Sangamo Therapeutics, Inc.

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 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, Louis Wilkie, Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you. Good afternoon. 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 Durrababu, Chief Financial Officer, Jason Fontenot, Chief Scientific Officer, Natalie Dubois-Stringfellow, Chief Development Officer and Lisa Roy Care, 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 presentations page. This call includes forward-looking statements regarding Sangamo's current expectations. These statements include, but are not limited to, statements relating to the therapeutic and commercial potential of our product candidates. the anticipated plans and timelines of Sangamo and our collaborators for regulatory submissions, initiating and conducting clinical trials, screening and dosing patients, and presenting clinical data, advancement of our product candidates, anticipated feedback from and interactions with regulatory agencies, advancement of preclinical programs to the clinic, our strategic reprioritization and the anticipated benefits thereof, the sufficiency of our resources, cash runway, and plans to seek additional capital, our estimated financial guidance for 2023 and estimates of 2024 operating expenses, 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 of the SEC, specifically on our annual report on Form 10K for the fiscal year ended December 31, 2022, as supplemented by our quarterly report on Form 10Q for the quarter ended June 30, 2023, 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, Sandy McRae.

Thank you, Louise, and good afternoon to everyone joining the call. The second quarter has been a busy one for Sangamo, and I'm pleased to share some exciting clinical and preclinical progress as we advance our mission to translate groundbreaking science into genomic medicines that transform the lives of patients afflicted with serious genetic diseases. Our visionary culture has been a key driver in our success to date, alongside our innovative approach to genomic medicines, both which I believe will continue to drive Sangamo forwards towards the future. Starting with our clinical programs, we continue to make good progress in our Phase 1-2 STAR study for Fabry disease, having now dosed a total of 22 patients. Importantly, we recently received productive written feedback from the FDA on our proposed Phase 3 trial strategy. While we're seeking some specific clarifications, as it stands today, we feel we have a regulatory path forward to a potential Phase 3 trial. I'm enormously proud of the team for the work to get us to this point. We're refining our trial strategy and expect to submit a proposed phase three protocol to the FDA as early as the end of 2023. Needless to say, our operations team is driving forward with the logistics of these studies in parallel. We have also made good progress advancing our wholly owned clinical asset, TX200, our CAR Treg cell therapy candidate, for renal transplant rejection. Based on the encouraging safety data to date, we received endorsement from the Safety Monitoring Committee to progress to the next dose cohort. We are encouraged by the rate of patient enrollment we are seeing in this study and are pleased to be receiving initial approvals from European regulators for an updated study protocol that we believe will enable us to accelerate more quickly through the dose escalation phase. The underlying value of Sangmo is our zinc finger platform, which we believe is at the cutting edge of genomic medicine. Jason will share more context on the importance of our science and our neurology pipeline shortly, along with some of the exciting scientific advancements we present this quarter on our two lead neurology programs, our AAV capsids and our platforms. These scientific advancements are at the heart of the three business development deals that we recently signed and that Mark will elaborate on shortly, all of which underscore the important role SAGMA plays in helping to progress the broader cell and gene therapy industry forward. We are proud to be part of the important collaboration that is necessary within the field in order to best serve patients and are happy that our genome editing and payload delivery technology is being recognized by the broader industry. Lastly, I'd like to take a moment to welcome Dr. Lisa Roycair as our new Chief Medical Officer. Lisa joins us with strong experience as a physician and a drug developer. I'm delighted to have her as a strategic member of the leadership team focused on advancing our clinical and preclinical programs, and I am confident she will continue to bring great value to Sango as we progress our potential medicines closer to patients. We are proud of the strong progress we have made this quarter. Nevertheless, we recognise the importance of bringing in additional funding, as well as further reducing our operating expenses. This is a top priority for me and the rest of the leadership team and remains at the forefront of decision makings each and every day. While we stay committed to execution and our prioritised clinical and preclinical activities, we look forward to providing updates in these areas at the appropriate time. I'd now like to turn the call over to our Chief Development Officer, Natalie, who will share more on our clinical programs. Natalie?

