Sangamo Therapeutics Inc (SGMO) 2019 Q3 法說會逐字稿

Good afternoon, and welcome to the Sangamo Therapeutics teleconference to discuss third quarter 2019 financial results. This call is being recorded. I will now pass you over to the coordinator of this event, McDavid Stilwell, Senior Vice President of Corporate Communications and Investor Relations. You may begin.

Hello, and thank you for joining us. As we begin, I'd like to point out that we have posted our updated corporate presentation to our website, and we'll be referencing several of these slides today. A link to the slide presentation may be found on our website, 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 will discuss during today's conference call are based upon the information that we have available today.

Forward-looking statements include, but are not limited to, statements related to the timing and scope of Sangamo's genomic medicine platform and products; the potential for Sangamo's product candidates to provide clinical benefit to patients; Sangamo's development and manufacturing plans; and Sangamo's expectations regarding its financial performance. 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 forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and assumptions that are detailed in documents that the company files with the Securities and Exchange Commission, specifically in our most recent annual report on Form 10-K and in our most recent quarterly report 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 the Sangamo senior management team, including Sandy Macrae, Chief Executive Officer; the newest member of our executive leadership team, Sung Lee, Chief Financial Officer; Stéphane Boissel, Head of Corporate Strategy; Adrian Woolfson, Head of Research and Development; Bettina Cockroft, Chief Medical Officer; and Gary Loeb, General Counsel. And again, during this call, we'll will refer to several slides in our corporate presentation and those slides may be found on the Events and Presentations page of the Investors and Media section of the site.

Now I'll turn the call over to Sandy.

Thank you, McDavid, and good afternoon to everyone on the call. Thank you for joining us. At Sangamo, our mission is to translate our groundbreaking science into genomic medicines that transform patients' lives. We are realizing this vision by developing capabilities that allow us to design therapeutic approaches to resolve the underlying genetic causes of disease using whatever technology is best suited to deliver that treatment, including gene therapy, ex vivo gene-edited cell therapy, in vivo genome editing, and in vivo gene regulation.

As we move ahead with the robust pipeline of genomic medicines across these various platforms, we understand that investors would like further insights into the many programs that are helping to define the future of Sangamo. Accordingly, we would like to share how we prioritize drug development and research targets as well as the strategies that we utilize to help realize the full potential of our suite of technologies through our partner programs and wholly owned pipeline. We plan to cover all these topics and more at Sangamo's R&D Day on Tuesday, December 17, in New York City.

Over the past 3 years and in nearly all levels of the organization, Sangamo has transformed into a fully integrated clinical stage biotech company. The capabilities we have developed allow us to move our growing pipeline of product candidates forward from the research labs through preclinical development into the clinic where we're now driving studies forward and delivering clinical results one study at a time.

R&D Day will provide an opportunity to share an in-depth look at the technological, clinical and organizational evolution that has taken place at Sangamo and to demonstrate what makes us a truly unique and innovative genomic medicine company. Numerous speakers from across the company, including our leadership team and some of our lead scientists, will present their work and be available to take your questions. This will be our first public presentation following the posters at the American Society of Hematology Annual Meeting, or ASH, showing updated clinical data for programs currently in the clinic, follow-up gene therapy for SB-525 for hemophilia A and preliminary ex vivo gene edited cell therapy data for ST-400 in beta thalassemia.

We look forward to discussing the progress we have made in these programs. We will also show how insights from our most advanced programs are being incorporated into the next wave of programs that we're pulling forward to clinical development in rare diseases, autoimmunity and CNS therapeutic areas. Further, we will provide an overview of our long-term strategy to advance our pipeline of genomic medicines both in partnership with pharmaceutical companies and as programs wholly owned by Sangamo.

Before I turn the call to the team to discuss recent business and financial highlights, I'd like to introduce 2 new members of leadership at Sangamo. First is Bettina Cockroft who recently joined Sangamo as Chief Medical Officer. Dr. Cockroft oversees all the clinical development activities and operations and reports to Adrian Woolfson, our Head of R&D. Bettina brings over 20 years of clinical development experience across multiple therapeutic areas and in several countries. With a steady flow of readouts from her ongoing clinical studies and initiation of additional trials in the very near future, we are delighted to have her here and look forward to her contributions. We believe she will be a key player in helping us realize our mission.

