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Edited Transcript of SGMO earnings conference call or presentation 8-May-19 9:00pm GMT

Q1 2019 Sangamo Therapeutics Inc Earnings Call

RICHMOND Jun 13, 2019 (Thomson StreetEvents) -- Edited Transcript of Sangamo Therapeutics Inc earnings conference call or presentation Wednesday, May 8, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alexander D. Macrae

Sangamo Therapeutics, Inc. - CEO, President & Director

* Edward Rebar

Sangamo Therapeutics, Inc. - Senior VP & CTO

* Kathy Yi

* McDavid Stilwell

Sangamo Therapeutics, Inc. - VP of Corporate Communications & IR

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Conference Call Participants

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* David Steinberg

* Eric William Joseph

JP Morgan Chase & Co, Research Division - VP & Senior Analyst

* Evan Wang

* Qian Wang

BofA Merrill Lynch, Research Division - Research Analyst

* Ritu Subhalaksmi Baral

Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst

* Xiaobin Gao

Barclays Bank PLC, Research Division - Research Analyst

* Yanan Zhu

Wells Fargo Securities, LLC, Research Division - Associate Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Sangamo First Quarter 2019 Teleconference Conference Call. (Operator Instructions) As a reminder, this call will be recorded. I would now like to introduce your host for today's conference, McDavid Stilwell. Please go ahead.

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McDavid Stilwell, Sangamo Therapeutics, Inc. - VP of Corporate Communications & IR [2]

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Hello. Thank you for joining us. As we begin, I'd like to point out that we posted our May corporate presentation to our website and will be referencing several of these slides today. A link to the slide presentation may be found on our website, sangamo.com, on the Events and Presentations page of the Investors and Media section of the site. I'd also like to remind everyone that the projections and forward-looking statements that will be discussed during this conference call are based upon the information that we have available today. Forward-looking statements include, but are not limited to statements related to the potential therapeutic applications for Sangamo's genomic medicine platform, the potential ability of Sangamo's product candidates to provide clinical benefit to patients, Sangamo's product candidate, development, and manufacturing plans, our expectations regarding financial performance and other statements that are not historical facts.

This information will likely change over time. By discussing the future performance of Sangamo with you today, we are not undertaking an obligation to provide updates in the future. Actual results may differ substantially from what we discussed today, and no one should assume at a later date that our comments from today are still valid. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are detailed in documents that the Company filed with the Securities and Exchange Commission, specifically in our most recent annual report on Form 10-K and in our most recent quarterly reports on Form 10-Q. The forward-looking statements stated today are made as of this date and Sangamo undertakes no duty to update such information, except as required under applicable law.

With me this afternoon on this call are several members of the Sangamo's Senior Management, including Sandy Macrae, Chief Executive Officer; Kathy Yi, Chief Financial Officer; Stephane Boissel, Executive Vice President of Corporate Strategy; Ed Conner, Chief Medical Officer; and Ed Rebar, Chief Technology Officer. Again, during this call, we will refer to several slides in our May corporate presentation and the slides can be found on the Events and Presentation page of the Investors & Media section of the site. And now, I will turn the call over to Sandy.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [3]

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Thank you, McDavid, and good afternoon to everyone on the call. Thank you for joining us. At Sangamo, we believe in our future where drug development is focused on cures rather than symptomatic treatments, where patients with serious conditions can receive a one-time treatment rather than frequent medicines and interventions. For these patients suffering from serious conditions have (inaudible) hope. This future is a promise of genomic medicine and we believe it is known. Our capabilities and experience have enabled us to build a genomic medicines company that has the ability to design the appropriate therapeutic approach to potentially treat the underlying causes of specific genetic diseases. Our genomic medicines pipeline encompasses 4 complementary approaches; gene therapy, ex vivo gene-edited cell therapy; in vivo genome editing and gene regulation. We are developing products for conditions where the suite of proprietary genomic medicine technologies has the potential to make a difference where we understand the underlying biology and whether it's clear to patients' needs.

In the beginning of April, we showed how the pieces of our genomic medicines pipeline are coming together in a way that we believe sets us apart from other gene therapy or gene editing companies who focus on just 1 technological approach. As you know, we showed early promising clinical data from several of our new programs. We are particularly excited by these updates for a few reasons.

