Sangamo Therapeutics, Inc.

Good day and thank you for standing by. Welcome to the Sangamo of First Quarter 2023 teleconference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Louise Wilkie. Please go ahead.

Thank you. Good morning. I'm Louise Wilkie, Sangamo's Vice President of Investor Relations and Corporate Communications. Thank you for joining us on the call today. On this call are several members of the Sangamo Executive Leadership Team, including Sandy McRae, Chief Executive Officer, Mark McClung, Chief Operating Officer, Patricia Durababu, Chief Financial Officer, Jason Fontenot, Chief Scientific Officer, Natalie Dubois-Stringfellow, Chief Development Officer, and Bettina Cockcroft, Chief Medical Officer. Slides from our corporate presentation can be found at our website, sangamo.com, under the Investors and Media section of the Events and Presentation page. 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, The anticipated plans and timelines of Sangamo and our collaborators for initiating and conducting clinical trials, screening and dosing patients and presenting clinical data. Advancement of our product candidates. Advancement of preclinical programs to the clinic. Our strategic reprioritization and restructuring and the anticipated benefits thereof. The sufficiency of our resources, cash runway and plans to seek additional capital. Our preliminary estimated operating results for quarter ended March 31, 2023. estimated financial guidance and targets for 2023 and beyond, 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, 2022, supplemented by our quarterly report on Form 10-Q for the quarter ended March 31, 2023, to be 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. On this call, we discuss our non-GAAP operating expenses. Reconciliation of this measure to our GAAP operating expenses can be found in our press release, which is available on our website. Now, I'd like to turn the call over to our CEO, Andy McRae.

Thank you, Louise, and good morning to everyone joining the call. As I reflect on where Sangamo is today, I'm proud of our rich history of scientific innovation and industry firsts. We are committed to developing genomic medicines that have the potential to transform the lives of patients and to bring value for shareholders. In so doing, we've been driving forward important programs in our pipeline, which are producing promising results. Today, I want to step back and spend some time reiterating the vision for the company and why we believe Sangmo has the potential to create significant value in these areas of chosen focus. I will then outline a strategic reorganisation that is being announced today to prioritise resources and spend in an effort more effectively to achieve that vision. We will advance our wholly-owned neurology portfolio of preclinical assets that leverage the power of our zinc finger epigenetic regulation technology and are underpinned by strong capsid delivery capabilities. Anchored by our newly unveiled NAV1.7 program for the treatment of chronic neuropathic pain and the prion program for the treatment of Creutzfeldt-Jakob disease, We believe these targets are addressable today with existing delivery technology and present both large unmet medical needs as well as market opportunities. We believe our ability to repress or enhance the repression of genes is ideally suited to address challenging and often devastating neurological disorders, creating a promising portfolio which has the potential to result in one IND submission a year over the coming years. At the same time, we continue to advance our industry-leading Fabry and TX200 CAR Treg clinical programs, both of which have the potential to provide significant benefit to patients and value to shareholders. We are leading gene therapy and development to treat Fabry disease, with competitors continuing to announce the pausing or termination of programs. We believe Sangamo is ideally placed to address the needs of this important patient population. The promising safety and efficacy data we've presented today reinforces the potential of this program, and we're making good progress in preparations to consult the FDA on the proposed phase three trial design in the summer, once we have the data needed to support these conversations. Sangamo is also a leader in the CAR Treg cell therapy space, being the only known company to have those patients in a clinical trial through our TX200 Steadfast study. We believe renal transplant is the ideal model for a CAR Treg proof of concept, and if safety and efficacy are adequately demonstrated, CAR Tregs could be well suited to treat a broad range of autoimmune indications, holding great promise as a new treatment modality. We believe that our advanced Treg R&D capabilities coupled with our manufacturing know-how places us in an ideal position to continue to be a leader in the CAR Treg cell therapy field. To date, we have seen signs of success in more assets than the company can take forward alone, which is a very rare position for a company in this industry to be in. This requires focus and a disciplined approach to using data to inform what to progress, while also considering the commercial potential of each asset. While we must focus on progressing the science and delivering for patients, we must also manage our business by carefully investing resources and generating capital to fund it for the long term, with the goal of creating meaningful returns for our shareholders. In recent months, a number of factors, including general access to capital, have challenged the broader market in Sangamo, requiring us to critically evaluate next steps for programmes and make difficult but necessary decisions to prioritise investments and reduce cash burn. We're not the only ones being prudent with our resources, as others in the industry seek to maximise near-term value and rationalise their R&D spend. Therefore, today, we're announcing a sharp and strategic focus, with investments being carefully prioritised to advance three key areas. One, our newly unveiled NAV 1.7, and prime programs as our prioritized wholly-owned neurology portfolio. Two, our Fabry program to a potential Phase III clinical trial. And three, the TX200 CAR-T reg program in renal transplant through Phase I-II. We believe these are the core value drivers for the business. With the upcoming return of the programs from Biogen Novartis set within the wider economic backdrop, we've had to carefully select which neurology programs to take forward while also re-evaluating how we resource our strategic priorities. We have prioritized specific neurological epigenetic regulation targets that we believe can be delivered today through existing capsids, underlying the importance of our capsid evolution program to drive future value for the company and are advancing these programs to a potential IND. This has led to difficult but necessary decisions to step away from some preclinical assets, as well as significantly reducing our internal manufacturing and allergenic research footprints in California. We recognize internal manufacturing, especially in California, is an expensive and resource intensive asset. So at this time, we believe our spend should be focused on clinical and preclinical activities, which we expect to drive value in the near term. We are therefore announcing today the elimination of approximately 120 roles at Sangamon in the US, representing 27% of the current US workforce. The restructuring plans plus other planned cost reduction initiatives are expected to result in annualized savings of approximately $31 million. We believe that these changes, in combination with other cost reduction initiatives, will allow us to fund our planned operations for at least 12 months. We will continue to assess ways to reduce our annual operating expenses, consistent with the prioritised objectives and the progress of the company. Alongside these announcements, and with real personal sadness, I share that Andy Ramomar, Executive Vice President of Technical Operations, will be leaving the company. Andy has brought great passion and dedication to Sangwo, Building a manufacturing organization has allowed us to support the advancement of four programs into clinical development. His technical expertise is recognized throughout the industry, and his leadership is known by us all here. He leaves a legacy of technical excellence at Sangamo. Philip Ramsey, our current head of technical development, has been appointed to serve as a head of technical operations effective May 29th. I really look forward to working with Philip as we continue to advance and align our manufacturing capabilities with our strategic priorities. On a very personal level, these decisions have been extremely difficult. Sangam Ho has many brilliant and talented individuals who are and have been committed to our mission and have been instrumental in helping us achieve so many innovations during the years I've been responsible for this great company. I'm truly thankful for their dedication and for their service to Sangamo. But no matter how difficult these decisions are, as a leadership team, we believe that they are the right decisions and we are committed to acting upon them. They will preserve our future by focusing and redeploying our capital to our most promising projects. I'd now like to turn the call over to our Chief Scientific Officer, Jason, who will share more on the vision for the neurology pipeline.

