Sangamo Therapeutics Inc (SGMO) 2014 Q3 法說會逐字稿

Good afternoon and welcome to the Sangamo BioSciences teleconference to discuss third quarter 2014 financial results. This call is being recorded. I will now pass you over to your coordinator for this event, Dr Elizabeth Wolffe, Vice President of Corporate Communications.

Thank you, Sam. Good afternoon and thank you for joining Sangamo's management team on our conference call to discuss the Company's third quarter 2014 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; and Philip Gregory, Senior Vice President of Research and Chief Scientific Officer.

Following this introduction, Edward will highlight recent activities and significant events from the past quarter, Ward will run briefly third quarter 2014 results as well as our financial guidance for the remainder of the year, and Geoff will provide an update on ZFP therapeutic programs. Finally, Edward will update you on our goals for the remainder of 2014 and beyond, and following that we will open up the call for questions.

As we begin, I would like to remind everyone the projections or 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 2014 third quarter financial results as well as recent events and an update on the continued development of our ZFP therapeutics pipeline. The third quarter has been particularly busy for Sangamo as we continue to move our ZFP therapeutic programs forward, but before going into more detail, let me recap the important events of the past few months.

Starting with our clinical programs, Dr. Dale Ando, our Vice President of Therapeutic Development and Chief Medical Officer presented new data from our autologous T-cell therapy for HIV, SB 728-T at the 54th Interscience Conference on Antimicrobial Agents and Chemotherapy or ICAAC which was held in Washington DC in early September. In an oral presentation he described data from two of our clinical studies, SB 728-902 cohort five, and SB 728-1101.

Both studies designed to maximize the engraftment of the ZFN modified CD4 T cells in which both copies of the CCR5 gene have been disrupted making these cells fully resistant to HIV infection. An update on the status of the CCR5 delta 32 heterozygote subject in the 902 study who is controlled -- who has controlled his viral load during a treatment interruption, or TI, from his antiretroviral medications for more than a year. Two additional subjects enrolled in the 1101 study who have experienced a two-log decrease in viral load from their peak measurement during TI, which has been sustained in one subject for more than eight months as of the ICAAC presentation.

These and several other subjects currently remain on extended TIs, meaning longer than the 16 week period defined in the protocol. Needless to say, these data have garnered a great deal of interest in the clinical and scientific communities. My colleagues and our collaborators have been invited to present the details of these studies at a number of important scientific meetings, including the British HIV Association, autumn conference earlier this month, the NIH Strategies for an HIV Cure 2014, meeting last week and the European Society of Gene and Cell Therapy, ESGCT, annual meeting which is being held this week in the Hague.

Providing even more evidence of the enthusiasm for SB 720-8T by leading KOLs, we are very pleased to announce today that our longtime collaborators of the University of Pennsylvania led by Pablo Tebas and Carl June have filed an IND application to begin an investigator sponsored clinical trial of SB 728-T at 10. I'm also pleased to report that this IND has been accepted by the US FDA, and, pending IRB approval, this trial should open very soon.

The Penn team will use similar engraftment and enhancement strategies as those employed in our new ongoing phase 2 clinical trial SB 728-mRNA-1401, incorporating Cytoxan preconditioning and mRNA delivery of the zinc finger nucleases to generate the modified autologous T-cell product.

As we have previously discussed, mRNA delivery is more efficient than the earlier adenoviral delivery preparation and enables treatment of subjects with multiple doses of CCR5 modified cells. The Penn trial will nicely complement our 1401 study, and we believe that data produced from these studies will provide a clear path to pivotal studies.

I've asked Geoff to provide more details about the data to date from the SB 728-T program and the ongoing and proposed clinical trial later in this call. We also continue to make important progress on our ZFN mediated in vivo protein replacement platform or IVPRP which we are developing as a broadly applicable strategy to provide a one-time permanent genetic cure for monogenic diseases that are currently managed by protein replacement therapies.

This is a highly disruptive general approach that can be applied to numerous well-established therapeutic targets. As you know, our first two targets, factor IX and factor VIII, where for hemophilia B and A are being developed in collaboration with Shire. As Shire stated in a press release that we issued last month, Sangamo continues to make quote, rapid progress, end quote toward the filing of INDs for factor IX, factor VIII, and Huntington's disease.

