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

Hello, everyone, and thank you for joining the H.C. Wainwright 2022 Global Investment Hybrid Conference. My name is Jason Shieh, and I'm an Associate Analyst with H.C. Wainwright. While we are hybrid this year, we're confident we are going to be able to provide value to you with more than 550 companies presenting at this conference in multiple sector tracks devoted to life science, cryptocurrency, blockchain and fintech, technology, media and telecommunications, cleantech and growth. H.C. Wainwright is a full-service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. We have a total of 24 publishing senior analysts and more than 648 companies covered across all sectors. Please visit hcwco.com for more information. The in-person venue for the event is in the Fontainebleau Hotel in Miami. Virtual participations will be staged simultaneously with over 550 companies' presentations scheduled as live feed and available on demand. Please join us for one-on-one meetings, corporate presentations and panels that will be available live and streaming on May 24 to May 26. With that said, have a productive and enjoyable day, and I'd like to introduce our first presenter. It is my pleasure to welcome Mark McClung, who is Executive VP and Chief Operating Officer of Sangamo Therapeutics, which specializes in developing cell and gene therapies to address diseases including Fabry, sickle cell disease and others. So to start off, thank you, Mark, for joining us today.

And can you just start off to give us kind of an overview of really the origins of the zinc finger transcription factor? And is it a naturally occurring protein in humans? Or is it developed in other organisms? And how should we be thinking about immunogenicity for Sangamo's platform?

Sure, happy to. So first of all, Jason, thank you for the HCW team for inviting Sangamo to be with you today. We really appreciate it. So to answer your questions, zinc fingers, we believe, confer advantages for genomic therapies and further bring our hope that we can bring transformative genomic medicines to patients. They are human derived. Zinc fingers are naturally occurring in the human body, which is important because they have a lower potential for immunogenicity. They're versatile. We have the opportunity to put on interchangeable domain attachments such as nucleases, repressors, activators, recombinases and integrases. Zinc fingers are precise. They can be designed to precisely to the sequence targeted. We can target zinc fingers anywhere in the nuclear or the myoclondrial genome because they're not limited to any target motif. They also have advantages in terms of size and delivery. Zinc fingers are small, which helps facilitate delivery since they're easily packaged into AAV vectors. And finally, they're flexible. The zinc finger transcription factors are highly tunable, meaning it can be designed to precisely modulate the expression of targeted genes. And they give us the flexibility in terms of how we develop them then for therapeutic use. So it is a proprietary differentiated engineering platform, which we feel is a great advantage for us.

All right. Great. Thank you for the detailed overview. And I think that really just highlighting the advantages of Sangamo. Can you tell us how robust Sangamo's IP? And will it be possible for other companies to develop similar or identical zinc finger protein platforms?

Yes. So as you're probably aware, we've got over 25 years of history with Sangamo's research and development, and we've built a deep and broad body of knowledge and of expertise that we don't think can be easily replicated by any latecomer to the field. The advantage is particularly true regarding the zinc fingers. We filed our ZFP-related patents, in some cases, 20 years ago. And we've continued to grow our expertise and knowledge about the design optimization of the zinc fingers for specific clinical and research applications. And so we are very active, and we make sure that we strategically protect our valuable intellectual property. And so we feel that we're well positioned in that regard.

All right. That's really helpful to know. And I guess next to really talk about is, can you discuss a little bit more about the current Sangamo's manufacturing capabilities? And how should we view the new in-house cell therapy manufacturing facilities in Brisbane in California, HQ in France?

Sure. So in-house manufacturing capability, we think, provides a competitive advantage. As you pointed out, we completed both our AAV as well as our cell therapy manufacturing capabilities. The AAV and 1 cell therapy is in our Brisbane facility here in San Francisco and then we have a cell therapy, which is undergoing actually final regulatory approvals in our facility in Valbonne, France. The strategy is really to provide a greater flexibility, quality and control by building a balanced and necessary capacity achieved through our in-house manufacturing and also the partnerships with our CDMOs. We're investing in manufacturing process and analytics and developing a strong supply chain. And we think that, in general, having our pharmaceutical development folks and our manufacturing folks together at these facilities really allows for a close collaboration. And as you know, in many cases, the process is the product and particularly in cell therapies.

