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

[Audio Gap] of the Bank of America Healthcare Conference. My name is Greg Harrison. I'm one of the biotech analysts here at BofA. I also have Mary Kate Davis from the team here with me. And it's my pleasure today to introduce Mark McClung, Executive Vice President and CEO of Sangamo Therapeutics. Mark, would you like to give some opening remarks. And then after that, we can jump into the Q&A?

Yes, absolutely. So first of all, Greg, Mary Kate, thanks for having us, and thank you for your interest in Sangamo Therapeutics. So these are forward-looking statements. And as usual, we refer you to the quarterly filing that was put in last week, just for your reference. So Sangamo Therapeutics is an exciting company. Actually, it's a genomics medicine company. It's got a long history in terms of being a pioneer in genomic medicines that hopefully will give you a sense of today. We've got multiple clinical stage programs. But what's really unique about us is the advanced scientific toolkit that we have based on our zinc finger transcription editing capabilities. And so we've been in existence now for over 20 years, and I'm going to show you in the next slide a number of first. But one of the things that we've been really clear about is also building our manufacturing capabilities, both in terms of our AAV as well as our cell therapy expertise because we think it's important to advance both of those simultaneously along with our programs. So here's a sense of what we're trying to do to build a genomics medicine company. And again, I'm not going to go into too much detail here, but Sangamo over the last 20 years was the first to edit endogenous human genes. And more recently, we announced that we are the first, we believe, to dose a patient with engineered CAR-Tregs, which is really a first. And so we're delighted to be a pioneer in this space. Part of the reason we went into this space is that the -- it leverages our zinc finger editing capability. We'll talk in a few minutes about some of the advanced differentiated genomic medicines that we have in the clinic. We've made some good progress there. But what really excites us at Sangamo is pioneering the future of genomic medicine. And the 2 areas that we're focused on, again, is taking a portfolio of CAR-Tregs, engineered CAR-Tregs forward in autoimmune disease, but also leveraging our genome regulation technology in terms of central nervous system disorders. And again, we'll probably touch a little bit on that today. These are our Q1 business achievements. So we made some amazing progress with Fabry disease. We've now dosed 9 patients in the Phase I/II STAAR study. And we're getting prepared for the Phase III expansion and -- Phase III and expansion planning. In sickle cell disease, again, we dosed -- we announced that we dosed the fifth patient with a new manufacturing process. So happy to touch on more details there. With hemophilia A, we're continuing to make good progress with our partners at Pfizer. They've announced that last week that they're anticipating restarting the study in the third quarter of this year and that they should have top line data from the Phase III study reporting out sort of middle of 2023, which is exciting. And then again, we've dosed the first patient in our steadfast CAR-Treg study in renal transplant. And then we've got a number of exciting science being presented on the 16th to 19th at ASGCT. So making some tremendous progress. So back to you, I guess.

Great. That's a great introduction. Maybe to begin with, could you walk us through how zinc finger nucleases, specifically your technology, can be a differentiated gene-editing approach?

Sure. So there's a couple of different things that we think are really important. So first of all, they're versatile. So in addition to the nucleases, we can use transcription factors to either up-regulate or down-regulate genes. We can put base editors on them. So we've got a lot of flexibility that you don't get with other therapeutic approaches. The second thing is that they're human derived. And so we believe that, that should represent things well in terms of potential toxicity. And again, the number of programs that we've got going forward are looking actually quite promising, at least in the preclinical work that we've done. The intent to take them forward -- and I think this has really been emphasized by the partnerships we've done with Biogen and Novartis recently, where they basically have done these programs because of the versatility of the program. They don't need to know that they just need a nucleus if they have that flexibility. So they can come to us and get access to sort of a suite of things where they'd have to go to a number of different CRISPR companies to get that same capability. And then the final thing, which we think is important, in particular, as we try to advance medicines in the CNS, is that the zinc fingers are small. So we believe that we can do the engineering and still get them into a single vector and deliver them to the central nervous system.

Great. And then how do you approach safety with this technology, just given concerns overall throughout the industry about safety issues with gene editing?

