Sangamo Therapeutics Inc (SGMO) 2011 Q2 法說會逐字稿

Good afternoon, and welcome to the Sangamo BioSciences teleconference to discuss second 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 very much. Good afternoon, and thank you for joining Sangamo's management team on our conference call to discuss the Company's second quarter 2011 financial results. Present during this call are Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President-Research and Development; Dale Ando, Vice President-Therapeutic Development and Chief Medical Officer; and Philip Gregory, Vice President-Research and Chief Scientific Officer.

Following this introduction, Edward will highlight recent activities; Ward will briefly review second quarter financial results for 2011 and our current financial guidance; and, finally, Edward will summarize the status of our ongoing ZFP therapeutic programs and our goals for the remainder of 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 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 second quarter results for 2011. Let me begin by briefly recapping a few of our recent highlights.

Early in the quarter 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 has significantly strengthened our balance sheet and enables us to more aggressively advance our preclinical and clinical programs, as well as strengthening our position and flexibility in future therapeutic partnering discussions.

The second quarter was also a particularly successful period for Sangamo from a research and development perspective, as well as for grants and publications. To highlight this latter, Sangamo scientists were awarded several high profile grants to support research and preclinical studies using ZFP nucleases, or ZFNs.

In early July, a $7.9 million grant was awarded by the National Institutes of Health to the Scripps Translational Science Institute to conduct the nation's first ever heart-based disease-in-a-dish research program in collaboration with Sangamo scientists. Our collaborator at Scripps led by Dr. Eric Topol, will use induced pluripotent stem cells, or IPS cells, which are stem cells that are created from mature cell types, such as skin cells, to recreate a patient's own heart cells. These cells can be grown in the laboratory and our ZFN-mediated genome editing technology will be used to specifically remove a region of the genome that is known to put a patient at risk for coronary heart disease.

With only this region specifically removed but the rest of the cells genes in common, modified cells can be compared with the original IPS cells and the biological impact of the genetic change can be accurately observed.

A second high profile collaboration was announced this quarter, the Martin Delaney Collaboratory Project was created as a part of an initiative by the NIH to fund the evaluation of new strategies for curing HIV infection. A team of institutions including Sangamo, the Fred Hutchinson Cancer Research Center, City of Hope, and the University of Washington were awarded $20 million to fund animal studies to evaluate dosing of our ZFN CCR5-modified stem cells, as well as methods to directly attack reservoirs of HIV and eradicate the virus. These experiments directly complement on ongoing stem cell program in HIV, which is funded by the California Institute of Regenerative Medicine, or CIRM.

Both of these collaborations focus on important areas of research that will directly aid development of ZFP Therapeutics for significant unmet medical needs. In addition, the financial award represents and quantifies a growing appreciation of the power and potential of our ZFP Therapeutic platform.

Sangamo also published a record number of scientific papers this quarter, several of them in high impact journals that generated significant attention and interest in both the pharmaceutical industry and academia. The publications include data published in the journal Nature from our preclinical hemophilia B program. The study demonstrated permanent correction of the human Factor IX gene in a mouse model of the disease following a single systemic administration of our Factor IX-specific finger nucleases. This ZFN gene correction process resulted in functionally relevant levels of circulating Factor IX protein in the bloodstream capable of correcting the coagulation defect characteristic of hemophilia. This modification was permanent and was observed for the eight months over which the animals were tested. Notably, we achieved this with a single systemic injection of ZFN, further establishing the broad therapeutic application of our technology to address other monogenic diseases. We are advancing this program into the next stage of preclinical development, which is a dog model of hemophilia.

A second Sangamo described ZFN-mediated genome editing of human embryonic stem cells and IPS cells from Parkinson's patients to either insert or remove mutations known to cause early onset Parkinson's disease. This manipulations also enable disease-in-a-dish studies just as we are doing in the NIH funded heart disease collaboration.

The cell lines that this approach enables are expected to lead to a better understanding of the roles of specific mutations in the development of Parkinson's and to the screening of improved disease-modifying drugs.