Jason. Thank you, Sandy, and good morning to everyone on the call. Here at Sangamo, we strongly believe in our scientific capabilities, our platform, and the potential of our programs to help transform the lives of patients. Our zinc finger technology possesses important benefits over other editing modalities being explored. And we are seeing promising evidence from across our clinical and preclinical portfolio. That being said, as you heard Sandy outline, we believe now more than ever in the need to limit the number of initiatives we are undertaking at one time by focusing on advancing our prioritized neurology portfolio, Fabry to phase three, and our TX200 CAR T-REG clinical study through phase one, two. I will start by outlining our portfolio of preclinical programs to treat neurological disorders, to dive deeper into why we see significant value ready to be unlocked in these important assets. Our neurology pipeline leverages Sangamo's proprietary zinc finger gene targeting technology, a high precision genomic engineering platform. It is highly versatile, extremely customizable, and very compact. Once delivered, our epigenetic transcriptional regulators are capable of repressing or activating the expression of target genes for therapeutic benefit without the introduction of mutations, breaks, or other permanent changes to the genome. Thus, they are well-suited to address neurological diseases. To maximize our probability of success and build long-term value, we have designed a strategy that focuses on diseases that can be treated with the delivery capabilities we have in hand. existing AAV capsids. We are currently focusing on developing novel AAV, we are concurrently focusing on developing novel AAV capsids that we believe will greatly broaden the set of indications addressable with our technology in the future, including high-value neurodegenerative diseases such as Alzheimer's disease. We believe this wholly-owned neurology portfolio has the potential to result in one IND submission a year over the next few years. Today, we unveil the flagship program of our wholly-owned neurology pipeline, NAV1.7. Using an optimized zinc finger epigenetic repressor, we will specifically target and seek to reduce NAV1.7 expression in dorsal root ganglions to inhibit pain sensations in diseases of chronic neuropathic pain. Despite being a highly validated target, NAV1.7 has evaded small molecule or antibody therapeutic manipulation due to very challenging specificity issues. By contrast, our zinc finger epigenetic repressors have demonstrated potent and highly selective repression of NAV1.7 expression, up to 99% per cell, paired with a high degree of specificity even among NAV1.7's most closely related receptors. Our initial focus will be NAV1.7 associated small fiber neuralgia. with an estimated prevalence of at least 43,000 patients in the U.S. We believe we can specifically prevent the transmission of nociceptive pain signals to the brain and believe initial success in treating small fiber neuralgia would subsequently enable us to broaden use of this therapy to other neuropathic pain indications, regardless of the cause of pain. Importantly, reducing pain by inhibiting NAV1.7 is not known to be associated with any other neurological side effects and other sensory modalities are not expected to be affected. Detailed preclinical data from this program will be shared via platform presentation on May 17th at the upcoming American Association of Gene and Cell Therapy annual meeting in Los Angeles. We are anticipating an IND submission for the NAV 1.7 program in 2024. Beyond NAV 1.7, we continue to advance our wholly owned neurology program targeting the prion protein for the treatment of Creutzfeldt-Jakob disease. At the prion 2022 conference last September, we reviewed data demonstrating that our approach to targeting neurological pathologies with zinc finger repressors is effective. Our prion targeted therapy reduced the expression of prion by 40 to 60% in the brains of mice, reducing toxic prion aggregates that drive neuronal degeneration. This data, developed in collaboration with the Massachusetts Institute of Technology's Broad Institute, demonstrated that the therapeutic administration of our zinc finger epigenetic repressors significantly extended survival of prion infected mice through to 500 days, the typical lifespan of a mouse. Importantly, the effect was superior to published ASO treatments. This data provides validation of our work in prion disease, but more importantly, for our entire neurology targeted zinc finger epigenetic repressor portfolio. Prion disease represents a group of conditions with a devastating unmet medical need at this time, which we believe our technology can address. This disease is rapidly progressive and always fatal, usually within one year of onset of illness. Our intent is to target symptomatic, hereditary, sporadic, or acquired Creutzfeldt-Jakob disease, which has an incidence of approximately 500 patients per year in the U.S. The impressive data generated to date is fueling our ongoing development of the PREON program, with a potential IND submission expected in 2025. Delivery to the central nervous system is a major hurdle for clinical application of genomic medicine. The blood-brain barrier limits the brain-wide distribution of intravenously administered macromolecules. To overcome this issue, we have developed a proprietary AAV capsid discovery platform called Sifter. Sifter allows us to engineer AAV capsids with the potential for highly improved central nervous system transduction efficiency. Using Sifter, we have identified what we believe are the first of many novel AAV capsids, STAC-102 and STAC-103. which have demonstrated high efficiency delivery to the brain. This capsid innovation work is broadly enabling our entire neurology pipeline, and we expect we'll also provide valuable revenue generation opportunities through potential partnerships. I'm very pleased with the progress we have made and look forward to sharing more about our AV capsids in the near future. With regards to our partner neurology programs, We received notice this quarter that both Biogen and Novartis have decided to terminate collaborations with us. While completely unrelated, these two decisions had an unfortunate coincidental timing coming in the same week. In both cases, these decisions resulted from strategic portfolio reviews seeking to balance value, growth, and risk. This is reflective of broader trends in large pharma to step away from early stage risk and prioritize investment in de-risk late stage and commercial products. While we understand these decisions, Sangmo's focus is bold discovery to create transformational medicines. In pharma, such work is out of favor, as companies look for cost savings. We are pleased with the progress of these programs and look forward to sharing preclinical data from them in the near future, most notably exciting work demonstrating epigenetic zinc finger activator capabilities for the first time. These programs will be returned to Sangamo upon completion of the three-month termination activities. After a comprehensive review of our portfolio, we have recently made the strategic decision to pause these previously partnered programs and instead focus our efforts on our wholly owned pipeline programs. We look forward to potentially revisiting these targets and indications as our SIPTR platform identifies new AAV capsids to facilitate the delivery necessary for success in these indications. Notably, the programs returned to us from Biogen and Novartis have generated $425 million in cash for us and are now significantly more advanced, thereby driving significant future value opportunities for Sangamo and our neurology-focused pipeline. I will now turn the call over to Chief Operating Officer Mark, who will contextualize the broader pipeline and progress in our key clinical assets. Mark.

Thank you, Jason, and good morning, everyone. Starting with Fabry, we remain the leading gene therapy in this space with yet another competitor recently announcing the termination of development. This underscores the need for us to double down and continue working tirelessly to make this medicine available to those living with Fabry disease. As we actively prepare for a potential phase three trial, it's helpful to remind everyone of the market opportunity for this asset. We know that there are approximately 4,000 diagnosed Fabry patients in the United States. as well as many more that are not diagnosed, even with familial incidence of the disease. Of those diagnosed, around 13 to 1,900 are actively on treatment like enzyme replacement therapy, although many struggle with adherence to the regimen. We have successfully recruited naive, pseudonaive patients into our Phase 1-2 study, as well as patients already on ERT, which demonstrates the desire of patients to have alternative and improved treatment options over and above the standard of care. We will therefore continue to appropriately invest in this program to maximize the chances of clinical and commercial success. The compelling data we shared last quarter from the STAR study demonstrated a favorable safety profile and evidence of clinical benefit from strong biomarker data to kidney biopsies and improved SF36 general health scores. Since Q4 earnings, we have dosed to further three patients in the Phase 1-2 study, to achieve a total of 20 patients to date, and we continue to enroll in the study. We strongly believe ST920 is a potential medicine, so we're progressing phase three planning with urgency and plan to meet with the FDA on the proposed study design this summer once we've accrued sufficient data for those discussions. The trial is anticipated to commence in the second half of 2023. and dosing of the first patient could happen as early as the first part of 2024, depending on the regulatory interactions. As a reminder, the expansion phase 1-2, for which we expect to complete dosing in 2023, is not expected to be a gating factor for the commencement of the phase 3, but will provide additional data to support the regulatory package. Now turning to our CAR Treg portfolio, where once again, We're a leader in the field of research and in the clinic. When we acquired TXL in 2018, we gained deep expertise in regulatory T cell biology and married that with our detailed understanding of manufacturing and our experience developing INDs and progressing programs into clinical development. With these factors combined, we believe we are well-placed to maximize the opportunity for CAR Tregs to treat a range of autoimmune indications, and are pioneering a new type of treatment modality. The first of the programs, TX200 and HLA A2 mismatch kidney transplantation continues to move through the clinic. This quarter, we dose the third patient in cohort one and all patients continue to do well. Preparation for the second and higher dose cohort is actively progressing and we have additional patients in pre-screening who continue to enroll. As we outlined on the last quarterly call, We've been working to accelerate the pace of enrollment in this study. I'm pleased to announce that we've received positive initial feedback from two European agencies required for the enhanced trial design that will accelerate dose escalation. We're also on track to share clinical data from cohort one by the end of 2023. As part of our sharpened focus, we plan to prioritize the investment of our near-term autologous CAR-T reg portfolio And this has resulted in a decision to transition all allogeneic research activities from the United States to our Valbonne France facility to cease cell manufacturing in our Brisbane, California facility. While allogeneic capabilities will be important to the long-term development of the CAR Treg platform, it's important that our resources are directed towards advancing TX200 at this time. Finally, I want to reiterate two other important components of the story that we expect to be value drivers for the company. The first is duroc-toco gene phytoparpovac, an investigational gene therapy we're developing with Pfizer for patients with moderately severe to severe hemophilia A, currently in phase three. Dosing is complete for all patients required to complete the primary analysis, and Pfizer continues to work toward a pivotal readout expected in mid-2024. Fraser anticipates the potential BLA and MMA submissions in the second half of 2024, which if completed would generate a significant milestone payment. As a reminder, this partnership agreement allows for a potential milestones of up to 240 million and up to 14 to 20% in potential royalties. The other important potential value driver is of our portfolios innovative new caps that Jason outlined earlier. and which serves as a resource to address the issue of delivery to places like the central nervous system. We recognize the importance of unleashing the potential of new engineered capsules as enablers of genomic medicines, both for our own programs and those of potential partners, and are making significant progress in addressing delivery to a range of previously inaccessible areas. We see this asset as a source of competitive advantage and also potential revenue, and are hopeful to share some exciting updates about our CAPSID program over the coming months. I'll now turn it over to our Chief Financial Officer, Prathusha, for an overview of the financial results. Prathusha?

Thank you, Mark, and good morning, everyone. Sangamo announced preliminary first quarter financial results yesterday as we work towards completing customary quarter-end close and review procedures, including the evaluation of non-cash charges related to impairment of long-lived assets. Our preliminary results are as follows. Revenues for the first quarter ended March 31, 2023, are estimated to be approximately $158 million, compared to $28 million for the same period in 2022, reflecting an increase of $130 million year-over-year. This was primarily driven by the return of assets from Biogen, requiring us to accelerate approximately $121 million of non-cash revenue from the related upfront fees. Total GAAP operating expenses for the first quarter are estimated to be in the range of $120 million to $140 million compared to $73 million for the same period in 2022, reflecting an increase of $47 million to $67 million year-over-year. This was primarily driven by certain non-cash charges, including goodwill impairment of $38 million and estimated impairment of long-lived assets of up to $20 million. These impairments were driven by several factors, including termination of significant partner agreements noted previously and lower market capitalization, similar to what other companies in our space have observed. We ended the quarter with approximately $241 million in cash, cash equivalents and marketable securities, which is expected to fund the company for at least the next 12 months. This represents a decline of approximately $66 million from the prior quarter. Furthermore, the headcount reductions announced today, in combination with other planned cost reductions, are expected to result in annualized savings of approximately $31 million going forward. We continue to assess ways to further reduce our annual operating expenses and to manage Sangamo as a highly focused organization driving towards our prioritized two neurology assets, Fabry and TX200. As a result of these changes, our previously announced 2023 non-GAAP operating expense guidance range of $275 to $295 million is now obsolete. We expect our current estimate for 2023 to be in the range of $240 to $260 million. This range excludes certain non-cash charges, including estimated goodwill write-down, impairment of long-lived assets, and stock-based compensation expense. Sangam was assessing ways to further reduce operating expenses in line with our strategic priorities, and the readouts from key programs will continue to drive decisions and investments in the coming months. In parallel, Sangam was committed to creating long-term value for our shareholders, and we will continue to proactively and intensively explore avenues to raise additional capital, including through partnerships. I will now turn the call back to Sandy for closing remarks. Sandy?

