Sangamo Therapeutics Inc (SGMO) 2013 Q2 法說會逐字稿

Good afternoon, and welcome to the Sangamo BioSciences teleconference to discuss second quarter 2013 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, Jonathan. Good afternoon, and thank you for joining Sangamo's management team on our conference call to discuss the Company's second quarter 2013 financial results.

Also present during this call are several members of Sangamo senior management, including Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President of Research and Development; Philip Gregory, Vice President 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 the significant events from the past quarter. Ward will then briefly review second quarter 2013 results, as well as our financial guidance for the rest of the year; and Geoff will provide an update on our ZFP therapeutic program. Finally, Edward will update you on our goals for 2013 and beyond. 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 2013 second quarter financial results, as well as recent accomplishments and plans for development of our ZFP therapeutic pipeline.

As we emphasized last quarter, one of the areas of major focus for Sangamo this year is the advancement of our lead clinical program, SB-728-T, an autologous T cell therapy designed to provide a functional cure for HIV/AIDS. Using our zinc finger nuclease, or ZFN technology, we can specifically disrupt the gene encoding CCR5, a required co-receptor for HIV infection of CD4 T cells, and thus generate a population of T cells that are protected from this virus.

The aim of the therapy is to provide a circulating population of HIV-resistant cells that are available to fight opportunistic infections and the virus itself. As you will hear in more detail later, we are evaluating the effects of SB-728-T on both the control of the virus in the bloodstream, but also on the very important viral reservoir, which is not and cannot be addressed by current antiretroviral medications.

We have ongoing Phase 2 trials of SB-728-T that represent two distinct approaches, both aimed at maximizing the engraftment of T cells, in which both copies of the CCR5 gene are disrupted -- so-called biallelically modified T cells. Knocking out both copies of the CCR5 gene, make these cells resistant to infection by HIV.

In May, as promised, we presented preliminary data from both of these trials at the Annual Meeting of the American Society for Gene and Cell Therapy, or ASGCT. As well as a status update on these trials, Dale Ando our Chief Medical Officer, presented encouraging antiviral data from subjects that underwent a treatment interruption from their antiretroviral medications, as well as unprecedented data on the reduction of the size of the viral reservoir in subjects from earlier Phase 1 clinical trials.

These data are particularly important, as they provide the first demonstration that it is possible to reduce the size of the viral reservoir while simultaneously increasing total CD4 counts in HIV-infected subjects. I've asked Geoff to provide you with more detail on these data later in the call.

ASGCT has been an important meeting for us, and this year was no exception. In addition to our presentation of preliminary clinical data from our HIV clinical programs, Sangamo scientists and our collaborators presented 12 additional abstracts, including new data from our hemophilia A program, which is partnered with Shire.

Using our in vivo protein replacement platform, we demonstrated that a single systemic treatment in a mouse enabled the successful targeted insertion of a human Factor VIII gene in the albumin locus, the efficient and stable production of therapeutically relevant levels of this clotting factor. Our goal is to file an IND, or Investigational New Drug application, in 2014 for this program.

Later in May, we announced that the California Institute for Regenerative Medicine, or CIRM, granted Sangamo a $6.4 million Strategic Partnership Award to advance our ZFP therapeutic hemoglobinopathy program, specifically in beta-thalassemia. The four-year grant provides matching funds that will help offset the costs of IND-enabling preclinical studies and a Phase 1 clinical trial in beta-thalassemia subjects.

The grant application, entitled, quote -- A Treatment for Beta-thalassemia via Highly -- High Efficiency Targeted Genome Editing of Hematopoietic Stem Cells, end quote, won the highest scientific score and was the only application recommended for funding in this round of CIRM's Strategic Partnership Awards.

This award provides valuable support for the development of this program, as well as validation of the powerful science that underpins this program. We look forward to providing you with more details on this program as we move closer to our goal of filing an IND application in 2014.

Finally, in the last week, you may have seen numerous articles on the application of our technology in Down syndrome. Results of the study, carried out with collaborators at the University of Massachusetts, were published in the journal Nature.

