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.