Sangamo Therapeutics Inc (SGMO) 2013 Q3 法說會逐字稿

Good afternoon and welcome to the Sangamo BioSciences Teleconference to discuss third 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. (Operator Instructions).

Thank you, Jamie. Good afternoon, and thank you for joining Sangamo's management team on our conference call to discuss the Company's third quarter 2013 financial results.

Also present during this call are several members of Sangamo's senior management, including Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President of Research and Development; Dale Ando, Vice President of Therapeutic Development and Chief Medical Officer; and Philip Gregory, Vice President of Research and Chief Scientific Officer.

Following this introduction, Edward will highlight recent activities and the significant events from the past quarter. Ward will then briefly review third quarter 2013 results as well as our financial guidance for the remainder of 2013. And Geoff will provide an update on our ZFP therapeutic program.

Finally, Edward will update you on our goals for the remainder of the year 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 contain 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 third quarter financial results, as well as recent events and plans for development of our ZFP therapeutic pipeline.

The last few months have been particularly busy and very productive for Sangamo on multiple fronts. And as you will hear on this call, we expect that trend to continue as we approach the end of the year. In particular, we have numerous data presentations from both our clinical and preclinical programs at major scientific and clinical meetings. But before going into more detail, let me recap the highlights of the past few months.

A principal 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 specifically disrupt the gene encoding CCR5, a required co-receptor for HIV infection of CD4 T-cells.

Disrupting both copies of this gene in a T-cell makes it resistant to HIV infection, thus providing a circulating population of HIV-resistant cells that are able to fight the virus throughout the body.

This is a critical feature and advantage of our approach versus conventional antiretroviral therapies, and underpins our goal of a functional cure for HIV.

In September, Dale Ando, our Vice President of Therapeutic Development and Chief Medical Officer, presented new data demonstrating sustained viral control without antiretroviral drugs in a subject enrolled in our SB-728-902 Cohort 5 Phase 2 trial. The data were submitted as a late-breaking abstract to the 53rd Interscience Conference on Antimicrobial Agents and Chemotherapy, or ICAAC.

While we have previously observed a decrease in viral load to undetectable levels in two other CCR5 delta-32 heterozygote HIV-infected subjects, the data featured in the late-breaker were a very important demonstration of sustained control of viral load at or below levels of detection.

In a second presentation at ICAAC, we reported on the depletion of the HIV viral reservoir and immune reconstitution with a single SB-728-T treatment in a group of chronically infected HIV subjects.

Given how long these subjects had been infected and the consequential damage to their immune system, this is a difficult population to protect. And, as such, these data have been received with great interest, given the dramatic effects.

I've asked Geoff Nichol to provide more detail on both of these data sets and their significance later in the call.

Shifting to the financial side, in mid-September we announced the sale of approximately 7 million shares of Sangamo common stock. We were pleased that the shares were sold at $10.58 per share, which was the closing price of the stock on the day immediately prior to pricing.

The net proceeds from the offering were approximately $70 million and, as we announced in our press release today, this brings our cash balance at the end of the third quarter to $133 million.

Some investors have asked, given the strength of our balance sheet and our expected future revenues from our existing partnerships, why we raised an additional $70 million at this time. While we certainly were not in dire need of new capital, we felt that it was prudent to take advantage of strong institutional investor interest in the Company and the good market conditions.

These new funds significantly strengthen our balance sheet and will enable us to expand our ZFP therapeutics pipeline as well as provide us with a stronger financial position from which to approach future partnering discussions.

Finally, as I mentioned, our progress over the past year has increased the Company's visibility with several major investors, and this offering enabled us to bring a number of additional high-quality institutional investors into the stock.

Turning to the delivery side of our platform, in late August we announced the acquisition of Ceregene, a privately-held biotechnology company focused on the development of adeno-associated viral vectors, or AAV gene therapies.

The transaction brought a number of valuable AAV assets into Sangamo which augment our existing delivery capabilities. In addition, we also acquired several preclinical and clinical assets, including a fully-enrolled and fully-funded Phase 2 clinical trial in Alzheimer's disease.

