Sangamo Therapeutics Inc (SGMO) 2011 Q1 法說會逐字稿

Good afternoon and welcome to the Sangamo BioSciences teleconference to discuss first quarter 2011 financial results. This call is being recorded. I will now pass you over to the coordinator of this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications.

Thank you. Good afternoon, and thank you for joining Sangamo's management team on our conference call to discuss the Company's first quarter 2011 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 Therapeutic Development and Chief Medical Officer.

Following this introduction, Edward will highlight recent activities, Ward will then briefly review first quarter financial results for 2011, and, finally, Dale and Edward will update you on our ZFP therapeutic programs and our goals for 2011. 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 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 first quarter results for 2011. Let me begin by briefly recapping the events of the past few months. We continue to make important progress in our ZFP therapeutic clinical programs. In January, we announced the completion of accrual of our Phase IIb clinical trial of SB-509 in subjects with moderate severity diabetic neuropathy. This double blind, repeat dosing, placebo-controlled study, SB-509-901 is designed to finalize dose, treatment schedule, and primary and secondary approvable endpoints for future pivotal trials.

We accrued 170 subjects, slightly more than the initial objective of 150, and are on track to present top line efficacy data from this study in the second half of this year. As we said before, with positive data from this trial, we intend to move forward with partnering discussions to efficiently move this first-in-class disease-modifying drug to the market. I look forward to updating you on the outcome of this trial later this year.

We also presented very positive preliminary clinical data from our studies of our ZFP therapeutic for HIV/AIDS at one of the most important scientific meetings for the HIV field, the Conference on Retroviruses and Opportunistic Infections, or CROI. We are evaluating SB-728-T, an autologous CD4 T cell product in which the CCR5 gene is modified by our zing finger nucleases in two Phase I studies.

Data were presented from both Sangamo's dose escalation trial, SB-728-T-902, as well as the single dose study of the drug that is ongoing at the University of Pennsylvania. Importantly, we observed that the infusion of the modified cells was safe and well tolerated. The cells were persistent and trafficked normally, and the treatment had positive effects on the subjects' immune system.

These data give us tremendous confidence in the potential for this approach going forward as we complete these studies and prosecute our new Phase I-II study in HIV subjects that are not currently on antiretroviral therapy and thus have active viral infections. I have asked Dale to discuss the clinical data that we presented at CROI in more detail later in the call.

In addition to the presentations of the clinical data at CROI, our collaborator, Dr. Paula Cannon, presented positive preclinical data from our studies that use the same CCR5 ZFNs in CD34 hematopoietic stem cells. The data demonstrated the ZFNs can be used to make stem cells resistant to HIV infection without affecting their ability to differentiate into all of the cells of the immune system. Furthermore, in a mouse model of HIV infection, these ZFN modified cells that lack a functional CCR5 receptor have a selective advantage over the nonmodified cells, gradually taking over the entire population of the immune system cells, and within the space of several weeks eliminating the virus.

This work is being carried out as part of the collaboration with Paula and scientists of City of Hope that is funded by CIRM , or the California Institute for Regenerative Medicine, with the ultimate goal of advancing this program to an IND.

In summary, the four oral presentations of Sangamo's program at CROI provided a strong proof-of-concept for our clinical approach and showcased the full range of our programs in HIV/AIDS. If you have not done so already, I would encourage you to view the webcast and listen to the presentations which can be accessed via the CROI website.

In March we announced a collaboration which further expands our pipeline of ZFP therapeutics for monogenic diseases. We are working with the leading nonprofit group in Huntington's disease, the CHDI Foundation, to develop a novel ZFP therapeutic for this devastating disease. Our ZFP therapeutic approach, which will target the Huntington's gene, mutations in which have been shown to be the cause of Huntington's disease, an inherited [neuroregenerative] disease for which there are currently no therapies which slow disease progress. I look forward to updating you on our progress on future calls.

