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

All right. Let's get started. Good afternoon. My name is Rich Law, I'm a Senior Biotech Analyst at CS. For the next session, I'd like to welcome Sangamo to join -- and this will be a presentation followed by a fireside chat. And we're joined by Mark McClung, COO of the company. So thank you for coming. A pleasure to be hosting you. So I'll turn it over to you for the presentation.

All right. Thanks, Rich, and thanks for those of you that are joining us today. So let me get right into it. I apologize, we were a little late in getting over here. These are our forward-looking statements. So Sangamo Therapeutics, we think, is a very interesting company. We're founded and really our vision is to become a genomics medicine company. Many of you know that core to Sangamo is our zinc finger editing capability that the company has been working on for many years. And with that, we've had a number of the first. And I think that really gives us the desire to continue to make sure that we're taking that platform and focusing on those areas that can have the most impact. So although we have what we call our first-generation medicines that are in the clinic right now, the hemophilia A program, which I'll touch, on as well as our Fabry program, what excites us is really the pioneering of the genomic medicines of the future, and that's by leveraging that engineering platform that we have in order to apply that both to our CAR-Tregs as well as our gene regulation. And again, I'll touch a little bit more on that in terms of the progress that we've made. So the value thesis is here. I'm not going to go through all of this. But in addition to what I just touched on, we also have an expansive R&D discovery engine. Some of that is supporting our wholly owned programs, as I'll touch on in a moment. Some of that is actually supporting partnership programs, which is one of the things we're particularly proud of because it applies our technology and brings in nondilutive financing for the company. We've had 5 of those deals that have been done, which have brought in over $815 million in upfront cash to us and has allowed us to continue to invest in areas like our GMP manufacturing facility. So in our Brisbane facility, we have the ability to do capsids, AAV manufacturing, as well as cell therapy for our CAR-Tregs. And our Valbonne facility in France, we're in the midst of going through the authorities approval, but we've got manufacturing in our Valbonne facility for cell therapies as well, which -- and companies that are in the CAR-T reg space, many of them don't have that capability. And we believe that having the technology folks and our pharm dev, tech dev people side by side, it allows us to produce a more robust process. So here is our pipeline. You see our wholly owned programs, which I'll touch on and provide a summary. We also have the partner programs as well, and these are really critical for us. And again, in the case of hemophilia, is kind of our near-term catalyst that we're moving forward. So Fabry disease. We're now -- we believe that we're in the lead in terms of advancing therapies for Fabry disease. This is a data set that was presented in -- with a data cutoff at July '21 at the European Society of Cell and Gene Therapy. In terms of the kind of summary of the information we presented there is that we provided the elevated alpha-Gal A activity which was sustained through the last sampling point for 9 subjects across all of the -- sorry, 4 dose cohorts. All 4 subjects, patients 1 through 4, in the long-term follow-up, have maintained elevated alpha-Gal A levels for a period of more than 1 year. And 4 subjects underwent enzyme replacement withdrawal and continue to demonstrate elevated alpha-Gal A level up to 28 weeks post that withdrawal, which is really important. Since the time of the European Society of Cell and Gene Therapy, the fifth and final patient was withdrawn from enzyme replacement therapy in the dose escalation phase. And we've also progressed into our expansion phase with the first 5 patients being dosed in that protocol, 2 of which are female. So this is the first time that women have been given gene therapy. Both those patients are doing well. So we've got a total of up to 30 patients that can be enrolled in that, and we're providing an update on more of the program in the first half of 2023. Safety and tolerability, obviously, the Phase I/II study is really about the safety and tolerability. And as you can see here, all the patients continue to be generally well tolerated. I think it's really important that unlike some other gene therapy programs, no patients to date have been -- had to be treated with steroids, either prophylactically or reactively. We've seen no treatment-related adverse events. And any of those events that have been reported, as you see here, were either grade 1 mild or with one exception, Pyrexia, it was a grade 2. So a really nice profile that's emerging with the Fabry program. Our sickle cell program, this is a program that was returned to us by our partner Sanofi. We were notified in December of last year. The team has done an incredible job transitioning to back that program and complete a lot of those activities basically sort of middle of July last year. As of September 22 cutoff, there's no adverse events assessed through 91 weeks of follow-up. The one serious adverse effect of sickle cell anemia with crisis that was reported about 9 months after treatment has resolved. No other sickle cell-related events were reported in the 4 patients post infusion. And then since the ASH, we had a second VOC reported in the same patient that had achieved the lowest levels of chemo -- sorry, fetal hemoglobin, but the patient is doing fine now. And we've announced that we've actually dosed the sixth patient. And what's important about the fifth, sixth and the remaining patients in the cohort is these are patients that have a new manufacturing process which, through studies, have shown to increase the long-term progenitor cells. And so we're hoping that, that will improve the profile of the drug in the clinic. So stay tuned as we continue to gather that data. At ASH, there will be an update this year. But that update will only be the first 4 patients, possibly a bit of data from the fifth patient, depending on when the cutoff date is for that. Hemophilia A, I'm just going to touch on briefly, but Pfizer has resumed the Phase III study that was put on hold. The -- they're really just basically screening the patients again and they anticipate dosing all of those patients and are guiding to early 2024 top line data from that particular study. So again, great partnership with Pfizer, great progress. I'll remind people that there was a lead-in study that identified the patient population. Over 50% of the patients were enrolled. And obviously, they continue to gather long-term follow-up data. And that's why we believe they'll be updosing patients very soon because they've got line of sight, it's just a matter of rescreening the patients that they have. In terms of the second-generation programs. We've got our CAR-Treg therapy as well as the gene engineering platform. From a time standpoint, I won't go through this in a lot of detail, but I did want to give program highlights. So TX200, which is our Phase I/II study evaluating the TX200 candidate in renal transplantation. We provided an update that the second patient was successfully dosed in September 2022. We've added 2 control patients that have been enrolled in the -- and are transplanted. And we'll further provide guidance shortly in terms of where we are in terms of the dosing of the third patient. As a reminder, there's 3 patients in each dose cohort. The intent is obviously to provide an update once we feel that we've got a meaningful data set. And as a reminder, I mean this is the first time we believe that the patients that have ever been dosed with engineered CAR-Treg. So we're really pleased with the team's progress here. The reason why this is important is if we prove the biologic proof of concept, we believe that our efforts going into both the autologous, but also the allogeneic platform, could lead these programs to be really meaningful in a variety of different autoimmune diseases, which you see sort of depicted. So although our focus right now is on advancing our preclinical candidates for multiple sclerosis and inflammatory bowel disease, obviously, as well as our renal transplant proof-of-concept, beyond that, we can go into a variety of different diseases. And so again, we'll provide updates as we make progress. But again, excited to be leading this important new therapeutic field. And then finally, I touched on this briefly, but we continue to make great progress with our partners. We brought in about $815 million in upfront cash from Pfizer, Kite, Biogen, Pfizer Takeda and Novartis that have obviously potential milestones associated with those. All of those partners will provide preclinical updates as well as clinical updates as they advance the medicines. And then from a cash standpoint, we reported recently at our quarterly earnings a couple of things. One is that the revenues were about $26.5 million. Our non-GAAP operating expenses were about $73.5 million. And we have -- and we're guiding, I should say, in terms of our OpEx guidance, which is narrow and lower than we guided before, which should be in the 280 to 290 range. And so again, we're excited about the progress we're making. It's an important year for Sangamo. And I will stop there and open it up if there's any questions.