Second is Sung Lee, our new Chief Financial Officer. Sung oversees finance, facilities and information technology functions for Sangamo. He joins us from Gilead where he spent nearly 14 years, most recently as Senior Vice President leading the financial planning and analysis and investor relations functions. His exceptional track record of improving operational performance, leading large teams and communicating with investors as well as his deep experience and success in financial planning and analysis will have a significant impact on Sangamo as we continue to grow. We are very pleased to have both these talented leaders join us.

Lastly, I want to acknowledge the promotion this quarter of Andrew Ramelmeier to Executive Vice President of Technical Operations. His position in the leadership team highlights the importance of manufacturing and operations for Sangamo in advancing our pipeline forward. We look forward to Andy's continuing contributions in this much deserved leadership role. I will now pass the call over to Adrian who will discuss the ASH abstracts which posted online this morning.

Thank you, Sandy, and good afternoon. This morning the American Society of Hematology hosted several abstracts on their website that I would like to highlight this afternoon. These will be shown as posters at their annual conference in Orlando, Florida next month and include data from our SB-525 hemophilia A gene therapy clinical program and also our ST-400 ex vivo gene edited cell therapy program for beta thalassemia.

I would now like to provide some more context on what you should expect to see in those posters and our perspective on the abstract data. Please note that due to the ASH Embargo rules, we will not be able to discuss the data at this time beyond the scope of what was shown in the abstracts that were published this morning. The abstracts were submitted in early August.

First, I'd like to discuss SB-525, our hemophilia A gene therapy candidate which is partnered with Pfizer. The poster at ASH will contain updated patient follow-up data from the Alta study, a Phase I/II open-label, dose-ranging study in adult patients with severe hemophilia A. You will recall that our last data follow-up was at ISTH in July, 2019, where we showed data from the first 4 subjects at the high dose, 3e13, the furthest along of whom had been followed for 24 weeks. At ASH, we will have updated data and analyses including Factor VIII levels, bleeding rates and factor usage for all 5 of the high dose patients with follow-up ranging from approximately 4 to 11 months.

We continue to believe that the data published in the abstract we presented at ASH, including the observed rapid kinetics through ability of the responses thus far and the relatively low intra-cohort variability as well as the cessation of bleeding events and the elimination of exogenous Factor replacement news, together suggest that we may have a differentiated hemophilia A gene therapy product with potential to deliver significant benefit to patients.

As of August 3, ASH abstracts submission date, of the 5 patients treated in the highest dose cohorts, 3 patients who were followed for at least 8 weeks experienced transient and mild grade 1 ALT elevations and were treated with corticosteroids. None of these patients experienced a loss of Factor VIII activity levels and no new serious adverse events were reported. As a reminder, patients in the Alta study were not treated with prophylactic steroids. We look forward to showing the most up to date data at the ASH poster presentation.

Moving on now to ST-400, our ex vivo gene edited cell therapy for beta thalassemia, ST-400 is an autologous cell therapy product candidate that involves the editing of the patients' own genes, editing the genes of patients' own hemopoietic stem cells using nonviral delivery of zinc finger nuclease technology. In the Phase I/II study, ST-400 is being evaluated in patients with transfusion-dependent beta thalassemia. In preclinical studies, zinc finger nuclease mediated disruption of the [gata] binding region of the intronic erythroid specific enhancer, BCL11A, increased endogenous fetal hemoglobin production in erythroid cells, while also allowing healthy, multilineage hematopoiesis.

As shown on Slide 24 of the Corporate deck, for ST-400, cells are apheresed from a patient edited to knock out the erythroid-specific enhancer of the BCL11A repressor gene harvested and infused back into the patient following myeloablative conditioning with Busulfan. If you look at Slide 26, you can see examples of the various mutations that may lead to beta thalassemia. The clinical presentation of these patients varies widely depending on their genotype and other potential disease modifiers.

