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Sangamo BioSciences, Inc. (NASDAQ:SGMO)

Q4 2011 Earnings Call

February 8, 2012 5:00 p.m. ET

Executives

Elizabeth J. Wolffe, Ph.D. – Senior Director, Corporate Communications

Edward O. Lanphier II – President and Chief Executive Officer

H. Ward Wolff – Executive Vice President and Chief Financial Officer

Geoffrey M. Nichol, M.B., Ch.B. – Executive Vice President, Research and Development

Philip D. Gregory, D. Phil. - Vice President of Research and Chief Science Officer

Dale Ando, M.D. - Vice President, Therapeutic Development and Chief Medical Officer

Analysts

Joseph Schwartz - Leerink Swann

Charles Duncan - JMP Securities

Ted Tenthoff - Piper Jaffray

Liana Moussatos - Wedbush Securities

Alastair Mackay - GARP Research

Operator

Good afternoon and welcome to the Sangamo BioSciences teleconference to discuss fourth quarter and full-year 2011 financial results. This call is being recorded. I will now pass you over to the coordinator for this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications

Elizabeth Wolffe

Thank you. 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 2011 financial results. Also present during this call are several members of the Sangamo senior management team, including Edward Lanphier, President and CEO, Ward Wolffe, EVP and Chief Financial Officer, Geoff Nichol, Executive Vice President of Research and Development, Philip Gregory, VP 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 significant events from the past year. Ward will then briefly review fourth quarter and full-year financial results for 2011 as well as our financial guidance for 2012, Geoff will provide an update on our ZFP therapeutic program, and finally, Edward will update you on our goals for 2012. Following that, we will open up the call for questions.

As we begin, I'd like to remind everyone that the projections and forward-looking statements that we 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 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 operations to differ materially from those contained in our projections or forward-looking statements.

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

Edward Lanphier

Thank you, Liz, and thank you all for joining us for our conference call to discuss our fourth quarter and full-year results for 2011 as well as our plans for 2012. This end-of-year call always provides a useful opportunity to reflect on the achievements and events of the past year and to lay out our path and goals for the year ahead.

2011 was an important period of maturation for Sangamo as a therapeutic product development company. While disappointing, data from our Phase 2b clinical trial with SB-509 and peripheral diabetic neuropathy lead us to cease the development of that drug. Our team quickly refocused our resources to ensure the rapid advancement of our SB-728-T program in HIV/AIDS and our deep preclinical pipeline focused on engineering genetic cures for rare and monogenic diseases. But more on that later. Let me start with a brief update on the current status of our programs and our new strategic alliance.

We presented important data from our Phase 1 clinical trials of SB-728-T, our ZFN modified T cell therapeutic for HIV/AIDS had scientific meetings in the spring and fall of 2011.

In summary, the data demonstrated a statistically significant relationship between the number of ZFN modified T cells in which both copies of the CCR5 gene were disrupted, the so-called biallelic modification, and the drop in HIV viral load in the blood of HIV infected subjects.

These data have provided a clear signal of a therapeutic effect, and have enabled us to design additional clinical trials which we believe will clearly demonstrate the utility of SB-728-T as a potential functional cure for HIV/AIDS.

A few weeks ago, we announced that we had initiated ahead of schedule, two new phase 2 clinical trials of SB-728-T. The trials represent two distinct approaches aimed at maximizing the engraftment of biallelically modified cells. I've asked Jeff to provide more information regarding our rationales, strategy and details of the trial design later in the call.

I also want to briefly update you on our collaboration with scientists at City of Hope, aimed at developing a treatment for recurrent and refractory glioblastoma. I can confirm that this investigator sponsored phase 1 trial is still open and clinicians at City of Hope continue to screen subjects.

However, due to changes in the standard of care for glioblastoma patients, namely the introduction of Avastin, clinicians are not seeing subjects presenting with the same type of recurrent tumors as when the trial was conceived. They have had difficulty accruing subjects whose clinical profile fits the original trial design.

However, as I said, clinicians at City of Hope continue to screen subjects. We expect that they will report data if and when they have treated an appropriate number of subjects.

