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Sangamo Therapeutics (NASDAQ:SGMO)
Q4 2018 Earnings Conference Call
Feb. 28, 2019 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the Sangamo Therapeutics Teleconference to discuss fourth-quarter and full-year 2018 financial results. This call is being recorded. I will now pass you over to the coordinator of this event, McDavid Stilwell, vice president of corporate communications and investor relations.

McDavid Stilwell -- Vice President of Corporate Communications and Investor Relations

Hello and thank you for joining us. As we begin, I'd like to point out that we'll be referencing an accompanying slide presentation. A link to the slide presentation may be found on our website, sangamo.com, on the Events and Presentations page of the Investors and Media section of the site. I'd also like to remind everyone that the projections and forward-looking statements that we'll discuss during this conference call are based upon information that we have available today.

This information will likely change over time. By discussing the future performance of Sangamo with you today, we're 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. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are detailed in documents that the company files with the Securities and Exchange Commission, specifically our annual report on Form 10-K and our quarterly reports on Form 10-Q.

The forward-looking statements stated today are made as of this date, and Sangamo undertakes no duty to update such information except as required under applicable law. With me this afternoon on this call are several members of the Sangamo senior management team, including Sandy Macrae, chief executive officer; Kathy Yi, chief financial officer; Stephane Boissel, executive vice president, corporate strategy; Adrian Woolfson, executive vice president and head of research and development; and Ed Conner, chief medical officer. Again, we'll refer to a slide presentation during this call. And those slides are to be found on the Events and Presentation page of the Investors and Media section of the site.

And now I'd like to turn the call over to Sandy.

Sandy Macrae -- Chief Executive Officer

Thank you, McDavid, and good afternoon to everyone on the call. Thank you for joining us. At Sangamo, we are focused on the development of novel genomic medicines using scientific expertise we have developed for over two decades. We have five active clinical trials.

And at the end of this year, we'll have a total of nine programs in our clinic. Our pipeline of therapeutic genomic medicine candidates currently in clinical development encompass three complementary approaches: gene therapy, ex vivo genome medicine, and in-vivo genome medicine. We are sometimes asked why Sangamo, a company best known for genome editing, includes the gene therapy programs in its clinical development portfolio. The answer is simple.

We believe that the application of a variety of mutually compatible approaches to the problem of treating genetic diseases is both necessary and appropriate. Our use of gene therapy is in one sense pragmatic. We have a deep knowledge of AAV delivered in-vivo gene therapy as a result of the extensive work that we carried out over the last two decades. It's also scientifically and medically appropriate in the indications where we've elected to use this approach.

In these programs, we use AAV vectors to deliver a therapeutic gene to the nucleus of hepatocytes. The new gene is then expressed episomally via liver-specific promoter. Our gene therapy programs include our hemophilia A program, which has been developed in collaboration with Pfizer and from which we expect data later this year. We use gene therapy for hemophilia A because our scientists creates the construct that perform well pre-clinically and because gene therapy has a well-defined path forward with a favorable probability of technical, regulatory, and commercial success.

Our second gene therapy program is in Fabry disease. Following the recent FDA acceptance of our IND, we are on track to enter the clinic later this year. Here, we chose gene therapy as our preferred treatment modality for Fabry disease because we determined that could be developed rapidly and because Fabry patients are typically diagnosed as [Inaudible], making gene therapy a suitable approach. Our ex vivo genome editing clinical programs build on our foundational studies in HIV, which were the first trials to use ex vivo genome edited cells as treatment approach.

Utilizing recent improvements through ZFN platform, we've established a highly efficient and specific ex vivo editing capability, which results in an important validation through our partnership with Gilead for the creation of allogeneic CAR therapies. This partnership incorporates a CD19 CAR-T that is expected to advance to an IND application later this year. Our current ex vivo masses also include our genome editing therapies for beta-thalassemia and sickle cell disease, which we're developed in collaboration with Sanofi, formerly Bioverativ. We're additionally also excited by our wholly owned CAR-TREG program, which combines our ex vivo ZFN editing capabilities with a significant TREG cell and expertise of our new colleagues, who had joined us through the TxCell acquisition.

This fascinating new platform technology has the potential to fuse an entirely new class of therapeutic agents for the treatment of autoimmune and inflammatory disorders. Our current clinical pipeline also includes in-vivo genome editing, which is more technically challenging that other methods due simply to the need to deliver sufficient concentrations on the ZFNs to the target cells. We believe, however, that it holds a promise to open up a new frontier for clinical medicine and has the potential to deliver great benefit to patients, particularly, those with pediatric diseases. A few weeks ago, we presented interim data from the first in-vivo genome editing clinical trials, evaluating SB-913 and SB-318 for the lysosomal storage diseases, MPS 2 and MPS 1.

