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

Good afternoon, everyone. My name is Gena Wang. I'm Senior Biotech Analyst at the Barclays. Welcome to Barclays Global Healthcare Conference. It is my great pleasure to introduce our next presenting company, Sangamo Therapeutics. With us, we have Sandy Macrae, Chief Executive Officer. Sandy, why don't you give a brief intro and then we will dive into the questions?

Thank you, Gena, and thank you to everyone. It's always a pleasure to come to Miami and the Barclays conference, and to see you again, Gena. So Sangamo is a fascinating company that's executing and delivering on its promise. We have 3 late phase assets, hemophilia with Pfizer, where they've guided that they will file a BLA in the second half of next year. Fabry, where we're showing some great data that I'm sure you want to talk about, and we will hope to move into Phase III at the end of this year. And sickle cell, where we announced at our last quarterly call that we are looking for a partner for it because there's only so much a company and I'd like -- our size can do. In addition, we have our Treg portfolio, where we're the only Treg company of 15 that are in the clinic, and we've dosed 2 and about to dose the third patient in renal transplant with projects in MS and inflammatory bowel disease behind that. And then the bit that is truly the core of Sangamo is our zinc finger platform and particularly the repressors and enhancers, avoiding the double-stranded break where we have a wholly owned CNS portfolio that we're really excited to move into the clinic with INDs in '24 and '25, and hopefully making a transformational difference to patients with important disease.

That's good. So maybe I will start with Fabry disease. So you do have the world data update. And I would feel some investors perceive a little bit mixed kidney biopsy. I do know...

I would disagree with that completely, Gena.

I know. So we can discuss because I think it is -- there are only 2 patient data, one have a reduction, but the other did not. So maybe we can ask -- discuss about what -- why will be certain variability, what patient baseline characteristic contribute to this variability there.

I'm absolutely delighted to because there was such excitement around this data when we showed it at the WORLDSymposium. Excitement from other companies, from patients, from the investigators who see this is a really unique package of everything from biopsy data, to biomarkers, to physiology, to patient benefit. And I think when you put all of that together, there's very compelling data. So we decided not to biopsy patients until we got to the chosen dose for Phase III and only to biopsy patients that were naive or pseudo-naive. Pseudo-naive is 6 months or more of [ no ] ERT. The first patient is a very -- patient 9, as we call them, it's very conventional patient. Started with a very high lyso-Gb3, had a dramatic reduction in lyso-Gb3, and had a very significant reduction in Gb3 in the kidney. And just as an aside, Gb3 in the kidney we measure using the BLISS process. It's done by 3 oncologists or 2 measure it and 1 adjudicates. It's a very standard process. A lot of the other companies have used and it's using the -- histologists that everyone uses in the field. Importantly, we also measured podocyte loss in the urine in these patients. And with patient 1, there was also a dramatic reduction in podocytes in the urine. And what happens in Fabry disease is you got a podocytopathy. Podocytes are the little things. Podocytes mean feet and there are the little cells attach around the bowman's capsule and they're terminally differentiated. So when they die, they fall off, they go into the urine, and that's how you get proteinuria, and that's how you get renal failure. So the sign that we were preserving them and they weren't falling off is a real sign of preservation of renal function. Patient 8, the second patient, showed preservation of Gb3. There was no difference. It's an unusual patient. So this is a naive patient that already came in with a very low lyso-Gb3. So right from the start was something unusual about that patient. We showed somewhat of a decrease in lyso-Gb3. This is a complicated patient. It's got an unusual mutation. They've got renal disease due to hypertension, diabetes. They've got ITP and coming in with such a low lyso-Gb3, they would simply be excluded from a Phase III study because normally in patients with Fabry, you have to have a lyso-Gb3 greater than 50. That's how you diagnose it. In this early study, we took anyone that was diagnosed as Fabry. So you could be diagnosed on your DNA rather than on your biomarkers. So I would love them to have gone down as well, but we and others are not concerned by this because we know the patient population will dig into Phase III, and we're delighted by the podocyte response because I think that's a really good marker of physiology.

So I have a few questions here. First is regarding the baseline. Do you agree this patient seems very low baseline? A lot of other conditions there. When we also look across the other data points, and I can see the [ AVRO's ], they do have a 2-patient -- also baseline [indiscernible] when we look at your numbers like 3.55 and 4.03 at the baseline, and they did -- still show like 87% to 100% reduction.

I'm not talking about their baseline. You're talking baseline in kidney or baseline in of lyso-Gb3?

I think it was the...

I think you're talking about the Gb3 in the kidney.

Though the kidney...

