Hi everyone, my name is Maury Raycroft and I'm one of the Biotech Analysts at Jefferies. It's with great pleasure that I'd like to welcome Sandy Macrae, the CEO of Sangamo. Thanks so much for joining us today, Sandy.
My pleasure.
We're going to do fireside chat format, so maybe to start off if you want to provide an intro to Sangamo.
So thank you all for coming. Sangamo is a genomic medicine company. We have lots of things that are working, and that represents a challenge in our field. We have gene therapies with hemophilia, with Pfizer, and our Fabry project, which is first-in-class, best-in-class, I would argue only in class. We have a Treg program based in France that is the first company to talk about going into the clinic, and we will show results of that soon. But at the core of Sangamo moving ahead will be our editing capability, which is our zinc finger capability combined with capsid evolution. And once you have capsid and you have cargo, you have the solution to many neurological diseases. These are difficult times, you all know that, and we appreciate the support from the shareholders that continue to support us.
That's why we announced two weeks ago almost that we were cutting staff and focusing down. This is a journey we've been on for a long time, and it's the only way forward for the company. We need to make best use of what we do excellently and go into places where there's real unmet medical need and where we feel we can make a difference.
Makes sense. I think that's a great intro. And you've mentioned that you've shifted to your wholly owned zinc finger programs, but I did want to talk about the Fabry program and just where that has left off. Maybe provide a brief update there, and wanted to know how much alignment you had with FDA prior to pausing the phase III study design, where a potential partner could come in.
I'm delighted to talk about it. This is a medicine that really works. We went to a Fabry conference and three patients came up to us and said, "We have your medicine inside of us. Our life's completely changed. I wasn't able to work. I can now walk to work. I've thrown away my stick. I can tell you many days ago exactly I got the medicine." This is a medicine that will make an enormous difference to Fabry patients. At the moment, a proportion of them, not all of them, take ERT, and that means they have to go every second week and get an injection, an infusion that addresses some of their problems. In the 25 patients that we've dosed now with our gene therapy, they feel better. Their SF-36s are going up. They report that they're sweating again. It really is making remarkable changes.
We've dosed 11 patients, sorry, the 25 patients, some of them are out at three years, and there's no sign of decline of the benefit for α-Gal A , and therefore for the benefit it'll bring to the patients. Moreover, in the 11 patients who were on the ERT and have had it removed, all of them have stayed off ERT. They have no desire to go back on the ERT. ERT was a good thing when it was the only option for Fabry patients. If you can give them a gene therapy that gives them lasting benefit and it's the things that are important to the patients, we all need to listen to that. Now, to move forward to phase III, we've been talking to the agency, and we now have RMAT status, which means we can talk to them often and get their guidance.
We feel we have a clear path forward into the phase III, which, if you were trying to cover all the bases, would involve both a naive, pseudo-naive patient study and a withdrawal study from ERT. Those are expensive. Any gene therapy study in phase III is expensive, and so we're looking for a partner. I made the difficult but important decision that that medicine was better in the hands of a larger company that had the resources to do it globally and that the future of Sangamo should be based on our unique science. And that's why we announced last week that we're in discussions with many people about looking for a home for our Fabry asset.
Makes sense. And so you've got the minutes from those regulatory interactions, which could be important for a partnership discussion.
Partners want clarity about how to move this forward to phase III, and I think we can now give them that.
Maybe talk about the type of partner that would make sense and potentially where you're at with those discussions as much as what you could say.
A partner that cares. A partner that cares about Fabry, that understands the future of gene therapy. A partner that is, I believe from the training I've had, a global pharmaceutical company that has bases in many countries that will be able to do it in many jurisdictions as quickly as possible. A partner that will commit to launching it. Of course, we'd love an upfront. Of course, we'd like the financials to be good. But what's most important is getting this into patients. This is a medicine that makes an enormous difference to patients.
Got it. And lastly, on Fabry, just talk about what data you could show early next year, likely at World. How many more biopsies could you potentially have for that? And what other evolving data that you're collecting that could be important for partners?
We're getting data cuts on a regular basis. We just got the one that we hope to be able to show at the World next year, and we'll show as much data as we've got. We're proud of this data. I've done drug development for 25 years. This is as good data as I've seen in that time. It's a real medicine.
Got it. Makes sense. Let's shift gears to CAR-Treg. Your TX200 program is in patients with kidney transplants mismatched by HLA status. For this program, you've talked about direct investment or partnerships here, and you could update in first quarter of next year. Can you talk about what you would prefer as a company, and are there any other details on external interests that they can share for this?