We also published and presented data from several of our preclinical programs throughout 2011 that demonstrated the potential of our zinc finger nuclease technology to modify and permanently correct genes that cause disease.

Most recently, at the December meeting of the American Society for Hematology or ASH, we presented new data from our hemophilia program. This is one of the programs that we will be working on, as part of our recently announced strategic alliance with Shire. As you will hear later, this is just one of several monogenic diseases we are pursuing.

Speaking of our new partnership, last week we announced with Shire, one of the world's leading specialty pharmaceutical companies, our first major therapeutic alliance. As many of you know, Sangamo, like Shire, is focused on enabling people with life threatening conditions to lead better lives.

Even beyond our shared vision, one can also see the significant parallels between our therapeutic strategies when looking at our clinical and preclinical pipeline and Shire's three divisions: specialty Pharma, human genetic therapies, and regenerative medicine.

We are both, Shire and Sangamo, very excited about this partnership aimed at engineering genetic cures for rare and monogenic diseases. This alliance brings not only tangible financial benefits to Sangamo, but further validation of our ZFP Therapeutic Development platform with a highly respected partner.

The agreement provides significant near-term funding in the form of an up front payment of $13 million, and funding for all of our internal and external research-related and preclinical program costs through the filing of an IND. We are also eligible to receive milestone payments of $8.5 million for each gene target that we take to IND, and regulatory clinical and commercial milestones that bring the total potential milestone payments to $213.5 million per gene target.

Additionally, we retained very significant downstream value in the products we were developing under the collaboration and the form of loyalties that are an escalating tiered double-digit percentage of product sales.

Finally, while aggressively pushing the Shire targets forward, we will continue to develop our own internal ZFP therapeutic programs to point to the significant value inflection, enabling us to continue to execute on our business model by establishing additional strategic partnerships in focus to these areas.

So, with our collaboration with Shire underway, and our already strong cash position of $85 million at the end of 2011, we have a very solid financial base from which to execute on our development plans and our 2012 goals.

Before going into more detail on our ZFP therapeutic programs and our plans for 2012, let me hand the call over to Ward for an update on our 4th quarter and full year 2011 financial results, as well as our financial guidance for 2012. Ward?

Ward Wollf

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, 2011, and I am pleased to review the highlights of those results.

Revenues in the fourth quarters of both 2011 and 2010 were $4.7 million. Fourth quarter 2011 revenues were comprised of revenue from Sangamo's collaboration agreements with Dow AgroSciences, and Sigma Aldrich, and agreements related to protein production, as well as approximately $1.5 million of revenue from research grants.

As we mentioned in the press release, the increase in collaboration agreement revenues was due to increased sub-licensing and manufacturing revenue from DAS, as well as increased royalty revenue from Sigma.

The decrease in research grant revenues was primarily due to the receipt of four qualifying therapeutic development program awards in December 2010, and decreased revenue from the Juvenile Diabetes Research Foundation to support qualified expenses, and curtain Sangamo's clinical development program for SB-509 due to the completion of Phase 2 clinical trial for Diabetic Neuropathy. These decreases were partially offset by increased revenues from other research grant awards.

The total operating expenses for the fourth quarter of 2011 were $11.1 million compared to $13 million for the same period in 2010. Research and development expenses were $7.9 million in the 2011 quarter and $9.9 million for the prior year quarter. The decrease was primarily due to decreased expenses related to the completion of our phase 2, 2b clinical trial of SB-509.

General and administrative expenses were $3.2 million in both the fourth quarter of 2011 and the same period in 2010.

Non-cash stock based compensation expense was $2.1 million for the quarter with $1 million in research and development and $1.1 million in general and administrative.

For the fourth quarter of 2011, we reported a consolidated net loss of $6.4 million or $0.12 per share compared to a net loss of $8.3 million or $0.18 per share for the fourth quarter of 2010.

For the full year 2011, revenues were $10.3 million compared to $20.8 million in 2010, with the decrease due to the completion in July 2010 of the amortization period related to the commercial license fee received from Sigma in 2009.

