Sangamo Therapeutics Inc (SGMO) 2018 Q2 法說會逐字稿

Good afternoon, and welcome to the Sangamo Therapeutics Teleconference to discuss second quarter 2018 financial results. This call is being recorded.

I will now pass you over to the coordinator of this event, McDavid Stilwell, Vice President of Corporate Communications and Investor Relations.

Hello, and thank you for joining us. As we begin, I'd like to point out that we'll be referring to a slide presentation today and you may find a link to the slide presentation on our website, www.sangamo.com, on the Events and Presentations page of the investors and media section of the site.

I'd also like to remind everyone that the projections and forward-looking statements that we discuss during this call are based upon the information that we have available today. This information will likely change over time. By discussing 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. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are detailed in documents of the company filed with the Securities and Exchange Commission, specifically, our annual report on Form 10-K and our quarterly reports on Form 10-Q. The forward-looking statements stated today are made as of this date, and Sangamo undertakes no duty to update such information except as required under applicable law. With me this afternoon on this call are several members of Sangamo senior management, including: Sandy Macrae, Chief Executive Officer; Kathy Yi, Chief Financial Officer; Ed Conner, Chief Medical Officer; Ed Rebar, Chief Technology Officer; Heather Turner, Senior Vice President and General Counsel; and Gary Lee, Vice President of Cell Therapy. Again, we will refer to a slide presentation during this call and those slides are to be found on the Investors and Media section of our site.

And now I'd like to turn the call over to Sandy.

Thank you, McDavid, and good afternoon to everyone on the call. Thank you for joining us. Time flies. It's hard to believe we're already in the middle of the summer hosting our second quarter call. Sangamo has continued to evolve into a medicines company, dedicated to the development of novel genomic therapies that have the potential to transform patients' lives. This transformation is a process and our progress is becoming more and more visible. On today's call, we will highlight specific achievements in clinical development, in research and in our corporate strategy, all emblematic of our evolution.

In his clinical update, Ed Conner will discuss the positive preliminary results that we announced this afternoon from our clinical trial evaluating SB-525 gene therapy for hemophilia A. This is the first efficacy data to emerge from the new Sangamo and the first efficacy data from a program using AAV6. Another important data point for Sangamo will follow on September 5 at SSIEM, when we present preliminary results of our first 2 cohorts of the clinical trial evaluating our SB-913 in vivo genome editing therapy for MPS II. In the last few years, technology development at Sangamo has evolved to serve therapeutic ends. And Ed Rebar, our recently appointed CTO, will discuss key technical parameters required for safe and effective genome editing. He'll also provide his viewpoint about recently published studies about gene editing. We've been emphasizing interest in building an immunology cell therapy expertise. Our intention was to build de novo or to acquire through collaboration the cell therapy capability to lead the field of CAR-Treg development for immunology. Our proposed acquisition of TxCell solidifies our leadership position in this emerging field, accelerating our timelines to clinical development by up to 2 years. We plan to develop CAR-Tregs first in the solid organ transplant setting and later for the treatment of highly prevalent autoimmune diseases. TxCell is a high-performing team, and our intention upon closing is to allow them to continue to function as a subsidiary of Sangamo. Later in the call, Kathy Yi will provide an update on our finances, including the impact of the TxCell acquisition.

And for now, I'll turn the call to Ed Conner, our Chief Medical Officer.

Thanks, Sandy, and good afternoon, everyone. I'm pleased with the progress the clinical development group has made since our first quarter call, and I'd like to spend some time discussing latest developments from 2 of our lead clinical programs: our SB-525 gene therapy candidate for hemophilia A and SB-913 in vivo genome editing candidate for MPS II. Earlier this afternoon, we announced preliminary safety and efficacy results from the Phase I/II Alta study for hemophilia A. And I'm pleased to discuss some of the top line information from the press release on this call. We're excited by the results we have seen so far. And we and Pfizer intend to present the detailed data set later this year at the ASH 2018 Annual Meeting. ASH has stringent embargo requirements. And so until then, we will only discuss a few highlights in order to preserve the opportunity to present at the conference. The Alta study is an open label dose ranging clinical trial designed to assess the safety and tolerability of SB-525 investigational gene therapy in adult subjects with severe hemophilia A. To date, 5 patients have been treated at 3 dose levels, 2 patients per cohort.

