Sangamo Therapeutics Inc (SGMO) 2006 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Sangamo BioSciences 2006 second quarter conference call. My name is Leticia, and I will be your coordinator for today. [Operator Instructions] I will now turn the presentation over to your host for today's conference, Dr. Elizabeth Wolffe, Director, Corporate Communications. Please proceed, ma'am.

Thank you. Good afternoon and thank you for joining Sangamo's management team on our conference call to discuss the Company's second quarter 2006 financial results. Also present during this call are several members of Sangamo's senior management, including Edward Lanphier, the President and Chief Executive Officer; Dr. Dale Ando, Vice President of Therapeutic Development and Chief Medical Officer; and Greg Zante, Senior Director of Finance and Administration. Following this introduction, Edward will review our recent activities. Greg will then briefly review second quarter financial results. And finally, Edward and Dale will update you on our lead therapeutic program in diabetic neuropathy. Following that, we will open up the call for questions.

As we begin, I'd like to remind everyone that the projections and forward-looking statements that we discuss in this conference call are based upon the information that we currently have available. This information will likely change over time. By discussing our current perception of the market and future performance of Sangamo with you today, we are not undertaking an obligation to provide any updates in the future. Actual results may differ substantially from what we discuss today, and no one should assume at a later date that our comments from today are still valid. We alert you to be aware of risks that are detailed in documents that the Company files with the Securities and Exchange Commission, specifically our quarterly report on Form 10-Q and our annual report on Form 10-K. These documents include important factors that could cause the actual results of the Company's operations to differ materially from those contained in our projections or forward-looking statements.

Now I'd like to turn the call over to Edward.

Thank you, Liz, and thanks to all of you for joining us for our second quarter 2006 conference call. On this call I will briefly review some of our recent activities and then ask Greg to update you on our second quarter financial results and our recent financing. In the second half of this call, Dale will provide you with an update on the status of our clinical program in diabetic neuropathy, which we expect to move into a Phase 2 trial later this year. Finally, I will wrap up with a review of our expected milestones and events for the remaining five months of 2006.

The second quarter was a high watermark for Sangamo. We accomplished one of the most significant milestones in our Company's history, the presentation of the first-ever human clinical data for our ZFP Therapeutic. The results of our Phase 1a clinical trial of SB-509 were presented in April at the American Academy of Neurology meeting; and in June, additional data from our ongoing Phase 1b study were presented at the American Diabetes Association Scientific Sessions.

The data to date suggests that our ZFP Therapeutic was well tolerated in subjects with mild to moderate diabetic neuropathy. We reported that we have not observed any drug-related adverse events or dose-limiting toxicity, and most notably have successfully treated subjects at a dose that had previously been demonstrated to be effective in preclinical animal efficacy studies. In addition, we reported that a single treatment of SB-509 generated anecdotal improvements in clinical symptoms in a number of the subjects. Dale will provide more detailed information on the results and our Phase 2 trial plans later in this call.

In June we completed an underwritten financing, led by Piper Jaffray, that generated net proceeds to the Company of $20.15 million. As you will hear, this significantly strengthened our balance sheet, giving us over $59 million in cash at the end of the second quarter. Given the current market conditions, we are very pleased to have completed this transaction when we did.

The preclinical animal efficacy data that I mentioned earlier and support our diabetic neuropathy program were published in Diabetes, a journal of the American Diabetes Association. In addition, Sangamo scientists presented data at various disease-related meetings from several of our preclinical ZFP Therapeutic programs, including neuropathic pain and age-related macular degeneration.

At our annual meeting in May, Ward Wolff was elected to Sangamo's Board of Directors. Ward, who is now Senior Vice President and Chief Financial Officer at Nuvelo, was most recently the Chief Financial Officer and Senior Vice President of Finance at Abgenix until April, when Abgenix merged with Amgen. Ward will also chair our Audit Committee.

And finally, at the end of June we were added to the Russell 3000 Index and the associated Russell 2000 Index, important benchmarking indices for many individual and institutional investors.

As you can see, we made very important progress on several fronts in this past quarter, and we will provide you with more details later in this call. Before Dale updates you on our clinical programs, I would like to ask Greg to summarize our second quarter financial results and our recent financing. Greg?