Thank you, Sandy, and good afternoon to everyone on the call. It is my pleasure to provide an update on our clinical program over the last quarter, beginning with Fabry disease. In May, we announced that the US FDA granted fast-track designation for ST920, our only-owned gene therapy product candidate for the treatment of Fabry disease. Fast-track designation is intended to facilitate the development and expedite the review of new therapeutics and reflect the substantial unmet medical need for patient with Fabry disease. Receiving this important designation reinforces the encouraging data we have presented from our phase one two-star study to date and demonstrate the desire from regulator to provide Fabry patient with improved treatment options. The phase one two-star study continued to advance with 13 patients now dosed in the expansion cohort for a total of 22 patients dosed overall. We're making good progress in enrollment with strong demand from sites internationally. We anticipate presenting additional Phase I and II data in early 2024. This quarter, we submitted the briefing book describing our proposed Phase III trial strategy to the FDA and recently received a written response, something which is increasingly common with the agency. We were pleased with the clarity of the feedback and feel encouraged that we have a regular pass forward for potential phase three trial and for Fabry disease patients. While we cannot disclose full detail of the trial strategy at this time, I can share that we are currently designing a trial that is intended to maximize the potential addressable patient population for ST920 across two studies. Based on the FDA feedback received, We do not expect a head-to-head comparison with enzyme replacement therapy to be required in the naive and pseudonaive patient study. We're seeking additional information from the FDA on specific point and on some specific time expect to submit a protocol, phase three protocol to the FDA as early as the end of 2023. We hope to be able to provide further clarity on next step in the coming quarter. Moving to the Phase I-II steadfast study of our only-owned TX200 CAR-T reg cell therapy candidate for the prevention of immune-mediated rejection in HLA-A2 mismatched kidney transplantation from a living donor, we made some significant progress this quarter. A total of six study sites across four countries are now open and actively enrolling patients with strong interest being seen across our study sites. The safety monitoring committee met in May to review data from cohort one, and I'm pleased to share that they endorsed moving to the next higher dose level based on the encouraging safety data from the three-dose patient and the two control patients. Preparation for the next dose cohort actively progressed. We have successfully manufactured the product candidate for patient four, the first patient in the second cohort, and the patient has received their kidney transplant, is expected in the third quarter of this year. In parallel, we continue to pursue opportunity to accelerate dose acceleration with regulators. Based on the encouraging safety data to date, we feel it is best for patient to accelerate as safely and quickly as possible through to the highest dose cohort, where the dose can be more than 20 times greater than the one used in cohort one. We have received scientific advice and submitted an amendment study protocol to regulatory authority in Europe. We are thrilled to have already received our first full country approval. We intend to share initial data by the end of the year. Finally, puractococcin-fetalparvovac, our investigational gene therapy we are developing with Pfizer for patients with moderately severe to severe hemophilia A, currently in phase three, continues to progress. As we outlined last quarter, dosing required for primary analysis incomplete, and Pfizer continued to work towards a pivotal readout expected in mid 2024. Pfizer anticipate potential BLA and MMA submission in the second half of 2024. I will now turn the call over to our Chief Operating Officer, Mark, who will discuss business development update from the quarter.

Mike thank you Natalie and good afternoon everyone a core component of the Sangamo business strategy is to drive value by advancing our wholly owned pipeline while simultaneously strategically leveraging partnerships that create additional value we have made a deliberate decision to provide biotech and pharma partners with access to our technology when they are working in areas outside our strategic focus or when they can bring added value of their own expertise or proprietary technology. This advances medicines towards patients more quickly, and this is our priority, but it also accelerates learnings that we can apply to our own programs and technology and brings important non-dilutive funding to the company. The partnership world is opening back up in biotech, and as a result, our business development team has seen an uptick in interest. In the last two months, we have been excited to announce three strategic partnerships that not only highlight the potential value of our technology, but also the incredible work going on with the related fields. These transactions reflect continued interest in our technology, and importantly, both genome editing and payload delivery are being perceived as something Sangamo can offer. We feel encouraged by this progress and feel honored to be part of such innovation for the betterment of patient lives. As outlined at the last quarter earnings, our neurology platform is at the heart of our prioritized strategic focus, and we're very proud of the progress that we're making through our own AAV Capsid engineering platform called Sifter, the advancement of which is essential to solve the current challenges of delivery. Capsids are critical to unlocking the therapeutic potential of gene therapies and our entire genomic engineering platform. Last month, we granted rights to Prevail Therapeutics, a subsidiary of Eli Lilly, to access certain Sangamo proprietary cerebral spinal fluid administered capsids for the evaluation of neurologic targets, which we are not planning to study ourselves. Sangamo earned an upfront payment, and if Prevail exercises its option for all targets, and a Prevail product is approved in the U.S. and Europe for each target, Sangamo would also become eligible to earn exercise fees as well as developmental and commercial milestones of approximately 1.2 billion in addition to tiered product royalties. This agreement highlights the potential value of our AAV capsid engineering program, not only for our wholly owned programs, but also as an opportunity to work with partners to broaden the scope of the diseases addressable by AAV gene therapy. We are thrilled to work with Prevail and evaluate our cerebral spinal fluid administered novel capsids for neurological targets and are pleased that the other genomic medicine companies recognize their potential value. Each target indication is its own specific brain coverage requirements. So there's no one size fits all capsid to address all indications. That's why at the end of June, we also shared that we entered into a license agreement with Voyager Therapeutics in connection with our epigenetic regulation treatment of prion disease. We are combining Voyager's intravenous administered delivery capsid with our zinc finger transcriptional regulators that we believe can specifically and potently block expression of the prion protein, which is the pathogenic driver of prion disease. Our goal is to bring this potential treatment to patients with this devastating disease as soon as possible. And based on the animal data, we believe Voyager's capsid is the right one to target the specific parts of the brain that we believe are relevant to prion disease. This agreement reflects Sangamo and Voyager's shared commitment to addressing unmet need of neurologic diseases and gets us one step closer to our anticipated IND submission in 2025. Given the rapidly progressing and fatal nature of prion disease, we in Voyager felt it was important to work expeditiously to bring a potential new medicine to patients. This mutual sense of urgency led to the decision to move forward with Voyager's capsid for prion While our own significant efforts to discover capsids with broad brain delivery will be advanced for other Sangamo programs. Finally, last month we announced an agreement with Chroma Medicine, under which Chroma will evaluate select zinc finger proteins for epigenetic editing. Leveraging our technology platform in combination with Chroma's epigenetic regulators demonstrates the power of companies joining forces to advance the development of potential medicines. Sangamal will be providing Chroma for evaluation specific zinc finger proteins designed to target the specified collaboration genes which are outside of the central nervous system and our strategic focus in exchange for upfront technology access payment. If Chroma exercises its options for any or all targets, Sangamal would become eligible to earn an option exercise payment in addition to development and commercial milestones and tiered product royalty payments. We are very happy to explore combining our zinc finger technology with Chroma's capabilities and believe this work will further validate the importance of zinc fingers as an ideal platform to support epigenetic editing. The importance of these partnerships stretches beyond potential monetary returns. They're also crucial and critical to unlocking the full value of our scientific assets. We remain committed to our shareholders and will continue to seek strategic collaborations that enable us to leverage our technologies in order to support our future plans. I will now turn the call over to our chief scientific officer, Jason, for an overview of the preclinical pipeline. Jason?