Under the terms of the agreement, we issued 100,000 shares of Sangamo common stock to the stockholders of Ceregene, less than 0.2% of our total outstanding shares at the time. Importantly, the upfront consideration did not include any cash; and, going forward, this acquisition, including the ongoing Phase 2 Alzheimer's trial, will have no impact on our current operating expense guidance.

One additional note -- Phase 1 data from the Alzheimer's program, which is AAV-delivered nerve growth factor, will be presented for the first time at the 6th Clinical Trials on Alzheimer's Disease meeting, which will be held in mid-November in San Diego.

As many of you know, we are using AAV for our in vivo ZFP therapeutic programs, including our Huntington's disease program. Ceregene had arguably the most experience of AAV delivery to the central nervous system of any company in the world, as measured by preclinical studies, regulatory filings, and in treating patients. Specifically, they had deep knowledge and experience in AAV GMP manufacturing, including a well-established GMP process that is scalable, validated and commercially viable.

This acquisition was a great opportunity to capitalize on the more than 12 years of development and over $120 million that Ceregene had invested in their AAV platform and AAV-based gene therapies, and we believe that these assets will be of significant value to us, saving us both time and money as we advance our own in vivo ZFP therapeutic programs.

One final notable event in the quarter -- in mid-August we announced that the United States Patent and Trademark Office issued a Notice of Allowance for our US patent application covering fundamental aspects of the architecture of another genome editing platform, engineered Transcription Activator-Like Effectors, or TALEs.

Specifically, the issued claims cover core architectural aspects of TALEs that are necessary for these proteins to be useful in biomedical research and plant applications, and in any potential therapeutic applications. We expect broad adoption of this core architecture as it has already become the industry standard.

As you can see, it's been a very busy and productive few months, and we expect an equally active rest of this year. But before we go into more details on our ZFP therapeutic programs and our plans for the remainder of 2013 and beyond, let me hand the call over to Ward for an update on our third quarter 2013 financial results, as well as our financial guidance for the end of the year. 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 third quarter ended September 30, 2013, and I am pleased to review the highlights of those results.

Revenues in the third quarter of 2013 were $5.7 million compared to $4.9 million for the same period in 2012. Third quarter 2013 revenues were comprised of revenue from Sangamo's collaboration agreements with Shire and Sigma-Aldrich as well as approximately $900,000 of revenue from research grants. As we mention in the press release, the increase in collaboration agreement revenues was primarily due to our agreement with Shire.

Total operating expenses for the third quarter of 2013 were $11.9 million compared to $10.7 million for the same period in 2012. Research and development expenses were $8.7 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 expenses for our SB-728-T HIV/AIDS program.

General and administrative expenses were $3.2 million in the third quarter of 2013 and $3.1 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 $700,00 in general and administrative expenses.

For the third quarter of 2013 we reported a consolidated net loss of $6.1 million, or $0.11 per share, compared to a net loss of $5.8 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 third quarter of 2013 with $133.1 million cash, cash equivalents, short-term investments and interest receivable, including $69.5 million in net proceeds from our public offering completed in September. Net cash usage excluding these proceeds was $2.8 million for the third quarter and $12.7 million for the year to date.

With respect to financial guidance for this year, with the recent financing we now expect to have a cash investment balance of at least $125 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 reiterate our earlier guidance and expect 2013 operating revenues 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 team -- term provided in the Shire agreement. We also expect that the spread of total revenue over the four quarters of 2013 will be generally in line with the pattern in 2012.

In summary, we are pleased to have met our financial objectives for this quarter with respect to both operating results and net cash usage. The equity raised during the quarter was the largest in the Company's history, and we acknowledge and appreciate our existing investors who participated in the offering, as well as welcome new institutional investors who became shareholders.

Thank you, and I will now turn the call back over to Edward.