Turning to Slide 15 for the top line summary. SB-525 has been generally well tolerated with no treatment-related serious adverse events. The fifth patient in the study, the first treated at the third dose level, has achieved therapeutic Factor VIII activity levels. Epidemiologic data indicate that Factor VIII activity above 12% of normal is associated with substantial reduction or elimination of spontaneous bleeds in factor usage. A dose dependent effects has been observed in the study, with patients in the second cohort reporting reduced use of factor replacement after receiving study drug. There have been no use of tapering courses of oral steroids. Next steps for this study are to treat a sixth patient who is scheduled for treatment later this month. The protocol specifies that the Safety Monitoring Committee will then meet and recommend either confirmatory cohort expansion or additional dose escalation.

Based on the observations from these first 5 patients, I'm confident that with this study, we will determine the clinically appropriate (inaudible) of SB-525 for use in registrational trials.

Turning now to our SB-913 in vivo genome editing treatment for MPS II. We announced last week that we'll be presenting preliminary clinical data from the Phase I/II CHAMPIONS Study on September 5 at the 2018 Annual Symposium of the Society for the Study of Inborn Errors of Metabolism or SSIEM in Athens, Greece. The presentation will cover preliminary safety and efficacy from the first 2 dose cohorts. I'm also pleased to report we recently treated the sixth patient, the second and the highest dose cohort of the CHAMPIONS Study, completing the initial dose escalation portion of the trial. Last week, Sangamo held an educational webcast with Dr. Joseph Muenzer, one of the principal investigators in the MPS II CHAMPIONS Study. The goal of the webcast was to share the lens through which we are evaluating the SB-913 program. The webcast replay is available on our website and I encourage those who haven't seen it to watch it.

As shown on Slide 18, to understand MPS II disease progression and why enzyme replacement therapy is not completely effective, it's important to understand the differences in normal IDS production and how enzyme is delivered with enzyme replacement therapy or ERT. In healthy subjects, IDS is produced inside the cell and a small amount of it may leak out into the circulation due to the cell's imperfect internal transport system. A steady state is established as extracellular enzyme is taken back up by receptors on the cell surface. As a result, most of the enzyme normally produced in the body is found in tissues, with small concentrations found in circulation. In contrast, ERT is weekly infusion of a large bolus of enzyme designed to create high concentration in the circulation to allow uptake in the IDS deficient tissues.

However, as illustrated on Slide 19, ERT only produces transient high-level of IDS followed by rapid clearance from the circulation within a matter of minutes to hours due to its short half-life and because large amounts are taken up rapidly by the liver. Enzyme uptake by cells is a slow, receptor-mediated process, and the short window of exposure of ERT to the tissues limits its effectiveness. Instead, an ideal therapy for MPS II would produce and maintain continuous, stable levels of enzyme in the circulation, allowing for prolonged and sustained exposure to the tissues. That is the goal for SB-913, as you will see on Slide 20. We believe continuous IDS exposure produced through our genome editing approach has the potential to allow a greater amount to be taken up by receptors on the cell surface. We expect in the CHAMPIONS Study to learn about safety of SB-913 at various doses as well as potential for genome editing of liver cells to produce therapeutic levels of IDS. Our pharmacokinetic/pharmacodynamic model using preclinical and clinical ERT data as well as preclinical SB-913 data, suggests that very low levels of circulating enzyme may be sufficient to drive uptake into cells and expected levels of circulating enzyme should be sufficient to maintain suppression of GAGs.

At SSIEM next month, we expect to report data from 4 patients across 2 dose cohorts, 5e12 and 1e13 vg per kg. We expect to report on safety, plasma IDS and urine GAGs.

Moving to Slide 21. Once data from all 6 subjects has been reviewed by the SMC, Sangamo is planning to provide patient data to investigators and work with them to determine appropriate ERT withdrawal for their patients. As we have said before, stabilization of urine GAG levels after withdrawal of weekly ERT will be an important parameter for establishing the clinical relevance of SB-913. We're also advancing our plans to evaluate SB-913 in younger patients. Following FDA review, our U.S. protocol was recently amended to allow for the treatment of younger patient populations, once safety and efficacy are established in the first 6 adults. This is similar to the plan for pediatric evaluation allowed in our CTA in the U.K.