Total operating expenses were $46.1 million in 2011 and $45.7 million in 2010. The net loss for 2011 for $35.8 million or $0.71 per share, compared to a net loss of $24.9 million or $0.55 per share for 2010.

Turning to the balance sheet, I'm pleased to report we ended 2011 with $84.5 million in cash, cash equivalents and short-term investment. Our net cash used in operating activities was $25.9 million for the year. Our financing in April provided us with additional capital to advance our ZFP therapeutic programs, and strengthened our balance sheet providing us with multiple years of cash burn on hand. This will be further augmented by our deal with Shire announced last week.

With respect to financial guidance for this year, we expect to have cash and investment balances of at least $75 million at the end of 2012, inclusive of the $13 million upfront license fee and 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 approximately $43 million to $47 million, and revenue to be in the $14 million to $18 million range. This includes the research funding from Shire for internal and external research program related costs.

For the purposes of the revenue guidance, we have assumed that we will amortize the upfront fee from Shire into revenue over six years, the initial research term provided in the Shire agreement. We will be reviewing the accounting treatment during Q1 in connection with updated guidance expected from the [SCC] on the new revenue recognition pronouncement that became effective at the beginning of 2011.

We also expect that the spread of total revenue over the four quarters of 2012 will be generally in line with the pattern in 2011.

In summary, 2011 was an eventful year. We are pleased to have realized our financial objectives with respect to both our operating results and net cash usage, as well as the cash inflow from the 2011 financing and recent Shire deal. We will continue to be focused on advancing our clinical and preclinical pipeline while maintaining our historic financial discipline. Thank you and I will now turn the call back over to Edward.

Edward Lanphier

Thank you, Ward. As you have heard, we begin 2012 as we have previously guided with approximately $85 million which relative to our burn rate is a very strong cash position. The upfront payment and ongoing research funding that we will receive as part of our strategic alliance with Shire, further strengthens this position and enables us to aggressively and expeditiously move our ongoing clinical and preclinical stage therapeutic programs to points of significant value inflection. On that point, I've asked Geoff to update you on our recent ZFP therapeutic progress; first to outline the rationale and design of our two new Phase 2 clinical studies in HIV and secondly to tell you a bit more about our preclinical pipeline in rare and monogenic diseases. Geoff?

Geoffrey Nichol

Thanks, Edward. First let me begin by summarizing the overall rationale for our approach in HIV/AIDS. The HIV virus destroys the immune system, specifically CD4 T-cells. As the disease progresses into AIDS, the CD4 T-cell numbers decrease. However there is a small group of people known as elite controllers who are infected with the virus yet have undetectable HIV RNA in their blood and maintain normal CD4 T-cell counts without HAART. Many elite controllers have a natural mutation, the so-called delta-32 mutation in both copies of their gene encoding of protein called CCR5, which is a receptor used by HIV to infect T-cells. This mutation in the CCR5 protein means the receptor cannot be used by HIV to infect their CD4 T-cells.

There is also a larger group, approximately 5% to 10% of the U.S. HIV infected population that carries the delta-32 mutation on only one of their CCR5 gene copies. These so-called heterozygotes are not completely resistant to HIV infection, but take much longer to progress to AIDS than individuals with two normal CCR5 genes.

Additionally and beyond the naturally occurring mutation, is the example of the of the so-called Berlin patient who had both leukemia and HIV. In this case doctors in Germany took bone marrow cells from an unrelated donor who had the natural delta-32 mutation in both of the CCR5 genes and gave these cells to the HIV infected leukemia patient and more than four years later this person is both cancer free and free of HIV.

Alziafen technology allows us to modify effectively knocking out the CCR5 gene with our zinc finger nucleases. By doing this we hope to create T-cells that will be both protected from HIV infection and capable of mounting an effective immune response to HIV. If successful, this approach would enable a functional cure in these patients analogous to an elite controller. We call these ZFN modified or autologous CD4 T-cells SB-728-T.