Finally, earlier this month we completed an underwritten public offering of 6.7 million shares of our common stock which resulted in net proceeds to the Company of approximately $50 million. This additional capital significantly strengthens our balance sheet enabling us to more aggressively advance our preclinical and clinical programs, as well as strengthening our position and flexibility in future therapeutic partnering discussions.

Now, on that point, let me hand the call over to Ward, who, as well as giving you an update on our first quarter 2011 financial results and our financial guidance for 2011, will provide a bit more color on this offering and what it means for our Company. 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 first quarter ended March 31, 2011, and I am pleased to review the highlights of those results. Revenues for the first quarter of 2011 were $2.2 million compared to $6.6 million for the 2010 quarter. The first quarter 2011 revenues were primarily comprised of revenue from Sangamo's collaboration agreements with Sigma-Aldrich and Dow AgroSciences enabling technology agreements and research grants. The decrease in revenues between years was primarily due to the completion in July 2010 of the amortization period over which the $15 million in expanded commercial license fee received from Sigma in October 2009 was recognized as revenue under generally accepted accounting principles, or GAAP.

As a result, we recognized $4.8 million in associated deferred revenue in the prior year first quarter, in accordance with the amortization schedule that was completed in July of last year. Excluding this difference, the revenues for the first quarter of 2011 were $2.2 million compared to $1.8 million for the 2010 quarter.

Total operating expenses for the first quarter of 2011 were $11.8 million compared to $10.7 million for the same period in 2010.

Research and development expenses were $8.3 million for the 2011 quarter and $7.4 million for the prior year quarter. General and administrative expenses were $3.5 million for the first quarter of 2011 compared to $3.3 million for the 2010 quarter. The increase in research and development was primarily due to increased clinical trial expenses related to our diabetic neuropathy and HIV studies.

For the first quarter of 2011, we reported a consolidated net loss of $9.6 million, or $0.21 per share compared to a net loss of $4 million, or $0.09 per share for the first quarter of 2010. Again, the principal difference impacting the net loss is the $4.8 million of deferred revenue recognized in the 2010 quarter.

Turning to the balance sheet, we ended the first quarter of 2011 with $49.2 million in cash, cash equivalents and marketable securities. Speaking of our cash position, I would like to make a few comments with respect to the financing we completed earlier this month, shortly after the end of the first quarter.

On April 13, we completed an underwritten public offering of 6.7 million common shares with Barclays Capital, which resulted in net proceeds of $50.2 million for Sangamo. This financing was significant for Sangamo for a number of reasons. First, it provides additional capital to prudently invest in our ZFP therapeutic pipeline to bring these programs to points of optimal value and flexion. Secondly, it strengthens our balance sheet as we evaluate ongoing partnership opportunities across our portfolio. Third, it continues our historical operating perspective of always having multiple years of cash burn on hand.

We now expect to have a cash and marketable security balance at the end of 2011 in the range of $85 million to $90 million, up from the earlier primary guidance of $35 million to $40 million, with the only change due to the financing. Again, this is exclusive of any new funding from a partnership, but it does include anticipated milestones in 2011 from our existing partnership agreements.

I also want to reiterate our earlier secondary guidance provided on our fourth quarter and year-end call back in February, that we expect 2011 operating expenses to be relatively flat compared to 2010, in the range of $43 million to $47 million for the year.

To clarify a bit more, with approximately $8 million to $10 million in noncash expenses, principally stock-based compensation, this guidance of year-end cash and resultant operating use of cash in the range of $20 million to $25 million for 2011 translates into $10 million to $12 million in cash revenues for the Company in 2011, which we expect to be similar to the revenues recognized in accordance with GAAP. Again, the only change in the primary guidance of 2011 year-end cash is to increase it by the amount of financing.

In summary, with respect to finances and operating leverage to support our research and clinical development pipeline activities, I am very pleased to report that the first quarter results which track to our 2011 operating plan, combined with the subsequent common stock offering, have put us in an excellent financial position to start the year. We look forward to keeping you updated on our progress. Thank you, and I will now turn the call back over to Edward.