Thank you, Edward. For the second quarter of 2006, our consolidated net loss was $3.3 million or $0.11 per share. In the comparable quarter of 2005, our consolidated net loss was $3.4 million or $0.13 per share.

Our research and development expenses were $4 million for the three months ended June 30, 2006 as compared to $2.8 million for the second quarter of 2005. General and administrative expenses were $1.8 million for the second quarter of 2006 compared with $1.1 million for the same period last year. The increase in total expenses for the second quarter of 2006 was attributable to increased external development expenses, primarily associated with manufacturing costs for our upcoming Phase 2 clinical trial; increased personnel and associated lab supply expenses; and increased professional service-related expenses. Total expenses also included a non-cash charge of $494,000 during the second quarter ended June 30, 2006 for employee stock-based compensation.

Revenues for the second quarter of 2006 were $1.8 million as compared to second quarter 2005 revenues of $418,000. The increase in revenues for the second quarter of 2006 compared with 2005 was primarily attributable to revenues from our agreement with Dow AgroSciences.

Finally, as you heard from Edward, we raised $20.15 million in our recent financing. And I'm very pleased to report that with these additional funds we ended the second quarter of 2006 with $59.3 million. To give you a few more details on this transaction, on June 15th we announced an offering of 3.1 million shares of common stock at $6.75 per share that resulted in net proceeds to Sangamo of $20.15 million. We were very pleased with the efficiency of the transaction, an underwritten bought deal in which Piper Jaffray purchased the entire allotment of shares directly from Sangamo. This structure enabled us to raise money quickly without the inevitable softening of the stock price that frequently accompanies a traditionally marketed deal. The proceeds have strengthened our balance sheet, giving us additional flexibility as we make decisions about the advancement of our clinical and preclinical programs.

Prior to this recent financing, we had stated that we expected to end the year with $30 million in cash and cash equivalents. I am pleased to say that with this additional funding we now expect to end 2006 with approximately $50 million in the bank.

And on that note, I will now turn the call back over to Edward.

Thanks, Greg. As you just heard, we are in good financial shape as we head into the second half of 2006, ready to initiate our Phase 2 trial in diabetic neuropathy and, by the end of the year, file an IND for our first zinc finger nuclease therapeutic for the treatment of HIV/AIDS.

As you all know, our lead ZFP Therapeutic, SB-509, is moving through the clinical research process on schedule, and the initial human safety data are as expected. We have completed subject treatment and follow-up in the Phase 1a portion of the study and are recruiting and treating subjects in an ongoing Phase 1b study that we initiated late last year. Data from both of these trials were presented in the second quarter at the AAN and ADA meetings, and we expect to present additional data from the Phase 1b study at appropriate clinical meetings later this year. Today, however, we are looking forward.

Dale will provide you with more specific information about the protocol for the Phase 2 study that we plan to begin later this year. Dale?

Thanks, Edward. As Edward said, the presentation of the first human clinical data of a ZFP Therapeutic at the American Academy of Neurology meeting in April and at the American Diabetes Association meeting in June were significant events for us and for our diabetic neuropathy program. As most of you know, our ZFP Therapeutic for DN, SB-509, is a ZFP transcription factor that is designed to activate the endogenous vascular endothelial growth factor, or VEGF gene.

VEGF has been demonstrated to be a highly conserved, potent and direct neurotrophic and neuroprotective factor. These observations were borne out by our preclinical results, which demonstrated that SB-509 was effective in protecting motor and sensory nerve functions from disease-induced nerve damage in an animal model of diabetes. These data were published in early June in Diabetes, a journal of the American Diabetes Association, and have been well received by the scientific and clinical communities.

The Company's Phase 1a study, initiated in Spring of 2005, was a single-line dose escalation trial. In this study we replicated the single-leg dosing protocol, an effective dose range that had been used in the animal studies. The Phase 1a study was primarily designed to evaluate clinical and laboratory safety. The treatment regimen was well tolerated in subjects at a dose range that was previously seen to be efficacious in the animal studies.