Thank you, Ward. As you have heard, post our recent financing, we ended the third quarter with just over $133 million, which gives us a strong cash position as we advance our HIV Phase 2 studies and our ZFP therapeutic preclinical pipeline, with the goal of filing seven new INDs by the end of 2015.

With that in mind, let's turn to our lead clinical program in HIV/AIDS. I've asked Geoff to provide more detail on the late-breaking data that were presented at ICCAC in September, and to outline our plans for the presentation of data from this program over the next 2 months. Geoff?

Thanks, Edward. Good afternoon, everyone. As most of you know, our HIV program employs our ZFN technology to disrupt the CCR5 gene in T-cells of HIV-infected individuals. CCR5 is the major co-receptor for HIV entry into CD4 T-cells and a well-validated clinical target for a ZFN approach to HIV.

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.

The aim of our ongoing clinical program, SB-728-T, is to generate a population of modified T-cells in HIV-infected individuals, that will be both protective from HIV infection and capable of mounting an effective immune response against the virus throughout a patient's body.

As Edward mentioned, we have two ongoing Phase 2 clinical trials in this program. To follow up on an observation made in an earlier Phase 1 trial, in which we saw a very clear effect on viral load after SB-728-T treatment, one subject in these earlier studies who underwent an interruption of antiretroviral drug treatment -- a so-called treatment interruption or TI -- experienced a viral load drop to undetectable levels at the very end of the TI period. This subject was put back on their antiretroviral drugs per the clinical protocol.

It transpired that this individual was a delta-32 heterozygote, and so already had one disrupted copy of their CCR5 gene. ZFN modifications of such cells result in approximately twice the number of cells in which both copies of the CCR5 gene are disrupted -- so-called biallelic modification.

Our analysis of the data from all subjects in this study revealed a statistically significant relationship between the estimated level of engraftment of cells that had undergone biallelic modification, and reduction from initial peak in the level of virus in the blood during the TI.

We are further investigating this relationship using two different strategies that both aim to maximize engraftment of T-cells that have undergone biallelic modification. In one trial, SB-728-902 Cohort 5, we have enrolled ten CCR5 delta-32 heterozygote subjects. Delta-32 individuals represent approximately 5% to 10% of the HIV-infected population of the US.

In contrast, our SB-728-1101 study is designed to treat the rest of the HIV-infected population, regardless of their natural CCR5 status. In this group we're using a Cytoxan or cyclophosphamide conditioning regimen, which transiently depletes lymphocytes in the circulation.

Once the drug is discontinued, cells rapidly repopulate in response to the body's chemical signals to replace the missing cells. Such protocols have been used in adoptive T-cell therapies and cancer to great effect, to boost engraftment of the infused T-cells. We're looking for a similar enhancement of engraftment of SB-728-T by infusing our modified cells into Cytoxan-depleted circulation.

In both studies, while subjects remain on antiretroviral therapy, or ART, through the initial SB-728-T treatment, which is a single infusion of approximately 10 billion to 30 billion treated cells, they later undergo an interruption of their antiretroviral drugs, during which we evaluate the relationship between the levels of engraftment of biallelic modification of cells, and the effect on viral load, as well as numerous immunological parameters.

The late-breaking presentation recently at ICAAC focused on the SB-728-902 Cohort 5 CCR5 delta-32 heterozygote study. We presented data demonstrating that, in total, three of seven evaluable HIV-infected subjects had circulating HIV that became undetectable during from antiretroviral therapy, or ART.

Importantly, in one subject, the focus of the late-breaker, his viral load dropped and remained at a level that was at or below the limit of quantification of the current ultra-sensitive assays for HIV for 7 weeks.

I should note that this was, as of the last measurement that was taken before the meeting, and as of presentation, the subject remained on TI.

Again, reductions in viral load from peak during TI, showed a statistically significant correlation with estimated numbers of engrafted ZFN-modified cells that had undergone biallelic modification of CCR5, in line with our previous observations.

These data are the first demonstration that a single infusion of SB-728-T can lead to profound suppression of viral load in the blood and sustain functional control of the virus in the absence of ART.