Thanks, Ward. Our recent financing has significantly strengthened our cash position and, as Ward mentioned, we now anticipate ending 2011 with approximately $85 million to $90 million in cash. This puts us in a much stronger position as we make decisions regarding progression of our preclinical pipeline of ZFP therapeutics and look forward to data later this year from our clinical programs. To state the obvious, a strong cash position gives us greater flexibility around deal structures as we move forward with partnership discussions for various therapeutic programs.

As I mentioned earlier, I have asked Dale to provide you with more detail on the Phase I clinical data from our SB-728-T program in HIV/AIDS that were presented at CROI in early March. Dale?

Thank you, Edward. Our Product Division for SB-728-T is to provide ZFN-modified CCR5 negative CD4 positive T cells that are protected from viral infection and capable of mounting an infective anti-HIV immune response, thereby enabling a functional cure analogous to elite controllers, a group of HIV patients that are able to maintain undetectable levels of HIV RNA and normal CD4 counts without antiretroviral therapy, or HAART.

As Edward mentioned, we presented clinical data from our first studies at CROI earlier this year. While preliminary in these results were the best that we could have anticipated, based upon observations from previous HIV T cells trials, put more directly, the data to date provided mechanistic proof-of-concept that CCR5 and ZFN modification makes T cells resistant and enables selective expansion as we observed in our preclinical studies.

Data were presented by Dr. Carl June from both Sangamo's dose escalation trial, SB-728-T-902, which enrolled so-called immunologic nonresponders, subjects with CD4 cell counts below 500 cells per microliter. In the University of Pennsylvania trial, a single dose study in subjects whose CD4 cell counts were above 500 cells per microliter. Both groups were on HAART and therefore had well controlled virus that was undetectable throughout the trial, although two subjects in the Penn study underwent treatment interruption and halted their HAART for a 12-week period.

The aim of these studies is to evaluate the safety and feasibility of this approach, the pharmacology, specifically the engraftment tissue distribution and persistence of these modified cells, and to evaluate the effect of the modified cells of the subjects' immune systems.

First, a single infusion of SB-728-T and doses of either 10 or 20 billion total cells was safe and well tolerated. We did not observe any significant drug-related adverse events, or SAEs, and the only AEs were mild, reversible, transient infusion-related symptoms.

In aviremic subjects who have no measurable HIV in the blood and who have CD4 T-cell counts less than 500 cells per microliter, the gut is the major tissue where HIV replicates and CD4 cells are being killed. Therefore, we are very interested in the pharmacology of the modified T cells, i.e., how the cells behave once infused, and whether they appear to be trafficking necessarily by examining blood and rectal biopsy samples of these subjects. We have observed an unprecedented durable engraftment of SB-728-T in the peripheral blood of the majority 8 out of 9 of the subjects, as well as a significant increase in SB-728-T relative to total infused cells.

In one subject this increase was as high as 45-fold. At day 14 we observed a median increase of 4.2-fold suggesting that there was an unprecedented rapid in vivo expansion of SB-728-T post-infusion. This translates to a remarkable 6% to 8% of all CD4 T cells measured in the peripheral blood. Put in perspective, this means that 10 billion to 20 billion cells that we reinfuse into subjects increases to approximately 60 billion to 80 billion cells in two weeks.

Importantly, these levels remain persistently high with a median value in 90 days post-infusion of 6%, demonstrating the durability of SB-728-T, consistent with expansion of the modified cells in the peripheral circulation.

The data also demonstrated that SB-728-T traffics normally to the gut, which speaks to the normal functioning of these cells, and that the modification has not limited them in some way. The gut mucosal samples, SB-728-T persists, and these cells appear to undergo selective expansion in one subject approaching 100% CCR modified CD4 T cells. These data provide proof-of-concept that SB-728-T is resistant to HIV infection and able to selectively grow and divide in the major site of active viral replication the gut mucosa in the aviremic subjects.

In addition, we observed a direct improvement in immunologic health of these subjects as demonstrated by improvements in the normal range for total CD4 cell counts and CD4/CD8 ratio. This aroused significant interest at CROI, as well as existing antiretroviral therapies have successfully reduced viral replication in patients. Their effect on the immune system has been to simply slow the decline in CD4 cell counts.