One, the dose dependent response, evidence of sustained Factor VIII levels and tolerability observed to date with SB-525 hemophilia A gene therapy in partnership with our friends at Pfizer, showed the potential efficacy and safety of AAV6 based therapy. This is particularly important for our portfolio as a whole since 3 of 4 of our technical approaches involve AAV6 delivery. Two, the encouraging data for ex vivo gene edited cell therapy candidate ST-400 in beta thalassemia in partnership with our colleagues at Sanofi, opioid only for 7 weeks and in 1 patient. It was important because it is a promising early result from 1 of our core platforms that uses our proprietary zinc finger protein technology and it's again used in 3 of our 4 technical approaches. Finally, but most importantly, these first glimpses of clinical data indicate the potential of the product candidates in genomic medicine to make a real difference in patient volumes.

With regards to our hemophilia A program, we have dosed 1 of the patients in the SB-525 expansion cohort and anticipate dosing up to 4 more patients in the near future. We expect to present longer-term follow-up data later this year. We and Pfizer are evaluating options to accelerate the initiation of a registration of clinical trial. For the beta thalassemia program, we've enrolled a second patient. Additional patients are in the queue. We are planning to enroll 6 patients in the study and expect to provide follow-up data in the initial patient and in additional patients by the end of this year. As noted earlier, we are not planning to provide clinical updates for our hemophilia A or beta thalassemia programs until later this year. Instead on this call, we will focus on an update from our Fabry disease gene therapy program, and on the new data we presented at the American Society of Cell and Gene Therapy Annual meeting or ASGCT.

Moving to our wholly-owned Fabry disease gene therapy candidate ST-920, we're applying the same approach and know-how in AAV engineering, delivery and dosing as it's used in our SB-525 hemophilia A gene therapy candidate. In this program, the goal is for the gene therapy treatment using an AAV vector including the cDNA for human alpha-Galactosidase A or alpha-Gal A to enable a patient's liver to produce a long-lasting and continuous supply of the alpha-Gal A enzyme, which is absent in Fabry disease patients. We believe that gene therapy can present a major improvement for Fabry disease patients whose current standard of care is frequent enzyme replacement therapy that often does not address the underlying disease.

A study design for ST-920 is an open-label multi-center single-dose ascending study. The study includes 3 dose cohorts; 2 subjects will be assigned into each of these 3 cohorts with a potential expansion of any cohort with an additional 4 [adult] subjects for a total of up to 8 in subjects. The IND for ST-920 was accepted in February and we expect to initiate clinical sites later this year. The IND acceptance represents the first IND acceptance for Fabry disease gene therapy. Our agreement with Brammer Bio, now Thermo Fisher Scientific, announced at the beginning of April, provides us access to manufacturing tools capable of handling commercial-grade runs for gene therapy product candidates, such as ST-920.

Moving our gene therapy programs forward in the clinic is a top priority. We're urgently committed to gene therapy product development because we believe it is attractable opportunity with a defined regulatory pathway that offers immense hope for patients with serious conditions for which we have the experience, knowledge and tools to bring to market. We also continue momentum with our preclinical gene regulation studies, where we have presented highly compelling data this quarter including in Huntington's disease in partnership with Takeda, ALS in partnership with Pfizer and Tauopathies at the Alzheimer's and Parkinson's Disease Congress ASGCT, and at the Target ALS meeting. For all 3 programs, we refreshed the versatility of the zinc finger platform to create zinc finger protein transcription factors that enable single gene repression. In Huntington's disease and in ALS, we also engineered zinc finger protein transcription factors for disease allele-specific repression. These preclinical data, which have demonstrated the potential of our ZFP-TF platform across 3 different CNS diseases are truly highly promising. The preclinical work in tauopathies is particularly notable given the intensifying focus on tau in the treatment of Alzheimer's disease. Our Chief Technology Officer, Ed Rebar, will provide a snapshot of these data later on in the call.

In April, we strengthened our balance sheet with a public offering of common stock raising net proceeds of $136.2 million. The capital will be instrumental in supporting our product development, including manufacturing and our further advanced programs and engaging promising preclinical agents towards the clinic. As I wrap up, it is with mixed feelings I take the [opportunity] that our Chief Medical Officer, Ed Conner, who is with us today, informed us he will be resigning from Sangamo at the end of May to pursue a new opportunity. Ed has played an important role in transition of Sangamo to a therapeutic-stage company. He led the initiation of our 5 ongoing trials, build clinical operations and clinical development team and expanded our clinical capabilities across the US and Europe. We all wish him well in his future endeavors and are currently working on hiring a new Chief Medical Officer. Adrian Woolfson, our Head of R&D, will act as Interim Chief Medical Officer in the interim period.

