Sangamo Therapeutics Inc (SGMO) 2009 Q4 法說會逐字稿

Good afternoon, and welcome to the Sangamo Biosciences teleconference to discuss fourth quarter and full year 2009 financial results. Today's call is being recorded. I would now like to pass you over to your coordinator for this event, Dr. Elizabeth Wolff, Director of Corporate Communications.

Thank you, Gwen. Good afternoon, and thank you for joining Sangamo's management team on our conference call to discuss the Company's fourth quarter and full year 2009 financial results. Also present during this call are several members of Sangamo's senior management, including Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; and Dale Ando, Vice President of Therapeutic Development and Chief Medical Officer.

Following this introduction, Edward will highlight recent activities and the significant events from the past year. Ward will then briefly review fourth quarter and full year financial results for 2009. Dale will provide an update on our ZFP Therapeutic programs, and finally, Edward will update you on our goals for 2010. 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 during 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 the future performance of Sangamo with you today, we are not undertaking an obligation to provide 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 reports 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 thank you all for joining us for our conference call to discuss our fourth quarter and full year results for 2009. The past 12 months have been an important period of maturation for Sangamo as a therapeutic product development Company. We expanded our pipeline by initiating two new clinical trials, moved four programs through Phase 2 trials, and brought in over $40 million in additional capital from a variety of sources to fund these activities. In addition, this has been a period of tremendous progress in establishing our ZFP technology as a powerful platform in ground breaking applications in plant agriculture, transgenic animals and engineered cell lines.

Let me provide you with a few specific examples of our progress. A few weeks ago, we announced the initiation of a Phase 2b clinical trial of SB-509 in subjects with moderate severity diabetic neuropathy, or DN. As most of you already know, SB-509, our lead ZFP Therapeutic, is a zinc finger activator of the vascular endothelial growth factor for A gene, or VEGF-A, and has been shown to have significant effects on nerve and blood vessel growth in preclinical and clinical studies. Our new Phase 2b trial, SB-509-901 is a double blind repeat dosing placebo-controlled study and is designed to build on a wealth of data that we have gathered from earlier Phase 1 and Phase 2 trials.

These data have enabled us to identify a patient population who have a level of DN severity that we believe will give the greatest response in approvable clinical end points to SB-509 treatment over 180 day time period. The 901 study is designed to finalize dose, treatment schedule and primary and secondary approvable end points for pivotal Phase 3 trials. I've asked Dale to provide more details on this important development later in the call. On the business development front, while we continue our discussions with several companies regarding the development and commercialization of SB-509, beginning this trial in a timely manner allows us to continue to move this first-in-class drug forward and will maximize the present and future value of this program.

With respect to the perception of present value, the Juvenile Diabetes Research Foundation, or JDRF, whose science advisors know the SB-509 program and the Phase 1 and Phase 2 data very well as they were supporters of our 601 trial, have also renewed their support and will provide another $3 million in funding for the 901 study. Finally, given the neuromuscular activity of SB-509, we are also evaluating this drug in amyotrophic lateral sclerosis, or ALS. In December, we presented preliminary data from the first subjects enrolled in the SB-509-801 Phase 2 clinical trial at the International ALS meeting in Berlin. While early, the data demonstrated an approximate doubling of frequency of improved muscle function at day 120. Post treatment in subjects who received two treatments of SB-509 compared to matched historic controls.

Keep in mind that this approach is not designed to be a cure for ALS, but rather to improve muscle strength and function in order to give patients more control over their muscles, thus slowing the rate of loss of strength and improving their quality of life. We also saw important progress in our HIV programs. In February 2009, Sangamo and our collaborators at the University of Pennsylvania Medical School initiated the first Phase 1 safety trial of SB-728-T for the treatment of HIV/AIDS, and in September 2009 we announced the initiation of a Sangamo-sponsored Phase 1 trial, SB-728-T-902 at a site in San Francisco. In contrast to the UPENN study in which a single dose of modified T-cells is given, our study is a repeat dosing trial. Beginning our own trial enables us to expedite the clinical and commercial development of SB-728-T.