Thank you, Mark, and good afternoon, everyone. It is great to have this opportunity to highlight the work from Sangamo Research and our preclinical pipeline in the past quarter. Today, I will specifically focus on the exciting progress we've made in advancing our neurology-focused in vivo genome engineering therapeutics pipelines. Our strategy to focus on developing transformative medicines for neurological diseases was born out of a decision to maximally leverage the core strengths of the Sangamo scientific team and the most differentiated aspects of our science and technology platforms. Our goal is to develop transformative genomic medicines that are both safe and efficacious. To achieve this goal, our AAV-based genomic medicines require two critical factors for success. a highly precise and potent cargo, namely our zinc finger epigenetic regulators, and an AAV capsid that can deliver this cargo safely and effectively to the relevant tissues and cells. Both are crucial for success, and we believe Sangamo is uniquely positioned with this combination of cutting-edge technologies. Innovating in these areas is a major focus of Sangamo's research engine, and as evidenced by the data we presented this quarter at ASGCT and elsewhere, and by the recent agreements with Prevail Therapeutics and Chroma Medicine, we are making tremendous progress. This progress is bringing us closer to potentially transformative genomic medicines. This progress is also being recognized by both the scientific field and by others in the biotech and pharmaceutical industry. The cargo component of our AAV-based genomic medicines are from our zinc finger genomic engineering platform. Sangamo's genomic engineering platform has a set of unique properties that in combination allow us to create potential therapeutics that would simply not be possible using CRISPR-based systems. Our zinc finger transcriptional repressors are derived from naturally occurring human genes, are compact enough to be delivered, to be packaged and delivered, and even multiplexed, complete with cell type or tissue-specific promoters in AAV viral vectors, and are able to exert their therapeutic properties without cutting, mutating, or otherwise damaging the genome. I'm excited by the progress and the new data we are seeing in our preclinical neurology pipeline. Our recently announced NAV1.7 program aims to develop a transformative genomic medicine to treat neuropathic pain using our zinc finger-based epigenetic repressors targeting the NAV1.7 gene. We're particularly excited about the number of patients that might benefit from this potential medicine. There's an estimated prevalence of at least 43,000 patients in the U.S. for our lead indication for NAV 1.7 associated small fiber neuralgia. And we believe that there is significant opportunity to expand into other areas. This quarter, we presented a comprehensive package of data evaluating our zinc finger transcriptional repressors in this program. This work demonstrated potent and specific repression of NAV1.7 expression at both the RNA and protein level, and culminates with data from a neuropathic pain model in mice, demonstrating that in vivo repression of the NAV1.7 gene reverses pain hypersensitivity. We have also identified human-specific lead candidate zinc thinker transcriptional repressors that demonstrate potent repression of NAV1.7 gene expression in human iPSC-derived neurons. Importantly, we have found essentially no off-target activity, including no repression of any of the closely related NAV channels. I'd like to highlight this amazing selectivity versus other NAV family members is a major differentiator of our program and why we believe it has the potential to be both efficacious and safe. Consistent with this, our most recent data from nonhuman primate models with human-specific lead candidates showed significant repression of NAV1.7 gene expression in the dorsal root ganglion, and all analyses continue to support progression to IND-enabling nonhuman primate studies. We are on track for an expected IND submission for this program in 2024. In animal models of prion disease, our other lead preclinical program, we have shown that our zinc finger transcriptional repressors significantly reduce expression of the prion protein in the brain safely extend the lifespan and limit formation of toxic prion aggregates. The final selection process for human therapeutic lead candidates is in progress and plans for IND enabling studies are well underway. And as Mark mentioned earlier, our recently announced license agreement with Voyager provides a capsid that we believe will help us advance this important program forward as quickly as possible. For our NAV 1.7 and prion programs, we've chosen capsids that are available to develop today. To maximize the delivery of our epigenetic modulators to the appropriate sites in the nervous system for future programs and some of the most valuable neurology indications, a new and improved generation of AAV capsids is needed. Identifying such capsids has been a focus of paramount importance for the entire AAV field in recent years. Leveraging our longstanding commitment and experience in the AAV delivery, we are focused on solving delivery to the central nervous system for a multitude of neurologic targets that need both convenient and broad delivery to the brain. Specifically, we have developed a multiplex transcription-dependent directed evolution capsid engineering platform called SIFTR. Using this unique selection platform, we are seeking to generate and identify novel AAV variants that exhibit significantly improved either widespread or region-targeted transduction and expression in the CNS when delivered by either direct injection or through the blood-brain barrier when delivered via the blood. In this last quarter, we presented data describing the identification of multiple novel AAV capsids exhibiting characteristics consistent with enhanced blood-brain barrier transit and showing substantial improvement over AAV9 when delivered via blood circulation in non-human primates. Also this quarter, we presented new data describing performance optimization experiments that identified second-generation variants of our cerebral spinal fluid administered STAC102 capsid that mediate an additional five to tenfold increase in CNS delivery in nonhuman primates. I would also like to highlight that based on our real-world experience bringing AV-based therapies from bench to bedside, we recognize the importance of including considerations related to scale up and manufacturing early in our discovery process. In that regard, analyses also presented this quarter demonstrated improved manufacturing yields for some of these novel capsids when compared to our benchmarks. We are evaluating these second-generation capsids individually and believe that they're promising candidates for future potential therapies. As Mark outlined earlier, there may not be a one-size-fits-all capsid that could address delivery to all potential indications. That is why we continue to devote significant resources to developing and characterizing novel AV capsid variants with enhanced CNS tropism. We believe that this work will drive significant long-term value for Sangamo by allowing us to expand the addressable indication space for our epigenetic engineering technology to include major diseases with high unmet need, including Parkinson's and Alzheimer's disease. We feel a great responsibility to patients to apply our technology to as many potential medicines as possible. And this is reflected by the announcements that Mark spoke about earlier. The recognition we are receiving from other companies and how we are deploying our zinc finger technology to be combined with the unique capabilities of our partners is a testament to our commitment to our mission. From taking forward our own internal programs to enabling our partners, we continue to advance the field of epigenetic editing. I will now turn the call over to our Chief Financial Officer, Prathusha, for an overview of the financials. Prathusha?

