Sangamo BioSciences Inc.
Q1 2012 Earnings Call
May 2, 2012; 05:00pm ET
Edward Lanphier - President & Chief Executive Office
Ward Wolffe - Executive Vice President & Chief Financial Officer
Geoff Nichol - Executive Vice President of Research & Development
Philip Gregory - Vice President of Research & Scientifics, Chief Scientific Officer
Dale Ando - Vice President of Development & Chief Medical Officer
Elizabeth Wolffe - Senior Director of Corporate Communications
Charles Duncan - JMP Securities
Liana Moussatos - Wedbush Securities
Joseph Schwartz - Leerink Swann
Good afternoon and welcome to the Sangamo BioSciences teleconference to discuss first quarter 2012 financial results. This conference call is being recorded. I will now pass you over to the coordinator for this event, Dr. Elizabeth Wolffe, Senior Director of Corporate Communications.
Thank you Mammy. Good afternoon and thank you for joining Sangamo's management team on our conference call to discuss the company's first quarter 2012 financial results.
Also present during this call are several members of Sangamo Senior Management, including Edward Lanphier, President and Chief Executive Office; Ward Wolffe, Executive Vice President and Chief Financial Officer; Geoff Nichol, Executive Vice President of Research and Development; Philip Gregory, Vice President of Research and Scientifics, the Chief Scientific Officer; and Dale Ando, Vice President of Development and Chief Medical Officer.
Following this introduction, Edward will highlight recent activities and the significant events from the past quarter. Ward will then briefly review the first quarter financial results, as well as our financial guidance for 2012. Geoff will provide an update on our ZFP therapeutic programs, and finally Edward will update you on our goals for the rest of 2012. Following that we will open up the call for questions.
As we begin, I’d like to remind everyone that the projections and forward-looking statements that we discussed during this conference call are based upon the information that we currently have available. This information will likely change over time.
By discussing our current perception of the market and future performance of Sangamo with you today, we are not undertaking any obligation to provide updates in the future. Actual results may differ substantially from what we discuss today, and no one should assume at a later date that our comments from today are still valid.
We alert you to be aware of risks that are detailed in documents that the company files with the Securities and Exchange Commission, specifically our quarterly reports on Form 10-Q and our annual report on Form 10-K. These documents include important factors that could cause the actual results of the company’s operations to differ materially from those contained in our projections or forward-looking statements.
Now, I'd like to turn the call over to Edward.
Thank you Liz and thank you for joining us for our conference call to discuss our first quarter results for 2012, as well as recent events and our plans for the rest of the year. 2012 is off to a great start. Let me begin by summarizing the important events of the quarter.
In early February we entered into a strategic alliance with Shire Plc, a global specialty biopharmaceutical company, to develop our ZFP Therapeutic for the treatment and potential genetic cure of hemophilia and other monogenic diseases. This alliance is a significant step towards our goal of establishing our ZFP technology as a major new platform for the development of innovative therapeutics for unmet medical needs.
In addition to the notable financial benefits of this agreement, which I will discuss in a moment, our partnership with the company as sophisticated and well positioned, as Shire is a terrific validation of the potential and promise of our terchnology.
As you all are aware, Shire is one of the most highly respected and successful companies in especially pharma and rate disease space and we are very excited to be working with them. To remind you of a few of the details of the collaboration, we have licensed Shire the exclusive rights to develop and commercialize ZFP Therapeutics to seven gene targets, four blood clotting factors, factors VII, VIII, IX and X and three additional disease related genes.
Our collective goal is to develop ZFP Therapeutics targeted to these genes with the objective of establishing potentially curative therapies for these monogenic diseases. We look forward to keeping you updated on the progress of this important collaboration.
The agreement also establishes our respective rules and responsibilities. Sangamo will conduct all research and pre-clinical development activates for all seven ZFP therapeutics, up to the filing of an investigation and new drug application or IND or the European equivalent, a CTA.