These data demonstrated preliminary evidence of the first step for in-vivo genome editing in a human, building on Sangamo's distinguished legacy of a leadership in the field of genomic medicine. This was an important moment and represented our first step in the process of validating our in-vivo genome editing zinc finger technology in the clinic. We are encouraged to see preliminary evidence of activity in the first iteration of this technology. We are in a start of a journey, developing in-vivo genome editing treatments and recognize that greater efficacy will be required to provide the necessary clinical benefit.

But we firmly believe that we have the technical abilities to get us there and get us to our destination. We must also remember that the early data that we've seen so far are interim results and that we will learn much more as additional data are gathered from the high-dose subjects. It is important to mention that over the last two years, we've developed a second-generation ZFN technology for in-vivo genome editing program, which Ed Conner will discuss later on the call. We anticipate commencing a clinical trial later this year using this second-generation ZFNs and the information from the study should facilitate a Phase 3 decision for the MPS 2 program sometime in 2020.

Before I turn the call over to other members of the team, I would just like to say how excited I am about where we find ourselves as a company in 2019. We are, for example, making this call today from a conference room in the third floor of Sangamo's brand-new, state-of-the-art building in Brisbane, located in the epicenter of the biotech cluster of South San Francisco. We have completed the first phase of our move here. And later this year, we'll finish the build-out of our AAV manufacturing facility on the ground floor, providing us with expanded capacity to supply our clinical trials.

Gaining control of our process development and manufacturing is critical for gene therapy companies, and we're delighted to be adding this facility. Our transformation to a clinical stage biotech company has proceeded rapidly and this new building is a symbol of how far we have come. Last year, we made significant progress in clinical trial across our studies. And as a result, we expect data from five different clinical programs over the course of the year, including not just our in-vivo genome editing programs but also our gene therapy program for hemophilia A and our ex vivo gene edited cell therapy for beta-thalassemia.

Now I'd like to turn the call over to Ed Conner, our chief medical officer.

Edward Conner -- Chief Medical Officer

Thanks, Sandy, and good afternoon, everyone. We believe that the MPS 2 and MPS 1 data presented at WORLD Symposium on February 7 are congruous and complementary and together, provide preliminary evidence of in-vivo human genome editing. Several lines of evidence support this conclusion, namely, first, we detected evidence of gene integration via RT-QPCR analysis of liver biopsy samples in both MPS 2 patients who received the mid-dose of SB-913. Second, in patient 6, who is treated at the high dose in the MPS 2 study, a substantial increase in plasma IDS activity was observed up to level as high as 50% of normal.

Third, we saw evidence suggesting a dose response across the low, medium and high doses in the MPS 2 trial. And fourth, we observed leukocyte IDUA activity increases within the normal range in the three MPS 1 patients treated in the EMPOWERS study as well as evidence of dose dependency. As discussed at WORLDS, these and ARM data marked the first in a series of readouts from these two studies, which we expect in 2019. We are looking forward to analyzing IDS activity measurements in the high-dose cohort, which includes the three expansion patients from the CHAMPIONS Study.

For EMPOWERS, we are eagerly awaiting longer-term data. Most importantly, for both studies, we look forward to ERT withdrawal data across all dose ranges. These data are an important step in validating our in-vivo ZFN-mediated genome editing technology in the clinic and build the foundation for the future development of our in-vivo genome editing programs. It is encouraging that our first-generation platform demonstrated this activity.

As Sandy mentioned earlier, we have developed a second-generation ZFN technology, which is a modified version of our first-generation reagents. The new ZFN constructs were designed among other things: to increase editing efficiency. In vitro data presented last year showed three potential advantages of using these new reagents in the clinic: first, a five- to thirtyfold improvement in efficiency and potency observed in-vivo, and which results from protein engineering to the ZFNs; second, the ability to function equally well in the patient's both single nucleotide polymorphism and the target locus in the albumin gene, which represents approximately 20% of the population whom we were not previously able to treat; and third, improvements in specificity. A separate package of pre-clinical data has been reviewed by the FDA.

And they have allowed us to submit protocol for a new study under the same IND for the SB-913 MPS 2 program. Second-generation ZFNs are already being manufactured, and we expect to begin a clinical trial later this year using this product. We anticipate that this will allow us to make a Phase 3 decision for the MPS 2 program in 2020. With regards to adolescents and children, we want to give these patients the best opportunity to benefit, and therefore, plan on using our second-generation ZFNs.

Turning now to our gene therapy program, SB-525, our hemophilia A program in partnership with Pfizer, where we have enrolled three patients so far. Following the recommendation from the SMC in October to dose escalate, we have treated two patients at the recommended higher dose. As previously communicated, once we complete the dose escalation, we plan to report data that includes safety and factor expression levels as well as information relating to factor replacement use and bleeding events. This is a fast-moving field, and we do not believe that others have yet presented data that would support an optimal product profile for hemophilia A gene therapy.

Also, with regards to our gene therapy programs, we announced earlier this month that the FDA accepted the investigational new drug application for ST-920, our product candidate that is being evaluated for the treatment of adults with Fabry disease. We're excited to begin this trial to assess the hypothesis that the onetime administration of a gene therapy can fundamentally change the clinical course of these patients with limited, effective treatment options. We expect to open several sites later this year. Turning to our gene edited cell therapies, starting with ST-400 for beta-thalassemia in partnership with Sanofi, we have enrolled two patients to date.