All right. Fantastic. We have about 15 minutes for Q&A. So why don't we get started? So Sangamo, as you mentioned before, it has a rich history of Gene Editing to zinc fingers, including in vivo gene editing cells. As we see more and more gene editing companies progress into the clinic with other genetic technics like CRISPR, CAF, HDR base editing, now prime editing, how will you compare Sangamo's editing capability now compared to these companies in both ex-vivo and in-vivo editing?

Yes. Sure. So we get that question a lot. So as I sort of alluded to, Sangamo has been in its existence advancing the zinc finger platform for over 20 years. So we've got a very rich library. And what's nice about Sangamo, sometimes we sort of use the analogy of a Swiss Army knife, which is we can do nucleases, we can do repressors, we can do activators. We can do base editors. And so as companies are looking for gene editing, when they look at Sangamo, they can say, listen, if I go after a target, I can bring any of those potential modalities to that, which is why Pfizer and Novartis most recently engaged with us, as well as the CRISPR companies. Another advantage in addition to the versatility which I just described is actually the zinc fingers are dramatically smaller than what you'd see with CRISPR. And so they're also easier to package into capsids. And so again, this field, particularly even the CNS gene regulation which I described, the issue is not editing, the issue is finding a capsid that you can deliver to the right target. So we provided an update this year on our own proprietary capsids, STAAR 1 and STAAR 2, which looks like they can exquisitely target certain parts of the brain. It's those types of things that are going to be really important. While it's very difficult to package a CRISPR in those capsids, where the zinc fingers do fit in them quite nicely. And so again, we'll look forward to providing more data on that.

Okay. Great. A couple of questions on your hemophilia asset, 525. So what is some of the key learning from BioMarin regulatory challenges? What can you apply those into 525?