Importantly, we used the same targeted ZFN-mediated gene edition technology that underpins our hemophilia and lysosomal storage disease programs, to insert a copy of the XIST gene, which normally functions to shut down one of the two X chromosomes during female development, into the extra copy of chromosome 21, the root cause of Down syndrome. We demonstrated that this ZFN-driven gene edition enabled the whole extra chromosome to be shut down or silenced.

The studies were carried out in induced pluripotent stem cells, or iPSCs, from individuals with Down syndrome, enabling the production of model cell systems that will allow better understanding of the genes that contribute to the pathology of this syndrome. These models may also be useful in screening drugs that could help alleviate some of the symptoms of the disorder.

In addition to the direct evidence of whole chromosome silencing, this advance further demonstrates the potential of ZFN-mediated gene editing to achieve unique and very powerful biological outcomes which have significant medical and therapeutic value. This outcome could not have been achieved with any other gene therapy approach. It required the highly specific targeting capabilities of our technology.

Importantly, the very large DNA sequence encoding the XIST gene is a substantially larger DNA sequence than we would typically use in our therapeutic gene editing programs. And the fact that the technology enables precise insertion in a single site in the genome, highlights the specificity and efficiency of our ZFN-mediated targeted gene edition.

Before we go into more detail on our ZFP therapeutics programs and our plans for 2013 and beyond, let me hand the call over to Ward for an update on our second quarter 2013 financial results as well as our financial guidance for 2013. Ward?

Thank you, Edward, and good afternoon, everybody. As you know, after the close of the market today, we released our financial results for the second quarter ended June 30, 2013, and I am pleased to review the highlights of those results.

Revenues in the second quarter of 2013 were $6.9 million, compared to $4.6 million for the same period in 2012. Second quarter 2013 revenues were comprised of revenues -- of revenue from Sangamo's collaboration agreements with Shire and Sigma-Aldrich, as well as approximately $800,000 of revenue from research grants. As we mentioned in the press release, the increase in collaboration agreement revenues was primarily due to our agreement with Shire.

Total operating expenses for the second quarter of 2013 were $12.4 million compared to $10.3 million for the same period in 2012. Research and development expenses were $9.3 million in the 2013 quarter and $7.6 million for the prior year quarter. The increase was primarily due to increased external expenses related to our preclinical programs, partially offset by lower clinical trial and manufacturing expenses for our SB-728-T HIV/AIDS program.

General and administrative expenses were $3.1 million in the second quarter of 2013, and $2.7 million for the same period in 2012.

Non-cash stock-based compensation expense was $1.4 million for the quarter, with $700,000 each in research and development expenses and general and administrative expenses.

For the second quarter of 2013 we reported a consolidated net loss of $5.5 million, or $0.10 per share, compared to a net loss of $5.7 million or $0.11 per share for the same period in 2012.

Turning to the balance sheet, I am pleased to report we ended the second quarter of 2013 with $66.4 million in cash, cash equivalents and short-term investments and interest receivable, reflecting net cash usage of $3.7 million for the second quarter, and $9.9 million for the year to date.

With respect to financial guidance for this year, we are on track to have a cash and investment balance of at least $55 million at the end of 2013, inclusive of research funding from Shire but exclusive of any new funding from a partnership or other sources.

We also expect 2013 operating expenses to be in the range of $46 million to $50 million, and revenues to be in the range of $20 million to $24 million. This includes the research funding from Shire for internal and external research program-related costs.

For the purpose of revenue guidance, we will continue to ratably amortize the upfront fee from Shire into revenue over the initial six-year research term provided in the Shire agreement.

We also expect that the spread of total revenue over the four quarters of 2013 will generally be in line with the pattern in 2012.

In summary, we are focused on advancing our clinical and preclinical pipeline while maintaining our customary financial discipline, and we are pleased to have realized our financial objectives for this quarter with respect to both our operating results and net cash usage. Thank you, and I will now turn the call back over to Edward.

Thank you, Ward. As you have heard, we ended the second quarter with just over $66 million, which, relative to our historic and projected burn rate, is a strong cash position and will enable us to advance our preclinical pipeline with the goal of filing up to seven IND applications by the end of 2015.

While these are ambitious goals, our strategy has always been to use our resources aggressively yet as efficiently as possible, to bring our ZFP therapeutic pipeline into and through clinical proof of concept.