Both studies are designed primarily to evaluate the safety and tolerability of this ZFP Therapeutic. However, subjects (inaudible) four T-cell counts levels of CCR5-modified T-cells and viral burden will also be monitored. On that point, our collaborator, Dr. Carl June, was invited to present preliminary data from the University of Pennsylvania study at a Keystone symposium a few weeks ago. The data were from an HIV positive subject treated with SB-728-T who, as part of the study, began a defined structured treatment interruption or STI, four weeks after treatment. During the study, the subject's CD4 T-cell count, the number of circulating ZFN CCR5-modified T-cells and the subject's viral load were measured.

In addition, biopsies were taken prior to treatment and at the end of the STI period to monitor levels of CD4 positive and ZFN modified T-cells in the gut associated lymphoid tissue or GALT, a major reservoir of immune cells and a critical reservoir of HIV infection. As expected, the subject's viral load increased during the STI period. However, the return of the virus was delayed. Importantly for our approach, CD4 positive T-cells and ZFN modified T-cells were found to be stable and were observed in the GALT, suggesting that ZFN modified cells were able to expand and were circulating and trafficking normally in the body. These preliminary data are encouraging and we plan to present additional data from these programs by the end of 2010.

Also in January 2010, we announced that our second ZFN program and our third party ZFP Therapeutic drug was entering the clinic. Late last year, the U.S. Food and Drug Administration reviewed and accepted an investigational drug application to initiate an open label multi-dosing Phase 1 clinical trial to evaluate a ZFN Therapeutic for the treatment of glioblastoma, a type of brain cancer. The trial is being initiated by our collaborators at the City of Hope and is designed to evaluate the safety and tolerability of a modified CD8 positive cytolytic T-lymphocyte or CTL product, that has been made resistant to glucocorticoid steroids using our ZFN technology.

As this study is still very early and is being conducted by our collaborators at City of Hope, we are not providing any further guidance at this time. But I have asked Dale to provide a brief outline of the rationale for this study later in the call. So before going into more detail on our recent clinical announcements and our plans for 2010, let me hand the call over to Ward to update you on our fourth quarter and full year 2009 financial results, as well as our financial guidance for 2010. Ward?

Thank you, Edward, and good afternoon, everyone. As you know, after the close of the market today we released our financial results for the fourth quarter and full year ended December 31, 2009, and I am pleased to review the highlights of those results. Revenues in the fourth quarter of 2009 were $10.2 million compared to 6.8 million for the 2008 quarter. The fourth quarter 2009 revenues were primarily comprised of revenue from Sangamo's collaboration agreements with Sigma Aldrich and Dow AgroSciences and enabling technology agreements, as well as approximately $70,000 of revenue from research grants.

The increase in revenues was primarily due to the $15 million license payment that we received from Sigma as part of our expanded agreement which we are recognizing ratably into revenue through July 2010. Total operating expenses for the fourth quarter of 2009 were 12.7 million compared to 9.0 million for the same period in 2008. Research and development expenses were 8.7 million in the 2009 quarter, and 6.7 million for the prior year quarter. The increase was primarily due to increased expenses related to clinical trials and manufacturing and increased personnel costs, including non-cash employee stock based compensation. General and administrative expenses were 4 million in the fourth quarter of 2009 compared to 2.3 million in the 2008 quarter. The increase in general and administrative expenses was primarily due to increased personnel costs, including non-cash employee stock based compensation, and professional fees.

For the fourth quarter of 2009, we reported a consolidated net loss of 2.4 million, or $0.05 per share compared to a loss of 2.6 million or $0.06 per share for the fourth quarter of 2008. For the full year 2009, revenues were 22.2 million compared to 16.2 million in 2008. The increase in revenues for 2009 was primarily attributable to our expanded agreement with Sigma Aldrich. Total operating expenses were 41.6 million in both 2009 and 2008. The net loss for 2009 was 18.6 million or $0.44 per share, compared to a net loss of 23.4 million or $0.60 per share for 2008. Turning to the balance sheet, I'm pleased to report we ended 2009 with $85.3 million in cash, cash equivalents and short-term investments.