Before concluding, I'll quickly review progress in 3 other active clinical programs. In July, we were pleased to announce treatment of the first patient in the SB-318 Phase I/II trial for MPS I. That first subject was treated at the mid-dose. As with SB-913, we are authorized in the U.S. and U.K. to begin treating adolescents as soon as safety and efficacy are established in adults. We're also making progress in the clinical development of our ST-400 beta-thalassemia program. We have 3 clinical sites open and our first patient is now enrolled in the study. The IND for BIVV-003 for sickle cell disease is approved and Bioverativ anticipates opening several clinical sites across the United States this year.

Finally, SBF-9 for hemophilia B remains a challenge to recruit in the U.S. We're working to initiate clinical sites in the U.K. and remain on track to activate those sites by year-end. These are certainly exciting times for Sangamo as the accumulation of clinical data is providing greater clarity into the capabilities of our technology platforms. This allows Sangamo to grow and transition from an editing company into a data-driven organization focused on clinical product development. I'm excited to be a part of these efforts at such a transformational time for the company.

I'll now turn the call back to Sandy.

Thanks, Ed. I'd just like to take a moment to introduce Ed Rebar, our Chief Technology Officer. Ed received his PhD from MIT where he studied methods for designing zinc finger proteins to target novel sequences. In the 20 years he's been here at Sangamo, Ed has led the development and optimization of our core zinc finger technology. In the field of genome editing, he's recognized as a leader and a strong voice for setting very high standards for editing technologies being developed for therapeutic use. We're delighted to have Ed serve as our CTO.

Ed?

Thank you, Sandy, and good afternoon. Let me begin by saying how excited I am to step into this role at this important juncture. The prospects of creating one-time curative treatments for currently intractable diseases have never been greater. However, realizing the full potential of these opportunities will require an ability to develop editing reagents that are sufficiently precise, sufficient and specific. As a reminder, we define precision as the ability to target the discrete clinically relevant nucleotide sequence within the genome. Efficiency is the degree of modification achieved at that site, and specificity indicates our preference for modifying only the desired target site and nowhere else.

At Sangamo, we take pride in having developed our zinc finger nucleases genome editing platform to provide great performance with respect to these key capabilities. Recently, Sangamo presented results that exemplify 2 of these capabilities, efficiency and specificity, at the FASEB Genome Engineering Conference in Florence, Italy. In that presentation, we demonstrated the ability of ZFN to modify a targeted locus both to virtual completion and with no evidence of off target cleavage, using clinically relevant target cells and delivery conditions. A summary of the critical study is provided on Slide 25. In this work, a pair of ZFNs designed to cleave the gene for T cell receptor alpha achieved 97% disruption as gauged by 2 assays, sequencing of the targeted locus and an antibody-based assay for gene expression, with a specificity analysis of the same samples reviewing no off-target cleavage down to a detection threshold of less than 0.1%.

I would like to take a moment here to underscore the rigor of our specificity assessments, since a finding of no off-targets is meaningful only if you have searched for them with sufficient diligence and within the context of high on-target modification. Our specificity assessments were performed in 2 stages. First, we identified candidate off-target sites using the gold standard assay in the field, oligonucleotide capture analysis analogous to the guide seek assay. This study was performed in cells that were highly exposed to ZFNs with on-target modification levels of 90%. Next, these candidate off-target sites were queried for evidence of mutations in the same T cells for which we had shown the 97% on-target modification. Critically, in both stages of the study, we verified that the assay of cells had been subjected to levels of ZFN activity that were not only very high in an absolute sense, but much higher than typically seen in specificity studies of other design nucleases. Despite this and despite an assessment of potential off-target loci for modifications down to a sensitivity threshold of less than 0.1%, no evidence of off-target cleavage was seen. This work is significant for 3 reasons. First, it represents, to our knowledge, the highest modification levels ever reported using target cells and delivery conditions of clinical relevance and with the complete absence of detectable off-target activity. Second, although not our original intent for the study, this result provides an initial direct test of whether pervasive p53 mediated apoptosis may limit the therapeutic application of ZFNs, as was suggested for CRISPR/Cas9 nucleases in recent studies. With modification levels at 97%, we can be sure that virtually every cell in our study was exposed to ZFNs and that any widespread apoptotic response will therefore be seen. Unlike the published CRISPR studies, which manifested the extensive loss of cells upon exposure to CRISPR nucleases, in our studies, no such response was seen.

