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

Good morning, everyone. My name is Gena Wang. I'm Senior Biotech Analyst at Barclays. Welcome to our Second Virtual Global Healthcare Conference. First, I wish everyone stay healthy and I would like to thank all the participants, investors, companies and especially our event team and corporate access team who made this virtual healthcare conference possible. With that, I'd like to introduce our next presenting company Sangamo. With us we have Sandy Macrae, Chief Executive Officer; and also we have Mark McClung, our Chief Business Officer. With that, I hand over to you, Sandy.

Thank you, Gena. So can I share my screen and I'll put it on full screen. So it's a pleasure to speak to and give you a short summary of Sangamo. So as always, I would direct you to our forward-looking statements. Sangamo is a fascinating company and we believe that genomic medicines will change the fate of therapeutics and will change the lives of patients. And how we're going to do that is through joining our novel science with clinical stage expertise and in-house manufacturing. And we believe these 3 pieces are necessary to become a fully integrated genomic medicine company. And this is what our pipeline looks like. And I'm going to ask you to look at this spread from right to left. On the far right, we have our hemophilia A program with Pfizer, which is recruiting even in the time of COVID. And that's the joy of working with a company like Pfizer, who has a global reach and can move our medicine through into the clinic. And for a company like Sangamo, it is so exciting to have a Phase III asset. In Phase I/II, we have our wholly owned Fabry disease program, where we've said that we've dosed 3 patients and have line of sight to future ones, and we'll show the results of that at the end of this year. In partnerships with our friends at Sanofi, we have both sickle cell disease and beta-thalassemia. And they too have said that they will show the results of the sickle cell trial at the end of this year. And then behind that, we have an array of programs that reflect the potential of zinc fingers to interact with many diseases. Some of these are with partners. Some of these are with us. And I would guide you particularly to 2, the first being our first ever Treg study in solid organ transplant TX200, which will look at HLA-A2 mismatched renal transplant, and we hope to start that study this year. And KITE-037, which is our CAR-T and oncology partnered with our friends at KITE, and they've said that they will submit the IND and start the study this year. So really, it's an exciting year for Sangamo Phase III study, 2 Phase II readouts and 2 Phase II starting. But 2020 was a very successful year for us. And in the time of pandemic, our labs remained open, our staff working at home worked harder than ever. And we achieved some very great things. We launched collaborations with Biogen and Novartis for neurodegenerative diseases and for autism spectrum disorders, which brought in hundreds of millions of dollars of value to Sangamo, but more importantly, brought real expertise to these diseases. And we're delighted with the progress we've already made with both Biogen and Novartis. As I said, Pfizer last year initiated our Phase III trial. Sangamo initiated our trial in Fabry. We've advanced in-house AAV manufacturing. So we are now GMP ready in Brisbane, California. And we built a very strong cash position. As of December 31, we had $692 million in the bank. And that's so important because it allows us to drive through the catalyst and make good decisions on our clinical programs. 2021 will continue those events, and we're excited by the number of things that we'll be able to talk to you about as the year progresses. We'll be able to show you the initial Phase I/II data for Fabry disease on the first 6 patients in 3 cohorts. We'll tell you that we've initiated the solid organ transplant TX200. We should have cell therapy manufacturing in both Brisbane, California and Valbonne, France to match our AAV manufacturing. It will be an important year for our partners. Pfizer will show 2-year data for the Phase I/II study in hemophilia A. KITE will submit the IND and initiate the first study for CD19 using our technology. And Sanofi will tell you the results of the Phase I/II study for sickle cell disease at the end of this year. So let's take a moment and go through some of these clinical programs in more detail. Fabry disease through ST-920 has the opportunity to be a once and done treatment. For an important disease, no preconditioning regime and should provide continuous lifelong expression of endogenously expressed alpha-Gal. And that's important because when we bring patients in to talk to us about this, what they want addressed is, of course, is renal function, of course, it's cardiac morbidity, of course, it's