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Sangamo BioSciences, Inc. (NASDAQ:SGMO)

Q1 2013 Earnings Call

May 08, 2013 05:00 PM ET

Executives

Elizabeth Wolffe - Senior Director, Corporate Communications

Edward Lanphier - President and CEO

Ward Wolff - EVP and CFO

Geoff Nichol - EVP, Research and Development

Philip Gregory - VP, Research and CSO

Dale Ando - VP, Therapeutic Development and CMO

Analysts

Charles Duncan - Piper Jaffray

Leanna Mistasos - Wedbush Securities

John Newman - JMP Securities

Elemer Piros - Burrill Securities

Ryan Martin - Lazard Capital Markets

Operator

Good afternoon, and welcome to Sangamo BioSciences Teleconference to discuss First Quarter 2013 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 Communication.

Dr. 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 First Quarter 2013 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 call, Edward will highlight recent activities and significant events from the past quarter. Ward will then briefly review first quarter 2013 results as well as our financial guidance for 2013 and Geoff will provide an update on our ZFP therapeutic program. 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. 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 discussed 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 of 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 first quarter results for 2013, as well as our near and midterm plans for the development of our ZFP therapeutic pipeline. This year, our major focus for Sangamo is the advancement of our lead clinical program, SB-728-T, an autologous T-cell therapy designed to provide a functional cure for HIV/AIDS.

Using our Zinc Finger Nuclease or ZFN technology, we can disrupt the gene for CCR5, a critical co-receptor for HIV infection as CD40 cells and generate a population of T-cells that are protected from HIV infection. The aim of the therapy is to provide a reservoir of HIV resistant, immunologically active cells that are available to fight opportunistic infections and the virus itself.

We have ongoing phase II trials of SB-728-T that represents two distinct approaches, both aimed at maximizing the engraftment of T-cells in which both copies of the CCR5 gene are disrupted, so called (biallelically) modified T-cells. Knocking out both copies of the CCR5 gene makes T-cells resistant to infection by HIV. In March, we presented new immunologic data from our phase I clinical trials that the major scientific meeting for HIV research, the Conference for Retroviruses and Opportunistic Infections or CROI.

The data were enthusiastically received as they extended our understanding of the unprecedented improvement in the immune system of HIV infected subjects after a single SB-728-T treatment. The data also showed that certain cell surface markers and gene expression profile may predict which patients will likely respond best to SB-728-T treatment giving us a valuable insight for subjects recruitment as we continue our clinical research. I will ask Jeff to provide more details on these data later in the call.

As most of you know our guidance has been, that we will present preliminary data from our phase II trials in the first half of 2013, and the full data set by the end of this year. The preliminary data will be presented next week at the annual meeting of the American Society for Gene and Cell Therapy or ASGCT by Dale Ando our Vice President of Therapeutic Development and Chief Medical Officer. Dale is an invited speaker and is chairing one of the first meeting sessions on Wednesday, May 15. I’ve asked Jeff to outline what you should expect from Dale’s presentation.

ASGCT is an important meeting for us every year. And this year it’s certainly no exception. In addition to Dale’s talk, we will have twelve other presentations including eight abstracts that were chosen for oral presentations. Notably, these will include new data from our In Vivo Protein Replacement Platform that further demonstrate the breadth and leveragability of this approach. By the way, I am very pleased to note that this abstract was selected as one of the top 6 talks submitted to the entire meeting. I think that this is a good indication of the kind of attention our in vivo protein replacement strategy is garnering in both academic and pharmaceutical circles.

The other presentations and posters cover a wide range of programs and collaborations including monogenic diseases, cancer immunotherapy, technology development and other aspects of our efforts in HIV. However, before going into more detail our ZFP therapeutic programs and our plans for 2013 and beyond, let me hand the call over to Ward for an update on our first quarter 2013 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 first quarter ended March 31, 2013 and I’m pleased to review the highlights of those results. Revenues in the first quarter of 2013 were $4.6 million compared to $3.2 million for the same period in 2012.

