Sangamo BioSciences CEO discusses Q4 2012 Results - Earnings Call Transcript

| About: Sangamo Therapeutics, (SGMO)

Sangamo BioSciences (NASDAQ:SGMO)

Q4 2012 Earnings Call

February 06, 2013 05:00 PM ET


Elizabeth Wolffe - Senior Director, Corporate Communications

Edward Lanphier - President and CEO

Ward Wolff - EVP and CFO

Geoff Nicho - EVP, Research and Development

Philip Gregory - VP, Research and CSO

Dale Ando - VP, Therapeutic Development and CMO


Charles Duncan at Piper Jaffray

Liana Moussatos - Wedbush Securities

Elemer Piros - Burrill Securities


Good afternoon, and welcome to Sangamo BioSciences Teleconference to discuss Fourth Quarter and Full Year 2012 Financial Results. This call is being recorded. I will now pass you over to the coordinator of this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications. You may begin.

Elizabeth Wolffe

Thank you, Ashley. Good afternoon, and thank you for joining Sangamo's management team on our conference call to discuss the Company's fourth quarter and full year 2012 financial results. Also present during this call are several members of Sangamo senior management, including Edward Lanphier, President and Chief Executive Officer; Ward Wolff, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President of Research and Development; Philip Gregory, Vice President of Research and 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 fourth quarter and full year financial results of 2012, as well as our financial guidance for 2013. Geoff and Philip will provide an update on our ZFP therapeutic programs, and finally, Edward will update you on our goal for 2013 and beyond. 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 discuss during this conference call are based upon the information that we currently have available. This information will likely to change over time. But by discussing our current perception of the market and the 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 time 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 would like to turn the call over to Edward.

Edward Lanphier

Thank you, Liz, and thank you all for joining us for our conference call to discuss our fourth quarter and full year results for 2012, as well as our near and midterm plans for the development of our zinc ZFP therapeutics pipeline.

We had a very busy fourth quarter and a great start to the New Year setting the pace for an eventful 2013. This end of your call provides us with an opportunity to reflect on the achievements and events of last year, but more importantly, to look ahead and layout our goals for the future. We began to do just that in early December at our analyst and investor briefing and follow that up in the first weeks of January during the annual JPMorgan Healthcare Conference. We used these two venues to accomplish a number of important goals but above all to articulate our vision albeit incredibly ambitious of engineering genetic cures for diseases, not incremental treatments, genetic cures.

During those meetings, we provided insight into how we select disease targets for our ZFP therapeutic platform. I have asked Geoff to expand on this later on the call. We also outlined our strategy for the next few years in terms of clinical and preclinical progress as well as our financial outlook.

We discussed our preclinical programs and our goal to file seven INDs by the end of the 2015 and explained how we expected to accomplish this within the framework of our current financial expectation.

Finally, we articulated how our vision and strategy enables us to create value while mitigating on several levels some of the inherent risk in drug development. If you have not had an opportunity to listen to our analyst briefing, I encourage you to do so. A webcast of the event is still available on our website on the events and presentation page in the investor section of the site.

At the analyst briefing, we also introduced our new in vivo protein replacement platform. This is a highly disruptive and broadly leveragable approach for the development of potentially curative ZFP therapeutics for a variety of diseases that are currently being treated using protein replacement therapies.

A few days after our briefing at the American Society of Hematology meeting or ASH, we gave a more detailed presentation of the data supporting the development of this platform. I have asked Philip to provide more information on this novel approach later on the call.

Looking back, the last 12 months have marked some important catalyst for Sangamo as a therapeutic product development company. Roughly a year ago we announced our first therapeutic collaboration with Shire to develop potentially curative ZFP therapeutics for monogenic diseases.

This alliance has brought further visibility to our product development platform with a highly respected partner as well as important financial benefits to Sangamo. You may recall that the agreement is for seven gene targets and Shire initially chose four in hemophilia, factors seven, eight, nine, and ten.