Post infusion of SB-728-T, there was a remarkably high additional increase in total CD4 counts in the peripheral blood in all subjects, and a persistent increase in greater than 100 cells per microliter improvement from their baseline CD4 count in the majority of subjects. This improvement led to persistent normalization of the CD4/CD8 ratios in five out of seven subjects that hindered the trial with CD4/CD8 ratios below 1.

Of importance for the feasibility and scale-up of this process, we presented data from two independent cell processing sites that demonstrated that we have a robust clinical scale manufacturing protocol for ZFN-modified CD4 T cells, SB-728-T that can be transferred.

Finally, we presented data from two subjects that underwent a brief 12-week treatment interruption. While I hesitate to make too much of this brief period of exposure of SB-728-T to detectable virus in the blood, and data from just a couple of subjects, they did demonstrate interesting patterns of HIV RNA appearance and decrease prior to reinstitution of HAART. We will obviously gain more information about the interaction of SB-728-T in the presence of the virus from our ongoing Phase I-II study, SB-728-T-1002 in subjects that are viremic but not currently on any antiretroviral therapy. The compelling data in aviremic subjects that were presented at CROI set the stage for the next studies.

In addition, we are evaluating SB-728-T in a patient population at the other end of the spectrum of HIV-infected individuals, those that are failing HAART. We have added a fourth cohort to our 902 study to evaluate SB-728-T in these multi-drug-resistant subjects. These additions mean that we are evaluating SB-728-T in subjects across a full range of the disease, from newly infected individuals through subjects that are well controlled on HAART, and through to individuals who are resistant to several antiretroviral drug regimens. Data from these populations will drive our next steps in this very exciting program.

Finally, we expect to present the full dataset from the 902 study and preliminary data from the 1002 trial at scientific or medical meetings in the second half of 2011. And I look forward to updating you on these data on future calls. And with that update I'll hand you back to Edward.

Thank you, Dale. As most of you know, our presentation at CROI attracted a great deal of attention and some notable observations on the data and our novel therapeutic approach. Dr. Tony Fauci, Director of the National Institutes of Allergy and Infectious Diseases, and one of the most influential HIV scientists in the world, noted that, quote -- This is elegant work, scientifically very sound and important proof-of-concept -- end quote. Dr. Jay Levy, the head of the Laboratory for Tumor and AIDS Virus Research at UCSF, and one of the early pioneers of HIV research was quoted in Business Week magazine as saying that our ZFN approach to HIV therapy is, quote -- a terrific way of looking for a long-term functional cure for the virus. This approach shows the most promise of any that I know of -- end quote.

As we noted earlier, webcasts of all of the presentations at CROI are available on the CROI website, and I encourage any of you who are interested in a deeper dive into these very encouraging data to listen to the original presentations. And while these clinical data generated significant interest in our ZFN approach to HIV, it also created a much greater appreciation for the potential of our ZFN technology as a therapeutic strategy in other diseases, particularly those with a defined genetic cause such as hemophilia, hemoglobinopathies, and other monogenic diseases.

So, in conclusion, we have had a great start to 2011 with all of our first quarter activities, plus our recent financing. We continue to stay focused on and are making significant progress towards our goal of establishing ZFP therapeutics as a new and highly differentiated class of human pharmaceuticals.

As I mentioned at the beginning of the call, we are on track to have data from our Phase IIb trial, SB-509-901 in subjects with moderate severity diabetic neuropathy in the second half of this year. Also in the second half of the year we expect to present additional data from our Phase I HIV studies, as well as preliminary data from our Phase I-II study in treatment-naïve subjects.

We look forward to updating you on the progress of these clinical studies at appropriate medical meetings and on future calls.

Finally, we will be presenting at two investor conferences next month, the Bank of America Merrill Lynch Healthcare Conference in Las Vegas, and the JMP Securities Growth Conference here in San Francisco. We will also host our annual shareholder meeting here at the Company in Richmond, California at 9 a.m. on June 1, 2011.