First quarter 2013 revenues were comprised of revenue from Sangamo's collaboration agreements with Shire, and Sigma-Aldrich as well as approximately $0.5 million 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 total operating expenses for the first quarter of 2013 were 11.5 million compared to 10.5 million for the same period in 2012. Research and development expenses were 8.2 million in the 2012 quarter and 7.3 million for the prior year quarter.

The increase was 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 3.3 million in the first quarter of 2012 and 3.2 million for the same period in 2012. Non-cash stock-based compensation expense was $1.3 million for the quarter of which $700,000, is included in research and development expenses and $600,000 is included in General and administrative expenses.

For the first quarter of 2013 we reported a consolidated net loss of $6.9 million or $0.13 per share compared to a loss of $7.3 million or $0.14 per share for the same period in 2012. Turning to the balance sheet, I am pleased to report we ended the first quarter of 2013 with 70.3 million in cash, cash equivalents short term investments and interest receivable reflecting net cash usage of $6 million for the quarter. With respect to financial guidance for this year we are on-track 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 our partnership or other sources.

We expect 2013 operating expenses to be in the range of $46 million to $50 million and revenues to be in the range of $20 million to $24 million. This includes research funding from Shire for internal and external research program related costs. For the purpose of revenue guidance we will continue ratably amortize the upfront fee from Shire in the revenue over the initial six year research term provided in the Shire agreement. We also expect that the spread of total revenue over the four quarters of 2013 will generally be in line with the pattern in 2012.

In summary, we are focused on advancing our clinical and preclinical pipeline while maintaining our customary financial discipline and we are pleased to have realized our financial objectives for this quarter with respect to both operating results and net cash usage. Thank you and I will now turn the call back over to Edward.

Edward Lanphier

Thanks Ward. As you have heard we ended the first quarter with just over $70 million which relative to our historic and projected burn rate is a strong cash position. This keeps us on path to meet our guidance of ending 2013 with at least $55 million in cash and cash equivalents. Underpinning our balance sheet strength our ZFP platform enables us to pursue a business model that maximizes the value of our technology across a broad range of applications and allows us to efficiently leverage our efforts to develop ZFP Therapeutic across multiple indications both partnered and proprietary.

The collaborative agreements that we have established in non-therapeutic applications with Dow AgroSciences and Sigma-Aldrich provide revenues from milestone payments, sub licensing and royalties on product sales, all at no cost to Sangamo. Even more significantly our therapeutic partnership with Shire around the hemophilia targets and Huntington's disease provides ongoing funding for both internal and external research costs as well as future milestone payments including 8.5 million for each program that we forward to an IND application.

We believe that this solid financial foundation will allow us to advance our preclinical pipeline at a rate that will enable to file up to 7 new IND applications by the end of 2015 including 3 as part of our Shire partnership and to complete our ongoing Phase 2 clinical trials of SB 728-T by the end of this year. And now, let's turn to that program, our lead clinical program in HIV AIDS. I've asked Geoff to discuss the data that we recently presented at CROI and the implications for our ongoing studies, as well as to discuss what you should expect at ASGCT next week. Geoff.

Geoff Nichol

Thanks Edward, and good afternoon to everybody as most of know our zinc finger nuclease technology allows us to specifically modify or disrupt any gene of our choosing. In the case of our HIV program we are targeting the CCR-5 gene which encodes the major co receptor for HIV entry into CD4 cells. CCR-5 is a well validated target for a ZFN approach to HIV as we know that there is a well characterized natural mutation CCR-5 delta 32 which makes the CCR-5 protein non functional, this enables individuals who carry that mutation on both copies of their CCR-5 gene to resist HIV infection despite repeated exposure to the virus.

