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

Good afternoon, and welcome to the Sangamo Therapeutics Fourth Quarter and Full Year 2024 Teleconference Call. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Louise Wilkie. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for joining us on the call today. On this call are several members of the Sangamo executive leadership team, including Sandy Macrae, Chief Executive Officer; Nathalie Dubois-Stringfellow, Chief Development Officer; and Prathyusha Duraibabu, Chief Financial Officer. Slides from our corporate presentation can be found on our website, sangamo.com, and under the Presentations page of the Investors and Media section. This call includes forward-looking statements regarding Sangamo's current expectations. These statements include but are not limited to, statements related to Sangamo's cash runway plans to obtain additional capital and ability to continue operating as a going concern, the therapeutic and commercial potential and value of Sangamo's product candidates and technologies, Sangamo's ability to earn and receive payments from its collaboration and license agreements, Sangamo's expectations regarding new collaborations and license agreements, the anticipated plans and timelines of Sangamo and its collaborators for clinical trials, clinical data presentations and releases, regulatory submissions, regulatory approvals, upcoming catalysts and milestones and other statements that are not historical fact. Actual results may differ materially from what we discuss today. These statements are subject to certain risks and uncertainties that are discussed in our filings with the SEC, specifically in our annual report on Form 10-K for the fiscal year-ended December 31, 2024, and subsequent filings and reports that Sangamo makes from time to time with the SEC. The forward-looking statements stated today are made as of today, and we undertake no duty to update such information except as required by law. Please note that all forward-looking statements about our future plans and expectations are subject to our ability to secure adequate additional funding. Now, I'll turn the call over to our CEO, Sandy Macrae.

Thank you, Louise, and good afternoon to everyone joining the call today. Sangamo's pipeline has made a great deal of progress since the start of 2024. We have advanced our prioritized neurology therapies towards the clinic, securing our first-ever neurology IND in idiopathic small fiber neuropathy for chronic neuropathic pain and demonstrating non-clinical proof of concept for our product candidate in prime disease. We showed that we are a collaborator of choice for neurotropic capsids with the announcement of 2 blue-chip pharma agreements for our industry-leading delivery capsid STAC-BBB, the first with Genentech for Tau and a second neurology target and the second with Astellas for up to 5 neurology disease targets. We have a clear regulatory pathway to accelerated approval in Fabry disease, which could reduce the time to potential approval by approximately 3 years. And our Fabry gene therapy study continues to generate best-in-class data, with a pivotal data readout expected in mid-2025. From a financial standpoint, since 2023, we have reduced our non-GAAP operating expenses by nearly half year-over-year. And in 2024, we raised over $100 million in funding through nondilutive license fees and milestone payments, as well as equity financing. And these are significant achievements for a company of our size. Judged by all other metrics, this would have been a very successful year. However, we know until we partner Fabry and appropriately capitalize the company for success, our work is not done. I want to reemphasize that our #1 priority continues to be addressing our financial needs. Sangamo must be well capitalized to fulfill our potential. We continue to engage in Fabry business development negotiations, and securing a commercial partner is our key focus. Interest in this program has been strong. This is proving to be a time-consuming process as discussions of this nature are complex, and facilitating the extensive due diligence required by potential partners takes time. We remain committed to securing an anticipated partnership in the second quarter of 2025 that is best suited to bringing ST-920 to Fabry patients upon potential approval, and that provides capital for Sangamo to execute on its other programs. We will share information as soon as we're able. Furthermore, we are actively engaged in advanced contract negotiations with a potential collaborator for the third STAC-BBB license agreement and are hopeful of having more news to share near the end of this quarter. I would now like to hand it over to Nathalie, our Head of Development, who will walk us through detailed pipeline developments. Nathalie?