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

Thank you, sir. (Operator Instructions) Our first questioner in queue is Charles Duncan with JMP Securities. Your line is open.

Hi, guys. First of all, congratulations on a nice presentation at CROI earlier this year, and thanks for taking my questions. I had a couple. First is on the diabetic neuropathy trial. Edward, you mentioned being able to enroll roughly 170 patients or slightly more than you had anticipated. Could you give us any color on the types of patients that were enrolled? Were you able to get the type of patients that you had expected, the mild to moderate, and why did you get 170 and not stop it at 150? Was that due to demand or screening procedure?

Yes, good questions, Charles. I'll be happy to comment and then if Dale wants to add anything, we can do that. So, the treatment or the accrual criteria was very rigorous and a process that, as you know from the data that we have presented at ADA and from the 601 trial and from the earlier 701 trial, that we really aggressively sought after a moderate severity population. A population that we had shown in a retrospective analysis of the 601 data to have a clinically relevant and statistically significant improvement or delta between placebo and treated. And so there was a rigorous accrual process and we feel quite good about the quality of the patients that we recruited.

And in terms of the numbers, it really was a function of demand at the centers. We had planned to complete accrual by the end of the calendar year of 150 patients and we were able to increase that based upon demand and interest in the study to 170 also by the end of the calendar year. So, Dale, do you want to add anything either on the patient accrual and inclusion criteria or the numbers?

Yes, Charles. So, there was quite a bit of interest, as usual, in this study FTN, and these patients have been consented and undergone a fairly rigorous evaluation for entry into the trial. So, we basically over-accrued by about 20 patients who were in the funnel of our accrual at the end of this period of time. And this is generally a good thing, because it actually increases the statistical power of the study by having those additional patients. So, this is very standard for larger trials that have pretty rigorous accrual criteria and sort of a funnel of screening of patients is to allow the patients who have had significant evaluations and have been consented to the trial to finally enter them if they qualify.

And those were all North American patients or centers, correct?

Correct.

And then if I could hop over to the HIV side of the house. You had mentioned your ongoing Phase I, Phase II trial in patients that were viremic. Can you help us understand how you will transition from the Phase I to the Phase II part of that trial, what will be the, call it trigger, for that?

Well, the Phase I trial, the 901 trial -- I'm sorry -- 902 trial, we have completed the accrual on that. We did add a fourth cohort in the multi-drug resistance category, but that is a distinct separate trial from the 1002 trial. So, the 1002 trial will accrue 14 subjects in a treatment-naïve setting, all viremic. So, separate trials, Charles.

I'm sorry, that's the one I'm referring to, 1002. Isn't that the one that is a Phase I/Phase II, or is it just limited by the 14 patients?

It's a Phase I/II and it's 14 subjects.

With those types, okay, defined by those types of patients. So, when would you anticipate being able to start, call it a classic Phase II or maybe it's a Phase IIb study in those types of patients?

Great question, and I think that the short answer, and I'm not sure there is really a longer answer at this point. The short answer is that will be a data-driven event, and so with the data that we have from the aviremic population and now adding viremic population to both treatment-naïve as well as multi drug resistants, those data will really drive the next steps in terms of Phase II or Phase IIb studies.

So, I don't think there is a longer answer to give you at this point. We do expect to have data from the two Phase I trials presented later this year, as well as preliminary data from the Phase I/II treatment-naive study. So, I guess I just have to ask you to stay tuned in terms of next steps.

So, if you had to guess, are you just going to wait until you see the data? If you looked at the regulatory path and the clinical need, would you consider perhaps a more capital efficient route to be defined by the patients which were multi drug resistant or were earlier on in their disease?

Well, I try not to guess at this point. And so without trying to duck your question, I would say that later this year, when we have data to discuss, we will be able to provide you and the rest of the street with a little more guidance in terms of next steps. At this point, suffice it to say we are deliberately looking at this product across the full spectrum of disease severity in HIV, and based upon data from those studies, that will really drive our decisions and our guidance on this subject.

