Sangamo Therapeutics - Earnings Call - Q4 2020
February 24, 2021
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by and welcome to the Sangamo fourth quarter and full year 2020 conference call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during this session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ms. Aron Feingold, Head of Corporate Communications. Please go ahead, ma'am.
Aron Feingold (Head of Corporate Communications)
Good afternoon, and thank you for joining us today. With me this afternoon on this call are several members of the Sangamo Executive Leadership Team, including Sandy Macrae, Chief Executive Officer; Mark McClung, Chief Business Officer; Jason Fontenot, Chief Scientific Officer; Rob Schott, Head of Development; and Bettina Cockroft, Chief Medical Officer. Slides from our corporate presentation can be found at our website, sangamo.com, under the Investors and Media section on the Events and Presentations page. This call includes forward-looking statements regarding Sangamo's current expectations. These statements include, but are not limited to, statements relating to plans and timelines for Sangamo and our collaborators to conduct clinical trials and present clinical data, and the potential for these data to demonstrate clinical benefit to patients; plans and timelines for bringing additional in-house manufacturing facilities online; our expectations regarding our financial performance and resources; and other statements that are not historical fact.
Actual results may differ substantially from what we discuss today. In addition, these statements are not guarantees of future performance and are subject to certain risks and uncertainties that are discussed in documents that we file with the Securities and Exchange Commission, specifically in our annual report on Form 10-K for the fiscal year ended December 31, 2020. The forward-looking statements stated today are made as of this date, and we undertake no duty to update such information except as required under applicable law. On this call, we discuss a non-GAAP financial measure. We believe this measure is helpful in understanding our past financial performance and our potential future results. This is not meant to be considered in isolation or as a substitute for the comparable GAAP measure.
The comparable GAAP measure and reconciliations of GAAP to the non-GAAP measure discussed on this call are included in today's press release, which is available on our website. Now, I'd like to turn the call over to our CEO, Sandy Macrae.
Sandy Macrae (CEO)
Thank you, Aron. Good afternoon to everyone on the call. I'd like to start by saying just how pleased we are with Sangamo's progress in 2020, despite all of the challenges of the pandemic. We executed on moving product candidates forward in the clinic. We executed on strengthening our manufacturing infrastructure and bolstered our strong cash position to execute on our therapeutic pipeline. Specifically, we initiated our phase I/II study of our wholly owned product candidate treating Fabry disease, and together with our partner Pfizer, the phase III trial of our product candidate treating Hemophilia A. We entered into transformational neuroscience collaborations with Biogen and Novartis to tackle challenging diseases such as Alzheimer's disease, Parkinson's disease, and autism spectrum disorder. We brought in-house AAV manufacturing capabilities online in our Brisbane, California headquarters.
This is a tremendous achievement under any condition, and bringing our facility online during the COVID-19 pandemic was particularly impressive and a testament to our dedicated manufacturing team. Our research engine was also highly productive, advancing our wholly-owned TX200 CAR-Treg cell therapy product candidate and all of our partner programs. We built a strong cash position primarily through upfront payments from our collaborations and finished the year 2020 with $692 million in cash, cash equivalents, and marketable securities. Looking ahead to 2021, we're focused on further unlocking Sangamo's value through clinical execution. For our wholly-owned programs, we expect to continue to enroll patients into our phase I/II Fabry study and present initial data by the end of 2021. We also anticipate initiating our phase I/II kidney transplant rejection study in the second half of the year.
Lastly, we expect to continue to advance our proprietary manufacturing capabilities and bring our cell therapy manufacturing facilities online by the end of 2021. We believe the in-house manufacturing capabilities can provide a competitive advantage with greater flexibility and quality control. Also, in 2021, we expect continued momentum in our partner programs. For example, Pfizer expects continued enrollment in our phase III Hemophilia A AFFINE trial with an expected presentation of pivotal data in 2022. Additionally, Pfizer expects another update from the phase I/II ALTA study within the next year. Our partner Kite expects the initiation of our clinical study of our anti-CD19 CAR-T cell therapy by the end of 2021. Lastly, we anticipate presentation of initial data by the end of 2021 from phase I/II study evaluating our investigational sickle cell disease product candidate developed with our collaborator, Sanofi.