In 2019, we expect to report initial safety and efficacy data, including levels of fetal hemoglobin and total hemoglobin. Regarding Sanofi's BIVV-003 for single cell disease, sites have been activated and patient identification is under way. I'll now turn the call over to Adrian.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Well, thank you, Ed, and thank you to everyone on the line for dialing in to our call today. Today, I'd like to provide you with updates on some of our lead pre-clinical programs that are making their way into the clinic. And in particular, I'd like to highlight our cell therapy platform. Sangamo has a distinguished history of employing singular nuclease mediated ex vivo gene editing technologies in the clinic, and these date back to our -- the time of our HIV studies in the mid-2000s.

So first, I'll mention our exciting work in multiplex ex vivo genome editing that's being performed with Kite-Gilead to generate allogeneic CAR-T cells. The use of multiplex gene editing in the generation of these agents plays to the high editing efficiency and specificity of ZFNs, which we believe makes them uniquely well suited for this purpose. Kite-Gilead recently announced that the first asset to enter the clinic from this partnership will be an allogeneic anti-CD19 CAR-T agent, Kite-037. They intend to file the IND in the latter half of the year.

Building further on our unique strength in this field of multiplex ex vivo editing, we're also exploring the development of an entirely new class of therapeutics, known as CAR-TREGs. Now these are regulatory T cells that have been genetically modified with a chimeric antigen receptor to endow the cells with both antigen and tissue specificity. And we believe that CAR-TREG cell therapy will prove to be both as exciting and as important for immunology and also immune diseases as CAR-T cell therapies have turned out to be for oncology. Now our first clinical TREG program, TX200, which we acquired as part of the TxCell acquisition, will test these new therapeutic agents in the context of kidney organ transplantation.

And this will represent the first time that a CAR-TREG cellular therapy will have been tested in humans. We believe that the TX200 program will play an instrumental role in establishing a human proof-of-concept for the therapeutic viability of CAR-TREGs and that it will also pave the way for their broad application in both autoimmune and inflammatory diseases. Now on the TX200 program, an HLA-A2 CAR is engineered into TREGs. In a clinical setting of organ transplantation, mismatches of HLA alleles between the organ graft recipient and the donor are commonplace.

So -- such mismatches are the primary causes of transplant rejection. And as a result, transplant patients are typically reliant on global lifelong systemic immunosuppression in order to prevent graft rejection. Now if you look Slide 20 in the presentation, you'll see that it outlines the concept and also shows, in the case where the recipient is HLA-A2 negative and the donor graft is HLA-A2 positive, the recipient T cells are recognized HLA-A2 on the graft can be selectively suppressed by the activity of infused CAR-TREGs. Now this treatment intervention has the potential to facilitate the tapering and even perhaps the eventual removal of immunosuppressive agents.

We plan to harvest TREGs from a recipient and then to engineer them with a CAR that recognizes the HLA-A2 presence on a cell surface of the donor organ. The engineered CAR-TREG cells are designed to selectively bind to HLA-A2 positive cells on a donor organ and then by providing localized, targeted immunosuppression, and in so doing, inducing selective immune tolerance. Now the core pre-clinical data supporting this study, which describes the developments of humanized HLA-A2 CAR, its transduction into TREG and the evaluation of the resulting HLA-A2 CAR-TREG cells in several pre-clinical trials transplantation models is summarized on Slide 21 for you. Now this data was published in February 2019 in the journal, JCI Insight, and represents the work which was done by our collaborator, Professor Megan Levings of the University of British Columbia, UBC, and also worked under the Center for Drug Research and Development, or CDRD.

And this is a Canadian translation center, which is located in UBC. Now in this publication, the UBC team, led by Professor Megan Levings, in collaboration with CDRV, shows that HLA-A2 CAR-TREG cells rapidly migrated to and persisted within the HLA-A2 allografts and following which they eventually migrated to the draining lymph nodes. Interestingly, the HLA-A2 CAR-TREGs were then able to suppress rejection both in the graft-versus-host disease, GVHD, model and also in a skin graft model. Now this work has enabled the identification of the optimal humanized single-chain variable fragments, or SCFV, fragment, which we then selected as our clinical candidate, TX200.

This first-in-human study, in our view, actually defines the next frontier of cellular therapy. And it's a representation that CAR-TREG cell therapy will, in the end, be as exciting for immunology and also immune disease as CAR-T cell therapies have been for oncology, and we hope to be recapitulating some of the successes that have been observed in this field to date. Now as is the case with the CAR-T cell therapies used to treat human malignancies, precise and specific gene editing is required to realize the full potential of CAR-TREGs. And this T cell engineering will facilitate both the knock-ins and the knockouts that will enable us to manufacture allogeneic TREG cells and also to honor them with CARs, and as well as additional edits to introduce novel properties into the CAR-TREGs.