They also selected our Huntington Disease Program later in 2012 as the fifth of their seven targets. As you will hear from Phillip, strategies that we have developed for our Shire targets namely our in vivo protein replacement platform can also be leveraged for our own proprietary programs in lysosomal storage diseases.

The funding from Shire has allowed us to focus our resources on the advancement of our SB-728-T program in HIV AIDS and other proprietary programs in our preclinical pipeline including the development on ZFP Therapeutics for hemoglobinopathies such as sickle cell anemia, and beta-thalassemia.

Speaking of SB-728-T let me briefly update you on the current status for our lead clinical program. As most of you know, we have two ongoing Phase II clinical trials, SB-728-902 Cohort 5 and SB-728-1102. These trials represent two distinct approaches. Both aimed at maximizing the engraftment of T-cells in which both copies of the CCR5 gene are disrupted so called biallelic modification T-cells. Modification of both copies of the CCR5 gene makes T-cells resistant to infection by HIV.

As we have previously stated, we anticipate presenting preliminary data in the first half of this year and expect to present full data sets by the end of 2013. We will also be presenting data from our earlier Phase I, SB-728-T clinical trials at the Conference for Retroviruses and Opportunistic Infections or CROI in early March.

But before going into more detail on our ZFP Therapeutics programs and our plans for 2013, let me hand the call over to Ward for an update on our fourth quarter and full year 2012 financial results as well as our financial guidance for 2013. Ward?

Ward Wolff

Thank you, Edward and good afternoon everyone. As you know, after the close of the market today, we released our financial results for the fourth quarter and full year ended December 31, 2012 and I’m pleased to review the highlights of those results.

Revenues in the fourth quarter of 2012 were $8.9 million compared to $4.7 million for the same period in 2011. Fourth quarter 2012 revenues were comprised of revenue from Sangamo's collaboration agreements with Shire, Dow AgroSciences and Sigma-Aldrich as well as approximately 400,000 of revenue from research grants.

As we mentioned in the press release, the increase in collaboration agreement revenues was primarily due to our agreement with Shire as well as an increase in the minimum annual sublicensing revenue from Dow AgroSciences.

Total operating expenses for the fourth quarter of 2012 were $12.3 million, compared to $11.1 million for the same period in 2011. Research and development expenses were $9.3 million in the 2012 quarter and $7.9 million for the prior year quarter. The increase is primarily due to increase in external research expenses associated with our preclinical programs, partially offset by lower clinical trials and manufacturing expenses associated with our SB-728-T HIV AIDS program. General and administrative expenses were $3 million for the fourth quarter of 2012 and $3.2 million for the same period in 2011.

Non-cash stock based compensation expense was $1.3 million for the quarter with 700,000 in research and development and 600,000 in general and administrative.

For the fourth quarter of 2012, we reported a consolidated a net loss of $3.5 million or $0.07 per share compared to a net loss of $6.4 million or $0.12 per share for the fourth quarter of 2011.

For the full year 2012, revenues were $21.7 million compared to $10.3 million in 2011 with the increase again primarily due to Sangamo's collaboration agreement with Shire.

Total operating expenses were $43.9 million in 2012 and $46.1 million in 2011. The net loss for 2012 was $22.3 million or $0.42 per share compared to a net loss of $35.8 million or $0.71 per share for 2011.

Turning to the balance sheet, I am pleased to report we ended 2012 with $76.3 million in cash, cash equivalence, short term investments and interest receivable. Our net cash used in operating expenses was $8.1 million for the year.

With respect to financial guidance for this year we expect to have a cash and investment balance of at least $55 million at the end of 2013 inclusive of research funding from Shire but exclusive of any new funding from a partnership or other sources. We also expect 2012 operating expenses to be in the range of $46 to $50 million and revenues to be in the range of $20 to $24 million. This includes the research funding from Shire for internal and external research program related cost.

For the purpose of revenue guidance we will continue to ratably amortize the upfront fee from Shire into revenue over six years, the initial research term provided in the Shire agreement. We also expect that the spread of total revenue over the fourth quarters of 2013 will be generally in line with the pattern in 2012.