Yeah, absolutely. So Tregs are quite a fashionable thing. And there are 10 or 15 CAR-Treg companies or Treg companies, depending on how you count them. The majority of them are academic spin-outs. In 2018, we decided Tregs were important. We acquired a company in France called TxCell who were real experts in Tregs and on this HLA mismatch project. And we felt that their Treg expertise and our editing genomic medicine expertise were a good combination. And then COVID hit, and the trials slowed down because people don't do renal transplants or they worry about doing them and immunosuppressing people during COVID. Thankfully, that has improved.
I'm very proud that my team found a way to speed the trial, which means that whereas we were guiding previously, we wouldn't get to the top dose till 2025, we will dose the top dose in the first quarter of next year. And the top dose is 18-fold higher than the initiating dose. For that trial, because it was the first-ever CAR-Treg that anyone had put into a patient, we deliberately started low. You agree with the agency. You start wisely. And it's been very well tolerated. There are no safety issues at all that we have seen. And the investigators are very eager to move forward and get to the highest dose. We've seen initial translational medicine data, and we've made a decision to show the data en masse once we have the highest dose in the middle of next year.
Got it. Makes sense. And for partnering, what would that look like? Would it be for all indications or for MS or IBD?
So the HLA-A2 mismatched renal transplant study is ongoing, and behind that, we have INDs for inflammatory bowel disease and for multiple sclerosis. Those are really nice diseases to be addressed by Tregs. For MS, we target MOG, which is in the myelin sheath, which is where the inflammation is in multiple sclerosis. It doesn't mean MOG is the cause. It means MOG is the activating local antigen. And for inflammatory bowel disease, we use IL-23R, which increases at times of inflammation and inflammatory bowel disease. So they're both sensible antigens. Those are both diseases that are important. And although both of them have anti-inflammatory agents, we think it's more than anti-inflammatory with Tregs. We think there's both an anti-inflammatory, a tolerizing, and even repair mechanism. We have data in MS that suggests that repair mechanisms are activated by the Tregs. What are we looking for?
What we hear from when we went out with the broad Sangamo story was, "We like Tregs, but we want to invest in a Treg company. There's all these other Treg companies I can put my money directly into." And so because we've built Sangamo France as a standalone thing, we can easily kind of move it to one side and use it as a vehicle to bring investment into. And we're talking to lots of people who are very interested in how far advanced we are compared to the competition.
Got it. What would be the best benefit for Sangamo? If the money from this type of investment is non-fungible, would that direct investment help your cash runway at all?
Any money helps my cash runway. Cash runway is important because I know when you all look at a company, you work out the cash runway, and it's one of the biggest shadows over investor love for the company. We need to solve it. I appreciate my shareholders staying with us and going through this with us. We are lucky that we have assets that where everything that Sangamo is doing at the moment is working. Hemophilia, Fabry, sickle , the Tregs, the neurology platform, the promise of a capsid coming soon. We're lucky. We have things that we can partner, sell, and raise money that is non-dilutive that keeps the pipeline going.
Got it. Talk about what you could have in the data update middle of next year.
So we hope to show you all our new capsid, which is we have encouraging data for, and we'll have conclusive data at the beginning of the year. Why is a capsid important? Our zinc finger repressors and enhancers are perfect for neurological diseases. Nucleases like CRISPR don't work well in the CNS, and that's because the cells aren't dividing, so the repair mechanisms aren't in place. Whereas repressors and enhancers, which is how you're all being controlled at the moment by repressors, it's the commonest way to control gene expression, work perfectly there. We've shown data that we can turn off tau. We can turn off Huntington. We can turn off prion disease. It's about getting it into the brain. And when I started this business at SmithKline Beecham 25 years ago, my first symposium was on blood-brain barrier and how are we going to solve this.
And we've been looking for this for years, and you've all gone to meetings where someone claims they've solved it. But the new capsids that are being evolved specifically within non-human primates are looking like they will get there. Companies like Voyager and Capsida have shown encouraging data. The data that we've shown indicates to us that we will have a blood-brain barrier capsid. If we combine that with the cargo, and we have ways to turn off prion and the mice are cured, we can turn off tau, and the Biogen data now shows that if you turn off tau, you preserve cognitive function. And there's a whole array of synuclein for Parkinson's disease. We have the cargos waiting to go into the capsid. Some of these are things that Biogen walked away. I want to be very straight with you here.