Sangamo's singular nuclease platform is certainly well suited to multiplex editing, and we expect to be able to engineer product candidates for a range of different indications in the first instance using autologous CAR-TREGs and then moving on to allogeneic agents. Now the TX200 program facilitates two core goals: it has the potential to address an unmet medical need, where there hasn't been an innovation in many years; and will also provide invaluable learnings to help us to accelerate the development of CAR-TREGs in both autoimmune and in inflammatory diseases. And Sangamo's cellular therapy team in Valbonne, France, continues to make excellent progress in a range of CAR-TREG programs that target autoimmune and inflammatory disorders, and these indications include multiple sclerosis and Crohn's disease. So I'll stop there now and I'll turn the call over to Kathy, who'll give you a review of our financial results.

Kathy?

Kathy Yi -- Chief Financial Officer

Thank you, Adrian, and good afternoon, everyone. Detailed financial results for the fourth-quarter and full-year 2018 were included in the press release that we issued earlier this afternoon, and Q4 results are summarized on Slide 24. I will briefly review the most important components of our financials today and I'll also discuss primary drivers of our growth and the investments for 2019. We ended the fourth quarter with a strong balance sheet of $400.5 million in cash, cash equivalents, and investments.

Our 2019 operating expense guidance is in the range of $210 million to $220 million, and we project our current cash position to provide at least two years of runway. As discussed earlier by Ed, we're excited about the future progress achieved in our clinical programs this year and anticipate data readouts from hem A and beta-thal as well as the entry of Fabry into the clinic. While we continue to invest in expanding our capabilities and developing our future pipeline, we also plan to be prudent in our future capital allocations and investments. We recently moved into the Brisbane facility and expect to complete the manufacturing and process development portion of the build-out by middle of this year.

While this expansion is critical from talent recruitment and capability perspective, we're excited about the AAV manufacturing capabilities in this facility and expanding capacity to supply clinical materials for our future pipeline. We also expect to continue to maintain capacity at our CMO while building out our own internal manufacturing capability. Turning to our financials for the full year of 2018, the consolidated net loss was $68.3 million or $0.70 per share, compared to a consolidated net loss of $54.6 million or $0.70 per share for the full year of 2017. Revenues were $84.5 million for the full year of 2018, compared to $36.6 million in 2017.

The increase in revenue was primarily related to our collaboration and license agreements with Kite-Gilead and Pfizer. The total operating expenses were $161.6 million for 2018, compared to $92.9 million in 2017. The increase in operating expense was primarily related to manufacturing and R&D expenses related to the advancement of our clinical program. As a final comment, in the fourth quarter of 2018, we successfully completed the TxCell acquisition for aggregate purchase consideration of approximately $80.4 million.

We continue to be excited about developing the next-generation CAR-T cell -- CAR-TREG cell therapy and expect the clinical trial initiation in 2019. And with that, I'll now turn the call over to Sandy for closing remarks.

Sandy Macrae -- Chief Executive Officer

Thank you, Kathy. We're excited by the progress we've made across our key therapeutic programs. During the past few years, as our focus has been on gearing up our operations and moving our programs into the clinic, we are now seeing clinical data emerging from these programs. This has the potential to validate our new therapeutic approaches to utilize our differentiated technologies in a series of high unmet medical needs.

With our manufacturing facility in Brisbane and continued contracting with our CMO, we are preparing for the future. We look forward to bringing you further data throughout the year, which will continue to define how we develop our genomic medicines across our therapeutic portfolio. We'll now turn to your questions. Operator? 

Questions and Answers:

Operator

[Operator instructions] Our first question is from Qian Wang from Bank of America Merrill Lynch. Your line is now open.

Qian Wang -- Bank of America Merrill Lynch -- Analyst

Hi. Good afternoon. Thank you very much for taking my questions. So if I may, just a couple.

First of all, just on the MPS 2 program, I know you guys are starting the ZFN 2.0 trial soon. Can you just speak to what detail/design do you have? And what time could we expect clinical data update? And a follow-up on that is, you said potentially you could trigger the pivotal trial in 2020 and what kind of data do you need to see? Have you spoken the requirements with FDA yet?

Sandy Macrae -- Chief Executive Officer

Thank you for the question, both important questions. Can I maybe pass this on to Adrian, our head -- new head of R&D to address both of these?

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Thank you, Sandy. Yes. Yes, so we're very enthusiastic about this new study. We believe that the second-generation singular agents might just be able to take us slightly further into the therapeutic window to realize the full power of this technology.

To answer your question specifically, the design of the new study will recapitulate essentially the design of the first-generation study in MPS 2. The data that will trigger are moved toward Phase 3. It will be based upon the usual parameters, a combination of the data that evolves out of existing first-generation studies in both MPS 1 and MPS 2 and also the new data pertaining to the safety, obviously, but also enzyme activity, evidence of integration, and ERT withdrawal. But at this point, specifically I got to say we need a full house, where one of the other -- we will watch the data as it evolves, and we'll make a decision when we feel we have enough data to do that.