An even more recent publication described the use of our ZFN technology to generate transgenic pigs for human organ transplantation. Specifically, we demonstrated that using our ZFN technology we could efficiently and specifically knock out or delete both copies of the porcine gene that we targeted. The study represents a significant advancement in the development of improved, less immunogenic animal tissue as a source for transplant into humans. Transplantation of a variety of different organs and tissues is considered to be the best treatment option for thousands of patients every year whose organs are damaged or diseased. However, a major problem is that the supply of human organs and tissues available for transplantation is insufficient to address the demand. Our work lays the foundation for the use of our validated ZFP technology platform to modify animals that will allow their organs to be used for human transplantation.

Finally, we published data on the use of SP-509 in animal models of stroke and ALS. We also had a major presence at the annual meeting of the America Society for Gene and Cell Therapy, where we and our collaborators gave over 20 presentations on a variety of preclinical and research staged therapeutic programs, one of which the Factor IX program was featured as part of a presidential symposium.

On the business front, our partner, Sigma-Aldrich, continues to aggressively market and develop our ZFN technology for research applications, including the launch of a new kit to facilitate genome editing in the mouse, and new human cell lines for breast cancer research, as well as an innovative collaboration to produce spider silk in silkworms. There is no doubt that our ZFP technology and its many applications are garnering a great deal of interest.

Last but certainly not least, earlier this month we appointed Dr. Geoff Nichol as Executive Vice President-Research and Development. In this newly created position, Geoff will oversee and coordinate all of the Company's research and clinical development activities. Geoff has been directly and successfully involved in all aspects of drug discovery and development in both biotechnology and pharmaceutical companies including MedRx, Novartis, and SmithKline Beecham. His 20 years of experience in drug development covers everything from program initiation to all phases of clinical testing to product approval and launch of multiple marketed drugs.

In addition, his particular experience at MedRx, where he led the development of their novel monoclonal antibody platform will be invaluable to Sangamo as we advance our existing ZFP therapeutic programs and continue to expand and prioritize our therapeutic product development pipeline. We are at a very exciting stage of our growth and we look forward to his leadership as we move into our next phase of clinical and commercial development. Welcome, Geoff.

Thanks, Edward. Thrilled to be aboard.

As I mentioned on our last call, we expect to announce important data from our clinical programs in the second half of 2011. However, before we go into more details on this, let me hand the call over to Ward for an update on our second quarter 2011 financial results, as well as our financial guidance for the rest of 2011. 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 second quarter ended June 30, 2011, and I am pleased to review the highlights of those results.

Revenues for the second quarter of 2011 were $1.5 million compared to $6.5 million for the 2010 quarter. The second 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 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 approximately $5 million in associated deferred revenue in the prior year second quarter in accordance with the amortization schedule that was completed in July of last year. Excluding this difference, the revenues for the second quarter of 2011 were relatively comparable to the 2010 quarter.

Total operating expenses for the second quarter of 2011 were $11.8 million compared to $10.4 million for the same period in 2010. Research and development expenses were $8.1 million for the 2011 quarter, and $7.1 million for the prior year quarter. General and administrative expenses were $3.7 million for the second 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 HIV and diabetic neuropathy studies. Stock-based compensation expense was $2 million for the quarter, with $900,000 in research and development and $1.1 million in general and administrative.

For the second quarter of 2011, we reported a consolidated net loss of $10.3 million, or $0.20 per share compared to a net loss of $3.9 million, or $0.09 per share for the second quarter of 2010. Again, the principal difference impacting the net loss is the approximately $5 million in deferred revenue recognized in the 2010 quarter.

Turing to the balance sheet, we ended the second quarter of 2011 with $92 million in cash, cash equivalents, and marketable securities. As Edward indicated, we were pleased to have completed a $50 million common stock offering at the beginning of the second quarter. This financing provides additional capital to bring our ZFP therapeutic programs to points of optimal value inflection while strengthening our balance sheet as we evaluate partnership opportunities across our portfolio and maintaining our historical operating perspective of having multiple years of cash burn on hand.

Speaking of our cash position, we reiterate our earlier guidance of having a cash and marketable securities balance at the end of 2011 in the range of $85 million to $90 million. Again, this is exclusive any new funding from a partnership, but it does include anticipated milestones in 2011 from our existing partnership agreements.