Thank you, Pratusha. Today you heard that Sangovo is being responsible, responsive and nimble in order to position ourselves for future success. There's a lot to look forward to with Haemophilia A marching closer to a potential BLA submission. Today we announced our wholly owned neurology portfolio centered around NAV1.7 with an IND submission anticipated in 2024, leveraging our innovative SYNC finger technology and underpinned by a capsid development capability that we believe can provide value in the near and long term. Our market leading Fabry program advances towards a potential phase three trial expected to begin at the end of this year. And our first in class CAR T reg technology is being assessed in the clinic through TX200 with initial data from cohort one expected by the end of 2023. I am very thankful to our leadership team and all my Sangamo colleagues for their hard work and dedication to our mission. I'd like to close by expressing my hope and excitement for the future that lies ahead for Sangamo. So at this time, we'd like to open up for questions. Operator. Please open the line for questions.

Certainly. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question will come from Ben Burnett of Stiefel. Your line is open.

Hey, thank you very much. I had a question regarding the Fabry program. I was wondering if you could provide more color on the potential phase three design being proposed to the FDA. And is there any expectation that Fabrazyme would be needed as a comparator? And I guess if so, any thoughts as to whether or not a non-inferiority study would suffice for approval in the U.S.?

Ben, thank you for your question. I'm going to pass that one on to Natalie.

Yeah, hi. Thank you for the question. We are preparing the interaction with the FDA right now. We hope to have a meeting this summer, and we will comment on the phase three design and potential agreement with the FDA after the call.

Natalie, what's gating or going to that interaction?

Some additional data from our top dose in the phase one to trial that we are.

So it's simply just the time of collection of data?

Absolutely.

Okay, that makes sense. I appreciate that. And maybe if I could also just ask a question, like a biology question, actually, on the prion disease program. I think the way the slide's depicted, as we understand it, prion proteins, I guess, are continually supplying material for the production, these larger misfolded aggregates. Is there anything known about whether aggregates will be cleared once the prion source is turned off? What have you unveiled there?

Jason, can you help with that, please?

Yes. There is evidence that if the source of the prion protein aggregates, the gene, the prion gene is turned off that aggregates do diminish. So we believe that this approach will have therapeutic potential. And indeed, the data that we presented at Prion 2022 showed great effects in the preclinical mouse models. So we're very excited about this program.

And Jason, can you just summarize that data quickly about the difference in lifetime of mice and when the dosing was given?

Sure. So the model that was used in that study is considered a gold standard for understanding Freon disease. And we took two approaches there, one where the mice were inoculated with the prime protein, which initiates the disease and simultaneously treated with the zinc finger repressors but we also took an approach where the mice were inoculated and then the disease was allowed to start to develop and then a therapeutic application of the repressors was used and in both cases our repressors extended very significantly extended the lifespan of the mice and we compared this to data that has been published on asos And really an impressive part of this was how much improved our zinc finger repressors were at extending the mice lifespan. That's super interesting.

Thank you.

And one moment for our next question. Our next question will come from Greg Harrison of Bank of America. Your line's open.

Hey, good morning. Thanks for taking our question. Maybe you could give us a little background on just what led to the choice of NAV 1.7 as the target of focus, and how could your approach be differentiated from others like the small molecule blockers under development, you know, like for a Texas program?

Greg, thank you for the question. And I'm going to pass on to Jason again to talk us through the science. But for those of us that have been in industry for any period of time, we've seen the number of companies that have tried to drug NAV1.7 and struggled with the fact that small molecules and antibodies that work on NAV1.7 and give clear benefit in pain interact with similar proteins such as NAV 1.6, NAV 1.8 and cause side effects. So Jason, why do we think our approach is so fundamentally different?

Yeah, so what's so exciting about NAV 1.7 is that there is very clear genetic data from human populations that show that this molecule is a key regulator of pain sensation. So it has a very clear genetic, it's genetically implicated in diseases. But as Sandy pointed out, the problem with targeting NAV1.7 has been that it's part of a family of very closely and structurally similar receptors. And small molecule approaches in particular have been unable to specifically target NAV1.7 without involving other receptors. And this creates issues of specificity. So what's unique about our zinc finger program is that we can design an epigenetic repressor that very specifically targets NAV1.7 without without affecting the expression of any of the other closely related receptors. And this allows us to do what small molecules or antibodies can't do, which is only target NAV 1.7 and achieve this reduction in pain transmission without affecting the other processes that are regulated by the closely related receptors.

I want to just underline that and take it to a kind of simpler level. The small molecules target the protein what we do is we target the DNA. And the DNA target for NAV1.7 is completely different from all the other NAVs. And therefore, we do not have this problem of specificity because it's the DNA that we target and not the protein. Does that help, Brett?

Yeah, that's super helpful. If I could sneak one more in. Just curious, now that you're focusing you know, on the 1.7 program and other earlier stage programs like CAR T-REG. Will you seek partners to help fund development and just broader, what's your strategy for funding the pipeline in the more medium to longer term?

That's a very fair question. Mark, can you help with that?

Sure. Hi, Greg. Thanks for the question. You know, as we've communicated before, We're excited about our technology, and when we get approached by potential partners that are interested in it, we really ask ourselves a couple of questions. One is, can the partners help us accelerate the program faster to patients by bringing resources, expertise, and capabilities? And if they do, then we take a serious look at that. I mean, we've got a strong history over the last several years in terms of partnerships that have brought in about $815 million in upfront. And, you know, we've seen a lot of progress as a result of those partnerships, you know, including Pfizer's, you know, advancements that I've commented on earlier. So we will look at that.

Great. Thanks for taking the question.

And one moment for our next question.

Our next question will come from Gina Wang of Barclays.

Your line is open.

Thank you. I also have one question regarding NAV 1.7. I think it's also expressing actually quite different tissues as well, like pancreatic beta cells and olfactory sensory. There are a few other parts of the body. So wondering, you know, several questions. One is what is the advantage or disadvantage of a long-term incubation and what is your route of administration and how good is the selectivity regarding the specific organ?

So there's three questions, Gina, that I heard. One is about route of administration. One is about specificity, which I think we partly addressed. And the other one is about long-term benefit to the patient. So between Jason and Natalie, can we address this? So Jason, do you want to talk about the specificity, please, and the route of administration?

Sure. Thank you for the question, Gina. I think there are two important points about the specificity. This is where the power of our zinc finger genomic engineering platform really comes to the front. We are able to design zinc finger epigenetic repressors that are highly specific for NAV1.7 and avoid repression of any of the closely related receptors. But in addition to that, in the AAV vector that delivers this cargo, we also can use promoters that are specific for the cell type that we're interested in driving that repression in. So through the combination of both of those mechanisms, we're able to achieve very selective expression in the tissues that we're interested in targeting, specifically here, the dorsal root ganglion. So that's really the key to how we can achieve really exquisite specificity for both the target and the cell type is through the combination of our zinc finger gene targeting capabilities and our promoter engineering capabilities. In terms of delivery, for the dorsal root ganglion, we can achieve delivery through systemic administration. And so that is the approach that we are taking.

Through systemic administration?

Sorry, excuse me, intrathecal administration.

Natalie, do you want to comment on that?

Yes. So, yeah, we are targeting a population of patients with small fiber neuropathy that have chronic diseases. So, we hope that the treatment will last for a long time. It's a one-time single intrathecal bolus injection of the product. And we, you know, intend to do a dose escalation trial that will allow us to target the appropriate dose for reducing the pain in those patients.

And these are patients, this group that we're targeting as our first population are people with intractable pain. Their lives are dominated and ruined by their intractable pain. We've had them come visit us with the company. By doing it intrathecally, by doing it with a promoter that's specific, an AAV that is only going to appear around the dorsal root ganglia, and by zinc fingers that will only repress a single gene, we get an enormous specificity benefit. We will show results at ASGCT about animal experiments that show the benefit on pain. And we really feel that there's a route forward here for what is an important, significant medical unmet need.

And importantly, I think I may add that reducing pain by inhibiting NAB1.7 is not known to be associated with any neurological side effects and other sensory modality are not expected to be affected. So very specific targeting. Yeah.

So yeah, my question also like a long term inhibition, you know, what could be the disadvantage there?

So we will do this. Gina, you know as well and you know how seriously we take patient benefit and patient safety. And so we will start it at the appropriate dose agreed with the agency and gradually increase it. But I cannot importantly enough, how seriously impacted these patients are by their pain. And so for them, this is an enormous advantage. And we've consulted with them. We've had them come into the companies. And they see this as a really promising future medicine.

Thank you. One moment for our next question. Our next question will come from Maury Raycroft of Jefferies.

Your line is open.

Hi, good morning. Thanks for taking my questions. Maybe as a follow-up to Gina's question, you mentioned the cell-specific promoter and intrathecal delivery. Can you talk more about capsids as a gating factor for program advancement? I guess I would like to clarify that for the previously partnered Biogen and Novartis programs, One of the reasons why those are paused for now is primarily because of AAV delivery limitations. And will you use a novel Sangamo capsid for NAV1.7 and prion or a conventional capsid like AAV9 because you need less blood-brain barrier penetration and distribution for those targets?

