Good day, and welcome to the Sangamo Therapeutics First Quarter 2024 Teleconference Call. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Louise Wilkie, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for joining us on the call today. On this call are several members of the Sangamo executive leadership team, including Sandy Macrae, Chief Executive Officer; Prathyusha Duraibabu, Chief Financial Officer; Amy Pooler, Head of Research; Nathalie Dubois-Stringfellow, Chief Development Officer. Slides from our corporate presentation can be found on our website, sangamo.com, under the Presentations page of the Investors & Media section. This call includes forward-looking statements regarding Sangamo's current expectations. These statements include, but are not limited to, statements related to the therapeutic and commercial potential of our product candidates and engineered capsids, and the potential of our next-generation genome engineering technology. The anticipated plans and timelines of Sangamo and our collaborators for regulatory submissions, initiating and conducting clinical trials and presenting clinical data, advancement of our product candidates, anticipated regulatory submissions, advancement of preclinical programs to the clinic, our strategic reprioritization and reallocation of resources and the anticipated benefits thereof, plans to partner certain of our programs, the sufficiency of our resources, cash runway and plans to seek additional capital, upcoming catalysts and milestones and other statements that are not historical facts. Actual results may differ materially from what we discuss today. These statements are subject to certain risks and uncertainties that are discussed in our filings with the SEC, specifically on our annual report on Form 10-K for the fiscal year ended December 31, 2023, supplemented by our quarterly report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC. The forward-looking statements stated today are made as of this date, and we undertake no duty to update such information, except as required by law. Please note that all forward-looking statements about our future plans and expectations are subject to our ability to secure adequate additional funding. Now I'll turn the call over to our CEO, Sandy Macrae.