As Edward said, in our ongoing clinical program we are knocking out CCR-5 in the CD4 T-cells of HIV infected individuals with the aim of generating a population of these cells that will be both protected from HIV infection and capable of mounting an effective immune response against the virus and opportunistic infections. However before going much further given current therapies one might ask the question, why bother? Hasn't anti retroviral therapy or ART made HIV a chronic and controllable infection? Both these drugs which suppress new virus replication work just fine. Certainly although chronic use of ART has significant side effects, the development of current anti retrovirals is one of the great success stories of pharmacology.

With that said however even the best version of these drugs only keep blood levels of the virus below detection, they do nothing to diminish the levels of the viral reservoirs which exist deep in the body, where the virus is integrated into the DNA of a specific subset of CD4 T-cells, the central memory T-cells. That's why when subjects come off therapy the viral load in their blood rapidly rebounds as the virus emerges from these reservoirs killing many of these cells in the process. This is why many other groups in the HIV community are researching novel approaches to clearing the HIV reservoir and why we are pursuing a promising immunological approach with the goal of protecting critical central memory T-cells from HIV entry and thereby providing a functional cure for HIV.

As you are aware one of the reasons that HIV is being such a difficult virus to thwart is that it kills the CD4 T-cells including central memory T-cells depriving the body of an immune cell type which is critical in the battle against infections and providing long term immunity. CD4 cells are also called T-helper cells, play a vital role in controlling viral and bacterial infections. In simple terms, they circulate throughout the body, in the blood and lymph tissues and when they come across the pathogen they become activated and divide.

Some of the pathogen becomes what is known as infected T-cells that we will secrete factors that will help another T-cell type; the CD 8 T-cell to do the actual killing. Without this hope, CD 8 T-cell are not effective killers. Some of the cells will become memory T-cells. Memory T-cells persists in the circulation for long periods until they re counter the same pathogen. Then they quickly re activate, reacting more rapidly than they did in their first encounter.

One of the central problems of HIV however is that one CD 4 T-cells become activated, they also become better targets for the virus and are killed. This becomes a vicious cycle which cannot for the reason that I have just explained be addressed by ART.

What we are trying to do is break this cycle and protect and empower the body's immune system to control the virus without anti-retroviral drugs. We believe that our approach like any other immune logical response to an infection does not require us to protect every single CD 4 T-cell in the body. Just as sufficient number of cells of the right type that are capable of recognizing the virus and ultimately helping the CD 8 T-cells to destroy it.

Results from our Phase 1 study suggest that we are doing just that and have given us valuable insights into both the properties of SB-728 T and potential approach to maximize its effectiveness. The data to date demonstrates that ZFN modified cells in graph well once fused back into the body and what I mean by that is that they circulate as more T-cells do through the bloodstream; the lymphoid cells including the gut-associated lymphoid tissue which harbors much of the HIV reservoir.

The ZFN modified cells compared to the; just like unmodified cells from an immunological perspective and they are persistent. In fact increasing in number after infusion into the body and are most respond to the subject. We can still detect ZPN modified cells as all of the subjects that we have treated. Some of whom were infused over three years ago. Our further observation that was made in the Phase One studies was the unprecedented positive effects of SB-728 treatment on the immune system, and particularly in increasing levels of circulating CD 4 T-cells.

The cells that the HIV infection destroys; with SB-728 T treatment we see a sustained increase in CD 4 T-cells counts in the blood, in the maturity of subject which also leads to a normalization of the CD 4 to CD 8 T-cell ratio. Our market of the overall health of the immune system, this unique immunological reconstitution effect has not been seen to this degree with any other treatment and occurred over and above any increases in T-cells counts introduced by ART.

To try to better understand the mechanism of this increase, we looked more closely at the toxic cells that were part of this phenomenon and the role they play in immune function. This work was carried out in collaboration with the laboratory of Dr. Rafick-Pierre Sekaly, who is co-director and chief scientific officer of the vaccine and gene therapy institute of Florida and a leader in this area of immunology. We presented the initial findings at the Interscience conference on Antimicrobial Agents in chemotherapy or ICAAC in September last year. And further data at the CROI meeting in March.