In summary, 2012 was an eventful year; we are pleased to have realized our financial objectives with respect to both operating results and net cash usage. We are focused on advancing our clinical and pre-clinical pipeline while maintaining our customary financial discipline. Thank you and we'll now turn the call back over to Edward.

Edward Lanphier

Thank you Ward, as you have heard we ended 2012 with just over $76 million in line with our guidance of at least $75 million which relative to our historic and projected burn rate is a strong cash position. As we outlined in our analysts briefing we believe that our balance sheet provides a solid basis from which to work and will enable us to complete our ongoing Phase II clinical trials and to bring up to seven products to INDs by the end of 2015.

The platform nature of our technology enables us to leverage our work across multiple programs, partnered and proprietary. I've asked Jeff to outline our decision making process and provide more insight into how we prioritize programs and determine how to apply our technology to therapeutic targets that we have chosen. Jeff.

Geoff Nichol

Thanks Edward. As you know, our ZFP platform is unique in that it operates at the DNA level. We've shown this technology to be robust, highly specific and broadly applicable to target any gene that we choose. This gives us a very versatile toolbox, the scope of which cannot be duplicated by small molecules, antibodies or RNA based technology such as Antisense and RNAI. Using ZFPs we can access a range of powerful gene modification outcome, including permanent gene disruption, gene addition or correction as well as the ability to regulate the expression of genes in a cell, turning them up or down to make more or less, of a given protein. This gives us distinct technical advantages and enables us to think very differently about how we address disease particularly so called monogenic diseases caused by a mistake in a single gene such as hemophilia, Huntington's disease or beta thalassemia. This allows us to think not just about treating or alleviating symptoms but about really engineering genetic cures, a whole new paradigm in medicine.

So, given the power and breadth of our platform how does one begin to prioritize a therapeutic pipeline, how do we select targets that should, product strategy be to use this technology to its fullest potential. What characteristics do we need in the target disease before we begin to apply our toolbox in a way that can drive a genetic cure? And very importantly, what is the best strategy for delivery in order to achieve the therapeutic effect we're looking for.

First, what is a qualified target? There are several essential criteria that we think about. The first is an unambiguous correlation between the gene and the disease. By definition that’s a monogenic disease. For example a mistake in an individual's factor IXG results in that person having hemophilia B. correction of the mistake in a mutated gene to provide a permanent source of the fractional factor IX protein will cure the disease. Our technology can do this as well as address other disease related gene targets that are inaccessible to small molecules or biologics such as proteins and antibodies.

The next question that we ask is whether there are a sufficient benefit to the patient in developing a therapy using our technology. The symptoms of hemophilia-uncontrolled bleeding can be alleviated by providing replacement factor IX which helps the blood to clot normally. However, depending on the severity of the disease, this usually requires biweekly infusions of replacement proteins, levels of which understandably follow a sore tooth curve, initially very high and gradually weaning, unlike in a normal individual who expresses constant level of protein.

So, while in some cases, there are current therapies, they are costly, have side effects and are not always efficient. An ideal approach is to engineer a cure that permanently changes the lives of our patients. If we can correct the person’s own defective genes or as you will hear later, have the individual safely make sufficient amounts of the correct protein from a safe harbor site in the genome, we can potentially cure hemophilia.

The next question that we ask is around delivery. To which cells do we need to apply a technology for each indication? Are the target issues blood or bone marrow cells requiring an ex-Vivo approach that is treatment outside the body, such as in our HIV and hemoglobinopathy programs, or is the disease optimally addressed by systemic delivery such as an (inaudible) replacement application or directly into a specific tissue such as the brain as in Huntington disease?

Finally, what is the best method to deliver our ZFP Therapeutics to these locations and what duration of effect do we require? Short transient expression such as for our gene modification technology or longer-term expressions as in our gene refreshment applications. We have developed a full range of delivery options for our ZFP Therapeutics depending on the indication and the product strategy and these are core competencies here at Sangamo.