Thank you, Jason, and good afternoon. We ended the quarter with approximately $182 million in cash, cash equivalents, and marketable securities, which represents a net decline of $59 million from the prior quarter. We believe available cash, cash equivalents, and marketable securities as of June 30, 2023, in combination with other potential cost reductions, will be sufficient to fund our plan operations for at least the next four months. We have made some great progress in our business development efforts this quarter, as Mark outlined, and we continue to proactively explore a range of options to raise additional capital. Non-GAAP operating expenses, which include impairment charges and stock-based compensation expense for the second quarter ended June 30, 2023, was approximately $72 million compared to $67 million for the same period in 2022. primarily due to the restructuring expense related to the reduction in cost announced this quarter and higher operating costs as we advance our clinical trial. As a reminder, our current investments are being directed towards our three prioritized areas of focus, advancing our February program to a potential phase three trial, progressing TX200 through phase one, two as quickly and safely as possible, and the development of our prioritized CNS pipeline. Our detailed financial results for the quarter are available in the press release and 10Q issued this afternoon, which can be found on our website. Turning to our full year 2023 guidance, we expect our full year non-GAAP operating expenses, which exclude certain non-cash impairment and stock-based compensation expense, to remain unchanged and to be in the range of approximately $240 million to $260 million. As a reminder, The restructuring we announced at Q1 earnings is expected to result in annualized savings of approximately $31 million going forward. We expect our 2024 operating expense to reflect these savings and to be significantly lower as we further focus our resources in line with our strategic priorities. The readouts from key programs will continue to drive decisions and investments in the coming months. We will provide further insight into our 2024 guidance in our fourth quarter earnings as per regular schedule. I will now turn the call back to Sandy for closing remarks.