Yes. I mean so far in terms of our -- the preclinical data that we have, we're not seeing any major toxicity. As part of the actual creation of the zinc fingers, one of the things that we do is engineer out potential off-target things. So we can actually really get selective and get rid of a lot of the off-targets. Obviously, from a capsid standpoint, we're still learning. But if you take a look at our 2 capsids using our AAV6, both in hemophilia A as well as the Fabry program, the capsids appear to be safe thus far in patients, which encourages us that when we take our AAV9 capsids forward in CNS, we're hopeful to see the same safety. Having said that, we realize that from an ethical standpoint, we're putting therapies into patients that are going to be with the patients for the entirety of their life. And so we're doing these 15-year follow-ups with the patients. We're very meticulous about monitoring the patients with our -- with the sites that are utilizing our technologies. And we feel that one of the things that we feel strongly about is making sure that in the informed consent process, patients really understand that they're getting something that's going to be with them for their life.

Great. Maybe we'll move on to the Fabry program. Could you talk a little bit about the -- just the indication itself, the unmet need, why you chose to go after this indication and what impact you hope to make there?

Yes. So Fabry diseases, we talk to patients, is a devastating disease for them. The problem with Fabry disease is that many patients are not even diagnosed. And even those with a family history, sometimes are told that their carriers that actually are not going to get the disease. The disease can manifest itself over 15 to 20 years. And so if you take a look at the U.S. as an example, there's only about half of the patients that have been diagnosed and are having engagements with the health care than to actually get treatment. And what's interesting is that, over time, you'll see these other patients start developing kidney decline, cardiovascular issues, neuropathy. And one of the biggest causes of a patient passing from Fabry disease is cardiovascular disease. So we think that the lack of patients' ability to get access because they're not symptomatic and therefore, they don't get prescribed the enzyme replacement therapy as well as things like compliance, all contribute to this fact that the disease progresses over time. So we think that with a gene therapy that can be targeted to the liver, generate alpha-Gal A, get to the tissues, reduce the lyso-Gb3 clearance. There's a real opportunity to provide a long-term benefit for these patients over time. And then we're hopeful that we can expand out of the currently treated population into those patients that have not been diagnosed that are likely to go down a fairly slippery slope in that 15-year time frame and really cure their disease.

Now what do you think is the hurdle as far as durability given that you're targeting the liver? How long would you expect the durability to last and where do you think that needs to be for it to be successful?

Yes. So I think one of the questions that we get quite often is, if you take a look at hemophilia B, it looks like there's this durability after the treatment. There's signs in the hemophilia programs that there may be a decline over time. And so there's this question whether or not the durability and the predictability in patients is going to be in that 3-year time frame, 5-year time frame or longer. And the reality is we just don't know yet. One of the things that we've seen and its early days with our Fabry patients, again, we've dosed 9 patients. But even the patients in the low-dose cohort, which the 1 patients, I would think, over 15 months now, they're seeing fairly stable alpha-Gal A levels. And I think that's important because it's an indicator of the durability that the liver is generating it and we'll provide further updates towards the end of the year. So we think that something that is durable for patients over a period of time is important. In terms of time horizon, we've not looked into the specifics, but I would say a 3- to 5-year time frame as a minimum is something that one would want to see in the target product profile. Now one of the things that we're doing as well is in that study, we've released specific data on patients 1 and 4 recently, both that were on background enzyme replacement therapy. And both of those patients have recently been withdrawn off enzyme replacement therapy. And so again, what we're going to be looking to see is that alpha-Gal A expression. The hypothesis is it will probably come down, but it will stay in super physiological levels and stay constant. And that certainly seems to be what we're seeing with the short time frame since withdrawal. So again, we'll be providing updates on that as we accumulate the data towards the end of the year.

Great.

Great. Maybe given the current standard of care for Fabry, how are you looking to position your genetic medicine in the treatment paradigm?

Yes. So I mean, ideally, we want to convert the enzyme replacement therapy over. Fabrazyme has taken every couple of weeks depending on the patient's weight, the infusion can be anywhere from 3 to 7 to 10 hours. Again, that's usually weight related. They're having to do that every couple of weeks. And so it's a significant burden for patients to have to spend a better part of the day there. What we're hoping is that the profile of the drug not only will be more convenient that you're giving it once and you're done. But what we're really focused in is the effects that it has on the downstream sequela, both in terms of the cardiovascular endpoints, the kidney endpoints and things like neurologic pain. Early in the studies, we've suggested that there's some anecdotal examples of where patients were not able to sweat. And these were patients actually were on enzyme replacement therapy in at least one case. And what they're reporting is the ability to sweat again. So it's indicative that hopefully, we're going to see that reduction of substrate in the target tissues. And if that's the case, then we should be able to expand that out.