decreasing neuropathy. But it's all the symptoms of pain, heat and tolerance that really plague these patients' lives. And we think expressing the alpha-Gal gene in the liver should allow to circulate through the bloodstream and be taken up in tissues, including the heart and the kidney and relieve the patient of the problems caused by Gb3 not being metabolized within each of the organs. And then in hemophilia A, our acid giroctocogene fitelparvovec, which is transitioned to Pfizer. Pfizer will drive forward with the Phase III study. They're recruiting well. It all looks on target. Pfizer is excited about this. The primary endpoint of the study is annual bleeding rate through 12 months, and we are delighted with the progress our friends at Pfizer made with the study. I want to change track a little to talk about our CAR-Treg programs. CAR-Tregs are fascinating. These are the cells that are targeted to areas of inflammation. We add a CAR into the Tregs. So that we can guide where it goes. It is then activated. You don't need to know the causative antigen, you just need to know a localizing antigen. Our first program is in solid organ kidney transplant. 20% of kidney transplants have a mismatch in HLA-A2. So we take patients that are HLA-A2 negative. We apherese them. We modify their Treg so as they have a CAR for HLA-A2. And when they get their HLA-A2 positive kidney. We then apherese back these cells. And hopefully, the Tregs will now be targeted only to the kidney, where they will be activated and will relieve the inflammation and the potential rejection. We are really excited by this study. There's some poly and there's some initial work on polyclonal Tregs that give us very great encouragement in the 1 study. But we think that having it targeted specifically to the kidney is really important. But I want you to think of this as the start of the journey, the next stage being allogeneic CAR-Treg therapy. And we're going to look at that for solid organ transplant again for multiple sclerosis and for inflammatory bowel disease. And for this, we use our zinc finger capability to edit the cells down to an allogeneic form. And we're also working on looking at IPSCs, where we can create Tregs from IPSCs. Being able to do this allows us to move to a much larger patient population. It simplifies the patient journey. It reduces the cost. It reduces the complications. And that allows us to go into diseases on the far right, that could include multiple sclerosis, hepatitis, Crohn's disease, rheumatoid arthritis. It really is exciting. If the Tregs fulfill their promise and their ability to control and modulate inflammation, this is an enormously exciting area for Sangamo. And then I want to touch on our neuroscience platform. And we have the joy of having to do many things that we can apply to address neurological disease, whether it's [ panel like gene's ] repression, such as we do with Biogen for tau and synuclein, whether it's gene activation for autism spectrum disorder with Novartis. If it's alio-specific where we can turn off the mutant and leave the wild-type active for Takeda for Huntington’s, for Pfizer for ALS. If it's epigenetic editing, which is something really exciting and new, whether it's inflammation such as for multiple sclerosis or the ability to edit mitochondrial disease. Really, the potential for zinc fingers to address some of the diseases in the CNS, I think, so untrackable and difficult to treat. And it leads to us having a portfolio of neurological diseases that are gradually moving forward and heading to the clinic, and we'll be excited to tell you about these in years to come. So let me think -- take you through the key points in Sangamo's story. And first remind you that we have our manufacturing strategy. It's a blended manufacturing strategy between working with Thermo Fisher for large-scale commercial manufacturing, but also in our facility in Brisbane, having the capability to do gene therapy already completed at the end of 2020; and cell therapy, both here in California and in France by the end of the year. We think this is so important because it lets us control manufacturing, but it also ensures our scientists and our manufacturing teamwork side by side. So finally, let me give you the key takeaways I'd like you to take home. It has been a successful 2020. It will be an exciting 2021. We have a broad portfolio with prioritized candidates, and we can choose because we have options. We have a technology that's been validated by 6 pharma/biopharma companies, and they've all chosen Sangamo. We have a strong balance sheet with $692 million in assets at the end of the year that allows us to take the company to the future. We have in-house manufacturing that allows us to control the processes. And we are a genomic medicine company that's now executing on a clinical stage. Thank you. Gena, I'll hand it back to you.

