Sangamo's Management Discusses Phase 2b Clinical Trial SB-509-901 Top Line Data - Conference Call Transcript

| About: Sangamo BioSciences, (SGMO)

Sangamo BioSciences, Inc. (NASDAQ:SGMO)

Special Call

October 3, 2011 08:30 ET

Executives

Dr. Elizabeth Wolffe – Senior Director of Corporate Communications

Edward Lanphier – President and Chief Executive Officer

Dale Ando – Vice President, Therapeutic Development and Chief Medical Officer

Analysts

Charles Duncan – JMP Securities

Liana Moussatos – Wedbush

Chad Messer – Piper Jaffray

Operator

Good morning and welcome to the Sangamo BioSciences Teleconference to discuss data from the company’s Phase 2b clinical trial subject to the diabetic neuropathy. This call is being recorded.

I would now pass you over to the coordinator of this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications.

Dr. Elizabeth Wolffe – Senior Director of Corporate Communications

Thank you, (Sharon). Good morning and thank you for joining Sangamo’s management team on our conference call to discuss top line data from the company’s Phase 2b clinical trial SB-509-901 which we released this morning.

Also present during this call are several members of Sangamo’s senior management including Edward Lanphier, President and Chief Executive Officer; Geoff Nichol, Executive Vice President of Research and Development; Dale Ando, Vice President of Therapeutic Development and Chief Medical Officer; and Ward Wolff, Executive Vice President and Chief Financial Officer. Following this introduction, Edward and Dale will summarize the data and outline our products forward. 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 change over time. By discussing our current perception of the market and our 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 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 operation to differ materially from those contained in our projections or forward-looking statements.

Now, I’d like to turn the call over to Ed.

Edward Lanphier – President and Chief Executive Officer

Thank you, Liz and thank you all for joining us for our conference call to discuss the data that we disclosed in a press release this morning from our placebo-controlled double-blind Phase 2b clinical trial SB-509-901 which was designed to evaluate SB-509 in subjects with moderate severity diabetic neuropathy.

In summary, SB-509 treatment did not show greater improvements from baseline compared with placebo at a 180 days in key endpoints of sural nerve conduction velocity or NCV, neuropathy impairment score in the lower limb or NIS-LL, quantitative sensory testing or QST, or intraepidermal nerve fiber density or IENFD.

We did see trends towards improvement in an exploratory endpoint for lower extremity neurologic sensory exam or LENSE. This is a standardized exam which provides the clinical measure of sensory function in subjects with neuropathy. I have asked Dale to provide more detailed description in the study and findings later in the call.

We are obviously disappointed that the SB-509-901 trial did not produce a better outcome in the pre-specified primary and secondary endpoints. We designed the 901 study using clinical data from our previous Phase 1 and Phase 2 clinical trials and believe that we conducted a thoroughly designed and well-controlled trial. Therefore, based upon these results we will discontinue all further clinical development of SB-509.

Moving forward, we will focus our attention and resources on our rich pipeline of ZFP Therapeutic programs, particularly in HIV/AIDS and in monogenic diseases. These are unmet medical needs for which our Zinc Finger Nuclease genome editing technology is uniquely suited to provide a therapeutic solution.

Before I say anything more about our future plans, let me turn the call over to Dale to give you some more details on the data that we collected in the 901 trial. Dale?

Dale Ando – Vice President, Therapeutic Development and Chief Medical Officer

Thanks Edward. The challenge in any clinical development program is to design trials that provide the best chance of seeing a significant difference between the placebo group and the treated group around clinically meaningful and potentially approvable endpoints over the period of the study.

As you know, we have previously carried out several Phase 2 trials in population with varying severities of diabetic neuropathy, which is the progressive degeneration of the nerves. Using the data from these studies, we undertook a rigorous accrual process designed to exclude both the very mild and very severe populations and thereby subjects that we believe would be the most responsive to treatment. This selection involved assessing baseline measurements of all major endpoints and accruing only subjects that sell into a pre-specified range.