Before I turn the call over to other members of the team, I would like to highlight how excited I am about the field of genomic medicine as a whole and about the future. This is an area of medicine with an immense potential to help patients and has grown exponentially in the last 3 years I've been at Sangamo. I'm very confident of Sangamo standing within this field as we build on our strong foundation of institutional knowledge, commercial relationships, and [find feat] to construct a unique genomic medicines company. The emergence of promising gene therapy and ex vivo edited cell therapy clinical data this quarter was an important first step in validating and derisking our therapeutic approaches. We look forward to follow-up data later this year.

Now, I'll hand the call over to Ed Rebar, our Chief Technology Officer. Ed?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [4]

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Thank you, Sandy, and good afternoon, everyone. At Sangamo, we take considerable pride in not only applying current technologies to the development of cutting-edge genomic medicines, but also in establishing new capabilities through innovative research. This latter emphasis, and in particular, our commitment to extending the frontier of therapeutic possibilities sets Sangamo apart from many of our peers, whose focus is much more normally high. Our commitment to cutting-edge research is reflecting in Sangamo's impactful publication record as well as our strong presence at genome editing conferences and meetings. The most recent example of this commitment, Sangamo last week participated in the Annual Conference of the American Society of Gene and Cell Therapy. The company had a significant presence at the conference, with our progress featured in 10 presentations including 8 podium talks and 3 [vital] symposia on topics of special interest in the society.

For my comments today, I will provide a brief overview highlights. I will begin by describing the work of my colleague, Jeff Miller, who has developed new insights into how to engineer highly specific ZFNs. His work was featured in a podium presentation on the first day of the conference. Jeff and his team has developed design strategies that will allow independent tuning of 2 key parameters that govern treatment specificity, target affinity and catalytic rate and used these methods to develop ZFNs that can achieve near complete on-target modification with no detectable off-target cleavage. The extraordinary specificity of these reagents could provide a differentiated safety feature in the genome editing space.

In the second presentation, our partners from Sanofi provided new data on the types of edits generated by the new ZFNs for BCL11A programs. In the podium presentation, Scientist (inaudible) described a research scale clinical analysis of erythroid colonies derived from ZFN-treated CD34 cells from healthy donors. This study revealed very high levels of [bile] liver candidate with this outcome seen in more than 90% of edited clones. Updates were also provided for gene regulation programs targeted to 3 CNS disease areas, Huntington's disease, amyotrophic lateral sclerosis or ALS, and tauopathies. These programs exemplify Sangamo's drive to innovate beyond the traditional limits of genome editing therapy. They also represent potential therapeutic approaches for large patient populations in new effective medicines.

For the Huntington's program, our Takeda partners who have in-licensed the program from Sangamo, provided an update on their studies. In a podium presentation, Vivian Choi, Director and Head of Gene Therapy Research US at Takeda, presented data generated by this Takeda product team showing a real selective reductions of new Huntington protein in multiple brain regions of (inaudible) after 33 weeks post-treatment. Moreover, (inaudible) chemical analysis of [striatal] demonstrated extensive reduction of pathological mutant huntingtin aggregates in transgene positive cells.

An update on our ALS program, which is partnered with Pfizer, Sangamo's scientist, Mohammad Samie reported development of ZFP-TFs that has the potential to selectively repress disease alleles of the C90RF72 gene that bear an expanded [repeat]. These alleles have been implicated as a potential cause of more ALS. As shown on Slide 47, the ZFP-TFs identified by Dr. Samie exhibited allele selective repression over 100 full-dose range. An important thing to point out is that the Huntington's and ALS programs include a common strategy for achieving highly selective repression of disease allele, namely, recognition of repression of repeat expansion that mediates disease. Our success in these 2 programs suggested this approach will prove generally effective for addressing conditions where repeat expansions are drivers of disease.