I also want to reiterate guidance from our first quarter call with respect to expected operating expenses and revenue for 2011. We expect 2011 operating expenses to be relatively flat compared to 2010, in the range of approximately $43 million to $47 million for the year, and revenues and related cash proceeds to be in the range of $10 million to $12 million this year.

In summary, with respect to our finances and operating leverage to support our research and clinical development pipeline activities, I am very pleased to report that the second quarter results, which track to our 2011 operating plan, combined with the common stock offering, have kept us in an excellent financial position.

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. As you have heard, we continue to manage our cash burn and with $92 million in cash at the end of the second quarter and our expected second half revenues, we remain on track to meet our financial objective of ending 2011 with at least $85 million to $90 million in cash and cash equivalents.

As I mentioned earlier, we have a very substantive second half of 2011 ahead of us, during which we expect to present clinical data from our lead ZFP therapeutic programs, which represent the two branches of our technology platform -- gene regulation and genome engineering. SB-509 is an example of our zinc finger technology for gene regulation, specifically, the activation of the vascular endothelial growth Factor A gene, or VEGF-A.

As you know, this ZFP therapeutic is currently being evaluated in a Phase IIb clinical trial, SB-509-901 in subjects with moderate severity diabetic neuropathy, or DN, and we expect to present top line efficacy data from this study in the fourth quarter of this year. Just to remind you, DN is a major complication of diabetes and a growing problem. Current treatments include pain killers and antidepressants, which only address the painful symptoms of the disease, not the underlying nerve damage.

SB-509 is the first-in-class disease-modifying approach to DN and in previous clinical trials has been shown to have a significant effect on both nerve and blood vessel growth. The 901 trial is a double-blind, placebo-controlled repeat dosing study in 170 subjects randomized 1-to-1 between the placebo and treatment arms. The design of this trial was informed by our prior Phase II studies, which evaluated the drug in subjects with severity of DN symptoms ranging from mild to severe. Collectively, these data provided us with valuable confirmatory evidence for a neuroregenerative mechanism of action as well as a clear strategy for selecting a drug-responsive population around approvable endpoints for the SB-509-901 study.

Specifically, we are collecting data on endpoints which have been used as primary and secondary endpoints in previous pivotal studies of neuroprotective drug candidates. These include nerve conduction velocity in the sural nerve, or sural NCV, the Neurological Impairment Score in the Lower Limb, or NISLL, which is a scoring method to quantify the standard neurological exam, and Intraepidermal Nerve Fiber Densities, or IENFD, a direct histological measure of nerves. We anticipate that top line efficacy data will be presented in a press release in the fourth quarter of this year, and that a full data analysis will be presented at a relevant clinical meeting in 2012.

As we have indicated before, if these data are positive, our plan is to move this program forward in pivotal trials with a corporate partner. We look forward to reporting the outcome of this study to you later this year.

Data will also be presented later this year from our SB-728-T studies, our lead ZFN genome editing clinical program, which we are developing for the treatment of HIV/AIDS. Our product vision for this ZFP therapeutic is to provide ZFN CCR5 modified -- I'm sorry ZFN modified CCR5-negative CD4 T cells that are protected from viral infection as they no longer express a functional CCR5 receptor, yet are capable of mounting an effective anti-HIV immune response, thereby enabling a functional cure for HIV.

Sangamo has two ongoing clinical trials of this therapeutic approach -- a Phase I dose-escalation trial, SB-728-902, in HIV subjects which are taking antiretroviral medication, or HAART, and are thus aviremic, and a Phase I-II trial, SB-728-1002 in treatment-naive HIV-infected, or viremic subjects. In addition, an investigator-sponsored Phase I trial is being conducted by Dr. Carl June at the University of Pennsylvania in aviremic subjects.

At the 2011 Conference on Retroviral and Opportunistic Infections, or CROI, in early March, Dr. June presented preliminary data from the first two dose cohorts of our 902 trial, which enrolled so-called immunological nonresponders, or subjects with CD4 counts below 500 cells per microliter, and the University of Pennsylvania trial, which enrolled subjects whose CD4 counts were above 500 cells per microliter. All subjects in these two studies were on HAART and therefore aviremic.