Along with Shire, we updated our IND filing timelines to reflect the significant changes in personnel and procedures that Shire has implemented over the past several months. Less clear at that time, and even more so now, is the impact of the shifting corporate situation at Shire and the implications for existing programs and personnel. As a consequence, while our Shire partnered programs continue to progress, we are not in a position to be specific regarding the timing of IND filings.

As such, we are currently guiding to filing INDs for factor IX, factor VIII, and Huntington's disease by year-end 2015. Importantly, the work we have completed for the factor IX and factor VIII INDs has greatly informed the path of our proprietary applications of the IVPRP, for lysosomal storage disorders. As such we remain on track to file two IND applications for our own LSD programs by the end of 2015.

Our partner programs in hemoglobinopathies with Biogen Idec are also proceeding very well. We received a very positive review of the proposed phase 1 clinical protocol for our beta-thalassemia program by the NIH Recombinant Advisory Committee, or RAC, last month which voted unanimously to approve the study. We remain on track to file an IND application for the beta-thalassemia program in the next two months and to file an IND for the sickle cell disease program in 2015.

Lastly, I am pleased to reiterate that we remain on track to open the phase 1 clinical trial of our stem cell application for HIV, SB 728-HSC at City Of Hope later this quarter. And finally, I want to proudly mention that five members of Sangamo research and development team were recently named among Thomson Reuters list of the world's most influential scientific minds 2014, ranking among the top 1% of scientists most cited in their subject field.

Sangamo scientists have pioneered the field of therapeutic genome editing using ZFP nucleases, which uniquely enable precise and specific changes to any gene. I would like to congratulate Philip Gregory, Ed Rebar, Mike Holmes, Fyodor Urnov, Jeff Miller, and actually the entire Sangamo scientific team for this very well deserved honor.

So, as you can see, it's been a busy and productive few months which we expect to continue as we head into the end of the year, but before we go into more detail on our ZFP therapeutic programs, and what we have coming up for the remainder of 2014 and beyond, let me hand the call over to Ward for an update on our third quarter 2014 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, 2014, and I am pleased to review the highlights of those results with you now. Revenues in the third quarter of 2014 were $12.4 million compared to $5.7 million for the same period in 2013.

Third quarter 2014 revenues were comprised of revenue from Sangamo's collaboration agreements with Shire, Biogen Idec, and Sigma-Aldrich, enabling technology agreements and approximately $400,000 of revenue from research grants. The increase in collaboration agreement revenues was primarily due to our partnerships with Biogen and Shire. In the third quarter of 2014, Sangamo recognized $3.5 million of revenue related to research services performed under the collaboration agreement with Biogen.

Sangamo recognized $6 million of revenues from Shire which included a $1 million milestone payment associated with the toxicology studies for our hemophilia B program, the remaining $5 million of revenues was related to research services performed under the collaboration agreement. In addition, pursuant to the agreements entered into with Shire in January 2012 and Biogen in 2014, Sangamo received up front payments of $13 million and $20 million respectively. These payments are being recognized on a straight-line amortization basis over the initial six-year research term for Shire and 40 months for Biogen.

The Company recognized $500,000 of the Shire upfront payment and $1.6 million of the Biogen upfront payment as revenue for the third quarter of 2014. Total operating expenses for the third quarter of 2014 were $20.1 million compared to $11.9 million for the same period and 2013. Research and development expenses were $16.3 million in the third quarter 2014 compared to $8.7 million for the third quarter of 2013.

The increase was primarily due to increases in external research and manufacturing expenses associated with our pre-clinical programs and personnel related expenses including stock-based compensation. General and administrative expenses were $3.7 million in the third quarter of 2014, compared to $3.2 million for the same period in 2013. Non-cash stock-based compensation expense was $2.1 million for the quarter, with $1.2 million in research and development, and $900,000 in general and administrative.