Good morning, Maury. Thank you for the question. So we're not revealing which capsids we're using for which diseases at this time. but we believe that we have a solution for each of the ones that we're advancing. Talking about the biogen Novartis programs, for example, Alzheimer's, the challenge for that is ensuring that we have widespread brain coverage, particularly for the regions that are most impacted by Alzheimer's in an intravenous manner, we believe. And And so we've paused that program. It has advanced significantly over the three years it's been with Biogen. We are making great strides with our capsid evolution. We are watching with interest other people's capsid evolution change. And when there is progress, and I truly believe there will be progress in a blood-brain barrier crossing capsid in the soon future, those assets suddenly become very attractive for us or for other people.

Got it. That's helpful. Thanks for taking my questions.

One moment. Thank you, Maureen. For our next question. And our next question will come from Yanan Zhu of Wells Fargo.

Your line is open.

Hi. Thanks for taking our questions. On the NAV 1.7 program, just wondering, What percentage of suppression of expression are you driving for and expecting to have benefit? And also, are there advantages for using a transcription repressor approach as opposed to a straight knockout approach since you have both technologies? Thanks.

Jason, this sounds like a technical question for you.

Yeah, thank you for the question. So maybe I'll start with the second question. We are really excited about our epigenetic repression platform, and we believe that it's really optimal for this particular approach for a few reasons. One, because we are able to regulate the genes without the introduction of double-stranded breaks or any type of mutation. And we're able to do that very specifically and very potently. So we've achieved what is essentially 99% close to quantitative repression of the target gene using this approach. And we believe it will be stable for long term. So we're very excited about the approach and believe it's superior, especially in the CNS where cells are non-dividing than using nucleases, for instance, or any kind of approach that modifies the DNA permanently. Regarding how much repression is needed, I think there's two things to be considered there. There's the per-cell repression and the coverage, the number of cells that are being repressed. What's really great about our platform is that on the per cell basis, we can design repressors that repress gene expression to the amount that we think is needed to achieve the biological and therapeutic effect. And so we've identified repressors that are very potent at the single cell basis. And then through dosing and animal models, we will explore what level of repression across of multiple cell types is necessary to achieve the appropriate therapeutic reduction in pain. And that will be done by dosing in preclinical models to understand, you know, what range of doses we want to explore, and then we'll take that into patients.

Got it. Thank you. And maybe also a question. Maybe two quick questions. One on the Fabry's disease program. Could you comment on whether those patients who were off ERT remain off at this moment? Or should we have to wait until the next data update to hear about that? Thanks.

Natalie, can you update that?

Yes. So far, all the patients that have been withdrawn from ERT are still off ERT.

Very helpful. And lastly, for the TX200 program, will you move to a higher dose sometime this year? Because it sounds like, I think the first cohort is designed to have three patients, and it sounds like you have dosed all three. So could you talk about potential decisions for dose escalation there, and yeah, I think, yeah, that's the question.

Thanks. Bettina, can you help with that one?

Yes, absolutely, and thank you for the question. So, we're extremely happy to have concluded enrollment and dosing in cohort one for TX200. We plan to have a safety monitoring committee meeting coming up very shortly in May so that we can then move on to the next cohort. And we already have patients lined up. And we're excited by this. We have also recently engaged with regulatory agencies in Europe who are representing the countries where we're conducting the trial. that have agreed to an optimized design of our dose escalation protocol. And so this means we hope to accelerate dose escalation. And then we'll plan to share initial data from cohort one by the end of this year.

Got it. Thanks for all the updates.

One moment for our next question. Our next question. We'll come from Luca Izzi of RBC.

Your line is open.

Oh, excellent. Thanks for taking our questions. This is Lisa on for Luca. Maybe just one here first on the restructuring efforts announced today. Just wondering what other initiatives are being explored to either preserve capital or raise funds? And have you thought about potentially monetizing the royalty stream for hemophilia A?

Thank you for the question. The restructuring was a very important part of our announcement today. Prathisha, can you comment on this?

Yes, Sandy. So today's restructuring was a difficult decision, but it was in line with the strategic priorities we outlined on the call. And we'll continue to assess ways of running Sangamo as a leaner focused organization. As far as evaluating the different levers for extending our cash runway, as a clinical company, we're actively pursuing different opportunities for financing, and we will look at different avenues, including the royalty monetization.

All right.

Thank you.

That's helpful. Go ahead, Sandy.

It's a significant return or revenue for sangamo in in the future and we need simply to be thoughtful about when we access that revenue the closer it gets to um submission and hopefully marketing of an important medicine, the more valuable it is. And so that's the balance that Prathusha is constantly looking at about near-term cash versus long-term value, all of which will lead to return for our shareholders. That's right.

That's helpful. Thanks. And maybe just one on the Tregs, more of a big picture question. You know, we're going to get some data maybe later by year end. Just thinking, you know, what are going to be the next steps for Tregs? Should the data be positive? Will this accelerate your thinking on moving towards an autoimmune indication?

Mark, can you help us think about the Tregs, please?

Excuse me. Thanks, Lisa. Yeah, I mean, as we talked about, TX200, we think, is a perfect biologic model. to assess the performance of Tregs. And so we're really excited about that and we'll be looking forward to providing an update, as we mentioned, towards the end of the year. We do have our preclinical programs. They're continuing to progress. MOG for multiple sclerosis and IL-23 for inflammatory bowel disease. Both of those programs, as we've talked about, we're focusing primarily on the autologous to ensure we can move them forward towards INDs. And so we're very committed to that and excited to continue this.

We've got a lot of focus to execute against the preclinical work on both of those assets as we continue to execute on the TX200 trial. Thanks.

Thanks for taking our question.

And one moment for our next question.

And our last question comes from Patrick Trucio of H.D. Wainwright. Your line's open.

Thanks.

Good morning. I just have a few follow-up questions from a few that had been asked earlier. The first was just I was wondering if you can just talk a little bit more about the SIPTR platform and how it enables selection of CNS tropic AAV capsids. And in particular, you know, with regard to these neuro programs, what are you actually looking for in the identification selection of the engineered AAV capsids for enhanced CNS delivery? And then just separately, just with the CAR T reg, I'm just wondering, you know, with the intention to prioritize the near-term autologous portfolio, can you provide some additional details around this decision, how it you know, will this perhaps, you know, accelerate the INDs for the broader indications like MS and IDD?

So, let's answer, Patrick, thank you for your question. Let's try and answer this in two ways. Jason, can you take capsids, please, and Mark, can you talk about Tregs, please?

Sure. Thanks for the question, Patrick. So, we're really excited about the work in our capsid evolution group. I guess I can take the question in two different ways. There's the actual technology that we're using to develop and evaluate capsids, but there's also the approach that we're taking to decide what we're looking for in capsids. And so on that second component, I want to emphasize the work that is done uh as a collaboration between our development group the neurologist and our development group and our scientists in in research to identify indications that we think are optimal for being addressed with the technologies that we have specifically our our zinc finger epigenetic platform so once we identify diseases where we think we can really move the needle we think about the biology and the anatomy and where in the brain or in the nervous system needs to be targeted. And so for different diseases, those are different areas of the brain. Sometimes they're areas of the peripheral nervous system. And so once we identify where we want to target, then we think, okay, what is the best capsid to do that? And we have a team that is developing capsid libraries that are both targeted, so we evaluate specific pathways that are known to facilitate transport over the blood brain barrier. And we have capsid libraries that are more randomly diversified, and we can evaluate both of those in cells and animal models to look for novel capsids that produce high-frequency transduction, highly efficient transduction in the areas that we're interested in targeting for a specific indication. And so that's the approach that we use to look for novel capsids. So we have an idea of a whole set of indications and areas of the nervous system that we're interested in targeting. And we're using these libraries. that can be delivered. We have some libraries that are designed to be delivered systemically and we have other libraries that are designed to be delivered by direct injection. And we use both of those approaches to look for capsids that we think can get us to the therapeutic effect that we need. And once we have one of those in hand, then we're obviously excited to move forward.

So Patrick, on the T regs, I mean, I want to frame this in a couple of ways. One, as we all know, access to capital these days is a challenge. And as a result of that, and, you know, with the burn rate that we've had, we've had to really focus on prioritizing. And when we have to prioritize, it means we have to make choices. And sometimes there are things we would not choose to do. And in the case of the T regs, we had to make a choice to really focus on TX200 and the execution of that trial to the proof of concept and keeping the MOG and IL-23 preclinical auto programs, which are a little more advanced, moving forward. So we've had to make a difficult choice to, you know, deprioritize the aloe work until the future. But, you know, I want to say that our investors also say to us that they're very interested in the Tregs and they would love to invest in the Tregs. And so we're assessing how best we can set ourselves up to do that. But in the meantime, we're also looking and having conversations with interested parties around partnerships. If we ended up having a partnership come in, one of the things we'd want them to do is bring enough money and expertise in that we can restart those programs and accelerate them again. But it's purely a choice that we've had to make, unfortunately.

That's helpful. Thank you very much.

And I'm showing no further questions. I would now like to turn the call back over to Louise Wilkie for closing remarks.

Thank you once again for joining us today and for all your questions. As a reminder, you can access the earnings release and presentation on the investor relations section of the Sangamo website. We look forward to keeping you updated on our future developments. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. you Thank you. Thank you. Thank you. Thank you. Thank you. Good day and thank you for standing by. Welcome to the Sangamo of First Quarter 2023 teleconference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Louise Wilkie. Please go ahead.