Finally, an update on the third ZFP-TF program, Bryan Zeitler, our Associate Director of Gene Regulation, presented preclinical studies that demonstrate a robust tau impression in the brain of the non-human primate, as you can see on Slide 48. In this study, Bryan and colleagues showed repression levels of over 80% that were strictly dependent on ZFP-TF delivery. It also demonstrated clearly than 99% repression in Human iPSC neurons with no detectable off targets. These data suggest that the repressions that Bryan and the team are developing may provide effective reagents for addressing neurodegenerative conditions mediated by dysfunctional or mutated tau, such as progressive supranuclear palsy, frontal temporal dementia, and also potentially Alzheimer's disease.

In summary, this was a highly successful meeting with many exciting updates. I'm proud of the work that was presented by our colleagues and partners and look forward to providing additional updates as these programs further progress. I'll now turn the call over to Kathy for a review of our first quarter 2019 financial results. Kathy?

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Kathy Yi, [5]

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Thank you, Ed, and good afternoon, everyone. We issued detailed financial results for our first quarter 2019 in the press release issued earlier this afternoon, as well as in the 10-Q filed today. We ended the current quarter with $351.6 million in cash, cash equivalents and investments. In April, we completed an offering with net proceeds of $136.2 million, which in combination with our current cash will further extend our run rate to the end of 2021. We anticipate using the net proceeds from the offering for working capital and other general corporate purposes including support our own and our product candidates and research programs as well as building out our manufacturing capabilities and other business enrollment activity.

For the first quarter of 2019, the consolidated net loss was $42.2 million or $0.41 per share compared to a net loss of $20.2 million or $0.23 per share for the same period in 2018. Revenues for the first quarter 2019 were $8.1 million compared to $12.6 million for the same period in 2018. This current quarter revenues were primarily driven by our collaboration agreements with Kite Ilya, Sanofi and Pfizer.

Total operating expenses for the first quarter of 2019 were $52 million compared to $33.6 million for the same period in 2018. As anticipated, this increase in total operating expenses reflects the company's growth through the acquisition of TxCell, increased headcount in support of clinical development programs and manufacturing investments. We're maintaining our previous 2019 operating expense guidance expected to be in the range of $210 million to $220 million, and we believe we are in a strong financial position to fund our programs to their X value inflection milestone.

And with that, I'll now turn the call over to Sandy for closing remarks.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [6]

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Thank you, Kathy. Over the past months, we've made significant progress in the creation of a clinical stage company. The leverages are differentiated, multi-dimensional suite of genomic medicine technologies and the science I've just spoke about on this call. We have produced promising clinical data from our lead candidates. We continue to produce compelling preclinical data which may lead to development programs in challenging diseases which affect huge numbers of people. We have sound manufacturing capabilities in place which will help us carry forward and optimize our clinical studies. We have a strong balance sheet and 4 strategic biopharma partnerships. And most importantly, we're committed to realizing the vision of genomic medicine for patients who need it most.

We'll now turn to your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Qian Wang with Bank of America Merrill Lynch.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [2]

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Hello?

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Operator [3]

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And our next question comes from the line of Whitney Ijem with Guggenheim Securities.

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Evan Wang, [4]

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This is Evan Wang on for Whitney Ijem. Thanks for taking the question. So the first question I have is related to SB-525 and the comments on accelerated approval. Has the agencies seen the data? And if so, what kind of feedback have you gotten recently on the data? And what are their current thoughts on accelerated approval?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [5]

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We're very early in the data. We've shown you data from 8 patients now and we're starting to treat the expansion cohort. We will work very closely with our colleagues at Pfizer and they would be responsible for initiating the Phase III study and the regulatory interactions with close support from Sangamo. So, no, we haven't shared the data with them. It's very encouraging and we hope to show you more later in the year.

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Evan Wang, [6]

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And I had one more follow-up, on beta-thal. Just wondering what was the decision process around sharing that initial patient data in April? And as a follow-up, is there any reason to expect differential efficacy on a fetal hemoglobin basis between a beta-thal and sickle cell?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [7]

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See, we felt it was an important result. We felt it was important to share with patients and prospective patients that the first apheresis and re-infusion had gone well and we hope that it would give them encouragement to be part of this program. We want to be clear that it's early data and we have a second patient that's going through the process and we will come back to you with further set of data later in the year.

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Operator [8]

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And our next question comes from the line of Gena Wang with Barclays.

