Sangamo Therapeutics Inc (SGMO) 2011 Q4 法說會逐字稿

Good afternoon, and welcome to the Sangamo BioSciences teleconference to discuss fourth-quarter and full-year 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 fourth-quarter and full-year 2011 financial results. Also present during this call are several members of the Sangamo senior management team, including Edward Lanphier, President and CEO; Ward Wolff, EVP and Chief Financial Officer; Geoff Nichols, Executive Vice President of research and development; Philip Gregory, VP of research and Chief Scientific Officer; and Dale Ando, Vice President of development and Chief Medical Officer.

Following this introduction, Edward will highlight recent activities and significant events from the past year. Ward will then briefly review fourth-quarter and full-year financial results for 2011, as well as our financial guidance for 2012. Geoff will provide an update on our ZFP therapeutic programs. And finally, Edward will update you on our goals for 2012. Following that we'll 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 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 detailed in documents that the Company files with the Securities and Exchange Commission, specifically our quarterly results 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 the 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 2011, as well as our plans for 2012. This end-of-year call always provides a useful opportunity to reflect on the achievements and events of the past year and to lay out our path and goals for the year ahead.

2011 was an important period of maturation for Sangamo as a therapeutic product development Company. While disappointing, data from our phase 2B clinical trial of SB-509 in peripheral diabetic neuropathy led us to cease the development of that drug. Our team quickly refocused our resources to ensure the rapid advancement of our SB-728-T program in HIV/Aids and our deep preclinical pipeline focused on engineering genetic cures for rare and monogenic diseases, but more on that later.

Let me start with a brief update on the current status of our programs and our new strategic alliance. We presented important data from our phase 1 clinical trials of SB-728-T, our ZFN-modified T cell therapeutic for HIV/Aids at scientific meetings in the spring and fall of 2011. In summary, the data has demonstrated a statistically-significant relationship between the number of ZFN-modified T-cells in which both copies of the CCR5 gene were disrupted, so-called biolylic modification, and the drop in HIV viral load in the blood of HIV-infected subjects.

These data have provided a clear signal of a therapeutic effect and have enabled us to design additional clinical trials, which we believe will clearly demonstrate the utility of SB-728-T as a potential functional cure for HIV/Aids. A few weeks ago, we announced that we had initiated, ahead of schedule, two new phase 2 clinical trials of SB-728-T.

The trials represent two distinct approaches aimed at maximizing the engraftment of biolylicly-modified cells. I've asked Geoff to provide more information regarding our rationale, strategy and details of the trial design later in the call.

I also want to briefly update you on our collaboration with scientists at City of Hope aimed at developing a treatment for the recurrent and refractory glioblastoma. I can confirm that this investigator-sponsored phase 1 trial is still open and clinicians at City of Hope continue to screen subjects.

However, due to changes in the standard of care for glioblastoma patients, mainly the introduction of Avastin, clinicians are not seeing subjects presenting with the same type of recurrent tumors as when the trial was conceived and they have had difficulty accruing subjects whose clinical profile fits the original trial design. However, as I said, clinicians at City of Hope continue to screen subjects and we expect that they will report data if and when they have treated an appropriate number of subjects.

We also published and presented data from several of our preclinical programs throughout 2011 that demonstrated the potential of our zinc finger nuclease technology to modify and permanently correct genes that cause disease. Most recently, at the December meeting of the American Society for Hematology, or ASH, we presented new data from our hemophilia program. This is one of the programs that we will be working on as part of our recently-announced strategic alliance with Shire.

As you will hear later, this is just one of several monogenic diseases we are pursuing. But speaking of our new partnership, last week we announced with Shire, one of the world's leading specialty pharmaceutical companies, our first major therapeutic alliance. As many of you know, Sangamo, like Shire, is focused on enabling people with life-threatening conditions to lead better lives.