Key contributors in the fourth quarter to this increase in cash were the expanded agreement, license fee and payment of 15 million from significant Sigma Aldrich referred to previously, as well as an equity investment of 5 million from Sigma and the equity offering that we completed in October that resulted in net proceeds of 20.9 million. It is worth noting that our net cash used in operating activities for 2009 was 6.1 million compared to 17.3 million in 2008 and 16.1 million in 2007, all of which have reflect our ongoing commitment to prudently manage our cash. With respect to financial guidance for 2010, we expect to have cash and investment balance of at least 60 million at the end of 2010.

In summary, this has been an eventful year and we are pleased to have exceeded our objectives for 2009 with respect to our operating results and net cash used in operating activities. We will continue to be focused on advancing our clinical and pre-clinical pipelines while maintaining our historic financial discipline. Thank you, and I will now turn the call back over to Edward.

Thanks, Ward. As you have heard, we begin 2010 with a strong cash position. Ensuring that we have sufficient capital to expand our pipeline and prosecute our therapeutic programs is an important part of managing the drug development process. And last year, we were very successful in a number of fronts.

As Ward just outlined, we raised a little over $40 million in the fourth quarter of 2009. In October, we announced a major expansion of our existing license agreement with Sigma Aldrich for which we received $20 million in upfront payments, and on the heels of that transaction, we completed a $20.9 million financing. In addition, late last year, we were successful in accessing research grant funding from several sources to augment the development of several of our ZFP Therapeutic programs. The California Institute for Regenerative Medicine awarded a $14.5 million disease team research award to a multidisciplinary team of investigators led by the City of Hope to support our ZFN, CCR5 approach for HIV/AIDS in stem cells. This is in addition to a small but prestigious Grand Challenges Explorations grant that we received from the Bill and Melinda Gates Foundation earlier in the year to support an innovative global health research project, in this case ZFN for an in vivo treatment of HIV infection.

Our ZFN technology is also being applied to monogenic diseases such as sickle cell disease, and our collaborator, Dr. Donald Kohn, Director of the UCLA Human Gene Medicine program is a recipient of a $.5 million Doris Duke Innovation and Clinical Research award to support research focused on ZFN mediated gene correction in hematopoietic stem cells for sickle cell disease. Looking forward, we expect to end 2010 with at least $60 million in cash and cash equivalents. This cash projection does not include any new agreements or partnerships that we may development this year. As you know, the broad applicability of our technology in multiple commercial markets has enabled to us develop a business model which provides sufficient revenue from non-therapeutic -- significant revenue from non-therapeutic applications. This has allowed to us move our maturing portfolio of therapeutic programs forward with a very modest cash burn. Specifically, in 2009, our net cash used in operations was only $6.1 million. Our goal is to be as efficient as possible in our use of cash while aggressively building value. I think we are achieving that objective.

As I mentioned earlier, having a strong balance sheet gives us the flexibility and alternatives to pursue the path that we believe will maximize the value of our programs. The data generated to date in our SB-509 program provides direct histological evidence of nerve regrowth and a mechanicnistic proof of concept for its neuroregenerative effects. Our enthusiasm for the potential and importance of this drug is shared by patients with diabetic neuropathy, our key opinion leaders, potential pharma partners and the JDRF, who, after extensive review of the clinical data, has committed do fund a further $3 million of development costs for our new Phase 2b trial.

I've asked Dale to provide you with more information about the rationale behind and the specifics of this study. In addition, Dale will give you a brief description of our newest clinical program in glioblastoma. Dale?

Thank you, Edward. As you've heard, in recent months, we have made important advances in our therapeutic pipeline with the initiation of a new Phase 2b trial of SB-509 in diabetic neuropathy, and the Phase 1 trial of our ZFN Therapeutic program for glioblastoma, a type of malignant brain cancer. The Phase 2b clinical trail SB-509-901 will evaluate SB-509 in subjects with moderate severity DN. It is a double blind repeat dosing placebo-controlled study designed to finalize the dose, treatment schedule and primary and secondary end points for pivotal Phase 3 trials. Importantly, this study is being carried out in the population that we have shown to be the most responsive to SB-509.