Subsequently Shire has the responsibility for moving these novel approaches through all clinical studies and into the market. The agreement provides significant near term funding for us in the form of an upfront payment of $13 million and fudging for all of our internal and external research related and pre-clinical program cost through IND filing.
We are also eligible to receive milestone payments of $8.5 million for each ZFP therapeutic that we take to IND, and regulatory clinical and commercial milestones that bring the total potential milestone payments to $213.5 million per ZFP therapeutic.
Additionally, and very important to us, we retained significant downstream value in the products we develop under this collaboration, in the form of royalties that are an escalating tiered double-digit percentage of product sales. So an important validating relationship and a great start to 2012.
We also made important progress this quarter in our HIV clinical programs. Early in the year we announced that we initiated two new Phase 2 trails, the design of these studies is based upon Phase 1 clinical data that demonstrated a statistically significant relationship between the reduction in HIV viral load in the blood of SB-728-T treated subjects and the extent of engraftment of these ZFN modified T-cells, in which both copies of the CCR5 gene had gene disrupted, so called biallelic modified cells.
At CROI, the Conference on Retroviruses and Opportunistic Infections in early March, we presented further data from our Phase 1 trails. These data demonstrated durable engraftment of SB-728-T, prolonged trafficking and dynamic immunological responses. I had asked Geoff to provide more information on these data and how they relate to our ongoing Phase 2 trails later on the call.
Finally, as promised, we continue to publish and present data from our pre-clinical programs. In early April, a pre-clinical study demonstrating the use of Zinc Finger Nucleases or ZFNs to engineer safer and more potent Cancer Immunotherapies was published in Nature Medicine.
Our collaborators also presented the data at a major European oncology conference and the importance of this work was recognized by that community, with the award for the best abstracts submitted to the meeting. The reason this work was selected for recognition was that the data significantly advanced the development of novel cell-based therapies for the treatment of a broad range of cancers and further highlights the range of therapeutic applications of our technology.
We expect to continue to publish and present data from our pre-clinical programs throughout the year, including 12 Sangamo presentations and numerous other ZFP related talks at the upcoming annual meeting of the American Society for Gene and Cell Therapy or ASGCT, later this month.
Before going into to 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 first quarter 2012 financial results, as well our financial guidance for 2012. Ward.
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, 2012 and I’m pleased to review the highlights of those results.
Revenues in the first quarter of 2012 were $3.2 million compared to $2.2 million for the 2011 quarter. The first quarter 2012 revenues were comprised of revenue from the company’s new collaboration and license agreements with Shire to develop ZFP therapeutics, hemophilia and other monogenic diseases, existing collaboration agreements with Dow AgroSciences and Sigma-Aldrich Corporation, enabling technology agreements, as well as approximately $1.6 million of revenue from research grants.
As we mentioned in today’s press release, the increase in collaboration agreement revenues was attributable to the company’s agreement with Shire executed during the quarter. We are amortizing the $13 million upfront license fee or the initial six-year research term, resulting in $0.4 million recognized as related revenue in the first quarter for the two months that the agreement was in place.
In addition, we recognized approximately $0.6 million of revenue related to reimbursement of program related cost from Shire during the quarter, also included in collaboration revenues.
The increase in research grant revenues was primarily due to the final milestone payment from the Juvenile Diabetes Research Foundation, JDRF, for activities related to the completion of our Phase 2b clinical trial of SB-509 in subjects with diabetic neuropathy, as well as funding from CHDI for the development of a ZFP Therapeutic for Huntington's disease.
Total operating expenses for the first quarter of 2012 were $10.5 million, compared to $11.8 million for the same period in 2011. Research and development expenses were $7.3 million for the 2012 quarter and $8.3 million for the prior year quarter, with the decrease primarily attributable to reduced clinical trial expenses related to our discontinued diabetic neuropathy studies.