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Xiaobin Gao, Barclays Bank PLC, Research Division - Research Analyst [9]

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This is Xiaobin dialing in for Gena. Thank you for taking our questions. The first one on hemophilia A. Can you share a little more thoughts on the rationale behind fast kinetics of our factor VIII expression. Also do you think that the first 2 patients have already reached the statistics in your prior update?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [10]

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So thank you for your question. I think this reflects much we're all learning about gene therapy at the moment. The discussion we've had with the number of people goes along the lines in each of the 8 patients whose data we've shown, they seem to reach a plateau within 6 or 8 weeks perhaps. And there are other companies' factor that takes 26 weeks to reach a peak. With our other companies' data, it seems to drift slowly downwards as far as we've seen the data as opposed to ours being consistent and really remarkably flat.

And our scientists believe what we can't prove [Xia]. That the 2 events are related that are rapid and customization or circulation of the factor gives this stability and we saw this rapid uptake as well in non-human primates. And we hope that prediction begets long-term reliability of the treatment, because that's what patients want. Of course, this is a long-term disease. So they benefit from early effectiveness, but the thing they want most us to know that they will get the benefit from the gene therapy for a long time and for years into the future, and we hope that the first signs of the cycle data are showing that and we look forward to sharing more data with this later in the year.

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Xiaobin Gao, Barclays Bank PLC, Research Division - Research Analyst [11]

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Just one more question on the Fabry disease. I think that the preclinical data look quite promising, but then just want to get your thoughts about the translation from mouse to humans for (inaudible) protein, it seems that in the liver you have like more than 200-fold over expression, but in kidney, it was only 3-fold. How should we think about the conversion?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [12]

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Ed, do you want to?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [13]

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Yes. Sure. Happy to take that. So, yes, I mean we're extremely encouraged by the urine data on the Fabry program. And as Sandy mentioned earlier on the call, now with the data that we have in hand from the hem A program on AAV6, we understand the kinetics and dosing of that vector very well. So, we are very confident going into the Fabry program, which we look to initiate later in this year. I think with regards to your question about the different levels of enzyme in different tissues, obviously, mouse system is going to behave differently than humans. In terms of a review of the literature, you know that there appears to be -- sorry, review of the literature for mouse data that you do have to get to super physiologic levels in order to get greater tissue penetrants, and we're hopeful then that will result in better clinical outcomes.

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Operator [14]

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And our next question comes from the line of Maury Raycroft with Jefferies.

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David Steinberg, [15]

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This is David for Maury. Thank you for taking my questions. Maybe the first question is on the zinc finger nuclease 2.0, second generation for the MPS I and II. So can you provide any color in terms of the dosing strategies for this in the Phase I/II clinical trial? Based on your preclinical data as well as conversation with the regulators, do you think you can start treating patients at high dose or do you think that you have to do some sort of dose escalation for those patients? Thank you.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [16]

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So your question just is, what's the interaction been with the agency about translating from 1.0 to 2.0 or second-generation with zinc fingers. I don't think we shared that exact dosing yet, but so far of the conversation with the agency has been very positive and we look forward to getting more clarity on the dosing regime.

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David Steinberg, [17]

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Then maybe just a follow-up question. So you've shown some pretty compelling data for the zinc finger translational repression in tau in the non-human primates. Can you talk about your timeline to move the program into the clinic? And then are you thinking also about partnering the program with some sort of partners with the activities on it?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [18]

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Ed, do you want to comment?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [19]

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Well, we have not given any timeline in term of translating that technology to (inaudible) little we can say today. And tau has become a more interesting place. Yes, definitely. And by the time it will be ready for clinical development, we hope that the values program that we see passive and active immunotherapies targeting tau, that in a way answer some of the question that the tau hypothesis is calculating.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [20]

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And we hope you understand we can't comment on partnerships or relationships with other companies.

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Operator [21]

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And our next question comes from the line of Ritu Baral with Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [22]

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Glad to see the first presentation of the Huntington's program at ASGCT this year. Can you guys talk to where that is, when it might be entering the clinic? And I guess how does Takeda view it versus Shire, which obviously opted in relative interest in how fast to move that forward and what's left to be done before it does get moved into the clinic?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [23]

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So with programs that are in the hands of the partner now they are responsible for giving updates. I came from Takeda, it's my previous company and I am very pleased that they are -- I know about their passion for neuroscience, so I think it's in good hands and we haven't spoken to them since the merger was completed and heard from them their passion for Huntington's disease. So I think you should look forward to hearing more from them on this subject.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [24]