We analyze the types of CD4 cells in blood samples from the nine subjects enrolled in the first three cohort SB-728-902 study. Samples were collected prior to and over the period of a year post-treatment with a single infusion of SB-728-T and all subjects we saw durable increases in CD4 T cell count over base line over at least 12 month which overruled was the fifth degree significant. Five of the nine subjects demonstrated a remarkable increase in CD4 counts which improved to greater than 500 cells per micro liter.

Our level that was maintained for a year over post-treatment and which for reference is the usual T cell count threshold for initiation of HAART in HIV infected individuals. Perhaps even more importantly when we look more closely at the types of CD4 T cell in the SB-728-T product and in the circulation post-treatment we found increased level of central memory T cells.

Long term increases in total CD4 T cell counts correlated with increased numbers of central memory T cells and importantly increased ZFN mediated CCI5 disrupted central memory T cells. We’ve also observed the levels of CCI5 disrupted memory T cell was stable or increased all time compared to other T cells subpopulation. In addition, we saw that those subjects that had shown the greatest response in terms of an increase in the CD4 cells had a particular cell surface marker profile gene expression signature specifically these high levels of central memory T cells correlated with markers but indicated that there was less general inflammation in the immune cells and less activation of central memory cells which may provide useful clues as to which patient may respond best to SB-728-AT.

We continue to extend these studies. Returning to our ongoing clinical studies consistent with the biology and our original hypothesis for this program, in Phase I trial we saw a statically significant relationship between the level of engraftment of ZFN modified cells in which both copies of CCI5 gene is disrupted, so called biallelic modification, which affords complete protection from HIV entry and the level of virus in the blood and HIV infected subjects during the treatment interruption from the antiretroviral medication.

This observation prompted us to initiate two new clinical studies SB-728-902 cohort 5 and SB-728-1101 both of which aimed to maximize engraftment of biallelically modified T cells. The former is in subjects that already have one of their CCI5 gene knocked out so call CCI5 Delta-32 heterozygotes and the later in the rest of the HIV infected population in which we’re using a conditioning regimen with Cytoxan design to enhance engraftment as ZFN modified cells. In both of these studies all subjects will remain on art therapy through the initial SB-728-T treatment they later undergo an interruption of their anti-retroviral drugs during which we can evaluate the relationship between the level of engraftment of biallelicly modified cells and numerous immunological parameters as well as the affect on viral load.

Why data that we have generated thus far so important and why are we so excited by our progress? If we consider the factors required for immunological approach of a functional cure, we have successfully worked through the list of things that are necessary for us to be successful. First, we have modified and protected a critical cell type CD4 central memory T-cells. These cells are engraft traffic throughout the body appear to be immunologically active and finally persist, including in such which harbors the HIR reservoir,

In addition, we have indentified key immunological market of inflammation that correlate with the degree of engraftment and can potentially aid in the selection of subjects for which SB-728-T maybe most effective. Second, we see an unprecedented increase in total CD4 T-cell which correlates with the levels of protected CD4 central memory T-cells suggesting immune reconstitution in the subjected treated with SB-728-T.

What else do we need? Our ongoing studies aimed to answer three further questions. First, how many biallelicly modified T-cells do we need in what cell type, such as CD4 central memory cells? Second, are the cells HIV reactive and capable of supporting a response to the virus and third are their biomarkers that can identify the best patients to treat with SB-728-T? These are precisely questions that are being asked in our ongoing clinical trials and immunological investigations.

Finally, before I turn the call back to Edward, as you know we will present preliminary clinical data from these Phase II studies next week at ASGCT. These are ongoing studies. Therefore not all of the subjects have been included. So we will only include data from those subjects who have been enrolled in the studies for sufficient time for us to present a meaningful amount of clinical data.