Even beyond our shared vision, one can also see the significant parallels between our therapeutic strategies when looking at our clinical and preclinical pipeline and Shire's three divisions, specially pharma, human genetic therapies, and regenerative medicine.

We are both, Shire and Sangamo, very excited about this partnership aimed at engineering genetic cures for rare and monogenic diseases. This alliance brings not only tangible financial benefits to Sangamo but further validation of our ZFP therapeutic development platform with a highly-respected partner. The agreement provide significant near-term funding in the form of an up-front payment of $13 million and funding for all of our internal and external research-related and preclinical program costs through the filing of an IND.

We are also eligible to receive milestone payments of $8.5 million for each gene target that we take to IND and regulatory, clinical, and commercial milestones that bring the potential -- the total potential milestone payments to $213.5 million per gene target. Additionally, we retained very significant downstream value in the products we are developing under the collaboration in the form of royalties that are an escalating, tiered, double-digit percentage of product sales.

Finally, while aggressively pursuing -- aggressively pushing the Shire targets forward, we will continue to develop our own internal ZFP therapeutic programs to points of significant value inflexion, enabling us to continue to execute on our business model by establishing additional strategic partnerships in focused disease areas. So, with our collaboration with Shire underway and our already strong cash position of $85 million at the end of 2011, we have a very solid financial base from which to execute on our development plans and our 2012 goals.

Before going into more detail on our ZFP therapeutic programs and our plans for 2012, let me hand the call to Ward for an update on our fourth-quarter and full-year 2011 financial results, as well as our guidance -- our financial guidance for 2012. 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, 2011, and I am pleased to review the highlights of those results. Revenue in the fourth quarters of both 2011 and 2010 were $4.7 million. Fourth-quarter 2011 revenues were comprised of revenue from Sangamo's collaboration agreements with Dow AgroSciences and Sigma-Aldrich and agreements related to protein production, as well as approximately $1.5 million of revenue from research grants.

As we mentioned in the press release, the increase in collaboration agreement revenues was due to increased sub-licensing and manufacturing revenue from DAS, as well as increased royalty revenue from Sigma. The decrease in research grant revenues was primarily due to the receipt of four qualifying therapeutic development program awards in December 2010 and decreased revenue from the Juvenile Diabetes Research Foundation to support qualified expenses incurred in Sangamo's clinical development program for SB-509 due to the completion of phase 2 clinical trial for diabetic neuropathy. These decreases were partially offset by increased revenues by other research grant awards.

Total operating expenses for the fourth quarter of 2011 were $11.1 million compared to $13 million for the same period in 2010. Research and development expenses were $7.9 million in the 2011 quarter and $9.9 million for the prior-year quarter. So, the decrease was primarily due to decreased expenses related to the completion of our phase 2B clinical of SB-509.

General and administrative expenses were $3.2 million in both fourth quarter of 2011 and same period in 2010. Non-cash stock-based compensation expense was $2.1 million for the quarter, with $1 million in research and development and $1.1 million in general and administrative. For the fourth quarter of 2011 we reported a consolidated net loss of $6.4 million, or $0.12 per share, compared to a net loss of $8.3 million, or $0.18 per share for the fourth quarter of 2010.

For the full-year 2011, revenues were $10.3 million compared to $20.8 million in 2010, with the decrease due to the completion in July 2010 of the amortization period related to the commercial license fee received from Sigma in 2009. Total operating expenses were $46.1 million in 2011 and $45.7 million in 2010. The net loss for 2011 was $35.8 million, or $0.71 per share, compare to a met loss of $24.9 million, or $0.55 per share for 2010.

Turning to the balance sheet, I am pleased to report we ended 2011 with $84.5 million in cash, cash equivalents and short-term investments. Our net cash used in operating activities was $25.9 million for the year. Our financing in April provided us with additional capital to advance our ZFP therapeutic programs and strengthened our balance sheet, providing us with multiple years of cash burn on hand. This will be further augmented by our deal with Shire announced last week.