We also anticipate an update on our beta thalassemia program by the end of 2021. I would like to conclude my opening remarks by introducing the newest member of our executive team who joins us on the call today, Rob Schott, our Head of Development. Rob's leadership capabilities and drug development experience will help Sangamo advance our late-stage pipeline and prioritize our development efforts on programs with the highest likelihood of success and impact. He will be an instrumental leader during a year in which we anticipate several significant clinical milestones. Effective as the beginning of this year, we also promoted Jason Fontenot to Chief Scientific Officer. Jason has contributed significantly to Sangamo in his former role as Head of Cell Therapy and in his latest role as Acting Interim Head of Research. This new role enables Jason to continue building our heritage in genomic and cellular science.
I'm very excited by the partnership between Jason and the research team and Rob and the development team, which is designed to advance our differentiated technology to support a robust clinical pipeline. Before I turn the call over to the team, I'd like to acknowledge the hard work and dedication of all the Sangamo employees who came into our labs to keep our research engine running and those who progressed our business working from home. These were challenging circumstances. I am so proud of the team's achievements. With that, I will turn the call over to our Chief Medical Officer, Bettina, who will provide additional details on our clinical accomplishments. Bettina.
Bettina Cockroft (CMO)
Good afternoon. As Sandy mentioned, we're very pleased with our clinical momentum in 2020, which propels us into 2021 with multiple potential clinical catalysts. At ASH 2020, we and Pfizer announced phase I/II results from the Alta study showing sustained Factor VIII activity levels in the 3E13 vector genomes per kilogram high-dose cohort through one year following giroctocogene fitelparvovec gene therapy treating Hemophilia A. The results for the high-dose cohort showed that, as of the cutoff date, giroctocogene fitelparvovec was generally well tolerated. Steady-state Factor VIII activity was achieved by week nine. Mean and median Factor VIII activity remained in the therapeutic range through week 52 for all five patients and through the longest available follow-up of 82 weeks for the longest treated patient. Specifically, from week nine to 52, group median Factor VIII activity was 56.9%, and group geometric mean Factor VIII activity was 70.4% via chromogenic assay.
There were no bleeding events in the first year and only one target joint bleed during the second year following vector infusion. It is important to note that these results are reflective of five patients followed for less than two years. It is also important we continue to watch these patients over time and understand the potential of this therapy when we see a larger patient sample in the phase III AFFINE study, which Pfizer continues to enroll. Regarding our Fabry program, we have dosed the first three patients in phase I/II STAAR study evaluating ST-920 in Fabry disease. Following last year's dosing of the first two patients establishing the first cohort, earlier this month, we dosed the first patient in the second-dose cohort.
The STAAR study is evaluating the safety and tolerability of ST-920 in classical Fabry patients 18 years and older and includes all comers, those on enzyme replacement therapy or ERT, ERT naive patients, or ERT pseudo-naive patients who have not received ERT treatment in the prior six months. Key secondary efficacy measures in this trial include α-Gal A activity and assessment of GB3 and lyso-GB3 levels. We expect to present initial Fabry clinical data by the end of 2021 after we have identified a dose for cohort expansion. We expect the initial readout to include safety and tolerability measures as well as biochemical data such as enzyme and substrate levels. We do not expect the initial readout to include kidney biopsy data, which will be collected at a later date. We look forward to continuing to keep you informed on our progress in this program.
I will now turn the call over to Mark for an overview of the financial results. Mark.