Thank you, Louise, and good afternoon to everyone joining the call. I'm very pleased to be speaking to you today from the American Society of Gene & Cell Therapy Annual Meeting in Baltimore, where we have been presenting important preclinical data from our epigenetic regulators, AAV capsid delivery platform and next-generation genomic engineering platform. These data showcase both the depth of Sangamo's neurology pipeline and the power of our scientific capabilities, which we believe provides strong opportunities to advance programs ourselves and with potential partners. In order to progress these compelling programs, Sangamo must be well capitalized. The leadership team and I have been laser-focused on addressing our funding needs. In late March, we are pleased to announce a registered direct offering with institutional shareholders, including an important existing investor that raised approximately $24 million in gross proceeds. This was a significant development, and we are thankful for their support of our science and our mission. That was, however, the first step in our current journey to securing additional funding. I would like to emphasize that we are resolutely focused on building upon this foundation to position Sangamo for long-term success. That continues to be my #1 priority. Business development is an important part of these efforts, and I am pleased with the progress that is being made on this front. We are currently engaged in very encouraging conversations with multiple potential partners across our portfolio, including our Fabry disease program, our novel STAC-BBB engineered capsid, our preclinical neurology product candidates and our next-generation genome engineering capabilities. I understand your desire to hear more concrete news on this front, but we are unable to share more until any potential transaction is finalized. Be assured that we are encouraged by the progress of these discussions and hope to announce news of one or more transactions. Over recent months, Sangamo has presented important preclinical data that solidify our sharpened focus in neurology, validate our differentiated science and help contextualize why we made this important decision to dedicate ourselves to addressing neurological disorders. In March, we were proud to share remarkable preclinical data from our new intravenously administered neurotrophic AAV capsid, which demonstrated industry-leading blood-brain barrier penetration and brain transduction in nonhuman primates. This novel capsid STAC-BBB showed robust penetration of the blood-brain barrier with 700-fold higher transgene expression in neurons compared to the benchmark capsid AAV9 and outperformed all other known published capsid variants evaluated in the study. Combined with our potent epigenetic regulation cargo, we showed robust STAC-BBB mediated expression of zinc-finger cargo and neurons with potent and widespread repression of the prion and tau genes observed across all key brain areas, illustrating the exciting potential to modify disease progression in prion disease and various tauopathies. These data support further advancement of our prion and tau programs, which we are on track for regulatory submission to the clinic by the end of 2025. Meanwhile, we continue to advance our lead candidate in chronic neuropathic pain, Nav1.7, which uses an established intrathecally administered capsid towards an IND submission expected in the fourth quarter of this year. We believe our ability to combine potent zinc-finger epigenetic regulation payloads with exciting new industry-leading capsid delivery technology could unlock significant potential for the treatment of devastating neurological diseases, indications for which delivery of treatments to the central nervous system has historically proved challenging. Building on this, we are proud to be presenting 3 platform presentations and 17 posters at this week's ASGCT Annual Meeting. These presentations showcase the depth of our neurology pipeline, including various applications for our zinc-finger epigenetic regulation platform, exciting advances in our capsid delivery technology and the discovery of potentially transformative next-generation integrase technology engineered to enable large-scale genome editing. In epigenetic regulation, we have shared advances in zinc-finger activators and repressors for the potential treatment of a remarkable range of neurological diseases, such as prion disease, tauopathies, Charcot-Marie-Tooth diseases, type 1A and 2A, Dravet Syndrome, SOD1-mediated amyotrophic lateral sclerosis or ALS, Phelan-McDermid syndrome, Parkinson's disease, Angelman syndrome and many other neurological disorders. We have also demonstrated Sangamo's potent delivery capabilities developed through our AAV capsid engineering platform, SIFTER. Here, we have presented additional STAC-BBB findings, including prion and tau repression data achieved via STAC-BBB delivery. We also presented for the first time exciting initial findings for a possible mechanism supporting how STAC-BBB may cross the blood-brain barrier. Our SIFTER platform is designed to engineer capsids for various routes of administration, such as intrathecal and intravenous delivery. SIFTER can also engineer capsids for in-vitro discovery. So in a platform presentation tomorrow, we will present findings from STAC-150, a novel capsid that's been shown to be highly potent in neurons and enables high throughput screening of neurology-focused transcriptional regulators. We anticipate the STAC-150, which we believe manufactures easily at small scale, will help accelerate the discovery of potent and highly specific epigenetic regulators. Finally, building on our deep expertise in protein-DNA interactions derived from our zinc-finger platform, we presented for the first time a potentially breakthrough new approach for integrating large sequences of DNA into the genome to potentially treat with a single medicine patients who have unique mutations in the same gene. Precisely integrating large synthetic DNA constructs into a desirable chromosomal site has been the dream for people working in this field for many years. Our modular integrase or MINT platform is a versatile protein-guided genome editing method that understands and engineers Bxb1, a serine recombinase to insert or replace entire genes and adds to Sangamo's toolbox of editing capabilities. We are hopeful that our MINT platform could be used to correct many disease-causing mutations in a diverse patient population by inserting a correct copy of the gene into its natural locus. MINTs could be deployed internally for various neurological indications, but also provide potential partnering opportunities, both for human disease and in agricultural biotech settings. We are already in active discussions with potential partners about our integrase capabilities and are hopeful that MINT could provide us with another potential non-dilutive funding opportunity. Alongside our presentations in this topic at ASGCT this week, we have also published a manuscript in BioArchive further outlining these next-generation integrase advancements, which is also available on the Publications page of the website. I encourage you to learn more about this exciting development in the field of genomic medicines. Now looking at our clinical programs. We have made strong advances in the first quarter for our Fabry disease program, having dosed the final patient in the Phase I/II STAAR study of isaralgagene civaparvovec, our investigational gene therapy for the treatment of Fabry disease. With 33 patients now dosed, screening, enrollment and dosing are complete. One additional patient has been able to stop enzyme replacement therapy, or ERT, resulting in a total of 14 patients withdrawn from ERT to date. The 4 remaining patients dosed since February 2024, who began the study on ERT, already have plans in place to withdraw ER treatment at the appropriate time. At the 20th Annual World Symposium in February, we presented compelling updated preliminary clinical data from the STAAR study showing sustained benefit and a differentiated safety profile. These results underscore the program's potential as a single administration treatment for Fabry disease. As a reminder, this quarter, we announced alignment with the U.S. FDA on an abbreviated pathway to potential approval. We've also been granted prime eligibility by the European Medicines Agency, and ILAP designation by the U.K. medicine and healthcare products regulatory agency. We are engaged in active discussions with potential collaborator partners for our Fabry disease program and continue to defer additional investments in planning for a potential registrational trial until a collaboration partnership or financing for this program is secured. Moving to our partner clinical program. We look forward to the pivotal readout expected in mid-2024 in the Phase III AFFINE trial of giroctogene fitelparvovec, an investigational gene therapy we're developing with Pfizer for patients with moderately severe to severe hemophilia A. Pfizer anticipates submitting a biologics license application and a marketing authorization application in early 2025 if the pivotal readout is supportive. As a reminder, we are eligible to earn up to $220 million in milestone payments and up to 14% to 20% royalties on potential sales from this program. We ended the quarter with approximately $54 million in available cash and cash equivalents, which includes funds from the aforementioned registered direct offering. We believe these resources in combination with the cost savings expected from the recent restructuring, workforce reduction, and other potential cost reductions will be sufficient to fund our planned operations into the third quarter of 2024. As I outlined earlier, we are actively pursuing a range of different options to raise important additional capital and are encouraged by the business development discussions ongoing across our Fabry program, capsid engineering and next-generation genome engineering efforts. We believe our company has the science required to potentially transform the lives of patients living with devastating neurological conditions and are committed to raising the funding required as we seek to make our vision a reality.