After completing the enrollment of treatment of all subjects in the Phase 1a trial, we initiated a Phase 1b extension of the initial study. As in the previous study, the Phase 1b trial is a single-blind study, enrolling diabetics with mild to moderate diabetic neuropathy. Subjects are randomized and administered either SB-509 or a placebo in both legs by intramuscular injection in a pattern that tracks the anatomy of a major nerve. Two dose levels of our SB-509 are being tested, 30 milligrams and 60 milligrams per subject.

The important point is here that we were able to test SB-509 at a dose that has been shown to be pharmacologically effective in animal studies. This is in contrast to other neurotrophic approaches that have previously attempted to address the underlying cause of a nerve damage in neuropathy. These include nerve growth factors such as NGS. While these other agents have proved efficacious in animal models in neuropathy, adverse drug-related events have thus far prevented them from being used safely in humans at therapeutically effective doses, and the development was halted.

All subjects in the Phase 1a and 1b parts of our study were observed for adverse events and clinical laboratory safety and have been assessed using a standard battery of blood tests and physical exam. To date we have observed no drug-related SAEs and no dose-limiting toxicities. Minor reversible injection site reactions were observed in both the placebo and the SB-509 group.

In addition to monitoring clinical laboratory safety, we have been monitoring subjects for changes in symptoms and nerve functions at one, two, three, and six months as opposed to a single treatment, and have seen some anecdotal improvements of clinical symptoms that were reported at the AAN and the ADA meetings.

While anecdotal, the clinical effects have generated interest from neurologists who appreciate the need for a treatment approach that addresses the underlying problem of nerve damage and can improve upon the palliative approaches of pain control in antidepressants that are current standard of care.

The test conducting during the Phase 1a and B trials, which we will continue to employ in our Phase 2 studies, include standard blood tests and physical exam used to measure clinical and laboratory safety of the drug; assessment of pain using one of the most frequently used measurement scales in healthcare research, the visual analog scale, or VAS. The VAS is an 11-point scale from zero to ten, with zero being equivalent to pain at all and 10 being the worst possible pain.

Evaluation of nerve function, a composite measure of the total neuropathy score or TNS, is being used. A composite scoring system is widely regarded as the most comprehensible approach to evaluating changes in nerve health. The TNS combines information obtained from ten separate measurements, including qualitative assessment of symptoms, neurological exam, and quantitative measurements of nerve conduction velocities, the speed at which a nerve can conduct a signal, as well as quantitative sensory testing, a measurement of vibration threshold. Quantitative sensory testing uses a device called the Vibratron 2 that measures the subject's threshold of perception of vibration in both toes in a blinded fashion.

Overall, we have seen positive responses in average TNS scores in subjects receiving treatment compared to those receiving placebo, and particularly improvements in QST scores in the treated group. Once again, it should be noted that with so few subjects treated, these effects, while encouraging, are anecdotal.

We have submitted abstracts to present these data at clinical conferences this year, and we look forward to keeping you informed of the progress of our analysis of the Phase 1b data. We anticipate that the next presentation of data will be at the Annual Meeting of the European Association for the Study of Diabetes, which will be held from September 14th to 17th, in Copenhagen.

Turning to the Phase 2 trial, we remain on track to initiate this study in the third quarter of this year. Additional toxicology studies and GMP manufacturing needed for a multi-dose trial have been completed. We have also conducted an investigative meeting and continue the process of qualifying additional clinical sites for the new trial. As for the Phase 2 protocol, this trial was a double blind, placebo-controlled, repeat dosing study, enrolling subjects with mild to moderate diabetic neuropathy. Each subject will receive either treatment or placebo in both legs.

The trial design is intended to evaluate the clinical effects of SB-509 and the safety and durability of these clinical effects with repeat treatment. The SB-509 treatment group will receive intramuscular injections in both legs, once every two months for four months, at times zero, 60 days, and 120 days. The placebo treatment group will receive the same series of injections on the same schedule. We envision that we will enroll approximately 100 subjects and treat one-third with placebo and two-thirds of the subjects with SB-509. We anticipate that the accrual will take approximately 12 months, and subjects' follow-up will continue for seven months after treatment. And we plan to open between six and ten clinical sites.