So we're going to exclude the lyso-Gb3 in the plasma. And if you look at the -- all the data from AVROBIO or for 4DMT, patients with low lyso-Gb3, none of them show a reduction. It's patients with high lyso-Gb3 in the plasma, that they show a reduction. And AVROBIO dosed 4 patients and really only showed data from 2, I believe, in the biopsy. So there's a complicated story there with AVROBIO that we never saw all the data. 4DMT had 2 patients with a high lyso-Gb3 that dropped and the one with a low one didn't change. So I think we're all learning from this. If you go to the Fabrazyme data or any of the marketed products and if you ask the pathologists who look at Gb3 on a -- when they're asked to do so in clinical trials, all of them say that there's a range of responses. So we're not anchoring this on the incoming level of Gb3 in the kidney. We're seeing there's a range of responses. Fabrazyme patients that don't change. And there's a spectrum and there's a paper that you can look, I'm sure you've looked up, that shows a spectrum of responses. When we ask the people that treat these patients, it isn't -- they feel that what's more exciting is the range of responses that we've seen across all of those things. The patient benefit, the biopsy and the patient with the high lyso-Gb3, the podocyte response and the SF-36.

Okay. So then that may be leading to the question for Phase III and you just say like try to exclude the patient that was the long baseline. Do you think podocyte response shows very good. But what could be the approvable endpoint? I know you still have to discuss with the FDA but...

We have to discuss them. And some people knows the -- there have been -- there's been a journey that we've all come along with the agency about what's approvable. The original guidance some years ago was if you could show a reduction in Gb3 in the kidney that would get you the accelerated approval. And it was one of the reasons that everyone came to Fabry because they could see a tractable path forward. AVROBIO went to speak to them and came back with a response, allegedly that the agency said they couldn't do a cardiovascular endpoint, and they were setting a much more difficult task. AVROBIO had other problems because their cells didn't graph reliably and it was cell therapies. I feel that's quite a different one. 4DMT, when they declared their clinical hold, said that the agency had given them alignment on a cardiac endpoint. Now I don't know what alignment means because, to me, you only get agreement or not with the agency. So again, you would have to see the correspondence. We went to see the agency last year when we only had 4 patients' data and had a really good conversation with them. It's clear they're wanting to help people register for Fabry. They talked about demonstrating patient benefit and talking about finding good ways to do it. We feel that there is a path forward, and we're going to go and see the agency. I think it's in about a couple of months. And the reason for that timing is, by then, we'll have a year's worth of data at the highest dose. Now we're putting together a package and we'll see how compelling, how -- whether it needs to have that length of time or whether we just need to get going and speak to them. Peter Marks, at the same time as we presented the data at the conference at the WORLDSymposium, talked very forcibly about his passion for this and that the agency is going to try and find ways for companies like us, I think, to get registration as quickly as possible and open and his openness to biomarkers as a way forward. We're now the only company in Fabry disease. The -- if 4DMT is in a clinical hold. Freeline is reducing their force, selling off their manufacturing. AVROBIO has stopped. Amicus has stopped. Sangamo is now best-in-class person first-in-class almost by definition. And I think the agency will embrace that and help us take a way forward. What would the registration trial look like? I'll tell you once I've got agreement from the agency. It will involve biopsy. It will involve patients that are naive and are pseudo naive, and it will involve patients that are on ERT. The details of it, it would be unfair of me to tell you now until we get agreement with the agency.

That's very helpful. I think that there's another question is about whether you will need active control arm for the Phase III?

I know, that's an important question because that changes the complexity of the trial. And so we need to go and argue our case with the agency for us to understand that.

Okay. And then you scheduled a meeting with FDA after 1 year data, that will be second quarter?

We are hoping to do it next quarter, we're hoping to.

Okay. Second quarter. Right. Yes.

Yes, because our intention -- and my team are planning for success, our intention is to initiate the trial at the end of the year and dose the first patient in the first part of next year.

Okay.

Patients are waiting, Gena. And the patients love this. If you speak to the patients on our trial and we've now dosed 20, I think, is the formal number, they feel better, even the ones in ERT say they feel better. Both they tell us they feel better, and then the SF-36, I think that's the most interesting result in the trial. It goes up 19.5 points whereas 3 to 5 is a significant effect. That really is -- I mean it's what we're all here for isn't it? It's the patient feeling better.

Okay. That's very helpful. Maybe quickly on the market opportunity. Can you remind us the Fabry patient population? And also where's your AAV? If I recall correctly, AAV2/6?

We're AAV6 -- AAV2/6, and that's how you name it.

Yes. Yes. Yes, and like, what is the existing neutralizing antibody that could be...