For the third quarter of 2014, the Company reported a consolidated net loss of $7.5 million or $0.11 per share, compared to a net loss of $6.1 million or $0.11 per share for the third quarter 2013. Turning to the balance sheet, Sangamo ended the third quarter of 2014 with $231.8 million in cash, cash equivalents, short-term investments, and interest receivables. Our net cash used in operating activities was $5.8 million for the third quarter, resulting in $3 million net cash used in operating activities for the year-to-date.

With respect to our financial guidance for the remainder of 2014, due to increased investment in our ZFP therapeutic pipeline, we are slightly modifying our operating expense and year-end cash guidance. Our updated guidance is that we will end the year with at least $220 million in cash from previous guidance of $225 million, and that we expect to incur operating expenses for the full year 2014 of $70 million to $75 million from previous guidance of $65 million to $70 million.

The year end cash guidance is inclusive of research funding and milestone payments from Shire and Biogen but exclusive of any new funding from a collaboration, partnership, equity financings, or other sources. Our guidance for revenues in 2014 is unchanged at $45 million to $50 million. Revenues include partial recognition of the up front payment and research funding for internal and external research program related costs from Biogen and partial recognition of the up front payment research funding and milestone payments from Shire.

In summary, based on these results for the quarter I am pleased to say that the Company remains financially strong with a healthy cash position from which to fund our clinical and pre-clinical programs. Thank you. I will now turn the call back over to Edward.

Thanks, Ward. As you have heard, we ended the third quarter of 2014 with approximately $232 million which gives us a very strong cash position as we prosecute our HIV phase 2 studies and rapidly advance our ZFP therapeutic preclinical pipeline with a goal of filing multiple 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 data that were presented at ICAAC in September and to outline the two new clinical trials in this program that are designed to provide critical data for the design of pivotal studies. 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 the roughly 1% of the US population who carry that mutation in both copies of their CCR5 gene, so-called CCR5 delta 32 homozygote to resist HIV infection despite the repeated exposure to the virus.

The aim of our ongoing clinical program in HIV-AIDS is to replicate this phenotype in any HIV-infected individual by generating a population of modified T cells, SB 728-T, then will be protected from HIV infection and our capable of mounting an effective immune response against the virus throughout a patient's body, essentially providing functional control of the viral infection.

The data that we have generated thus far are very promising. We have demonstrated that SB 728-T treatment is associated with a reconstitution of the immune system, seen most visibly in an increase in the overall numbers of CD4 positive T cells and a decrease in the all important viral reservoir.

This last point is critical feature and advantage of our immunologic approach versus conventional anti-retroviral therapies which do nothing to address the reservoir and underpins our goal of a functional cure for HIV. Data presented at ICAAC provided a possible explanation for these and other clinical observations such as the durability of our modified cells as I would explain later.

In addition in some subjects we've noted a sustained decrease in viral load during a treatment irruption from anti-retro viral medication. The new phase 2 studies that is ongoing is designed to use all that we have learned so far to provide conditions that we believe may enable demonstration of these effects in additional HIV-infected individuals and lead to the design of pivotal studies which will be undertaken with a partner.

In mid-September at ICAAC we presented new data on demonstrating sustained control of viral load for well over a year without anti-viral drugs. In a subject enrolled in our SB 728-902 cohort, five phase 2 trial, the subjects in this cohort already have one of their two CCR5 genes disrupted, and they represent approximately 5% to 10% of the US HIV-infected population.

While we had previously observed a decrease in viral load to undetectable levels in two other CCR5 delta 32 heterozygote HIV infected subjects, the data featured at ICAAC were a very important demonstration of the durability of this affect; keeping viral loads at a level at which the subject is considered to be noninfectious. I should point out that there had been previous reports of functional control in two subjects, the so-called Boston patients, who received bone marrow transplants from uninfected individuals.

While both seemed to be free of the virus initially, after stopping treatment with antiretroviral medications, neither of these individuals was able to maintain control of their viral load for longer than a few months in the absence of antiretroviral therapies. Notably, in contrast to the one person who has been thought to have been cured of his HIV, the Berlin patient, neither of the Boston patients received cells from donors that were CCR5 negative.