As before, we will be monitoring the safety of SB-509 as in the Phase 1a and 1b studies. We will also monitor the effects of the treatment on pain and measure clinical effects by evaluation of symptoms, neurologic examinations, as well as electrophysiologic and quantitative sensory testing.

In addition to the previously described measurements, we will also assess changes in nerve integrity in these subjects by examining changes in the density of nerve fibers in the skin after treatment with placebo or SB-509. This will be done by taking small punch biopsies from the skin on the thigh and quantifying the presence of nerves using histochemical techniques.

Measurement of the density of nerves of the skin is a recently adopted quantifier of nerve health and is useful for a number of reasons. While deficits in nerve conduction velocity and quantitative sensory testing are indirect markers of loss of nerve function, punch skin biopsy, an assessment of nerve fiber density, is a direct assessment. This class of nerve fibers found in the skin is affected early in diabetes, and typically is the most sensitive measurement of velocity.

Finally, these epidermal nerve fibers can be treated in a very standard procedure by applying capsaicin - this is the active ingredient that makes chili peppers hot - so that the degree of regenerations of the nerve can be assessed.

Finally, while data obtained from the Phase 2 trial will not be statistically significant, we believe that we will have a significantly large study to detect any trends in efficacy, helping us in the design of a pivotal Phase 3 trial.

In closing, we are encouraged by the results to date from the Phase 1a and 1b trials, and we are excited to be moving this novel drug to the next stage of clinical research. Edward.

Thank you, Dale. We are obviously very pleased with the initial data from the Phase 1a and Phase 1b studies. As you heard from Dale, we have not observed any drug-related SAEs or dose-limiting toxicities, allowing us to treat subjects in the dose range that has been shown to be efficacious in animal studies. In addition, we are seeing encouraging anecdotal effects on the clinical symptoms. We look forward to presenting the full-blown follow-up from the Phase 1a study as well as the data from the 1b extension trial at appropriate clinical meetings in the future, including the EASD meeting in September.

As you also heard, the Phase 2 study is designed to be double blinded. And as such, there is no provision or opportunity for interim data analysis. Once this study begins, we do not plan to provide updates until the final subjects are treated. Data from the trial will not be released until the follow-up has been completed. We currently expect this to be in the middle of 2008.

Continuing on our clinical development progress, we expect our partner, Edwards Lifesciences, to initiate a Phase 2 clinical trial in critical limb ischemia before the end of this year. We are also working hard to file an IND for our ZFN gene modification of CCR5 in T-cells for HIV/AIDS by the end of this year. Putting it all together, we expect 2006 to continue to be a year of significant clinical progress, and look forward to updating you at clinical meetings and on future calls as data become available.

We also continue to look at thoughtful opportunities to monetize the technology and intellectual property value we have created. Last year we announced a very significant agreement with Dow AgroSciences. Earlier this year we announced an expansion of our enabling technology agreement with Pfizer. And today I'm pleased to announce a new protein production agreement with Kirin. You should expect to see additional announcements in this area in the second half of this year.

We are also increasingly focused on developing strategic partnerships for our ZFP Therapeutic, and I look forward to providing you with more information on our progress in this area on future calls.

Finally, you can expect us to continue to carefully manage our expenses. In 2006, with our Phase 2 trial for diabetic neuropathy in progress and a new IND for HIV, CCR5, our net cash used will be approximately $17 million. We therefore expect to end this year with approximately $50 million in cash and cash equivalents. This guidance does not take into account any new corporate partnerships that we might establish later this year.

The progress that we have made in the past quarter represents very important and fundamental steps towards our ultimate goal: to develop ZFP Therapeutic as a new and highly differentiated class of human pharmaceuticals.

This completes our prepared comments. I would now like to open up the call for your questions.

[Operator Instructions]

And your first question comes from the line of Charles Duncan with JMP Securities. Please proceed, sir.

Good afternoon and congratulations on an excellent quarter of progress.

Thank you, Charles.

I had a couple of questions with regard to the Phase 2 as it relates to the ongoing Phase 1b. Is there a certain piece of data that you're looking for to start the Phase 2? What is really the question that you're trying to answer with the Phase 1b?