Qian Wang -- Bank of America Merrill Lynch -- Analyst

If I may, I can have another follow-up? So --

Sandy Macrae -- Chief Executive Officer

Sure.

Qian Wang -- Bank of America Merrill Lynch -- Analyst

Yes, thanks. So, you are dosing a patient for beta [Inaudible]. And you said, we potentially would expect data on the fetal hemoglobin expression as well as the total hemoglobin. I'm wondering how long of a follow-up that we can see? And potentially, can we see any data points on transfusion independence?

Sandy Macrae -- Chief Executive Officer

Ed, would you like to take this one?

Ed Conner -- Chief Medical Officer -- Analyst

Yes. So we're very excited about our ST-400 program in beta-thalassemia, and we will have data readouts throughout the course of the year. Predominantly, that will include, obviously, initial safety as well as fetal hemoglobin and overall hemoglobin values. As with all our programs, we -- the data will come in and we'll present it as is appropriate.

Operator

Thank you. Our next question is from Ritu Baral from Cowen. Your line is now open.

Ritu Baral -- Cowen and Company -- Analyst

Hey, guys. Thanks for taking the question. I do have a follow-up to the last question, just about what you need to move to pivotal. Do you have an idea right now about how many patients that you want to treat, that you need to treat with the second-gen product before you'll have enough, I guess, critical mass of data to move into a pivotal portion? And how long do you need to follow them up for? And then I have a follow-up just on the second-gen potency?

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Yes, thank you. Yes, I don't think today we want to discuss specifics about that. Those are really an internal kind of go/no-gos that we're in the process of defining. But I think I can say that it should become fairly clear to us when we look at the totality of the data, if we begin to see really robust increases in enzyme activity, we don't really know what level of activity is necessary to get the clinical effect, but we will triangulate between the existing data and the new data and make a decision based upon what we've seen.

Sandy Macrae -- Chief Executive Officer

And we've said before and I think we've even had this conversation with you that enzyme -- being able to stop ERT is important. And we'll be learning about that from the many patients, the three patients in the expansion cohort, the two patients in cohort 3 for MPS 2 and the three patients in MPS 1. For the next coming months, they will all be withdrawing from the ERT, and we'll learn what the power and the utility of the first-generation ZFNs so on. And then as Adrian said, we will gather data from the second generation.

Again, we'll be moving those patients to ERT withdrawal. But throughout the process of their treatment, we will learn from the expression of enzyme and safety of that treatment. So lots of data to come, and it will be in the whole that we will make the decision to move forward.

Ritu Baral -- Cowen and Company -- Analyst

Got it. And then my follow-up is just on the increased potency that you're seeing for the second gen. You said five- to thirty-fold. Where is that coming from? Is that optimization of the vector that leads to bett transfection? Is that the promoter, the actual -- is it the actual six-finger construct and enzyme? What are the [Inaudible]

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Yes. So I'll answer. It's Adrian here. So the data is in vitro data, and the modifications that we've made are twofold really or two-pronged categories.

The first is modification to the vector itself, which impacts expression at the transgene, which includes, for example, modifications to the three and five prime untranslated and one, two other changes. And then we've also made some changes to the zinc fingers themselves. Obviously, one of the huge advantages of zinc fingers platform is that we can redesign that protein. And we've done some nice work to tune up the phosphate residue and get rid of some of the stickiness, which you occasionally see through nonspecific interactions between the phosphate backbone and the positively charged side chain residues done on beta-sheets.

And we've also done some tuning in the [Inaudible] itself. And we're able to uniquely tune between these two different sites. We've also made some additional changes to residues within the alpha-Galactosidase themselves, which contact the template, and those changes have contributed to some of the positive effects that we've seen with the second-generation technology and also enabled us to be agnostic to a common snip, which occurs in 20% of patients. So the combination of the changes to the vector and to the zinc finger itself through protein engineering, together enable us to get this projected increase in activity from the clinic.

Ritu Baral -- Cowen and Company -- Analyst

Was that snip present in any of the patients treated with the first gen, either at MPS 2 or [Inaudible]?

Ed Conner -- Chief Medical Officer -- Analyst

Yes. If we look across all our programs, there were a total of five patients who had the snip that excluded them from participation. I want to say that explicitly, again, patients with the snip were excluded from the clinical trial, which was part the challenge of recruitment for this clinical trial we didn't talk about. We now can go back to those patients that were excluded because of the snip and offer them a chance to enroll in the second-generation trial.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Right. And obviously, that will give us a bit of a head start when we're occurring this second-generation study because those patients were known to us.

Ritu Baral -- Cowen and Company -- Analyst

Got it. And the stickiness that you referred to, Adrian, I guess, the improvement in recognition and reduction in nonspecific. Is that going to improve the safety aspect or was that stickiness impairing potency?