Thank you, Sandy. First, I'd like to provide updates on ST-503, our investigational epigenetic regulator for the treatment of chronic neuropathic pain, which is ready to enter the clinic. Our initial indication is in Idiopathic Small Fiber Neuropathy, or ISFN, a peripheral neuropathy that results in highly debilitating symptoms such as burning, prickling, stabbing or lightning-like pain that is estimated to impact about 43,000 people in the United States. More broadly, peripheral neuropathy are estimated to affect nearly 40 million Americans. As we've shared previously, a significant body of evidence implicates sodium channels in mediating the pathophysiology of neuropathic pain. ST-503 is a Zinc Finger Repressor, or ZFR, targeting the human gene SCN9A that encodes the Nav1.7 sodium channel. Developing small molecules that specifically target Nav1.7 is challenging due to the high structural similarities between different sodium channels, making it difficult to achieve selectivity and avoid off-target effects. We believe our epigenetic regulation approach is differentiated. By directly targeting the SCN9A gene, ST-503 has shown to precisely and potentially reduce the expression of Nav1.7 sodium channels in sensory neurons in animal model and significantly reduce pain hypersensitivity following a single intrathecal administration. ST-503 has been well tolerated in nonhuman primates, with no off-target effect observed. Following FDA clearance of the IND in November 2024, our first-ever neurology IND, we are actively preparing for a Phase 1/2 study to assess the safety, tolerability and preliminary efficacy of a 1 time dose of ST-503 administered intrathecally to patients with intractable pain due to iSFN. This multicenter, double-blind, randomized, Sham-controlled dose escalation study is designed to evaluate 3 ascending doses, beginning with what we believe to be the minimally efficacious dose as determined from animal studies. Patient will be randomized in a 2:1 ratio to receive either ST-503 or a Sham treatment, with 3 patient planned in each of the first 2 dose cohorts and up to 9 patients in the top dose cohort. The primary objectives of this Phase 1/2 study will be to assess the safety and tolerability of ST-503 with secondary objective to assess preliminary efficacy based on the impact of ST-503 on refractory pain and assessment of the multidimensional impact of ST-503 on sleep, mental health and quality of life. We strongly believe in the potential of ST-503 to revolutionalize the chronic pain landscape. And if successful, significant opportunity exist to broaden its application to patient population suffering from other types of chronic neuropathic pain. We plan to begin patient enrollment and dosing in mid-2025 and anticipate having preliminary proof of efficacy data in the fourth quarter of 2026. Moving to our prion disease program, we continue to advance clinical trial authorization or CTA enabling activities and expect a CTA submission in the U.K. in the first quarter of 2026. As a reminder, this program leverages our novel STAC-BBB capsid, which, if safe and effective, could validate our broader neurology pipeline. Prion disease is a rapidly fatal and incurable neurodegenerative disease caused by the misfolding of the prion protein encoded by the PRNP gene. At least 1,300 new cases of prion disease are identified each year in the United States and in Europe with a similar presence globally. This quarter, we published a manuscript in bioRxiv demonstrating nonclinical proof of concept for our epigenetic regulation approach. A single intravenous infusion of our ZFR significantly reduced expression of prion mRNA and protein in the mouse brain, extended mouse survival and improved an array of molecular histological biomarker and behavior readouts even when administered post symptomatically to mice with prion disease. In addition, a single intravenous administration of the prion ZFR delivered via STAC-BBB to nonhuman primates resulted in potent and widespread reduction of prion expression in transduced neurons throughout the brain. This is a significant result in a highly challenging disease with no treatment options today. We plan to begin clinical trial enrollment and dosing in mid-2026 and expect to have preliminary clinical data in prion disease in the fourth quarter of 2026. Moving now to Fabry. At the WORLDSymposium in February, we presented impressive updated preliminary clinical data from our Phase 1/2 STAAR study of isaralgagene civaparvovec or ST-920, our investigational gene therapy for the treatment of Fabry disease. This latest data, which shows significant sustained benefit, improvement in kidney function and a favorable safety profile continue to demonstrate the potential of ST-920 as a onetime durable treatment option for Fabry disease that can improve patient outcomes. In the 33 patient treated with ST-920, elevated expression of α-Gal A activity was maintained for nearly 4 years for the longest treated patient. Importantly, we observed a positive mean eGFR slope of 3.061 millimeters of clean blood per minute per body surface in the 23 patient with at least 1 year of follow-up, indicating notable improvement in renal function. For context, the average untreated patient in Fabry disease has an eGFR slope of minus 3 or minus 4, so the statistically significant positive eGFR slope is a remarkable achievement. All 18 patients who began the study on Enzyme Replacement Therapy, or ERT, have been successfully withdrawn from ERT and remain off ERT. We also observed notable improvement in quality of life among the patient with at least 1 year follow-up. For example, among the Short Form 36 quality of life score, we saw a mean change in the general health score of 10.6 as well as significant improvement in physical component, bodily gain, physical vitality, social function and emotional well-being score. The FDA has provided us with a clear regulatory pathway to accelerated approval for ST-920 using eGFR slope at 52 weeks across all patients as an intermediate clinical endpoint. The 52 weeks eGFR slope data from all enrolled patients in the Phase 1/2 STAAR study will be available in the first half of 2025. We are thrilled with how the data are progressing and look forward to providing future update as the full 52 weeks data become available in the middle of this year. We're actively preparing all necessary activity for the BLA, including manufacturing readiness and continue to work towards a potential BLA submission in the second half of 2025. We're excited that this potential medicine could be commercialized as early as the second half of 2026, which would be an incredible achievement for Fabry patients in need. I will now hand it back to Sandy for closing remarks.