As many of you know, we have three preclinical programs, hemophilia A and B, and Huntington's disease, that are fully funded by Shire and will trigger milestone payments to Sangamo totaling $8.5 million per IND application.

We intend to file two INDs for each of the hemophilias in 2014, and one for Huntington's disease in 2015. A third prospective IND application for 2014 is our HIV/AIDS program in stem cells, which is being funded by a $14.5 million Disease Team Award from CIRM.

Sangamo is also moving forward three additional preclinical programs of our own. As I mentioned earlier, we recently learned that we have been granted, quote, matching funds, end quote, in the form of a CIRM strategic partnership award, to help offset the cost of IND-enabling studies and the Phase 1 trials in our beta-thalassemia program, which we also expect to be a 2014 IND.

For the two remaining Sangamo programs in lysosomal storage disorders, or LSDs, we are leveraging the same in vivo protein replacement platform that we are developing for our Shire-funded hemophilia programs.

In this platform approach, we insert, in a targeted fashion, a corrective gene into a so-called safe harbor site. The goal is to engineer a genetic cure for the disease by enabling replacement protein production by the patient's own liver, which will reduce or eliminate the need for administered enzyme replacement therapies.

We are employing the albumin gene as our safe harbor site, as this gene normally produces such large quantities of albumin that we can safely co-opt a very small percentage of its output to produce the therapeutic protein, be it one of the clotting factors, as in the hemophilias, or a replacement enzyme to correct any LSD that can be treated using enzyme replacement approaches.

So, as you can see, consistent with our strategy, we are working aggressively to ensure that we efficiently maximize the value of our technology platform and therapeutic pipeline.

And now, let's turn the call to our lead clinical program in HIV/AIDS. I've asked Geoff to provide more detail on the preliminary data that we presented at ASGCT Meeting in May, and to outline our plans for this program for the rest of the year. Geoff?

Thanks, Edward. Good afternoon, everyone. Our ZFN technology allows us specifically modify or disrupt any gene of our choosing. In the case of our HIV program, we are targeting the CCR5 gene, which encodes the major co-receptor for HIV entry into CD4 cells.

CCR5 is a well-validated clinical target for a ZFN approach to HIV, as we know that there is a natural mutation, CCR5 delta-32, which makes the CCR5 protein nonfunctional. This enables individuals who carry that mutation on both copies of their CCR5 gene, to resist HIV infection despite repeated exposure to the virus.

Our ongoing clinical program, SB-728-T, is evaluating the effect of knocking out CCR5 in the CD4 T cells of HIV-infected individuals, with the aim of generating a population of these cells that will be both protected from HIV infection, and capable of mounting an effective immune response against the virus and opportunistic infections.

In May, at the ASGCT Meeting, Dale Ando, our Vice President of Therapeutic Development and Chief Medical Officer, presented a summary of the clinical data to date from our studies, including preliminary data from our two ongoing Phase 2 clinical trials.

In these studies, we are following up on an observation made in earlier Phase 1 trials, in which we saw a statistically significant relationship between the level of engraftment of ZFN-modified cells, in which both copies of the CCR5 gene are disrupted, so-called biallelically modified cells, which are completely protected from HIV entry, and reduction from initial peak in the level of virus in the blood in HIV-infected subjects during a treatment interruption from their antiretroviral medication.

The trials, SB-728-902 Cohort 5 and SB-728-1101, both aimed to maximize engraftment of biallelically modified T cells. SB-728-902 Cohort 5 is enrolling subjects that already have one of their CCR5 genes knocked out -- so-called CCR5 delta-32 heterozygotes. I should note that the first subject in which we observed a drop in viral load to undetectable levels during a treatment interruption, was a delta-32 heterozygote.

In contrast, the 1101 study is designed to treat the rest of the HIV-infected population, regardless of their natural CCR5 status. In this group we are using a conditioning regimen with Cytoxan, designed to enhance engraftment of our ZFN-modified cells.

In both studies, while subjects remain on antiretroviral viral, or ART, through the initial SB-728 treatment, which is a single infusion of approximately 1 billion to 3 billion treated cells, they later undergo an interruption of their antiretroviral drugs, during which we can evaluate the relationship between the levels of engraftment of biallelically modified cells and the effect on viral load, as well as numerous immunological parameters.