All right. Great. That's helpful to know. And I guess the next part we really wanted to look into is more regulatory. Can you tell us a little bit more about how the FDA's recent ADCOM has impacted space, if at all?

Yes. So I think most folks looked at that September regulatory review as being uneventful, actually. It was very underwhelming. There was not really many clear guidance that came out of it. I noticed actually on Sunday, one of the consulting groups provided a 10-page response to the agency, making some recommendations on looking at impurities. So we haven't had a chance to look at that yet. But I do think it's an important conversation to have to ensure that we're all ensuring that the safe and effective use of things like AAVs. And at this stage, based on our preclinical experience with our AAVs as well as our clinical experience now, in particular with AAV6, in both the hemophilia A program in our wholly-owned Fabry program, we're seeing thus far it being quite tolerable and beginning to show signs of having the effects that we would want to see in these patients. And so we remain confident that thus far, we've got a safe AAV that is confirming what it's supposed to do and deliver.

All right. Great. That's helpful to know. And I guess since we've already laid the groundworks for really the background Sangamo, let's dive into some of the more specific programs that are -- that Sangamo provides. So I guess to first to start off with the Fabry disease. Can you provide some background on the ST-920 program, including the construct of the gene therapy? And what really makes it potentially differentiated from other gene therapy approaches?

Yes. So basically, the Fabry program is an AAV6 construct. We're delighted with the progress that we've made to date on that particular program. We have now dosed 9 patients across the 4 dose cohorts and happy to provide more of an update on that. Ultimately, we believe that the Fabry program is going to deliver, hopefully, a profile that will see patients alpha-GalA levels come back up into the normal range and stay consistent and elevated over time. And that we will begin to see a predictable and durable expression of that alpha-GalA enzyme, which is, as you know, is deficient in Fabry disease and creates a lot of accumulation of substrates like Gb3 and lyso-Gb3 that can cause challenging symptoms and morbidities, including impaired renal cardiac function, pain and GI symptoms. And so as we continue to advance that particular program, we will be effectively looking to see whether that profile holds and that we have positive impacts on the disease for patients, which would obviate the need for patients to continue to taking enzyme replacement therapies.

Okay. Yes. Kind of just building off of what you just mentioned in terms of the enzyme replacement therapy. So most of the standard treatment for Fabry's right now is really focused on that and also in terms of substrate reduction therapies. But what is it that really makes 920 a more favorable treatment over these other ones?

Well, I think it depends on the profile, as I mentioned. I mean, we're really looking for a predictable durable expression, which would be achieved by having literally one injection of the product. If you take a look at the Fabry disease landscape right now, only about 45% of the patients that have been diagnosed with Fabry disease are getting treatment. And that's generally because the prescribers aren't initiating treatment until they start seeing some of those downstream sequela I talked about, such as impaired renal or cardiac function. And in some cases, you see stabilization of that. But as you know, if you take a look at a product like Fabrazyme, as an example, patients are having to get that every couple of weeks. And depending on the patient's weight, it takes anywhere from 3- to 7-plus hours to get that treatment. And because of the natural up and down of the control of the alpha-GalA, the question is whether or not if you had a predictable and durable expression of alpha-GalA, whether or not you could improve the downstream risks related to the renal and cardiac function and pain and that kind of thing. And if that holds in a durable and predictable manner, we think it's a really attractive profile for these patients. About half the patients that succumb to the disease actually die of cardiovascular complications. And so one of the things we're including in our program is taking a very close look at cardiac function as part of that.

All right. Great. That's very helpful to know. And I guess, to kind of just dive into more specifically Sangamo, I think you kind of touched a little bit on it, in terms of really ST-920 being evaluated in the Phase I/II trial called STAAR. Can you tell us a little bit more about like the design of the program and also some of the characteristics of the -- baseline characteristics of these patients being enrolled in the study?