In summary, the data presented at CROI demonstrated that infusion of ZFN CCR5-modified T cells was well tolerated. The cells engrafted, persisted and trafficked normally. There was also evidence that the modified cell population expanded particularly in sites such as the gut mucosa, where one would expect to find a reservoir of HIV infection, that cannot be eliminated by HAART. Importantly, we observed a direct improvement in immunological health in these aviremic subjects as demonstrated by unprecedented increases in the total CD4 counts and the CD4-CD8 ratios.

While preliminary, these results were the best that we could have anticipated and provided mechanistic proof of concept that ZFN CCR5 modification makes T cells HIV-resistant and enables selective expansion in the presence of the virus. These data generated significant interest at CROI and markedly increased the visibility of this approach.

I am therefore pleased to announce today that we plan to present additional data from all dosing cohorts of the subjects in our SB-728-902 trial at the 51st Interscience Conference on Antimicrobial Agents and Chemotherapy, or ICAAC, which will be held on Chicago from September 17th to the 20th of this year. We also plan to present preliminary data from our SB-728-1002 trial at another scientific meeting later this year. We look forward to keeping you updated on this exciting and important program.

In conclusion, while our first half activities evidenced significant progress towards our goal of establishing ZFP Therapeutics as a new and highly differentiated class of human therapeutics, we anticipate a transformational second half of the year as we release important data from our major clinical programs. We look forward to keeping you informed of our progress.

In addition to the presentation of data from our HIV SB-728-902 clinical trial in mid-September at ICAAC, we will be presenting at the 2011 Wedbush Securities Life Sciences Management Access Conference in New York City in August, and three investor conferences in September, the Stifel Nicolaus Annual Healthcare Conference in Boston, the UBS Global Life Sciences Conference, and the JMP Securities Conference, which are both being held in New York.

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

Thank you. (Operator Instructions) Our first question comes from Charles Duncan from JMP Securities.

Hi, guys. Congratulations on a nice quarter progress. Thanks for taking my questions. Edward, I wanted to ask you about the HIV program. You mentioned, I guess, the aviremic, you'll have a little bit more data at ICAAC. Can you give us a little bit more color what you would like to see out of that data? And then why did you split that with the presentation on 1002 later on in the quarter?

I think I'll give you a quick answer and ask Dale to maybe comment further. I think the categories of data that we presented at CROI will be consistent with the same sort of categories that we will be discussing at ICAAC. So, first and foremost the safety of these modified cells. Secondly, the pharmacokinetics, the trafficking and engraftment of these cells. Third, on the basic immunological impact of these modified cells on the host immune system. And, lastly, in the environment of treatment interruptions on impact of these cells in the presence of virus. I think those are the main categories that you should expect to see. Dale, do you want it amplify on any of that?

I agree, these are the major parameters, and we'll have a more complete dataset than what was presented at CROI.

Okay. And then if we could hop over to 509, could you help us understand what the guidance includes in terms of planned expenses? Would you anticipate spending any additional R&D dollars on diabetic neuropathy irrespective of the outcome? And then, secondly, if the outcome of the trial is not clearly supportive of moving forward, would you see that as reading on the value of the gene regulation technology platform, or perhaps could that be a function of the complexity of the syndrome in which you're studying?

Two separate questions, Charles. First, as we said, our plan is to move forward and announce data from the SB-509-901 trial in the fourth quarter of this year. That will be top line data. And with those data, assuming they're positive, we'll move forward in discussions that are well anticipated in terms of potential corporate partnerships. We will have the normal follow-on of that through day 360 for the safety and any long-term follow-up, but our plan is to move forward with SB-509 in a partnered situation. And so we do not expect to initiate new studies absent a partner in that area.

Second part of the question was, is this a referendum or a -- again, no more so than any other drug modality around any other target or disease indication. I think it is very clear that we can build zinc finger transcription factors, both activators and repressors to numerous targets. We know we can activate, we know we can repress; this really becomes a function, as in any clinical development plan of do we have the right target for the right disease indication in the right clinical trial? So, I think while we're optimistic about the outcome of SB-509, good, bad or indifferent, it's not a referendum on the platform; I think the platform is well established.

I agree. If I could ask another question regarding stock-based compensation expense in 2Q. Can you give us a sense of the amount of that expense that was incurred?