ß0/ß0 is the most severe form of the diseases but even in non-ß0/ß0 patients, the phenotype of patients varies from mild anemia to a severe form of the disease where patients have virtually no endogenous hemoglobin production and are clinically indistinguishable from ß0/ß0. As a reminder, our study enrollment criteria allows beta thalassemia patients with any genotype, provided they are transfusion-dependent with disease that is severe enough to have required at least 8 packed red blood cell transfusions for each of the 2 prior years. It's notable that a competitor study using CRISPR CAS9 editing technology allows enrollment of significantly less of their patients with potentially as few as 4 transfusion events per year for typical adult patients.

The ASH abstract posted this morning shows that the first 3 patients enrolled are either ß0/ß0 or have a severe genotype with disease phenotypes functionally equivalent to ß0/ß0 patients. The first patient has a ß0/ß0 genotype. This patient demonstrated prompt Hematopoietic reconstitution with increasing fetal hemoglobin. After being free from packed red blood cell transfusions for 6 weeks, the patient has subsequently required intermittent transfusions. At the time of the last follow-up, on-target DNA indels at BCL11A were present in peripheral blood mononuclear cells and fetal hemoglobin levels remained elevated at 6 months post infusion.

Patient 2 is a non ß0/ß0 patient with a severe genotype where there is a near-complete absence of endogenous hemoglobin production. This patient experienced prompt hematopoietic reconstitution following infusion with on-target indels detected in circulating white blood cells at the time of the last follow-up and rising fetal hemoglobin levels observed through to 90 days post infusion.

Patient 3 who is a non ß0/ß0 patient but has a severe genotype, where there is near complete absence of endogenous hemoglobin production, is the most recently treated patient and received the ST-400 infusion in August. Besides the previously reported SAE for Patient 1 which was an allergic reaction to the DMSO cryoprotectant in the product that had resolved by the end of the infusion, no other SAEs related to ST-400 have been reported and all other reported AEs have been consistent with those expected following myeloablation. No clonal hematopoiesis has been observed to date.

As a reminder, our study is still very much in its early stages. Myeloablative conditioning such as that used in this study is a reboot of the hemopoietic system and as other myeloablative conditioning studies in this patient population have shown, sufficient time is required for the stem cells to fully repopulate the marrow and to dry hematopoiesis. This may take up to 12 months or even potentially longer. Accordingly, data that we'll show next month at ASH will be very preliminary, reflecting only limited follow-up from the first 3 patients dosed in the study. We look forward to more mature results towards the end of 2020 once all of the patients have been dosed and sufficient time has passed to allow for the full potential effect of ST-400 to manifest and to understand how it impacts transfusion burden.

I'll now turn the call over to our new CMO, Bettina Cockroft, for a clinical development and operations update.

Thank you, Adrian. And good afternoon. I'm very pleased to have joined Sangamo as Chief Medical Officer and I've spent the past few weeks meeting the various project teams and bringing myself up to speed with the pipeline for clinical development program. I was attracted to Sangamo by Sandy's genomic medicine vision, but also by upcoming flow of readouts from the ongoing clinical trials and the second wave of promising pipeline candidates that will enter the clinic over the next few years. Today I am going to discuss the progress that we've made in several of our clinical programs.

First, I'll discuss our hemophilia A gene therapy candidate which is partnered with Pfizer. Activities for transitioning the IND to Pfizer are underway and progressing well. We expect to complete the transition in the first quarter of 2020. The manufacturing technology transfer to Pfizer has been completed and the Phase III drug supply is anticipated to be ready by the time Pfizer begins its Phase III registrational study. Pfizer announced it has enrolled its first patient in the 6-month Phase III lead-in study to for hemophilia gene therapy.

The data from the study are expected to provide baseline information for patients who are subsequently enrolled into the registrational Phase III study which is anticipated to be initiated in 2020. Pfizer has been an excellent development partner throughout the process and we're excited to have them take this product forward into late -tage development. It is our hope that positive results from this program will deliver our first licensed product.