Data from our earlier Phase 1 and Phase 2 trials have enabled to us identify subjects that we believe are likely to demonstrate the greatest response to SB-509 treatment over the 100 day evaluation period. The inclusion criteria for the Phase 2b trial are based upon our accumulated data and include baseline thresholds in measurement, in large sensory nerves as measured by sural nerve conduction velocity, or NCV, and small sensory nerves by intra-epidermal nerve fiber density or IENFD -- IENDF, and vascular disease severity of DN as measured by baseline ICAM-1 levels in the blood. NCV in the sural nerve measures the rate of transmission of an electrical signal along the major sensory nerve that runs along the top of the foot; while IENFD is a direct histologic measurement of the density of nerve fibers in the skin, and is a direct enumeration of the stage of the subject's newer paper. The JDRF is particularly interested in the value of IENFD as a measure of nerve damage. The funded collection of these data in our SB-509-601 Phase 2 trials, and we are most impressed by the improvement that we observed in that trial in net fiber density.

Patients stratified by IENFD at baseline showed a four-year reversal of disease, and this data provided proof of concept for the nerve regenerative activity of SB-509 in man. We expect to accrue a total of 150 subjects into the Phase 2b trial. Each subject will be randomized one-to-one between placebo and treatment groups. The study has power to detect statistical improvements in sural NCV. The sural nerve is the first major nerve affected in DN, and as this is a double blind study we do not expect to provide interim data, and with our historic experience and accrual onto such trials, estimate we will have data by the end\ of 2011. However, in the second quarter of 2010, we will have data from the three dose arm of our Phase 2 trial of SB-509 in severe DN -- SB-509-701, part B. In this study, SB-509 is being evaluated in subjects that have at least one nerve in the leg for which nerve connection velocity cannot be measured.

In addition, we also expect to have data in the second half of 2010 from our Phase 2 trial in ALS. We will provide you with more information on where we will present these data on future calls. As Edward also mentioned, in the fourth quarter of 2009, along with our collaborators at City of Hope, we filed an Investigational New Drug, or IND, application with the FDA to start a Phase 1 clinical trial of our ZFP Therapeutic program for the treatment of recurrent and refractory glioblastoma. I am very pleased that in early January we were able to announce that City of Hope is initiating this important study. glioblastoma multiforme is a type of malignant brain cancer that is rapidly progressive and nearly uniformly lethal. The disease is currently managed through a combination of surgery and radiation if the location and size of the tumor allow these treatments. With modern combination therapy, the mean duration of survival has increased to 82 weeks, although five-year survival rates have only increased from 3% to 6%. Approximately 80% of recurrent tumors arise from the remnants of the original tumors (inaudible) incompletely removed by surgery.

The median survival of recurrent glioblastoma patients that are eligible to be treated with a seconds surgery is 36 weeks. Due to the location of these tumors in the central nervous system, current treatments for recurrent disease are often worse than already severe symptoms, so many patients can not be re-treated. Immunotherapeutic strategies such as anti-VEGF and chimeric T-cell receptors are increasingly being used because they are very tumor specific and limit side effects in subjects with recurrent disease. However, the problem with therapies using T-cells is that this approach is not used in situations where the patient is on high levels of steroids, which are commonly used to decrease brain swelling as a result of their disease and the surgery necessary to treat it. The steroids also effectively depress the immune system and activate the therapeutic T-Cells. This is where our ZFN technology is useful. In collaboration with scientists at City of Hope, we have been able to knock out the gene for the glucocortitoid receptor, or GR, on the therapeutic T-cells, in this case, a T-cell that has been engineered to recognize and kill glioblastoma cells.

Knocking the GR gene out allows the T-cells to function even in the presence of steroids. It also allows use of off-the-shelf prepared [alogeneric] therapeutic T-cells This is important, since patients with recurring disease need to be treated quickly. In the Phase 1 study, these cells would be infused into the tumor bed over two weeks in order to specifically eradicate the residual tumor that is left after surgery. This trial is a repeat dosing open label trial of the GR negative modified C8 positive cytolytic T-lymphocyte product. As with all clinical studies, the primary function of this trial is to assess safety and tolerability of the drug. In addition, data will be collected on the survival of the infused modified T-cells, as well as on tumor response and overall survival.

The study will accrue approximately ten subjects with recurrent or refractory malignant glioblastoma and will be conducted exclusively at the City of Hope. We look forward to updating you on the progress of this and our other trials on future calls. And with that update, I will hand it back to back to you, Edward.