Thank you. Good morning. I'm Louise Wilkie, Sangamo's Vice President of Investor Relations and Corporate Communications. Thank you for joining us on the call today. On this call are several members of the Sangamo Executive Leadership Team, including Sandy McRae, Chief Executive Officer, Mark McClung, Chief Operating Officer, Pratusha Durrababu, Chief Financial Officer, Jason Fontenot, Chief Scientific Officer, Natalie Dubois-Stringfellow, Chief Development Officer, and Bettina Cockcroft, Chief Medical Officer. Slides from our corporate presentation can be found at our website, sangamo.com, under the Investors and Media section of the Events and Presentation page. 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, the anticipated plans and timelines of Sangamo and our collaborators for initiating and conducting clinical trials, screening and dosing patients and presenting clinical data, advancement of our product candidates, advancement of preclinical programs to the clinic, our strategic reprioritization and restructuring and the anticipated benefits thereof, the sufficiency of our resources, cash runway and plans to seek additional capital, our preliminary estimated operating results for quarter ended March 31, 2023, estimated financial guidance and targets for 2023 and beyond, 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 10K for the fiscal year ended December 31, 2022, supplemented by our quarterly report on Form 10Q for the quarter ended March 31, 2023, to be 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. On this call, we discuss our non-GAAP operating expenses. Reconciliation of this measure to our GAAP operating expenses can be found on our press release, which is available on our website. Now, I'd like to turn the call over to our CEO, Andy McRae.

Thank you, Louise, and good morning to everyone joining the call. As I reflect on where Sangamo is today, I'm proud of our rich history of scientific innovation and industry firsts. We are committed to developing genomic medicines that have the potential to transform the lives of patients and to bring value for shareholders. In so doing, we've been driving forward important programs in our pipeline, which are producing promising results. Today, I want to step back and spend some time reiterating the vision for the company and why we believe Sangmo has the potential to create significant value in these areas of chosen focus. I will then outline a strategic reorganisation that is being announced today to prioritise resources and spend in an effort more effectively to achieve that vision. We will advance our wholly-owned neurology portfolio of preclinical assets that leverage the power of our zinc finger epigenetic regulation technology and are underpinned by strong capsid delivery capabilities. Anchored by our newly unveiled NAV1.7 program for the treatment of chronic neuropathic pain and the prion program for the treatment of Creutzfeldt-Jakob disease, We believe these targets are addressable today with existing delivery technology and present both large unmet medical needs as well as market opportunities. We believe our ability to repress or enhance the repression of genes is ideally suited to address challenging and often devastating neurological disorders, creating a promising portfolio which has the potential to result in one IND submission a year over the coming years. At the same time, we continue to advance our industry-leading Fabry and TX200 CAR Treg clinical programs, both of which have the potential to provide significant benefit to patients and value to shareholders. We are leading gene therapy and development to treat Fabry disease, with competitors continuing to announce the pausing or termination of programs. We believe Sangamo is ideally placed to address the needs of this important patient population. The promising safety and efficacy data we have presented today reinforces the potential of this program, and we're making good progress in preparations to consult the FDA on the proposed phase three trial design in the summer, once we have the data needed to support these conversations. Sangamo is also a leader in the CAR Treg cell therapy space, being the only known company to have those patients in a clinical trial through our TX200 Steadfast study. We believe renal transplant is the ideal model for a CAR Treg proof of concept. And if safety and efficacy are adequately demonstrated, CAR Tregs could be well suited to treat a broad range of autoimmune indications, holding great promise as a new treatment modality. We believe that our advanced Treg R&D capabilities coupled with our manufacturing know-how places us in an ideal position to continue to be a leader in the CAR T reg cell therapy field. To date, we have seen signs of success in more assets than the company can take forward alone, which is a very rare position for a company in this industry to be in. This requires focus and a disciplined approach to using data to inform what to progress, while also considering the commercial potential of each asset. While we must focus on progressing the science and delivering for patients, we must also manage a business by carefully investing resources and generating capital to fund it for the long term with the goal of creating meaningful returns for our shareholders. In recent months, a number of factors, including general access to capital, have challenged the broader market in Sangamo, requiring us to critically evaluate next steps for programmes and make difficult but necessary decisions to prioritise investments and reduce cash burn. We're not the only ones being prudent with our resources, as others in the industry seek to maximise near-term value and rationalise their R&D spend. Therefore, today, we're announcing a sharp and strategic focus, with investments being carefully prioritised to advance three key areas. One, our newly unveiled NAV 1.7, and prime programs as our prioritized wholly-owned neurology portfolio. Two, our Fabry program to a potential Phase III clinical trial. And three, the TX200 CAR-T reg program in renal transplant through Phase I-II. We believe these are the core value drivers for the business. With the upcoming return of the programs from Biogen Novartis set within the wider economic backdrop, we've had to carefully select which neurology programs to take forward, while also re-evaluating how we resource our strategic priorities. We have prioritized specific neurological epigenetic regulation targets that we believe can be delivered today through existing capsids, underlying the importance of our capsid evolution program to drive future value for the company, and are advancing these programs to a potential IND. This has led to difficult but necessary decisions to step away from some preclinical assets, as well as significantly reducing our internal manufacturing and allergenic research footprints in California. We recognize internal manufacturing, especially in California, is an expensive and resource intensive asset. So at this time, we believe our spend should be focused on clinical and preclinical activities, which we expect to drive value in the near term. We are therefore announcing today the elimination of approximately 120 roles at Sangamon in the US, representing 27% of the current US workforce. The restructuring plans plus other planned cost reduction initiatives are expected to result in annualized savings of approximately $31 million. We believe that these changes, in combination with other cost reduction initiatives, will allow us to fund our planned operations for at least 12 months. We will continue to assess ways to reduce our annual operating expenses, consistent with the prioritised objectives and the progress of the company. Alongside these announcements, and with real personal sadness, I share that Andy Ramomar, Executive Vice President of Technical Operations, will be leaving the company. Andy has brought great passion and dedication to Sangwo, Building a manufacturing organization has allowed us to support the advancement of four programs into clinical development. His technical expertise is recognized throughout the industry, and his leadership is known by us all here. He leaves a legacy of technical excellence at Sangamo. Philip Ramsey, our current head of technical development, has been appointed to serve as a head of technical operations effective May 29th. I really look forward to working with Philip as we continue to advance and align our manufacturing capabilities with our strategic priorities. On a very personal level, these decisions have been extremely difficult. Sangam Ho has many brilliant and talented individuals who are and have been committed to our mission. and have been instrumental in helping us achieve so many innovations during the years I've been responsible for this great company. I'm truly thankful for their dedication and for their service to Sangamo. But no matter how difficult these decisions are, as a leadership team, we believe that they are the right decisions and we are committed to acting upon them. They will preserve our future by focusing and redeploying our capital to our most promising projects. I'd now like to turn the call over to our Chief Scientific Officer, Jason, who will share more on the vision for the neurology pipeline.