Okay. Thank you, Sandy. So I think we can exit the sharing mode.

I will do. There we go.

We -- thank you. I think that's a very comprehensive overview. And maybe I'll start with your wholly owned asset, Fabry disease, I think on gene therapy in Fabry disease, that will be very important data catalysts later this year. So first, Fabry is a disease. There's a lots of heterogeneity. What enrollment criteria you have in place to try to make sure you enroll relatively consistent patient population?

So I can take that one, Sandy. So we've described our Phase I study that we're enrolling or opening the study up to all comers. So those that are on enzyme replacement therapy, patients that are naive or patients that are pseudo-naive, which means that they've been on ERT in the past and are no longer on ERT. Obviously, we don't know what we're going to get as we continue to enroll our patients. But we are planning. Once we define the dose to extend that into an expansion cohort to help us better understand how the gene therapy behaves in a variety of different patients, so we can adequately design the Phase III study.

Okay. That's very helpful. And I think that's sensible. So we get actually broader information if we enroll a large variety of patient population. So regarding the year-end data update, if we're using like 4 to 6 weeks waiting period for each patient. And so we should have 5, 6 months follow-up for the first 6 patients, if I calculate, rough math. So we -- do you expect to see meaningful improvement in biomarker by giving the follow-up time?

So we're obviously dosed the first 2 patients in cohort 1 in August and September of last year. And as we guided, we just dosed the third patient in the second cohort in February. So you can understand, as we continue to enroll the total 6 patients in that study, roughly, the time frame that we'll have. We will be providing an update on the safety and tolerability as well as the pharmacodynamics of alpha-Gal A and the presence of substrates in the plasma over time. And so that will be an important update for us. And then as I mentioned, by that time, we're hoping that we'll be able to define the dose that we would take into the cohort expansion to explore further data in those patients to inform the Phase III.

Okay. So what will be your goal when you look at those pharmacokinetic data, that mainly is the biomarker data. What will be your goal to identify? Like, the number you're looking for to identify the optimal dose?

I mean, really, the goal is -- we haven't described the specifics, but the goal is, as you're probably aware, is to make sure that you're seeing the alpha-Gal A levels in the normal range. And then once we've got an understanding of that, we see the reduction in the Gb3 and lyso-Gb3. Intent would be to define the dose. And then the plan would be to do renal biopsies at the appropriate time to understand the impact on the kidney specifically.

Okay. So yes, you mentioned kidney defects, things like the kidney biopsy data could serve as a surrogate endpoint for pivotal study. Will you be more focusing on patients with kidney defects?

Okay. The guidance from the agency regarding accelerated approval is in addition to seeing alpha-Gal A in the normal range. They want to see peritubular renal capillary biopsies which demonstrate that the Gb3, lyso-Gb3, deposition is improving. We've not set a target for that publicly, but that is obviously an important factor for the agency, as well as other impacts on things like neuropathy, renal function and left ventricular mass. So all of those things you can imagine are going to be things that we're going to monitor as we continue to look at the expansion cohort and design our Phase III program.

Okay. What is the scheduled timing for the kidney biopsy?

We haven't disclosed that at this stage. Again, we're going to finish the 3 cohorts of 2 patients and then inform the expansion cohort. And you can imagine that, that data would start to be collected after we started the expansion cohorts with the defined dose.

Okay. But for the initial cohort, are you also collecting kidney biopsy data?

We are not.

And if so -- you are not? So only the expansion cohort?

Right.

I see. Okay. And then if you will collect, like any thoughts on the timing, after gene therapy, after how many months? Would that be 1-year time point you will be collecting the kidney biopsy?

We've not disclosed that. I mean, the kidney biopsies, as you know, are quite invasive for the patients. So we want to make sure that we're seeing the appropriate effects on the alpha-Gal A and then the substrate levels so that we can -- and then the physicians work with their patients to get biopsies at the appropriate time.

Okay. That's fair. Any learning from alpha data so far?

And alpha bios data?

Yes.

Well, it just seems that the -- that alpha-Gal A expression is -- you don't need much in order to have an impact on the substrate levels. And so one of the things that we're quite interested in is seeing how our data evolves, both in terms of what -- where you need to get to in terms of the normal range. And more importantly, the impact it is having on the substrate. So time will tell, and we're really excited about the study and reporting that data out at the end of the year.

Okay. And do you think -- did they setting a high bar? I think that we did show the lyso-Gb3 in the -- from the kidney biopsy, showed over 80% reduction. Any thoughts there? And would that be some goal you wanted to achieve also of your program?

I think it's too early to tell. I mean, at the end of the day, it's really understanding how that relates to the impaired renal/cardiac function, pain and GI symptoms, which really plague these patients. And so whether higher is better or whether you just need to be over a certain threshold, I think we'll have to evaluate the data over time.

Okay. That's fair. Beyond the biomarker data, what additional like clinical data you think will be important to help you understand the dosing or the -- on the -- design the pivotal study?