Second these Phase II studies like all Phase I and Phase II trials are by definition studies to evaluate safety and science of efficacy. As such, we’ve planned to present the board set of clinically important end points on observation with guiding our path forward through the prosecution and completion of the trials. These will of course include data around the three questions that I proposed earlier as well as viral load measurements and other relevant immunological data.

With that summary of our SB-728-T program, I look forward to seeing many of you at ASGCT next week and to the opportunity to discuss on new HIV data with you shortly thereafter. With that I’ll hand the call back to Edward.

Edward Lanphier

Thank Jeff. To state the obvious, this is a very exciting and important time at Sangamo. Within the next week, we’ll have important data presentations from both our lead clinical program as well further validation of the leveragability and disruptive potential of our in vivo protein replacement platform.

As the year progresses, we expect to present further data from our partner programs in hemophilia and Huntington’s disease and our proprietary program in hemoglobinopathies and lysosomal storage disorders. We are very focused on our development goals and planned file of seven INDs over the next years including INDs for 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 2014 and in 2015, our goal is to file INDs for Huntington’s program with Shire and two proprietary programs in lysosomal storage disorders.

Later this year, we expect to complete our phase II clinical trials of our SB-728-T HIV/AIDS program and present the complete data set. As we have said before with positive clinical data we expect the partner our HIV program for further development and commercialization. I should also note that we are developing a novel therapeutic platform and therefore is intend to establish additional therapeutic partnerships to help in selected program through clinical studies to commercialization.

In conclusion, I am pleased with the progress we are making toward building substantial and sustainable shareholder value. Our strategy remains focused on development of our ZFP genome editing and gene regulation technology platform to create value while attempting to mitigate risk via diversification and leverage. We are using distinct therapeutic product development strategies to address a variety of well-validated targets.

Our business model has enabled us to generate both non-therapeutic and therapeutic partnerships while retaining significant value in our proprietary programs and by carefully managing our resources and leveraging advancements of our technology across the platform, we have the balance sheet strength to pursue an ambitious but highly disruptive therapeutic product development pipeline.

So, as I said, these are both exciting and important times at Sangamo and we look forward to keeping you informed of our progress. In addition to the presentation at ASGCT next week, we will be presenting at the Bank of America-Merrill Lynch 2013 healthcare conference on May 16.

I also want to take this opportunity to announce that our annual shareholder meeting will be held at 10:00 a.m. pacific time on June 12, here at our company headquarters. This completes our prepared comments. I’d now like to open up the call for your questions.

Question-and-Answer Session

Operator

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

Charles Duncan - Piper Jaffray

And you may have addressed this in your prepared remarks, Edward, but I'm wondering if you could characterize it, I know the data has yet to be presented. But help us understand preliminary data. Do you think there's really mostly value in terms of technological validation? Or some clinical simple concept for next week's trial presentation at ASGCT?

Edward Lanphier

Well Charles we did address the preliminary data aspect, and I will just repeat what Jeff said, and that is that we will be looking at subjects that has had sufficient amount of data in order for us to have a meaningful clinical perspective on them. I am not sure I got the second part of the question. And you’re breaking up at least at this end.

Charles Duncan - Piper Jaffray

Sorry about that. Do you see the value in the data as helping you to gain confidence from a technological perspective? Or for it to translate into clinical benefit? What is the key question that you'd like to have answered in your minds for the data next week?

Edward Lanphier

I will start, and now I will defer to Jeff and Dale who would like to, and then my point of view would be both, right, that as Jeff discussed in some detail, we will be looking at a wide range of endpoints in these studies to date and going forward truly help us learn and inform the mechanism of this immunological therapy and obviously throughout that and included in that are elements of endpoints that speak to clinical benefits. So Jeff, is there any?