The data that we presented were preliminary, in that we reported data from only those subjects that had undergone the treatment interruption, or TI, stage of the protocol.

From the SB-728-901 Cohort 5 study in CCR5 heterozygotes, we presented data from four evaluable subjects. Two out of four subjects showed consistent reduction in viral load during TI, with one of them achieving a transient undetectable viral load during this period. Notably, in both cases, these reductions in viral load were associated with anti-HIV immunologic responses.

As Dale noted in his presentation, we have three additional subjects enrolled in this study that had not completed the TI at that time, and we expect to report on these when we release the final data set by the end of the year.

For the 1101 study, we reported on subjects that had been infused in the two lowest-dose cohorts of the Cytoxan conditioning. The conditioning has thus far been safe and well tolerated. In keeping with the initial doses used in the first two cohorts, we observed some acute depletion and subsequent normalization of lymphocytes post-Cytoxan treatment. However, these were not yet sufficient doses to expect a significant impact on engraftment of SB-728-T.

We continue to accrue and treat subjects on this trial into the third dose cohort, where subjects receive 1000 milligrams of Cytoxan per meter squared, a dose at which we do expect to see enhanced engraftment. At the maximum tolerated dose, we will expand the trial to treat an additional six subjects.

As Edward noted, we expect to report a full data set from all three dose cohorts by the end of the year, at an appropriate medical or scientific meeting, and we will update you as to the venue at a later time.

As all of you know, HIV has been such a difficult virus to thwart because its replication kills CD4 T cells, depriving the body of an immune cell type that is critical in the battle against infections and providing long-term immunity.

In addition, the virus is able to integrate into the DNA of long-lived immune cells, forming a reservoir of infection. Antiretroviral drug therapy, or ART, efficiently addresses the first problem, but has no effect on the second. By suppressing viral replication and T cells, ART keeps levels of the virus in the blood below detection.

However, as these drugs only function during active viral replication, they do nothing to diminish the levels of the viral reservoirs that exist deep in the body. That's why, when HIV-infected subjects come off their ART, the viral load in their blood rapidly rebounds as the virus emerges from these reservoirs, killing many of these cells in the process. This is also why the HIV community is looking for novel approaches to clearing the HIV reservoir, and why we are pursuing what we believe is a promising immunological approach to a cure.

In addition to the preliminary Phase 2 data I've just described, we presented further analysis from our Phase 1 trial, SB-728-902, in immunological nonresponders.

This INR group is classified as such due to their relatively poor immunological response to ART. Essentially, they do not exhibit much of a rebound in their CD4 T cell levels, even as their virus is controlled by the antiretroviral drugs. INR subjects in our study came into the trial with CD4 T cells in the range of 200 to 500 cells per microliter, and with a median duration of HIV infection of 21 years.

To summarize our findings to date, which have been consistent across all groups tested, immunological responders and nonresponders alike, SB-728-T treatment is safe and well tolerated. We see engraftment, trafficking, and long-term persistence of the ZFN CCR5-disrupted T cells, as well as positive long-term effects on total CD4 T cells and CD4/CD8 ratios.

In addition, further analysis of the immunological characteristics of SB-728-T in the INR group, has given us a deeper understanding of the characteristics of our product and the factors that may be important for its optimal engraftment.

The one thing that we were unable to study in the INR group, as these subjects were well controlled on ART and did not undergo a TI, the effect of our treatment on blood levels of the virus. However, with the development of new, more sensitive techniques to measure viral DNA, we were able to evaluate the effect of SB-728-T on the viral reservoirs, the side of HIV infection that ART cannot address.

What we found was quite dramatic. In seven of the nine INR subjects on the SB-728-902 study, we measured a marked decrease in HIV proviral DNA, one measure of the viral reservoir in peripheral blood cells, over the period of a year.

Importantly, this decrease had a statistically significant correlation with levels of CCR5-modified CD4 T cells. This was particularly striking in a group of subjects that has been HIV infected for a very long time, and in which decreases in the viral reservoir are usually not observed.

Moreover, as noted by our clinical advisors and physicians who attended the meeting, this decrease in the reservoir occurred in the setting of an overall increase in total CD4 count. In previous studies in which a transient increase in overall CD4 T cell levels has been achieved -- say, with IL-7 infusions -- this increase was accompanied by a concomitant increase in the size of the HIV viral reservoir.