Mark McClung (Chief Business Officer)
Thank you, Bettina. Good afternoon, everyone. We're pleased to share our financial results for the fourth quarter and full year 2020. Beginning with our fourth quarter results, we reported a net loss of $40.7 million or $0.29 per share compared to net income of $4.5 million or $0.04 per share for the same period in 2019. Total revenues were $25.8 million compared with $54.9 million for the same period in 2019. In 2019, we achieved milestones in the fourth quarter under our collaboration agreements, which included $25 million for the completion of the IND transfer for Hemophilia A and $7.5 million from Sanofi, producing the first patient in our sickle cell phase I/II clinical study. The expected decrease in revenues is primarily due to these milestone achievements.
As a reminder, we also earned $35 million in milestones from Pfizer, as expected in the third quarter of 2020, related firstly to the dosing of the participants in our phase III AFFINE study, our gene therapy program in Hemophilia A, and second for completing our research activities in collaboration to develop genome regulation therapies for the treatment of C9orf72-related ALS. Non-GAAP total operating expenses, which excluded non-cash stock-based compensation expense, were $62.6 million in the fourth quarter compared to $48.2 million in the same period in 2019. The increase in operating expenses was due primarily to headcount growth and facilities expansion to support the advancement of our clinical trials and manufacturing capabilities. Turning to the full year 2020 results, for 2020, we reported net loss of $121.1 million or $0.90 per share compared to a net loss of $95.4 million or $0.85 per share in 2019.
Revenues were $118.2 million in 2020 compared to $102.4 million in 2019. The increase in revenues was primarily due to the recognition of upfront licensing fees under the Biogen and Novartis collaboration agreements entered into in 2020. The increase was partially offset by a decrease in revenues from our Hemophilia A collaboration agreement with Pfizer following the IND transfer in December 2019. Non-GAAP total operating expenses were $222 million compared to $188.3 million in 2019. The increase in operating expenses was primarily due to headcount growth and facilities expansion. As mentioned in the fourth quarter operating expense discussion, these increases reflect the advancement of our clinical trials and manufacturing capabilities. This increase was partially offset by a decrease in travel, corporate costs in 2020 arising from the COVID-19 pandemic. Moving to the balance sheet, we ended the quarter with approximately $692 million in cash, cash equivalents, and marketable securities.
In addition to this balance, in 2021, we have received net proceeds of about $15.7 million from the sale of our common stock through February 19, 2021, under our at-the-market offering program that we established in 2020. We believe our balance sheet remains strong and will allow us to reach several important R&D milestones, including potential filing of our BLA for Hemophilia A and potentially through its review and possible approval. Turning to 2021 full year guidance, we expect non-GAAP operating expenses, which excluded estimated non-cash stock-based compensation expense of about $30 million, to be in the range of approximately $255 million-$275 million. I'll now turn it back to Sandy for closing remarks.
Sandy Macrae (CEO)
Thank you, Mark. I'd like to conclude by saying that we're very pleased with our progress made in 2020 and where we find ourselves as a company in 2021. We're building momentum with our clinical execution, research engine, and in-house manufacturing capabilities. Our strong balance sheet enables us to advance our R&D pipeline. We are in a compelling position to achieve several important milestones and catalysts this year, and we look forward to updating you. Operator, please open the line for questions.
Operator (participant)
Thank you. Ladies and gentlemen, to ask a question, just press star one on your telephone keypad. To withdraw your question, simply press the pound key. One moment while we compile the Q&A roster. Our first question is from Maury Raycroft with Jefferies. Your question, please.
Maury Raycroft (Analyst)
Hi, everyone. Congrats on the progress, and thank you for taking my questions. First one is on ST-920 in Fabry. For the patients you've enrolled and treated, can you provide any additional perspective on the patient status and their backgrounds too? I guess, are they ERT experienced, naive, or pseudo-naive? Anything else you could say about the patients?
Sandy Macrae (CEO)
Maury, we're being very careful to state often that we won't give the results of the study or the characteristics until the end of the study because I think that's going to be easier for you to better know our product. Bettina, is there anything that we can see? The patients are all well?
Bettina Cockroft (CMO)
Thank you, Sandy. The patients are well. We have enrolled, as I mentioned, three patients, those three patients. Cohort two enrollment is ongoing with subsequent patients. As Sandy mentioned, we expect data will be shared toward the end of 2020 after we've completed the dose escalation part.