Sandy Macrae -- Chief Executive Officer

So the stickiness is a thing that we've talked about -- that Ed Rebar has talked about, a lot about the nonspecific binding between phosphate residues and the beta [Inaudible] sheet and the negatively charged part of the DNA. And that -- it largely reduces nonspecific binding and off-target cutting. So the impact of that part is largely about reducing off-target rather than increasing efficacy

Ritu Baral -- Cowen and Company -- Analyst

Got it. OK. Thanks for taking all the questions.

Operator

Thank you. Our next question is from Gena Wang from Barclays. Your line is now open.

Xiaobin Gao -- Barclays -- Analyst

Hey. This is actually Xiaobin dialing in for Gena. Thank you so much for taking our questions. A couple from us.

First question, just want to confirm that based on your slides, do you still plan to enroll the adolescent cohort for MPS 2? If not, what's the reason? Then for the second question, so you mentioned the allo CD19 CAR-T. Of course, it's run by your partner. Just wondered if you can speak to the aspect about the persistence of the allo CD19 CAR-T and if there's any divide implemented in the product.

Sandy Macrae -- Chief Executive Officer

So we have an agreement with our friends at Kite-Gilead that they would comment on the CAR-T products. So you'll understand if we pass on that question. But for the first one -- the first part, I'll hand it over to Ed.

Ed Conner -- Chief Medical Officer -- Analyst

Yes. So for the adolescents, we plan on including them in the ZFN 2.0 trial. And just to be clear, after adult patients are treated.

Sandy Macrae -- Chief Executive Officer

Yes, we feel like we're moving -- so we've said previously that we will understand the two data set from the first-generation trial with efficacy and safety and ERT withdrawal, and we feel that as we're then going to move into the second generation, it is the right thing to do to offer the second-generation to the adolescents and children rather than treat them with the first generation.

Ed Conner -- Chief Medical Officer -- Analyst

Right.

Sandy Macrae -- Chief Executive Officer

I'm sure you would agree.

Xiaobin Gao -- Barclays -- Analyst

Got it. Thank you so much.

Operator

Thank you. Our next question is from Jim Birchenough from Wells Fargo Securities. Your line is now open.

Jim Birchenough -- Wells Fargo Securities -- Analyst

Yes. Hi, guys. Congrats on all the progress with the science here. A few questions.

I guess, just first, in terms of optimizing the in-vivo gene editing. Are you looking at unproductive editing? And specifically, I'm wondering if you can look at indels without the IDS gene insertion, whether those are occurring and is there some way to avoid that? Is that something you can look at?

Sandy Macrae -- Chief Executive Officer

Adrian, in that sense, one for you.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Yes, it is something we can look at. And actually, we believe that we actually have the safest gene editing reagents of all time. I think occasionally, you hear some claims about specificity of CRISPR. But in our hands, if you take the on-target into account, we feel that we're really doing extremely well here with regard to safety and off-target.

and that these are ideally suited for this purpose. We can measure indels with the MiSeq assay, and we're confident that the off-target is extremely known now, but those -- but actually, the first-generation would be more so now with the second generation.

Sandy Macrae -- Chief Executive Officer

But I think Jim's asking a very specific question about whether we can drive insertion of the transgene over indel.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Oh, I see, whether you can actually -- whether you can favor homologous recombination. I'm not -- I mean, there are a few ways to do that, which have been discussed. I just got back from Victoria, the one beating that. Broadly, it was something we're thinking about.

But at the moment, we don't have a specific way -- Jim, if your question is how could we specifically bias the system to favor homologous recombination over indel generation, we don't have a specific method to do that at the moment. But you can --

Jim Birchenough -- Wells Fargo Securities -- Analyst

Yes. And I guess, the question was really, to the extent you could look at indels off-target, I was wondering if you could look at indels in the albumin gene locus to see whether you're getting editing without the transgene insertion and if you can optimize to avoid that?

Sandy Macrae -- Chief Executive Officer

It's a good question. Sometime ago, we looked in animals and saw a ratio of indels to insertion, and that led to the current protocol, which has 1:1:8 as a ratio of transgene to ZFNs. So you drive the equation by putting in more transgene. I think it's something that we will come back to and look at again with the new generation of the ZFNs.

It may be something around timing of transgene generation compared to ZFN cutting or it may be just simply, again, the ratio of amount of each. Once we start to see editing, we can start to then improve on -- and this one -- your question very well -- very perceptive. It's one that --

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Yes, it's one that we discussed, yes.

Jim Birchenough -- Wells Fargo Securities -- Analyst

And then maybe just on the ex vivo gene editing. Should we assume that some of the advances that have been made in the transplant protocol in single cell disease, as an example, things like pretransfusion and recruitment of cell, that those have been optimized in your program with Sanofi?

Ed Conner -- Chief Medical Officer -- Analyst

Yes. So Sanofi, specifically for single cell, is responsible for that Phase 1, 2 studies. But yes, all current standard-of-care medical interventions are being included both in beta-thalassemia as well as sickle cell protocols.