As Edward mentioned, in January we announced that we had begun two new clinical studies building upon data from our Phase 1 trials. As we described in September at the 2011 ICAT meeting, six subjects who enrolled in the trial run by our collaborators at the University of Pennsylvania, underwent a 12-week treatment interruption, or TI, of their antiretroviral medications one month after SP-728-T treatment. All subjects experienced the expected rise in their viral loads after holding their medication.

Interestingly however, in three of these subjects, viral loads subsequently decreased from peak during the TI, by about 10 to 100 fold. In one subject, HIV RNA levels fell to undetectable levels before the subject was [??] HAART in accordance with the protocol.

The development of a viremia is highly unusual during treatment interruptions in HIV patients. This particular individual already carried the natural delta-32 mutation in one of the two copies of his CCR5 gene, making him a heterozygote for that gene mutation.

The advantage of entering this trial as a heterozygote is that ZFN modification gives the subject nearly double the number of cells in which both CCR5 genes are modified. That's a high percentage of cells that are completely resistant to HIV infection.

Furthermore, when we calculated the estimated rates of engraftment of the so called biallelically modified cells across all subjects during the treatment interruption, we saw a statistically significant correlation with the observed decrease in viral load during the TI.

This observation is consistent with the hypothesis under which we began this program, and gives us an important signal as to the threshold of percentage biallelic modification and engraftment that we may need to achieve in order to control HIV viral load.

With this clear early signal and our goal in moving this important therapy forward quickly to confirm this observed antiviral effect, we have initiated two new phase 2 studies.

The first trial, SP-728-T cohort [sounds like] 5, is designed to recapitulate and further explore our initial observation [??] HIV infected CCR5 delta-32 heterozygotes.

In this study, we are enrolling up to 20 delta-32 heterozygote subjects, who are on HAARP and who will undergo a 16 week treatment interruption two months after SP-728-T treatment. This study will, as previously, reinstitute HAART if a subject's CD4 counts fall below a certain threshold. Or viral loads rise too high to too high a level. But importantly, will also have the provision to delay resumption of HAART if patients are aviremic at the end of the 16 week TI period. This trial is progressing well, and we have treated our first subjects under the protocol.

The second trial that we have initiated, SP-728-1101, takes the observation of enhancing engraftment of biallelically modified cells much further and applies it to the entire population of HIV infected subjects. The rationale behind the study design is to use what is called a lymphopenic preconditioning regimen that temporarily depletes lymphocytes from the subject and not only makes space for our modified cells but sets up a response in the body that signals all lymphocytes, including the ZFN modified cells, to rapidly multiply to address this depletion.

Our newly opened SP-728-1101 clinical trial, a phase 1-2 dose escalation study. We are using Cytoxan, administered one day prior to SP-728-T infusion to transiently reduce the numbers of lymphocytes in the body which will rapidly repopulate once the drug is discontinued. This approach has been used to enhance and engraftment the reductively transferred T-cells in the treatment of cancer and has been safely used experimentally in patients with HIV and as therapy for several autoimmune diseases.

We are enrolling at least nine HIV infected subjects on HAART into three dose escalating cohorts. One day after receiving Cytoxan subjects will be infused with SB-728-T. Six weeks after that infusion subjects will undergo a 16 week TI of their antiretroviral therapy. This study will as will the Delta 32 heterozygous study reinstitute HAART if a subject CD4 count falls below a certain threshold or viral loads rise too high a level. But importantly, we'll also have the provision to delay resumption of HAART if patients are aviremic at the end of the TI period.

In addition to safety and viral load reduction, we will evaluate the effective escalating doses of Cytoxan of 728-T engraftment, the change in CD4 T-cell counts in peripheral blood, and the long-term persistence of SB-728-T. We expect to present data from these trials at appropriate scientific meetings and we'll provide more guidance as to data presentation timing as the trials progress.

However, regarding earlier Phase 1 studies, I can tell you that we will be presenting additional important follow-up data at this year's Conference for Retroviral and Opportunistic Infections or CROI, which will be held in Seattle in early March.

Moving on, I'd like to briefly comment as to our preclinical and research stage programs and the recently announced alliance with Shire. Alziafen platform provides a range of powerful gene modification outcomes including gene disruption, gene addition, and gene correction and importantly can be designed to target any DNA sequence with singular specificity. In monogenic diseases, which are diseases that are caused by a mutation in a single gene we can use ZFNs to permanently correct that error.

