Sangamo Therapeutics, Inc. (NASDAQ:SGMO) Q1 2024 Earnings Call Transcript

Sangamo Therapeutics, Inc. (NASDAQ:SGMO) Q1 2024 Earnings Call Transcript May 9, 2024

Sangamo Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to the Sangamo Therapeutics First Quarter 2024 Teleconference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] 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.

Louise Wilkie: 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 investor relations 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, advancements of our product candidates, anticipated regulatory submissions, advancements of preclinical programs to the clinics, 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 discussed today. These statements are subject to certain risks and uncertainties that are discussed in our filings with the SEC, specifically in our annual report on Form 10-K for the fiscal year ended December 31, 2023, supplemented by a 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.

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 Cell and Gene 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 provide 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 were 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 number one priority. Business development is an important part of these efforts, and I am pleased with the progress that was 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 pre-clinical 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 neurotropic AAV capsid, which demonstrated industry-leading blood-brain barrier penetration and brain transduction in non-human 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, stacked BBB-mediated expression of zinc finger cargo in 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 submissions sent to the clinic by the end of 2025.

Meanwhile, we continue to advance our lead candidate in chronic neuropathic pain NAV 1.7, which uses an established intrathecally administered capsid toward an IND submission expected in the fourth quarter of this year. We believe our ability to combine potent sink 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 three 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, SOD-1 mediated amyotrophic lateral sclerosis or ALS, Phelan-McDermid syndrome, Parkinson’s disease, Angelman syndrome, and other neurology 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 capsid for various routes of administration such as intrathecal and intravenous delivery. SIFTER can also engineer capsid 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 STAG 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 that 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 serum-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 integrates capabilities and are hopeful that MINT could provide us with another potential non-dilutive funding opportunity. Alongside our presentations on 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 1/2 STAR 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 four remaining patients dozed 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 STAR study showing sustained benefit and a differentiated safety profile. These results underscored 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 and 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 3 affine trial of giroctocogene 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 end 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 this cost savings expected from the recent restructurings, 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 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. Operator, please open the lines for questions.

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