In addition, we instituted rigorous training of site personnel with regard to drug administration and technical and clinical measurements. The trial enrolled 170 subjects in which only three did not complete the trial. So, just from randomized one-to-one and treated by intramuscular injections at day 0, 60, and 120 with either SB-509 or a saline placebo. We monitored the progression of the diabetic neuropathy symptoms by measuring sural, NCV, NIS-LL, QST, and IENFD and LENSE at baseline in several points throughout the 100 days study period. We also assess the quality of life using questionnaires and monitored their underlying diabetes.

The placebo treatment groups were well-matched in terms of their overall demographics and diabetes control over the course of the study period. As we had observed in prior trials, SB-509 was generally well-tolerated. There were three serious adverse events in the SB-509 treated group compared to three serious adverse events in the placebo group. The remaining adverse events were mild and reversible and generally equivalent in both groups. The primary endpoint of the study was sural NCV. We saw no statistical difference in this measurement at 180 days between the SB-509 treated and placebo group.

As in past trials, the SB-509 treated group showed improvement in sural NCV measurement. However, this study the placebo group unexpectedly also showed improvement. Compared to placebo treatment, SB-509 treatment did result in a greater improvement in nerve fiber density in the skin as we have seen in the 601 study, but it was not statistically significant. While we did not see any differences between the SB-509 treated groups in the overall neurologic exam as quantified by NIS-LL, in the pre-specified analysis, we did observe a clinically relevant improvement from baseline in the mean total LENSE score in SB-509 treated subjects compare to placebo treated subjects with a p-value of 0.11.

This trend affected pinprick and touch pressure sensation more than vibration and was primarily due to improvement seen in subjects with a baseline IENFD score of less than 9 fibers per millimeter or subjects with more severe DN. In this group, the effect on total LENSE score was prominent at 90 days with the mean improvement from baseline in treated subjects compared with the worsening in placebo subjects which gave a p-value of 0.008.

The LENSE uses assessments routinely applied in clinical neurologic examination and provides a measure of patient-reported sensory function. These positive outcomes in LENSE which mean more directly reflect patient benefit by therefore scientifically intriguing. However, in the end, we did not meet our key clinical endpoints and accordingly will no longer pursue development of SB-509.

Let me now hand the call back to Edward.

Edward Lanphier – President and Chief Executive Officer

Thanks, Dale. So, first and foremost, I would like to take this opportunity to thank the patients, investigators, and the Juvenile Diabetes Research Foundation for their support and participation in this trial. I would also like to thank and acknowledge my colleagues here at Sangamo who did a very professional job conducting this study.

While it’s always disappointing to have to closedown a clinical program, we have a broadly applicable technology platform which provides us with multiple opportunities for the development of new therapeutics. Our ZFN mediated genome editing platform enables us to modify any gene that we choose and as such is ideally suited to address diseases for which the gene target is well-defined such as our CCR-5 HIV programs and in monogenic diseases such as hemophilia.

As most of you know, we recently presented very encouraging data from our studies of SB-728-T at ICAAC demonstrating “significant progress towards a functional cure for HIV/AIDS.” Based upon these data, we planned to continue to expand this clinical program and begin two new clinical trials in the first half of 2012 designed to maximize the engraftment of CD4 T-cells with both CCR-5 alleles modified.

One study will be in subjects for natural heterozygote for CCR-5, delta-32 mutation in whom biallelic modification is maximized and a second study in non-heterozygotes which will explore mechanisms to enhance engraftment of SB-728-T and maximize the impact of HIV-resistant cells on Viral Load Reduction and the overall improvement of the immune system of HIV patients.

We also have several programs at the late-stage of large animals, model studies including our ZFP Therapeutic for Parkinson’s disease, which is being tested in non-human primates. And our ZFM program for the correction of the Factor IX gene and hemophilia, which is being studied in a dog model of the disease. In addition, we have ongoing pre-clinical and research stage programs in Huntington’s disease, sickle-cell anemia, X-linked SKID, and other monogenic diseases.

Finally and very importantly, we have a very strong financial position and remain on track to this end to end the year with at least $85 million in cash and cash equivalents. I look forward to updating you on our progress, on our third quarter call later this month. This completes our prepared comments.