Sure, Charles. The expense for the quarter was $2 million, and further broken down, $1.1 million in G&A and $900,000 in R&D.

The final question is for Geoff, the new guy. I know this is probably a little unfair because you're sitting there with your new colleagues, but can you give us a sense as to what the key driver was to you joining Sangamo and if there are any parallels that you see between, say, the MedRx technology platform and its breadth of utility and that of Sangamo's? I mean, what was the real reason for getting involved here at this stage of your career?

Now, Charles, I have to tell you, I promised Geoff right upfront that we weren't going to feed him to the -- I can't remember whether I said sharks or dogs or lions, whichever you guys would like to be characterized. But, Geoff, you want to bite on that one?

Yes, Charles, that's a good question. Sangamo has a very promising platform technology and superficially that is similar to MedRx. Perhaps the antibody technology is a little more mature, but essentially at MedRx, quite aside from the platform, we were also breaking very new ground in immunotherapy. And I sense exactly the same sense of scientific commitment as well as competence and enthusiasm here at Sangamo as I sensed at MedRx. And those are the primary reasons why I'm here.

Thanks for the added color.

Thanks, Charles.

Thank you, sir. Our next question comes from Liana Moussatos from Wedbush Securities.

Thank you for taking my question. For the SB-509-901 study results that are coming out in Q4, what would you consider to be the minimum for you to consider going forward with the program when you're mentioning the sural NCV, the NISLL and histology endpoints, what's the minimum you'd want to see in order for you to take it forward?

So, I'll let Dale respond in terms of on the technical side in terms of magnitude and so on. But from a business perspective, again, it's relatively binary here. The data are going to be -- and Dale can discuss them -- but those will really be used in our discussions with potential partners, and that will drive the program into the next stage of development. Dale, you want to talk about maybe some of the parameters around the endpoints?

Yes. So, what we're really looking for is clinical relevance in the change in these parameters, and the hallmark of this is really how these parameters change in a typical moderate severity diabetic patient over the course of a year. So, for sural NCV, that's about 1 meter per second. For NISLL, that's about 1 unit on the NISLL score. And the nerve fiber density is approximately 0.9 fibers per millimeter, generally accepted 1 fiber per millimeter change. And so we would like to see improvements in the sural NCV and decreases in the NISLL by 1, and increases in nerve fiber density by 1.

So, in general, these are the changes that would occur in the opposite direction in terms of deterioration in a year, and we would like to be able to say that we could -- with these three treatments over the course of 120 days reverse these endpoints, that would represent a year's worth of worsening in the diabetic patient.

Thank you.

Thanks, Liana.

Thank you. Our next question comes from Ted Tenthoff with Piper Jaffray.

Great. Thank you very much. And Edward and everyone, congratulations on all the scientific progress in the quarter and the new hire. I guess taking a step back, obviously it's going to be a very busy back half and I wish you all the best with the clinical data.

Maybe you can tell me a little bit more about the commercialization strategy around ZFP. I know we've talked about this over the years, Edward, in terms of the broad applicability and all of the scientific progress that's being made, but tell me more about how you intend to commercialize and monetize this good science?

Well, Ted, it's a longer conversation and a shorter conversation and, as you say, we've had it. Let me give it to you in sort of two planes. The applications and the technology will either be direct injectable pharmaceuticals or they will be used to modify a cell that will be pharmaceutical. And so those are the two principal product profiles of the products, of our platform.

And the our business model is to move forward at points of clear value inflection with partners who have a deep, even passionate interest in the disease indication and in the area, and have the requisite downstream infrastructure for development and marketing. That is certainly our near-term plan.

Longer term, we do hope with success to forward integrate probably in areas of rare diseases or orphan diseases, but that's a ways out and predicated on success in the more former partnering activities.

Thank you.

Sure. Thank you.

And thank you for the data.

Thank you, sir. Our next question comes from Joseph Schwartz with Leerink Swann.

Hi. Thanks for taking the question. I was wondering if you could -- and this is a housekeeping question -- break out your revenues from Dow and Sigma? It looks like they declined around 50%. I'm wondering what the main drivers are? I know that the Sigma portion can consist of reagents, cell lines and transgenic animals, so some clarity within any of those buckets would be helpful.