Jason. Thank you, Sandy, and good morning to everyone on the call. Here at Sangamo, we strongly believe in our scientific capabilities, our platform, and the potential of our programs to help transform the lives of patients. Our zinc finger technology possesses important benefits over other editing modalities being explored. And we are seeing promising evidence from across our clinical and preclinical portfolio. That being said, as you heard Sandy outline, we believe now more than ever in the need to limit the number of initiatives we are undertaking at one time by focusing on advancing our prioritized neurology portfolio, Fabry to phase three, and our TX200 CAR Treg clinical study through phase one, two. I will start by outlining our portfolio of preclinical programs to treat neurological disorders, to dive deeper into why we see significant value ready to be unlocked in these important assets. Our neurology pipeline leverages Sangamo's proprietary zinc finger gene targeting technology, a high precision genomic engineering platform. It is highly versatile, extremely customizable, and very compact. Once delivered, our epigenetic transcriptional regulators are capable of repressing or activating the expression of target genes for therapeutic benefit without the introduction of mutations, breaks, or other permanent changes to the genome. Thus, they are well suited to address neurological diseases. To maximize our probability of success and build long-term value, we have designed a strategy that focuses on diseases that can be treated with the delivery capabilities we have in hand. existing AAV capsids. We are currently focusing on developing novel AAV, we are concurrently focusing on developing novel AAV capsids that we believe will greatly broaden the set of indications addressable with our technology in the future, including high-value neurodegenerative diseases such as Alzheimer's disease. We believe this wholly-owned neurology portfolio has the potential to result in one IND submission a year over the next few years. Today, we unveil the flagship program of our Holyoke neurology pipeline, NAV1.7. Using an optimized zinc finger epigenetic repressor, we will specifically target and seek to reduce NAV1.7 expression in dorsal root ganglions to inhibit pain sensations in diseases of chronic neuropathic pain. Despite being a highly validated target, NAV1.7 has evaded small molecule or antibody therapeutic manipulation due to very challenging specificity issues. By contrast, our zinc finger epigenetic repressors have demonstrated potent and highly selective repression of NAV1.7 expression, up to 99% per cell, paired with a high degree of specificity even among NAV1.7's most closely related receptors. Our initial focus will be NAV1.7 associated small fiber neuralgia. with an estimated prevalence of at least 43,000 patients in the U.S. We believe we can specifically prevent the transmission of nociceptive pain signals to the brain and believe initial success in treating small fiber neuralgia would subsequently enable us to broaden use of this therapy to other neuropathic pain indications, regardless of the cause of pain. Importantly, reducing pain by inhibiting NAB1.7 is not known to be associated with any other neurological side effects and other sensory modalities are not expected to be affected. Detailed preclinical data from this program will be shared via platform presentation on May 17th at the upcoming American Association of Gene and Cell Therapy annual meeting in Los Angeles. We are anticipating an IND submission for the NAV 1.7 program in 2024. Beyond NAV 1.7, we continue to advance our wholly owned neurology program targeting the prion protein for the treatment of Creutzfeldt-Jakob disease. At the prion 2022 conference last September, we reviewed data demonstrating that our approach to targeting neurological pathologies with zinc finger repressors is effective. Our prion targeted therapy reduced the expression of prion by 40 to 60% in the brains of mice, reducing toxic prion aggregates that drive neuronal degeneration. This data, developed in collaboration with the Massachusetts Institute of Technology's Broad Institute, demonstrated that the therapeutic administration of our zinc finger epigenetic repressors significantly extended survival of prion infected mice through to 500 days, the typical lifespan of a mouse. Importantly, the effect was superior to published ASO treatments. This data provides validation of our work in prion disease, but more importantly, for our entire neurology targeted zinc finger epigenetic repressor portfolio. Prion disease represents a group of conditions with a devastating unmet medical need at this time, which we believe our technology can address. This disease is rapidly progressive and always fatal, usually within one year of onset of illness. Our intent is to target symptomatic, hereditary, sporadic, or acquired Creutzfeldt-Jakob disease, which has an incidence of approximately 500 patients per year in the U.S. The impressive data generated to date is fueling our ongoing development of the PREON program, with a potential IND submission expected in 2025. Delivery to the central nervous system is a major hurdle for clinical application of genomic medicine. The blood-brain barrier limits the brain-wide distribution of intravenously administered macromolecules. To overcome this issue, we have developed a proprietary AAV capsid discovery platform called Sifter. Sifter allows us to engineer AAV capsids with the potential for highly improved central nervous system transduction efficiency. Using Sifter, we have identified what we believe are the first of many novel AAV capsids, STAC-102 and STAC-103. which have demonstrated high efficiency delivery to the brain. This capsid innovation work is broadly enabling our entire neurology pipeline, and we expect we'll also provide valuable revenue generation opportunities through potential partnerships. I'm very pleased with the progress we have made and look forward to sharing more about our AV capsids in the near future. With regards to our partner neurology programs, We received notice this quarter that both Biogen and Novartis have decided to terminate collaborations with us. While completely unrelated, these two decisions had an unfortunate coincidental timing coming in the same week. In both cases, these decisions resulted from strategic portfolio reviews seeking to balance value, growth, and risk. This is reflective of broader trends in large pharma to step away from early stage risk and prioritize investment in de-risk late stage and commercial products. While we understand these decisions, Sangmo's focus is bold discovery to create transformational medicines. In pharma, such work is out of favor, as companies look for cost savings. We are pleased with the progress of these programs and look forward to sharing preclinical data from them in the near future, most notably exciting work demonstrating epigenetic zinc finger activator capabilities for the first time. These programs will be returned to Sangamo upon completion of the three-month termination activities. After a comprehensive review of our portfolio, we have recently made the strategic decision to pause these previously partnered programs and instead focus our efforts on our wholly owned pipeline programs. We look forward to potentially revisiting these targets and indications as our SIPTR platform identifies new AAV capsids to facilitate the delivery necessary for success in these indications. Notably, the programs returned to us from Biogen and Novartis have generated $425 million in cash for us and are now significantly more advanced, thereby driving significant future value opportunities for Sangamo and our neurology-focused pipeline. I will now turn the call over to Chief Operating Officer Mark, who will contextualize the broader pipeline and progress in our key clinical assets. Mark.

Thank you, Jason, and good morning, everyone. Starting with Fabry, we remain the leading gene therapy in this space with yet another competitor recently announcing the termination of development. This underscores the need for us to double down and continue working tirelessly to make this medicine available to those living with Fabry disease. As we actively prepare for a potential phase three trial, it's helpful to remind everyone of the market opportunity for this asset. We know that there are approximately 4,000 diagnosed Fabry patients in the United States. as well as many more that are not diagnosed, even with familial incidence of the disease. Of those diagnosed, around 13 to 1,900 are actively on treatment like enzyme replacement therapy, although many struggle with adherence to the regimen. We have successfully recruited naive, pseudonaive patients into our Phase 1-2 study, as well as patients already on ERT, which demonstrates the desire of patients to have alternative and improved treatment options over and above the standard of care. We will therefore continue to appropriately invest in this program to maximize the chances of clinical and commercial success. The compelling data we shared last quarter from the STAR study demonstrated a favorable safety profile and evidence of clinical benefit from strong biomarker data to kidney biopsies and improved SF36 general health scores. Since Q4 earnings, we have dosed to further three patients in the Phase 1-2 study, to achieve a total of 20 patients to date, and we continue to enroll in the study. We strongly believe ST920 is a potential medicine, so we're progressing phase three planning with urgency and plan to meet with the FDA on the proposed study design this summer once we've accrued sufficient data for those discussions. The trial is anticipated to commence in the second half of 2023. and dosing of the first patient could happen as early as the first part of 2024, depending on the regulatory interactions. As a reminder, the expansion phase 1-2, for which we expect to complete dosing in 2023, is not expected to be a gating factor for the commencement of the phase 3, but will provide additional data to support the regulatory package. Now turning to our CAR Treg portfolio, where once again, We're a leader in the field of research and in the clinic. When we acquired TXL in 2018, we gained deep expertise in regulatory T cell biology and married that with our detailed understanding of manufacturing and our experience developing INDs and progressing programs into clinical development. With these factors combined, we believe we are well-placed to maximize the opportunity for CAR Tregs to treat a range of autoimmune indications and are pioneering a new type of treatment modality. The first of the programs, TX200 and HLA A2 mismatch kidney transplantation continues to move through the clinic. This quarter, we dose the third patient in cohort one and all patients continue to do well. Preparation for the second and higher dose cohort is actively progressing and we have additional patients in pre-screening who continue to enroll. As we outlined on the last quarterly call, We've been working to accelerate the pace of enrollment in this study. I'm pleased to announce that we've received positive initial feedback from two European agencies required for the enhanced trial design that will accelerate dose escalation. We're also on track to share clinical data from cohort one by the end of 2023. As part of our sharpened focus, we plan to prioritize the investment of our near-term autologous CAR-T reg portfolio And this has resulted in a decision to transition all allogeneic research activities from the United States to our Valbonne France facility, to cease cell manufacturing in our Brisbane, California facility. While allogeneic capabilities will be important to the long-term development of the CAR Treg platform, it's important that our resources are directed towards advancing TX200 at this time. Finally, I want to reiterate two other important components of the story that we expect to be value drivers for the company. The first is duroc-toco gene phytoparpovac, an investigational gene therapy we're developing with Pfizer for patients with moderately severe to severe hemophilia A, currently in phase three. Dosing is complete for all patients required to complete the primary analysis, and Pfizer continues to work toward a pivotal readout expected in mid-2024. Fraser anticipates the potential BLA and MMA submissions in the second half of 2024, which if completed would generate a significant milestone payment. As a reminder, this partnership agreement allows for a potential milestones of up to 240 million and up to 14 to 20% in potential royalties. The other important potential value driver is of our portfolios innovative new caps that Jason outlined earlier. and which serves as a resource to address the issue of delivery to places like the central nervous system. We recognize the importance of unleashing the potential of new engineered capsules as enablers of genomic medicines, both for our own programs and those of potential partners, and are making significant progress in addressing delivery to a range of previously inaccessible areas. We see this asset as a source of competitive advantage and also potential revenue, and are hopeful to share some exciting updates about our CAPSID program over the coming months. I'll now turn it over to our Chief Financial Officer, Prathusha, for an overview of the financial results. Prathusha?

Thank you, Mark, and good morning, everyone. Sangamo announced preliminary first quarter financial results yesterday as we work towards completing customary quarter-end close and review procedures, including the evaluation of non-cash charges related to impairment of long-lived assets. Our preliminary results are as follows. Revenues for the first quarter ended March 31, 2023, are estimated to be approximately $158 million, compared to $28 million for the same period in 2022, reflecting an increase of $130 million year-over-year. This was primarily driven by the return of assets from Bryogen, requiring us to accelerate approximately $121 million of non-cash revenue from the related upfront fees. Total GAAP operating expenses for the first quarter are estimated to be in the range of $120 million to $140 million compared to $73 million for the same period in 2022, reflecting an increase of $47 million to $67 million year-over-year. This was primarily driven by certain non-cash charges, including goodwill impairment of $38 million and estimated impairment of long-lived assets of up to $20 million. These impairments were driven by several factors, including termination of significant partner agreements noted previously and lower market capitalization, similar to what other companies in our space have observed. We ended the quarter with approximately $241 million in cash, cash equivalents, and marketable securities, which is expected to fund the company for at least the next 12 months. This represents a decline of approximately $66 million from the prior quarter. Furthermore, the headcount reductions announced today, in combination with other planned cost reductions, are expected to result in annualized savings of approximately $31 million going forward. We continue to assess ways to further reduce our annual operating expenses and to manage Sangamo as a highly focused organization driving towards our prioritized two neurology assets, Fabry and TX200. As a result of these changes, our previously announced 2023 non-GAAP operating expense guidance range of $275 to $295 million is now obsolete. We expect our current estimate for 2023 to be in the range of $240 to $260 million. This range excludes certain non-cash charges, including estimated goodwill write-down, impairment of long-lived assets, and stock-based compensation expense. Sangam was assessing ways to further reduce operating expenses in line with our strategic priorities, and the readouts from key programs will continue to drive decisions and investments in the coming months. In parallel, Sangam was committed to creating long-term value for our shareholders, and we will continue to proactively and intensively explore avenues to raise additional capital, including through partnerships. I will now turn the call back to Sandy for closing remarks. Sandy?