The final question we ask is how quickly and decisively we can generate proof of concept data in animals and humans. One advantage of many monogenic diseases and protein replacement therapies is that animal studies and early small-scale human trials can be highly predictive of ultimate therapeutic outcome.

With that I would like echo Edward and encourage you all to listen to the reply of our analyst briefing, if you’d like a deeper dive into our product development strategy.

And I'll now turn the call back to Edward.

Edward Lanphier

Thanks Geoff. In addition to broadly covering how we think about our therapeutic product development platform and its applications to different disease targets. We also spoke for the first time about a new strategy that we have been developing our in Vivo Protein Replacement Platform. This is an application that we feel truly represents our ability to reliably make highly specific and precise changes to the genome and one that can be leveraged across multiple monogenic diseases.

I have asked Philip to provide you with more details. Philip?

Philip Gregory

Thanks Edward. Let me begin with some background. As many of you know, in 2012, we published in the journal Nature, the use of our Zinc Finger Nucleases or ZFN technology to permanently correct a mutation in the human factor IX gene effectively providing a genetic cure for hemophilia in a mouse model of the disease. In this instance, we used ZFN specific for the human factor IX gene and a corrective DNA repair sequence encoding a good copy of factor IX.

Systemic administration of these ZFNs resulted in the correction of the factor IX gene and production of the corrected protein in the liver of the animal. It restored blood clotting time to normal. We can, of course, design ZFNs to correct a variety of gene targets that are mutated in diseased. (Inaudible) and Alpha 1-antitrypsin deficiency are examples we also published in Nature. For each target, we designed a specific set of ZFNs to precisely bind that individual gene and demonstrated highly efficient gene correction.

Thinking along the lines that Edward and Geoff outlined, how do we maximize the value of this incredible technology? We asked ourselves, could we go one step further than doing this one gene at a time? Wouldn’t it be more efficient if we could find a way of leveraging one single site in the genome to treat a host of monogenic diseases requiring enzyme or protein replacement? Could we design one set of ZFNs that would enable us to safely insert a correct copy of any gene at the single site and produce the encoded therapeutic protein from that site.

What I am going to describe is what we came up with. Our In Vivo Protein Replacement Platform which is a potentially highly leveragable method of using a single ZFN site to produce any secreted therapeutic protein that we desire from the liver. We reasoned that the ideal gene would fit the following criteria. It needed to be highly expressed, only expressed in the liver, and the gene whose capacity was so high, that co-opting just a small percentage of that gene’s output would be safely tolerated and provide a therapeutic dose of protein.

We picked the albumin gene. It has all the properties that we desire. Very-very highly expressed, it’s actually the most abundant protein found in the serum, so it's safe to co-opt a small percentage of its expression and it's highly tissue specific and is only made in the liver. Just to give you some perspective, we produced about 80 grams of albumin per week, which is about 9 pounds of albumin per year. So it’s very clear with that level of expression we would need to coopt very little of the total albumin production rate to achieve levels of stable protein production that will be sufficient to take on hemophilia or indeed many other diseases requiring enzyme replacement including some lysosomal storage diseases.

The concept is therefore very simple, by delivering ZFN design to specifically target the albumin gene, as well as the DNA template that have enclosed the therapeutic we wish to express, we can place the expression of this protein under the control of the albumin promoter in the liver. As we showed at ASH, this approach is agnostic protein payload and coded by the DNR repair template. So it could be factor IX for hemophilia B or factor VIII for hemophilia A or lysosomal storage disease enzyme.

If we use hemophilia as an example, the goal in treating hemophilia with clotting factor infusions is to achieve about 5% of the normal level of proteins. Using our technology to correct the endogenous factor IX locus, we achieved over 20% of the wild pipe levels of factor IX, which is corrective in terms of clotting time.

Using the in Vivo protein replacement platform powered by the albumin locus we achieved up to 100% of the normal factor IX level in mouse models. Similar data were also presented at ASH demonstrating the feasibility of this approach with four different enzymes that are mutated in Fabry, Hunter, Perla and Gaucher disease all of which lysosomal storage diseases.