General and administrative expenses were $3.2 million for the first quarter of 2012, compared to $3.5 million for the 2011 quarter. Non-cash stock based compensation expense was $1.4 million for the quarter with $0.8 million in research and development and $0.6 million in general and administrative. For the first quarter of 2012, we reported a consolidated net loss at $7.3 million or $0.14 per share, compared to a net loss of $9.6 million or $0.21 per share for the first quarter of 2011.
Turning to the balance sheet, we ended the first quarter of 2012 with $87 million in cash, cash equivalents and marketable securities. Our financial guidance for the year remains unchanged from our year-end call in February. We expect to have cash and investment balances of at least $75 million at the end of 2012, inclusive of the Shire agreement, but exclusive of any new funding from our partnership sources.
We also expect 2012 operating expenses to be in the range of $43 million to $47 million and revenue to be in the range of $14 million to $18 million. Again, inclusive of the research funding from Shire for internal and external research program related cost.
In summary, we are please to report that the first quarter results are tracking to our 2012 operating plans. Our first therapeutic collaboration with Shire has enhanced our leveraged in managing our finances and balance sheet and complements the business model established for our existing partnerships outside of human therapeutic. We are in an excellent financial position to start the year and we look forward to keeping you updated on our progress.
Thank you and I will now turn the call back over to Edward.
Thank you Ward, as you have heard we begin 2012 with approximately $85 million, which relative to our cash ease and operations we have a very strong cash position. The upfront payment and ongoing research funding from our strategic alliance with Shire further strengthens this position and enables us to aggressively and expeditiously move our ongoing clinical and pre-clinical stage therapeutic programs to points of significant value inflection.
And on that topic, I’ve asked Geoff to update you on the new data from our HIV clinical trials that were presented CROI and to update you on our pre-clinical pipeline, particularly our work in rare and monogenic diseases. Geoff.
Thanks Edward. As most of you know, our zinc finger nuclease technology allows us to specifically modify and effectively knock out the CCR5 gene, which encodes a major co-receptor of HIV entry into cells. By doing this we integrate two cells that were protected from HIV infection and capable of mounting an effective immune response to HIV, similar to our naturally occurring situation in individuals who carry a well characterized mutation, the CCR5 delta-32 mutation.
If successful, this approach would enable a functional cure in these patients, such that they could control their HIV without taking antiviral medications. We call these ZFN modified autologous CD4 positive T-cells, SB-728-T.
Thus far our results from our Phase 1 studies of this product have been very encouraging, but they do demonstrate that there is a statistically significant relationship between the level of engraftment of ZFN modified cells, in which both copies of the CCR5 gene are modified, so called biallelic modification and the levels of virus in the blood in HIV infected subjects during a treatment interruption from their antiretroviral medication. This observation was consistent with our hypothesis under which we began this program and with this clearly early signal, we have moved quickly into two Phase 2 studies, which I will describe later.
As Edward mentioned, in early March we presented new data from our Phase 1 clinical trial with SB-728-T at one of the major HIV meetings of the year, the Conference on Retroviruses and Opportunistic Infections, otherwise known as CROI. The data was selected from 21 infected subjects enrolled in Phase 1 clinical studies at the University of Pennsylvania and it’s Sangamo sponsored sites in Northern and Southern California.
All study subjects were taking highly active antiretroviral therapy or HAART and had stably controlled undetectable levels of HIV in their blood. Subjects were classified into two groups based on their CD4 T-cell counts upon entering the study.
15 subjects with CD4 T-cell counts below 500 cells per microliter, designated immunological non responders to HAART an a second group of six subjects, the CD4 T-cell counts of greater than 450 cells per microliter, designated immunological responders. One month after SB-728-T treatment, the six subjects in the immunological respondent group underwent a 12-week treatment interruption or TI of their HAART therapy.
The Phase 1 studies valuated safety and tolerability, as well as changes in CD4 T-cell accounts and the ratio of CD4 to CD8 T-cells. Persistence of SB-728-T in the blood and trafficking of the ZFN modified cell into gut-associated lymph tissue for all subjects. In addition, co-viral DNA and changes in viral load is determined by HIV RNA, were measured during the TI in the non-responder subjects.