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And my follow-up question is just on Fabry and Fabry gene therapy. How do you see the unmet need in Fabry given the current treatment options, and also other gene therapy approaches moving forward in Fabry disease. If you think about clinical appeal, clinical profile et cetera.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [25]

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Ed?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [26]

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Yes, there is still a very significant unmet need. We actually had a couple of patients come by Sangamo 2, 3 weeks ago, and these are individuals who have taken the enzyme replacement therapy for long periods of time. And while they have had some benefits in terms of renal function, they still have significant symptoms with regards to neuropathic pain and GI symptoms, and obviously, there are associated cardiac issues that did occur as well that really aren't addressed by ERT currently. So we are with the Fabry program, knowing the kinetics now of AAV6 with the data that we have on SB-525 having a very potent construct. We are very exciting to move this program into the clinic and I think still remains the critical unmet need for these patients.

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Operator [27]

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And our next question comes from the line of Jim Birchenough with Wells Fargo Securities.

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [28]

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This is Yanan in for Jim. So firstly, on hemophilia A, what kind of interest have you been getting since the data announcement in terms of potential enrollment? And are you going to announce the first patient treatment in the expansion cohort?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [29]

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So, thank you. We did, on this call, say that the first patient had been treated in the expansion cohort and that we have the rest lined up, and the patients have been (inaudible).

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [30]

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There has been extremely strong interest and we're delighted to have a pipeline of patients lined up to slot in. Yes, logistically, they have to spend the night and the same seat is reserved (inaudible) but we have a clear line of patients who are very, very strongly interested as our investigators and we'll plan to continue enrolling that study.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [31]

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We've worked often, just like I said, we worked with Fabry patients and we have had several patients from hemophilia patients and they are very knowledgeable community and we watch carefully what companies are going to say and what analysts like you say. And so they were really quite excited to see the Sangamo data and our sense is they will watch and wait and decide which of the agents is the right one for them to take in the long run.

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [32]

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That's great to know. And on the ST-400 program, just wondering the second patient treated, are you able to disclose the genotype? And also if we learn more about this program in the future data releases, what kind of data package do you plan on sharing, for example, the percent of hemoglobin F expression cells or the percent of white blood cells being edited, are we going to be able to see those type of detail in future data releases?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [33]

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Absolutely, we will. So the second patient is in the process and we will reveal as much data as possible as at the right time throughout the year. There are obvious places that we can do it and we will give you as much information we can because I know this is an important area for everyone's analysis of the area of thalassemia. I know, we haven't said what kind of patient, the second patient was.

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [34]

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Okay. So then --

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [35]

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Actually, the next update will be in Q4 out of that program.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [36]

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Yes, that's correct.

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [37]

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So, for Fabry's program, would you be able to talk about potential primary endpoints and secondary endpoints for the study?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [38]

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So of course with the Phase I/II study, the primary endpoint is all those safety evaluation. But key secondary endpoints as you might imagine is the production of the plasma alpha-Gal A activity levels Gb3 and lyso-Gb3 measured in the plasma and urine. And then looking at estimated glomerular filtration rate, left ventricular mass and then the number of patient-reported outcome measures looking at things like, pain, GI symptoms and quality of life.

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [39]

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So, lastly for the MPS programs, when would you be able to share the liver biopsy data from patient 6? And then in terms of the proportion of liver cells that has the vector in them, would we be able to see that kind of a data, because I think even with the generation 2 product, probably the proportion of the cells modified at a similar dose would be the same, although I'm sure the efficiency of editing is going to be increased because of the new engineering.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [40]

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So, thank you for your question. What we said we'll do is, we'll gather this data throughout the year and will present it together later on in the year. Your analysis of the number of cells that are edited being dependent on the dose is probably correct. And so what the second generation brings, we believe, is an increase in efficiency for each cell that has got a zinc finger and it increases the probability of editing. So we look forward to sharing as much data as we can towards end of this year.

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Operator [41]

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And our next question comes from the line of Qian Wang with Bank of America Merrill Lynch.

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Qian Wang, BofA Merrill Lynch, Research Division - Research Analyst [42]

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So, I have a couple, if I may. The first question is that you've shown interesting -- or your partner at Takeda show interesting Huntington preclinical data at ASGCT. I know that you probably handed the program over to them, but just wondering whether you would have any insight on the potential differentiation of the preferential refreshing of the mutant alleles comparing to the other players potentially in the field that refresh those?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [43]

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So, thank you for your question. Yes, we'd love that product back, but it's safely in the hands of Takeda. Your question was about the ratio between the 2 alleles?