With respect to financial guidance for this year, we expect to have cash and investment balances of at least $75 million at the end of 2012, inclusive of the $13 million up-front license fee and research funding from Shire, but exclusive of any new funding from a partnership or other sources. We also expect 2012 operating expenses to be in the range of approximately $43 million to $47 million and revenue to be in the $14 million to $18 million range. This includes the research funding from Shire for internal and external research program-related costs.

For the purpose of the revenue guidance, we have assumed that we will amortize the up-front fee from Shire into revenue over six years, the initial research term provided in the Shire agreement. We will be reviewing the accounting treatment during Q1 in connection with updated guidance expected from the SEC on the new revenue recognition pronouncement that became effective at the beginning of 2011. We also expect that the spread of total revenue over the four quarters of 2012 will be generally in line with the pattern in 2011.

In summary, 2011 was an eventful year and we are pleased to have realized our financial objectives with respect to both our operating results and net cash usage, as well as the cash inflow from the 2011 financing and recent Shire deal. We will continue to be focused on advancing our clinical and preclinical pipeline while maintaining our historic financial discipline. Thank you, and I will turn the call back over to Edward.

Thank you, Ward. As you have heard, we begin 2012 as we had previously guided with approximately $85 million, which relative to our burn rate is a very strong cash position. The up-front payment and ongoing research funding that we will receive is part of our strategic alliance with Shire further strengthens this position and enables us to aggressively and expeditiously move our ongoing clinical and preclinical stage therapeutic programs to points of significant value inflexion. On that point, I've asked Geoff to update to update you on our recent ZFP therapeutic progress, first to outline the rationale and design of our two new phase 2 clinical studies in HIV and secondly to tell you a bit more about our preclinical pipeline in rare and monogenic diseases. Geoff?

Thanks, Edward. First let me begin by summarizing the overall rationale for our approach in HIV/Aids. The HIV virus destroys the immune systems, specifically CD4 T-cells. As the disease progresses into AIDS, the CD4 T-cell numbers decrease. However, there is a small group of people known as elite controllers who are infected with the virus yet have undetectable HIV RNA in their blood and maintain normal CD4 T-cell counts without HART

Many elite controllers have a natural mutation, the so-called Delta 32 mutation, in both copies of their gene encoding a protein called CCR5, which is a receptor used by HIV to infect T-cells. This mutation in the CCR5 protein means the receptor cannot be used by HIV to infect their CD4 T-cells. There's a also a larger group, approximately 5% to 10% of the US HIV-infected population, that carries the Delta 32 mutation on only one of their CCR5 gene copies. These circled heterozygotes are not completely resistant to HIV infection but take much longer to progress to AIDS than individuals with two normal CCR5 genes.

Additionally, and beyond the naturally-curing mutation is the example of the so-called Berlin patient, who had both leukemia and HIV. In this case, doctors in Germany took bone marrow cells from an unrelated donor who had the natural Delta 32 mutation in both of his CCR5 genes and gave these cells to the HIV-infected leukemia patient and more than four years later this person is both cancer free and free of HIV.

Our ZFN technology allows us to modify, effectively knocking out the CCR5 gene with our zinc finger nucleosis. By doing this we hope to create T-cells that will be both protected from HIV infection and capable of mounting an effective immune response to HIV. If successful, this approach would enable a functional cure in these patients, analogous to an elite controller. We call these ZFN-modified, or [talugus] CD4 T-cells SB-728-T.

As Edward mentioned, in January we announced that we have began two new clinical studies building data from our phase 1 trials. As we described in September at the 2011 ICAC meeting, six subjects who enrolled in a trial run by our collaborators at the University of Pennsylvania under went a 12-week treatment interruption, or TI, of their antiretroviral medications one month after SB-728-T treatment. All subjects experienced the expected rise in their viral loads after holding their medication.