Turning now to our other gene therapy program, ST-920 for Fabry disease. ST-920 was recently granted US orphan drug designation by the FDA and received approach of a clinical trial authorization application allowing its functional study into the UK. A Phase I/II study now has 4 sites open with 2 actively recruiting and we're on track to enroll the first patient by the end of the year. We will explore 3 different dose cohorts and will present results when we have a full set of data.

In addition to safety and tolerability, which are the primary end points, we will be looking at plasma a-Gal A activity, Gb3 substrate levels in plasma, lyso-Gb3 in plasma, and ultimately, successful ERT withdrawal which is the goal. We believe that our extensive know how in AAV6 cassette engineering, AAV delivery and gene therapy dosing attained from the ongoing hemophilia A clinical trial have enabled us to design a Fabry disease gene therapy that has the potential to deliver meaningful clinical impact to patients. We're encouraged by the draft FDA guidance on Fabry which we believe will considerably shorten the time to approval and allow us to be among the first gene therapy treatment on the market.

Turning now to beta thalassemia, which is partnered with Sanofi, following the third patient dosing, we have earned a $6 million milestone from Sanofi and $2 million from the California Institute for Regenerative Medicine. As of today, we have enrolled 5 of the 6 patients that we expect in the study. As Adrian mentioned, we will have preliminary data from this program next month at ASH with more complete and mature results expected in late 2020 after enrollment is complete and when all 6 subjects have had sufficient follow-up to evaluate the effects of treatment with ST-400.

Our other clinical trial partnered with Sanofi in hemoglobinopathies for sickle cell disease which takes a similar autologous cell therapy approach as beta thalassemia. Sanofi is currently recruiting patients in the Phase I/II open label PRECIZN-1 trial evaluating BIVV003 for autologous hemopoietic stem cell transplantation in patients with severe sickle cell disease.

Turning to Slide 34, we have TX200, our CAR-Treg program for HLA-A2 mismatched kidney transplant. We're very excited about this first in human CAR-Treg study and have recently submitted the CPA. And we expect to begin treating patients in 2020.

As a reminder, about 20% of patients receiving kidney transplants have an HLA-A2 mismatch with donors and this mismatch is a common cause of transplant rejection and necessitates lifelong use of immunosuppressant drugs. The hope is that the infusion with TX200, the CAR-Treg will suppress the immune response to the mismatched organ. This is an ideal first indication for CAR-Treg as these patients undergo regular kidney biopsies which will provide insights into a range of efficacy and safety measurement and will help demonstrate the mechanism of action of CAR-Treg. We very much look forward to presenting an in-depth overview of our CAR-Treg program and our first candidate, TX200 soon.

I will now turn it over to Stéphane for the financial results of this quarter.

Thank you, Bettina, and good afternoon to all. It has been my pleasure to serve as interim CFO over the last 6 months. I've very excited to welcome Sung Lee as our new CFO. Sung has formally taken over the role and will report the financial section on future calls. Before I give this financial update, I would like him to say a few words. Sung?

Thank you, Stéphane, and good afternoon, everyone. It's day 5 at Sangamo for me and I'm very excited about the opportunities that are ahead. I see tremendous potential in the technology platform at Sangamo and the right talent to execute on the pipeline. I'm pleased to join the leadership team and look forward to speaking with you in the future. Back to you, Stéphane.

Thank you, Sung. For the third quarter results, detailed financial statements were included in the press release that we issued this afternoon as well as in the Form 10-Q that we filed just before this call. Accordingly, I will only address the highlights.

Revenues for the third quarter were $22 million compared to $23.6 million for the same period in 2018. The decrease of $1.6 million was primarily driven by the decrease of $7 million in revenue related to the Pfizer Factor VIII collaboration and $1.4 million related to royalty revenue offset by an increase of $6.5 million in revenue related to the Sanofi collaboration.

As anticipated, operating expenses increased in the third quarter reflecting the company's growth including increased US head count in support of the preclinical pipeline and clinical development program as well as manufacturing readiness activities.