Thanks, Dale. The ZFN glioblastoma drug, SB-313, is our third ZFP Therapeutic to enter the clinic and the second example of the ZFN based therapeutic approach to go through the IND process. Establishing that, while the technology is (inaudible), the FDA regards ZFN based drugs as an important new therapeutic approach.

As Dale said, we are looking forward to updating you on the progress of all of our clinical programs at appropriate medical meetings and on future calls. Outside the therapeutics area, our partners Dow AgroSciences and Sigma Aldrich are developing, distributing and promoting our technology in their respective fields of expertise. These relationships are not only important for their established ability to bring in near-term and longer-term revenues, but they also enable a broader distribution and recognition of the power and breath of our technology platform. Sigma is distributing ZFPs to researchers in academia and industry all over the world, and our technology is front and center in their presentations and advertising. ZFPs are being broadly applied across the life sciences, all the way from generating custom cell lines and animal models for drug discovery through improving cell lines for biologic drug production, culminating in forming the basis of novel therapeutic discovery programs which which funnel back to Sangamo. Successful approaches are being rapidly adopted.

Consider this; in July, 2009, we published data describing the first ZFN generated rat knock out models. And in January 2010, the first paper was published by independent researchers who made a knock out rat of their own using ZFNs purchased from Sigma. That's less than six months. If you heard Sigma's presentation from the recent JPMorgan conference, ZFP technology is a major component of Sigma's growth strategy and they are eager to capitalize on its "endless possibilities." This is only one example of the growing awareness of our ZFP technology, and this rapid adoption has important implications for our financial future and our future therapeutic pipeline.

Looking to the future, 2010 will be another very eventful year. In the first half of this year, we will have data from our completed Phase 2 SB-509-701 study in severe DN and we plan to present data from SB-509-801 in subjects with ALS in the second half of this year. We will also continue to prosecute our HIV programs, and expect to have data from at least one of the trials by the end of 2010. As you have no doubt gathered, our clinical team has a very full plate, and we are actively recruiting into the development group. Earlier this year, we expanded our senior clinical development team, appointing Shirley Clift to serve as Vice President of Regulatory Affairs and Dr. [Winston Tang] as Vice President of Clinical Research. I'm very pleased to welcome Shirley and Winston to Sangamo. Our diversified business model will continue to serve us well in 2010, providing milestone and royalties from our agreement with Sigma and commercial sublicenses and milestones from Dow AgroSciences. We also continue our discussions with strategic partners regarding our ZFP Therapeutic programs, including SB-509.

From a financial perspective, our business development and financing activities over the past year have put us in a strong position, enabling us to begin this year with 85.3 million in cash and cash equivalents. You can expect us to continue to carefully manage our expenses while working hard to build value in clinical development and additional strategic alliances. However, assuming no new partnerships or financing and continued prosecution of all of our clinical programs, we expect to end 2010 with at least $60 million in the bank. In conclusion, 2009 was an important and exciting year for Sangamo, and we expect 2010 will build on that progress. We continue to stay focused on and make substantial progress towards our goal of establishing ZFP Therapeutics as a new and highly differentiated class of human pharmaceuticals, and we look forward to keeping you informed of our progress. We will be presenting at the BIO CEO and Investor conference next week in New York City and at the Cowen Healthcare conference in March. This completes our prepared comments, and I would now like to open up the call for your questions.

(Operator Instructions). We will take our first question from Charles Duncan with JMP Securities.

Hi, guys, thanks for taking the question and congratulations on a nice year of progress.

Thanks, Charles.

I had a couple of questions regarding the details of the diabetic neuropathy study that maybe I didn't catch. Can you give me some color on the duration of therapy and the administration regimen?

Sure, Charles. The treatment regimen is the same as the 601 trial, with treatment at days 0, 60 and 120, and the primary data analysis point at day 180. Is that your question?

Yes, that answers it, thanks. And then how is the trial blinded? Will you use an actual -- do the same administration with out the zinc finger in it?

You mean how is it controlled?

Yes, yes.

(Inaudible). Same as the 601 trial, same as the 701 trial.

Okay. And then finally, are you allowing concomitant drugs to be used like standard of care?