As we have previously reported, the study demonstrated that during the TI, after initial increase in the viral load, there was a subsequent over two log reductions from peak, observed in three of six subjects with the highest estimated circulating levels of biallelically modified cells.
One subject, subject 205 who entered the study carrying the natural CCR5 delta-32 mutation, on one copy who have the CCR5 gene with aviremic by the end of the TI period. I started out with one CCR5 gene already naturally modified, the subject received an SB-728-T infusion, estimated to have twice the percentage of biallelically disrupted CCR5 genes and the amount of subjects entering the study with volatile CCR5 gene.
This observation forms the basis for one of our two new phase 2 studies, cohort 5, SB-728-902, in which CCR5 heterozygotes are being recruited. The data from all subjects that completed the TI revealed that suppression of viral load as measured by HIV RNA, correlated significantly with calculated levels of circulating CD4 T-cells that have undergone biallelic modification of a CCR5 gene.
Using a new, very sensitive measure, the level of circulating proviral DNA, a measure of the HIV reservoir exhibited very limited increase in five and six subjects over this period and was elevated in only one subject who’s SB-728-T engraftment was the lowest of the group. We will investigate this observation further in future studies.
The studies presented at CROI also confirmed an extended our previous observations of unprecedented improvements in overall CD4 T-cell accounts and CD4 to CD8 T-cell ratios, a measure of health for well over a year post administration of SB-728-T. The levels of T-cell cytokines in the blood in the first few days post SB-728-T infusion, may had a way with dramatic post infusion expansion of CD4 T-cells and SB-728-T.
This is interesting in the light of our second recently initiated phase 2 study, SB-728-1101, which impairs a lymphopenic preconditioning regimen to expand the numbers of biallelically modified cells in subjects post infusion. This preconditioning regimen, which trends here depletes lymphocytes is known to up-regulate the levels of growth factors in the system, including the cytokines that we measure.
As demonstrated in other settings, this approach is expected to increase the number of engrafted biallelically modified cells, potentially by orders of magnitude and totally we are also concern during the endorsement and persistence of SB-728-T, in the peripheral plant over a year, that one subject after 738 days and the ability of SB-728-T to traffic to the gut mucosa, an important reservoir of active HIV infections. And finally, SB-728-T treatment continues to be safe and well tolerated with only mild reversible symptoms, typically of only few reactions.
I also want to briefly mention the second data set selected for presentation of CROI, because it demonstrates the many other things that our SP-728 T-cells, behave as if they are immunologically active. We observed one subject who received a single dose of SB-728-T and in whom we were able to identify and track the course of a presumed inflammatory event of the gut mucosa unrelated to 728-T infusion.
We noted an associated increase in total CD4 T-cells and a percent of ZFN CCR5 modified CD4 T-cells in the gut mucosa in response to the inflammation event, with a greater than one log increase in SB-728-T observed locally in the gut, preceding resolution of the inflammation. Analysis for the individual T-cell claims confirm that this significant increase of SB-728-T was specific to the gut mucosa and suggested that there was response by these cells to local gut inflammation.
We also observed that HIV DNA levels in both gut mucosa and the periphery decreased from peak levels by about one log, coincided with the timeline of significant increases in SB-728-T at the site of inflammation. Taken together, these data suggest that SB-728-T is functionally active and capable of participating in an immunological response and has the potential to maintain or restore health in the GI tract, a major reservoir of HIV.
We will present additional data from our HIV clinical program later this year. Regarding our recently initiated Phase 2 trials, as always we will present data with a major medical meeting a I expect to be able to give you more information on the timing of this as we continue to accrue subjects into these trials.
Moving onto our pre-clinical program, our ZFN 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 a singular specificity.