Total operating expenses for the third quarter were $51.2 million compared to $39.8 million for the same period in 2018. R&D expenses were $36.3 million for the third quarter of 2019 compared to $28.8 million for the same period in 2018. The increase is primarily due to increased higher compensation costs for head count growth, higher facility expenses related to our new Brisbane facility, and higher manufacturing expenses related to our clinical activities.

G&A expenses were $14.9 million in the quarter compared to $11 million for the same period in 2018. The increase was primarily due to increased compensation costs due to head count growth and increased facility expenses. Construction of our in-house GMP unit in Brisbane is proceeding on schedule, and we still expect to commence qualification procedures early next year.

As of the end of September 2019, the company had cash, cash equivalents and investments in the amount of $408.3 million. In line with our financial guidance for 2019, we continue to project operating expenses in the range of $210 million to $220 million for the year. We also expect that current cash, cash equivalents and investments should provide funds for operations through the end of the year 2021.

I will now turn it back to Sandy for closing remarks.

Thank you, Stéphane. The primary focus at Sangamo is the programs that are currently in the clinic. ST-525 in hemophilia A continues to generate promising data and has been met with great interest from both the patient and physician communities as well as from investors. This is a really important moment for us as we transition SB-525, our lead asset, to Pfizer for late-stage registrational development. It has also been instrumental in guiding our future programs, most notably in Fabry disease where we have a wholly owned gene therapy candidate for which we expect to enroll our first patient this year.

While gene therapy continues to be a near term value driver for Sangamo, we are the zinc finger company and we are also excited about the upcoming pipeline that utilizes these ZFNs and ex vivo gene edited cell therapy. And finally, for in vivo genome editing and gene regulation using the ZFP transcription factors which we still believe is the ultimate goal of a genomic medicine company. And which will define us in the future of clinical medicine.

Thank you for joining us in the call today. Operator, please open the call to questions.

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

Congrats on the progress. Welcome to the new additions to the team. First question is just on the 3 patients discussed in the ST-400 abstract. Just wondering if the different per/kg doses are related to the genotype or is there another reason for the different doses? And what will the third patient get for ST-400?

If I understand your question correctly, you're asking about dosing as in cell number and the indels and CFUs. For each patient, the manufacturing process for each patient is a bespoke process. So what you do is you edit the cells that you can recover from that patient, which varies from patient to patient. And then put back as many as you can. So the process itself will evolve with time and with learning and with experience. Rather than it being a dose response experiment as in other gene therapies or other gene editing projects.

Got it. That makes sense. So basically, you're going to use the number of cells you have available for the patient then.

That is correct.

Okay. Then for the first patient that was treated, if you can talk more about why the patient started to need transfusions after 6 weeks, the rate of intermittent transfusions and any thoughts on whether this patient would stop requiring transfusion going forward?

We're happy to, can I pass that one over to Adrian?

Yes, thanks for the question, we appreciate it. I'd just like to reiterate, obviously we can't say too much about the data itself because of the ASH embargo. I think the important points that you'll see from what we said today, that we've got evidence that we've seen successful editing with the zinc finger nucleases, that they're safe, that we've got on target indels in BCL11A in the PBMCs. We've seen increasing HBF and successful hematopoietic reconstitution.

So to specifically address your question, I think really, as we said on the call, it's really early days and I think we need to leave sufficient time for this data to evolve. If you look at the supplementary information in New England Journal paper that we've published, you'll see that it can take very variable amounts of time for the full effect to kick in. So I think we just need to watch this data evolve and it's a little bit early to make any definitive comments on that.

And we look forward to showing more data over the course of later 2020 when we will have data from all 6 of the patients.

Got it. And then you may have mentioned this, but for the DMSO just wondering if you washed that out for the second patient that was dosed and if that's the plan to wash that out going forward.

It's not as much a matter of washing it out as it was making sure the patients are protected and we give them Tylenol and antihistamine now routinely. And this patient had had previous reactions to DMSO in packed cells, in platelets. So we haven't seen it in any other patients.

Got it. Then I guess just one last question based on the baseline transfusion rate versus competitors. You guys mentioned the CRISPR CAS 9 company that's also in the space. If you could just provide any perspective into how we should compare and contrast data. And I'm wondering if regulators weigh the data differently based on the baseline transfusion rate.