Yes. So I mean people may have seen that actually today there was another announcement in endpoints regarding another 3-month delay. I mean, I think with gene therapy, the agency probably is just being cautious in terms of making sure that the data set helps them write the appropriate label, being the first gene therapy. One of the things that we're particularly proud of is our partnership with Pfizer and advancing that. People are aware that one of the things that Pfizer did when they saw these spikes in Factor VIII level was to put a voluntary hold on the trial. And the reason they did that is so that they could revise the protocol and put in the right kind of procedures to be utilized by the various sites globally to manage any potential safety issues that could come from spikes in Factor VIII level. That's something that we know exists in the BioMarin data. Pfizer will have a protocol in place that will allow the agency to help write a label on that. But we're -- in terms of the annualized bleeding rate as being the end point, we're confident that we understand that. And based on the data, they'll provide an update and see whether there's any meaningful difference in things like predictability and durability of response with our asset versus the BioMarin.

I see. Okay. So based on what you see there, is there any additional -- are you proactively doing any additional work to kind of sort of guess what the FDA is looking for and then sort of be prepared for that?

So Rich, I mean, all of the regulatory interactions are between Pfizer and the agency. And so you'd have to direct those to the Pfizer team.

Yes. Is there any learning that you can apply to other gene therapy program beyond hemophilia? Like Fabry disease?

So I think one of the things that we're particularly pleased of is with our AAV2/6, both in the hemophilia A trial but in our own data that we've provided the update on this notion around do you need to kind of use prophylactic steroids or are you going to see it. At this point, through both of those, it hasn't looked like we've needed to do that. And so I do think that different factors behave differently from a safety standpoint potentially, but also potentially an efficacy standpoint. And so right now, with those 2 programs, we're pretty comfortable. The other area, obviously, that's been helpful between the 2 programs is the tech transfer to Phase III. And we're using the same CDMO as we used with our hemophilia A program. And were midst of that. So builds confidence that we know how to do the tech transfer to be able to produce the Phase III lots and the commercial lots for Fabry disease as we continue to push forward with that program.

Okay. Why don't we move into SCD. So this is turning into a very, very crowded [indiscernible] cell therapy market. Where do you think Sangamo can show differentiation? And how would you compete commercially given that you're going to be behind CRISPR and Bluebird and others?

Yes. So again, I touched on the fact that we've done an adjustment to the manufacturing process which should translate into an improvement in long-term progenitors. Our commitment right now is to finish the Phase I/II PRECIZN study and take a look at what that profile looks like relative to the competition. And that will be an important component of the decision as to whether we take this forward ourselves, whether we look for a partner or otherwise. It is true that CRISPR, Vertis and Bluebird are further ahead. There are about 30,000 severe patients with sickle cell disease, of which there's estimates of around probably 15 to 20 which would be the target population. The whole ability to serve that population is going to be built on your ability to manufacture. So manufacturing capacity, by definition, could extend the amount of time it's going to take to treat all of those patients. So again, in a world where projects look the same from a safety and efficacy standpoint or ideally if one of them looks as though it's going to be differentiated, there could still be a market there. And so we'll assess that at the time, but it's an important disease. I'm very pleased that so many players have advanced programs for this important disease area.

Okay. Got it. So you guys have an abstract at ASH on the updated Phase I/II data for sickle cell. What kind of data should we expect there?

So it's going to be purely incremental. So you saw on the slide there, there'll be more data on those first 4 patients. The fifth patient that was dosed within this window, there will just be some minor data, but that will be provided as an update. The sixth patient, which we announced recently that's been dosed, that patient will not make the cutoff with any meaningful data.

I see. And you mentioned about this -- the improved manufacturing process. I think the latest patient have been dosed with the material from this manufacturing process. What impact do you anticipate to have based on this new manufacturing?

So you have to stay tuned for the data. So again, we don't want to read too much off on one patient data, but that will be included in the ASH presentation.

Okay. Got it. And what are the plans for sickle cell beyond the Phase I/II? How do you kind of see it going to...

We haven't made a decision on that yet. I mean, again, our commitment is to finish the Phase I/II study that Sanofi started, and then we'll make a decision of further investments based on that data relative to the competitive updates we hear from CRISPR, Vertis and Bluebird.

And will you look again for another partner at that point?

We're not ruling anything out at this stage.

Okay. I see. Okay. Why don't we turn now to Fabry disease? So regarding your Phase I/II data that you presented at ESGCT, what other takeaway do you think investors should have beyond the alpha-Gal A data?