Finally, turning to Slide 26. The very high modification capabilities highlighted by the study provide the foundation for enabling highly efficient, multiplex editing of T cells, including regulatory T cells or Tregs. As we have discussed in our announcement of the TxCell acquisition, precise, efficient and specific gene editing will be required to pursue the full potential of Treg therapies. With our zinc finger nuclease platform and multiplex editing capabilities, we have the potential to engineer CAR-Treg product candidates, reaching larger patient populations through development of autologous and allogeneic projects for our broader range of indications, including autoimmune diseases.

More generally, we anticipate that highly sophisticated cellular engineering therapies enabled by multiplex editing will provide the key for generating the next generation of T cell based therapies on oncology as well as autoimmunity and transplant rejection biology.

In closing, let me express again my excitement at the performance we are achieving with our zinc finger nuclease platform as well as prospects for further improvements. The capabilities that I have summarized today, along with others highlighted in prior calls, provide great confidence that we'll be able to engineer zinc finger nucleases of the highest precision, efficiency and specificity to enable any therapeutic opportunity.

I'll now turn the call over to Kathy for our financial update.

Thank you, Ed, and good afternoon, everyone. We issued a press release earlier today that included detailed financial results for the second quarter of 2018, which are summarized on Slide 28.

Revenue for the current quarter was $21.4 million, which reflects the upfront payment from the Kite-Gilead oncology collaboration and represents an increase of $13.2 million from the prior year. Total net loss for the second quarter of 2018 was $16.6 million or $0.17 per share compared to $12.5 million or $0.17 per share for the same period in 2017. We ended the current quarter with $574 million in cash, cash equivalents and investments. With the completion of our proposed TxCell acquisition expected by the fourth quarter of this year, along with other transaction and integration-related costs, we expect to end this year with at least $380 million in cash.

As Sandy discussed earlier in the call, we have plans to invest in immunology as part of our 3 therapeutic area strategy. And believe with this acquisition, we are accelerating our autoimmune pipeline. TxCell has developed expertise in Treg cell cultivation and manufacturing and will be ready to enter the clinic next year. We believe the potential future value of this asset is far greater than the purchase price of EUR 72 million, and that assembling the necessary asset and capability ourself de novo would have taken far more resources and a much more longer timeline. We have also invested heavily to upgrade our infrastructure over the past year, and expect the integration of TXCell into Sangamo's business operations to progress smoothly. We are excited to welcome the TxCell team to the Sangamo family and look forward to working with them to build our immunology pipeline. Our other investments in inherited metabolic disease and CNS continues to present significant value creation opportunities for future pipeline. We plan to continue to invest in these areas and our future operating expenses are expected to increase. In addition, our construction project in Brisbane for our corporate headquarters is going well, and we expect to occupy by the end of this year. Finally, our operating expense this year is heavily influenced by the TxCell transaction closing date. Therefore, we plan to provide updated guidance on operating expense and cash run rate on a future quarterly earnings call. We believe we're in a strong financial position to fund our clinical development programs to our next milestone as well as execute on the TxCell acquisition.

And with that, I'll now turn the call over to Sandy for closing remarks.

Thank you, Kathy. I'm delighted with all that the team has accomplished this summer and excited for what's to come in the second half of the year. Our clinical group is making steady progress across our clinical programs, and we are so excited that the data now available for SB-525 and will soon be for SB-913. The preliminary readouts in these programs will inform the development of our pipeline and reveal potential new opportunities where we may apply our technology. Our zinc finger transcription factor and ZFN platforms are in the capable hands of Ed Rebar's technology group. And I'm confident that they will continue to set the therapeutic standards in precision, efficiency and specificity for genomic medicines. We believe our proposed acquisition of TxCell not only accelerates our immunology strategy over the next 2 years, but will act as a cornerstone to generate significant long-term value for both patients and shareholders for years to come.

We'll now turn to your questions. Operator?

(Operator Instructions) Our first question comes from the line of Maury Raycroft with Jefferies.

My first question is just if you can contextualize the top line data, what does it mean in light of recent data we've seen from an efficacy and safety perspective?

So as we said, we will be presenting full details of this conference at the end of the year. And so we have to be very careful about the embargo that these conferences have, so there's not much more that we can say. Ed, do you want to reflect on what we've heard recently in this field?

Yes. I mean, I think, as we've said all along, immunogenicity and then -- and immune reactions are very important in gene therapy targeting the liver. Not just because of the consequence for liver cells, but because of the impact potentially on the gene product itself that you're trying to produce. So obviously, there's been recent news. We're looking forward to hearing more about some of the details of that at a medical conference, but it's too premature at this point given the limited data that's been released.