Yes. So as I mentioned, the Phase I/II STAAR study is actually now completely enrolled. So we enrolled 4 dose cohorts, a total of 9 patients. The study was focused on classic males. The age is ranged from, I believe, it's 22 years old to, I think the oldest patient was 51. It was a combination of patients who are either on ERT, pseudo-naive to ERT, which means that they had been on ERT but had not been on enzyme replacement therapy for at least 6 months. And then also patients that were naive, so they've never had enzyme replacement therapy. There's a variety of different mutations in the patients and those baseline characteristics if people are interested or available in our corporate presentation, if they want to get a closer look.

All right. Great. That's really helpful. And I guess, like part of like the study for the STAAR study is to really be focusing on the GalA and also lyso-Gb3. So let's kind of just dive into a little bit more about the GalA. So should we be focused on reduction of GalA or really the maintenance of normal GalA activity in the STAAR study?

So what we're seeing in the study right now is that for patients that are on enzyme replacement therapy, we're seeing a fairly high expression, in some cases, 13- to 14-fold increases in a very stable alpha-GalA level. And so one of the things that we've done recently has provided an update that Patient #4 in the second cohort as well as Patient #1 in the first cohort have recently been withdrawn of their enzyme replacement therapy. And so what we'll be doing later this year is providing an update on what happens there. What we think will happen is that there will be still super physiological expression above the normal range of alpha-GalA, and we'll know more when we see the data. If you take a look at the patients that are on pseudo-naive, each of those patients have roughly a 3- to 4-fold increase in their alpha-GalA levels. And at this point, all of the patients continue to have a fairly consistent stabilization of that range. So we're not seeing a dramatic increase. We had one patient where we followed the lyso-Gb3. They had an elevated lyso-Gb3 at their baseline, and we saw that decrease by about 40%. The other patients had relatively low lyso-Gb3, and we really haven't seen much change there. But what we're planning to do, obviously, is continue to follow the substrate levels in the plasma. And in particular, now that we've dosed patients 8 and 9 in that high dose cohort, which are both naive patients, we've done baseline biopsies on them. And we intend to do biopsies in about 6 months and report out what's happening in the biopsies in the kidney.

Okay. Great. That's helpful. And I guess, like, as I think one of the things you were mentioning in terms of the patient 3 with the lyso-Gb3 levels, can you discuss whether there is a correlation that has been found with patients with increased lyso-Gb3 in disease severity or any other factors?

So we believe there is. I mean one of the things that in a couple of patients, I believe, was that AVROBIO had presented, they saw that they saw a fairly modest effects on increasing the alpha-GalA levels, but they did see a reduction of substrate in the, believe us, the 2 patients related to the kidney biopsy. So there seems to be this correlation between getting alpha-GalA back into the super physiological ranges above normal and the ability to reduce substrate in the tissues. One of the things that we've seen, albeit early days, right, that we've reported on is some preliminary signs and symptoms. And what we've seen is that in some of the patients, they've had the ability to resume sweating. And so we think that that's a good marker of the fact that it's probably having an impact on the substrate. Additionally, we had one patient that had left ventricular hypertrophy that showed some improvements and allowed them to go back to work. And so that's why, as I mentioned earlier, we'll continue to be focused on following the cardiac function as well as the eGFR function and also other patient-reported outcomes, including things like peripheral neuropathy and those types of things.

All right. Great. Yes. So I guess just a last question before we move on to the other programs. Can you discuss your level of confidence and aligned with the FDA on a potential accelerated approval pathway for ST-920 and the time -- and kind of the timing of when the clarity will be reached?

Yes. So what we have mentioned at our recent quarterly review is that we actually have engaged with the agency in a Type C meeting. So we have got some feedback that the team is integrating into our revised protocol. And we haven't commented specifically, but one of the things I believe the agency continues to be remained open to is where you have positive effect relative to the competitive products on important areas of the disease or clinical manifestations of the disease. And so that insight, we found to be very encouraging and at the appropriate time, we'll share that. Our focus right now is really to move into the expansion cohort, where we intend to dose women, patients that have cardiovascular involvement, patients that have got eGFR involvement and use those patients to help inform the final design of the study.