Okay, that makes sense. Thank you. I'll hop back into the queue. Thanks.

Thank you, sir. Our next questioner in queue is Joseph Schwartz with Leerink. Please go ahead.

Thanks for taking the question. I was wondering if you could review for us the treatment regimen in the SB-509-901 trial, and when should the last patient enrolled have their last visit? How long do you think it will take for you to collect and analyze the data?

Hi, Joe. Good question. I'll take the last part and Dale can certainly discuss the treatment protocol. I think at this point our guidance is that we'll have data from the trial, top line efficacy data in the second half of the year. Beyond that we have not been specific in terms of when the last patient had his first treatment and when the last visit will be, and so on and so forth. So, I think that is as much granularity as I can give you on coming. Dale, do you want to talk about the treatment schedule and regimen?

Yes. The treatment schedule is basically treatments at times zero at two months and at four months either with SB-509 treatment or placebo treatment, with the primary analysis being at six months. So, that's the basic regimen.

Does that cover your question, Joe?

Yes, that's helpful, I think. Can you tell us, has the DSNB charter been modified any from what you used in Phase IIa based on any of the SAE that we are seeing there? If we haven't heard anything yet, does that mean that no similar SAE has occurred?

Well, again, without giving any guidance on the study at all at this point, we do not have any updates that we need to make on that subject.

Okay. Maybe you can help us understand on the 728 program. How many patients, if you could just summarize for us, how many patients have been treated so far and do you expect to be treated by the end of the year?

Good question. We presented the following at CROI, and then I'll give you a sense of the year-end. We presented data from nine subjects at CROI, six from the Sangamo study, three from the Penn study. And at that point I also believe that Carl June said that there were a total of 13 subjects that had been treated up to that point, and that's what he referred to when he talked about the safety and tolerability data. But the efficacy data that were presented and the pharmacology data were presented from nine subjects.

Beyond that, Joe, we have not given accrual updates or guidance, but what we have said that by the end of the year we expect to have treated approximately 39 subjects on the study.

And then just one more on the 509-901 trial. Are you doing multiple comparisons for the various endpoints that you are evaluating, and how doe that work?

Well on the SB-509-901 study, we are very focused on several endpoints that have been used as approvable endpoints in previous pivotal trials of disease-modifying therapies in peripheral diabetic neuropathy.

In general terms, those are the nerve conduction velocities and particularly looking at sensory component, or sural nerve. We are also very interested in quantification of the normal neurological exam, or the neuropathy impairment score in the lower limb and other composites of the neurological exam, quantifications of the neurological exam, as well as the most direct measurement of changes in nerve health or nerve fibers. And that is a direct biopsy and counting of nerve fiber densities. Dale, do you want to anything more to that in terms of top line efficacy endpoints?

(Inaudible)

I think that about covers it, Joe.

Okay, so you'll be doing separate analyses and then choosing one for the Phase III? Any of those could be used for registration purposes?

Again, a very good question. In previous trials, nerve conduction velocity has been used as both a primary and/or a secondary, and the, again, composite scores of quantifications of overall neurological health, including the NISLL has been used as a primary and/or secondary in previous pivotal trials. And so based upon the data from the 901 trial, we would certainly review those data with the Agency when we propose the structure and treatment plan and statistics around a pivotal study.

Very helpful, thanks.

Thank you, sir. (Operator Instructions) Our next questioner in queue is Liana Moussatos with Wedbush Securities. Your line is now open.

Thank you. What was the stock-based compensation expense in Q1? And are you going to roll out any new INDs this year?

Hi, Liana. I'll leave the stock-based compensation question to Ward, and we have not given any guidance on rolling out any new INDs this year. So, Ward, do you want to comment on --

Sure. Liana, the Q1 stock comp expense was $2 million even, and that compared to about $8 million for the full year last year, and $1.9 million for Q1 of last year.

And what do you think about -- I mean, what are the trends for R&D expense from Q2 to Q4? Do you expect it to go up and then go down in Q4?