In monogenic diseases, which are diseases that are caused by and has taken a single gene, we can use the offence to permanently correct that. Furthermore we have demonstrated that we can apply this technology systemically. This direct in vivo approach significantly expands our ZFP therapeutic applications and the diseases for which our technology can provide genetic cures.
In our published Factor XI work, we target the liver in mouse and demonstrate production of Factor XI with restoration of normal blood clotting times following a single systemic injection of our effective launch specific ZFN. Shire recognized the potential therapeutic applications of this remarkable technology and we are collaborating with them to develop CFP therapeutics for a total of seven monogenic disease gene targets. The additional four gene targets are clotting Factors VII, VIII, IX and X for which we are developing potentially curative approaches for hemophilia A and B.
While our alliance with Shire began very recently, our Factor IX program has faired us along and is already in animal testing on the path to an IND. We sincerely look forward to updating you on the progress and the timing of new INDs for several of our monigenic disease programs later this year.
As our most recent Nature Medicine publications demonstrates, our technology also has the potential to revolutionize another fast moving therapeutic area, the field of cancer immunotherapy, which is being developed to address a broad range of malignancies.
Cancer Immunotherapy uses the immune system and in its cell therapy manifestation specifically CD8 T-cells that are genetically engineered to express new cells surface receptors with specifically recognized tumor cells. These engineered T-calls can be redirected to seek out and destroy tumors. However CD8 T-calls already have a natural specificity for different non-tumor targets, expression of both receptors in the same cells reduce the potency of the cell and more importantly could also make the cells self reactive, leading to graft versus host diseases.
Our ZFN technology can very specifically disrupt and insert genes in to cells and this enables the engineering of these immunotherapy cells to optimize their performance, with a degree of precision and efficiency and was previously impossible.
In the Nature Medicine study published in April, ZFNs were used to specifically disrupt a native T-cell receptor, TCR genes in tumor directive CD8 T-cells resulting in an enhanced immunotherapeutic product, with potent anti-cancer activity coupled with the elimination of graft versus host disease in a mouse model.
This is one of several oncology applicants, which uniquely leverage our ZFN platform. You can expect to see publications and data presentations from these and other pre-clinical programs in the upcoming months, including as Edward mentioned, at the upcoming ASGCT annual meeting later this month.
As you see, this a very exciting and very busy time at Sangamo and I look forward to updating you on future calls, on the progress of these programs, as well as the work on the gene targets that we are developing with
With that I’ll turn the call back to Edward.
Thanks Geoff. As you have heard, our clinical program in HIV are progressing on schedule and we have a rich pipeline of pre-clinical programs with Shire, as well our own internal targets. In addition to the Shire main team affiliate targets, we are also advancing programs in Parkinson’s and Huntington's disease, as well as numerous monogenic diseases, included sickle cell anemia and several lysosomal storage diseases. We expect to have much more to say about these pre-clinical programs, specifically regarding data, milestones and expected timing to IMB filings by the end of the year.
Our partnerships in the non-therapeutic applications of our technology also continue to thrive. To give you an idea of the kinds of creative and thoughtful ways that Sigma Aldrich is using our technology to drive growth, I encourage you to listen to the replay of the business review that they hosted on March 29. The webcast of this event can be found on their website.
During that briefing executives from several of Sigma’s business units highlighted the use of ZFN technology within their particular units for the generation of lab kits and re-agents, cell lines and transgenic animals. In addition, Sigma highlighted the combination of our ZFN technology with their recently acquired BioReliance Group, a leader for safety testing on biological drugs, to expand their offering into novel animal models and new testing services, assays and cell lines.
Our collaboration with Dow AgroSciences also continues to go well. Dow is employing our ZFN technology in its core focus crafts and marketing the technology as exact precision technology for companies working in other crafts.
As many of you know, these collaborations have allowed us to access capital in a way that is very different for most biotechnology companies. But over the past five years our Sigma and Dow collaborations have brought in over $84 million, importantly and as in our Shire agreement, 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 VFMs and VFM based precuts. Including the Shire agreement, in 2012 we estimate revenues will be in the range of $14 million to $18 million.