I think both companies are at very early stage and we only have a handful of patients, we'll have 6 by the end of next year. I don't know how far along our friends at CRISPR. I think you do need to pay great attention to the genotype and phenotype of the patient as there can be a great range in transfusion requirements. We have chosen patients with really significant disease. The CRISPR patients are milder. But I think until there's a substantial body of evidence for both companies, it would be premature to compare and contrast.

Our next question comes from the line of Gena Wang with Barclays.

I also have a few questions regarding the beta thalassemia data. So we do understand because these are the most severe patient population, just wondering, did you see any significant reduction in urethral lineage cell?

Again, I think we have to be very careful about mentioning any specific data on this call because of the ASH embargo. So if you don't mind, we'll defer that to December, but thank you for the question.

Gena, we're trying to be very careful to follow the guidance of ASH and we will show as much data as we can in December.

Yes, what I can say though is we've been very happy with the hemopoietic reconstitution that we've seen so far.

I don't know if you can comment, did you see comparable editing efficiency across 3 patients so far?

We'll show you whatever we can in December at ASH.

Okay. Another question regarding the Fabry disease. So you expect to enroll first patient by the end of this year. Just wondering, will the initial dose be within the therapeutic window? And what would be the timing for the data update?

Bettina? So we're expecting the first patient, Bettina, we hope to enroll the first patient this year.

That's correct. We hope to enroll the first patient this year. We're currently screening patients, so the start of the study is underway. I think that's all we can say at this stage.

Yes, and as always, the first time you go into a clinical trial, you hope to give as much benefit as possible to the patient. And until we see the results of the clinical trial, we can't give you that.

You probably saw our HSCT data with the glako GA knockout model and you saw that we achieved super therapeutic levels of alpha Gal A. I don't think that we've announced the doses that we plan to use, so I won't disclose those on this call.

We just said low, medium and high.

And the timing for data update? Is it fair to say like second half next year we should start to anticipate some data coming?

I think we've guided to the latter part of 2020 for biochemical data. We hope the trial runs smooth and recruits quickly and this is an important event for Sangamo, so we look forward to talking about it at the end of next year.

Our next question comes from the line of Whitney Ijem with Guggenheim Securities.

Congrats on the new roles. Just had another question on beta thalassemia. I know at the April update you kind of commented around 30% hemoglobin. How are you thinking about the desired level of hemoglobin you want to see going forward? And are there any levers you can pull in the treatment of new patients to increase that?

Thank you for your question and also thank you for acknowledging our new staff. I'm really pleased with the quality of people that we're now able to attract, both with Bettina and with Sung. It's great that the management team is now complete. We're all at very early stage of understanding of the effect of editing we see in BCL11A. I think the data that we'll accumulate over the coming year to 18 months will be essential to educate us on the utility of this as an approach.

Got it. And I have a follow-up on the manufacturing transfer to Pfizer. I understand it's complete. Is there anything you can say on potential changes that occurred during the process as it was being transferred?

Thank you for that question. I know this is something that a number of you have asked. Our friends at Pfizer are very pleased with the transition. They want everyone to know that it's all under control and there is nothing remarkable happening. They are keeping close how they are manufacturing it, but I just want to reassure everyone the transition has gone smoothly and there is nothing remarkable happening.

Got it. One last question for me, can you comment on whether any patients have been treated in the sickle cell trial?

It's McDavid. So that's up to Sanofi to comment on. We've just been able to say that they are recruiting the study.

Our next question comes from the line of Debjit Chattopadhyay with H.C. Wainwright.

Congrats on all of the progress. This is Aaron on for Debjit and I just wanted to ask, of the few liver enzyme elevations that you've seen from SB-525, can you tell if there has been any correlation with Factor VIII activity and the intensity of the liver enzyme elevation?

I can only talk about the data that we've seen so far or that we've shared so far which have shown that we haven't lost Factor VIII activity. I'm very pleased with my clinical team here, they do a great job of monitoring the patients closely and quickly treating with steroids. And as the data that's publicly available, we have not seen any loss of activity.