Maury Raycroft (Analyst)
Got it. Okay. Thank you. The second question is on the KITE-037 and TX200 cell therapy programs. Just wondering if you can comment on whether there are synergies between these two programs from a manufacturing standpoint. Is there any additional insight you can provide into gating factors prior to starting the studies for one or both of the programs?
Sandy Macrae (CEO)
Oh, that's an interesting question. Both are progressing. Kite Gilead have guided that they will be moving forward to IND and into the clinic very soon with the CAR-T. For the Treg program, we have said that we will dose a patient in the second half of this year and are moving forward with great momentum to there. Your background question is more interesting. It's about what do we learn. There are learnings across it. Jason, I wonder if you can comment about the difference between CAR-T and CAR-Treg and the learnings in what we're trying to do.
Jason Fontenot (Chief Scientific Officer)
Sure. Both of these programs are very exciting. We're excited to be working with our partners at Kite. We're also tremendously excited about our engineered Treg program. There are certainly synergies around our understanding of lymphocyte engineering and the use of our zinc finger platform in both T cells in the Kite program and in Treg for our program. I would say that's where the biggest synergies are. As you probably know, Kite is doing the manufacturing for their product. We own the manufacturing for our Treg program. There are some real differences between Treg manufacturing compared to effector T cell manufacturing for CAR-Ts in oncology. That's where we've really heavily invested. I think our work is paying off in building the process development and manufacturing for regulatory T cells, which has lots of nuance.
It can be quite different from CAR-T, but it's a critical part of our program and why we're so excited about it.
Sandy Macrae (CEO)
Mark, can you touch on the manufacturing strategy and what we're building out for the cellular manufacturing?
Mark McClung (Chief Business Officer)
Yeah. We believe that our manufacturing capability can provide a competitive advantage. We are building a balance in necessary capacity to achieve our in-house manufacturing as well as securing access through our partnership with contract manufacturers. We are investing in manufacturing process and analytics and beginning to lay the foundation for developing a strong supply chain.
Maury Raycroft (Analyst)
Great. Thanks for all the perspective. I'll hop back into queue.
Sandy Macrae (CEO)
Thanks, Maury.
Operator (participant)
Thank you. Our next question comes from Geoff Meacham with Bank of America. Your question, please.
Geoff Meacham (Analyst)
Hi, guys. Thank you. Thanks for taking our questions. Just a couple of quick ones from us, maybe a little bit more high level. First on the Treg technology, maybe you could talk about what the steps are from moving from an autologous approach to getting into the more allogeneic side. What are some of the gating factors, steps you need to do to get into allogeneic? I would love to just get your thoughts on some of the non-AAV-based delivery mechanisms that have been studied for gene therapy in Hemophilia A. Thank you.
Sandy Macrae (CEO)
Jason, we spent a large part of yesterday talking about autologous versus allogeneic. It's cutting-edge science, yes?
Jason Fontenot (Chief Scientific Officer)
Yes. Thanks, Sandy. Yeah. The differences between autologous and allogeneic are many. There are two main aspects of it. One is the engineering and the biology that needs to be done to move from an autologous product to an allogeneic product, which by definition is a healthy donor's cells in a patient. We need to avoid rejection of those cells. There is a lot of complex engineering involved there, cell engineering using our zinc finger platform. It requires that we understand how that engineering to make the cells more immune silent is affecting their biology and making sure that we still have a potent and effective product. On top of that, once you have the strategy for engineering the cells, you also have to then bring that more complex engineering strategy to a scale which can allow delivering the medicine to patients.
Both of those areas are places where we're investing a lot of effort. Yeah. Those are the key places.