Definitely. And you mentioned planning was ongoing, but maybe what could a Phase III trial look like in this population?

So we haven't disclosed the design of the Phase III. What we have done is recently had a Type C meeting with the agency where we got some very good feedback. Obviously, people are aware that Fabrazyme was -- that the accelerated approval was converted. So the expectation is we likely need to do an imperative trial. But there's a real opportunity, we think, to have a trial that includes clinically meaningful end points. And that's what's being designed right now with the input from the agency. One of the key aspects that we're also looking forward to is getting into the expansion cohort. So right now, all 9 patients have been classic males. The intent is to go into the female population, obviously, as well as patients that have underlying cardiovascular complications and/or renal complications. And that will help inform the final Phase III approach we take back to the agency.

Great.

Maybe I'll switch gears and talk about the CAR-Treg program. Maybe for those who are less familiar, if you could just give just some background on the approach with the CAR-Treg? How it differs from a CAR-T and maybe doesn't have all the same concerns that you would have with the CAR-T approach?

Okay. So I'm going to start with the CAR-T cells. So obviously, the -- one of the implications that CAR-Ts are having is when you're going in with a CAR-T cell, you're going into effectively aniolate a tumor burden in the patients. And so where there's a tissue or a tumor-specific antigen, you're seeing kind of less off-target activity. So you're seeing a much better profile, for example, in leukemias and lymphomas than you're seeing in solid tumor. And part of the issue there is that it doesn't distinguish against the tissue that it's -- or the target other than it's going for that particular antigen. So if they could express it somewhere else in the body, it's going to go in and eradicate it. With Tregs, Tregs basically are a natural way of us having immune suppression in our body in response to something. What we're doing is an example with the HLA-A2 mismatch trial, which we've just dosed the first patient. And as you've got a patient who is getting a healthy donor, HLA-A2-positive kidney, but they're HLA-A2 negative. And so in about 20% to 25% of healthy donor transplants, that's what's happening. What we've done is we've engineered a CAR to the HLA-A2 positive kidney. And so effectively, the only place that CAR is expected to go is to that target tissue. And the expectation is that you'll traffic the CAR-Tregs, which we can tag and know whether they're going to that site, they will stay on that site, they will expand at that site and hopefully, the hypothesis they'll induce tolerance at that site. So you don't have the same issues with regards to the off-target aspects of it. Our preclinical program, just to compare and contrast, for multiple sclerosis, is targeting an antigen called MOG. The only place it's expressed is in the myelin sheath. So again, the hope there is that irrespective of what might be causing the autoimmune response, we can target a CAR-Treg to the site and again, see the expansion and the effect that it's going to have at the -- on the myelin sheath to hopefully stop the disease. So that's the hypothesis. We're delighted that we're a pioneer in this space, and we're really actively concentrating on how we continue to refine the programs and move them forward.

Great. Well, now that the first patient has been dosed, what do the next steps look like in terms of expanding and dosing additional patients and moving closer towards a pivotal program?

Yes. So we've dosed the first patient in the first cohort, which is a low -- we're calling a low cell cohort. The expectation is that we'll dose a second patient by the middle of the year. The way it's set up is there's 3 cohorts of 3 patients. So we'll do that dose escalation. Now one of the unique things about the kidney being a great biologic model is that for patients that undergo kidney transplants, they get scheduled biopsies usually every 2 to 3 months after their transplant. And so effectively, what we'll do is at the appropriate time is you do the biopsy, so we'll collect that data. As I mentioned, we'll also be able to take a look at blood and other things to take a look at whether our tagged CAR-Tregs with the chimeric-antigen receptor are getting to the target tissue. And once we've collected that data, we'll provide an update. What we don't know is whether the low, medium or high dose is the right dose is the first time we're looking at it. So when we announce the results, we'll probably be a sense when we've gone through the dosing cohorts, we know that we've got a safe product. The SMC has told that we can continue to move forward and that we generate some consistent evidence of what's happening within the target area there at the kidney.

Great. And how do your manufacturing facilities that you have fit into the cell therapy programs? Can you talk a little bit about the capabilities there and what you need to have to bring these therapies to a commercial?