So in summary, we’ve taken a highly disruptive technology platform which enables us to specifically target a chosen location of the human genome and achieve permanent genome editing and we’ve developed an entirely new product strategy which has the potential to be applied to a wide range of monogenic diseases, where the liver is the appropriate organ to deliver our therapeutic payload.

And on that note, I’ll hand you back over to Edward.

Edward Lanphier

Thanks Phillip. So what we’ve tried to do today is give your insight into how we approach targets and implement our strategy in the development of ZFP therapeutic pipeline. Over the next year we expect to make significant progress in delivering on the promise of ZFP therapeutics.

We will complete our Phase II clinical trials in our SB-728-T HIV AIDS program. With positive data from these studies we expect to partner in this program for further development and commercialization. You can expect data presentations from these studies in the first and second half of 2013, as well as a presentation in CROI on further immunological data from our earlier trials.

Over the next year, we will continue to present data from our partnering programs in hemophilia and Huntington disease and our proprietary program in hemoglobinopathies and lysosomal storage diseases. As we outlined in our analyst briefing in December, our goal is to file INDs in 2014 in hemophilia A and B, a hemoglobinopathy program and our HIV application in stem cells which has been funded by a grant from the California Institute for Regenerative Medicine or CIRM.

In 2015, our goal is to file INDs for Huntington’s program with Shire and two lysosomal storage diseases applications. I also hope that our presentations over the past few months have provided you with a sense of how our technology platform and business development strategy can create significant value yet mitigate risk via diversification and leverage. We have distinct therapeutic product development strategies that can be implemented to address a variety of well validated targets.

We have a business development model that has enabled us to generate both non-therapeutic and therapeutic partnerships, as well as proprietary programs. And as we have a platform, we can and will seek out further therapeutic partnerships to bring selected programs through clinical studies to commercialization. This along with our careful management of our resources and our ability to leverage advancements of our technology across the platform has given us the balance sheet strength to pursue an ambitious therapeutic product development pipeline.

On the financial side, we began the year with just over $76 million after an essentially cash burn neutral fourth quarter and expect to end 2013 with cash and cash equivalents of at least $55 million. This cash projection does not however include any new agreements or partnerships that we may develop beyond our agreement with Shire.

Needless to say, we are looking forward to an exciting year of progress in what feels like a promising climate for Sangamo, with a strong interest from Big Pharma patients and investors and potentially curative approaches to genetic and rare diseases, and a growing appreciation for the potential of our ZFP therapeutic platform.

We look forward to keeping you informed of our progress. We will be presenting at the Leerink Swann Global Healthcare Conference as well as the RBC Capital Markets Global Healthcare Conference in February in New York, the Cowen & Company 33rd Annual Healthcare Conference in early March in Boston and the Barclays Global Healthcare Conference in late March in Miami. And as we mentioned, data from our Phase I HIV trials we presented at CROI in early March.

This concludes our prepared comments. I would now like to open up the call for your questions.

Question-and-Answer Session


(Operator Instructions). Our first question is from Charles Duncan at Piper Jaffray. Your line is open.

Charles Duncan- Piper Jaffray

So, my first question is on that upcoming data at CROI. It's clear that your line is going to be additional data from Phase I. Can you help us understand how to think about that with regard to the ongoing Phase II? What would you expect to see?

Edward Lanphier

Well I don't know, I'll speak while Geoff and Dale collect their thoughts on this. I mean I would probably say we're not interested in and particularly front running the actual presentation. I like the way I characterized it before Charles and I'll certainly ask Dale or Geoff if they want to come further, is that at ICAC in September for the first time we really laid out the emulogical underpinnings of this approach, in terms of both durability as well as the type of the T cells that are involved. And I think that you should expect to see further analysis along those lines. I'll pause there and see if Dale or Geoff want to add to that or have any more color on that. No, that about covers what I think we would highlight in terms of the expectations.

Charles Duncan- Piper Jaffray

Okay, that makes sense Edward. And just to be clear you stated your strategy then, if you have positive data out of these twos to seek a partnership for future development?