Shire has recognized the potential therapeutic applications of this remarkable technology and we're collaborating with them to develop ZFP therapeutics for a total of seven monogenic diseased gene targets. The initial four gene targets are clotting factors 7, 8, 9, and 10 for which we are developing potentially curative therapeutics for hemophilia A and B. As you might imagination, Shire's interest in our technology has been significantly influenced by the progress we have made in our preclinical program in hemophilia B, a bleeding disorder that is caused by a mutation in the factor 9 gene.

We have presented and published preclinical data demonstrating permanent functional correction of the human Factor IX gene in neonatal and adult mouse models of the disease resulting in restoration of normal blood clotting times or with a single systemic injection of our factor 9 specific ZFN. Based on these data, we have moved the Factor IX program into large animal testing on the pathway forward to an IND.

An important aspect of these data is the demonstration that we're able to deliver ZFN systemically that is directly into the bloodstream and express them in a target tissue in this case the liver, the site of factor 9 synthesis. This direct in vivo approach significantly expands our ZFP therapeutic applications and the diseases for which our technology can provide genetic cures.

As you can see, this is a very exciting time at Sangamo and I look forward to updating you on future calls on the progress of these programs, as well as our work on the gene targets that we're developing with Shire. With that I will turn the call to you, Edward.

Edward Lanphier

Thanks, Geoff, that was a great summary. As you have heard, we have a very busy year ahead with continued data from our lead clinical program and our rich pipeline of preclinical programs, with both Shire and our internal targets. In addition, our partnerships with non therapeutic applications of our technology continue to thrive.

Sigma-Aldrich continues to do a great job of diligently and creatively developing our ZFN assets in its composer custom reagents kits and custom cell lines, as well as their transgenic animal program, which represents a huge growth area both scientifically as well as commercially.

They are an imaginative partner, and recently announced the acquisition of BioReliance], a leader for safety testing of biological drugs. As Sigma CEO explained at the JP Morgan conference, they see an opportunity to enhance and improve the services provided by BioReliance using ZFN technology to produce targeted cell lines, as well as animal models.

Our collaboration with Dow AgroSciences also continues to go well. Dow is employing our ZFN technology in its core focus crops, and marketing the technology as exact precision technology to companies working in other crops. These collaborations have allowed us to access capital in a way that is very different than most biotechnology companies.

Over the past five years our Sigma and Dow collaborations have brought in over $83 million, and importantly, we have retained significant downstream value in the commercialization of these assets, including, in the case of Sigma, a 10.5% royalty on sales of ZFNs and ZFN-based products, including transgenic animals.

As such, in 2012, we estimate revenues in the range of $14 million to $18 million, largely from these partnerships and our new agreement with Shire. On the financial side, we expect to end 2012 with cash and cash equivalents of at least $75 million, which is more than sufficient capital to allow us to achieve our goals of advancing our therapeutic programs. This cash projection does not, however, include any new agreements or partnerships that we may develop, beyond the recently announced agreement with Shire.

2011 was an important year for Sangamo, and we expect that 2012 will be even more significant year of progress. Establishment of our first therapeutic partnership was a high priority goal for us in 2012, and I am delighted that we were able to achieve this goal so early in the year.

As you might imagine, our alliance with Shire has further raised our visibility in the pharmaceutical industry and firmly establishes our ZFP technology as a platform for therapeutic product development. In addition to increased visibility, in the year ahead we intend to present clinical data from our lead ZFP therapeutic program in HIV/AIDS, at appropriate scientific meetings and preclinical research from the rest of our pipeline.

As far as our internal pipeline, we're advancing programs in Parkinson's and Huntington's disease, as well as monogenic diseases such as the hemoglobinopathies, including Sickle Cell Anemia, and rare diseases such as the lysosomal storage diseases.

As I mentioned during my presentation at JP Morgan, we have been actively evaluating each of these programs with respect to our internal goal of expeditiously moving ZFN-based therapeutic products into the clinic. I look forward to providing you with additional information as our progress and more detailed information regarding our plans for advancing specific programs into the clinic in the second half of this year.