Thank you, Pratusha. As you've heard today, Sangamo continues to execute in a focused, strategic manner, driving forward our clinical and preclinical programs with focus and determination. The business development deal signed this quarter demonstrate the broader recognition of our technology and show the importance of both our genome editing and payload delivery capabilities to our wholly owned programs and to potential partners. The productive interactions we've had with the regulatory authorities on Fabry and TS200 continue to further strengthen our faith in these important clinical programs. While we remain dedicated to advancing Fabry and TX100 through the clinic, we're focused on advancing our wholly owned neurology epigenetic regulation pipeline. And I'm very pleased that we've been able to share more of our promising preclinical data in this important area. Importantly, we continue to operate with a strong focus on fiscal discipline and prioritization. and recognize the importance of continuing to seek ways to bring in additional funding through a variety of potential channels. Our focus will continue as we reach internal inflection points or in a position to make strategic decisions. At this time, we would like to open it up for questions. Operator, please open the lines.

As a reminder, to ask a question, please press star 11 on your telephone. and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. The first question comes from Mari Raycroft with Jefferies. Your line is open.

Hi. Congrats on the progress and thanks for taking my questions. Fabry, for some of the Fabry feedback, can you elaborate on what the two studies in the proposed plan for the phase three would entail in terms of patient populations? And are there any other details you can share on size, scope, and timing of the two studies? And as follow-up, given you don't think that a head-to-head versus an ERT is necessary, what would FDA use as a comparator?

Good afternoon, Marie. So thank you for your question. So I'm going to get some help from Natalie here, but we're really pleased with the interaction we had with the agency, aren't we, Natalie?

Yes, absolutely. I think we had a lot of clarity on our proposed design and very optimistic about start, you know, submitting a clinical phase three protocol optimistically by the end of the year. So very happy with the progress. In terms of your question, we are studying the entirety of the patient population. As you know, the patient population in Fabry disease is heterogeneous, both in symptom and treatment. And we are, our strategy is to address the entirety. So we had proposed two studies. They address both the naive and pseudonaive population and the patient on ERT. We are seeking additional clarification on some of the feedback we received just to finalize our phase three strategy, but we can share that we do not need to do an ERT comparator with a naive pseudonaive patient, and that we will share additional detail on the detail of the phase three protocol at a later date.

Mary, I know you know this, but the whole process of having these interactions with the agency is you put in a document, they give you their response, and you have the opportunity to ask for clarification. So it is very normal for us then to go back and make sure we've fully understood what it is we believe they've said. So the response from the agency only came very, very recently. and therefore we're still in the middle of that process.

Got it. Makes sense. And so for those two studies, would they start at the same time or be staggered? Anything additional you can say about that?

We're doing our very best to get them both going as quickly as possible, and we'll give you more details on that at the right time. Okay. Sounds good. Thank you very much.

Please stand by for the next question. The next question comes from Luca Isai with RBC Capital. Your line is open.

Oh, great. Thanks so much for taking my questions. Maybe a follow-up on more questions there for Fabry. It sounds like you have great alignment with the FDA on naive and pseudonaive patients, which is great news. However, what's the plan to go after patients that are actually on ERT? What is the FDA asking there? Again, any caller would be much appreciated. And then maybe on hemophilia A, Can you just give a sense of how much energy and time is Pfizer putting behind gene therapy for hemophilia? It looks to me that they're really excited about their sub-Q monoclonal antibody, marcisinab, and maybe a bit less focused on gene therapy, but would love if you have a different view here and maybe related, wondering if you have any plans to monetize that royalty stream. Thanks so much.

Thank you. There's a lot to answer in that single question. So I'm going to suggest we do it in reverse order. So Mark, can you talk about haemophilia? And then can you maybe reflect on the epidemiology of Fabry about the patients that are on and the patients that are not on ERT? And then Natalie, perhaps you can comment on the ERT patients. So Mark, if you start with haemophilia.

For haemophilia A, Pfizer has not changed their guidance. They anticipate having the top line data sometime in the first half of 2024. And they are still guiding on submitting a BLA in the second half of 2024. The interactions that we have with them are consistent with the fact that they're continuing to move that program forward. So we're very excited about the continued progress on that. We're not going to comment right now in terms of any monetization of the royalties. um you know we've we've guided on what the royalties and and milestones are in the in the past and if something changes we'll provide an update but but as we've talked about it is an option for us should we need to extend our cash runway and mark yes Yeah, so as I think we've talked about before, Luca, you know, if you take a look at the database that we had on Fabry patients, there are about 4,000 patients that have got a diagnosis of Fabry in this particular database. What I find striking is that there's, at the best case scenario, there's only about 1,800 patients that are engaging at any given time over the course of a year. with the healthcare providers, and that's measured by at least two to three visits per year. But at the low end, sometimes it's as low as 1,300. So the way I sort of triangulate that is there's roughly 4,000 patients that have had a diagnosis. Clearly, around 2,000 have not been prescribed any therapy right now, so they're probably just being monitored by the physician. There is probably about 1,800 that have been put on enzyme replacement therapy. Those are the ones that are regularly going in. But when you take a look at the compliance rates, they're kind of all over the place. And so you've got, in any given month, you've got as low as 1,300 patients that are going in on a regular basis. And so, you know, when you think about the pseudonaive and naive population, a substantial number of the patients fall into that particular category. the number of patients that are, you know, compliant with their regular enzyme replacement therapy is actually a fairly small number of the totally diagnosed population.