All right. Great. That's really helpful to know. I guess -- so kind of move on to the next big program that we're all really excited about is the TX200 program. So can you just kind of provide us like kind of the background, the framework for the TX200, including like kind of why Sangamo decided to acquire this program?

Yes. So to start with the acquisition, we acquired a company called TXL back in 2018. That is now Sangamo France. Their lead compound was the TX200 CAR-T program for HLA-A2 mismatched renal transplantation. And as we announced, we are very pleased that we believe we're the first company to dose a patient with an engineered CAR-Treg. The original rationale for that particular program is that HLA-A2 mismatch renal transplantation is a perfect biological kind of experiment to do to understand the CAR-Treg. And so very quickly, I mean what ends up happening is the patient is HLA-A2 negative. Their donor kidney, which is a living donor kidney, is HLA-A2 positive. And so you would expect an increase in rejection an immune response when the patients successfully achieve their kidney. And so one of the things that happens, as you're probably aware, is these patients would undergo immunosuppression and be followed for a period of time. And what we've done is in advance of them getting their kidney transplant, we effectively engineer their personalized CAR-Tregs and basically target their HLA -- their CAR-Tregs to the HLA-A2 positive kidney. So it's the only place the HLA-A2 positive antigen is present. We would expect to see that there would be a localization of their personalized CAR-Tregs at that site, an expansion of their Tregs and then, over time, hopefully, and inducing a tolerance in the immune response. We can then work with the physicians and the patients to begin to withdraw them at the appropriate time from their immunosuppression. And the hope is we'd see similar kind of things that was published in The Lancet with polyclonal T cells where you see that the engineered T cells are localized. They're doing their normal job of managing the immune response to that transplant and that, over time, the patients will no longer require immunosuppression, which would be a real benefit for patients. The feeling is that, that would help validate the biology, and we'll utilize that learning as we continue to advance our programs preclinically against the multiple sclerosis with the target and the IL-23R program for inflammatory bowel disease. So we're super excited to be a pioneer in this space and really look forward to sharing some of the updates as we progress through the -- this landmark study.

All right. Great. That's really helpful. And we're definitely excited to see that. And so I guess, just with some of the limited time that we have left for today, let's just kind of move on briefly into looking at the sickle cell disease program. So can you provide also some background on the Phase I PRECIZN-1 trial for the SAR445136? And what are some of the preliminary POC data that's been presented so far?

Yes. So given the time, I'll do this fairly quickly. So we did present some data back at ASH, where we showed the tolerability and sustained effects as of -- I think it was the June 25 cutoff date. All 4 patients experienced increases in their total hemoglobin, fetal hemoglobin and percent F cells. And again, if you look at the corporate presentation, there were really no adverse effects related to the investigational compound. One of the things that you would have seen in that presentation is that all 4 of those patients had a total of about 40 VOCs. And then after dosing, only -- there was only 1 VOC in 1 patient. What we've updated at our current quarterly result is that we've actually dosed patient 5, and we dosed them actually with an improved product candidate, which was manufactured and has shown experimentally to increase the number of long-term progenitor cells in the final product. And so patient #5 was dosed with that new manufacturing process. We anticipate dosing an additional 2 to 3 patients by the third quarter. And we'll evaluate that proof-of-concept data, obviously, relative to the emerging competitive landscape, in particular, CRISPR, Vertex and Bluebird, and make a decision on how we take that particular program forward. We believe that there's about 100,000 patients just in the U.S. with sickle cell disease, of which 20,000 to 30,000 of them are severe. And if there's an opportunity to take the program forward and service the needs of those patients that we feel we need to find a way to do that. And so one of the things to keep in mind is that the ability to service that population is going to be based on the ability to manufacture their personalized cell therapy. So it's going to be a fairly slow uptake to get product to those patients. And so again, we're doing all the evaluation on that now.

All right. Great. Thank you so much, Mark. And I want to thank all the presenters for taking part in what has been a very productive and informative series of presentations. We appreciate the time and effort that went into preparing though. We're very grateful for your flexibility and your presence at our conference this year. Thank you again from the H.C. Wainwright team. Thank you.

Thanks, Jason.