So, in early 2012 we continue to make significant and very visible progress towards our goal of establishing ZFP therapeutics as a new and highly differentiated class of human pharmaceuticals. Pharmaceuticals that can provide a genetic cure to many diseases, and I sincerely look forward to keeping you informed of our progress.

To that end, we will be presenting at the Leeric Swann 2012 Global Healthcare Conference in February in New York, and as Geoff mentioned, data from our phase one HIV trials at the Croy meeting in early March.

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

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from Joseph Schwartz with Leerink Swann. Your line is opened.

Joseph Schwartz - Leerink Swann

Thanks for taking the question. I was wondering what is the timeline for you to submit an IND in hemophilia and does your 2012 year end cash guide of $75 million include any new IND filings under the Shire collaboration?

Edward Lanphier

Good questions, Joe. So as we've said in the script, our plan is to give much more visibility, both in terms of priority meaning, which targets we'll move first to the clinic, and then timing around those IND filings in the second half of this year. The reason being is that we are in critical experiments associated with several of these targets. Those experiments, those data, quite frankly, drive both the prioritization as well as the timing to IND.

To the part of your second question with financial guidance, that Ward gave, in term of revenue assumptions, do not include any milestones from the new partnership with Shire. They only include, in terms of Shire, the amortization of the up-front payment, as well as expected research funding for both internal and external cost.

Joseph Schwartz - Leerink Swann

OK. Great. Thanks. To what extent does the Shire agreement provide a blueprint for future collaborations given these rare inherited disorders can often be developed more efficiently, and you do have some good clinical development infrastructure? Would you contemplate taking any programs to a further stage yourself or will you be looking to out-license things as early as you did with the Shire deal?

Edward Lanphier

Good question, Joe. The answer is both. We have a platform that can be applied to dozens and dozens, if not, quite frankly, hundreds of potential monogenic disease targets. We do expect to continue, as I mentioned, the visibility of the Shire deal and the data out of ASH have really increased the visibility and awareness of the platform in Pharma.

We do expect to do deals at the preclinical level. With that said, we are moving several programs forward on our own account and are going to plan to move those forward into the clinic. With that said, if the right collaboration comes along, such as hemophilia with Shire, we would move forward with partners around those as well.

Joseph Schwartz - Leerink Swann

OK. Great. Thanks and I'll get back in the queue.

Operator

Thank you. Our next question comes from Charles Duncan of JMP Securities. Your line is opened.

Charles Duncan - JMP Securities

Hi, guys. Congratulations on the recently signed therapeutic collaboration and thanks for taking my questions. Edward, I had a question along the lines of the HIV program. I'm wondering on the CCR5 heterozygotes, have you been able to follow up with your patient that was in your Phase 1 trial? Do you have any sense of how that patient is doing in terms of viral load or T-cell count?

Edward Lanphier

Well, I will give it a short answer. Then, Geoff or Dale, you can comment further. That patient went back on his heart therapy after the end of the TI. I don't expect that there was going to be a viral-load impact based upon 728-T. In terms of long-term follow-up, I'm not personally aware. Dale or Geoff?

Dale Ando

He's on heart and long-term follow-up.

Edward Lanphier

Just what I said, Charles, he's on heart and in long-term follow-up.

Charles Duncan - JMP Securities

OK. You also mentioned that the cohort you're working on EN-902 is progressing well and have your first subject treated. I believe Geoff also mentioned that you would guide to data later on. Is there any sense as to how many patients you'd like to have in that data? Could we see data yet this year? Are you beyond just one subject having been treated so far in that trial?

Edward Lanphier

Again, as you know, we don't typically give accrual updates or guidance. What Geoff said is we will update later in the year in terms of timing related to presentation of clinical data. Geoff, in terms of total numbers on the Cohort 5, I think we said up to 20. Is that where we still are?