And we want to make sure that we [release our] data in context of others with more patient weeks and months of exposure.

That's right. Absolutely.

Got it. And maybe a follow-up. If you can provide any perspective on whether the doses that were using non-human primates, if those are corresponding to what you're seeing in the human data. And potentially for the cohort 3 patient at the highest dose, is that patient at a plateau state and should that patient remain above that 12% are normal? Or I guess at what point is that patient -- I know it's been pretty recent since...

So Maury, I know you want to know more. We will [give it] you as soon as we can and the conference allows it. I think I'm not sure it's useful now to go back and look at the primate data. Now we're in humans. We'll have human data, as do the other companies. And you can be looking for the levels that we achieved within the therapeutic, the consistency and the lack of an immune response. Those are the kind of things we hope to be able to share more with you come the end of the year.

Got it. Maybe one more quick one then. Just based on the data that you have, are you sharing it with KOLs? And could this potentially enhance enrollment and could we see a ramp-up with the enrollment rate?

Let's let Ed answer that one.

So to be clear, enrollment has remained on track the whole year. We have a pipeline of patients available to continue forward. And so we're very confident that we'll continue to enroll on time on this program.

Our next question comes from Ritu Baral with Cowen.

This is Irina on for Ritu. I was just wondering if you could comment on a general level on the expression levels that you guys intend to aim for with the SB-525 program. And more precisely, are you just targeting decent therapeutic levels or do you plan to try to pursue the normal expression level window of above 50%? And then, I have one more.

So you can imagine that there's a range in all of us and all of us around this call. And so that's why we're saying, we'll be in a therapeutic range. And there's epidemiological data that everyone quotes and is aware of that says, as long as it's above 12%, it should be very effective. We've talked and we've talked to many of you over the years and you know our opinion has always been over 12%, not too high, and consistent and avoiding immunological response. And so those are the characteristics that we think are more important.

And maybe just as a quick follow-up. In that case, how do you think about buffering for any potential waning effects over time?

It's clearly important. And we have some data with our patients over time, and we're very encouraged by the consistency that we've seen. But we want to collect more data and the late-breaking publication of this later this year will allow us to incorporate more data.

Sure. That's fair. And then my last question, just wondering, will the ASH presentation include data detail just from these 5 patients that you've treated so far? Or do you expect to be able to introduce maybe an additional patient or 2 by then into the data set?

Yes. So we are enrolling another patient, or we expect to enroll another patient, later this month. And the expectation is that we would include data on that patient as well. Hence, there may be the potential for more patients. But as was said on the call, the SMC will meet after that sixth patient has been dosed.

Our next question comes from Gena Wang with Barclays.

This is actually Xiaobin dialing in for Gina. Maybe just a question about the use of tapering course of oral steroids that there's no use. Just wondering like did you see any cytotoxic immune responses? And then also the second question would be about the future expansion of any dose that you selected, so just wondering what would be your criteria and would you continue to dose escalate?

Understanding our patients and their safe treatment is really important. So Ed, can you talk to that?

Yes. So that's right. So there were no tapering courses of steroids because there were no cytotoxic immune effects that were observed. We have occasionally per protocol reactively treated patients with a dose or 2 of steroids as we await repeat liver function test, but those have come back normal. We have stopped the steroids. So we're very pleased with what we've seen thus far with regards to safety across all of the dose cohorts treated.

Got it. And regarding the potential expansion and the dose escalation?

Yes. It'll be a discussion that we have with our Safety Monitoring Committee, again, after the sixth patient is treated. And we'll look at a variety of factors and make a determination regarding dose expansion.

Does that answer your questions?

Yes. Yes. Just maybe a quick question for the MPS II program. Just want to -- if you have any updated understanding about the potential, the impact from your therapeutics on the CNS aspect. I know that you got the interesting mouse data. Do you expect to see any effect in the patient as well?

So I'm glad you agree that the mouse data is interesting, it's encouraging. These are adult patients that we are treating, so the chance of them showing a CNS benefit is very small. We don't expect to see anything. We're encouraged, as Ed said, by the fact that both the European authorities and the American authorities have allowed us to move into children. So starting with adolescents then moving into children, once we can confirm the safety in the adult population and some form of efficacy. So I think that's a very encouraging sign from the authorities that they understand that it's the children that will have the greatest benefit, that they are pleased with the package that Sangamo has put together, and that they are helping us find a path to get to the patients with the most need as quickly as possible.

