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

Good morning, everyone. Welcome to Barclays Global Healthcare Conference. My name is Gena Wang. I'm a SMid Cap Biotech Analyst. It is my great pleasure to introduce our next presenting company, Sangamo Therapeutics. With us today, we have Sandy Macrae, Chief Executive Officer.

Thank you, Gina. It's such a pleasure to be back out in the world and to be here with Gina in Miami and to talk to you about Sangamo. As always, we refer you to our forward-looking statements. Sangamo is a fascinating company. We believe we have been a pioneer in the genomic medicines. We believe that we have compelling clinical data, scientific tool kit and the manufacturing infrastructure that is essential to underpin any genomic medicine company. And we've been on a remarkable journey from the company the first pioneer at editing of cells, editing in vitro, editing in vivo to the first-generation Sangamo, where I'm going to show you data from gene therapy in some of the early cellular therapy. The vision we have will be predicated on the success of our CAR-Tregs and our zinc finger technology applied to CNS and important diseases. Now the investor thesis is important because you have choices and we want to convince you that your choice to be Sangamo. And so the thesis that we have constructed is that we have first-generation medicines now with compelling data, that we have a vision for the second genomic medicines that use unique technology that's not available to anyone else. Because that third scientific underpinning is important. I have scientists who have dedicated their whole life to the understanding and application of zinc fingers and they continue to advance and refine the technology. And the validation of that technology to us comes from 5 blue-chip pharma partnerships, where, in each case, they have comment on a deep diligence of the company, look to the technology. And again and again, chosen Sangamo. We've raised over $815 million in upfront just from these partnerships. As I said, manufacturing is important. We now have GMP manufacturing for AAV and for cell therapy in Brisbane and for cell therapy in Valbonne, France. And finally, you need the money. And in the current environment, having a stable financial foundation is important and I'm going to show you those numbers at the end because we feel we're in a very good place. And all that comes together to give us a pipeline. And this is a new way to show our pipeline, and we do this to tease apart the Sangamo wholly-owned pipeline on the left and the partner program on the right. We are proud of both of them. The partner one brings us not just the cash that I talked about, but also brings us biology, clinical expertise and hopefully commercial expertise for areas that we cannot be expert in now. But on the left, our pipeline, I really want you to pay attention to this because it's not just the ones genomic clinic, but it's a range of CAR-Treg programs in MS and inflammatory bowel disease. And we now have 4, I believe, CNS assets that are wholly owned, that are advancing towards IND. And we've chosen these specifically in the CNS, so they can use existing technology and existing ways of delivery. But let's now talk about the current assets because I know those are very important. And I'm delighted that we now have compelling clinical data from 3 clinical assets in such diverse fields. And I'm going to talk you through just snapshots of the data from each one, and then I'm sure Gena will ask some questions later. And I want to start with Fabry because Fabry is the one that everyone is delighted with. It's clearly is the leader in the field at the moment. So it's gene therapy for Fabry producing alpha-Gal from the liver. And this was the first data that we showed, which shows 4 patients. We're now up to 6 patients, and we have a whole slew of pipeline of patients to come. And it shows that for each one of these patients, it's above the normal levels and normal levels was assessed by looking at volunteer levels and then comparing them to what we saw here. So that's great. It's safe. All the patients are well even at the third cohort dose. It's long-lasting. Some of these patients are out to a year. And because I noticed in a debate within gene therapy about longevity, there is no question that this is stable way beyond a year. And finally, the patients are starting to show a benefit, and that's a bit, I think, is remarkable. The patients are reporting. They've started sweating, which allows them to exercise, allows them to go out in the warm weather of Miami. The patients or their doctors are saying that their MRIs of their heart are showing stability and their symptoms are getting better. This is a very important mention we are driving forward with the hope of moving into Phase III. Already in Phase III is our hemophilia A asset with Pfizer, and they've shown a sustained benefit way beyond 2 years. They put themselves on clinical hold because they saw excess efficacy. And I've worked with Pfizer and the Pfizer team have done great efforts to then clear the regulatory hurdles and they are anticipating starting the study again soon. And finally, sickle, which is zinc finger editing of the BCL11A control element within the genome. And the bit that pleases me immensely is if you look at the bottom graph, each of these red bars is not just a data point. It's a sickling event. It's a painful crisis that the patient went to a hospital for. And then you compare it to the ones after. This is a medicine that can make an enormous difference for a dreadful disease for underserved population. Sanofi have come up with a new formulation, a new way to formulate the cells because, in cell therapy, the process is the product. And we'll be dosing the next 4 patients by the middle Q3 of this year and look forward to showing the data at the end of this year and into the beginning of next. And what will we show you this year is a series of clinical updates from Fabry as we continue to dose patients and going to expansion cohorts, from hemophilia A as we complete the Phase III study, from sickle as we use a new process. But the one that I think is going to be important that you should pay attention to is that we will dose the first CAR-Treg patient very soon. And this will be the start of a generation of treatments that will hopefully change how autoimmune diseases is approached. And finally, the numbers. We -- at the end of Q4, we had $465 million we've raised money through our partnerships and our partnerships will continue to provide us with milestones and eventually royalties, it's 14% to 20% royalties on hemophilia A once it's launched. We have a very clear financial plan. We have a very clear strategic plan and we're in a good healthy place. It's an exciting time for genomic medicine. I'm delighted to answer Gena's questions.