Geoffrey Nichol

Yes. We are going up to 20, Charles. The thinking, and I have talked about this before, is that we are looking for a clear-cut response in individual patients along the lines of the patient who became aviremic in the collaborative study at Penn. This is like a response in a cancer patient. Typically, if you want to know if you've got an active agent, you're looking for a reasonable proportion of responses in usually a relatively small number of patients.

We're talking a proportion of those 20 patients with good engraftment being the number that we need to get to. We'll guide more once we are approaching those numbers and can give you some greater clarity.

Edward Lanphier

One additional piece of color on that Charles, is when we started this trial or were contemplating this trial, it was unclear how difficult it would be to actually accrue subjects. It turns out there are a lot of HIV infected people who really now their CCR-5 status.

Accruals have actually gone pretty efficiently in this study.

Charles Duncan - JMP Securities

Edward, that's the actual part that I was wondering about. It sounds like it's easy to identify these patients and enroll them but it's really you're looking for some responses, so that makes sense.

If you could help us understand a little bit. I know it's early but you've pointed to potential other collaborations. Is it possible that there could be a collaboration for an HIV product candidate or do you think that you could identify patient population that you could serve through, at least take further into the clinic or even get all the way over the goal line with an internal commercial infrastructure?

Edward Lanphier

I think both are true. I think data will drive both of those potential outcomes. Data will drive the continued interest in a possible collaboration and data will also drive any decision that we might make in terms of moving things farther and farther forward ourselves.

I will say that we have put ourselves from a cash position and from an operating position in a position to make those kinds of decisions. It's really going to be data driven at this point.

Charles Duncan - JMP Securities

One final question with regard to the Shire collaboration, again, that was a nice deal. I'm wondering if you could provide a little bit more color on the thought behind the six-year duration? Going back to the last question that Joe asked, I know that you're not giving guidance on how much time to get to an I&D but could you anticipate getting all four targets through within that six year period should the early data hold up?

Edward Lanphier

Yes. Again, it's a bit of a same sort of question. I'm not going to give specific time frames but the six years was originally agreed upon as more than sufficient time to move all of these targets through our responsibilities, which through I&D filing. That should in a backdoor way answer your second question.

Charles Duncan - JMP Securities

That's helpful. Thanks for the added color.

Operator

Thank you. Our next question comes from Ted Tenthoff of Piper Jaffray. Your line is opened.

Ted Tenthoff - Piper Jaffray

Great. Thanks for taking the question and congrats on all the really exciting progress. When it comes delivery modalities, what kind of work have you been doing there to broaden potential applicability for different diseases, be they rare diseases, orphan diseases, kind of like what we've seen with Shire collaboration or even broader, larger indications?

Ed Lanphier

Well, I'll start and then I'll see if Philip or Geoff or Dale want to add. We have, for many years now, I'll pick a number and say ten, but maybe it's eight, had internal expertise and capabilities in essentially all of the major DNA-delivery platforms and I won't list them off here, but all is a pretty fair number.

We've had extensive external collaborations with really most of, again, I won't say all here, but most of the KOLs and major thought leaders around these delivery platforms, and even beyond that into in the case of cell therapies and stem cells and IPS cells and we've published on all of this.

So, I think it's fair to say we are delivery agnostic, whether its in vivo or ex-vivo and really try and select the appropriate formulation based upon the target tissue based upon the duration of expression and based upon really the biology of the disease target we're going after.

Operator

Thank you. Our next question comes from Liana Moussatos of Wedbush Securities. Your line is opened.

Liana Moussatos - Wedbush Securities

Hi. Thanks for taking my question. So, at Croix do you know which date your data will be presented yet?

Ed Lanphier

I have no idea. No, I'm kidding. I don't know, but maybe somebody else does. Dale, do you know? I'm looking around the room and I'm getting the same blank look that I have on my face, so. We'll let you know as soon as we know.

Liana Moussatos - Wedbush Securities

OK. My other, short and sweet for Ward. Can you repeat what you said about four quarters and financial in 2012 is going parallel 2011. What were you (inaudible)?