Turning to the 1101 study which uses Cytoxan preconditioning to enhance engraftment of SB 728-T, we reported that two subjects, one in the one gram per meter squared and the other in the 1.5 gram per meter squared cohort of Cytoxan treatment, experienced a two-log decrease in viral load from peak. And as of the meeting, that decrease had been sustained in one for more than 39 weeks. We also reported that including these three individuals, five subjects remain on extended TI, which is defined as beyond the 16 week period laid out in the protocol.

In a second presentation at ICAAC we reported data from immunological analysis that provide a possible explanation for the SB 728-T that I described earlier. SB 728-T treatment has resulted in an unprecedented and durable increase in CD4 positive cells, which is likely to be primarily due to the expansion of protected CD4 stem cells central memory cells or TSCM, which are self-renewing stem like cells. We postulate that protection of TSCM from infection provides two possible roots to limit and ultimately control HIV in an infected individual.

The protected CD4 cells that TSCM generates can provide sustained anti-HIV immune helper function against infected cells, allowing functional control of virus in the blood and reservoir. And as these TSCM cannot be infected, their present ultimately limits the ability of the reservoir to be replenished and maintained which may over time result in reservoir erosion. Keep in mind that current antiretroviral therapies inhibit the replication of the virus in cells that do nothing to affect the levels of the HIV reservoir, which is why, when subjects come off their [art], their levels of virus in their blood rebound.

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

As Edward mentioned, we and our collaborators are using the data that we have generated over these past trials to maximize the engraftment of cells that have been modified at both CCR5 genes, so-called biallelic modification which we have previously shown to be a significantly driver in the achievement of control of viral load during a treatment interruption from antiretroviral therapy. Our studies have demonstrated that Cytoxan preconditioning prior to a single infusion of SB 728-T leads to a dose dependent increase in both engraftment of CCR5 modified cells and notable increases in total CD4 cells above the baseline.

In our dose ranging study we determined that the optimal dose of Cytoxan was 1 gram per meter squared. We've also determined that delivery of the ZFNs used to knock out CCR5 genes via messenger RNA and electroporation, is a more efficient method offering higher rates of biallelic modification of CCR5 than adenoviral delivery, which is what we have used in our studies thus far.

mRNA has other advantages over viral delivery besides cost and ease of manufacturing. In contrast to viral vectors messenger RNA modified cells do not elicit an immune response. And so, we cannot only treat a broader segment of the population, we previously had to exclude subjects from our trials if they had high existing levels of adenoviral antibodies, we can also dose them multiple times.

As you heard there are two new clinical trials of SB 728-T, Sangamo's own ongoing phase 2 study SB 728 messenger RNA 1401, or the 1401 trial, and a planned phase 1 investigator sponsored study that will be conducted by our collaborators, Pablo Tebas and Carl June, at the University of Pennsylvania. While both trials use similar methods to maximize engraftment, namely Cytoxan preconditioning and mRNA delivery of the zinc fingers, the two studies complement each other nicely in terms of their design.

Sangamo's 1401 trial is an open label multi-center study. We plan to enroll nine subjects in two cohorts. Each subject will receive a total of up to 40 billion ZFN modified T cells. The first cohort will receive this dose divided into infusions of two equal doses of SB 728-mRNA-T 14 days apart after a Cytoxan preconditioning treatment of 1 gram per meter squared, which will be administered two days prior to the first SB 728-T infusion. The second cohort will receive three doses of cells.

Dividing the total cell dose and administering sequentially in this matter, is thought to maximize overall cell engraftment. Four weeks after the last SB 728 MR infusion, subjects will undergo a 16 week treatment interruption during which time their antiviral -- antiretroviral therapy will be discontinued.

In contrast, Penn is proposing an open label phase 1 study of a single infusion of SB 728 T, using electroporated messenger RNA with or without the prior administration of two different doses of Cytoxan. One cohort will not receive Cytoxan. Two other cohorts will. In the Cytoxan treated group, one cohort will comprise subjects who are CCR5 delta 32 heterozygotes, the individuals who already have one CCR5 gene naturally mutated, and the other Cytoxan pretreated cohort will comprised of subjects with both CCR5 genes intact. All will undergo a 16 week treatment interruption.