I'll take the first part and then ask Dale to comment. We're not waiting for any particular new data or particular observations out of the Phase 1b to initiate the Phase 2. The Phase 2 really is moving us forward into a placebo-controlled trial with much larger numbers and in a repeat dosing situation. So we're not waiting for anything incremental from 1b, but let me ask Dale if he wants to expand upon that.

Hi, Charles. So the Phase 1b is a single treatment of the SB-509 and the Phase 1, the extension that we have designed is basically a placebo-controlled versus SB-509. So it gives us the opportunity to get the first sort of controlled dataset of the efficacy and safety of a single injection. I think that materially will not affect the design of the Phase 2 trial. But as part of the product development, development of incremental data on both efficacy and safety, should provide us with very important placebo-controlled data of single treatment. And obviously diabetes is a chronic disease, so building upon that will be the Phase 2 program with repeat treatment.

What are your thoughts on the dosing? Would you perhaps look at a couple different doses in Phase 2 or are you pretty much nailed down on the dose?

Yes, I think we're quite happy with the 60 milligram dose distributed in two legs. That brings us right into the efficacious dose in the animal models. And at this point, doing any further dose level changes would actually decrease the power of the observation of the Phase 2 trial. So I think we're quite comfortable with the dosing and the dosing intervals, and the trial is designed to give us as much statistical power as we can from this number of patients.

I know that we are probably way premature to even consider this, but what are your thoughts about perhaps turning that Phase 2 into one of two trials necessary for a registration package? Any sense that that could occur?

Well it certainly will be the prototype. The key will be analysis of the data, and then based on that, defining the primary endpoint. You can't really transition from two to three in the same trial. You really have to analyze a trial, define the primary endpoint after the Phase 2 trial. And there's a process of meeting with the FDA to get basically agreement on the primary endpoint and then starting a Phase 3 trial. But in terms of indication, yes, I think this is the most moderate indication in diabetic neuropathy and would certainly be the basis of one Phase 3 trial.

Now if I may, one last question on 509. You mentioned the nerve density on biopsies that you'll be doing. Any other clinical indications that you've given thought to where that data may be applicable, may inform you on a different indication besides diabetic neuropathy?

Yes. So this type of nerve fiber density endpoints and then the regeneration study with capsaicin has also been used in toxic neuropathy such as associated with HIV neuropathy. So that definitely would be an endpoint that could be used in both. And as we have discussed earlier, ir gives you direct histologic information on the viability of these sensory nerves of the skin.

Thanks, Charles

Then will -- thanks, Edward.

And your next question comes from the line of Edward Tenthoff with Piper Jaffray. Please proceed.

Great. Thank you very much for taking my question. Just one quick follow-up to Charles' question. What are approvable endpoints for diabetic neuropathy? And then I guess my second question, if I may, would be on the HIV program. Is there anything else that you guys need to accomplish before filing that IND?

Yes, in terms of approvable endpoints in diabetic neuropathy, there is not a good -- nothing has been approved for diabetic neuropathy so far. So there's nothing that we can go to the public record and say this has been approved. That being said, there have been a number of Phase 3 trials that have been designed and presumably discussed with the FDA. The use of composite scales, such as the one we're using, I think is fairly common.

There was an advisory committee [in 2004 where these types of scales and nerve conduction velocities were analyzed. And then in addition, the electrophysiologic tests, such as nerve conductor velocity, have been used as part of a multi-endpoint analysis with scales and improvements in parts of the NCV approvable endpoint.

So most likely the scales of the neurologic endpoint is a composite of sort of symptoms and exams in addition to the quantitative assessment using electrophysiology. So we're basically -- have covered the gamut of endpoints and will be assessing that using a predefined, a multi-endpoint analysis for this trial, and should be able to gather what composite will be the best for a Phase 3.

And in terms of the HIV neuropathy studies, at this point we have not done any animal modeling in any HIV neuropathy such as ddI, ddC, etc. So I think some level of efficacy in a toxic neuropathy, which has a different kinetic, would be necessary before we filed an IND and extend it into the HIV area.

And do you think that you'd be on time to do that by year end?

Let me just -- you told -- Ted's question was about the CCR5 ZFN trial, and where we are with that, what the next steps are.