Interestingly, however, in three of these subjects viral loads subsequently decreased from peak during the TI by about 10 to 100 fold and in one subject HIV RNA levels fell to undetectable levels before the subject resumed half in accordance with the protocol. The development of aviremia is highly unusual during treatment interruptions in HIV patients. This particular individual already carried the natural Delta 32 mutation in one of the two copies of his CCFI gene, making him a heterozygote for that gene mutation. The advantage of entering this trial as a heterozygote is that ZFM modification gives the subject nearly double the number of cells in which CCFI genes are modified and that's a higher percentage of cells that are completely resistant to HIV infection.

Furthermore, when we calculated the estimated rates of engraftment of the of the so-called biolylicly-modified cells across all subjects during the treatment interruption, we saw a statistically significant correlation with the observed decrease in viral load during the TI. This observation was consistent with the hypothesis under which we began this program and gives us an important signal as to the threshold of percentage biolytic modification and engraftment that we may need to achieve in order to control HIV viral load. With this clear early signal and our goal in moving this important therapy forward quickly to confirm this observed antiviral effect, we have initiated two new phase 2 studies.

The first trial, SB-728-T cohort 5 is designed to recapitulate and further explore our observation in HIV-infected CCR5 Delta 32 heterozygous. In this study we are enrolling up to 20 Delta 32 heterozygous subjects who are on HART and will undergo a 16-week treatment interruption two months after SB-728-T treatment. This study will, as previously, reinstitute HART if a subject if a subject's CD4 counts fall below a certain threshold, or viral loads rise to too high level. But importantly, we'll also have the provision to delay resumption of HART if patients are aviremic at the end of the 16-week TI period. This trial is progressing well and we have treated our first subjects under the protocol.

The second trial that we have initiated, SG-728-1101 takes the observation of enhancing engraftment of biolylicly modified cells much further and applies it to the entire population of HIV-infected subjects. The rationale behind the study design is to use what is called a lymphopenic preconditioning regiment that temporarily depletes lymphocytes in the subject and not only makes space for our modified cells but sets up a response in the body that signals all lymphocytes, including the ZFN modified cells, to rapidly multiply to address this depletion.

In our newly-open SB-728-1101 clinical trial, a phase 1-2 dose escalation study, we are using cytoxin administered one day prior to SB-728-T infusion to transiently reduce the numbers of lymphocytes in the body, which then rapidly repopulate once the drug is discontinued. This approach has been used to enhance engraftment of adoptively transferred T-cells in the treatment of cancer and has been safely used experimentally in patients with HIV and as therapy for several autoimmune diseases.

We are rolling at least nine HIV-infected subjects on HART into three-dose escalating cohorts. One day after receiving cytoxin subjects will be infused with SB-728-T. Six weeks after that infusion, subjects will undergo a 16-week TI of their antiretroviral therapy. The study will, as with the Delta 32 heterozygote study, reinstitute HART if a subjects CD4 count falls below a certain threshold or viral loads rise to too high a level, but importantly will also have the provision to delay resumption of HART if patients are aviremic at the end of the TI period.

In addition to safety and viral load reduction we will evaluate the effect of escalating does of cytoxin on 728-T engraftment, the change in CD4 T-cell counts in peripheral blood and the long-term persistence of SB-728-T. We expect to present data from these trials at appropriate scientific meetings and we'll provide more guidance as to presentation timing as the trials progress.

However, regarding earlier phase 1 studies, I can tell you that we will be presenting additional, important follow-up data at this year's conference on retroviruses and opportunistic infections, or CROI, which will be held in Seattle in early March.

Moving on, I'd like to briefly comment as to our preclinical and research stage programs and the recently-announced alliance with Shire. Our ZFN platform provides a range of powerful gene-modification outcomes, including gene disruption, gene addition, and gene correction, and importantly can be designed to target any DNA sequence with singular specificity. In monogenic diseases, which are diseases caused by a mutation in a single gene, we can use ZFNs to permanently correct that error.