So in general, in our trials, we have advantage against the others. We've now dosed and must be nearly 150 people with AAV6 between the MPS trials, the hemophilia, and now this. There is somewhat between state to state, to be honest, but it's about 30%. But that's us making sure we have a safety -- security margin between the patients with the highest antibodies. There is a subgroup of that 30% that have got very significant antibodies. And I can imagine with time we will explore reducing the titer than we exclude. But it's the same for all the other AAVs, they're all about 30%. Now the advantage of AAV6 is its a safety profile. Some of our competitors came up with completely novel capsids and they ran into immunogenicity, hemolytic uremic syndrome myocarditis. So I think we have a real tolerability advantage.

Okay. Very good. So kind of thinking -- the biomarker data given the full approval and which is also supporting the biomarker is valid because you have a full approval. So would that lead to like more likely you will have the biomarker as an end point?

I'm going to go to the agency and talk about the whole package. I'm going to talk about how well tolerated it is, I'm going to talk -- and no use of prophylactic steroids. I'm going to talk about how we have complete alignment of alpha-Gal, lyso-Gb3. I'm going to talk about the biopsy and why we focus on this one patient. I will have other biopsy data as the year progresses. And I'm going to talk about how the patient benefit. I'm going to talk about how the patients are coming to us. We have a queue of patients to complete this Phase I/II study. And I'll have a good sensible conversation, I am certain, with the FDA about how we can get this registered soon and then also register for as many people as possible because in a Phase III study, the 2 things don't always align. There's a desire to register it quickly and then there's also a need to expand the label. We dosed the first ever woman for Fabry disease, and she's doing well. We will expand it into patients with cardiac disease, with renal disease, and that will help inform the design of the study. And when we start the Phase III, we'll continue to observe the patients in the Phase I/II. So we'll have a cohort of 30 patients, 20 of whom will be on the target dose that will be providing long-term data? Because one of the questions you've asked me before is do we see a continuation of effect? And the answer is yes, out to 26 months, I think, for the first patient. There clearly is continuation of effect.

Okay. Very helpful. Any update regarding the data? Will we see more biopsy data later this year?

We really don't want to dribble data out, one patient at a time. So we will show the next bolus of data at the appropriate time. We'll tell you when we're ready to go to Phase III, we'll tell you when we've got -- or you'll hear because we'll register on clinicialtrials.gov. So that may be the next thing to inform.

Okay. So basically, after feedback with FDA, and then you will share the...

I don't imagine you won't, you'll hear from us in the next couple of months before we speak to the agency.

Okay. That's fair. And then maybe also remind us the reason to choose 5e13.

5e13 is the dose. If you look at the naive, pseudo naive patients, the response at 5e13 is significantly more than at 1e13 or 0.5e13.

Okay. Good. So we switch gear to -- and we have quite a few other we can discuss. Maybe quickly on hemophilia. I know it's the partner programs with Pfizer, so far and maybe the latest thoughts given we will see how BioMarin's Roctavian will get approval and the market optimistic...

I wish Roctavian all success. They've worked hard at this. They've kept driving forward with the agency. It will inform so many of the rest of the gene therapy approvals. All I can tell you is Pfizer are signaling very loudly that heme is important for them. They are guiding that they will show the results of the Phase III in the first half of next year and that they will file the [ BL ] in the second half of next year. When -- once they do that, there's a series of milestones come to Sangamo. There's $240 million between then and launch in a variety of different markets. And then there's 14% to 20% royalties on what could be a very important drug. This is important. Hemophilia patients love the idea that they can step away from factor and have a life that's under their control. And really, I think in the community, we need to start talking more positively about genomic medicines. Hemophilia, Fabry, I would hope, where now 7 patients are off of ERT, or the sickle cell where patients stop having VOCs. We're making fundamental differences. This isn't a product line extension. This is a new way of thinking about treatment for these dreadful diseases.

Great. I think on the other hand, when we talk to the doctors, particularly hemophilia doctors, they seems more reserved and the concern is about the unknown say, long-term safety -- and so maybe like what is your market feedback?

So come with me and talk to the patients. Come with me and talk to the patients. And talk to the patients that have to carry syringes and factor in the fridge and hear about how their life changes. Now I think the doctors are right to ask for long-term data and to understand how long the promise is. They're right that we, the companies, show them evidence of safety, and they will take time to adopt it. But I think that this is going to be embraced. And the patients tell us because we talk to them 5 to 7 years' worth of benefit it makes the whole equation work for them. And Roctavian looks like it will give 5, maybe more, years. I can't tell you what we'll do because we haven't seen the Phase III data. But I really do think the patient promise is there, and I hope that doctors listen to their -- I'm a doctor. I hope they listen to their patients. And I hope they embrace this important treatment.

Maybe one quick question. How would the Sangamo's program or Pfizer program differentiate from BioMarin's profile?