The purpose of both studies is to evaluate the safety and tolerability of the treatment and the effect of these treatments on engraftment, total CD4 counts in peripheral blood, and viral load in the absence of antiretroviral medication. The ultimate goal is to amass further data to support our earlier observations that suggest that SB 728-T treatment can potentially enable the patient's immune system to attack HIV infection from several angles and to define conditions that would inform pivotal studies which would be undertaken with a partner.

In summary, we've been greatly encouraged by the data that we have generated thus far in this program, and we are excited by the progress that we're making and by these new trials. Finally, I appreciate that many of you have been curious about the status of our HIV stem cell program. As Edward mentioned, we are on track to initiate this phase 1 trial at City Of Hope in the near future.

With that I'll hand the call back to Edward.

Thanks, Geoff. As you have just heard in considerable detail we and many others are intrigued and very impressed by the potential for SB 728-T to generate a functional cure for HIV, and we look forward to presenting data from these new studies in 2015.

In the very near term, we expect to present data from our Huntington's disease program at the annual meeting of the Society for Neuroscience which is being held from the November 12 to November 15 in Washington DC. Philip Gregory Sangamo's Senior Vice President of Research and Chief Scientific Officer, and I have also been invited to present at the genetic therapy meeting at Harvard on December 3. And in early December Fyodor Urnov, a senior scientist at the Company, is an invited speaker at a session at the annual meeting of the American Society of Hematology, or ASH, called Taking it to the Clinic, Genome Editing for Blood Disorders.

Also in the very near term, we will file the IND for our Biogen partnered beta-thalassemia program and will initiate our phase 1 clinical trial at City of Hope for our HIV stem cell program. Looking further ahead, in 2015, our goal is to file INDs for both of our hemophilia programs and our Huntington's program partnered with Shire, although as I have said before, ultimately, we don't control that timing.

We also remain on track to file two INDs for our proprietary in vivo protein replacement program, LSDs as well as our sickle cell disease program partnered with Biogen by the end of 2015. We also expect that the data from our phase 2 Alzheimer's disease study that we acquired from Ceregene will read out in 2015. That's a lot of moving parts, and we look forward to providing you with more information on the specific timing of these events on future calls.

Finally, we look forward to keeping you informed of our progress at several upcoming investment banking conferences. To that end, we will be presenting at the 25th annual Piper Jaffray Healthcare Conference on December 2; and at the 32nd annual JP Morgan Healthcare Conference in mid-January 2015, 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.

Thank you, sir.

(Operator Instructions)

Our first question comes from Charles Duncan of Piper Jaffrey. Your line is now open

Hi, Edward, thanks for taking my question and congrats on the earned scientific distinction to your colleagues as well as the very good year-on-year revenue optics.

Thanks, thanks Charles. Appreciate that.

So my -- first of all Geoff did a great job outlining what's going on with HIV, and as the phase II that you're running is an open label study, could you imagine that you might be in a position to release some of the progress in say the spring or even or at least the fall of 2015?

I'll give you a short answer and say yes. I mean, that's reasonable.

But I do expect it will have, I guess, what I'll say is a complete data set from the 1401 mRNA study by the end of 2015. And, Geoff, you all right with that?

Yes, that's fine. Obviously the data will, as you point out, Charles, will be coming in on the earlier patients, a little earlier but in order to complete all the patients, we will ultimately go towards the -- towards the latter part of 2015. So those opportunities are there. Obviously, they will be driven by the data itself.

It sounds like the goal is to end early 2016 to be designing pivotal program around what you might move that program forward?

Yes, I think that's right. I think the goal is to use the existing 1401 mRNA study and the repeat dosing that protocol offers to generate the kind of definitive phase II data that we need to design pivotal studies, number 1. And number 2, as we've said before, our plan is before moving into pivotal studies to partner this program for, for commercial, for pivotal studies and commercialization.

Okay. That's helpful. And then I know that you can't speak much about Shire and the interaction there, although it surely has been an interesting time for that company recently.