Yes. With that trial at this point we are working on the scale-up of the manufacturing of the CCR5 modified T-cells at the University of Pennsylvania. And we're trying to work aggressively to see if we can file an IND at the end of the year and get the appropriate HIV challenge and infection data given to support the IND.

Great. Thank you very much, Dale.

Thanks, Tent.

And your next question comes from the line of John Sullivan with Leerink Swann. Please proceed.

Hey guys. Good afternoon.

Hey, John.

Just a question away from application of your technology to human health. It seems to -- it seems that investors are increasingly appreciative lately of the application of molecular technologies like yours to applied markets outside of human health. Is there any update that you can give on partnerships like Dow AgroSciences or other programs where you are selectively controlling specific genes outside of human health?

Let me give you a couple of things and then ask anyone else around the table if they want to add to it, John. But our business model is very much consistent with that, focusing on the core science, but then leveraging in areas where we think we can create outcomes that are both unique biologically but also important economically. And so the Dow AgroScience collaboration is very much in evidence in that approach.

We don't have new data that we can talk about today. But I can tell you, just from a high level, that that program is going extremely well. And we do look forward to opportunities over the next six, 12 months to update you on some of the specific progress.

We've also been quite successful in using both a gene activation technology and more recently, the nuclease technology, to do cell line engineering to improve or increase the production efficiencies of mammalian cells for antibody, monoclonal antibody production and recombinant protein production. And then we also continue to be asked, and have a lot of interest in, extending the technology into more general laboratory research reagents, and those are part of ongoing discussions as well. Does that address the question, John?

Yes, very helpful. Thanks.

Okay.

And your next question comes from the line of Pamela Bassett with Cantor Fitzgerald. Please proceed.

Hi, everyone. Thanks for taking my question.

Hi, Pamela.

Pamela Bassett Hi. A follow-up about Dow. Should we expect to get a little bit more detail or color on that program before the end of the year?

I would say, Pamela, that's my hope. But you'd have to under -- well I know you already understand -- is that this is a collaboration that Dow is very excited about, but also in a field that's very competitive and an area where a disclosure of the specific targets is not something that any of us, particularly Dow, wants to do prematurely. So we look forward to opportunities to discuss the program, but I'd say at a time and place when it's appropriate.

Okay. A couple other questions. The Kirin agreement, is that a commercial license?

It's a materials transfer agreement, a company synthesis agreement, and so they're evaluating the chosen cell line.

Okay. Great. And any other -- what should we, how should we think about the other of some of the other preclinical programs in terms of when they might move closer to the clinic? Is there one, are there one or two programs that seem to be ahead of the others or are they all moving in parallel?

Well the short answer is yes, there are one or two that are ahead of others. And that's exactly what -- and I appreciate the question, because that's exactly what we plan to discuss closer to the end of the year. And right now we're planning our third quarter call in October, end of October, and then an analyst briefing in New York in early November, and we'll be coming out with more specifics on that. But at that time we really do plan to give you much more insight into our plans for '07 and '08 in terms of the preclinical pipeline.

Okay, great. Thank you very much.

Sure. Thank you.

[Operator Instructions]

And your next question comes from the line of Alastair Mackay with GARP Research. Please proceed.

Hi. Good afternoon.

Good afternoon, Alastair.

I wonder if you have any thoughts about the contralateral beneficial effects that the Phase 1 data suggests might come from SB-509. Is that an opportunity or a risk, or is it too early to say much of anything about it at this point?

Well, I'll chime in first and then Dale can give you his point of view. I think it's too early to really have much of a point of view in the 1a work. In the Diabetes paper, we did not see any activities in the contralateral limb, and that was done in a large enough number to have some statistical significance. In the 1a that was done at three, at four different dose levels, three people per dose, contralateral limbs. And so I think that, statistically speaking, it's just too few numbers to have anything beyond that to say that there's some anecdotal observations. But Dale, you want to add anything to that?

I would agree; it's too early. We're still analyzing some of the pharmacology data, et cetera, and unfortunately the numbers of patients are so small. And that's one of the reasons why the extension and moving to patients either treated with placebo or with SB-509 in the extension is important in helping us sort out some of the pharmacology issues. So that's an ongoing process at this time.

