Sangamo's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Sangamo BioSciences Inc.

Q1 2012 Earnings Call

May 2, 2012; 05:00pm ET


Edward Lanphier - President & Chief Executive Office

Ward Wolffe - Executive Vice President & Chief Financial Officer

Geoff Nichol - Executive Vice President of Research & Development

Philip Gregory - Vice President of Research & Scientifics, Chief Scientific Officer

Dale Ando - Vice President of Development & Chief Medical Officer

Elizabeth Wolffe - Senior Director of Corporate Communications


Charles Duncan - JMP Securities

Liana Moussatos - Wedbush Securities

Joseph Schwartz - Leerink Swann



Good afternoon and welcome to the Sangamo BioSciences teleconference to discuss first quarter 2012 financial results. This conference call is being recorded. I will now pass you over to the coordinator for this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications.

Elizabeth Wolffe

Thank you Mammy. Good afternoon and thank you for joining Sangamo's management team on our conference call to discuss the company's first quarter 2012 financial results.

Also present during this call are several members of Sangamo Senior Management, including Edward Lanphier, President and Chief Executive Office; Ward Wolffe, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President of Research and Development; Philip Gregory, Vice President of Research and Scientifics, the Chief Scientific Officer; and Dale Ando, Vice President of Development and Chief Medical Officer.

Following this introduction, Edward will highlight recent activities and the significant events from the past quarter. Ward will then briefly review the first quarter financial results, as well as our financial guidance for 2012. Geoff will provide an update on our ZFP therapeutic programs, and finally Edward will update you on our goals for the rest of 2012. Following that we will open up the call for questions.

As we begin, I’d like to remind everyone that the projections and forward-looking statements that we discussed during this conference call are based upon the information that we currently have available. This information will likely change over time.

By discussing our current perception of the market and future performance of Sangamo with you today, we are not undertaking any obligation to provide updates in the future. Actual results may differ substantially from what we discuss today, and no one should assume at a later date that our comments from today are still valid.

We alert you to be aware of risks that are detailed in documents that the company files with the Securities and Exchange Commission, specifically our quarterly reports on Form 10-Q and our annual report on Form 10-K. These documents include important factors that could cause the actual results of the company’s operations to differ materially from those contained in our projections or forward-looking statements.

Now, I'd like to turn the call over to Edward.

Edward Lanphier

Thank you Liz and thank you for joining us for our conference call to discuss our first quarter results for 2012, as well as recent events and our plans for the rest of the year. 2012 is off to a great start. Let me begin by summarizing the important events of the quarter.

In early February we entered into a strategic alliance with Shire Plc, a global specialty biopharmaceutical company, to develop our ZFP Therapeutic for the treatment and potential genetic cure of hemophilia and other monogenic diseases. This alliance is a significant step towards our goal of establishing our ZFP technology as a major new platform for the development of innovative therapeutics for unmet medical needs.

In addition to the notable financial benefits of this agreement, which I will discuss in a moment, our partnership with the company as sophisticated and well positioned, as Shire is a terrific validation of the potential and promise of our terchnology.

As you all are aware, Shire is one of the most highly respected and successful companies in especially pharma and rate disease space and we are very excited to be working with them. To remind you of a few of the details of the collaboration, we have licensed Shire the exclusive rights to develop and commercialize ZFP Therapeutics to seven gene targets, four blood clotting factors, factors VII, VIII, IX and X and three additional disease related genes.

Our collective goal is to develop ZFP Therapeutics targeted to these genes with the objective of establishing potentially curative therapies for these monogenic diseases. We look forward to keeping you updated on the progress of this important collaboration.

The agreement also establishes our respective rules and responsibilities. Sangamo will conduct all research and pre-clinical development activates for all seven ZFP therapeutics, up to the filing of an investigation and new drug application or IND or the European equivalent, a CTA.

Subsequently Shire has the responsibility for moving these novel approaches through all clinical studies and into the market. The agreement provides significant near term funding for us in the form of an upfront payment of $13 million and fudging for all of our internal and external research related and pre-clinical program cost through IND filing.

We are also eligible to receive milestone payments of $8.5 million for each ZFP therapeutic that we take to IND, and regulatory clinical and commercial milestones that bring the total potential milestone payments to $213.5 million per ZFP therapeutic.

Additionally, and very important to us, we retained significant downstream value in the products we develop under this collaboration, in the form of royalties that are an escalating tiered double-digit percentage of product sales. So an important validating relationship and a great start to 2012.

We also made important progress this quarter in our HIV clinical programs. Early in the year we announced that we initiated two new Phase 2 trails, the design of these studies is based upon Phase 1 clinical data that demonstrated a statistically significant relationship between the reduction in HIV viral load in the blood of SB-728-T treated subjects and the extent of engraftment of these ZFN modified T-cells, in which both copies of the CCR5 gene had gene disrupted, so called biallelic modified cells.

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