Clearly, the ability to decrease proviral DNA reservoir while increasing CD4 T cell levels, is precisely what we would hope to achieve in an immunological approach to a functional cure for HIV.

We continue to follow these subjects and monitor their immunological health and viral reservoir, and are expanding this analysis to other groups of SB-728-T-treated subjects.

In summary, we've been greatly encouraged by the data that we have generated thus far in this program, and we're excited by the progress that we have made and continue to make.

If we consider the factors required for an immunological approach to a functional cure, we believe that we are successfully working through the checklist of factors that are necessary for this to be careful, our modified cells and graft. They traffic throughout the body. They appear to be immunologically active. And finally, they persist. We can still detect ZFN-modified cells in all of the subjects that we have treated, some of whom were infused over three years ago.

I did not dwell on this today, but we also know that our ZFNs are modifying and protecting a critical cell type, CD4 central memory T cells, which are critically important for long-term immunological response to disease; and, incidentally, the primary cell type that houses the HIV reservoir.

So, in summary, these are very exciting times in this program. Looking forward, our ongoing studies aim to answer a few very specific questions. How many biallelically modified T cells do we need, and of what cell type, such as CD4 central memory cells? Are the cells HIV-reactive and capable of supporting a response to the virus?

Here, we are very interested in the control of the virus. Can SB-728-T have an impact in the TI, when there is an active infection in the body? But also, importantly, does it have any effect on the deeper issue -- the size of the viral reservoir, which is untouched by current therapies? If so, we are definitely on the right path to creating an immunological cure for HIV.

We look forward to discussing the results of our complete HIV data set with you later this year.

And with that, I will hand the call back to Edward.

Thanks, Geoff. As Geoff indicated, later this year we expect to complete our Phase 2 clinical trials of our SB-728-T HIV program, and present the complete data set at a medical or scientific meeting.

As we have said before, with positive clinical data and before entering pivotal studies, we plan to partner our HIV program for further development and commercialization. As 2013 progresses, we also expect to present data from our partnered programs in hemophilia and Huntington's disease, and our proprietary programs in hemoglobinopathies and lysosomal storage diseases.

We are very focused on our development goals, and plan to file INDs in 2014 for hemophilia A and B, beta-thalassemia, and our HIV application in stem cells. In 2015, our goal is to file INDs for our Huntington's program with Shire, and our -- and up to two proprietary programs in lysosomal storage disorders.

In conclusion, we are very pleased with our progress during the first half of this year in the development of our ZFP genome editing and gene regulation technology platform, and our plans to create significant value while mitigating risk via diversification and technical leverage.

Our business model has enabled us to generate both non-therapeutic and therapeutic partnerships, while retaining significant value in our proprietary programs. All of this has given us a strong financial foundation from which to pursue an ambitious but highly disruptive therapeutic product development pipeline.

Needless to say, we have an exciting second half of the year ahead of us, and we look forward to keeping you informed of our progress.

In the immediate future, we will be presenting at the Wedbush Securities Life Sciences Management Access Conference on August 14th, which will be webcast and available on the Sangamo website.

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

(Operator Instructions). Charles Duncan, Piper Jaffray.

Hi, guys. This is Roy, in for Charles. Thanks for taking the question. I wonder if you could go into more detail on the partnering progress for HIV. Are you in discussions now, or are you waiting for conclusion of the Phase 2? Do you think it'll be HIV only, or could it include a broader T cell program, or maybe the stem cell program? Thanks.

Thanks, Roy. Let me, first off, just reiterate our current guidance, and then I'll try and be more specific to your question. So, what we've said, since initiating these two ongoing trials, is that once we've achieved the kind of data that are sufficient to move into pivotal studies, our plan is to move forward for pivotal trials and commercialization with a partner.

In terms of the status, we have, I'd say for several years, been in active communication with the major HIV pharmaceutical and biotechnology companies. I think it's fair to say that any of the major players even outside of HIV and infectious diseases, are well aware of this program, and we regularly, either at scientific meetings or otherwise, update them on our progress.