Sure. I mean, just to reiterate what Ward said in the prepared remarks, last year we were still amortizing the upfront fees from the initial -- from the second license agreement, so that was a part of the revenues last year that accounted for the primary difference quarter-over-quarter. Ward, any additional color on that?

No. As I mentioned, Joe, in the call, that we did have the $5 million a year ago quarter that did not repeat this year, so that was a factor. We still view that both Dow and Sigma provide significant revenues on a full year basis. Historically, our revenue stream has been somewhat back-end loaded because some of our minimum royalty payments and whatnot come in in Q4, and some of that relates to (inaudible) but also relates to some of the Sigma royalties which tend to ramp a bit during the year.

So, I look at this quarter somewhat, as I said, being relatively comparable to a year ago, and it's a function of the, to some extent, the grant revenue and the timing and all that. But we're still comfortable, as I mentioned, with this $10 million to $12 million for the full year.

Okay. And how long do you think it will be before we see ZFN in humans with hemophilia or other monogenic diseases given it seems like an ideal application of the technology, but I know that 728 took a while as you worked on the vector and those sorts of aspects. Would you expect to be able to go faster now? If you had to hazard a guess, how long do you think we could -- or how long do you think before we could see one of these drugs in an agent in actual patients?

Well, a good question, Joe. As you pointed out, the zinc fingers are in the clinic around CCR5, and that's in T cells. We're also working in hematopoietic stem cells in that area. And the recent Factor IX data, again using ZFNs from a systemic delivery perspective has gotten a lot of visibility, and on this call we updated and said we were moving forward into the next preclinical development model, which is the dog model.

There are numerous monogenic diseases that we have previously discussed and even published and presented around, many of which were done at ASCGT this year in the area of sickle cell disease and other monogenic diseases.

We don't have any specific guidance today about clinical startups in those areas, but certainly the experience that we have from the CCR5, moving that to the clinic, gives us a significant leg up in moving new zinc finger nucleases into the clinic.

Okay. And then lastly, can you give us any greater sense of the timing of the SB-509 Phase II data in the fourth quarter? When does the last patient come out and how are you analyzing that? Is it on a rolling basis? Any thoughts on how long you'll need to crunch the data?

Well, obviously we have very, very, very specific definitive thoughts on that, but the guidance that we are comfortable with is that we will present via press release the top line efficacy data for all 170 subjects at day 180, in a press release in the fourth quarter.

Okay, thank you.

Thanks, Joe.

(Operator Instructions) Our next question comes from Alastair Mackay from GARP Research Corporation.

Hi. I had two small follow-up questions. Dale, one is that when you went through the endpoints for SB-509-901, are those formal predefined endpoints or are you speaking more informally in terms of what you're hoping and expecting to see?

Yes, as any double-blind placebo controlled study, we have to predetermine the endpoints and power the studies to those particular endpoints. So, this is -- these are predefined and have been written into the protocol since the beginning.

Great, thanks. And then to follow-up on something Joe was saying. The hemophilia, the Factor IX studies and the other monogenic studies, with the added confidence that you have in the ZFN agents as opposed to the ZFP agents, one thing that I wonder about is the absence of discussion of partnering activities with respect to some of these monogenic diseases, especially in light of the prospects for more rapid development under an orphan program. Edward, can you comment on that?

Only to say that I think it's an astute question and that our business model, given the breadth of the platform in its generality and ability to apply to numerous targets allows us to think about those kinds of focused partnerships in a way that doesn't really take much off the table in terms of our future upside.

So, it's an astute question, Alastair, and one that, as I sort of alluded to during the script, that the Factor IX data that was presented as a late breaker at ASH in December of last year was published in Nature just this last quarter and was the subject of a presidential symposium at ASGCT, has garnered an enormous amount of attention, and your question is on point.

Okay, thank you.

Thank you, sir. I would now like to turn it back to Edward Lanphier for further comments.

Thank you. We would 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 will be available later today if there are any follow-up questions. Thanks very much.

Thank you. Ladies and gentlemen, this does conclude your call for today. You may now all disconnect. Thank you very much and have a wonderful day.