For their diabetes, they are allowed to be treated with their current regimen. It has to be stable. And basically the only drugs for diabetic neuropathy are for pain symptoms, and they are allowed to be treated with any pain medications. There are no drugs that are neuroregenerative that are approved for treatment.

But they will be able to use their pain meds as usual? And then final question regarding that, you said that it was hard to detect a statistical difference in sural nerve conduction velocity change. But can you give us a sense of the magnitude of change that you would like to see?

Greater than one meter per second.

And that is clinically significant in your view, or based on your diligence?

Yes, yes.

It's clinically relevant, that's right.

And then one last question for Edward, perhaps. I know you aren't guiding to any partnerships, and that makes sense -- I think you have the wherewithal to take this ball over the goal line -- but can you characterize of types of interactions you are having with potential future therapeutic partners? Are they kicking the tire? Is there some interest? And kind of what those interactions involve?

The short answer, Charles, is yes, there's interest, there is tire kicking and there are meaningful discussions. But as you also pointed out in the premise of the question, we are in a position to take this through the Phase 2b trial on our own. So it's really now a business decision in what will create the maximum value around the program and for our shareholders.

Thanks for taking my questions. I'll hop back in the queue.

Thanks, Charles.

We'll go next to Liana Moussatos with Wedbush Securities.

Hi, thank you. Following up on Charles' question, asking you what would you consider to be successful in the 701 study, what would you consider to be successful for efficacy indications in the 801 study for ALS?

For ALS, I think what we are really focusing on muscle strength which can result in improved activity of daily living, (inaudible) specific functions such as being able to use your hand. For example, an ALS patient who can't use their fingers or hands really then is relegated to like a convalescent home home or hospice -- somebody has to feed them, dress them, et cetera. So it's a major change in the activities of daily living if they can't do that. So I think what we are going to really focus on is the ability of SB-509 to increase function of the neuromuscular junction, increase muscle strength. We've seen that increasing muscle strength in the 601 DN studies, so I think we have pretty good evidence that -- in humans that we can improve neuromuscular strength and actual muscle strength in humans. So that's what our focus will be on.

And what would be like a minimum quantitative unit? Like you gave greater than 1 meter per second for the 701 study for NCV?

It's generally on the other of two to three units. I mean, the MMT is a little complicated. But in the end, I think rather than units of strength it's probably the ability to maintain a specific function such as hand grip function, what will probably be much more important to the patient than any grading scale for muscle strength.

Okay. And what duration is the minimum that it matters?

Probably I would say (inaudible) three to four months, with the caveat being nothing does that right now for a period of time.

Okay, and can we get insight -- going more financial -- on the quarter trends -- quarter by quarter trends in 2010 for operating expenses? What should we be thinking about for R&D expense versus the year end? And, I'm sorry, G&A.

Well, I will start, and Ward can comment further further. As you know, Liana, historically we comment on our cash position at the end of the year, and guiding to at least 60 million. Ward, beyond that, anything you want to say about OpEx?

Sure. As Edward mentioned, we don't give specific guidance on OpEx, but as you know, we've got a fairly consistent pattern quarter over quarter. I will point out that in Q4 this year we had a little bit of a true up with respect to some of the stock comp expense, and so that was a little bit higher than the trending. But I think it's fair to look at 2010 along the lines of a slightly reduced Q4 '09 annualized.

And as you know, Liana, those stock compensation expenses are non-cash.

All right, thank you.

Thank you.

We'll go next to Joseph Schwartz with Leerink Swann.

Hi, this is Mike [Smith] for Joseph Schwartz. Thanks for taking my call. I guess picking up on the finance, I guess you have a pretty strong cash position at the moment. Can you give us some more color long-term on the cash burn outlook?

Mike, at this point, the only cash guidance that we are providing is through 2010. And just to reiterate that, assuming no new financings, no new partnerships and continuing to prosecute all of our clinical -- ongoing clinical programs, we expect to end 2010 with at least 60 million in cash and cash equivalents. We've not given and don't plan to give at this time any additional guidance beyond 2010.

Okay. Great. And regarding the Sigma partnership, I was wondering specifically, have they recorded -- I guess they have started selling already the (inaudible) animal models, in particular the rat models. Have they recorded any sales in the fourth quarter of '09 already?