Shire has recognized the potential therapeutic applications of this remarkable technology and we are collaborating with them to develop ZFP therapeutics for a total of seven monogenic disease gene targets. The initial four gene targets are clotting factors VII, VIII, IX and X for which we are developing potentially curative therapeutics for hemophilia A and B. As you might imagine, Shire's interest in our technology has been significantly influenced by the progress we have made in our preclinical program in hemophilia B, a bleeding disorder that is caused by a mutation in the factor IX gene.

We have presented and published preclinical data demonstrating permanent functional correction of the human factor IX gene in neonatal and adult mouse models of disease, resulting in restoration of normal blood-clotting times, or with a single systemic injection of our factor IX-specific ZFN. Based on these data, we have moved the factor IX program into large animal testing on the pathway forward to an IND, An important aspect of these data is the demonstration that we're able to deliver ZFN systemically that is directly into the bloodstream and express them in a target issue -- in this case, the liver, the site of factor IX synthesis.

This direct invivo approach significantly expands our ZFP therapeutic applications and the diseases for which out technology can provide genetic cures. As you can see, this is a very exciting time at Sangamo and I look forward to updating you on future calls on the progress of these programs, as well as our work on the gene targets that we are developing with Shire.

With that, I'll turn the call back to you, Edward.

Thanks, Geoff, that was a great summary. As you have heard, we have a very busy year ahead, with continued data from our lead clinical program and a rich pipeline of preclinical programs for both Shire and our internal targets. In addition, our partnerships in the non-therapeutic applications of our technology continue to thrive. Sigma-Aldrich continues to do a great job of diligently and creatively developing our ZFN assets in its Composer custom reagent kits and custom cell lines, as well as their transgenic animal program, which represents a huge growth area, both scientifically, as well as commercially.

They are an imaginative partner and recently announced the acquisition of BioReliance, a leader for safety testing of biological drugs. As Sigma's CEO explained at the JPMorgan conference, they see an opportunity to enhance and improve the services provided by BioReliance using ZFN technology to produce targeted cell lines, as well as animal models.

Our collaboration with Dow AgroSciences also continues to go well. Dow is employing our ZFN technology in its core focus crops and marketing the technology as exact precision technology to companies working in other crops. These collaborations have allowed us to access capital in a way that is very different from most biotechnology companies.

Over the past five years, our Sigma and Dow collaborations have brought in over $83 million, and importantly, we have retained significant downstream value in the commercialization of these assets, including, in the case of Sigma, a 10.5% royalty on sales of ZFN and ZFN-based products, including transgenic animals. As such, in 2012 we estimate revenue in the range of $14 million to $18 million, largely from one of these partnerships and our new agreement with Shire.

On the financial side, we expect to end 2012 with cash and cash equivalents of at least $75 million, which is more than sufficient to allow us to achieve our goals of advancing our therapeutic programs. This cash projection does not, however, include any new agreements or partnerships that we may develop beyond the recently-announced agreement with Shire. 2011 was an important year for Sangamo and we expect that 2012 will be even more significant year of progress.

Establishment of our first therapeutic partnership was a high priority goal for us in 2012 and I am delighted that we were able to achieve this goal so early in the year. As you might imagine, our alliance with Shire has further raised our visibility in the pharmaceutical industry and firmly establishes our ZFP technology as a platform for therapeutic product development. In addition to increased visibility, in the year ahead we intend to present clinical data from our lead ZFP therapeutic program in HIV/Aids at appropriate scientific meetings and preclinical research from the rest of our pipeline.

As far as our internal pipeline, we are advancing programs in Parkinson's and Huntington's disease, as well as monogenic diseases, such as the hemoglobinopathies, including sickle cell anemia, and rare diseases, such as the lysosomal storage diseases. As I mentioned during my presentation at JPMorgan, we have been evaluating each of these programs with respect to our internal goal of expeditiously moving ZFN-based therapeutic products into the clinic.

