, we'll look at long-term data from the thalassemia study that Sangamo ran last year. Again, Sanofi are excited and driving forward with this study. I'm delighted that it's a company like Sanofi that's running this because this is a global medicine -- disease, and it needs a company like Sanofi with their commitment to social responsibility. And finally, KITE-037, the first product of our collaboration with Kite-Gilead, will go to IND this year and go into the clinic this year. And we have already had discussions with Kite for the next indications, and we're working on that. And we're providing them with resources to help them understand that whole process of allogenicity, really important and delighted with the progress we're making there. I want to close the presentation by talking about neurological disease. And it's -- in some way, it's a celebration of the deals with Biogen and Novartis and I guess Pfizer and Takeda, but it also really, to me, reflects the true potential of this technology. And this is a slide that I always use to talk about the potential. And this is if you're targeting diseases within the brain, how can you use zinc finger? And it isn't just as a result of the competition about the nucleus. We can do genome regulation. So you don't make a double-stranded break. You just turn up or turn down a gene. We can do it pan-allele, which is what we've done for Biogen for tauopathies and for Novartis for autism spectrum disorder. We can do it allele-specific, what we've done for Pfizer with Huntington -- sorry, Takeda for Huntington and Pfizer for C9ORF. We can do epigenetic editing, which we have looked at with Rett and with fragile x. But -- and potentially it's expanded. We -- the CAR-Tregs will be able to address multiple sclerosis and perhaps even ALS. And uniquely, zinc fingers can get into the mitochondria, something CRISPR can. And that opens up cerebellar ataxias and Leigh syndrome. The next slide is a representative of the many different forms of gene repression, which -- and this is for Alzheimer's. And I'm going to show you 2 slides to me -- talk about the industrialization and the robustness of the effect. In the top right, you can see all the different zinc fingers that are laid down around the promoter of the gene, many, many options that allow you to choose the best. In the left, you see within cells that we can repress up to 99% and that it only affects a single gene. On the right, you can see the effect in mouse and you can see, color-coded to help you see it, that the effect is robust and remarkable. And in the next slide, Slide 24, I would point out that we've now shown this effect in human cells on the top right, in mice on the left and in monkeys. And we can choose whether it's 99% reduced, 50%, 30%. And it allows us a fine control and a tuning of what we do with a gene. And that's important because many people trying to attack the proteins of these diseases, some people trying -- attack the RNA, but there are so many forms that is unclear which is the right one. We believe going to the source, to the DNA, allows control over each one of these and gives us what is a robust neurological pipeline on Page 26. So let me just reprise the keys -- the point in Sangamo's 2021 story. The most important thing is that we're going to execute on the clinical-stage pipeline, Phase III, Phase II, moving into Phase II. We will invest in manufacturing. And we do that to control time lines, to control budgets, but also to control quality by having our scientists and our manufacturing people side by side. We've completed AAV manufacturing at GMP scale and level, and we will do cell therapy in Brisbane, U.S.A. and in Valbonne in France. And we will continue to partner with our CDMO, Thermo Fisher, who we have a great love and respect for. On the final slide, Slide 30, what I want you to take away. I hope that I've been convincing. It's that we have a broad portfolio with prioritized candidates in both rare and large indications. Our technology has been validated by deep diligence from biopharma partners. We have a strong balance sheet with a cash of $695 million at the end of September. We have in-house GMP facility, allowing us to control manufacturing and that we're a genomic medicine company executing on a clinical-stage pipeline. Thank you.

All right. Thanks, Sandy, for that -- thanks for that presentation. Moving to Q&A, I guess first question, just to pick up on the STAAR trial, ST-920 in Fabry disease. I guess how -- I guess what learnings from the hemophilia A program might translate to the Fabry program, the Fabry trial in terms of the sort of the dose safety relationship with a dose transgene expression relationship that sort of might be relevant to dose selection and -- in the Fabry study, otherwise be -- or kind of be in a therapeutic range essentially in the Fabry trial?

So I'm going to pass this one to Mark, who's our Chief Business Officer. Mark?

Obviously, the fact that we use the same vector, AAV6, in both studies for both areas is important. And clearly, we took a look at the data from our hem A and looked to try to inform our Fabry dose. But as you can imagine, when we're taking a look at our preclinical Fabry dose and trying to scale that then to what we would need to do in humans, there -- I wouldn't read too much into the dosing. We selected doses that we believe we have activity. There are 3 dose cohorts, as Sandy mentioned, and we will expect to see activity within the range that we're testing in that study and report that out at the end of 2021.