And Natalie, how are we going to, so you've said that the naive pseudonaive will not need a comparator study, which is great news. And for the, those are on ERT?

So we're seeking clarification from the FDA on some specific question. in order to finalize our proposed phase three trial protocol for the ERT patient. But needless to say that we really have an exciting potential passport for both population, naive and pseudo-naive, as well as ERT, patient on ERT.

And look, the ERT patients are important because we believe that gene therapy will be a much better patient proposition for them. It avoids them having to go every two weeks. In the studies that we've done, the patients that come off of ERT, their quality of life goes up, they feel better, they're staying off ERT. We're over a year in some of these patients that wear on an ERT, and so we feel an obligation to address them. We need to ask some more questions of the agency, and we'll let you know as soon as we can what the design of that study will look like.

Thanks so much.

Very helpful.

Please stand by for the next question. The next question comes from Greg Harrison with Bank of America. Your line is open.

Hey, good afternoon. Thanks for taking the question. For the Fabry Phase III trial, What would you expect the timing to be on the turnaround after you submit your protocol to FDA, and how does the initial demand for patient enrollment look like?

We have great engagement with the patient support groups. The patients in the current clinical trial are coming to us very eagerly to get this medicine. So, Natalie, if we submit at the end of the year, what are we guiding to?

So the FDA will have 30 days to review the protocol and then give us some comment or go ahead for the phase three. And then needless to say, we are preparing our operation team for having a start as soon as possible after we have agreement with the FDA on the final protocol.

Gotcha. And then if I could sneak one more in, what What assumptions are baked into your cash runway guidance for the next 12 months, and would you consider partnering any of your whole programs to fund later stage development?

Prathusha, can you take that one?

Sure. Our cash balance at the end of the quarter was $182 million, and we are projecting that it would fund our operations for at least 12 months. As far as what assumptions, I mean, you have to keep in mind that the guidance for the, it's for 2023, the 240 to 260 million. And the restructuring that we did in Q1, we announced in Q1 and we've executed is expected to result in at least 30 million of savings. So we haven't shared our guidance yet for 2024, but along with these savings, we expect the spend for 2024 to be significantly lower. And as for, we're looking at, as Sandy alluded to in the call, right, we're looking at several options, both from a funding perspective, and we're really encouraged by the partnership market opening up. And also, we're looking at how do we further streamline our OPEX.

Great. Thanks again for taking the question.

Please stand by for the next question. The next question comes from Jenna Wong with Barclays. Your line is open.

Thank you for taking my questions. Just want to clarify, the FDA specific additional clarification question from FDA, that's only regarding the ERT phase three trial design?

Thanks for the question. We have the opportunity to clarify everything the agency tells us. And it's important to take this opportunity because it's such an important piece of information. So we were able to go back and ask across the whole range of things they commented on.

Okay. Is there any like preclinical data or clinical data clarification or request from the FDA before the phase three trial initiation?

Natalie, I think we can answer that one.

Yes.

So no, there is no preclinical data that needs to be added. And we have a clear path forward on the data for starting the phase three. So I think we have clarity on both of those.

Okay, great. And then very quickly regarding the AAV capsid, can you elaborate a little bit like a Voyager's IV-administered CNS target AAV, compare contracts to your own internal CNS target AAV capsid?

So let me pass over to Jason, but just before I do that, we are very careful to keep the team's clear that they're working either on a Sangamo capsid and a Voyager capsid. We are very grateful to Alan, the team at Voyager for giving us access to their capsid and so have to be very careful to not put the information from them together. It's a very important partnership point to make. Jason.