Geoff Nichol

Yes, Charles, I think in terms of the question of validating the technology we are feeling pretty confident about the technology at this point. We have got our pretty expensive phase I data set showing that indeed we can modify these cells and slightly give them rotations where they can grow, persist, and do all those good things. So I think this is an ongoing clinical development program, it’s exploratory, and we will be looking to see progress in terms of measuring partly linking modified cells how much do we need, what are the right cells, are they HIV reactive, clearly are they supporting a response to the virus and also are we seeing biomarkers that will help us refine the program as we go forward. So again to repeat Edward, it’s really, it’s both. But you should expect to see some progress in our ongoing clinical evaluation of SB-728-T

Operator

Our next question is from Leanna Mistasos of Wedbush, your line is open.

Leanna Mistasos - Wedbush Securities

Thank you. Since the goal you mentioned is for the HIV program is to partner it before Phase III, what are partners telling you they want to see in the data? Do they need to see -- like for drugs, a reduction viral load to undetectable for a period of time? Or is the reconstitution of the immune system enough for them to pull the trigger?

Edward Lanphier

Well Leanna, it is a good question and it is a heterogeneous population out there the most obvious and accepted endpoint in HIV is impact on viral load and so there is no question that that is the primary recognized endpoint and of greatest interest with that said and I think we will be speaking we have spoken to this at ASGCT and CROI will be speaking more to it going forward is really the unprecedented immune reconstitution that this product provides to these patients and ultimately if you think about the disease in terms of the current ART therapy and as Geoff commented in his program there has been nothing that has been shown to have the kind of increase and durable increase in CD4 counts that this drug has accomplished with a single treatment so I think both elements are important to partners and one obviously has a more established clinical development pathway the other has an absolutely unprecedented immunological benefit to HIV-infected subjects.

Leanna Moussatos - Wedbush Securities

So both in other words you need both?

Edward Lanphier

Well again your question was in the context of partnering but I think both are relevant yes.

Operator

Our next question is from John Newman of JMP Securities. Your line is open.

John Newman - JMP Securities

I just had two quick questions the first one is can you give us a sense as to the type of data that we would see by the year end versus the type of data that we would see next week on the HIV program? And the second question that I had was I know that the number of subjects in these studies that you will be discussing next week is relatively modest but might we see any information on viral tropism at all? Thank you.

Edward Lanphier

So on the first question what are the types of data that you will see now and versus the types of data you will see at the end of the year, it is the same answer the types of data and Geoff I won’t repeat them now but, and Geoff went through them in his prepared comments cover the gamete of relevant endpoints both viral as well as immunologic that are important for this immunological approach to the disease so what you should expect to see now is preliminary so a fewer number of patients and then at the end of the year a complete data set I will also say that in one of the studies the Cytoxan study that a dose escalation study and so you will obviously see at the end of the year more data around higher doses than you will see at the lower doses in preliminary data.

In terms of the question about antiviral data I think again that is certainly a part of what we will be discussing both for preliminary data as well as data sets at the end of the year only look at Geoff and Dale and see if they think that's responsive to your question.

John Newman - JMP Securities

You told us that we're limited to the R5 virus.

Edward Lanphier

I apologize, go ahead Geoff.

Geoff Nichol

Yes, so in terms of tropism you know the studies are designed to enroll patients who are infected with the, exclusively with the R5 virus.

Operator

Thank you, our next question is from Ryan Martins, Lazard Capital Markets your line is open. Looks like our next question is from Elemer Piros of Burrill Securities, your line is open.

Elemer Piros - Burrill Securities

This question is going back a little bit in time, I forget whether it was IL-2 or an IL-7 helping a similar HIV patient population which led to some degree of immune reconstitution of CD4 positive T-cells, but it eventually didn't lead to a impact on the viral load, I don’t know if you remember Geoff or Edward, whether they characterized what type of CD4 positive T-cells they were able to boost.