Thank you, Nathalie. In closing, we're pleased with the progress we have made this year as we transition to becoming a clinical stage neurology company. We have advanced our long-planned neurology pipeline towards the clinic, securing our first-ever neurology IND and with patient dosing expecting in the coming months. We have shown Sangamo to be the collaborator of choice for neurotropic capsids with the announcement of 2 blue-chip pharma agreements for STAC-BBB. And we have secured a clear regulatory pathway to accelerated approval in Fabry disease, which would reduce the time to potential approval by approximately 3 years. We are proud of this progress and excited to be so close to the anticipated dosing of patients in our first-ever neurology clinical trial. In parallel, we remain resolutely focused on raising the additional capital needed to set Sangamo for success. As I outlined earlier, we're in the very late-stage business development negotiations for a third potential STAC-BBB license agreement. We have compelling Fabry data with a pivotal data readout expected in the coming months. And business development negotiations for a potential Fabry commercialization agreement continue to advance with several interested partners. We believe we can solve both our short-term and long-term financing needs and look forward to providing additional updates as soon as they become available. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Luis Santos of H.C. Wainwright.

This is Luis on for Patrick Trucchio. I was wondering if you're still waiting on any data for the Fabry program as you expect this partnership next discussions to -- lead to results next quarter. Similar question for the Haemophilia A. Should we be expecting any more data later this year? And would that facilitate any partnerships there?

Thank you, Luis. So the Fabry partnership, we would love to have announced it. We would -- we're in late-phase discussions across several partners, potential partners and look forward to taking that forward and finding the right place for the right -- for the patients and for the right partnership for our shareholders. These things take time. The route forward from the agency was as recently as end of October. The -- we've had to compress the planning for the file and launch from what was 3, 3.5 years down to 6 months to the filing and then to the launch. And so there's a huge amount of activities that are going on. What I can reassure you is the data that Nathalie and her team showed in -- at the WORLDSymposium remains positive, remains very positive, and we look forward to seeing the 1 year data for the last patient as soon as next month. And that will allow us to drive this forward. Now it's a matter of closing the deal and making sure we find the right partner. For the Hemophilia A, that was returned to us or the termination notice was given over the holiday period. And the more we see from Pfizer, the more we realize that it really was days away from both U.S. and a European filing. Our team are sitting closely with the Pfizer organization to understand and explore all possibilities for a transition. Ideally, we would like to hand this directly to a partner without having to go through Sangamo, but these are very early days to be able to give you a commitment to that plan. What I can tell you is that we've already had incoming interest on the Hemophilia A program, but I don't want to overpromise until we have a chance to understand all the data and speak with potential partners.

Just to clarify, are you -- do you get the rights to all of the data? Will you have access to all of that and you will be able to share at some point?

We will have access to all the data from Pfizer. It's very clearly laid out in the contract, but that's a huge amount of data for something that was about to be filed in a few days' time. And like you, we respect the idea that if someone goes into a clinical trial, you have a responsibility to make the data available.

Our next question comes from Yanan Zhu of Wells Fargo.

This is Kwan on for Yanan. So our question is also around Fabry. So can you share -- have the interesting party have seen any data beyond the WORLDSymposium data? I think that data has a data cut in, I think, September 2024. So any updated data partners -- potential partner have seen beyond that?

I'm looking to Nathalie here, and who's shaking our head. We believe they haven't seen any efficacy data beyond what we've seen.

Yes.

They have seen lots of other data. They've seen data about the manufacturing, about the CMC process. They've seen broader versions of the data cut that you saw, but they haven't seen later data. We now have seen data for up to the 30 patients, and there's only 2 more patients to complete their journey before we have the complete data set and can pull that together for the file.

Got it. That's super helpful. And for the 30 patient data you have seen so far, is the eGFR data consistent with what you have presented at WORLD?

You can understand I can't give you more details, but we remain very encouraged by the data set and look forward to filing it because we feel that it's fulfilling all that the agency is asking for.

Our next question comes from Maury Raycroft of Jefferies.

I was going to ask on the STAC-BBB deal. Just clarifying on that. You said you could have that in place by the end of this month. Is that correct? And then is there more you can say on what the upfront for that one could look like?

So I think you could look at what we've got as upfronts for the previous 2 deals. There's now almost like a standard market price for those. Yes, we're guiding at the end of the year. We hope -- at the end of the quarter, thank you, Louise. We had hoped to have done it in time for this quarterly call. And just these things are not always in our hands. But we know that the partner is one that you will find a very logical blue-chip choice, and we feel that we are putting a capsid in the hands of a great -- another great company that will allow their neurology pipeline and ours, frankly, to advance.

Got it. That's helpful. And just a quick question on OpEx. Just how you're thinking about that going forward? And once you solidify the partnership for Fabry, how that could change?

Prathyusha?

From the OpEx itself, we've done everything proactively what's in our control. We've reduced our OpEx by nearly half year-over-year. And we've designed our OpEx for '25 to be very focused on taking our neurology pipeline forward. So from a guidance perspective, we've guided to keeping the same level of OpEx as last year as we move both Nav1.7 and prion forward.