Edward Lanphier

That's correct.

Charles Duncan- Piper Jaffray

And then if we could move on to the INDs within the Shire partnership, could you help us understand some of that needed steps required to get to those INDs and whether or not you'll be increasing visibility on that progress.

Edward Lanphier

Well, again I'll start and happy to have Philip or Geoff or Dale provide more color. And we try to lay out at the analysts briefing some of the major buckets here Charles and so refer people to the specific sections and the analyst briefing we went through, some of the next steps in detail. But essentially what we need to do and starting with the hemophilia program is scale up and from small to large animals, establish the delivery modalities and ratios in terms of delivery and then with that in place move forward into standard GNP production, toxicology studies and IND filing, but that's a very high level representation. Anybody want to drill down on any of that in any more detail?

Dale Ando

Yes, I think the critical steps are really showing that we can continue to move up in scale, both in terms of delivery efficiencies to large animals and then upping the scale in terms of manufacturing and that's the, those are the, sort of critical path items for us.

Charles Duncan- Piper Jaffray

And then success will be defined by the actual filing of INDs or do you anticipate being able to provide some additional information on progress and finally is the filing of an IND pretty much Gant Chart driven or does it require some okay or buy in by Shire?

Edward Lanphier

Well I think I’ll take them step at a time. I think as we mentioned you'll continue to see us present and publish at appropriate disease oriented meetings like the ASH meeting, like ASGCT Society for Neuroscience on pre-clinical efficacy data. I think you'll also see major milestones announced as we move through programs, such as initiation of toxicology studies or things like that. And of course in terms of the actual IND filing, this is a collaboration so we will do and make those decisions in discussions with Shire but I think we are equally motivated, both parties are motivated to move this forward in a high quality way but also as efficiently as possible, so I think we're joined at the hip on that.


Thank you. Our next question is from Liana Moussatos of Wedbush Securities, your line is open.

Liana Moussatos - Wedbush Securities

The two Phase II HIV trials, do you envision reporting them together or this enrolment's different, would you report one out and then the other?

Edward Lanphier

Again I'll start and Dale and Geoff can comment but these are independent studies and so I don’t see one, I don't see them having to be linked in terms of when they're presented or anything like that. I'll give a little bit of color that I've given in the past to others.

The Delta-32 heterozygotes study is essentially the same process, the same treatment for all subjects on that study. The engraftment enhancement study is a dose escalation study starting at the lowest dose and then moving up and so one might expect that you would see data from the Delta-32 studies in sufficient numbers earlier than one might see the later stages of the higher dose in the dose escalation Cytoxan studies but that’s a general statement about the process of the trials themselves but I don’t see them necessarily been presented together. Geoff or Dale, any?

Geoff Nichol

I can’t really add a whole lot more color to that. Edward is right. There probably is something of temporal staggering of the two studies but I can’t really elaborate more in terms of exactly how much of each study will present in the preliminary presentation in the first half of the year and obviously we do anticipate being done with both studies by the end of the year.

Liana Moussatos - Wedbush Securities

So you could have a press release on one and then press release on the other, or would you have one press release with top-line data for both in the first half?

Edward Lanphier

The possibilities are mindboggling. Yes, I don’t think that we are planning this to be, not to be glib about it, around press releases we are really driven by the data and by sufficient amount of data to make a sincere legitimate credible scientific presentation.

Liana Moussatos - Wedbush Securities

What do you mean by sufficient amount of data, certain number of patients?

Edward Lanphier

Yes, certain number of patients who have a sufficient amount of time that we can make a reasonable clinical observation.

Liana Moussatos - Wedbush Securities

Then what number would that be?

Edward Lanphier

That would be a sufficient number.

Liana Moussatos - Wedbush Securities

Okay. In 2014, you mentioned the INDs and then another group of INDs was at 2013 or 2015, for Huntington and lysosomal storage diseases?

Edward Lanphier

I must have slurred my words, 2015 for Huntington and to lysosomal storage disease targets.