Jim Birchenough -- Wells Fargo Securities -- Analyst

Great. Well, thanks for taking the questions.

Sandy Macrae -- Chief Executive Officer

Thanks definitely.

Operator

Thank you. Our next question is from Maury Raycroft from Jefferies. Your line is now open.

Maury Raycroft -- Jefferies -- Analyst

Hi, everyone. Good afternoon and thanks for taking my questions. First question is just on the next-gen program. Is that a plug-and-play type situation, where that could be incorporated into the hem B in MPS 1 studies? And I guess, what are the plans to do that?

Sandy Macrae -- Chief Executive Officer

Good question. We feel that it's prudent to do with one initially. So that's probably why we're driving ahead with MPS 2. And part of the reason for choosing MPS 2 is to be pragmatic.

One that the team had already have discussions with the regulatory authorities, and we're ready to go with that. However, we will be watching the results of the MPS 2, MPS 1 and hem B first-generation studies at the same time as doing the trial in MPS second-generation and collecting that data. And the team are looking at what would be the trigger points to start the other studies with the second generation.

Maury Raycroft -- Jefferies -- Analyst

Got it. That's helpful. And a specific question for MPS 2, I'm just curious for the cells that you harvested from the patient biopsies. And I know you did the RT-QPCR in them.

But I'm wondering if you stained any of those cells and if you get a sense as to the amount of IDS that was produced in a few of those cells. I guess, if you stain intracellularly, are those cells overloaded with IDS?

Sandy Macrae -- Chief Executive Officer

So we haven't done that kind of staining. The amount of tissue we get in these patients is very small. If you imagine that these patients are often smaller because of the disease, and these are not therapeutic biopsies, but clinical trial biopsies. So we try and use the very smallest needle.

And the amount of tissue we get is perhaps half of the nib of your pen. And when we do the PCR, it was on something like 100,000 or a couple of hundred thousand cells. So we've done very little capability to define histological examination.

Maury Raycroft -- Jefferies -- Analyst

OK. OK. And then last question is just on the TREG program and the publication, which looks pretty cool. I'm just wondering for the antigen, the HLA-A2 antigen that you're targeting, is that sequence in epitope proprietary? And can you talk about higher optimizing and going from mouse to humans with the antigen targeting?

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Yes, thank you for that question, and it's excellent question. And we'd rather not, at this point, discussed the details of the IP around our targets. So with regards to your second question, it was the...

Sandy Macrae -- Chief Executive Officer

Optimizing between mouse and humans.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

[Inaudible] Optimization between mouse and humans. So moving from a mouse model to a human, is that what you're saying? And I think the answer to that question is that, really, one of the key purposes of our TX200 program is exactly that, to enable us to sort of, for the first time ever, really, to test this hypothesis, the TREG -- CAR-TREG hypothesis in humans and to see how efficiently we can translate what we're seeing in these animal models, and we showed some of the data earlier into humans. And I think this is the first step which will pave the way forward for us to then move into some larger indications like, for example, Crohn's disease, multiple sclerosis and others. So I think the answer is we need to see.

We expect it to translate. We're confident that it will. Obviously, there's been some data from polyclonal TREG studies with regards to safety but we believe, we're in a completely different place when it comes to efficacy, obviously. So this is something I think -- which is the case of wait and watch.

And we'll know pretty quickly and that will really provide us with an important foundation for our future work.

Sandy Macrae -- Chief Executive Officer

But even this morning, we reviewed the landscape of TREG companies. And there seems to be a growing swell of new companies interested in this space, which is why we feel that the acquisition of the TxCell was so important because what we saw when we visited them was the very special product development that they have and the ability to purify TREGs. And that will turn out, we think, to be as important as the editing capability.

Stephane Boissel -- Executive Vice President, Corporate Strategy

And we still expect, if I may continue, Sandy and Adrian. So we still expect to be the first company to put a TREG -- a CAR-TREG in the clinic this year. But we see more and more encouraging to that technology, so we can expect, let's say, more [Inaudible] in the future. But we have to be the first, and we expect to be keeping that -- those will be advantageous by investing as early as possible.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Well, I think it's fair to say that we feel the cellular therapy CAR-TREG is seen as the next frontier really. And I'm really delighted, as are we all, to be the people actually pushing this forward to be the first company to actually take this concept into the clinic and test that.

Maury Raycroft -- Jefferies -- Analyst

Very good. Looking forward to it. Thank you very much.

Operator

[Operator instructions] And our next question is from Whitney Ijem from Guggenheim Securities. Your line is now open.

Evan Wang -- Guggenheim Securities -- Analyst

Hi. This is Evan Wang on for Whitney Ijem. We just had a question on hemophilia A. With respect to timing, I guess, with the fourth quarter completely enrolled, what is the timing of an SMC opinion? And if you need to enroll a higher dose, will you provide us an update on that? And I have a follow up.