Yes. Yes. So we've got GMP clinical manufacturing at our Brisbane, California site. We actually, through COVID, surprisingly to me, the team did an amazing job, has the site facility in Valbonne, France, up and running, and we're just going through the final regulatory approvals for that. One of the things that with cell therapy, right, is that the process is the product. And so you're consistently trying to refine the product and look to how you're going to basically do the transfer to whatever your commercial capability is going to be in the future. And we find that having our pharmaceutical development people, alongside the team that's doing the cell therapy manufacturing, is a great way to continue to refine the processes. And so we feel it's a competitive advantage to have that skill and capability and that -- we'll continue to refine the final products as we move towards commercialization and scaling for manufacturing for the commercial businesses.

Great. And so we've talked about kidney transplant. You touched on MS. Where else could this sort of technology of CAR-Tregs be applied?

Yes. So the other preclinical program that we have is an inflammatory bowel disease against the IL-23 receptor. Again, we also have backup candidates for those -- both those preclinical programs. But our focus is that we believe that has utility in autoimmune disease. So you can imagine rheumatoid arthritis in other areas, that we could develop CARS too. But the focus right now is to really advance the learning with the kidney program and advance the 2 preclinical concepts. As I mentioned or we've mentioned before, we're also investing a lot in terms of the allogeneic approach, which we think is fundamental to scaling and serving larger populations with cell therapies. So we've got a program that's looking at editing healthy donor T cells down into purified Tregs and then we're also looking at IPSCs. And -- those utilize our engineering capabilities. And so we're quite excited about the progress that we're making preclinically, and we'll provide updates on that as we can.

Now where would you see a therapy like this fitting into the treatment landscape, especially in some of these INI categories that are pretty competitive right now? What would be your target patient that you would want to give this sort of a therapy to?

Yes. So we haven't disclosed that, but there's discussions obviously internally going on about that. I think part of the issue is going to be what the regulators are going to -- what patient population the regulators are going to ask us to go into versus where we think you want to get to, right? So I think we might have to go in, and we not have the conversations yet, into more severe unmet need populations where immunosuppressants and things haven't worked for the patients and/or they've stopped working and the patient needs something. But I think the goal, if you look theoretically, would be to continue to move the therapy back. And something like multiple sclerosis is an example. If the patient is a relapsed/refractory multiple sclerosis patient, has very extensive disease, a lot of nerve damage, stopping further damage is great. But ideally, I think what you want to do is diagnose them early and stop the disease from progressing. And so these are the concepts that we're going to have to think about very carefully as we move these into the clinic and build a data package that will convince the regulatory authorities about which segment is the most appropriate for these types of therapies.

Great. Maybe we can talk about sickle cell a little bit. Maybe if we could just get your thoughts on what's going to determine the future of that program, whether you continue to invest or find a new partner or keep it in-house?

Yes. Yes. So for those of you that don't have the backdrop, so we had the program partnered with Sanofi. Sanofi announced a fairly significant strategic change by -- and in particular, the exit out of personalized cell therapies to opt for things that are more off-the-shelf and can serve larger populations. So we're in the transition now. The transition goes through to June -- the end of June, it's progressing extremely well. When we received the news December 30, what we quickly agreed is that we actually need to honor patients and make sure that we're completing the Phase I/II PRECISION trial. And so the initial 4 patients that Sanofi dosed, there was an update at ASH last year. We announced recently that we've dosed the fifth patient. What's important about that is that the fifth patient has been dosed with a new manufacturing process that's been shown to increase the number of long-term progenitor cells. Our commitment is to dose an additional 3 to 4 patients in that study and then take a look at the data set. Now from a competitive standpoint, clearly, we're watching what CRISPR, Vertex is doing. We're watching what Bluebird's doing. But one of the things that I tend to kind of remind people of is these are personalized cell therapies. So in the United States, as an example, there are about 100,000 patients that have sickle cell disease, about 20,000 to 30,000 of those patients are severe. And so what they want is a medicine that's going to reduce their VOCs. And so even in a case where there's a couple of competitors that had what looked like the similar safety and tolerability profile, the reminder is to be able to service those patients, it's all about what your manufacturing capacity is going to be. And so it's not going to be one of these huge uptake markets. And even in the severe population, it's going to be dependent on how many patients you can serve through your manufacturing capacity over the course of the year. So we'll make an assessment at that time. We're -- obviously, we're planning to get the program back from Sanofi. So the team is very busy right now. But if it's the right thing to do to take this forward for sickle cell patients and that unmet need, we'll find a way to do it. If it's not by us, we'll find the right partner to take it forward.

Yes. Yes. So do you think the data needs to be in line with CRISPR better? Is there still room if it's close, but maybe not the same?