I look forward to providing you with additional information as our progress and more detailed information regarding our plans for advancing specific programs into the clinic in the second half of this year. So, in early 2012 we continue to make significant and very visible progress towards our goal of establishing ZFP therapeutics as a new and highly-differentiated class of human pharmaceuticals, pharmaceuticals can provide a genetic cure to many diseases, and I sincerely look forward to keeping you informed of our progress.

To that end, we will be presenting at the Leerink Swann 2012 global health care conference in February in New York and as Geoff mentioned, data from our phase 1 HIV trials at the CROI meeting in early March. This completes our prepared comments. I would now like to open the call for your questions.

Thank you. (Operator Instructions). Our first question come from Joseph Schwartz of Leerink Swann. Your line is open.

Hi, thanks for taking the question. I was wondering, what is the timeline for you to submit an IND in hemophilia and does your 2012 year-end cash guidance of $75 million include any new -- any IND filings under the Shire collaboration?

Good questions, Joe. So as we said in the script, our plan is to give much more visibility, both in terms of priority, meaning which targets will move first to the clinic, and then timing around those IND filings in the second half of this year. The reason being is that we are in critical experiments associated with several of these targets and those experiments, those data, quite frankly, drive both the prioritization, as well as the timing of the IND To the part of your second question, the financial guidance that Ward gave in terms of revenue assumptions do not include any milestones from the new partnership with Shire and our -- only include in terms of Shire, the amortization of the up-front payment, as well as expected research funding for both internal and external costs.

Okay, great. Thanks. And how -- to what extent does the Shire agreement provide a blueprint for future collaborations, given these rare inherited disorders can often be developed more efficiently and you do have some good clinical development infrastructure? Would you contemplate taking any programs to a further stage yourself, or will you be looking to outlie some things as early as you did with the Shire deal?

Good question, Joe, and again, the answer is both. We have a platform that can be applied to dozens and dozens, if not, quite frankly, hundreds of potential monogenic disease targets and we do expect to continue. As I mentioned, the visibility of the Shire deal and the data out of ASH have really increased the visibility and awareness of the platform in pharma so we do expect to do deals at the preclinical level. With that said, we are moving several programs forward on our own account and are going to plan to move those forward into the clinic. With that said, if the right collaboration comes along, such as hemophilia with Shire, we would move forward with partners around those, as well.

Okay, great. Thanks, I'll get back in the queue.

Thanks, Joe.

Thank you. Our next question comes from Charles Duncan of JMP Securities. Your line is open.

Hi, guys, congratulations on the recently-signed therapeutic collaboration and thanks for taking my questions.

Sure, thanks, Charles.

Edward, I had a question, first of all, along the lines of the HIV program. I'm wondering, on the CCR5 heterozygotes, have you been able to follow up with the patient that was in your phase 1 trial and do you have any sense of how that patient's doing in terms of viral load or T-cell counts?

Well, I'll give a short answer and then Geoff or Dale, you can comment further. That patient went back on his heart therapy after the end of the TI, so I don't expect that there was going to be a viral load impact based upon 728-T. In terms of long-term followup, I'm not personally aware. Dale or Geoff, any --?

He's on heart and long-term follow up.

Just what I said, Charles, he's on heart and in long-term follow up.

Okay. And then you also mentioned that the cohort you're working on in 902 is progressing well and you got your first subject treated, but I believe Geoff also mentioned you'd guide data later on. Is there any sense as to how many patients you'd like to have in that data? Could we see data yet this year, and are you beyond just one subject having been treated so far in that trial?

Well, again, as you know, we don't typically give accrual updates or guidance and I think what Geoff said is we will update later in the year in terms of timing related to presentation of clinical data. Geoff, in terms of total numbers on the cohort 5, what's -- I think we said up to 20, is that where we still are?