The fact that three of the seven evaluable CCR5 delta-32 subjects achieved undetectable levels, is a major step towards our goal of immunological functional control of HIV.

A tiny minority of HIV-infected individuals -- so-called elite controllers -- can accomplish this without drug intervention. These individuals typically have low CCR5 expression and good antiviral CD8 responses, a characteristic shared by those SB-728-T-treated subjects, in which we have to date seen the greatest effects on the virus. This is exciting support for the idea that the engrafted, protected CD4 T-cells are indeed enhancing the body's immunological response to HIV.

Our second presentation at ICAAC reported data from subjects enrolled in Cohorts 1 through 3 of the SB-728-902 trial. These subjects had been infected with the virus for a long time -- a median of 21 years -- and were all identified as so-called immunological non-responders. This is a group of individuals with low levels of CD4 T-cells despite virus that was well controlled by ART.

In this group we have observed the treatment with SB-728-T leads to a long-term increase in CD4 counts. This effect on total CD4 counts in SB-728-T-treaded subjects was significantly greater than those observed in previously-published T-cell infusion studies without CCR5 modification, and correlated with increased total and CCR5-disrupted central memory CD4 cells.

In addition, when we looked over a 12-month period at the levels of the HIV reservoir, we saw a median 0.6 log reduction, as demonstrated by measurement of HIV total DNA in peripheral blood mononuclear cells -- PBMCs. This decrease of reservoir showed a statistically significant correlation with the improvement in CD4 count.

Clearly, we are amassing a body of data that suggests that SB-728-T treatment can potentially enable the patient's immune system to attack HIV infection from several angles, an effect on controlling the acute rebound in viral load off ART, and a longer-term effect on the viral reservoir as source of HIV.

Keep in mind that current antiretroviral therapies inhibit the replication of the virus themselves, but do nothing to affect the levels of the HIV reservoir. Which is why, when subjects come off their ART, the levels of virus in their blood rebound.

Many believe that the HIV reservoir is not completely inert, but is sustained by a process of slow cell turnover. We speculate that SB-728-T promotes immunologically-driven elimination of these cells as they turn over, resulting in a steady elimination of the HIV reservoir.

As we move into the last few months of this year, I'm very pleased to announce that, per our guidance, we will present data from both of our Phase 2 studies, including all dose escalation cohorts of the 1101 study, at the 6th International Workshop on HIV Persistence, Reservoirs and Eradication Strategies, which will be held in Miami from December 3 to 6.

In addition, we will have data presentations that include analyses of immunological aspects of SB-728-T treatment as well as its effect on the viral reservoir from both our Phase 1 and Phase 2 studies, at two other meetings this quarter -- the first at the annual meeting of the European Society of Gene and Cell Therapy, or ESGCT, which is being held in Madrid next week; and the second, a translational medicine meeting organized by The Lancet, entitled -- What Will it Take to Achieve an AIDS-Free World? -- which is being held here in San Francisco from November 3 to 5.

In summary, we have been greatly encouraged by the data that we've generated thus far in this program, and we're excited by the progress that we're making. We believe that we are successfully working through the checklist of factors necessary to achieve immunological functional control of HIV throughout the body.

Our ZFN-modified cells and grafts -- 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 3 years ago.

We also have clear evidence that we are having an effect on the virus throughout the body, reducing the viral reservoir and, in the setting of a TI, a prolonged effect on levels of virus in the blood. We look forward to updating you on the results of our completed HIV data set in December.

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

Thanks, Geoff. As we guided earlier this year, we expect a fourth quarter that is rich in data presentations. As Geoff has outlined, we will present data from our SB-728-T clinical trials, including all cohorts from our ongoing Phase 2 studies, at the 6th International Workshop on HIV Persistence, Reservoirs and Eradication Strategies in early December, as well as updates at several meetings in the next few weeks, including ESGCT -- the ESGCT meeting in Madrid next week and the Lancet meeting in early November.