Biogen walked away from the partnership with Sangamo because they did not have a capsid. Viehbacher felt he was overexposed on Alzheimer's, and he didn't have a capsid, so he gave us it back. We were very grateful for three years of work they had done and funded that meant that we have clinical assets that are ready to go as soon as we have the capsid. So these things are ready to go, and we'll make an enormous difference to neurological diseases.
Got it. And so this would be for a capsid update first quarter of next year.
That's what we hope.
Okay. And you've shown some really good data from NHP. This would be additional data showing proof of concept for the CNS clinical study.
So capsid evolution is a fascinating thing. You make huge libraries of you mutate known AAVs. You make huge libraries of focused mutations. You then put them into non-human primates. Each individual capsid has got. Don't ask me how they do this. It's got a barcode on it. So if it crosses the blood-brain barrier, you can spot which mutation crossed the blood-brain barrier. You then make sub-libraries, and you select again, and then you select again. And we're at the stage of now putting in the individual capsid into the monkey. And that will allow us to show that the capsid crosses the blood-brain barrier.
Got it. Makes sense. What would be next steps after the data update for this program?
So we have two programs that we're wholly owned and we're passionate about in the neurology field. Our first is Nav1.7. So before we had our own capsid, I challenged the neurology group to do things with existing capsids. So using an existing capsid and an intrathecal CSF delivery, we believe we know that we can repress Nav1.7. Nav1.7 is a channel that exists in the dorsal root ganglion that controls the gating of pain. Many people have tried to target Nav1.7 for years with small molecules. And the problem is by repressing it with small molecules, you hit other channels, and you get cardiac side effects. And therefore, people walked away from it. However, we don't go for the channel. We go for the DNA. And the DNA, the promoter of the gene, is unlike anything else.
We can do single gene repression without touching any other gene. What we've shown in mouse studies with pain models that are very classical pain models is we can repress pain in those mice that have a single injection into the intrathecal space and do it as well as gabapentin or existing pain medicines. It opens up a whole new world for patients with really intractable pain. I know that there are other companies looking at bunionectomies and tummy tucks. We're not talking about that replace opiate type proposal, which has got some, it's a good thing for society. What we're talking about is people who can't live because of their pain. Their pain is so intractable that they're looking for something to turn it off.
I think that what we will show is a single injection into the intrathecal space will turn off their pain and hopefully do it for a very long time. But then there's other options, anything from trigeminal neuralgia to cluster headaches that could be addressed by this. So that's the first neurology project that Sangamo's got: an IND next year and be in the clinic soon after that. The second one that has been waiting for a capsid is prion disease. Prion disease, I'm back in Britain, and we know mad cow disease here, and we know how seriously we all took it, which is a real advantage to us because the National Prion Center, the MRC Prion Unit at UCL, is one of the best in the world. They get patients that could have prion disease within two weeks.
It's one of the joys of the NHS. They think that the data that we have shown is fantastic. What we've shown is in mice, if you inject them with prion, they die at day 160, all of them. If we give them zinc finger repressors to the prion protein, they live a normal mouse life. They've never seen data like this. The mouse lives normally. Now, there are 500 or 600 patients a year in America and in Europe that get prion disease. It's a sporadic mutation. There are still some that get it from hunting and from deer, but the majority are sporadic mutation. They die within 12-18 months.
And so we'll feel that working with a group like the MRC, with the MHRA who are desperate to try and bring a medicine to patients, that we have a route to get proof of concept, both of our capsid and of the zinc finger repressor, and to make an important difference to patients.
For this program, what else has to be done for the IND? And could you show us some more data from this potentially this year or next year?
So one of the challenges of prion is there are few animal models. So the mouse are the only one. You can't do non-human primate models. So it really will be about us showing the data of the capsid crossing the blood-brain barrier in non-human primates and expression of the zinc finger. We won't be able to show that monkeys live longer because you don't do monkey experiments because it's an incredibly infectious condition. And so we will be showing that data over the course of the year with the intention of trying to get an IND in 2025.
Got it. Makes sense. And for Nav1.7, maybe talk a little bit about the market size there and what the ideal repression of Nav1.7 should be to get normal pain based on your preclinical data?
The market size is as big as you want it to be. When people hear pain, they imagine this enormous market size that goes up to people taking paracetamol. This is not what we will be treating. We will be treating people with intractable pain, which is in the thousands. We start with the most serious because we take our ethical medical obligation on gene therapy very, very seriously. It's the first time we will work carefully up the doses to make sure we get to the dose where they have the right amount of suppression of pain. They will still have sensation, but they won't have the pain. It's the pain pathway that will be blocking.
Got it. Makes sense. Maybe going back to CAR-Treg, so you plan on having a data update next year for that program. Talk about what you could have for that data update?