Thank you, Sandy. So maybe I will start with your Fabry program. This is the one you wholly own and show very encouraging initial data. So maybe at a high level, what is your thoughts on competitive landscape?

Fabry is an interesting place because there were 3 other companies, 4D, there was AVROBIO and there was Freeline. And what all of them have shown is the drug development is difficult and you can't always predict what the future is. AVROBIO, unfortunately, has pulled out, but some of the data they showed, I think, is encouraging for all of us. They showed the alpha-Gal, small levels of alpha-Gal leads to clearance of the Gb3 for the kidney. And I think that's a very hopeful sign for all of us. The other 2 gene therapies have each had their safety events that they are having to navigate now. New capsids, you have to understand the safety profile. We're lucky that with AAV6, we've been treating in hemophilia A and some of the MPS programs, which is a number of patients and we're very comfortable with the safety profile. I wish them all well. The field could do with more than one successful treatment and we look forward to showing data from our medicine in the coming months.

So actually, you mentioned coming months, presenting that, can you give a little bit more color, like next update? When should we expect to see the next update?

We will show data at the appropriate conferences throughout the year. Incremental data is just months and months of patient benefit that we're acquiring. We're also acquiring data from patients that will come off their ERT. The medical community is really excited about this data. Recruitment of patients has been so much easier since we showed the data. The doctor's comfort in taking the patient off the ERT is so much greater. So we hope for the course of the year to accumulate a lot more data to show you.

Okay. So when you see medical conference, can you like give us some sense, what kind of medical conference should we be expecting?

We won't commit yet, but we hope to shortly turn the year.

Okay. Good. Very good. And also for the -- based on the data you have so far, Cohort 1 and Cohort 2, any thoughts on, say, big patient selection in terms of baseline characteristics in order for the moving forward to the next step?

It's really hard to do that with so few patients. We are treating naive, sickle naive that have been on ERT for 6 months and ERT patients. And so we already have heterogeneity in the patient population. And once we've gone through the dose-escalation cohorts, we've now treated 6 patients in 3 cohorts. And the SMC will lead to, we would then decide whether we should treat a fourth cohort. When we get to that point, we will expand the cohort and have more focus groups who have a treatment group for women, for example. We'll look at those with heart disease. And that will allow sufficient numbers to answer some of your questions about which patients benefit the most? And how should we decide which patients to treat.

So how important is the biopsy data for you to make a decision for the next step?

Biopsy data once was very important because there was an accelerated approval pathway that depended on lyso-Gb3 clearance in the kidney. That changed as a regulatory environment has changed and it isn't the fast track to early approval that it was. However, you need to show not just by a chemical benefit, you need to show benefit to the patient. And then you can confirm that with tissue biopsy. But the most important thing is, is the patient feeling better, it's heart disease stabilized, is the renal function stabilized? And those are things that I think will allow us to decide on a more holistic set of measurements for Phase III. We will do biopsies. And what we've said is from Cohort 3 onwards, we will do renal biopsies on any patient that is naive or sickle naive because biopsying a patient that's already on ERT, I think would give a confusing result. And we look forward to sharing them, but I want to set some kind of expectation. Once you biopsy the patient, you rebiopsy after 6 months on treatment, and then it takes some 2 to 3 months for that biopsy to be processed and analyzed. So biopsy results are unlikely until Q1, Q2 of next year.