Okay. And in terms of activity, just how are you -- I guess what end points are you particularly focused on? I believe biopsies are sort of optional in this trial. And really, the focus is primarily on safety, at least to start. Are you looking at sort of peripheral Gal A expression? What might be sort of a promising sign of activity?

Yes. Eric, you've really touched on it. I mean the primary end point is safety and tolerability. But obviously, the secondary end points will be looking at pharmacodynamics of alpha-Gal A as well as the presence of its substrates in the plasma, Gb3 and lyso-Gb3 over time. And then we're also taking a look at the impact on enzyme replacement administration. And as Sandy mentioned, we have a bit of an all-comers group in that first 6 patients. And hopefully, that will inform us to allow us to select the appropriate dose for the cohort expansion for next steps in the trial.

Patients will be -- you're looking at both ERT-naive -- or eligibility is for both ERT-naive and also ERT-experienced patients who are on treatment. I guess how do you delineate the activity of 920 versus background ERT treatment as you're looking at those peripheral biomarkers?

Well, so we've got 3 sets of patients potentially that -- and we'll see what -- Sandy mentioned we'll see what actually gets enrolled into the trial. But there'll be patients that are on ERT. And so you could expect if we're seeing the right alpha-Gal levels, then -- which there might be an opportunity at some point in the follow-up to begin to withdraw ERT and see how they do and see whether they still stay in range. For those patients that have not been on ERT, we'll be able to take a look at them and see if we can actually see a predictable and durable expression of the alpha-Gal A enzyme in those patients. And then likewise, in the naive population, which is a little bit more difficult for us to get probably in these trials, we would see whether or not, again in a naive patient, we can get them into a predictable, durable expression of their alpha-Gal A enzyme. And so depending on that, we're hoping then that it will inform us in terms of what we can do in that expansion cohort that I touched on so that we can get a good representation of the broader Fabry population and really understand then what we would take into the registrational-directed trials.

And Eric, I want to just take that a little further. We are preparing for success -- planning for success. So the Phase III program will include some of these subgroups and individual studies. We're manufacturing to prepare for that so as when the results come out and, we hope, are successful, we are ready to drive forward and get this to Phase III and then to market as quickly as possible.

Operationally speaking here, I guess any challenges the pandemic presents to recruiting or treating patients in the trial?

So I'll take this one, Mark, because it's a clinical one. The -- I've been so proud of my Chief Medical Officer and her team. They decided they were all ready to dose in March, April, and that was at the peak in New York of the pandemic. And they decided it wasn't the right thing to do, that doctors and hospitals have things they have to focus on. And they have followed these patients and the doctors all the way through the year. And we're ready to start the trial again in October when the pandemic seemed to be coming. Now moving ahead, we need to be thoughtful and prudent and again make sure that people are focusing on what they should do. And we will work -- we've been very innovative with home monitoring and home blood samples and keeping patients out of the hospitals, but it's just a matter of watching this as we go.

Okay. All right, all right. Maybe just pivoting to the TX200 program. I guess how should we be thinking about the type of data that might be considered proof of concept in the STEADFAST study in solid organ transplant? And I know, sort of longer term, the goal would be to use -- develop an allogeneic CAR-Treg product for a broader scope of indications potentially. But I'm wondering sort of whether there might be certain avenues for autologous CAR-T product -- Treg products beyond just solid organ transplant.

Mark?

Yes. So we're very excited about the -- moving into the clinic with our CAR-Treg cell therapy. Sandy mentioned we're taking this into the HLA-A2 mismatched renal transplantation. So can you -- as you can imagine, the way that this works is it's similar to engineered cell therapy approach as the patients that will undergo leukapheresis will get their Tregs and they'll be isolated and engineered in cryopreserve. The HLA-A2 negative patient will then undergo transplantation surgery and, following a recovery period, will receive their personalized TX200 candidate back. So in terms of what we'll be looking for, right, is really whether we reduce the -- prevent -- or we prevent the rejection of both the graft-versus-host disease but also take a look at whether or not, at some point, we can obviate the needs for immunosuppressive therapies. And that will be quite important because as you know, without heavy doses of immunosuppressive therapies, many of these patients would just have their graft rejected and therefore would fail the transplant. So we're quite optimistic that by sending a localized antigen to the renal stone and activating it, we'll be able to basically subdue that inflammatory response and we'll see a higher rate of graft survival and a longer-term benefit for the patients.