Are you talking about total R&D?

Uh-huh.

Yes. I think that, as you have seen, we've had a fairly consistent band of R&D expenses historically, so I think it's -- the guidance we gave for total OpEx looks pretty consistent with last year in total. So, I think that figure that we reported for Q1 is fairly -- is going to be fairly indicative to the rest of the year.

All right. Thank you very much.

Thanks, Liana.

Thank you. We do have a follow-up question from Charles Duncan with JMP Securities. Your line is open.

Hi, guys. Thanks for taking my follow-up. And, Ward, I wonder if you would talk to us at all about the deal environment in terms of potential collaborators? I think you mentioned that following diabetic neuropathy data, you may either start or follow-up with potential collaboration conversations. I'm wondering if you'll be starting those or is that a follow-up to previous discussions, and do you know that the data that you'll be presenting, if positive, are going to be necessary and sufficient perhaps for a collaboration for diabetic neuropathy?

Again, Charles, without getting, as we would say, over the handlebars here, and I think that's exactly what we think. There are many companies out there that have followed the diabetic neuropathy program. There is a great deal of interest in a first-in-class disease-modifying drug in such a large market as diabetic neuropathy. And there are a number of companies that are quite up to speed on this program.

To the second part of your question as it relates to the DN program, positive data around the endpoints that we discussed earlier, I believe, will be sufficient to move forward from a partnering perspective.

And is that your sole focus right now in terms of collaborations, or would you consider other perhaps broader technology access deals for, call it monogenic or defined genetic diseases?

Again, without being specific on an one area, our goal, Charles, is to fully exploit and leverage the breadth and kinds of clinical outcomes that this technology platform can drive. Monogenic diseases and the data that we are presenting at ASH in December highlights the role of zinc finger nucleases in both a gene correction and targeted insertion. Certainly the CCR5 work highlights the ability to do targeted disruption, and the SB-509 work highlights the ability to regulate endogenous genes. And our goal over time is to leverage the breadth of this platform in multiple therapeutic targets. And so, yes, there is an increasing if not very broad appreciation for the kinds of biologies that this platform can drive. There is a great deal of interest in it and we will look for partnerships beyond SB-509 going forward.

And just on the subject of visibility, I think those of you who listened to the Sigma-Aldrich call earlier today and really great quarter that they had in the first quarter, are also aware of the visibility that Sigma has created around the zinc finger nuclease and zinc finger platform. And there is not a pharmaceutical company really in the world anymore that is not using this technology.

So, there is a great deal of awareness about the platform, a great deal of appreciation for the unique biologies that can be driven and created by functioning at the DNA level, and that has only accelerated the interest in the technology from a therapeutic product development perspective.

Well, you actually took my last question I was going to ask you, because we have heard, based on our diligence, some pretty positive feedback on the use of the technology. So, I wondered if there was increased -- any increased visibility you could offer from either Sigma or the Ag side of the business?

Again, as usual, I would encourage you to talk to our partners. Sigma is obviously a lot more accessible to the street and I think they have been outspoken in their comments on zing fingers and the importance and role of that. Dow AgroSciences, being a wholly-owned subsidiary of Dow Chemical, it's a little harder getting visibility there. And it is also more difficult for us to speak to the efforts that they are making. So, we would really let our partners speak for those subjects.

I will say, however, if you just do any kind of quantitative measurement, if you look at zinc finger publications, if you look at the number of presentations and so on that are being given, it is really an enormous, really exponential increase over the last several years. And from what Sigma is doing and what others are doing, I think you should expect to see that continue.

Thanks for the added color.

Thank you.

Thank you. And at this time I'm showing no additional questioners in the queue. I'd like to turn the program back over to Mr. Edward Lanphier for any closing remarks.

We'd like to thank you for joining us and we look forward to speaking with you again when we release our second quarter financial information. We will be available later today if you have any follow-up questions. Thank you very much.

Thank you. Ladies and gentlemen, this does conclude today's event. Thank you for your participation and have a wonderful day.