I guess I'm wondering if you folks were solely in charge of filing those INDs if you think that you'd be in a position to do that in terms of the hemophilia B program, i.e. are there any additional, call it technical or scientific studies that need to be done to prepare for that IND?

I know what might answers to that, Charles. Geoff, do you want me to answer the question, or do you want to answer?

You better start.

I'll be happy to start. The answer is no.

We are from a technical perspective and from other perspectives, as it relates to the hemophilia B program, we are making great progress. And there are no technical issues, there are no fundamental issues scientific, or otherwise that would prevent us from doing that.

Geoff, you want to dive in here, or shall I just take the bullet here?

Yes, Charles, you know, it's a provocative question. I think we're moving forward very closely working with Shire. And they remain very committed to the program, and that's because it's making good progress and achieving its objectives. So that's all that I will say.

Yes, I think the, to use the term of the surrogate marker for that, is the continued progress we make on the LSD program for our own account. And we look forward as they said in the script to presenting data around that in the not-too-distant future.

And then last question and then I'll hop back in the queue is on the beta-thal program. I know we've discussed this a little bit in previous around previous ASH meetings, but wondering why you would use a Bcl11a knockout approach versus a gene replacement or a correction approach just fundamentally what your thought is on that?

Well, there is one very overwhelming reason, and then there are lots of other reasons. But the overwhelming reason is that the approach that we're taking, we believe is curative for both beta thalassemia and sickle cell, whereas a single replacement or correction of the betaglobin gene would not be.

Now, there are lots of other reasons and Philip is on the call and Geoff is here, so they can add or subtract from that. But the overwhelming reason is that from a product development and target product profile perspective, it's a potentially curative outcome for both beta-thal and sickle.

Geoff or Philip, do you want to add anything? Philip?

Yes, this is Philip. Charles, I guess the other thing to point out is that with the CCR5 program, having pioneered ZFN based gene disruption, that was a technology that was sort of ripe if you will to apply directly to the thalassemia and sickle applications. And so it was also sort of ready for prime time, if you will.

And I did think the second point is the one that Edward's made, which is that if we're successful as we hope to be, with Bcl11a being a way of activating fetal sufficiently, it should do that for both thalassemia and for sickle cell disease whereas correction of the betaglobin defect in sickle is by design only capable of fixing sickle disease.

Thanks for the added color, guys.

Sure. Thanks, Charles.

Thank you our next question comes from Cory Kasimov of JPMorgan, your line is now opened.

This is actually Whitney on for Cory. Most of my questions have been asked.

I guess I'll just ask on the HIV program, if you can just remind us of how you're thinking about that program and moving it forward into pivotal? And how you're thinking about that on a partnership front, will you wait for all the phase II data to roll in, or will you entertain those conversations ahead of that?

Hi, Whitney. So let me use that question, and then I'll try and be complete. Let me use that question about timing on data and the length of these studies.

So the key end point in the 1401 study and the same in pivotal studies is acute viral load control. And the way we evaluate that is during a treatment interruption, which is initiated six to eight weeks after the infusion of the modified cells and then subjects go off their anti-retroviral therapy.

And the goal of the trial is within the 16 week treatment interruption period, to evaluate the control of acute viral load based upon or by these modified CCR5 negative CD4 T cells. And so that period of time, 16 weeks post infusion, really gives us a clear sense of this.

And so while formally we follow patients and the studies are formally opened for follow-up of these subjects for several years, we're going to be able to make a very data-driven judgment about the outcome of these studies and in the 1401 study we will be doing mRNA modifications plus repeat dosing in these studies. We will be able to make a judgment about that as I discussed earlier in the 2015 timeline or timeframe, or early 2016.

So our plans are as mentioned is to use those data to design pivotal studies. We would do that in the context or in consultation with a partner around this. We had active discussions, I mean, most recently around ICAAC and the new data that came out with multiple parties that are following this program.

We keep them up to speed. They certainly know our intentions and the design of this work. And so the goal would be as mentioned earlier to be in a position to partner this program and initiate pivotal studies, data-driven, data dependent in 2016.

That is helpful. Thanks for taking the question.