We started, Eric, with autologous because there's 2 questions, really. If you go into allogeneic, you're trying to answer 2 questions at once. Does the Treg work? And does the allogenicity work? And therefore, we thought, at least for this first one where you have time with a planned transplant, autologous is the right thing to do. Going ahead, allogeneic has got the advantage for patients that would need more rapid treatment. If you have a flare of IB -- of inflammatory bowel disease, you would need that treatment urgently. It will be off-the-shelf, but there's also something about the price point as you move into inflammatory disease. Autologous, just by the operations of it, is an expensive thing to do and may not be suitable for things like rheumatoid arthritis, multiple sclerosis and, therefore, preparing for allogeneic. And as I said, we're doing 2 forms of that. We can -- using zinc fingers, we can edit down from healthy donor to an allogeneic form, but we also have a really important program looking at iPSC-derived Tregs, where -- and we did a deal with Mogrify last year but we -- it was also with internal work. We think we can find a way to make iPSCs into Tregs, which if you then add a CAR, it makes them an easily off-the-shelf, bankable resource.

Okay. So it sounds like not as -- potentially not as challenging problem with allogeneic-izing Treg or getting a CAR-Treg product than we've come to learn with the cytotoxic CAR-T approaches.

It's -- so allogeneic-izing, if that's a verb, is harder than everyone says. And if you ask every company, we all have a different view of what that should look like. And if it's successful, it has enormous potential. And iPSCs get around the question of what you knock out by making it, from the get-go, allogeneic T cell.

Okay. All right. I guess how -- certainly, 2020 was marked by a fair amount of deal activity. I guess how should we be thinking about that cadence going forward. And does that change at all with Sung no longer in the CFO seat going forward?

So Sung, are you going to -- are we going to change what we do because you're going?

They won't miss a beat here. And yes, I appreciate the question, Eric. I think this year, in Sandy's presentation, he spoke a lot about clinical execution and clinical milestones and programs. And that's really the focus in 2021. It's executing on our programs. But as we've always been, we'll be very opportunistic about collaborations or partnerships where they make sense. And certainly, we are often approached by companies that are fascinated by our technology. So the door will remain open, but rest assured, we are very interested in taking programs forward on our own as well. And you see that with Fabry and you see that with TX200. So we're very much looking forward to taking those programs forward on our own.

And Eric, just to close off your tease, the strategy of Sangamo was put together last year by Sung and Mark together, and we are completely aligned on the way forward both in how we partner and what we take forward ourselves. We realize that we have an abundance of riches and can continue to partner, but the way to make us the company that we have the potential to be, we need to drive forward programs ourselves.

Your balance sheet, how should investors be thinking about it in terms of runway? It's -- some programs are proprietary, totally internal. Many are partnered. What -- yes, I guess how should we be thinking about what the cash balance allows you to do in terms of bringing proprietary programs to significant inflection points?

Sung?

Yes. So Eric, as Sandy mentioned, we had $695 million in cash as of the end of September last year. So we're very well capitalized to execute on our wholly owned programs, but we also have obligations with our collaborators. So we're well funded to be able to deliver on those collaborations. So let's focus on the Fabry program. So we'll take this all the way through, through the current phase. And if the data cards turn out positive, we'll be in a position to be able to initiate Phase III. As Sandy mentioned in his presentation, we're going to initiate TX200. That's our CAR-Treg program. So we're able to do that. And really, the balance sheet sets us up nicely to be able to get through many of these R&D milestones. And then I think there's a significant -- potential significant event not too far away perhaps and that's the Phase III hem A program that Pfizer is conducting. And they've guided previously that they could potentially get to pivotal data next year in 2022, which would be very significant for us. So I think we're set up nicely in terms of cash runway, cash position, and we look forward to executing.

All right. Well, great guys. I think we'll leave it there for time. But thanks to you all for joining us for this session. And thanks everybody for tuning in to the webcast.

Thank you very much, Eric.

All right.

Thank you.