To speculate on the scope of the collaboration, certainly the T cell work would be included. I think it's reasonable to assume that the HIV stem cell work would be included in an HIV partnership. I probably take the opposite point of view about expansion to other disease areas or other targets. I hope that's responsive to your question.

Yes. Perfect. Thank you. And a couple, I guess, detail questions. So, can we expect consistent R&D reimbursement from Shire for the rest of the year?

By consistent, do you mean consistent with the last two quarters?

Yes.

Well, I will answer, but I'm -- I'll look to Ward to maybe modify if necessary. But, yes, we expect to see consistent revenues from Shire over the second half of the year, consistent with the first half. Ward, is that --

No, I'd agree with that. Yes.

Okay. And no revenues from Dow for the quarter?

We have not had revenues from Dow this quarter, but we fully expect to have revenues from Dow in the second half.

Okay. Thank you.

John Newman, JMP Securities.

Hi, Edward. Thanks a lot for taking my question. I just wanted to ask about the data that you're planning on presenting at the end of the year, if you could tell us a little bit about the types of measures that you may be able to talk about, in terms of the 902 study. And also, just curious as to what we might expect to see from the 1101 study. Thanks.

Well, John, I'll start, but I'm here with Geoff and Dale, and they can certainly drill down as deeply as we need here.

From a high-level perspective, the type of data that you should expect to see from us in the second half, in terms of categories, is exactly the kind of data you've seen from us thus far, and I think Dale did an excellent job of highlighting during ASGCT. And that obviously is viral load measurements during treatment interruptions; but then also, continued evaluation of the viral reservoir and impact on the viral reservoir; and also the variety of immunological endpoints that we've looked at, including some of the polyfunctional Gag analysis.

So, those, I would say, are the buckets I would highlight in terms of data from the 902 Cohort 5 and the 1101 study. But Geoff or Dale, do either one of you want to add or subtract to that?

Yes. John, I think, you know, we expect broadly to see complete data set from the subjects in both studies that we originally wrote in the protocols when we began. So, we ought to see TI data on the 902 Cohort 5 group. We should -- that should be completed, along with a bunch of other ancillary measures that Edward's talked about.

And for 1101 for the first three dose cohorts -- again, engraftment you know, tolerability, and TI data from those subjects. We had mentioned earlier that we have the option to expand and evaluate more patients in the 1101 study, and we don't anticipate having all of those subjects available at the end of the year, but possibly some of them.

Okay. And if I could ask a quick follow-up, do you expect also to have, from the 1101 study, data on the viral reservoir?

Again, I'll start, and Dale and Geoff can do it. The viral reservoir work to date -- that we've presented to date, was been -- has been on patients who have not undergone TI. As Geoff said in his prepared remarks, we are expanding that reservoir analysis. And whether we have those data from the 1101 subjects by the end of the year, I think is to be determined. Geoff, do you --?

Yes, I'd agree. You know, John, as we said, we are sort of stepwise expanding the reservoir work. It's quite technically demanding for us and we need to work very closely with collaborators to make all that happen. So, at this point we don't have any clear guidance as to just how much reservoir data we'll have available at the end of the year. But what we have, we'll certainly be telling you about.

Right. And as Geoff said in his prepared comments, we continue to expand that evaluation across multiple studies that we've done.

Great. Thank you very much for answering the questions.

(Operator Instructions). Ryan Martins, Lazard Capital Markets.

Hi. It's actually Jonathan Chang, stepping in for Ryan Martins. Thanks for taking my questions. Hi. The first question I have is, with regards to the hemoglobinopathies program, are you thinking of pursuing both beta cell and sickle cell at some point? Or does beta cell have priority over sickle cell?

Again, I'll start, and with Philip and Geoff here, they can chime in. Yes, we plan to pursue both; and yes, beta-thal is currently the one that we plan to take into the clinic first.

Okay. And also, just staying on the hemoglobinopathies, how does your electroporation approach compare to Bluebird Bio's HIV-based approach? Any general or specific comments on that?

Sure. I mean, it's quite different. And why don't I ask Philip to maybe use the beta-thalassemia hemoglobinopathies approach to maybe compare and contrast those two approaches?