I would now like to open up the call for your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Charles Duncan with JMP Securities. You may begin.

Charles Duncan – JMP Securities

Hi, guys. Just a couple of questions, first involve Edward, in terms of the diabetic neuropathy program, what do you think was the issue, was this the lack of biologic activity or perhaps multiple factors involved in measuring clinical activity and diabetic neuropathy?

Edward Lanphier

Good, Charles, let me start and then perhaps Geoff and Dale would like to say further. There is no question this is a complex disease. There is no question that there is a lot of underlying biology. I’ll say two things. One, I think the design of this trial and the successful efforts to accrue precisely the population that we went to accrue gave us a very good study in terms of what we have proposed to do. With that said, we did not meet our primary or secondary endpoints, which are measures of changes in neurological health and as such our plan is to no longer continue to invest in this program. Dale or Geoff, anything in addition?

Dale Ando

No, I think that says it all Edward. Charles, diabetic neuropathy has always been a difficult study to examine. Clinically, the endpoints are the best that we can come up with, but I think if you ask around the community, folks are not delighted with nerve conduction velocity as being a primary endpoint. So, and certainly a lot of the measures that we use have a fair amount of statistical variation. So, you are right, it is a tough disease to approach. We did not see as much and as clear an increase or a difference in the nerve fiber density as we had expected to see based on the prior studies, but we did see some difference between the active and treated group, which might be a suggestion that the underlying biological activity, which is pretty clear in pre-clinical studies was nevertheless operating, but simply not enough to be able to detect sufficient differences in nerve conduction velocity and NIS-LL to lead to releasing of in change here.

Charles Duncan – JMP Securities

Okay. And if I could…

Edward Lanphier

I think Charles…

Charles Duncan – JMP Securities

Excuse me.

Edward Lanphier

Charles, by contrast some of those complications and diversity of endpoints and even subjectivity of endpoints with the kinds of endpoints that we are able to look at in specific gene targets both in monogenic diseases as well as in CCR-5 and changes in viral load. So, moving forward, I think we are looking at indications where the endpoints are more well-established and are much more clear to see a signal in early stage clinical programs.

Charles Duncan – JMP Securities

It makes sense to me perhaps if I could ask a question about the HIV program, you know, that the diabetic neuropathy program has been terminated. It seems to me that both operationally and financially you may be able to focus more resources on that program. Can you tell us, what you can do for that program? Is that possible that you could catalyze timelines or perhaps even point to the next value added milestone for that program?

Edward Lanphier

Well, I think we have been gearing up for, I’ll take last 18 months and you heard me several times say that both our enthusiasts for this program, but it’s a science and database development plan and as of ICAAC of this year with the clarity around the correlation between biallelic modification and reduction in viral load, we are expeditiously and then by that I mean in as quick way as possible and not in a resource constraint way towards the two clinical trials.

I won’t repeat them here in now that I outlined earlier and we discussed just a few minutes ago on the call. But there is no question that has been in the plans all long and we continue to move forward that expeditiously and we continued and have been investing aggressively in our preclinical program and highlighting the Parkinson’s program, the hemophilia program, the hemoglobinopathy programs and others.

Charles Duncan – JMP Securities

We have noticed in clin trials that you have been able to expand the HIV program with more patient and longer treatment interruptions. Are there any takeaways from the diabetic neuropathy program in terms of say the FDA or your capabilities and comfort with the technology platform, which is alone you have to expand the HIV program?

Edward Lanphier

Well, obviously these are different programs, different drugs, different diseases indications. I’ll say and as Dale discussed the safety profile of SB-509 in this patient population is good, outstanding. The drug was very well tolerated and safe in this group and essentially equivalent at these in both the placebo and the treated population. And I would also speak to the relationship that Dale and the team here have and the quality of that relationship with the both of our investigators as well as regulatory agencies. But moving forward, I think there is a growing safety base both in SB-509, but also moving forward we have a growing safety database in the SB-728-T.