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Qian Wang, BofA Merrill Lynch, Research Division - Research Analyst [44]

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Right.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [45]

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Ed, can you speak anything to them?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [46]

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Yes. I mean so my understanding is that if you speak to people in the field, the preference would be to selectively down-regulate just the disease allele, right and that's what our program offers. I know there, as you point out, there are other programs that don't differentiate and they have a rationale as to what they're looking forward. But we're premised on the best effect being that you just selectively (inaudible) and that's causing the problem.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [47]

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And then, this is the second program now where we can show allele specific trends, sense and antisense specific as well. Correct?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [48]

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Yes. As Sandy points out, I mentioned that our ALS targeted therapy takes advantage of a similar concept, where we're selectively recognizing and repressing the expansion.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [49]

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So you think it may be a more generalized on technology?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [50]

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Yes, I think this is a great example. The second example, right shows that what we achieved with Huntington's wasn't sort of a one-off deal, we think that we have something that should be generally helpful.

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Qian Wang, BofA Merrill Lynch, Research Division - Research Analyst [51]

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And then on hemophilia A, I know that you guys are on the expansion phase right now. Can you disclose like how many patients have you dosed so far? And potentially use that, you are going to present the data at a medical conference, and when could that be and how many data can we see?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [52]

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So we will show you when it comes. I'm sure it will be at ASH. And we have treated 1 patient, we have said, we have not said for the remaining [more] been treated. As I said, the excitement in the patient community has allowed us to lineup the other patients, and it will be a simple matter of logistics, these patients have normal lives and they need to dedicate a couple of nights in hospital and the hospital needs to find who's (inaudible) in the bed. So they are excited, we are excited and investigators are very positive about the results.

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [53]

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But Sandy, if I may add, it's possible that we will have an update at [ASGCT] but very unlikely that it will be on the expansion collaboration, that will be on the 8 patient that we've been waiting to come.

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Qian Wang, BofA Merrill Lynch, Research Division - Research Analyst [54]

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And if I may, I know you guys are starting to looking at more CNS programs and have you decided what route of administration will you actually consider?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [55]

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We haven't discussed that. There are many different routes that we could choose, whether it's direct injection, intrathecal or even intravenous, and we are exploring all of these. And in some cases, it's disease specific, because some diseases demand that you get to certain parts of the brain, and numbers are less specific, less fussy. So, delivery is an important part of what we do and we have a very clever young man here who is leading our vector group, and who is looking at ways of adapting vectors to enhance our chances to get into the CNS.

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Qian Wang, BofA Merrill Lynch, Research Division - Research Analyst [56]

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I see. And if I may, and my last question is about manufacturing. So when I come back from the ASGCT conference, the key takeaway I feel is that you have to start the manufacturing process as early as possible. I just wondered as for your hemophilia A, for example, of Fabry or beta thal, like how much hard your manufacturing process are and how much more tweak do you need in order to be in a late-stage or even commercial stage?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [57]

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So the question is, how important is it to do manufacturing early and where are we with --

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Qian Wang, BofA Merrill Lynch, Research Division - Research Analyst [58]

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Yes, like how the material process are?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [59]

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Yes, well, we should start as soon as possible, but we are not giving any details as to the specific of where we are with the manufacturing process. What we can say that, at one point, this process will be transferred to Pfizer and manufacturing of that part of legislation on this study will no longer be our responsibility or won't be our responsibility.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [60]

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But if I may lead the witness, our emphasis on manufacturing internally and externally.

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [61]

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Yes, we've said on the manufacturing strategy, that was obviously a very critical aspect of our strategy and we have 2 different situation, we have gene therapy on one hand and cell therapy on the other hand. From gene therapy, we are currently completing the building of manufacturing site here in Brisbane, in California and that site will be responsible for smaller scale manufacturing of gene therapy product going forward. And for larger scale manufacturing, for Phase III and commercial, we will rely on the Brammer Bio agreement that we signed last month. And when it comes to cell therapy, we are currently relying on (inaudible) CMOs and we've announced earlier that we were going to change that situation on that very likely, we're going to in the next few years have our own manufacturing capacity again for small-scale manufacturing i.e. Phase I/II trials.