Sure. So, as you know, the Bluebird approach uses a lentiviral vector. This is a virus which needs to infect and integrate itself into the genome of the stem cell to achieve its therapeutic outcome. So, there's a necessity for this virus to enter the genome to express its payload.

And the risks associated with that that are, I think, relatively obvious -- that you could have insertional mutagenesis associated with this virus invading into a random sequence at some place in the stem cell genome.

By contrast, what we're doing, using our electroporation approach, is to deliver zinc finger nucleases, which are highly targeted entities. They are designed to cleave at a specific site in the human genome. And we deliver them as an mRNA, so their expression is transient, and certainly would not be present in these cells when returned to the patient.

And so, the real differences here are the permanent and random integrating technology that sort of supports the lentiviral methods, versus this highly site-specific and transient approach that we can achieve.

Just one comment on the efficiency of the two approaches. I think that though both approaches show incredible efficiency in research scale processes, as one scales these up to clinical approaches or clinical scale necessary for treating patients, as you may know, the FDA restricts the number of vector genomes that can be integrated per cell with the lentiviral approaches, and that has an impact on the amount of vector one can use and the efficiency of that process.

And we are able, at the large scale -- and we have data at clinical scale, using the electroporation technology, where we've exceeded over 50% of the alleles being modified in a single stem.

And so, we feel very confident this approach has both the efficiency at the scale necessary to achieve a very targeted outcome. And we think that's going to be very important in treating diseases such as beta-thalassemia and sickle cell disease, which aren't immediately life-threatening diseases.

Sure. That's helpful. Also, should we expect to see updates to the Huntington's program at the Society of Neuroscience? And if so, should we expect to see non-human primate data?

Well, Jonathan, it's a great question. I think I'll duck it, and just say we do plan to present data on Huntington's later this year. We have not guided to what specific meeting we will do that. But -- nor have we guided to exactly what type of data will be presented. But it's definitely a program that we plan to present data on at a major scientific meeting later this year.

Okay. And maybe just one final one. On HIV, for -- on Cytoxan treatment, would you please explain the rationale behind Carl June at Penn testing the 3,000 milligrams per meter squared Cytoxan dose? And maybe provide some color on how that dose was chosen, given that your Cohort 3 dose is 1,000 milligrams per meter squared.

Well, I'll start. And again, we're here with two experts in the field. So, happy to defer to them or to add on that. I think it's really a question of balancing a safe dose with a dose that maximizes the kind of engraftment enhancement that we want to see in terms of generating a robust engraftment of biallelically modified cells.

Without, you know, speculating, I think Carl's been quite successful in the oncology setting with this kind of preconditioning. And those doses of perhaps 3 grams per meter squared are the type of doses one might see in an oncology setting, and could well be the type of doses that are necessary to maximize engraftment of biallelically -- CCR5 biallelically modified cells.

So, I think we're still, as we've always said, in the clinical research stage of this program. And certainly, engraftment enhancement is one of the keys that I think everybody has identified for success here. And strategies to maximize that in a safe way, I think are areas of great interest to ourselves as well as Carl. Anybody else?

Yes. Jonathan, it's Geoff. I mean, I think Carl comes from a -- kind of an oncology background, and certainly 3 milligrams (sic) is getting up into those kinds of -- 3 milligrams (sic) per meter squared's getting into that kind of, you know, dose range.

Certainly, we currently have a cohort going at 1 gram per meter squared. We do not rule out the possibility of a data-driven increase in dose above that. But that remains to be determined by the advent of the actual data that we're seeing.

Sure. Thank you. That's very helpful.

Sure. Good question.

Charles Duncan, Piper Jaffray.

Hi, guys. Sorry. It's Roy again. I think you just addressed this, but -- so, the expansion of six additional patients -- that can see an increase in the Cytoxan dose. Is that correct?

Yes. I mean, and just to repeat what Geoff said -- and Geoff can repeat it again himself, and that is that as we complete the top dose of the dose escalation of 1 milligram (sic), we'll be evaluating those parameters -- the safety and tolerability of that dose, and then the impact on engraftment enhancement.

If it makes sense from a clinical safety and efficacy perspective, we would certainly consider increasing the Cytoxan dose, and that could possibly be done in the additional six subjects that we plan to treat going forward.

I see. Okay. Perfect. Thank you.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks.

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

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.