Thank you, Pratusha. Today, you heard that Sangamo is being responsible, responsive, and nimble in order to position ourselves for future success. There's a lot to look forward to, with Haemophilia A marching closer to a potential BLA submission. Today, we announced our wholly-owned neurology portfolio centered around NAV1.7, with an IND submission anticipated in 2024, leveraging our innovative zinc finger technology and underpinned by a capsid development capability that we believe can provide value in the near and long term. Our market leading Fabry program advances towards a potential phase three trial expected to begin at the end of this year. And our first in class CAR T reg technology is being assessed in the clinic through TX200 with initial data from cohort one expected by the end of 2023. I am very thankful to our leadership team and all my Sangamo colleagues for their hard work and dedication to our mission. I'd like to close by expressing my hope and excitement for the future that lies ahead for Sangamo. So at this time, we'd like to open up for questions. Operator. Please open the line for questions.

Certainly. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And one moment for our first question. And our first question will come from Ben Burnett of Stiefel. Your line is open.

Hey, thank you very much. I had a question regarding the Fabry program. I was wondering if you could provide more color on the potential phase three design being proposed to the FDA. And is there any expectation that Fabrazyme would be needed as a comparator? And I guess if so, any thoughts as to whether or not a non-inferiority study would suffice for approval in the U.S.?

Ben, thank you for your question. I'm going to pass that one on to Natalie.

Yeah, hi. Thank you for the question. We are preparing the interaction with the FDA right now. We hope to have a meeting this summer, and we will comment on the phase three design and potential agreement with the FDA after the call.

Natalie, what's gating our going to that interaction?

Some additional data from our top dose in the phase one to trial that we are.

So it's simply just the time of collection of data? Absolutely.

Absolutely.

Okay, that makes sense. I appreciate that. And maybe if I could also just ask a question, like a biology question, actually, on the prion disease program. I think the way the slide's depicted, as we understand it, prion proteins, I guess, are continually supplying material for the production of these larger misfolded aggregates. Is there anything known about whether aggregates will be cleared once the prion source is turned off? What have you unveiled there?

Jason, can you help with that, please?

Yes. There is evidence that if the source of the prion protein aggregates, the gene, the prion gene, is turned off that aggregates do diminish. So we believe that this approach will have therapeutic potential. And indeed, the data that we presented at PRION 2022 showed great effects in the preclinical mouse models. So we're very excited about this program.

And Jason, can you just summarize that data quickly about the difference in lifetime of mice and when the dosing was given?

Sure. Sure. So the model that was used in that study is considered a gold standard for understanding Freon disease. And we took two approaches there, one where the mice were inoculated with the prime protein which initiates the disease and simultaneously treated with the zinc finger repressors. But we also took an approach where the mice were inoculated and then the disease was allowed to start to develop and then a therapeutic application of the repressors was used. And in both cases, our repressors extended very significantly, extended the lifespan of the mice. And we compared this to data that has been published on ASOs. And really an impressive part of this was how much improved our zinc finger repressors were at extending the mice lifespan. That's super interesting.

Thank you.

And one moment for our next question. Our next question will come from Greg Harrison of Bank of America. Your line's open.

Hey, good morning. Thanks for taking our question. Maybe you could give us a little background on just what led to the choice of NAV 1.7 as the target of focus, and how could your approach be differentiated from others like the small molecule blockers under development, you know, like for our Texas program?

Greg, thank you for the question. And I'm going to pass on to Jason again to talk us through the science. But for those of us that have been in industry for any period of time, we've seen the number of companies that have tried to drug NAV1.7 and struggled with the fact that small molecules and antibodies that work on NAV1.7 and give clear benefit in pain interact with similar proteins such as NAV1.6, NAV1.8 and cause side effects. So Jason, why do we think our approach is so fundamentally different?

Yeah, so what's so exciting about NAV1.7 is that there is very clear genetic data from human populations that show that this molecule is a key regulator of pain sensation. So it has a very clear genetic, it's genetically implicated in diseases. But as Sandy pointed out, the problem with targeting NAV1.7 has been that it's part of a family of very closely and structurally similar receptors, and small molecule approaches in particular have been unable to specifically target NAV1.7 without involving other receptors, and this creates issues of specificity. So what's unique about our zinc finger program is that we can design an epigenetic repressor that very specifically targets NAV1.7 without without affecting the expression of any of the other closely related receptors. And this allows us to do what small molecules or antibodies can't do, which is only target NAF1.7 and achieve this reduction in pain transmission without affecting the other processes that are regulated by the closely related receptors.

I want to just underline that and take it to a kind of simpler level. The small molecules target the protein, what we do is we target the DNA. And the DNA target for NAV1.7 is completely different from all the other NAVs. And therefore, we do not have this problem of specificity because it's the DNA that we target and not the protein. Does that help, Brett?

Yeah. Yeah, that's super helpful. If I could sneak one more in. Just curious, you know, now that you're focusing you know, on the 1.7 program and other earlier stage programs like CAR T-REG. Will you seek partners to help fund development and just broader, what's your strategy for funding the pipeline in the more medium to longer term?

That's a very fair question. Mark, can you help with that?

Sure. Hi, Greg. Thanks for the question. You know, as we've communicated before, We're excited about our technology, and when we get approached by potential partners that are interested in it, we really ask ourselves a couple of questions. One is, can the partners help us accelerate the program faster to patients by bringing resources, expertise, and capabilities? And if they do, then we take a serious look at that. I mean, we've got a strong history over the last several years in terms of partnerships that have brought in about $815 million in upfront. And, you know, we've seen a lot of progress as a result of those partnerships, you know, including Pfizer's, you know, advancements that I commented on earlier. So we will look at that.

Great.

Thanks for taking the question.

And one moment for our next question. Our next question will come from Gina Wang of Barclays. Your line is open.

Thank you. I also have one question regarding NAV 1.7. I think it's also expressing actually quite different tissues as well, like pancreatic beta cells and olfactory sensory. There are a few other parts of the body. So wondering, you know, several questions. One is what is the advantage or disadvantage a long-term incubation and what is your route of administration and how good is the selectivity regarding the specific organ so there's three questions gina that i heard one is about root of administration

One is about specificity, which I think we partly addressed. And the other one is about long-term benefit to the patient. So between Jason and Natalie, can we address this? So Jason, do you want to talk about the specificity, please, and the route of administration?

Sure. Thank you for the question, Gina. I think there are two important points about the specificity. This is where the power of our zinc finger genomic engineering platform really comes to the front. We are able to design zinc finger epigenetic repressors that are highly specific for NAV1.7 and avoid repression of any of the closely related receptors. But in addition to that, in the AAV vector that delivers this cargo, we also can use promoters that are specific for the cell type that we're interested in driving that repression in. So through the combination of both of those mechanisms, we're able to achieve very selective expression in the tissues that we're interested in targeting, specifically here, the dorsal root ganglion. So that's really the key to how we can achieve really exquisite specificity for both the target and the cell type is through the combination of our zinc finger gene targeting capabilities and our promoter engineering capabilities. In terms of delivery, for the dorsal root ganglion, we can achieve delivery through systemic administration. And so that is the approach that we are taking.

Through systemic administration?

Sorry, excuse me, intrathecal administration.

Natalie, do you want to comment on that?

Yes. So, yeah, we are targeting a population of patients with small fiber neuropathy that have chronic diseases. So, we hope that the treatment will last for a long time. It's a one-time single intrathecal bolus injection of the product. And we, you know, intend to do a dose escalation trial that will allow us to target the appropriate dose for reducing the pain in those patients.

And these are patients, this group that we're targeting as our first population are people with intractable pain. Their lives are dominated and ruined by their intractable pain. We've had them come visit us with the company. By doing it intrathecally, by doing it with a promoter that's specific, an AAV that is only going to appear around the dorsal root ganglia, and by zinc fingers that will only repress a single gene, we get an enormous specificity benefit. We will show results at ASGCT about animal experiments that show the benefit on pain. And we really feel that there's a route forward here for what is an important, significant medical unmet need.

And importantly, I think I may add that reducing pain by inhibiting NAB1.7 is not known to be associated with any neurological side effects and other sensory modality are not expected to be affected. So very specific targeting. Yeah.

So yeah, my question also, like a long term inhibition, you know, what could be the disadvantage there?

So we will do this. Gina, you know as well and you know how seriously we take patient benefit and patient safety. And so we will start it at the appropriate dose agreed with the agency and gradually increase it. But I cannot... importantly enough, how seriously impacted these patients are by their pain. And so for them, this is an enormous advantage. And we've consulted with them. We've had them come into the companies. And they see this as a really promising future medicine.

Thank you. One moment for our next question. Our next question will come from Maury Raycroft of Jefferies.

Your line is open.

Hi, good morning. Thanks for taking my questions. Maybe as a follow-up to Gina's question, you mentioned the cell-specific promoter and intrathecal delivery. Can you talk more about capsids as a gating factor for program advancement? I guess I would like to clarify that for the previously partnered Biogen and Novartis programs, One of the reasons why those are paused for now is primarily because of AAV delivery limitations. And will you use a novel Sangamo capsid for NAV1.7 and prion or a conventional capsid like AAV9 because you need less blood-brain barrier penetration and distribution for those targets?