Please open the lines for questions.

This is James on for Maury Raycroft. Congrats on the progress. I just wanted to ask where are you with the preclinical and GLP tox studies with STAC-BBB? And what are your latest thoughts on which targets or indications would make the most sense to partner or keep in-house?

Thank you for your question. One of the reasons that we like STAC-BBB so much is that our manufacturing team has been able to work with it and found that it is very manufacturable. They can take it up to 50-liter scale and are going higher. They can use the same purification and assay techniques, and it feels like a capsid that will be able to give us great yield and also be able to use many of the processes and CMC work that is really underappreciated in the importance of capsid selection. We've said publicly that we are moving ahead with tau and with prion. You could imagine the amount of external interest in tau, not just because it's a high unmet medical need, but because the capsid gives you the brain penetration and widespread delivery that's needed, and our zinc-finger repressors are really unique in being able to almost switch off tau in the cells that they can get to. We are having many discussions with companies about our capsid and we'll choose wisely who we partner with and which ones we take forward ourselves. What we understand, and I want to say this again and repeat what I said in the chosen words is that we understand the need to bring in money to the company. And that's always a balance between the desire that we have to take things forward and the money that's available from many of the partnerships, and I'm sure we will achieve this in the coming weeks.

Great. That's very helpful. And just to go on to some of the more specialized parts of your ASGCT presentation. Can you talk about the importance of targeting the pons and motor neurons in Alzheimer's? And are there any other companies that you're aware of that have the ability to target these sites?

Thank you for your question. It's really been a remarkable ASGCT, and the field moves closer to these tools being able to address such important diseases. Amy, can you talk a little bit about this? I know this is one of your passions.

Yes, I would love to. Thank you for the great question. What's really important here is being able to target brain regions that would be traditionally challenging to address using something like a direct injection approach. The pons, being part of the brainstem, is not a region that you would necessarily want to reach using a direct injection guided approach even for the most severe diseases. So we were so excited to see the biodistribution that was able to be achieved with the STAC-BBB capsid, especially for what it means for the tau program. The pons is critical in progressive supranuclear palsy, but also in other tauopathies like Alzheimer's disease. In addition, as you noticed, the motor cortex, which is part of the frontal cortex, we use this as an example of how STAC-BBB was able to transduce those cortical neurons. Really, we believe that this kind of widespread brain targeting is critical for halting or slowing the progression of the disease.

Thanks, Amy.

I have two questions. The first one is also about the STAC-BBB. It seems like a very exciting new capsid. What is the highest dose you used in nonhuman primates? And what is the limiting dose toxicity there? And then the second question quickly regarding the Hem A. I know it's your partner, Pfizer, is in charge, but just wondering for the mid-'24 Phase III update, would that be just a press release from Pfizer? And then for the $220 million milestone payment, is the first milestone the drug approval? And is that a big portion of the $220 million?

Gena, thank you for your questions. And I know you've been following Hem A for a great deal of time, so it's good to be coming closer to the point where it gets to registration and approval. So let me pass this on to two people. Amy, can you talk about the dose that we've used and whether there was any toxicity?

Yes, absolutely. As part of the STAC-BBB study that we've discussed yesterday, and we also will discuss later today at the poster session at ASGCT, we performed a dose-range finding study with our tau and clinical lead zinc finger. We did three different doses and the top dose was 1e14. We are really happy to see that with the histopathology results we didn't see any dose-limiting toxicity and really no findings in the brain, the spinal cord or the liver of these peripheral organs. So really, really positive and encouraging data.