Liana Moussatos - Wedbush Securities

And in 2014, what were the ones that you mentioned again?

Edward Lanphier

Two hemophilia targets, factor VIII and factor IX, the stem cell based HIV program that we are doing in collaboration with City of Hope and (CIRM) and the hemoglobinopathies program for CD34 cells.


(Operator Instructions). Our next question is from Elemer Piros of Burrill Securities. Your line is open.

Elemer Piros - Burrill Securities

What I would like to ask Edward is, and this is related to what Charles was asking about the IND enabling studies, if you could give us an idea, if there are any peculiarities, differences between when you are getting ready for an in Vivo as opposed to an ex Vivo trial, and as you go from small animals to larger animals and to humans, the delivery system, would it remain the same?

Edward Lanphier

Let me repeat the questions, just so I have it. You are asking about sort of preclinical development path to IND filing and the differences, potential process or hurdles that might be different for an in Vivo therapy versus and ex Vivo therapy, is that right?

Elemer Piros - Burrill Securities

That is exactly correct. And if there are any changes; for example as you work up from mice to non-human primates to humans in terms of the way you deliver the therapy?

Edward Lanphier

Yes, again I will again I’ll go first here. I’m not sure that I’m the right person that I am also looking around the room to see who wants to raise their hand to jump on it. Yes, I think the path under Ciber and you know this is both under Ciber both in the division of cell and gene therapy, is well-well established. And for instance for our in Vivo approaches, both factor VIII and factor IX, lysosomal storage diseases, Huntington’s were using an NAAV vector. There have been, I don’t know what the right numbers. I will take thousands of patients who have been treated with AAD under dozens and dozens of INDs and so there is a well-established path in terms of toxicology studies, CNC, release criteria for the vector and so on so forth and Dale has been through this dozens of times with the programs.

On the cell therapy side, again, same sorts of issues, well established path for characterization of the initial material characterization of release criteria and so on and so forth. And in terms of toxicology studies again, well established processes. With that said I mean, Dale are there any things that you would point out that differ between, I’ll just take toxicology studies for cell based therapies versus vector therapies.

Dale Ando

In general, human cell based therapy, there is really no good animal model per se to show us exactly what’s being done and in general you put those cells into compromised mice to look at safety and whatever parameters if any that can be evaluated whereas the direct viral vector therapies often can be mimicked in animals and where appropriate we will do those for both preclinical and for safety. So that’s the major difference.

Elemer Piros - Burrill Securities

And in terms of factor use as you; for example if you think about the Factor IX program, these are all scaling up. The same sort of delivery system used as it goes from?

Philip Gregory

This is Philip. For our in Vivo programs for example we will be using the identical vector systems for the both small animal studies, the large animal studies, and obviously those will be the ones that we are multiplying ultimately take to clinic. So there is no change in the vector used between a small animal safety testing and/or efficacy testing and the ones that we used for large animals are ultimately declined.

Edward Lanphier

Okay and certainly Elemer, in our in Vivo vectors are at no associated virus and we have access to at least two strings of AAV which are effective for delivery to deliver. So that’s the approach there. The ex Vivo approaches don’t use an AAV. There are various approaches that we can take to getting the encoded ZFNs and ZFPs into the cell and clearly the toxicological issues with in Vivo tend to deal with systemic delivery and so on we still face the fact that we are targeting the human genome without therapeutic and it’s not usually possible to fund exactly for same site in animals for the specific agent in the Vivo setting. In the ex Vivo setting we can modify human cells and put those into animals again as they will a set highly artificial situation but there the issues are engraftment and the systems and continued help of the cells and the animals during the time that you can maintain those human cells ex Vivo in those immuno deficient animals.


Thank you. I'm not showing any further questions in the queue. I’d like to turn the call back to management for any further remarks.

Edward Lanphier

Great. We’d like to thank you for joining us and we look forward to speaking with you again when we release our first quarter financial information. We will be available later today if there are any follow-up questions. Thank you.


Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Everyone have a great day.

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