Edward Lanphier

I know, if you're talking about the (Silcap) study performed by Chiron, they used (inaudible) subcutaneous IL-2 for a year in HIV subjects, the endpoints there really AIDS defining illnesses and not viral load, one of the problems with just using IL-2 was that that provided a growth advantage for both T helper cells and T regulatory cells so that wasn't a bias towards providing any growth signals for the CD4 t helper cells, I think in the long run there was probably only a 50 cell per micro liter increment associated with the increase in total CD4s but I think in the more detailed analysis more than half of those cells were not of the helper phenotype, they're more of the regulatory phenotype.

So that a big difficulty with IL-2 as a growth factor, IL-7 again that is a cytokine for homeostatic proliferation of central memory and one of the issues there in terms of the risk is promoting increase in size of the reservoir and the viral blips that are seen even in patients on heart therapy. So those have been some of the features with respect to T-cell cytokine, cytokine growth factors without specificity in HIV trials.

Elmer Pierce - Bureau of Securities

Yes. Most definitely it does. And, Edward, I also notice that in both the abstracts you submitted and in general there is a significant growth in the (tau) nuclease related work. Do you envision any of your seven INDs filed with that sort of molecular is there; as opposed to zinc finger nucleases?

Edward Lanphier

Well let me ask Philip a little bit about the first part of the question in terms of ASTCT and then we can definitely come back and address the R&D question.

Philip Gregory

Yes, we have 12 abstract for the ASTCT; this time the vast majority focusing on the zinc finger nucleases platform and so that's clearly where our focus is. As you know, we have continued to be pioneers in the application and development of other nuclease platforms including (tau) nuclease. With respect to our selection of program and technology, at this stage we consider the zinc finger platform to be superior and I don’t see any reason to switch to the (tau) platform so as of today I think we should anticipate that the IND's that we have in our sites will be zinc finger driven.

And then just to ego that; I think that's certainly I think the right guidance although I will say it from a clinical perspective; that has technically driven our event; from an intellectual perspective, arguably agnostic given the efforts that we have made in talents.

Elmer Pierce - Bureau of Securities

Okay. And the question related to your stem cell program. I again see that there is quite a bit of work being done on optimizing the right method to introduce the piece of DNA in an a-viral manner or via virus. Where are you in terms of optimizing and getting to the [five] on protocol that you would file an IND with?

Philip Gregory

So obviously the lead stem cell application is also in HIV and this is the work that Edward introduced funded by the California Institute regency medicine and we have as one of the abstracts that the STCT describes, we have essentially selected the messenger R&A as the delivery platform for the nuclease for that particular cell product. And we feel very happy about that selection; obviously the need to create GMP grade virus for this application and to eliminate the use of viral components from the process and so we think it's certainly simpler but perhaps just in just in raw numbers, we see, actually improve efficacy in stem cells using this transient MRNA approach and so that's certainly going to be our selection for the HSE program for the HIV program.

Elmer Pierce - Bureau of Securities

And the last question is, of the seven programs that you discussed, Edward, how many are perhaps in non-human primate studies at the moment?

Edward Lanphier

Well, I think that what we’ve said before is the work that we’re moving towards INDs and 2014 and move the non-human primate large animal models and so that would be preprograms the two hemophilia program and the hemoglobinopathy program.

Elmer Pierce - Bureau of Securities

Okay. Thank you for answering my questions. See you next week.

Operator

(Operator Instructions). Our next question is from Ryan Martin of Lazard Capital Markets. Your line is open.

Ryan Martin - Lazard Capital Markets

Hi. Can you hear me now?

Edward Lanphier

We can.

Ryan Martin - Lazard Capital Markets

Okay. Perfect. My question was just to follow up also on the HIV. I know you said that you'll have date on patients that have sufficient, been on the trials a sufficient amount of time. Do you see that sufficient amount of time being patients who've been through the 16-week treatment interruption and beyond? Or how do you see that being a sufficient amount of time?