Great. And if I could ask one question, changing subjects a little bit. It seems that with SB-509 that the target sequence in a model animal such as a rat is the same as with a human. About CCR5 I don't know, but I'll guess that the relevant sequence is different in most model animals than it is for the CCR5 gene of humans. Going forward, do you see thatas being a potential issue with different therapeutic targets, a case where you have a different sequence in the model animal that you prefer to use for a given disease compared to what it is in the humans?

So, Alastair, it's a very insightful question. And I'd say it happens more often than not, that we will build a specific activator or a specific repressor to a given species and then another one to a human sequence. And I can think of several examples where we've done that. But you're correct. In the VEGF activator, the target sequence is conserved in both the mouse models and rat models as well as human. But Phil, if you want to add anything:

I think that the, specifically with respect to the CCR5 program that you're referring to, because we're treating cells ex vivo, there really isn't a question of whether to go into it as an animal model because the animal models will investigate whether those human cells treated with the ZFP, to be therefore CCR5 negative, will behave in the appropriate way. So there isn't a question in that particular program as to whether there's species conservation of the CCR5 gene.

So it seems like it is not really a major issue in terms of the toxicological or the regulatory filings that have come up in the course of development.

This is Dale talking. I wouldn't say it's not an issue, but it's not a unique issue to ZFN. It is the same issue in biologics. Several of the interferons at very different levels of action and human interferons did not work on the mouse systems. Many of the specific human monoclonal antibodies, against VGEF receptor, for example, were not found to react with murine species. So from a regulatory point of view, the sponsors have worked with the FDA often use, basically murine-specific products and use that to test in parallel with what's called homologs in terms of efficacy and safety. So it's not a new issue unique for ZFN and I think in biologic has been a major, has been an issue since the beginning of the biologics.

Okay, great. It's a great answer. Thank you.

Thanks, Alastair.

And your next question comes as a follow-up from the line of Charles Duncan with JMP Securities. Please proceed.

Yes, thanks for taking my follow-up.

Sure.

You talked about a partnership beyond the protein manufacturing partnerships and you said that you look forward to updating us. Can you give us some sense as to which clinical area you're thinking? Is it in the new diabetic neuropathy programs that you're having the most interest out of partnerships or out of would-be partners?

It's a good question, Charles. Actually the interest from different pharmaceutical and biotechnology companies really covers the gamut of most of the programs, both clinical and preclinical, that we're working on. So we have discussions of strategic relationships in the area of infectious diseases, in the area of cardiovascular disease, in the area of neuropathic pain. But you're correct. In general, the more mature a program, the more data there are, the more interest there is in terms of the potential large pharmaceutical companies.

And how would you like us to think of that, as a goal or as something you're very confident in? I know you don't control the whole process.

Sure. I'd like you to think of it as a sort of a core or central part of our business model. We have a platform technology. We think it can be applied to generate unique therapeutics with unique outcomes. And we are -- our business strategy is to thoughtfully monetize the platform, both the technology and intellectual property value that we're creating.

And I guess the emphasis there is "thoughtfully". We're not going to do something just for the sake of doing it. We're going to do things that we think really create not only mid-term but long-term value for the business. And obviously our recent financing continues to give us the runway on which to be hopefully continually thoughtful. But with that said, it's a major goal and it's a major part of our business model.

But in terms of intellectual capacity and/or financial capability, capabilities, with regard to clinical development expenses that you envision in the next call it 18 to 24 months, you're all set?

Yes. For the next time period with ending this quarter with $59 million in the bank, ending the year with at least $50 million in the bank. Our various businesses, our business opportunities that we have successfully completed outside of therapeutics, in agriculture, and in enabling technologies continues to allow us to keep a low burn rate, and principally in terms of paying for the infrastructure. And then $50 million over the next several years, given our clinical development plans, is more than sufficient.

Okay. Thanks.

Thank you.

At this time there are no more questions. I will now turn the call over to Mr. Lanphier for closing remarks.

Thank you. We'd like to thank you for joining us and we look forward to speaking with you again when we release our third quarter financial information. We'll be available later today if there are any follow-up questions.

Thank you for your participation in today's conference. Ladies and gentlemen, this concludes the presentation. You may all disconnect, and have a good day.