That's great. Then real quick, so the initial increase in hemoglobin that you saw from treatment from ST-400 which seems to have perhaps diminished somewhat, do you think that could be explained by transfection of short term precursors that just quickly died off and then you really need to wait for the longer-term hemopoietic stem cells to replace them? Or do you think it's something else?

As I said, so for thanks for the question. I think we're all learning about what happens when you edit this enhancer repressor complex. I think we're all learning about what happens when you do the transplantation of the cells back. And I think we're learning about the various populations of short term and long-term progenitor cells that will hopefully gradually populate this patient's marrow and lead to a long-lasting cure or long-lasting need not to have transfusions. But let's wait and see over the next 12 to 18 months with 6 patients and we will know so much more.

Our next question comes from the line of Ritu Baral with Cowen.

My first question is on the Fabry program. Sandy, you said that you'd present the data when you had "a full set of data." And then you mentioned a bunch of biomarkers, a-Gal, Gb3 and lyso-Gb3. What does a full set of data mean for you? Is it a full patient cohort? Is it comparing one dose cohort versus the next? And are you going to wait until ERT withdrawal before you present something?

Thank you for your question. You know us very well. I have misstepped occasionally in the past by releasing data from a quarter at a time. I would much prefer to show you the full range of a study. I understand that there are some long-term measures that will be too late for sharing, and so we'll try and give you the data when all patients have been dosed. And we'll try and give you as much of it as possible. But we think, we are of the opinion that it's better for you and better for us and better for patients if we give a more rounded, complete picture.

Got it. And is kidney biopsy part of this protocol?

We haven't commented on biopsy. I think we both know of the FDA change in guidance where they've said that biopsy may allow an earlier registration and we too are interested in that. We will work with the clinical team and our regulatory people to understand where we make biopsy part of the study.

Got it. And apologies for the noise, but you also mentioned in your hemophilia A data that you are seeing signals that suggest that your treatment 525 is differentiated. Can you comment on that without upsetting the ASH embargo?

I'll pass it to Adrian to say as carefully as possible.

Just remember, I'm principally addressing data from ISTH and a tiny little bit of extra data at the time of the abstract release. But if you recall from the data in Melbourne, I think what we're seeing here is a therapy that's well tolerated which the highest dose, which we believe is the therapeutic dose, we see no bleeding events, no Factor usage, and the data we showed, to a degree of correction it puts the patients into the normal range, we get a couple of transient and very benign grade 1 ALT elevations which are rapidly managed and which do not in any way impact the degree of Factor VIII expression. We see a relatively low intrasubject variability within the high dose cohorts.

Remember also by the way, we're using half the dose as [Pharox] at 3e13 as is 6e13. In the data of ISTH you're seeing durability, you're also seeing very highly differentiated kinetics. We're getting up there into normal range within 7 to 10 days versus 20 days with Pharox . We showed you a clear threshold effect and a clear dose response. And you also if you recall, saw there was sustained activity in cohort 3 up to a year at that time. So for all of the above reasons, I think we are still in a position where we can confidently believe that we have the potential to deliver a differentiated hemophilia A gene therapy going forward.

Thanks, Adrian. And we just need to ask you all to be patient to see the data at the end of this year. And then to hold hands with us over the coming 6 months as the data evolves and hopefully gives everyone confidence that the efficacy has remained in the Sangamo product, which would be the biggest differentiating feature.

And it's also worth mentioning, all the patients that you saw, because I can only talk about those obviously, had significant disease burden. They were truly severe disease and I think that's important to recall as well.

Sandy, do you think it's more important to be differentiated on safety or efficacy versus the BioMarin product?

I think safety is the thing that is a semiquinone. Everyone must have it because it's important to the patients. I think the efficacy question that everyone is asking and that all of you ask when we meet with you, is will it persist? Patients are looking for a medicine that lasts a sufficient length of time. I think we're lucky that so far the medicines have all been relatively safe for such a fundamental benefit to patients. Both our product and [Pharox] has been remarkably safe. And now what the patients are looking for is consistency of effect.