Yes, we're going up to 20, Charles. The thinking -- and I think I've talked about this before -- is that we're looking for a clear-cut response in individual patients along the lines of the patient who became aviremic in the collaborator study at Penn. So this is like a response in a cancer patient, so typically if you want to know whether you've got an active agent, you're looking for a reasonable proportion of responses in usually a relatively small number of patients. So we're talking a proportion of those 20 patients with good engraftment being the number that we need to get to and we'll guide more once we're approaching those numbers and can give you some greater clarity.

One additional piece of color on that, Charles, is when we started this trial or contemplating this trial it was unclear how difficult it would be to actually accrue subjects, and it turns out that there are a lot of HIV-infected people who really know their CCR5 status. And so accruals have actually gone pretty efficiently in this study.

Edward, that's the actual part that I was wondering about. So it sounds like it's easy to identify these patients and enroll them but it's really you're looking for some responses, so that makes sense. If you could, help us understand a little bit -- I know it's way early, but you've pointed to potential other collaborations. Is it possible that there could be a collaboration for an HIV product candidate, or do you think that you could identify a patient population that you could serve through -- at least take further into the clinic, or even get over -- all the way over the goal line with an internal commercial infrastructure?

Yes, I think both are true. I think data will drive both of those potential outcomes, data will drive the continued interest in a possible collaboration, and data will also drive any decision that we might make in terms of moving things further and further forward ourselves. I will say that we've put ourselves, from a cash position and from an operating position, in a position to make those kinds of decisions, so it's really going to be data-driven at this point.

Okay, and one final question with regard to the Shire collaboration. Again, that was a nice deal, but I'm wondering if you could provide a little bit more color on the thought behind the six-year duration? And going back to the last question that Joe asked, I know that you're not giving guidance on how much time to get to an IND, but could you anticipate getting all four targets through within that six-year period, should the early data hold up?

Yes, again, it's a bit of the same sort of question so I'm not going to give specific timeframes, but the six-years was originally agreed upon as more than sufficient time to move all of these targets through our responsibilities, which is through IND filing. So that should, in a backdoor way, answer your second question.

That's helpful, thanks for the added color.

Thank you. Our next question comes from Ted Tenthoff of Piper Jaffray. Your line is open.

Great, thanks for taking the question and congrats on all the really exciting progress.

Thanks, Ted.

When it comes to delivery modalities, what kind of work have you been doing there to broaden potential applicability for different diseases, be they rare diseases, orphan diseases kind of like what we've seen with the Shire collaboration, or even broader, larger indications?

Well, I'll start and then I'll see if Philip or Geoff or Dale want to add. We have for many years now -- I'll pick a number and say 10, but maybe it's 8 -- had internal expertise and capabilities in essentially all of the major DNA delivery platforms. And I won't list them off here, but all is a pretty fair number. And we've had extensive external collaborations with really most of -- again, I won't say all here, but most of the KOLs and major thought leaders around these delivery platforms. And even beyond that into -- in the case of cell therapies and stem cells and IPS cells and we've published on of this. So I think it's fair to say we are delivery agnostic, whether it's in-vivo or ex-vivo and really try and select the appropriate formulation based upon the target tissue, based upon the duration of expression and based upon, really, the biology of the disease target we're going after.

Thank you. Our next question comes from Liana Moussatos of Wedbush Securities. Your line is open.

Hi, thanks for taking my question and --

Hi, Liana.

Hello, Edward. So at CROI do you know which date your data will be presented yet?

I have no idea. No, I'm kidding. (laughter) I don't know, but maybe somebody else does. Dale, do you know?

You ask good questions. In March.

I'm looking around the room and they're getting the same blank look that I have on my face.

Okay.

So I'm not -- but we'll --

My other question --

-- let you know as soon as we know.

Okay. My other question, short and sweet for Ward. Can you repeat what you said about four quarters in financial in 2012 is going to parallel 2011, what were you --

Right. No, a good question, Liana. I think just to give those of you that work on a model -- I think you'll notice a healthy part of our annual revenue was in the fourth quarter, so in the fourth quarter I think we had about 45%, 46% of our revenue in Q4 of 2011 as a percentage of the full year and the first quarter is normally 20%-ish. So I think just from a -- as a guidepost I said that if you're modeling 2012 by the quarters, that same sort of a spread is -- should be fairly -- should work fairly well. And as it relates to some of the milestones we get on certain programs and some of these tend to fall in the fourth quarter. So just tried to give a little more color there.