Ed Conner -- Chief Medical Officer -- Analyst

So the SMC typically meets eight weeks after the second patient is dosed. We expect that meeting to occur in the spring, and we will certainly update on actions following that as is appropriate.

Evan Wang -- Guggenheim Securities -- Analyst

OK. And with respect to the Fabry program, I guess, what are your expectations for a competitive program?

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Yes, I mean that's a really good question, and it's, obviously, a crowded field. But you can remember that Sangamo has been doing this kind of thing for many years that the reasons why we believe we can be competitive, as Sandy said, we feel that gene therapy is part of the portfolio of approaches, including gene editing and genome editing. And it's a question of whether we can be best-in-class. And we believe, looking at the profile of what we're seeing pre-clinically, and without going into details about what we expect to our study.

I think there's a good chance that we have everything to play for here and that we have best-in-class potential where we're going to really the data, obviously.

Stephane Boissel -- Executive Vice President, Corporate Strategy

Our expectation is to be the next gene therapy program in the clinic, yes.

Sandy Macrae -- Chief Executive Officer

We're uniquely placed -- we feel we're uniquely placed in having that balance of gene therapy, which is tractable, practical clinical development with ex vivo editing, which is something where you can control the quality and the QC before you give the struct back to the patients -- the cells back to the patient with really cutting-edge frontier science on in-vivo editing. And it's that balance of risk and benefit and clinical benefits, I think, is the big advantage that Sangamo has.

Evan Wang -- Guggenheim Securities -- Analyst

Thank you.

Operator

Thank you. Our next question is from Eric Joseph from JP Morgan. Your line is now open.

Eric Joseph -- J.P. Morgan -- Analyst

Good afternoon. Thanks for taking the question. Just a couple on the 2.0 program from us. I just want to clarify whether there any other adaptations to the AAV vector design as part of 2.0 that you're seeking or that you've -- adapt in order to increase editing efficiency? And just as a follow-up to that, I guess, just going back to the biopsy -- liver biopsy analysis that you did in the MPS programs, I know that you looked at transgene insertion by PCR, but did you also look at singular finger cassette levels by PCR? And do you see proportional increases in cell path activity, as you dose escalate?

Sandy Macrae -- Chief Executive Officer

So if I can answer that, and I'm not sure I fully understood the second question. But for the first question about AAV, it is something we're working on, and we've got some really interesting results that suggest we can -- may carry AAVs transfection even better. That's not ready for this generation, but we feel it's important as any pharmaceutical bio pharma company would do to constantly be improving the next generation. So that's for the future.

And then the second question that you asked was around the liver biopsy. As I said, we have very little tissue and all we can comment on was the presence of the transgene and the transgene being correctly around and in the correct place of the albumin locus. So that's all we can say.

Adrian Woolfson -- Executive Vice President and Head of Research and Development

And just picking up on the statement, how we can improve the efficiency of editing in-vivo. And I think the nice thing about Sangamo is that we have, what I would call, multiple levers that we can use to get there. And our second generation of zinc fingers is one of them. But we have some other approaches, too, and we've got nice portfolio of approaches so -- that we believe we have preliminary evidence, as we stated, that we have edited the human genome in-vivo for the first time.

And yes, as of today, just with the preliminary data we have, we might need a little bit more efficacy to get into the clinical range. We may be there. We may not be. We don't know.

The data is still maturing. It's still evolving. And we'll know much better over the next few months. But I think the important point is that we have levers to take us to the next level of efficacy.

And the first lever that you're going to see in the clinic is the second-generation [Inaudible]. We expect that, that has a good chance of getting us there and we have many other options beyond that as well.

Eric Joseph -- J.P. Morgan -- Analyst

OK. That's helpful, thanks.

Sandy Macrae -- Chief Executive Officer

Thank you, Eric.

Operator

At this time, I am showing no further questions. I would like to turn the call back over to Sandy Macrae for closing remarks.

Sandy Macrae -- Chief Executive Officer

We'd just like to thank you all. It's an exciting, fundamental year for Sangamo and we're grateful for your continued support, and we'll wish you a good rest of afternoon.

Duration: 54 minutes

Call Participants:

McDavid Stilwell -- Vice President of Corporate Communications and Investor Relations

Sandy Macrae -- Chief Executive Officer

Edward Conner -- Chief Medical Officer

Adrian Woolfson -- Executive Vice President and Head of Research and Development

Kathy Yi -- Chief Financial Officer

Sandy Macrae -- Chief Executive Officer

Qian Wang -- Bank of America Merrill Lynch -- Analyst

Ed Conner -- Chief Medical Officer -- Analyst

Ritu Baral -- Cowen and Company -- Analyst

Xiaobin Gao -- Barclays -- Analyst

Jim Birchenough -- Wells Fargo Securities -- Analyst

Maury Raycroft -- Jefferies -- Analyst

Stephane Boissel -- Executive Vice President, Corporate Strategy

Evan Wang -- Guggenheim Securities -- Analyst

Eric Joseph -- J.P. Morgan -- Analyst

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