Yeah, so regarding the Voyager capsid and that partnership to develop a therapy for prion disease, you know, we've been extremely excited about the data that we've generated through our collaboration with the Broad Institute and MIT in animal models of prion disease. And we've received really uniformly positive feedback from the community on the potential there. And when we saw the progress that Voyager had made in their IV-administered capsid, we believe that it was really the best way to get that drug to patients in the quickest way possible. And if you understand the need in prion disease, I'm sure you'll appreciate why we felt it was so important. This is a devastating disease where people can die extraordinarily quickly. And so our motivation there was really around getting that to patients as quickly as possible. And we thank Voyager for their partnership there, as they also recognize that. Nonetheless, we also have a major effort in developing our own capsids. And we've seen a lot of progress there. I mentioned the work that we've done We've shown at ASGCT, we continue to make lots of improvements, and we're very optimistic that over the course of the next year or two, we're going to see some major developments from our own programs. And so, as we look at our pipeline, we reflect on when we need to commit to a capsid, what capsids are available, and we make choices in a strategic manner to advance the pipeline, recognizing that we have to combine capsids with a cargo and each case could be unique and we need to maximize our probability of success, but also maximize our potential to move things forward in a reasonable amount of time. So it's a multifactorial decision, but we believe that we've got our own capsids. I think that the partnership with Prevail and Lilly emphasizes that others in the community are recognizing the strength of our own capsid development. program, but at the same time, if there's a need to move something forward more quickly, we're always open to doing that.

Thank you very much.

Please stand by for the next question. Our next question comes from . Your line is open.

Hi, guys. Thanks for taking our questions. Firstly, on the Fabry program, how many more patients are you planning to dose in the Phase 1-2 expansion cohort? And does the FDA want to see any additional data from these patients before possibly signing off on the Phase 3, do the two Phase 3 designs? And I have a follow-up.

Natalie, can you deal with that?

Yes. So we are continuing to enroll patient and dose patient in the Phase 1-2 study. But we do not depend on this data to start a phase three plan and protocol. Is there any additional data that we need for starting the phase three trials is something we are not sharing at this point, but we'll provide clarification at a later point.

I think it's important to realize that this could be a phase one, two study of up to 30 patients. And it will be incredibly supportive when we file the BLA from the phase three data, because those patients will be showing benefit, we believe, for years. And that will give that longevity data that the agency, I'm sure, will be very pleased to see.

Yeah, they will be part of the durability and safety database for BLA filing.

Sure. And then secondly, on TX200, could you give us some sense of what to expect from the initial data guided for your end? Will there be any biopsy data? And if so, what are we looking for? Thank you.

Lisa, can you take this one?

Sure. Thanks for the question. So as it is primarily a safety and tolerability study, we would be presenting some of that data at the end of the year. And we're not going into details about what additional data we may present as well.

Please stand by for the next question.

The next question comes from Nicole Germina with Truist. Your line is open.

Hi, good afternoon and thanks for taking my question and congrats on all the progress. So, just two quick ones on the CAR T-REG platform. So a couple of investors have expressed some concern that the immunosuppressive agents given to patients may suppress IL-2 production. Can you help us understand the use of immunosuppressants in the study after TX200 infusion? And my second question is on, you know, there's a lot of interest in the IBD space from Big Pharma, and several companies with CAR-T reg platforms are partnering off their IBD programs to Big Pharma. Can you just remind us the progress with your CAR Treg program in IBD and potential timing for IND?

So I'm going to suggest Lisa takes the clinical technical question. Mark, do you want to talk about how the interest there is in Tregs in general? If Lisa goes first.

Yeah, sure. Thanks for the question. So you're We are using standard immunosuppressive therapy regimens in the study and following the adaptation in those regimens over time. So we haven't actually heard that there have been any concerns related to the regimen that we're using because it's standard of care, standard of practice. So we're following in terms of the clinical outcomes, looking at evidence of rejection as well as the patterns of immunosuppressive therapy use by the investigators?

Yeah, so in terms of interest in Tregs, we've had a lot of inbound interest from potential partners for the Tregs, and I think as we've communicated before, we have a lot of investors that are looking for opportunities to create a mechanism for them to invest directly into the CAR T-reg platform because of the potential and obviously our leadership in that. And so we are looking at both of those. We're having conversations with partners, but we're also taking a look at mechanisms to allow for direct investment and we'll provide an appropriate update at that time. But yes, there is a lot of interest in the CAR T-regs and the progress that we're making. And at this point, we still feel that we're the furthest along in terms of the dosing of patients and And as Natalie commented on, we'll hope to provide an update in terms of what data, or actually Lisa said, what data we'll potentially be able to show by the end of the year.

And that's what we hear from the people that come and talk to us about it, that we are the furthest along. We're the only one that's talked about being in the clinic. We're the only one with GMP manufacturing in Valbonne that allows us to control the process. We're the only one with an editing capability, and we are the one that's got the experience of doing INDs and cell and gene therapy. So that's why they like what they're seeing at Sangamo in the Tregs. And we do look forward to sharing the data. As Lisa says, this is a safety study first and foremost. This is the first time CAR Tregs have been given, and it is remarkably well tolerated.

Great.

Thank you so much.

Please stand by for the next question. The next question comes from Yanyan Zhu with Wells Fargo Securities. Your line is open.

Hi, thanks for taking the time. This is Quan for Yana. So two questions from us. The first one is on battery. So for the phase one to start, do all the ERT withdrawal patients remain off ERT? And then the second one is on TX200. So besides safety, what does the company need to see to move the program forward? And how many patients of data would be required for the company to make that decision? Thank you.