[Operator Instructions] Our next question comes from Nicole Germino of Truist.

So there is some literature around hypertension associated with inhibition of Nav0.1 channel -- sodium channels. So I have 2 questions. Do you have any hypotheses on how and why you're not seeing any hypotension so far in animal models? Or rather maybe how do you get investors comfortable around any potential hypotension concerns? And then second question, can you help us understand the patient enrolment criteria for patients enrolling into the Nav1.7 study?

Nathalie, can you talk to these?

Yes. So we have not seen any effect on hyper or hypotension in all our animal studies, especially in the NHP study where it's a GLP study where we monitor those functions very closely. I think the Nav1.7 relationship with hyper or hypotension is not really well established. I think there is 1 report on a small molecule that was reported and the protein was -- the small molecule is delivered IV to the general, and we don't know the specificity. We don't have that information. So I think it's too early to make the conclusion that Nav 1.7 or there is not enough evidence to show that Nav1.7 could impact hyper or hypotension.

And all the monkeys are closely monitored. The blood pressure is monitored. They've all done very well. So we feel it's a very different situation.

And then it's also intrathecal as well, right? -- Intrathecal. It's intrathecal?

It's intrathecal, yes.

And there was a second question.

On the patient enrolment criteria. So we're targeting patients with iSFN, as mentioned and there is a bunch of inclusion/exclusion criteria that will be highlighted when we publish the clinicaltrial.gov design in -- design on pubicaltri.gov. So is there anything specific you're looking for?

Just overall, the patient description for the iSFN patient population, if there's anything that -- if there's anything of note.

I don't think so. There's always a balance between having a pure population and trying to avoid comorbidities, and that's always a fine needle to and fine path to try and execute. But I think the team have done a nice job of getting a recruitable study that will give us a clear answer. And we --I think it's important to emphasize that this is a 1 time treatment, and therefore, the benefit risk is really important. And therefore, a clear result is what we need to look for, for the powerful effect that we believe if the animal models are replicated that this molecule should achieve.

Our next question comes from Gena Wang of Barclays. Please go ahead, Gena.

Thank you. I have 2 sets of questions. First 1 is regarding the Fabry deal. Just wanted to know that the delay on Fabry deal, the potentially 2Q, was that due to the deal term agreement or is that because the potential partner wanted to see additional data or regulatory certainties? And then are you still looking for deal term to cover the, I think, almost 2 years OpEx to until you reach, like say, 4Q '26, be able to show the proof concept data from both internal program? And the second question is regarding the 503. 4Q '26 data update, do you expect to identify going forward dose? And what is your goal of a placebo-adjusted pain score reduction?

So Gena, thank you for your questions. The Fabry discussions are going well. The clinical results are so compelling that the -- each of the partners is fascinated by it. We can't discuss the terms and we can't discuss what we are in negotiation over. I'm sure you understand that. But the overall goal of Sangamo has to be to get us well funded to get to that point at the end of next year where we can demonstrate the effect of Nav1.7 and hopefully show early results for prion disease. So that's our overall mission. And as we get closer and closer to the pre-BLA meeting in the summer and the file by the end of the year, you can imagine that the energy around the discussions increases. And Nathalie, you had a question as well, didn't you?

Yes. Yes. On the ST-503, so to be successful, our product candidate needs to demonstrate both near-term efficacy and long-term effect. In our trial, we hope to see a reduction in pain within the first 12 weeks. We understand the placebo effect, which is an important consideration and as we've planned for our Phase 1/2 study design. But you have to consider also that it's a 1 time therapy. So our approach is very different to traditional therapy where the placebo control has been documented where then the Sham treatment are taken regularly, which really can straighten the reminder of the placebo effect. So just as a reminder, this is a 1 time potential treatment with one injection, and we believe the placebo effect will start to wane as we get further away from the point of administration. And as I mentioned, we think looking at the data in -- from our animal study that really we should have near-term efficacy fairly quickly. In our animal study, I would say that the effect is maximum and plateau at about 3 to 4 weeks after administration.

Are you looking for any placebo-adjusted pain score reduction? You will be looking for like a 2 score or any particular scores you have in mind given some benchmarks?

We wouldn't be wise to set ourselves a target of the amount of reduction. This is clinical science and the first time it's been administered in humans. We hope that it will be a significant effect because this is a dreadful disease and intractable pain is not something anyone would wish to have. And we look forward to sharing the results with you over the coming year to 18 months.

I am showing no further questions. I would now like to turn the call back to Louise Wilkie for closing remarks. Ma'am?

Thank you, and thanks once again for joining us today on the call and for your questions. As a reminder, you can access our presentation on the Investor Relations section of the Sangamo website. We look forward to keeping you updated on our future developments.

This concludes today's conference call. Thank you for participating. You may now disconnect.