Charles Duncan – JMP Securities

Thanks Edward. I will hop back in the queue.

Edward Lanphier

Thanks Charles.

Operator

Thank you. Our next question comes from Liana Moussatos with Wedbush. You may begin.

Liana Moussatos – Wedbush

Thanks for taking my question. When do you think you will have monogenic diseases in the clinic like hemophilia and you mentioned Parkinson’s you think you will have something in the clinic next year?

Edward Lanphier

Thanks, Liana. I think I’m going to give you an answer that may not be completely satisfying, but its one that you heard from me many times. The decision to move things forward will be based upon science and based upon data. So, we are moving multiple programs forward. Actually I think if you look at the breadth of our preclinical pipeline and even the maturity of our preclinical pipeline. I think it’s very robust relative to many, many, many biotech companies. So, we are moving those forward.

To say at this point, here is the one that we are going to take forward in terms of an IND and the timing on that is just premature. But I can assure you that I’m is interested and anxious to provide that guidance as anyone, maybe more so. And that as we have the large animal data confirming what we have seen in earlier stage animal studies with our existing programs and this moving forward, our monogenic disease programs. We will certainly continue to keep you informed of that and as soon as we have clarity around from a science-driven perspective we will guide to the timing of INDs.

Liana Moussatos – Wedbush

Okay. And the status of glioblastoma and ALS programs, what is that?

Edward Lanphier

The ALS is part of the SB-509 package and as such we do not intend to continue our further investment in that. That certainly a program that where there is initially data it was a signal-seeking study in ALS and there are some signals there. But we will not be continuing to move that forward ourselves. As it relates to glioblastoma the guidance is the same as before upon having a sufficient amount of data to discuss. We will be presenting that in appropriate scientific meeting.

Liana Moussatos – Wedbush

Thank you.

Operator

Thank you. I show no further questions at this time. I would now like to turn the call back over to Edward Lanphier.

Edward Lanphier

Actually, I’m showing this time one more question. Operator?

Operator

We have a question from Chad Messer with Piper Jaffray. You may begin.

Chad Messer – Piper Jaffray

Hi, thanks, thanks guys. You have mentioned in the release in briefly in Dale’s remarks that you had a more robust placebo response then you had anticipated. How much was that a contributing factor relative to some of the other factors you discussed and do you have any series is to what might have caused the placebo that will be more robust or is it just look like kind of way in the bad luck to you?.

Edward Lanphier

I’ll start this is certainly something Dale is start deeply about and is commented on. Chad, your overall observation is exactly right. We saw and this is not scientific. But at a high level, we saw essentially the same improvement in the moderate severity population in this 901 trial that we saw in that disease segment population 601 trial. So, a fairly robust improvement and in the subset in the 601 trial that placebo population eroded and so it created a delta and a chronically meaningful delta and that’s what we intended to recapitulate. What we did see in this trial across those endpoints largely was that same sort of robust positive response in the treated population. But we saw a similar improvement in placebo population. Why that is I mean is obviously a question of debate, I know Dale has some strong feelings about the improvement in diabetes control. Dale is there anything you want to comment further about either the placebo effect here or after that.

Dale Ando

Yeah, I don’t think we exactly, but the treatment in diabetes has improved significantly with the addition of DPP-4 inhibitors, GLP-1, and PPAR-gamma mechanism of drug. So, possible that there may be non-glucose related improvements in the diabetic neuropathy and that is difference from the 601 study when those drugs were not that prevalent use, so there is that potential.

Chad Messer – Piper Jaffray

All right, well, thanks guys. I guess this highlights the complexity of the disease you’re going after and I do comment you for it at least one in the right study to trying to get these answers.

Dale Ando

Thanks Chad. I appreciate that.

Operator

Thank you. I’ll show no further questions. I’d like to turn the call back over to Edward Lanphier.

Edward Lanphier – President and Chief Executive Officer

Thank you. We’d like to thank you for joining us. We look forward to speaking with you again when we release our third quarter financial information. We’ll be available later today if you have any follow-up questions. Thank you.

Operator

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. Have a wonderful day.

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