(Operator Instructions) Our next question comes from the line of Eric Joseph with JPMorgan.

I guess to follow up on that last, your last point, Sandy, with the importance being around persistency, I'm curious to get your current view on sort of the import of the duration that you're seeing with the 1e13 dose. How strong of a read-through do you think that has to persistency at the higher 3e13 dose? And also whether we would see an updated look on Factor VIII persistency at that lower dose at ASH. Then I have a follow-up.

So it's encouraging that the 1e13 dose persists and we have seen no sign of it flagging, which is excellent. And we'll show you more data for it at ASH, that's currently embargoed. The data we've got that's in the public is all that we can talk about and at ASH we'll give you some more months, so the 3e13 will be up to almost 11 months' worth of data. And the 1e13 will be continued and we'll show you that. And the question I've been asked by some people is if it's something about the more efficacious dose that is more taxing to the liver. And so I think although the 1e13 is encouraging, it really is the 3e13 dose that everyone wants to see and we look forward showing you next month.

Got it. That's helpful. Then just on Fabry, understanding your point, your conservatism around disclosing doses, I guess are there different safety considerations in the Fabry population that you're recruiting when it comes to dose selection compare to hem A, particularly around liver sensitivity? I'm also curious to know whether you're employing prophylactic steroid use.

No, we're not really expecting the safety profile to be any different. We're using the same hepatotropic AV6 Factor which we believe played a key role in the success of SB-525. We're also using a construct which is near identical, so we believe there will be read-through, both of safety and of efficacy. And yes, we can't, we obviously can't disclose the dose other than to reference the Gal k-o mouse data which was very compelling. I'm sorry, there was one other thing you said oh, the prophylactic steroid. We haven't commented on that.

Final question if I could if you don't mind. I guess how should we be thinking about a clinically meaningful reduction in plasma in Gb3 of Lyso-Gb3. I guess as that might inform Phase 2 dose selection?

Oh, my goodness. It's great to be thinking about the next phase of development. We will learn and watch what happens. I think we've all been interested in the [Abrobial] data where they showed some reduction in plasma levels and significant effects in the kidney suggesting that we're all learning about the relationship between the pharmacokinetics and the tissue effect of this. So we will show you the data as we go and the most important thing is, can the patients come off of their ERT? And that really is the goal that we're all trying to aim for.

Our next question comes from the line of James Birchenough from Wells Fargo Securities.

This is Yanan in for Jim. So first, just wondering for the Pfizer Phase III study, will it not use prophylactic steroid or have you commented on that?

We haven't commented. And Pfizer now will be responsible for talking about it. So we're very careful to respect their privilege.

Got it. And then could you talk about the interest in the enrollment of the Fabry study and particularly if you can shed some light on relative preference for different gene therapy approaches, that would helpful.

Can you repeat the question to we make sure we understand it, please?

Yes, so the interest from physicians and patients in participating in the Fabry AVH therapy especially with the context of other gene therapy approaches for Fabry such as an antiviral approach?

You would have to ask them. What I can say is we, since our last set of clinical trials, we have a new head of clinical operations, a remarkable woman who has made a great job of setting the study up. And we have had a lot of interest from investigators who all are looking for something to bring to patients.

Got it, and lastly, just on TX200, wondering if you plan to use lymphodepletion for that kidney transplant setting. And if so what regimen? And also for broad, for your future more broader development in autoimmune disease, how do you think of lymphodepletion in the setting of the Treg therapy?

I think honestly at this point, it's a great question, but I would rather not disclose details of how we plan to, as you know, it's becoming suddenly a very, very competitive area. We've not disclosed any of those types of details and I think at this juncture it would be prudent for us not to, if you don't mind. But obviously a very relevant question.

I'm not showing any further questions. I would now like to turn the call over to Sandy Macrae for closing remarks.

Thank you. And thanks again to everyone for joining the call and for all your questions. We hope you will join us for the R&D Day next month on December 17th and we look forward to keeping you updated on future developments. Have a good day.

Ladies and gentlemen, that concludes today's conference. Thank you for participating. You may now disconnect. Everyone, have a wonderful day.