Well, again, I would definitively on that question refer you to Sigma Aldrich.

Okay. Great. And lastly, I guess you are going to provide an update on the HIV program later this year on a conference. Could you provide a little bit more color on sort of the broad outlook in HIV and the indication for the Company?

I can give you a little bit of color maybe, Mike. I refer you to some previous presentations. But the SB-728-T program employs the zinc finger nucleases that disrupt the CCR5 gene in (inaudible) T-cells. As I mentioned on the call, we have also along with our collaborators at City of Hope and USC received a $14.5 million grant from the CIRM, the California Institute for Regenerative Medicine, to apply those same reagents -- the same zinc finger nucleases -- in hematopoietic stem cells, which if successful would create a broader population of the immune system that have a dysfunctional CCR5 receptor. And we have also received funding from the Bill and Melinda Gates foundation to marry those nucleases with an in vivo vaccine approach, intending to create a product that can be used in a global health setting. Beyond that, there are several publications and presentations, but I think that covers the scope of our development activities at this time.

Okay, great. Thanks a lot. Thank you.

We'll go next to Alastair Mackay with GARP Research and Securities.

Hi, I have a follow-up question on the duration of therapeutic efficacy. The trials for diabetic neuropathy, the definitive endpoint is at 180 days. Is there any thought given to looking at some of these patients beyond 180 days to gauge how persistent benefits might be?

So Alastair, I will start, and certainly Dale can go more if we need to. We do follow these patients out; in particular, the primary safety analysis is done through day 360, and we continued to neurological evaluations of patients during that time as well. And Dale, correct me if I'm wrong, but I think we did present day 360, David, and the Society for Neuroscience meeting showing some of the durability of the response as it relates to NISLL out to that point. I know we have done that for the 401 data as well. But we are continuing to evaluate the durability of this process out to at least day 360.

Is that a durability question, something that has come up in discussions with potential partners?

Well, every question comes up, Alastair, with regard to potential partners. I don't mean to be glib. But yes, certainly that question of durability, the chronic nature of the disease, the repeat dosing as respects of a plasma based product which permits repeat dosing are all, I think, significant positive product characteristics here.

Great, and then switching gears to ask Dale if you can comment on this, there has been some interesting genomics data on glioblastomas showing -- not surprisingly -- that there are several broad classes of these tumors and the suggestion being that therapeutic or clinical course is to some extent is a function of what the mutations are in the given cancer. So if one is doing a rather small study and assigning tumors randomly, that could make it harder to interpret results. Have you or Dr. Jensen given any thought to these questions?

Yes, I mean, that, I think, more likely applies to patient who apply for primary therapy. We are selecting a group -- a very select poor prognosis group -- who have recurrent tumors that can be surgically (inaudible), and that has a lot of implications as to the location and size of the tumors. So in the experience of City of Hope, this is a pretty uniform poor prognosis group. So it basically filters out any people who, like in the VEGF (inaudible) studies for primary therapy could have a more variable duration of their tumor due to (inaudible) genetic factors.

Great. Thanks a lot.

(Operator Instructions). We'll go next to Ted Tenthoff with Piper Jaffray.

Great, thank you very much, and congratulations on a productive year. Two questions, if I may. Firstly, with respect to looking at 4Q -- I know we will get the details coming in the Q in a little bit -- but can you give us a sense of what the Sigma Aldrich amortization was in the quarter? Will that be straightlined, ratable, through July?

Ted, yes. Ward here. Yes, it will be straight lined through July.

Okay, great. Now, what made up for the other kind of difference? Can you tell us sort of what the revenues were maybe? Because didn't the Dow Agro amortization end in September?

No, it actually carried on initially through December, and that has now been extended but just with whatever was remaining -- apparently a modest amount -- is now being extended through 2010 because we have ongoing research activity that we have initiated in 2009.

I got you. So there was some Dow in the quarter?

Correct.

Okay, cool, that's very helpful. Good, well, excellent. I look forward to the clinical updates throughout 2010.

Thanks, Ted.

(Operator Instructions). And that concludes our question and answer session. I'd like to turn the conference back over to Edward Lanphier for any closing remarks.

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

Thank you, everyone. That does conclude today's conference. We thank you for your participation.