Gena, does that answer your question? Is there any follow-up?

Yes, like more thinking other than the dose finding, like what is the highest dose you tested for the safety toxicology perspective?

1e14. So 1e14 is the highest we've gone in the efficacy study that we just reported. And we really saw nothing that would give us any concern when we will now go into the GMP tox study, which is the only thing remaining to complete the IND-enabling studies for that. But we will clearly start at a lower dose in the clinical study because that's the right thing to do, and that's what the agency will ask us to do. Thus far, we've had a very clean capsid, which is great news. And then can we talk about Hem A, Nathalie? I know you've been speaking to your friends at Pfizer regularly.

Sure, sure. Yes, we're very excited that the mid-2024 pivotal readout in Hem A is coming up soon. The partnership allows for $220 million in potential milestone and 14% to 20% royalty on potential sales. But the specific amount of each milestone is not publicly disclosed, but this could start as early as the start of 2025 if the pivotal readout is positive and if Pfizer would like to see regulatory approval for the program.

And Gena, just to reflect on that, we're limited in what we can reveal. When you sign these deals, there's always an agreement about who talks about what. But the regulatory milestones, which are — we get one for the U.S., one for Europe, and one for Japan are not for approval, they're for submission of the package. And then the commercial milestones, which are for first patient dosed rather than for reaching a certain sales threshold, are very, very favorable milestones that will fund the company in '25 and '26.

Yes. I need to mention that a significant portion of the $220 million is near term, and we could also choose to monetize them now.

Yes. So Gena, the closer we get to when the data is revealed and then when Pfizer submits this, we have the option of monetizing those royalties, but we can also choose to wait and use them to fund '25 and '26. What will meet that decision is the non-dilutive funding from business development that we do now will tell us whether we need to make that decision. I know that there's concern from people who have followed us for a long time about our near-term cash runway. We feel that we are fortunate to be able to do both capsid deals, Fabry deals, technology deals, and to have this large amount of cash next year that we can bring forward, if necessary.

Our next question comes from Patrick Trucchio of H.C. Wainwright.

This is Luis Santos for Patrick. Congratulations on the recent progress and your impressive presence at ASGCT. I am interested in knowing if you have already guided to the tau program and if it's going to be in Alzheimer's, do you know which patients you're going to be treating and which other indications you are going to push forward here with the tau program? And then I have a follow-up question.

Thank you for your question. We haven't guided on that. There's been an enormous amount of interest in our presentation yesterday at ASGCT. It clearly was, I think, the most remarkable presentation of all the many people that are moving forward in blood-brain barrier penetrant capsids. We feel that the tau asset, the cargo that's within it, doubles down and makes this even more interesting. The role of tau in Alzheimer's, I think, is becoming increasingly clear. The Biogen data is very encouraging. The idea that it's the thing that is relevant to the clinical stages of tau or Alzheimer's rather than in the early presymptomatic ones makes this a much more easy lift. However, we are very conscious that Alzheimer's studies are large programs and that we need to make sure that we either do ourselves well or partner with someone who has real expertise in Alzheimer's.

On a follow-up that was helpful. On the follow-up on partnerships, but for the MINT platform, you mentioned that there are business development opportunities there. Do you have any potential collaborators in mind? And what diseases would you be targeting?

The MINT integrase is remarkable. The presentation at ASGCT was just 57 minutes ago. And there was a lot of excitement in the room about it. We have already been speaking to people for 3 months on this. I want to put the business development discussions into perspective. We had the regulatory clarity for Fabry just in February. We had the capsid results just in March. We finally have taken MINT to a place that we feel we can share it in May. I understand the desire for signed deals, but the results have only come out over the past two or three months, which means that at the moment, you could imagine our business development group is incredibly busy in talking to lots of people about this. Now, integrase has the potential for really disruptive genomic engineering. It's the kind of thing that David Liu when he was asked, said was his dream of what the ideal genomic medicine was, which was an integration that could be engineered to go to your site of choice and put in pieces of gene-sized pieces of DNA that would replace all of the mutations downstream. The team at Sangamo, because of their expertise in understanding the interaction between proteins and DNA from the zinc-finger platform, has been able to do this remarkable engineering, and the whole AlphaFold and understanding artificial intelligence of how you understand proteins has helped us. We feel that this is something that Sangamo can use, but it has also attracted great interest from the hardcore science pharma companies that you could imagine who all see this as the future of genomic engineering. We have a responsibility to put it in as many people's hands as possible. I think you will hear more about this MINT platform for some time to come.