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 aggressively advancing our clinical and pre-clinical therapeutic program. This cash projection does not however include any new agreements or partnerships that we may develop beyond the recently announced agreement with Shire.
And on that point, our businesses model is to establish partnerships, to help drive our programs forward through the development process and into the market. Establishment of our first therapeutic partnership was a high priority goal for us and I am delighted that we are able to achieve this objective so early in 2012.
As you might imaging, our alliance with Shire has further raised our visibility in the pharmaceutical industry and firmly established our ZFP technology as a new platform, not just for novel therapeutic development, but for potential genetic cures.
So in the first quarter of 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 that can provide the potential for a genetic cure for many diseases and innovative approaches to intractable diseases such as Parkinson’s disease and cancer. I sincerely look forward to keeping you informed of our progress.
To that end, we will be presenting at the JMP Securities Growth Conference in San Francisco on May 14 and the Bank of America/Merrill Lynch Healthcare Conference in Las Vegas on May 16. Finally, I would like to invite you to attend our annual meeting of shareholders, which is scheduled for Thursday, June 21 at 9:00 am here at the company in Richmond California.
This completes our prepared comments. I would now like to open the call for your questions.
Thank you. (Operator Instructions) Our first question comes from Charles Duncan of JMP Securities. Your line is open.
Charles Duncan - JMP Securities
Hi guys, thanks for talking my questions and congrats and some good progress in the quarter. Edward, I’m not sure if I heard it right from Geoff, but I’m wondering in terms of data flow of the HIV program, it sounds like you might have some incremental data from the earlier studies, but that you would anticipate data perhaps in the first half of 2013 out of the Phase 2.
Charles, let me see if I can repeat what we said on the descriptive and Geoff and Dale can certainly add any additional color. I think what we talked about was more data coming out of the Phase 1 studies later this year. I think we have some presentation at ASGCT in some of these data.
But what Geoff said on the call here was that we are in the process, activity accruing on the Phase 2 studies that’s going very well. I’ll let Geoff comment on that a little more. But I think its realistic to think that we will have those trials accrued by the end of the year and data in the first half of 2013 is a realistic expectation. Geoff, do you want to give any more color on the trials themselves and the community interest in them.
Yes, interest is high Charles amongst investigators and patients to Novel technology and we are aiming high here to move towards a functional cure in what is on at the studies. So we are recruiting actively. As you know, these studies don’t happen over night, but as we accrue data we’ll be, as you would anticipate, we would put that out at appropriate meetings, but for now absolutely on target in terms of our progress.
Charles Duncan - JMP Securities
Okay, and then my second question is around partnering strategy, Edward. You provided a lot of information in the last part of the call, but really in particular on the next therapeutic partnering that you could do, congratulations on the Shire one, and I guess I’m illustrated to always what’s next.
But perhaps you can share some thoughts on HIV and whether or not there is value or interest. When do you think that really emerges? Is it going to be with the upcoming data and is it possible that you could identify capital efficient road to market, whereby you would take this further along in development and perhaps partnering it at the next state.
There is a lot in there Charles. I mean to start it’s 30,000 feet from a strategy perspective and I’ll drill down on the HIV program. So as I said in the script and it think its worth repeating, our business model as we have done in other areas and as the Shire deal further exemplifies, is to bring programs to points of value inflections and those can be at different points for different types of programs.
As you can see the Shire deal is a pre-clinical program, but I think the data showing a single systemic delivery of a Factor IX zinc finger nuclease and giving correction of coagulation time and so on, it really drove that to a point of significant value inflection and that’s what we really intent to do around novel targets and novel areas.
We also intend to push programs forward for our own account and so moving to the second part of your question, we really look for capital efficient ways to bring programs further and further forward and as we have evolved as a company, taking those forward potentially into pivotal trials.