Good morning, Maury. Thank you for the question. So we're not revealing which capsids we're using for which diseases at this time. but we believe that we have a solution for each of the ones that we're advancing. Talking about the biogen Novartis programs, for example, Alzheimer's, the challenge for that is ensuring that we have widespread brain coverage, particularly for the regions that are most impacted by Alzheimer's in an intravenous manner, we believe. And And so we've paused that program. It has advanced significantly over the three years it's been with Biogen. We are making great strides with our capsid evolution. We are watching with interest other people's capsid evolution change. And when there is progress, and I truly believe there will be progress in a blood-brain barrier crossing capsid in the soon future, those assets suddenly become very attractive for us or for other people.

Got it. That's helpful. Thanks for taking my questions.

One moment. Thank you, Maureen.

For our next question. And our next question will come from Yanan Zhu of Wells Fargo.

Your line is open.

Hi. Thanks for taking our questions. On the NAV 1.7 program, just wondering, What percentage of suppression of expression are you driving for and expecting to have benefit? And also, are there advantages for using a transcription repressor approach as opposed to a straight knockout approach since you have both technologies?

Thanks. Jason, this sounds like a technical question for you.

Yeah, thank you for the question. So maybe I'll start with the second question. We are really excited about our epigenetic repression platform, and we believe that it's really optimal for this particular approach for a few reasons. One, because we are able to regulate the genes without the introduction of double-stranded breaks or any type of mutation. And we're able to do that very specifically and very potently. So we've achieved what is essentially 99% close to quantitative repression of the target gene using this approach. And we believe it will be stable for long term. So we're very excited about the approach and believe it's superior, especially in the CNS, where cells are non-dividing, than using nucleases, for instance, or any kind of approach that modifies the DNA permanently. Regarding how much repression is needed, I think there's two things to be considered there. There's the per cell repression and the coverage, the number of cells that are being repressed. What's really great about our platform is that on the per cell basis, we can design repressors that repress gene expression to the amount that we think is needed to achieve the biological and therapeutic effect. And so we've identified repressors that are very potent at the single cell basis. And then through dosing and animal models, we will explore what level of repression across of multiple cell types is necessary to achieve the appropriate therapeutic reduction in pain. And that will be done by dosing in preclinical models to understand, you know, what range of doses we want to explore, and then we'll take that into patients.

Got it. Thank you. And maybe also a question. Maybe two quick questions. One on the Fabry's disease program. Could you comment on whether those patients who were off ERT remain off at this moment? Or should we have to wait until the next data update to hear about that? Thanks.

Natalie, can you update that?

Yeah. So far, all the patients that have been withdrawn from ERT are still off ERT.

Very helpful. And lastly, for the TX200 program, will you move to a higher dose sometime this year? Because it sounds like, I think the first cohort is designed to have three patients, and it sounds like you have dosed all three. So could you talk about potential decisions for those escalation there, and yeah, I think, yeah, that's the question. Thanks.

Bettina, can you help with that one?

Yes, absolutely, and thank you for the question. So, we're extremely happy to have concluded enrollment and dosing in cohort one for TX200. We plan to have a safety monitoring committee meeting coming up very shortly in May so that we can then move on to the next cohort. And we already have patients lined up. And we're excited by this. We have also recently engaged with regulatory agencies in Europe who are representing the countries where we're conducting the trial. that have agreed to an optimized design of our dose escalation protocol. And so this means we hope to accelerate dose escalation. And then we'll plan to share initial data from cohort one by the end of this year.

Got it.

Thanks for all the updates. One moment for our next question. Our next question. We'll come from Luca Izzi of RBC.

Your line is open.

Oh, excellent. Thanks for taking our questions. This is Lisa on for Luca. Maybe just one here first on the restructuring efforts announced today. Just wondering what other initiatives are being explored to either preserve capital or raise funds? And have you thought about potentially monetizing the royalty stream for hemophilia A?

Thank you for the question. The restructuring was a very important part of our announcement today. Patricia, can you comment on this?

Yes, Sandy. So today's restructuring was a difficult decision, but it was in line with the strategic priorities we outlined on the call. And we'll continue to assess ways of running Sangamo as a leaner focused organization. As far as evaluating the different levers for extending our cash runway, as a clinical company, we're actively pursuing different opportunities for financing, and we will look at different avenues, including the royalty monetization.

All right.

Thank you.

That's helpful. Go ahead, Sandy.

It's a significant return or revenue for Sangamo in the future. And we need simply to be thoughtful about when we access that revenue. The closer it gets to submission and hopefully marketing of an important medicine, the more valuable it is. And so that's the balance that Prathusha is constantly looking at about near-term cash versus long-term value, all of which will lead to return for our shareholders. That's right.

That's helpful. Thanks. And maybe just one on the Tregs, more of a big picture question. You know, we're going to get some data maybe later by year end. Just thinking, you know, what are going to be the next steps for Tregs? Should the data be positive? Will this accelerate your thinking on moving towards an autoimmune indication?

Mark, can you help us think about the Tregs, please?

Excuse me. Thanks, Lisa. Yeah, I mean, as we talked about, TX200, we think, is a perfect biologic model. to assess the performance of Tregs. And so we're really excited about that and we'll be looking forward to providing an update, as we mentioned, towards the end of the year. We do have our preclinical programs. They're continuing to progress. MOG for multiple sclerosis and IL-23 for inflammatory bowel disease. Both of those programs, as we've talked about, we're focusing primarily on the autologous to ensure we can move them forward towards INDs. And so we're very committed to that. and excited to continue this.

We've got a lot of, you know, a lot of focus to execute against the preclinical work on both of those assets as we continue to execute on the TX200 trial. Thanks.

Thanks for taking our questions.

And one moment for our next question.

And our last question comes from Patrick Trucio of HD Waring-Wright. Your line's open.

Thanks. Good morning. I just have a few follow-up questions from a few that had been asked earlier. The first was just I was wondering if you can just talk a little bit more about the SIPTR platform and how it enables selection of CNS tropic AAV capsids. And in particular, you know, with regard to these neuro programs, what are you actually looking for in the identification selection of the engineered AAV capsids for enhanced CNS delivery. And then just separately, just with the CAR-T reg, I'm just wondering, you know, with the intention to prioritize the near-term autologous portfolio, can you provide some additional details around this decision? How it, you know, will this perhaps, you know, accelerate the INDs for the broader indications like MS and IDD?

So let's answer, Patrick, thank you for your question. Let's try and answer this in two ways. Jason, can you take capsids, please? And Mark, can you talk about T-Rex, please?

Sure. Thanks for the question, Patrick. So we're really excited about the work in our capsid evolution group. I guess I can take the question in two different ways. There's the actual technology that we're using to develop and evaluate capsids, but there's also the approach that we're taking to decide what we're looking for in capsids. And so on that second component, I want to emphasize the work that is done uh as a collaboration between our development group the neurologist and our development group and our scientists in in research to identify indications that we think are optimal for being addressed with the technologies that we have specifically our our zinc finger epigenetic platform so once we identify diseases where we think we can really move the needle We think about the biology and the anatomy and where in the brain or in the nervous system needs to be targeted. And so for different diseases, those are different areas of the brain. Sometimes they're areas of the peripheral nervous system. And so once we identify where we want to target, then we think, okay, what is the best capsid to do that? And we have a team that is developing capsid libraries that are both targeted, so we evaluate specific pathways that are known to facilitate transport over the blood brain barrier. And we have capsid libraries that are more randomly diversified, and we can evaluate both of those in cells and animal models to look for novel capsids that produce high-frequency transduction, highly efficient transduction in the areas that we're interested in targeting for specific indications. And so that's the approach that we use to look for novel capsids. So we have an idea of a whole set of indications and areas of the nervous system that we're interested in targeting, and we're using these libraries. that can be delivered. We have some libraries that are designed to be delivered systemically, and we have other libraries that are designed to be delivered by direct injection. And we use both of those approaches to look for capsids that we think can get us to the therapeutic effect that we need. And once we have one of those in hand, then we're obviously excited to move forward.

So Patrick, on the T regs, I mean, I want to frame this in a couple of ways. One, as we all know, access to capital these days is a challenge. And as a result of that, and with the burn rate that we've had, we've had to really focus on prioritizing. And when we have to prioritize, it means we have to make choices. And sometimes there are things we would not choose to do. And in the case of the T regs, we had to make a choice to really focus on TX200 and the execution of that trial to proof of concept and keeping the MOG and IL-23 preclinical auto programs, which are a little more advanced, moving forward. So we've had to make a difficult choice to deprioritize the aloe work until the future. But I want to say that our investors also say to us that they're very interested in the Tregs and they would love to invest in the Tregs. And so we're assessing how best we can set ourselves up to do that. But in the meantime, we're also looking and having conversations with interested parties around partnerships. If we ended up having a partnership come in, one of the things we'd want them to do is bring enough money and expertise in that we can restart those programs and accelerate them again. But it's purely a choice that we've had to make, unfortunately.

That's helpful. Thank you very much.

And I'm showing no further questions. I would now like to turn the call back over to Louise Wilkie for closing remarks.

Thank you once again for joining us today and for all your questions. As a reminder, you can access the earnings release and presentation on the investor relations section of the Sangamo website. We look forward to keeping you updated on our future developments. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.