Sure. Thank you.

Thank you.

(Operator Instructions)

Our next question comes from Ryan Martins of Jefferies. Your line is now open.

Hi, thanks for the questions. So, I wanted to ask about Shire. When do they have until to select the two additional targets, or do they have any kind of time lines. Have you got any information on that?

But they do, Ryan. The research period, the time for selecting the last two targets is within the research period which was a six-year period which began in January of 2012. So they, round numbers, another three and half years to select those targets.

Okay. And then just to clarify on your prepared comments and your follow-up. So on hemophilia B, are you saying you're committing to getting that IND filed into 2015 or you are targeting (inaudible)?

So are we committing are targeting? Is that the distinction and the question?

Yes, on non-hemophilia B.

I'm targeting, thank you.

Okay.

If it were -- if you were, I don't know that I would be as black-and-white as you just were, but if you're talking about a program that was solely under our control, I would be more definitive. But as I mentioned, these are partnered -- this is a partner program, and we do not have, what I either would like to say as ultimate control or specifying influence over the final timing or the final filing of the IND. It's ultimately a Shire's decision.

Okay. And then a question on hemophilia, we've heard from some docs, they would like to see clotting factor levels of 15% or more from -- (technical difficulties)

Yes, you say that you heard from docs that they're looking to get levels sort of double-digit low double-digit levels of normal factor VIII or factor IX, is that the question? Or statement?

Yes, low double digits versus I guess taking a patient from severe less than 1% to (multiple speakers)

I heard the same thing at the conference that you guys hosted as well. I don't know what to say about that except I'm sure that is the ambitions, that's the objective, that would be great. And so on, but I will say, that if you look at current therapies, they are well, well, well below that at least on an -- on average. So I heard the same thing, I think it's -- if I was a KOL treating subjects and I had an opportunity to raise the bar for companies, I'd probably do the same thing.

Okay. And then on the issue of inhibitors that you have developed in these hemophilia patients especially hemophilia A, is this something you can do in advance by enrolling patients where you could try to minimize the issue of inhibitors? Or you think gene therapies maybe don't have that particular issue inhibitors would develop?

Yet, I don't have a response on -- Philip, do you have a point of view or Geoff?

Yes, Edward. It's Geoff here.

So, as you know, inhibitors do develop of people who to get recombinant clotting factors. And, you know, typically we gene therapists try to move forward with things that are that are either the complete wild type approach or somewhere close to it or close indeed to what is being used successfully with recombinant therapy. So those are the, so those are some of the guiding principles that we've used and that's -- those are the principles we've used as we've moved forward.

Philip, anything to add?

Yes, just the point that there is certainly no reason to imagine that the gene therapy-based approach -- the genome editing-based approaches will have any higher propensity for inhibitor generation than the same peptides that are generated, ex vivo and then injected. And in fact, you could argue based on some data that, endogenously produced proteins may be more toleragenic than those given in bolus direct injection form although that's obviously speculation at this point.

And any strategy implies, when you enroll patients to try to minimize the risk of that happening? Is there anything that exists?

It's Geoff. It's very typical in these studies to ensure that the patients who are enrolled have been well exposed to recombinant clotting factors and have not developed -- and have not actually developed the inhibitors. So they sort of already started with demonstrating that they are not immunologically responding to the recombinant protein.

Okay. And then finally, this last one on ASH, are we expecting updates on the partner program, generally at ASH is that the plan?

Well, I think the guidance at this point, Ryan, is what we know that we'll be presenting and that's the invited talk that Fyodor Urnov will be giving on taking, moving from bench to clinic for blood disorders. So that's the one that I think you should expect to see. That's -- we'll cover certainly the hemoglobinopathies work, but I guess I'd say stay tuned as time goes by.

Okay. Thanks for the color.

Yet, thanks, Ryan.

Thank you. At this time I'm not showing any further questions. I'd like to turn the call back to Management for any closing comments.

Great. We would like to thank you for joining us, and we look forward to speaking you again when we release our fourth-quarter financial information in early 2015. We will 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 does conclude today's program. You may all disconnect. Everyone, have a wonderful day.