As it relates to HIV however, I think that’s a program that we will view as something we would like to partner for pivotal trails and for commercialization. It’s a large patient population, therefore a fairy significant commercial manufacturing undertaking and its something that we’d like to bring a partner on for pivotal trails and commercialization.
Charles Duncan - JMP Securities
And my final question is related to the potential focus of the pipeline going forward. Is it possible that by year-end of this year you’ll be able to talk more about plans there, perhaps even identifying a development candidate, maybe not an IND candidate, but a development program.
Precisely. And so to reiterate what both Geoff and I said, by the end of the year we fully expect to lay out a real clear road map in terms of both specific therapeutic targets, timing around major milestones associated with those and prioritization and timing of leaving those programs into human clinical trials. And that’s a data driven process, but one that we will position to discuss in detail by the end of the calendar year.
Charles Duncan - JMP Securities
Thanks for the added color Ed.
Thank you. Our next question comes from Liana Moussatos with Wedbush Securities. Your line is open.
Liana Moussatos - Wedbush Securities
Thank you. Just filling up on what you were just talking about, do you anticipate enrolling patients in a trail for the Factor IX program next year.
Well, that’s precisely what we were talking about Liana and that is what we intend to discuss in detail by the end of the calendar year. Again, maybe a little more color around it. These are very much data driven decisions and the team here is working overtime on multiple targets, multiple programs that we are driving forward and we expect to have a very good clarity around those and the prioritization of those and the timing of those by the end of the calendar year. So we look forward to giving you a direct answer to your question at that time.
Liana Moussatos - Wedbush Securities
Okay, thank you very much.
Thank you. (Operator Instructions) Our next question comes from Joseph Schwartz of Leerink Swann. Your line is open.
Joseph Schwartz - Leerink Swann
Hi, thanks. You and your collaborators have already generated very positive pre-clinical data in hemophilia and also I was wondering, what additional work needs to be in animal studies before you can file for an IND.
Thanks Joe, I’ll start and then ask the team here if they want to add more color, but its really very, very much just a typical, almost a generic kind of pre-clinical development. We are currently in large animal studies with the Factor IX work and based upon doses that we see in that, we’ll move into formal toxicology studies and those will then be driven by the kinds of process development in GLP and GNP manufacturing that needs to go on in the CMC sections for INDs, along with then based upon toxicology data, the efficacy data, the design of Phase 1 trail.
So it’s really very much the kind of development steps and blocking and tackling for these programs as it is for any biologic. But Geoff or Dale, do you want comment further on the process here.
I think you’ve highlighted it pretty accurately Edward. The way for moving these things is to take them into larger animal models and larger animal situations to make sure that we are getting to the kind of scale that we need in humans and then obviously manufacturing toxicology and all those other good steps and we are very, very busy doing precisely that.
Joseph Schwartz - Leerink Swann
Hey great, thank you. That’s very helpful. For Ward, could I just ask, is there any significant to the six year research term over which you are amortizing? I think it’s the upfront from Shire and for example, does that correspond to your expectation for the amount of the time required to file an DNA or anything like that.
Joe, the six-year period really is a function of giving the programs enough time to move forward. We certainly expect to see very material progress around numerous targets, much, much earlier than that in terms of moving programs into clinical trials. It was really part of the negotiations, part of the discussion to make sure that there was more than sufficient time to get to points for all of the targets to IND filing for Shire to take it over. But I think six years, we certainly expect to move things forward into the clinic much sooner than that.
Joseph Schwartz - Leerink Swann
Got you. Okay, thank you.
Thank you. I’m showing no further questions in the queue at this time. I’ll hand it back to the speakers for closing remarks.
Thank you. We’d like to thank you for joining us today and we look forward to speaking with you again when we release our second quarter financial information. We will be available later today if you have any follow-up questions.
Thank you. Ladies and gentlemen, this concludes the conference for today. You may all disconnect and have a wonderful day.
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