We will also present Phase 1 clinical data from the Alzheimer's disease program that we acquired from Ceregene in mid-November at the 6th Clinical Trials Conference on Alzheimer's Disease. Those of you who follow this field will be interested in these data.

In addition, we will make presentations of preclinical data from our Shire-partnered programs in hemophilia and Huntington's disease, and our proprietary program in hemoglobinopathies.

Data from our Huntington's disease program will be presented at the annual meeting of the Society for Neuroscience in mid-November, and data from our hemophilia and hemoglobinopathies programs, and our T-cell cancer immunotherapy program, will be presented at the annual meeting of the American Society of Hematology, or ASH, in early December.

As the flow of this data would suggest, we are very focused on our ZFP therapeutic development goals, and aim to file INDs in 2014 for hemophilia A and B, beta-thalassemia, and our HIV application in stem cells.

To that end, our HIV stem cell program was reviewed and received unanimous approval by the NIH Recombinant Advisory Committee, or RAC, in September.

Looking further forward, in 2015 our goal is to file INDs for our Huntington's program with Shire and up to two proprietary programs in lysosomal storage disorders. We also expect our Phase 2 program in Alzheimer's disease will read out in 2015.

All in all, a lot to look forward to, and we look forward to providing you with more information on specific timing of these events on future calls.

Needless to say, we have an exciting few weeks and months ahead of us, and we look forward to keeping you informed of our progress. To that end, we will be making presentations at the 25th Annual Piper Jaffray Healthcare Conference on December 4, and at the 32nd Annual J.P. Morgan Healthcare Conference in mid-January 2014, both of 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.

Congratulations on all the progress in the quarter.

Thanks, Charles.

First question is either for you, Ed, or Geoff. I'm wondering -- you know, ICAAC was in mid-September. Weeks are going by. I'm kind of wondering what the disposition is of that patient who you saw the improvement in viral -- or, the improvement in viral control during the treatment interruption. Can you share with us whether or not that has been sustained and if the person is still on a treatment interruption?

So, great question, Charles, and this is one I don't even have to pass over to Geoff. So, we're not going to update on this call beyond the data that we presented at ICAAC; but, as guided, we will be updating at upcoming meetings and you should expect a complete data update in early December at the meeting in Miami. But I'm sure you can imagine, on this call we don't plan to update past the ICAAC data.

Okay. That makes sense. And then, with regard to the three of seven responders, if you will, for the evaluable patients, which is in my view pretty decent for this type of treatment, I'm wondering if you have any insights -- further insights on what would comprise a responder, and thoughts on how to target patients.

Well, I think -- and Geoff, I'll lead off here, and certainly ask you to comment. I mean, in terms of responders, Charles, the critical issue on both the Cohort 5 delta-32 trial as well as on the 1101 Cytoxan study, is really focused sort of in the TI period, where we're evaluating viral load.

Obviously, on top of that we're looking at other parameters -- the expansion or maintenance of the modified cells; the overall CD4 counts; but the principle issue there is impact on viral load and immunological functional control, as Geoff talked about.

Geoff do you want to comment further on that?

Yes. Charles, you know, as you know, we continue to evaluate the profile of our patients using a wide range of immunological parameters in collaboration with Pierre-Rafick Sekaly (sic - Rafick-Pierre Sekaly) and other investigators. And those evaluations continue.

You know, we've published that some of the effects of SB-728-T appear to be affected by the underlying sort of inflammatory state of the patients, which is well-known to have a significant effect on the morbidity and mortality outcomes in -- even in treated HIV.

But it'll be a little while yet before we can really come out with absolutely final conclusions about that. Those evaluations continue and are companion evaluations to the viral load and other protocol measures that we're making in these studies.

Okay. And I guess a follow-up to that -- the question is, would we anticipate you being able to come up with patient profiles and incorporate those into the next steps? And would you anticipate that next step to be perhaps a Phase 2b, perhaps to start in 2014?