Our next question comes from Jim Birchenough with Wells Fargo.

Maybe starting with SB-913, the expert call this past week was very helpful. But one thing I was still left wondering is, what's the typical lag from achieving therapeutic IDS levels to seeing reductions in urinary GAG? Is that something you've got feedback from your investigators from? Just as we're thinking about at what point shall we look for that dynamic to occur.

So most of what's known about GAGs is when you're starting or stopping ERT. And what you see when you see ERT is very rapid decline in GAG over a period of probably 2 to 3 weeks. And then, sort of a slow measurable decline as patients remain on ERT. But what's also known is that when patients come off ERT, is that you see GAG levels start to rise in a period of about 2 to 4 weeks. And so as we talk about discontinuing ERT, we should be able to measure effects within that timeframe that I just talked about.

And then, just again on 913, given the rapid uptake by cells of IDS, is there any way to measure tissue IDS levels in your study either directly or indirectly?

So we're not taking tissue biopsies. I mean, it has been done in the past, but the -- it was done in the past to correlate with tissue GAGs, which are essentially the measurement of overall glycosaminoglycan load in the body. And so really, measurements of GAGs in the urine is a very helpful, useful and clinically validated surrogate for what your tissue and cellular GAG levels are.

Great. And then, maybe just back to SB-525, trying to ask some questions maybe a different way. I guess, there's a concern that what might be deemed a target goal for Sangamo may be different than what competitors are targeting. And I guess, perhaps, just if you could give us a sense as to whether the threshold from advancing is to achieve competitive Factor VIII activity with other more advanced programs? Or if you're thinking about it differently?

So Jim, it's a really important question and it's one that the whole field is thinking about. And the reactions we've seen over the past few days to the BioMarin data and the Spark data says that none of us really can be entirely sure of what the right value is. And we learn from what they have said and what they are aiming for. And we've watched one of the company's values slide down and there -- what they're aiming for move with that. And we watched another company having to address immune reactions. And so what Ed and I are very clear about is that what we're looking for is something that is greater than that 12% that we said and also, that is designed for the patients. So that it's consistent, it's not generating immune reactions and it's predictable. Ed?

Yes. And I think to add to that, it's not only about an individual patient but about a population of patients. And that's why long-term data is so important. It's not just about reaching a mean threshold. It's about reaching an important clinical threshold in each and every patient that you're treating. So I would just add that.

Our next question comes from Qian Wang with Bank of America.

So I have a couple, if I may. And first one is on hem A. So you mentioned about the potential of dosing or expansion. Just wondering what kind of criteria are you thinking about. Especially I mean, given the competitive environment, maybe you want to move fast. Would you want to see like a stabilizing levels of all 6 patients before you make the decision? Or even more durability, just wondering thinking about when could we hear about that? That decision is going to be some time, third quarter, fourth quarter?

So you can be sure that we will always be moving as quickly as possible, but Ed, there's a [clear wait until] this is decided.

Yes. I mean, it's based on the things that we were just talking about. It's not just levels, it's consistency. It's overall safety. We're very pleased with what we've seen thus far and we really look forward to presenting all the data to the SMC. But obviously, that's a decision that we will share after that meeting has occurred. And as we talked about, we'll be going over or we will be presenting the details at the ASH meeting at the end of this year.

The most important thing to us at Sangamo is patient safety.

Correct.

It's not a competition around numbers with other commercial entities. It's making sure that what we provide to patients is effective and safe.

Okay. Great. I have a follow-up for the steroid use. Can you just confirm your criteria comparing to the others? And also, have you seen -- I know that you don't see any significant signals, but do you see any dose response? And in light of what Spark have shown, will you guys be cautiously trying to -- a prophylactic for potential higher dose? And also, wondering whether you have engaged any conversation with your partner to think about potential threshold (inaudible)...

Before I hand it over to Ed, can I just make sure we've got your questions? Are we planning to use prophylaxis? Did we see any -- because we didn't use any tapering courses of steroids, did we see any dose response in any way and what were the criteria for us using steroids? Ed, can you help with some of these? But we can't talk about all of them.