Yes. So Obviously, the alpha-Gal A data is important. I think that the fact that we have now got 5 patients which have had their enzyme replacement therapy removed, in some cases over a year, and that they're still in that super physiological level and seeing a stable alpha-Gal A is exciting. So one would hope that, that translates into some improvements in the clinical manifestations of the disease. Obviously, the kidney involvement, the cardiovascular involvement is related to Gb3 deposition in those target tissues. What we have seen from the very small data set that we have right now, which is encouraging, is in patient 1, who was on enzyme replacement therapy, has left ventricular involvement in their disease and was unable to go to work. When they added in the gene therapy, there was an improvement and they stabilized and they're able to go back to work. That patient is one of the patients now has been withdrawn. And so one of the things we're going to be watching closely, including in this expansion cohort, is the effects that we have on some of the cardiovascular manifestations of the disease as well as obviously the eGFR from a kidney standpoint. We have had patients in that study that have also said that they can begin to sweat again, which they haven't, which again is a sign of Gb3 in the skin tissue. So again, very early days, but these are the clinical manifestations of the disease that we're hoping the gene therapy will be able to mitigate for these patients.

I see. Got it. So we have a couple of more minutes left for the session, if the audience have any questions, please raise your hand and we'll come to you. So why don't we keep going? So you recently announced that -- you just mentioned about that you have 2 females for that dose expansion study. What profiles of these Fabry patients are you recruiting for this expansion?

So we're not commenting on individual patients and where they land. But basically, there'll be alpha-Gal A neutralizing positive and negative antibodies. There is a cardiovascular cohort as well as an eGFR cohort. And I'm probably missing one because the spot, but there's a total of potentially 30 patients in those cohorts. And like I said, these -- the 2 women that have been enrolled are really excited about. I often I have to remind people that they don't realize that the Fabry market is over 50% women. And one of these things that's been problematic is because people feel it's an X-linked disease, they don't realize that there is a form that affects women. And what ends up happening is they get pushed aside saying that they don't have anything to worry about with Fabry disease and yet they develop these clinical manifestations of the disease which tend to be kidney function as well as cardiovascular issues. Of patients that succumb to the disease, almost 45% of them die of cardiac involvement. And so I think if you can treat patients earlier and importantly identify that women can benefit from therapies rather than watching and waiting for the clinical manifestations to get to a point where there's very little you can do, I'm hoping that this therapy turns into a promise for all Fabry patients. So we're really excited about it.

Fantastic. And when should we expect data for that?

We will provide -- we're going to provide updates over the course of the year. The -- we've guided that we anticipate having the biopsy data from the 2 patients in the fourth, so the high-dose cohort, both naive patients. We should have that early in 2023. So that we think it will be important just to kind of see the reduction in the substrate in the kidneys. But our commitment is, as we continue to move forward with the expansion cohort and the remainder of the study that we'll provide important clinical updates on a timely basis.

Sure. And what are the plans for the Phase III?

The Phase III plans are being set. So we did a type C meeting with the agency was incredibly helpful. The team is putting together the protocol options, which we've reviewed. We will continue -- although it's not gated any of the data that we're developing through the expansion cohort will help inform any fine-tuning to that and we'll engage with the agency in the future. At this stage, we're doing everything to be ready to move forward into Phase III if the data continues to show this could be a promising therapy for patients.

Okay, got it. So we have 2 more minutes left. I just want to check to see if any question from the audience. Okay, two more questions for me. Why do you think Sangamo is a great stock to invest in?

So I think Sangamo is underappreciated. So right now, most of our stock is focused on the hemophilia A program and the Fabry program. What I want people to think about is the promise that we have in the 2 areas which really could revolutionize genomic medicine, which is our leadership in the CAR-Tregs, where we currently have no platform value at all, as well as our gene regulation. So we've seen 2 partners, actually 3, including Pfizer, confirmed their interest in our capabilities in terms of editing. We're now seeing the new capsids which will mean that those -- that editing can get to the target tissues of choice. None of that is factored into our valuation at this point right now, although we generated $415 million just from Pfizer and Novartis on that platform. So I think that we need to continue to demonstrate that we can move those towards INDs and get those into the clinic, but I'm very pleased with the team's efforts and progress on that regard and I believe that's something people should pay attention to.

I see. Got it. And what do you think are the most impactful events for the rest of 2022 and then moving on to 2023?

So 2022 is going to be mostly incremental, for the remainder of the year. I've touched on this, I do think there's a lot of interest in seeing the biopsy data with Fabry. I think people will want to hear that, obviously, Pfizer has completed enrollment in Phase III and provide guidance on when they're going to have the top line data readout. The other thing that I think is going to be important is when we feel we have enough data around our engineered CAR-Tregs in the TX200 program in order to present and provide a meaningful update and where we're at with that.

Yes. Fantastic. Any final remarks?

No, I mean, listen, thank you for the opportunity to present. I appreciate those of you that chose to join the session today. I really appreciate it.

All right, Mark, thank you so much.

All right, Rich. Thank you.