Well, again, I'll start, and Geoff can comment. I'll take the latter piece. We're not going to, at this point, comment on what next steps might be. That's obviously a data-driven event, and the timing of that would be, again, dependent upon what the next step is and what the data are. In terms of, you know, baseline profile of these patients, Geoff, is there anything you want to add to what you've already said?

No, Charles; it's pretty much what I'd said before. I mean, this is an ongoing clinical investigation, and clearly we're investigating a lot of things.

I agree with you that trying to identify profiles that would help us to focus the therapy on the right patients -- you know, that's an aim across the entire industry at this point, and obviously we will be continuing to follow that. But, you know, it would be simply premature to guide to anything at this point.

Thanks for the added color.

Yes. Thanks, Charles.

Ryan Martin, Lazard Capital Markets.

Just a few questions. Just to start out a bit, obviously, ASH abstracts coming up in a little over 2 weeks. You said you're going to have some (inaudible) data there, probably [AMV]. Are we to expect this is going to be in non-human primates or dogs? If you can talk about that.

And, you know, maybe some of your latest thinking on how you're thinking about incorporating the factor VIII gene, which obviously is much larger than the factor IX gene, into the AAV construct. And one other one on ASH is, I -- did you say you will not have any LSD data at ASH?

So, I'll start off, and Philip, you can certainly chime in. I don't think I'm going to comment at this point, or run in front the ASH abstracts in terms of what those cover. As you point out, those will be out shortly, and I think will cover that.

Maybe, Philip, you can speak to the loading capacities around AAV8 and AAV9? And at this point, Ryan, I don't think we've commented on when and where we'll be presenting new LSD data. So, Philip, do you want to comment on -- in terms of loading capacity on factor VIII?

Sure. So, Ryan, you're absolutely right that the factor VIII gene is a very large gene relative to the sort of average-sized human gene. And that there is substantial difficulty in getting that gene packaged into a classical AAV vector.

One of the features that makes that difficult, of course, is that, if you think about a standard cDNA approach, it's necessary to also include promoter sequences that not only -- so, not only the cDNA itself but also the sequences necessary to drive the expression of that cDNA.

And that's really where this -- our approach is different. We don't need to include the promoter because we're going to target this -- the coding sequence of the factor VIII gene into our in vivo protein replacement landing pad, if you will, which is the albumin locus. And the albumin locus itself provides that promoter sequence.

And so, that's a relatively small change, but that change actually is quite substantial in giving you the flexibility to load the factor VIII cDNA into an AAV vector without any special tricks. And it really comes down to that ability to eliminate the promoter sequences.

Okay. Now, thanks for that color. Just a question (inaudible). I looked at the abstract (inaudible) abstract's out, I guess, on Society for Neurosciences. You know, is -- it seems like there's clearly some correlation between delivering the repressor and the impact on the medium spiny neurons in the stratum of the brain. Can you maybe talk about that and, you know, what the relevance of something like that may be?

Sure. Philip, you want to take a first shot at that?

Sure. So, not -- again, not wanting to get too far ahead of the data that will be presented, but just sort of sticking to what's in the abstract, I think, you know, it's clear that in Huntington's disease the medium spiny neuron is one of the critical neurons that's sort of selectively lost in response to the expanded CAG repeat.

And so, this is a particular class of neurons that we track, because they're selectively lost. If we're having an impact on the presentation of disease, and hopefully on the phenotype of disease, we would expect to molecularly preserve the medium spiny population.

And so, we've tracked -- using numerous markers, we've tracked this population of cells in mouse brain that has been exposed to our zinc finger protein repressor at the large CAG repeat found in the mouse model. And are very encouraged by the retention of these medium spiny neuron markers that indicate that we're having a functional preservation of the relevant cell size.

But there'll be a lot more data on that presented at SFN. But that's sort of the -- that's the basis of why we're interested in that particular class of neurons.

Okay. Thanks again. And, you know, one final, I guess, broad question.

I think in the prepared comments it was mentioned that, you know, the use of the cash would be also for expansion of the pipeline. You do have an abstract, as you mentioned, on your T-cell cancer immunotherapy approach at ASH; and of course, with the Ceregene acquisition, there's some activities there from the ophthalmology side.