Well, yes, I mean, I think what one question is how predictable is the control of the -- or is the expression, I should say, of the alpha-Gal A and the impact on the downstream sequelae. Durability, obviously, is really important as well, right? And which is in this particular case, ST-920 is a liver-directed gene therapy, expected to be a onetime IV infusion that doesn't require any pre-conditioning treatment for patients. And so I think what people will want to see is that durability over time. And we'll have to continue to follow the patients, not only in the Phase I/II STAAR study, but also in our expansion cohorts. And obviously excited about doing the Phase III to see whether this predictability and durability and impact on the downstream sequelae differentiates our therapy versus other alternatives in the marketplace.

Okay. And maybe switching gear to CAR-Treg. That's another important asset, your wholly-owned asset. So your current approach was targeting HLA-A2 mismatch. So maybe just give a little bit high level, why do you choose this target as a first approach? And what could be the other organ transplant you can apply using this approach?

So this was the target that the company TxCell that we acquired in 2018 have been working on. And they like the target for a few reasons. One, biopsy is renal transplant as part of the routine of following up. And so we would be able to see that the Tregs go to the kidney are activated in the kidney and survive there. 20% of renal transplants have a mismatch between HLA-A2, so the patients are HLA-A2-negative. They get a transplant from a live donor of a kidney that is not mismatched to HLA-A2 -- sorry, that has a mismatch at HLA-A2. And that means that when the kidney, HLA-A2-positive kidneys in the recipient, it's the only place that, that antigen is expressed. And therefore, the CAR-Tregs have only one place to go because they are the localizing CAR on them that takes them to the HLA-A2. They're activated there. And if there are any other mismatches, they also should be ameliorated, abrogated, by the release of immunomodulators from the CAR-Treg. So it's a localizing antigen that takes it to the kidney. It isn't the causative antigen that's important. And we expect and hope that there will be benefit across the whole of the kidney transplant from this HLA-A2 guidance system.

So beyond kidney transplant with HLA-A2 mismatch, what other...

So you could go to other transplants that are mismatched for this antigen, for example, liver, if there are patients with that. Kidney transplants are much more common. The patients are much healthier. And therefore, it's -- we feel it's a better model system for us to go to.

I see. Okay. If we use in liver transplant, what is the percentage that could be also HLA-A2 mismatch?

I don't know that figure.

Okay. That's fair. And then beyond HLA-A2 mismatch, what other strategy or organ specific target that you could use?

So beyond that, we move out to transplant and into areas where there are localizing antigens. An example is in multiple sclerosis where there is an antigen called MOG that's expressed in the myelin sheath. So that would allow you to take the CAR-Treg specifically to the myelin sheath, whatever the cause of the multiple sclerosis is. We've also -- we have a second backup program to that for another CNS antigen. Then within the gut, we have IL-23, which will take you to the [indiscernible] of the intestine, and that we feel will allow us to get the CAR-Tregs to go to the site of inflammation in inflammatory bowel disease. But you can start to -- and there's only so many programs we will push forward initially. But you could start to think of collagen in the joint or liver-specific antigens for hepatitis. And so if this works, it has an enormous potential for autoimmune disease.

Right. Any safety check for Treg over-acting?

That's a great question because safety and the welfare of the patients is most important thing to us. We haven't seen anything in animal models. We make sure that we purify Tregs that do not -- and give back Tregs and not effector cells. But this is a new area, and we will have to go carefully and start at low doses and watch for the safety of the patient because that, in the end, is what we all care about.

Okay. So my last question is regarding the partnership. I know we did see quite a lot of a successful partnership in the past. Any thoughts on the future collaboration that will be strategic based on what the capability of technology you think will be better to form a partnership to move forward?

So Sangamo is a company creating its own proprietary pipeline and its own products to take to commercialization. And while we're doing that, we will -- we consistently get approached by other companies who are interested in our technology. And we can only take so much forward ourselves. And therefore, we're delighted when others are interested, when they come and look at our platform, and they vote to take Sangamo rather than the alternatives, and they drive it forward. Because they bring money that supports our proprietary programs, but they also bring in expertise in Alzheimer's and autism that allows these medicines to move forward into patients as quickly as possible.

Okay. Well, thank you. Thank you, Sandy. Thank you, Mark. And I wish, hopefully, we have a very productive 2021. And let's keep our fingers crossed and looking forward to the great data later this year.

We look forward to talking to you throughout the year, Gena. Thank you.

Thanks, Gena.

Okay. Bye-bye.