Edward Lanphier

I think that’s more or less what we’ve got, I don’t want to be specific but I think in order to make a clinical judgment or have something clinically meaningful to say about this I think having gone through a significant part if not completed. The initial 16 weeks of TI are what we would look at as a good parameter for patients that are valuable or presentable at this point.

Ryan Martin - Lazard Capital Markets

Okay. And also following up on that, at the end of the treatment interruption, you do have some clear parameters that need to be looked at in order to initiate patients on HAART or leave them off HAART, but is there also some element of subjectivity allowed in terms of the calculation and GI evaluation of the patient?

Geoff Nichol

Yes, Ryan. It's Geoff here. I think that's probably best left until we tell you about the patients at ASGCT. And the protocol has guidelines for that and we can speak more at ASGCT when we actually present some of the data.

Ryan Martin - Lazard Capital Markets

Okay, thanks. And then in terms of the protein replacement platform, obviously, you've talked about the extent beyond data with factor IX at ASH. You also had some initial data analyzable storage diseases. In terms of factor IX, you had some functional data on plotting. I mean, should we expect to see functional data here for the lysosomal storage enzyme? How should we think about this presentation? Clearly it's an update and you've been selected as one of the top six docs as you mentioned.

Geoff Nichol

Right out comment first Philip may want to add. I think, what we’ve said and I will stick to this is that we will have more data at ASGCT next week that speaks directly to the breadth and leveragability of the in vivo protein replacement platform and obviously the elements there aren’t just albumin modification but it’s extends towards these kinds of biological outcomes. So, without running in front of the data at this point, I’ll ask Phillip if he wants to say anything more than that but I think we have a awful lot coming out next week including more data around the albumin strategy.

Philip Gregory

I don’t want to get ahead of the abstracts and data. So, I think you’re asking right questions and we’re looking forward to talking after the data is described.

Ryan Martin - Lazard Capital Markets

Okay. And you know, maybe, I'd rather, also, on the hemoglobinopathy program, clearly you are now using the m-RNA for delivery of (inaudible) delivery into the stem cells. For your hemoglobinopathy programs, you're probably going to need a donor DNA, etcetera. Have you, I don't know if you've talked about this, but are you thinking along the lines of plasma-based delivery, viral-based delivery? I was wondering if you could talk about that a little bit.

Philip Gregory

We’ve not obviously spoken in great detail about our hemoglobinopathy programs and perhaps to just, and this suspends a little bit there are a ways of tackling these disease they do not require a donor DNA and for those programs we would envisage m-RNA based delivery of the ZFN only. With respect to provision of the donor DNA we have not made a formal choice but we continue to evaluate a number of different deliver devices including plasma DNA as well as some viral vector based approaches as well at this stage. And some of those are described in abstracts of the ASGCT.

Ryan Martin - Lazard Capital Markets

Okay, thanks. And just one final one. I noticed on the ASGCT abstracts there was some, I guess with a collaborator, on new (inaudible) stem cells using ZFNs there for the treatment for cystic fibrosis. Is this an area that's just collaboration or an area that's of strategic interest to the Company longer term?

Philip Gregory

I think just at this stage this work is a collaboration, we have a number of collaborations at the set of early research phase with a number different academic labs. But, obviously, CFTR falls into a class of rare diseases that have very well defined genetics and there are common alleles cause of the vast majority of disease. And so in that perspective it remains very interesting disease to us. But at this stage, that’s information those going to be presented at ASGCT is essentially a research grade stage program.

Operator

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

Edward Lanphier

Before I close up the call, let me correct myself, Elmer you asked the three programs in non-human primates. I said, hemophilia A and B and I misspoken said, hemoglobinopathy, it’s actually the Huntington’s program all those Hs got me confused.

Anyway, we’d like to thank you for joining us and we look forward to speaking with you again when we release our second quarter financial information. We’ll be available later today if there are any follow up questions. Thanks very much.

Operator

Ladies and gentlemen, thanks for participating in today’s conference. This concludes today’s program, you may all disconnect. Everyone have a great day.

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