And so, maybe if you can just talk, you know, a little more broadly around other approaches you're -- or maybe disease areas you may go after, outside what we already know about that you've already committed to.

Well, you're absolutely right, Ryan. The -- one of the reasons for doing the financing is to allow us to more aggressively invest in pipeline expansion. And we specifically included in the prepared remarks today, and highlighted the abstract that is going to be presented at ASH in the T-cell immunotherapy space. And you're also right that there were some pretty significant AAV ophthalmic assets as part of the Ceregene acquisition.

And there are probably another three or four programs that are ongoing here, that I could add to that list just to round that out.

But I don't think, at this point, we're going to be highlighting any of those beyond the four INDs that we're working towards next year, and the three additional INDs, plus the -- in 2015, plus the Phase 2 Alzheimer's data. But I think it is fair to say that both of those things that you mentioned, plus several others, are very much a part of what we're working on.

And as time goes by -- and again, in a data-driven way, will be things that we will highlight and talk about. But at this point I'd say the investors should stay focused on the pipeline that we've discussed.

Okay. Thanks, Edward.

Sure. Thank you.

John Newman, JMP Securities.

So, I wondered if you could talk a little bit about what type of data we might see on your Phase 1 Alzheimer's program -- what you might discuss. And if you could remind me what the endpoint is, that you're looking at there?

Sure. I'll start off, and Geoff, maybe you can talk a little bit about this. This is obviously the program that came in through the Ceregene acquisition. I think the expectations in terms of the Alzheimer's data are Phase 1 data.

So, first, safety, and that's the primary endpoint in any Phase 1 trial. But also I think the real issue is -- in this program, is gene expression, and durability of gene expression. And I think those are critical elements in any kind of CNS delivery.

Geoff, do you want to comment any further, in terms of the clinical trial or endpoints of the Phase 1?

Sure. So, John, yes, as Edward said, the primary outcome really for this early-stage program is safety. Nevertheless, a pretty broad range of exploratory endpoints were included, looking at efficacy, the ADAS-Cog, and a variety of other rating scale-driven sort of approaches, as well as scanning data.

And as Edward mentioned, you know, there's -- unfortunately, you know, sadly some patients die in these programs and it's therefore possible to, you know, attain postmortem evaluations of the expression of the actual [transgene] itself.

So, that's giving you a little bit of color. But, again, I don't want to get too far ahead of the actual presentation in a few weeks' time.

Okay. Great. And just in terms of the SB-728-T program, going forward, could we expect to hear some news regarding perhaps an electroporation technique during 2014, or is that something that you're still sort of deciding on?

Well, I'll go first, and either Dale or Geoff -- you can comment further. And even Philip, because we've done a lot of work at this end. But I think there's a couple of things that we've talked about in this point, John.

One, our collaborator, Carl June -- we've talked about him from a process development perspective, moving towards electroporation in the trial that he's going to initiate. And we've had an awful lot of success with electroporation of RNA in the stem cell environment. And that's certainly what we're employing in our HIV stem cell protocol.

But there are significant advantages of RNA electroporation in both T-cells and stem cells, and it's certainly an important piece of process development -- technology development, that we've been working on.

Geoff or Philip, anything else you want to add to that?

It's Geoff. You know, unless Philip has -- or Dale, have any other comments, I think that's pretty much it, John, in terms of -- we've become very enamored of the electroporation approach, and we've worked with Carl to adapt that beyond the setting that we've used in stem cells to look at T-cells as well.

So, yes, you will be seeing more of that data. Exactly when and where, it remains to be determined.

Okay. Great. Thanks very much, guys.

Thanks, John.

(Operator Instructions). And I am showing no further questions.

Great. All right. We'd like to thank you for joining us, and we look forward to speaking with you again when we release our fourth quarter financial information in early 2014. We'll be available later today if there are any follow-up questions. Thank you.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.