All right, thank you. My last question is, in -- and this is for Edward. In your discussions with potential partners for the HIV program, what are they looking for? You changed your clinical strategy, what did they want to see before they would opt in on a partnership?

Well, again, I won't say what they want to see before they opt in on a partnership, what I will comment on is what the goal of the program is, which is essentially a functional cure. That really is our objective and I think the objective of anyone who is looking at this strategy and that's, again, as you know, precisely what these two new phase 2 trials are designed to try and demonstrate.

Okay, thank you very much.

Sure. Thanks, Liana.

Thank you. (Operator Instructions). Our next question comes from Alastair Mackay of GARP Research. Your line is open.

Hi, thanks. Edward, I wonder if you could talk a little bit about TALENs as a potential competitor or competing technology to ZFNs? And if you could talk about those both in terms of the possible effect that they might on the reagent business and anything you could say about any possible effect on clinical business or on therapeutics?

Sure. It's a long question and it's a relatively complicated response, but let me try and start it and then Philip is here and I think literally embodies one of the world's experts in the space, so I'm -- I'll turn it over to him, as well. So TALs are DNA-binding proteins found in a plant bacterial pathogen, so relatively rare, that have been shown to have remarkable design ability in terms of being able to engineer them to target sequences. I think it's very early days in TALs and there are some pretty significant limitations in terms of their use, particularly in the human therapeutics space. So why don't I turn it over to Philip to comment and then I'm happy to come back and maybe talk about some of the commercial implications.

Sure. So as Edward said, so the TALEN technology is very, very early. It's a [domain] derived from a bacterial plant pathogen, as Edward said, and holds a lot of promise in the sense that from an academic perspective, its an exciting, largely uncharted DNA binding domain and perhaps could do some of things that zinc fingers and zinc finger nuclease, in particular, have been shown to do. We've, as you know, been busy in this space. We have been actively publishing on some of our work with the TALEN technology and at least with the inventions that we have come up with we can make them active, although less so than ZFNs in research applications. And their specificity at this stage remains largely uncharted. So I think from a research reagent perspective it's early days and from a therapeutic perspective extraordinarily early.

And just I'd add, Alastair, Philip is being modest. If you look at the publications in this space over the last two years -- call it 10 or 12 -- the vast majority of those are either our work or work that we have provided the TALENs to collaborators. So this is a space that we really, I think, are the current leaders in. I won't speak deeply to the IP space, but you can rest assured that it's an area that we have filed extensively in. With that said, it's very, very early days and I don't think there's going to be any immediate effects on the research reagent space and certainly no even mid-to-long-term effects on the therapeutic space.

Great, thanks.

Thank you.

And then if I could switch gears and ask about -- just, Edward, for you to speculate a little bit about, let's say, call it per-patient pricing. If we look at, say, monogenic diseases, how do you -- when you're just doing cocktail napkin arithmetic, how do you think of what the cost of a therapy for an individual patient with a monogenic disease might be? And maybe instead of giving numbers, if that's not good, we could talk about some of the other pharmas and the various strategies they've taken?

Yes. Again, this is a long and interesting discussion. What I would parse here is cost of goods versus value to the patient, and I think what we're focusing on are outcomes, again, potentially genetic cures. We're focusing on outcomes where there is enormous value, not only to the quality of life of the patient but also in terms of the savings to the healthcare system and those pencil out on a napkin very easily.

Okay, great. Thanks very much.

Sure.

Thank you. At this time, I'm not showing any further questions. I would like to turn the call back to Edward Lanphier for any further remarks.

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

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program, you may all disconnect. Everyone, have a great day.