Okay. Very helpful. So regarding the regulatory costs, you're kind of thinking like what then start like the endpoint, like if it's biopsy, it would be less risky to receive approval. And I remember the updated Fabry, if the guidance actually put that in the written format that, that could be fair, and, of course, you have to do in vitro study, but that would be there.

We've had very good discussions with the agency, and I'm often asked how helpful the agency is being. And I have to say the document we got back from them recently was remarkable. It was thoughtful. It was -- it understood the subject and it helps us to design the Phase III study. We're not going to share that because I think there's a competitive element in what the design of Phase III is. But it's clear that they're focused on things that are important to the patient.

So based on what we learned on so far, is it fair to say what the listing the guidance like you need active comparator and that will still be in place?

Let's wait and see but it's things that are important to the patient is what we want to demonstrate. But this is -- this disease has got the advantage of clear biomarkers and tissue biopsy being seen as very definitive of a link between tissue biopsy and long-term benefit to the organ [produce the kidney or the heart ].

Okay. Very helpful. Another a little bit technical question is, alpha-Gal A, we know that over 30% of normal range will be sufficient to prevent a disease. So is there any way -- I know it's a little bit tricky, but is it feasible to checking intracellular level to see if a super physiological level will lead to the clinical benefit?

In our mouse study, we found that the higher levels we went to, the more clearance there was in the tissues of the mouse. In humans, AVROBIO showed levels much lower than what we've shown led to complete clearance of the kidney. The levels we've showed and the fold increase is compared to the meaning of normal patients. So it's -- we're already way above what you and I have circulating. But what you and I have circulating is very different from a patient with Fabry because in you and I, the alpha-Gal is produced in the cells, it metabolizes the Gb3. And then what you measure in the plasma is what leaks out from the call and is being distributed and excreted or metabolized. What we measure with our treatment is production from the liver and it's been traveling to the cells were then does it has its effect. So the 2 situations are not physiologically the same. And I think we need to be patient and wait to see what the correlation between the levels in the plasma in these patients are and the benefit to the patient.

Very helpful. And now we switch gear to the hemophilia A, your second Phase III asset. So with the -- maybe first, any update I know it is in your partner visor's hand, but any updated -- any updates regarding the clinical hold?

We always leave these to Pfizer to talk about. And I've been very impressed how they've hustled to put together the necessary regulatory document and they passionately have to get the study started. Two things to remember about that study. One is 50% have been dosed already. And those patients are still accumulating data on a daily basis. And the second thing is that the other 50%, Pfizer had wish ready to recruit. And so when they restart the study, one hopes that they'll be able to start it, but I would guide you to speak to Pfizer about that.

Okay. Very helpful. And maybe I will try to ask a hemophilia related questions. So like based on the data that we've seen so far from last ASH, right, we saw the 2-year data. Do you feel comfortable that you can have some endpoint of 1-year endpoint instead of 2 years? And what we saw from BioMarin if they change their mind, ask them to show the 2-year data? So any thoughts on that potential risk that you may have to expand your Phase III trial?

I think that's for Pfizer to talk about. And I know that you've been talking it to the regulatory authorities to witness.

Okay. Okay. Helpful. The sickle cell program, now you're in the process of transitioning back to you from Sanofi, maybe updated status is the transition?

Well, the transition is going very well. I mean I was speaking to Sanofi last night about it and our teams talk on a regular basis. The team at Sanofi are if I may say this a hippocampus, they were passionate about this, too. So they're doing everything possible to make sure it gets into our hands and patients get treated as quickly as possible. We plan to treat 3 or 4 patients coming up with the new process. And this is something that Sanofi developed over the past year. The editing is -- the editing works very well. And in cell therapy, it's all about how you look up to the cells. It's about the media you use, it's how you expand them and we are learning on a daily basis about this. Sanofi feel they have a new process that will increase the number of long-term progenitors, which will increase the number of edited cells in patients. So we look forward to dosing the first patients because until we can see the new clinical data, we can't definitively correlate it with what they've done in the process.

So can you give a little bit of time line when we could see this -- the data from the new patients?

So we hope to dose them by Q3. And then we will give you the data as soon as we have it. We're excited about this, and there's a great feeling within Sangamo, this is a genome editing. It's a zinc finger program. It's one of our own and we really feel passionately that this is a medicine that needs to be developed.