Let's wait and see the Phase III results because until we see them, I'm just promising things that I haven't seen.

Okay. That's fair.

But one of the differences is it's Pfizer and we all know how effective Pfizer are negotiating with payers and launching drugs successfully. And if Pfizer believe in something, I believe in them and their success.

Okay. Good. We have a few more minutes. I do want to touch on a few more other programs. Sickle cell, maybe quickly, you discussed with the FDA on the Phase III, but then you decided this will be more focusing for the partner optimizing so...

So -- Sangamo -- I mean, everyone is aware of our financial situation. We are being extremely careful with our spend. We are making strategic decisions on what we take forward, listening to investors, listening to advice. And there's only so many Phase III programs that a company our size can do. We inherited this as a surprise Christmas present from Sanofi. And we did -- the team did a fantastic job in transferring the IND, which is no major task. It's 6 months of work to transfer IND, and drive forward with the trial. The patient 5 that we showed with the new process looks identical to CRISPR-Vertex. They're not having VOCs. They've got the same amount of fetal hemoglobin is fantastic. But we cannot afford to take this forward, and we would rather put our money on other things. And so we have a process that we've initiated to find a partner for it because, ironically, we have the letter from the agency that says exactly what the clinical trial should look like. It says how many patients -- what data we need to have to move forward. It says agreement on the manufacturing process. And we have initiated a manufacturing update, which allows us to put everything in a box and reduce the cost, increase the reliability of manufacturing. So this is a Phase III asset in a box ready to go for someone. And I really hope we can get this forward. 30,000 patients with sickle cell will be waiting for this, and there is no way that any one company will solve all of this.

Good. And quickly on Treg, the initial data expectation? [indiscernible]...

So we dosed -- so you know, we acquired a Treg company in 2018. We have dosed 2 patients with HLA-A2 mismatched real transplant. The third is manufactured is about to be dosed. And that's the first cohort. Treg -- really, we're the only -- of 15 Treg companies, we're the only one that's in the clinic. We're the only one with our own manufacturing. The only one that has an editing capability. The only one that knows how to do INDs. And the first time you go in with the Treg, there was a -- the agencies were saying show us it's safe, first and foremost. And with the 2 patients we've dosed, I think we've addressed that. And now we need to get through the various dose levels to get to the maximum dose and give as many cells back to patients. I can't wait to sit up here and show you the results from that trial. But we need to make sure that we're not driving out 1 patient or 1 patient here. So we hope at the end of the year, beginning of next year to have that data. And it's so exciting because this unlocks Treg as a treatment for autoimmune disease, and we have the CARs already built and in testing for multiple sclerosis with MOG and inflammatory bowel disease with IL-23R. Now a lot of people are interested in our Treg program. They say, though, how do we invest in Tregs and when we just have to invest in the whole world of Sangamo, we need to find a way to address that because there is so much excitement in the potential for Tregs.

And you do have tons of the partner programs. So maybe any progress from the partner programs and then Treg is the one you wanted to...

So I can tell you that all of our partner programs move forward, and they are delighted with our science. I can also tell you that our partners are going through -- all of them are going through their strategic reviews. Novartis has changed the head of NIBR. Biogen has changed their CEO. And so we're always interested to watch what will happens with those programs. It's their strategy. It's their decision to take forward. I'm very clear from we partner, we partner and get the upfront. And when we get the upfront, it funds the company. Since I've taken over Sangamo, we've raised $1.6 billion, of which $800 million is from upfront. And when you take that, you lose decision rights because it's the other companies. But we make sure with very close alignment that they're progressing those and so those assets are moving forward and they're increasing in value and increasing in importance.

Very good. Quickly -- I know we are running out of stuff, quickly on the in-house manufacturing. Maybe a little bit of highlight on peak capacity and how you decide with the CDMO versus in-house?

So the advantage of in-house manufacturing is that they're right beside the research people right beside process development, and they can talk over lunch and make sure that the whole thing works well. We have GMP manufacturing for AAV and cell therapy in Brisbane, California, and cell therapy in Valbonne in France. For the early projects, it seems wise to use them as much as possible. But we are very clear that once we get into late phase development or commercialization, we will work through CDMOs and we have great relationships with CDMOs.

Lastly, SVB impact? I know you...

SVB. It's very easy to criticize SVB. So many startups and biotechs depended upon on them and they were the banker of choice. We moved 90% of our money out of them 2 or 3 years ago. We had -- and we guided on Friday we had 34 left. We guided today, I believe that we've removed it all. So we have removed all our money from SVB. It's safely with one of the large American banks.

Okay. Great. Well, thank you very much, Sandy.

Thank you, Gena.

Thank you, everyone.