Yes. Sure. So I guess first is prophylaxis, the use of steroids. We've seen nothing today from a safety perspective that would indicate that we should be doing that at this or future cohorts. With regards to a dose-dependent effect, we did comment on that, that we saw that in the second cohort where patients reported reduced use of factor replacement after receiving study drug.

Did you see a dose-response curve for steroid use?

No.

No. No.

No. The liver enzyme, for example, what's the response? Not [response by infusion].

No. No. We didn't see any dose response with liver enzymes.

Okay. And have you engaged any conversation with your partner about...

Oh, we talk to our partner very frequently. It's a terrific alliance. We're very fortunate to be working with them, and we're in communication very, very frequently.

If I may have a last one. It's on MPS. So basically, I think according to the KOL calls, I mean, the most informational conclusion could be drawn after the ERT withdrawal, right? Have you -- what kind of considerations are you talking about for potential removal of that? Can we potentially see those data in SSIEM meeting?

So we will meet with the investigators after the SMC convenes, now that the sixth patient has been treated. And then, we'll discuss with them about withdrawal of ERT for their individual patients.

Our next question comes from Eric Joseph with JPMorgan.

I joined a little bit late. So I'm sorry if you touched on this earlier. But just a point of clarification on CHAMPIONS in the MPS II study. Will patients have discontinued ERT at the time of SB-19 infusion? Is there -- just trying to get a clarification of whether there's sort of an overlap period. What sort of triggers withdrawal of ERT and post-withdrawal, what interim it allows for prior to resumption?

We can help you with that. Ed, I think he's just looking for a description of the study.

Yes. So patients don't have to be on ERT, but all patients are on ERT coming into the study. As you would expect, this is the only commercially available therapy that exists. So patients coming into the study are on ERT and remain on ERT until it is withdrawn. And the data again will be discussed with the individual investigators, after the Safety Monitoring Committee convenes, after the sixth patient data are in. And then, a discussion will occur about ERT withdrawal at that time.

Okay. Okay. Okay. It sounds -- and then, as part of that discussion obviously -- I would imagine, sort of how to think about rescue therapy, I guess. I guess it would mean on a patient-by-patient basis or...

Yes. And again, in patients who are not on this study but patients who are taking ERT generally, once you remove ERT, typically what happens is after about 10 days, they start to feel fatigue. But within 2 to 4 weeks, the urine GAG level starts to rise. So if you were to theorize about rescue criteria, if that's what you want to call it, you would have a marker that would you allow you to restart therapy if it was appropriate to do so.

(Operator Instructions) We have a follow-up question from James Birchenough with Wells Fargo.

Just 2 quick questions. So first, I guess, as you're measuring IDS enzyme levels, how do we discern between exogenously supplied enzyme from ERT and that, that's produced endogenously by your therapy?

So I'm going to pass on to Ed, but we've spent -- we've really spent some time looking at the PK/PD modeling of this and the kind of clinical -- as you have heard, clinical pharmacology of the drug. And Ed? It's quite different, isn't it?

Well, yes. It is. But to answer your question, Jim, the half-life of ERT is minutes to hours. Single dose administration is literally right around an hour. So what we do in the clinical study is because these patients are dosed weekly, we measure their IDS activity levels right before they receive their dose of ERT, so they are at trough levels and essentially have no detectable IDS activity that's been contributed from their ERT the week before. So this allows us then to measure what is the production from the liver from SB-913.

Got it. So we'll be seeing trough level -- or we'll see measurement from trough levels. Got it. Okay. That's helpful.

Exactly. Yes. Right. So because -- yes. Exactly.

And then just one other question on -- I understand if you can't -- if you're going to be presenting this at a medical meeting, you won't be able to say anything. But you mentioned the novelty of AAV 6 as a vector. And so can you say, in terms of the screening for neutralizing antibodies, whether there was anything surprising, good or bad that you saw in terms of AAV6 neutralizing antibodies?

We've looked across all of the antibodies and so far, they're all very similar. They're about 30% of the patients across the whole populations. And because we're doing them in MPS I, MPS II and hem B patients that we screen [in hemi] and if you average them all, it's about 30%.

Yes. And what we've seen is consistent with the published epidemiologic literature on that.

I'm not showing any further questions in queue at this time. I'd like to turn the call back to management for closing remarks.

Thank you very much and thank you all for joining us. It's a very encouraging day for Sangamo and we look forward to talking to you all again soon.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone, have a great day.