So my personal bias is if the risk benefit looks about the same, I still think there could be a market depending on the time frame. Again, it's really how much manufacturing capacity is there. If it's differentiated, even if it emerges late and those untreated patients, I think, are going to go for the differentiated program, but it's just too early to tell. We need to dose a lot more patients.

Okay.

Yes.

And then on the hemophilia program, how should we be thinking about the time lines there, assuming the dosing restarts in the near future? What's the right way to think about that?

Yes. So I mean a lot of this should be deferred to Pfizer. But what I can say is, first of all, we're delighted with Pfizer as a partner. We think they did the right thing by putting the patient safety first and putting themselves on a voluntary hold because of the increase in the Factor VIII levels, which although they saw no directly related thrombotic events and the literature suggested that patients are at risk for that. So they've put in into place the safety protocol that they're getting cleared by the various regulatory agencies. They've guided that they anticipate starting to dose the patients in the third quarter, again. What's important to understand is that they have done a lead-in study. So they're 50% enrolled, but they've got line of sight on the other 50% of the patients that are expected to be dosed. So they anticipate that dosing to go fairly smoothly and they're guiding for late Q2, Q3 top line data. And so we're really pleased with them. Again, I think Pfizer -- part of the reason we partnered with Pfizer is they've got that global scale and commitment to patients with rare diseases. And I think we have got a good shot at, hopefully, revolutionizing hemophilia A. Yes.

Okay. And then maybe kind of a similar question to what I asked on sickle cell, which is how do you see the market landscape shaking out if there are multiple hemophilia gene therapies in the market?

Yes. So I think in general, with gene therapies that -- and particularly with something like hemophilia A, I think there's a lot of questions commercially around the durability piece and in particular, related to whatever the price point would be. So we've seen other companies suggesting that they need that sort of 3- to 5-year range. I saw some research that came out, which was publicly available. I think it was January, February, which sort of showed the number of physicians that would treat hemophilia A patients based on a 3-year, 5-year or 7-year durability. And I think that's encouraging in terms of the market. From some work that we've done, we know that actually patients generally, if they're not well controlled on Factor VIII levels and things like that, are likely to be first movers into the gene therapy space. And then there's a group that's going to watch and wait and wait for the safety data to accumulate and the durability data. And so, again, it's hard to predict how that market is going to react in terms of adoption or uptake, but we think that there's plenty of opportunity to compete there.

Okay. And then maybe just wrap up with the broader strategic question, which is -- what is the approach with respect to partnerships? You have a very deep pipeline, a lot of partnerships. How do you make those decisions, whether to partner versus develop something yourself? And what should we expect going forward?

Yes. So a couple of things. So first of all, we're determined to stand up a wholly owned genomics medicine company. But as you mentioned, that's going to be a stepwise approach as we think about what it is that we can commercialize as a portfolio of products. In terms of our partnerships and if you look, in particular, the last 2 that we did with Biogen and Novartis and you compare and contrast them. Alzheimer's disease and Parkinson's disease, which formed the initial relationship with Biogen, they're complex diseases. I mean there's complexity in terms of the types of disease, the etiology of the disease, the challenges that we were going to have, not so much to do the engineering, but to do the delivery into the right part of the brain to have an effect. There's a clinical expertise and knowledge that they brought to the table, which, for us, is something that we could never build internally to support those programs, which are very high risk programs, but exciting programs if they work. And so that's the way we tend to look at it as if we believe a partner brings capabilities, resources to the table that could accelerate the programs forward, and they've got the ability potentially to get the technologies to patients earlier then we usually try to partner with them. If you take a look at the Novartis example, our team never even thought about doing autism spectrum disorders. They're really passionate about it. They came and said, "Can your engineering do this?" We said, yes, we believe we can do that. We did this partnership. So there is a kind of an extension to our R&D that we wouldn't have contemplated without Novartis brings us the idea. So that's an example as well where it's not within our wheelhouse. We know that our engineering platform has the ability to support it, so we'll do those types of deals. We've raised $815 million in upfronts through the various partnerships we've had and the potential for $6 billion to $7 billion in long-term value. And so again, financially, if there's a right area for us to engage with a partner on, we'll do that.

Great. Well, with that, we're about out of time. But Mark, I'd like to thank you for joining us, and thank everyone out in the audience for joining us today as well.

Pleasure. Thanks, Greg. Thanks, Mary Kate.

Thank you.