Sandy, can you give us a little bit more like a quantitative description, what kind of new improvement in new process? Like how much improvement in terms of the editing efficiency?

It's not the editing efficiency that it's a type of cell that you have at the end of the process. There's an increased number of long-term progenitors, and we'll describe that in time.

Okay, so if you increase that, the cells that in which some of the edited cells, like the process, the new enriched...

Yes, let me be very careful so that I don't cause confusion here. Of the edited cells, a greater proportion of them are long-term progenitor cells is what we're trying to do.

Okay. So by in which that, if I bid for the final product, editing efficiency could be higher because you removed the say...

Not quite. It's the percentage of -- the proportion of cells that are edited of the long-term progenitor type. It's not affecting the editing efficiency. We're not doing anything...

No, no. Just the final say, like if you have 1,000 cells, like 90, just making up like 200 is the progenitor, like the long-term progenitor cells. Now if you enrich the denominator, you cut from 1,000 to, say, 600, then the actual percentage of the cells in the final product additive that will be higher. Is that the right way you're thinking?

Not quite. But it's a longer discussion.

Okay. So we'll save that to another time. Yes. Okay. So then what kind of bar or clinical profile will make you decide you want to keep this asset in-house?

We need to see that patients are getting benefit. As I don't drive treated patients with sickle crisis as an orphan disease. And the idea is that these patients are now walking free of their disease, free of the sickling crisis is the first stage on that journey. Because then the second part is the kind of micro events as the patients have the microvascular events that lead to long-term damage to their heart and their kidneys and lead to mortality. These patients are younger than they should. And so for the first stage, I think the bit that is essential, the synuclein known for these medicines is can you prevent sickling crisis? And the data I showed is very encouraging. And we need to see that it's as compelling in the next 4 patients.

Okay. I think the reason I'm asking is also this is -- seems pretty also competitive space. We see so many companies all have -- either had later stage or early stage development for this particular indication. So just wondering what kind of profile do you think will be competitive the worst keep in-house?

Well, it's a fascinating space, and it's remarkable that a disease that was ignored for so long as so many companies looking at it. And the reason for that is there is a direct correlation between a gene and the patient benefit. And there aren't many of these that are so well described and can be done ex vivo. So ahead of us are CRISPR, Vertis with great data. bluebird seems to be in a difficult place and it's unclear whether that will be the -- that medicine -- what will happen with that medicine. To have only one medicine for a disease where there's 100,000 patients of which maybe 20,000 are currently appropriate for genome editing. For an autologous process, one company is not nearly enough, and it will take a long time to treat all these patients. All the other genome editing companies is there's now, I think, 27, 29 CRISPR companies describe sickle as something they're going to do. They're a long way back. And as the patient has to make a choice between a medicine that's got shown demonstrated efficacy and one that could be, might be patients tend to choose those with evidence. And so I don't look in the competitive landscape as other than those are ahead of us. Those are behind us and I've still to prove that it works.

Okay. So last 1, 2 minutes, I wanted to ask you a renal transplant program. There's also a very interesting new approach and we will, maybe start to see some data soon. So maybe layout a little bit of time line regarding where you are now and then at what point we will start to see the data?

So we've an old one patient. We've guided that we're trying 2 patients by the middle of the year. The process, because we're being as very prudent about this, because it's a first-ever demonstration of the importance of CAR-Tregs. Polyclonal Tregs work or seem to work in the one study in vivo transplant. And so we -- if release a patient, they have their transplant 3 months after the transplant, we give them back the CAR-Treg cells. These are HLA-A2 mismatched transplants. The only place the entity existence is in the kidney. And our belief is that the CAR-Tregs with an HLA-A2 CAR will go to the kidney, be activated and provide immunosuppression locally focused within the kidney.

So then 2 patients by mid-2022. And then if you lay out the timing you need, do you think it's realistic 2023 sometime for the second half?

We will be very eager to show data as soon as it comes. Because even the first patient or 2 are dosed is important, that it's safe is important. And one of the reasons we chose to the kidney transplant is that they biopsy the transplanted kidney on a regular basis, which allows us to get data. It's unclear, which is a 3 cohort study. It could work in the first cohort, the second cohort, the third quarter. Because once they get there and are activated, the cells expand. And so the actual number that you put in, it's unclear what the right number is, but we are so excited about this and look forward to sharing data.

Great. Well, thank you very much, Sandy.

My pleasure.

Thank you, everyone.