Thank you, as always, for your question. Natalie, Fabry, an easy one.

So, yes, all the patients on ERT in the Phase I and II that have withdrawn ERT remain off ERT. So I think that was the first question. And the second question was?

Okay. Yeah, so your question was about what safety data do we need to see to move the program forward? Well, thus far, as Natalie mentioned, we've already dosed the first three patients in the first dose level, and There were no DLTs, and we had a clean opinion from the SMC to open the second dose level, and now we're expecting to dose that patient within this quarter. Sorry, within the next quarter. And I think that I can say that we've been very encouraged by the safety data that we've seen thus far, and this has also allowed us to move forward with the protocol amendment. to potentially advance patients more quickly through the different dose levels. So these are all encouraging. In terms of long-term, we'll have to see how things evolve on the study.

Got it. Thank you so much.

Please stand by for the next question.

The next question comes from Patrick Trucu. With H.C. Wainwright, your line is open.

Thanks. Good afternoon. Just a few follow-up questions for me. The first one is just that you can discuss what remains to be completed in the NAV 1.7 program, particularly on the manufacturing side of the application ahead of an anticipated IND submission in 2024. And then secondly, just, you know, comments earlier in the call regarding increased interest from potential collaboration partners. wondering if you can discuss what aspects of the platform you're receiving the most interest on and what form potential future collaborations could take and if there are specific programs in earlier stage development that you might look to partner so natalie can you talk about what's left to do in nav 1.7 and then jason will we'll talk about his passion for the platform yes so we're we're really excited about uh the 9-1-1-7 and really getting to rind in 2024

The two things that are, the two main things that remain to be completed is the GLP talks to be able, in a non-human primate, and this is well planned and underway to be completed for an IND next year. And in terms of the manufacturing component, also we are underway to manufacture the clinical lot to be on time for the first patient in the trial. So at this point, the team is working fiercely to stick to this timeline, but we foresee no delays.

And Natalie, although we still have to do the GLP talks, we've already done the dose range.

Yes, we have done the dose ranging study. So this is, you know, the normal development path where we need to have this study.

And the talks was, there was no issues.

Absolutely. It was beautiful.

Okay. Thank you, Natalie. Jason.

Yeah. So in terms of inbound partner interest, It covers a wide area. We've already talked about our T-REG platform. We've seen lots of interest from many different potential partners in our advances there and particularly around You know, the capabilities that we've built there that go all the way from, you know, designing cars to manufacturing cells and then running the trials and patients. So lots of interest around Tregs. There are a variety of indications there, some of them very large, and we recognize that we can't run all of those studies ourselves. So we're always in discussions on that front. I'd say the next area where there's been quite a lot of discussion is around our zinc finger platform. One of the interesting things about ASGCT this year was that there seemed to be kind of a renewed discovery of something that I think we at Sangamo kind of have always known is true, and that is the value of the zinc finger platform for developing therapeutics based on the real tunability, the specificity, the compact nature of the proteins. And so we've really had a renewed interest from lots of different companies with different platforms that want to pair their technologies with our zinc finger programs. One way that we kind of evaluate those programs or those collaborations is how they fit into our strategy. So as we've talked about a lot today, Moving forward, we have a strong focus on in vivo genome engineering in the neurology space. So, you know, one of the first places that we're always very open to partner is to enable companies that are working outside of the neurology space and providing them with the cargo, our zinc finger cargo for their programs. When things get into the neurology space, we have to think through in a smart way, what areas do we really want to focus on? Where can we execute the soonest to drive value for the company? And if there are areas where we feel that there are other companies that can move things forward quickly, and that would ultimately benefit both patients and Sangamo, then we're always open to those types of collaborations. And then I would say the last area also that has been highlighted by the deal with Prevail is the work that we've been doing on our Capset Evolution platform. This is an area that over maybe the last two years, we've been seeing lots of really great data from the team and things are progressing very fast and we're very excited about it. And it's an area of that, as we mentioned earlier, the whole field is looking for these types of capsids because there are lots of diseases that need the right delivery platform. And if there's an indication that we're not going to pursue ourselves, but someone else is interested in doing it, and we have a capsid that's able to facilitate that, then we're happy to have those discussions. So really, you know, I'm tremendously proud of all of the work that's going on in the research and preclinical teams to move our zinc finger platform forward, our capsid evolution platform forward, the T-reg platform, lots of advances. And I think we're getting inbound interest in all those areas.

Well said, Jason. I know you spend a lot of your time talking to prospective partners and are always talking about how excited they are by the science they see.

Great. Thank you so much.

I show no further questions at this time. I would now like to turn the call back to Louise Wilkie for closing remarks.

Thank you once again for joining us today and for your questions. As a reminder, you can access the earnings release and presentation on the investor relations section of the FANGMA 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.