The most important thing for the CAR-T reg program is it's safe. It's fascinating how quickly we forget that there was a worry that CAR-T regs would not be safe. There was a worry that CAR-T regs could change to CAR effector cells. We've shown with our data conclusively that there is no risk of that, both in animal studies and in what we've seen so far in humans. We're pleased with that. The next stage will be to look at biomarkers both in the blood and the renal biopsy. One of the reasons that TxCell and now Sangamo chose the renal transplant study is you biopsy the kidney as part of the routine care of patients with renal transplant. So we'll be able to follow and show that there's no sign of rejection.
Hopefully, we'll be able to show that we can see CAR-T regs in the kidney. The next stage of that experiment or that, sorry, that protocol is that the investigators will start to withdraw treatment. We're at the very lowest dose. I want to have a conclusive body of evidence before the investigators really are persuaded with that. But now that we'll be dosing the top doses early as the first quarter of next year, I think we're going to get there quickly.
Got it. You could potentially have a partnership update before you do the data.
We will give you a partnership update as soon as we have it. And it's not as much partners. We're looking for investment in this. We're listening to what investors said. They wanted to be able to invest specifically in this because they believe in T regs. And I think that is the future for that program.
Got it. And I know you traditionally don't say a lot about hemophilia A because it's partnered with Pfizer. But maybe just talk a little bit about potential with this program, including the royalty and how you're thinking about that.
I'm not allowed to say much about it. It's part of these partnerships and I'm now going to say something about it. In these partnerships, you have an agreement about who talks about it and who doesn't. The irony being that it's not share price sensitive for Pfizer, and it is for us. So we have to explain things without talking about it, which get your head around that one. So hemophilia A, it looks like a medicine. So Pfizer have guided us very carefully, in the words that we could use, to say that the study has now been fully dosed, that they are planning a BLA in the middle of next year and a launch soon afterwards. Pfizer have, on many occasions, adjusted their portfolio, and they have never adjusted hemophilia A out of it. I think that's as strong a signal as you can.
We all know that in large companies, they make strategic decisions and portfolio decisions on an ongoing basis. I have seen no sign that that is what Pfizer intends to do. When they filed the BLA and the MAA, they will give us milestones. Then the milestones add up, and that's going to happen next year in the fourth quarter of next year. After that, we get launch milestones up to a total of $220 million. So although Sangamo's runway is something that I wake in the middle of the night about and do everything I can during the day to solve, the runway has just to get us to that point where those milestones start to kick in: $220 million milestone from Pfizer and then 14%-20% royalties. Few other companies that are in this challenging world have that promise to come.
We could have monetized them this year. But if you monetize them before the phase III study results come out, they want such a discount that I would have been hounded from the building for accepting the deals that were proposed to us. So we're being courageous and going to wait and wait till the results come out and perhaps even wait till the actual milestones come out. Because if we get there, a lot of our financing problem will be solved. And hopefully, you'll all feel that that's the right thing to do.
Got it. Another question about the capsid technology and that update there. Is that going to be one capsid that you keep internally, or would you have multiple capsids that could be leveraged in different ways?
The capsid companies out there have been selling capsids for anywhere from $25 million-$150 million. We've noticed that. The capsids hopefully will cover the whole blood-brain barrier. Sorry, the whole brain. The distribution is important because some diseases, you need cortex. Some you need brainstem. Some hypothalamus. What we're seeing so far is very encouraging that we would do all of the above, in which case there'll be some things that we keep for ourselves and some things that we license for others. Tau, for example, we have got the most beautiful tau data. You've never seen such repression, if that doesn't sound Trumpian. Now it's a matter of putting it in the hands of the right people. Alzheimer's would be a very heavy lift for a company of our size.
It's such an important thing that I want to make sure it gets there and gets to the right people.
Got it. Well, I think this has been a great conversation. We're almost out of time. Maybe talk about cash runway, current cash burn, and highlight key catalysts ahead for the company.
So we have done the difficult thing and reduced the size of the company. We've done the difficult thing and reduced our burn by 50% for next year. And that burn for next year, about $130 million, includes a significant amount that is completing the work that was to be done on Fabry and on TX200. Going ahead, it becomes less than $100 million, which I think is a much more manageable burn attached to a much more profitable, a much more focused company that has real assets that will make a difference. Our current burn takes us to Q3, but I think that is irrelevant. What's more important is the work that we're going to be doing in the next three to six months that will solve for this.
Got it. Thank you very much for joining us today, Sandy.
Thank you.