Our next question comes from the line of Luca Issi at RBC.

Great. This is Lisa on for Luca. I just want to ask another question on the MINT technology. Just wondering if you can give us a sense of what kind of targets would be good candidates. For instance, would it be possible to integrate something like a full-length CFTR gene, which is around roughly 190 kilobases? Or should we think about something larger like full-length dystrophin, which is measuring closer to over 2,000 kilobases? Just any color here would be helpful.

Yes, you asked really important and interesting questions. And as always, with Sangamo, we've thought about that size because as you know, zinc fingers are an eighth of the size of CRISPR, and even the small CRISPRs are four times as big as the zinc finger. And that's important because of delivery. It's the same with MINT because we've tried to keep the technology as small as possible, so we could put both the integrase and a cargo in an AAV. Now, when you get to the size of some of the genes that you're talking about, it comes down to what kind of delivery you're using. My dream for MINT is to be able to drop a cDNA copy of the gene or of the exons that are mutated into intron 1 of the genome. It would then be run off of the promoter, having all the locus control elements. It would alleviate the requirement to edit all the individual mutations that usually are the cause of genomic disease. Now to put in whole genomic copies would be unnecessary, I would argue. We need to look at what are the diseases where the cDNA is packageable into the delivery mechanisms that are available because the MINT should be size-agnostic and has so far shown great potential. Amy, is there anything else? Amy, I'm aware that you're on the line and more — as our Head of Research, perhaps you have other things to add to that?

No, that's a fantastic explanation, Sandy. I would just add that there are specific genes involved in some neurological disorders, and I'm thinking of things like Rett syndrome or MECP2, which needs to be fine-tuned at a very specific level. Something like an integrase where you could integrate perhaps the healthy copy of exon 1 or even a bigger portion of the gene so that it's under control of the endogenous promoter could be really transformative for a disease like that. So I think it's incredibly exciting to see the opportunities around this new MINT platform.

Our next question comes from Ritu Baral of TD Cowen.

Just a quick question on the Fabry program. Actually, you've dosed 33 patients, and we saw the data at World. Plus, you have the Phase III path going forward, agreed upon with the FDA. What is the next data update that we're going to get from that? And also, I guess, is there a data point or a follow-up point in a subset of patients that's gating to potential business development around or out-licensing of this program?

Thank you, Ritu. I'm going to pass this on to Nathalie, but I'll just remind you again, the whole business development conversation around Fabry changed with Peter's new way of thinking about this at the agency and the conversations that we had in February. It's like a new conversation we're having with potential partners. But Nathalie, can you address some of the technical pieces?

Yes, sure. So we've completed the dosing of all the patients in the Phase I/II, so for a total of 33 patients. We continue to analyze the data, but this body of data that we have thus far is not gate-limiting for any partnership and any of the Phase IIb preparation or registrational trial preparation. We continue to analyze the data, and I agree with the FDA that we have enough data to move on to a Phase IIb. And that's what we're discussing with potential partners.

Sandy, when you say that the discussion has changed, are you talking about the structure of the deal that is in Sangamo's best interest? Like is it — do you think it could be like a co- or is it just really sort of valuation terms that are different now?

I think it's much simpler than that, Ritu. There was a concern that there wasn't clarity about what the regulators were wanting. There was this worry that we've all talked about, that it was going to be a head-to-head against ERT. The agency now knowing — has made it clear to us, it’s a simple single study, and that we can come back halfway through the study and show them the data we've got if we feel it's compelling. I think this has changed how the various companies will approach this. Great credit to Peter; he is walking the talk in this, and we have benefited greatly from it as being almost like a poster child for what an approval of a rare disease gene therapy is. And if I may, Ritu, we've started the — we've initiated the conversations with the Europeans, and uniquely, the FDA is volunteering to send one of their staff with us to that conversation because we feel that the way forward for these kinds of therapies is for a common approach to them. It reflects the support that we have from the FDA in these discussions.

Thank you very much. At this time, I'm showing no further questions. I would now like to turn the call back to Louise Wilkie for closing remarks.

Thank you very much, and thanks to everyone for joining us on the call today. We look forward to speaking to you soon.

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