Ward Wolffe

Good question, Liana. I think just to give those of you that work on a model, I think you'll notice that a pretty healthy part of our annual revenue was in the fourth quarter. So, in the fourth quarter we had about 45%, 46% of our revenue in Q4 in 2011 as a percentage of the full year. The first quarter is normally 20%-ish. So, I think this, as guidepost, I said that if you're modeling 2012 by the quarters, that same sort of a spread it should be work fairly well. As it relates to some of the milestones we get on certain programs and some of these tend to fall in the fourth quarter. So, just trying to give more color there.

Liana Moussatos - Wedbush Securities

All right. Thank you. My last question is, and this is for Edward, in your discussions with potential partners for the HIV program, what are they looking for? I mean you changed your clinical strategy. What did they want to see before they would opt in on a partnership?

Edward Lanphier

Well, again, I won't say what they want to see before they opt in on a partnership. What I will comment on is what the goal of the program is, which is essentially a functional cure. That really is our objective and I think the objective of anyone who is looking at this strategy. That's, again, as you know, precisely what these two trials are designed to try and demonstrate.

Liana Moussatos - Wedbush Securities

OK. Thank you very much.

Operator

Thank you. (Operator instructions) Our next question comes from Alastair Mackay of GARP Research. Your line is opened.

Alastair Mackay - GARP Research

Hi. Thanks. Edward, I wonder if you could talk a little bit about TALENs as a potential competitor or competing technology to ZFNs? If you could talk about those both in terms of the, if possible, effect they might have on the reagent business. And, then, anything you could say about any possible effect on, let's say, a clinical business or on therapeutics?

Edward Lanphier

Sure. It's a long question. It's a relatively complicated response, but let me try and start and then Philip is here and I think literally embodies one of the world's experts in this space. So, I'll turn it over to him, as well.

So, TALENs are our DNA-binding proteins found in a plant bacterial pathogen, so relatively rare, that have been shown to have remarkable designability in terms of being able to engineer them to target sequences. I think it's very early days in TALENs and I think there are some pretty significant limitations in terms of their use, particularly in the human therapeutic space. But why don't I turn it over to Philip to comment and then I'm happy to come back and maybe talk about some of the commercial implications.

Philip Gregory

Sure. So, as a percent of TALEN technology is very, very early, it's derived from bacterial plant pathogen, as Edward said, and holds a lot of promise in the sense that from an academic perspective it's an exciting, largely uncharted DNA-binding domain and perhaps could do some of the things that zinc fingers and zinc finger nuclease, in particular, have been shown to do.

We've, as you know, been busy in this space. We have been actively publishing on some of our work with the TALEN technology and at least with the inventions that we have come up with, we can make them active, although less than ZFNs in research applications and the specificity at this stage remains largely uncharted. So I think even from a research reagent perspective, it's early days and from a therapeutic perspective, extraordinarily early.

Edward Lanphier

I'd add, Alastair, Philip is being modest. If you look at the publications in the space over the last two years, call it 10 or 12, the vast majority of those are either our work or work that we've provided the TALENs to collaborators. So this is a space that we really are the current leaders in. I won't speak deeply to the IP space, but you can rest assured that it's an area that we have filed extensively in. With that said, it's very, very early days. I don't there's going to be any immediate effects on the research reagent space and certainly no even no mid- to long-term effects on the therapeutic space.

Alastair Mackay - GARP Research

Great. Thanks. If I could switch gears and ask about, Edward for you to speculate a little bit about let's say call it per patient pricing. If we look at monogenic diseases, when you're just doing cocktail napkin arithmetic, how do you think of what the cost of a therapy for an individual patient with a monogenic disease might be? Maybe instead of giving numbers if that's not good, we could talk about some of the other Pharmas and the various strategies they've taken.

Edward Lanphier

Again, this is a long and interesting discussion. What I would parse here is cost of goods versus value to the patient. I think what we're focusing on are outcomes, again, potentially genetic cures, we're focusing on outcomes where there is enormous value not only to the quality of life of the patient, but also in terms of the savings to the healthcare system. Those pencil out on a napkin very easily.

Operator

Thank you. At this time I'm not showing any further questions. I would like to turn the call back to Edward Lanphier for any further remarks.

Edward Lanphier

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 very much.

Operator

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

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