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Kathy Yi, [62]

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So the great thing about Pfizer leading the Phase III manufacturing for hem A is that it's easily replicable to other gene therapy programs in the future. We don't expect a huge amount of redo in the scale-up process, for example.

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [63]

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And we will learn from (inaudible).

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Kathy Yi, [64]

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Exactly.

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Operator [65]

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(Operator Instructions) And our next question comes from the line of Eric Joseph with JP Morgan. Your line is now open.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [66]

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Just a couple on Fabry. First, I'm just wondering how we should be thinking about dose escalation in the upcoming Phase I trial and whether based on the safety data that you've seen today with 525 kind of in a path to an abbreviated dose escalation schema or whether there's any kind of unique AAV safety considerations between hemophilia and Fabry disease. And then secondly, also wondering how you might be thinking about how your [CEUs] is going to factor into the Phase I portion whether there might be a period of ERT withdrawal or means of distinguishing recombinant protein versus that produced by 920? Thanks.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [67]

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So let me answer the first part and I'll pass the second one to Ed. You're absolutely right, we learned a lot from hemophilia A. Part of the reason that program took a little longer than we all would have wanted was that we had to learn the translation factor between mouse, monkey and human and we now know that. Patient safety is the most important thing in all our clinical trials. So we and the agency want every program to start carefully and prudently, so as patients are looked after in these trials. We have learned about one thing that's been really encouraging in the 525 trial has been how few patients suffered any form of immunological reaction. We've learned that sometimes they will have a simple viral reaction if we can resolve with paracetamol and Tylenol or acetaminophen -- sorry, in this country and we learnt that the transaminase event is rare. So, already we're beginning to have a better feel of the vector and are very pleased with the track record.

And Ed, within the trial part, the second question with Fabry.

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [68]

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Yes. So ERT withdrawal is something that will be looked at. As part of the inclusion criteria, we're able to enroll both patients who are on ERT and treatment-naive patients.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [69]

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And just going back to the point of dose escalation, should we be thinking about this kind of the standard escalating process similar to what we're seeing today or something different?

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Edward Rebar, Sangamo Therapeutics, Inc. - Senior VP & CTO [70]

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Yes, as Sandy mentioned, the Safety Monitoring Committee will convene dose escalation will based on safety review. And safety is paramount, we also are excited again based on the translation of AAV6 non-human primates to humans that we've seen in SB-525. And at the starting dose that there is the potential for benefit with the production or -- there is the potential for benefit of production of alpha-Gal A based on the experimental data that we've seen pre-clinically in mouse and non-human primate data.

Sure. And thanks, Eric.

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Operator [71]

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We do have a follow-up question from the line of Jim Birchenough with Wells Fargo Securities.

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [72]

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This is Yanan again. I just have one quick technical question on the ST-400 program. So just trying to think about what we expect for non-beta zero/beta zero patients. The question is by editing the BCL11A enhancer locus and activating HbF, would you also suppress any residual beta expression, which is not an issue in beta-zero/beta-zero patient, but in a non-zero-zero patient, would you see that as a potential outcome?

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [73]

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So, I don't know the answer to that question, but can I just check I understand that question? Are you saying that the reduction of fetal hemoglobin per se results in reduction in the beta globin through some feedback mechanism?

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Yanan Zhu, Wells Fargo Securities, LLC, Research Division - Associate Analyst [74]

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Right. The increased fetal hemoglobin leads through a feedback leads to decrease in the residual beta.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [75]

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It is an interesting question, and as you know, there is all kinds of erythropoietin type feedback loops within the production. What I can't say that's important is that there are patients who are actually persistence of fetal hemoglobin and beta thalassemia that walk happily around where their fetal hemoglobin has abrogated their thalassemia. So if there is a balance forms, it seems that in a normal human situation that isn't [apropos]. But we will look for that carefully and watch what happens.

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Operator [76]

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Thank you. And that does conclude today's question-and-answer session. I would now like to turn the call back to Sandy Macrae for any further remarks.

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Alexander D. Macrae, Sangamo Therapeutics, Inc. - CEO, President & Director [77]

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Thank you very much for all your questions and we look forward to talking to you over the course of the year.

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Operator [78]

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Ladies and gentlemen, thank you for participating in today's conference. It does conclude today's program. You may all disconnect and everyone have great day.