Sandy Macrae (CEO)
The importance of allogeneic for Tregs allows us to move into larger population diseases such as multiple sclerosis, inflammatory bowel disease, even rheumatoid arthritis, where the patients want treatment more urgently. Also, the price point for normal treatment is different to that in oncology. Your second question was about other delivery modalities. Delivery is really important to us. We are based on AAV at the moment, but are constantly scanning the horizon to find other ways to deliver. LNP is looking encouraging. It is a complicated area. It is a complicated patent state. It is a complicated interconnection of companies. We are always on the lookout to find other ways to deliver, particularly beyond the liver, but also non-AAV ways into the liver.
Geoff Meacham (Analyst)
Thanks, guys. Appreciate the color.
Operator (participant)
Thank you. Our next question comes from Nicole Germino with Truist. Your question, please.
Minh Vuong (Head of Loyalty Rewards)
Hi, everyone. Thanks for taking our questions. This is Minh Vuong, on for Nicole. Just a quick question, I guess. With the resurfacing of oncogenic concerns from competitors in sickle cells, can you share your thoughts or any updated discussions you had with Sanofi on the risk of Zynteglo as it contributes to oncogenesis? Should the source be traced to the conditioning step? Can you share your thoughts going forward with the program on using reduced-intensity conditioning as an option? Is there any other changes to the trial design that you may want to consider? Thank you.
Sandy Macrae (CEO)
Thanks for your question. It is very difficult to comment on the safety data coming out from our friends at Bluebird. We know several people there. We know they are the kind of company that does the right thing. We know that they'll be making sure that they're understanding the patient journey. We're also confident that we have not seen anything similar with our medicine and are doing our very best to understand what it is that's appropriate for our patients. We and Sanofi have a great relationship and will be watching, listening, and learning from the discussion that goes on about what happened with Bluebird. We feel confident that we are doing something quite different. You asked another question about conditioning regimes. Once all of us work out a path to efficacy, I am sure that we will try and understand how to optimize conditioning regimes.
I'm sure the technologies we're using now are the first generation. We will continue to learn about what the best thing to do is.
Minh Vuong (Head of Loyalty Rewards)
Great. Thank you so much.
Operator (participant)
Thank you. Our next question comes from Gena Wang with Barclays. Your question, please.
Gena Wang (Managing Director of Biotech Equity Research)
Thank you for taking my questions. I have two sets of questions. First is regarding Fabry program. Just wondering, do you have a freedom to choose the dose based on the data you've seen so far, say, from cohort one to cohort two to cohort three? Based on the data, can you choose a certain dose when you dose up? My second question is, how often do you measure α-Gal A in a substrate and as well as AAV6 vector shedding? My second set of questions is regarding the TX200. Just wondering, any additional improvement regarding the TX200 as a construct since the completion of your TxCell acquisition? Also, for the second half this year, what will be the initial data sets you will be collecting for the kidney transplant?
Sandy Macrae (CEO)
Oh, thank you, Gena. A lot of questions there. Why don't we start with the first part around Fabry with Bettina? Then we'll come back to TX200 and TX cell.
Bettina Cockroft (CMO)
Yeah. Thank you, Sandy. Thank you, Gena, for the question. For now, what we have disclosed on our dosing strategy for the three cohorts is that we're looking at a low and a medium and a high dose. That's how we are looking at our dose escalation as of now. We are, as you point out, collecting α-Gal A and substrate levels throughout the study. We're doing that at regular frequencies. Those are data that we expect to be sharing towards the end of 2021. As I mentioned earlier, we are going to be waiting for those escalations to share that data.
Sandy Macrae (CEO)
Gena mentioned viral shedding.
Bettina Cockroft (CMO)
That's right. Viral shedding as well. We're also collecting viral shedding. We look forward to sharing that data with you as well at the appropriate time.
Sandy Macrae (CEO)
Gena, the.
Gena Wang (Managing Director of Biotech Equity Research)
Sorry. Yeah. Follow up the question.
Bettina Cockroft (CMO)
Sorry.
Gena Wang (Managing Director of Biotech Equity Research)
Yeah. Just wanted to, like you mentioned, the high, low dose, but is that fixed dose? Do you have a freedom to adjust the dose accordingly? Regarding collecting the biomarker data and also vector shedding, that's very interesting. I assume you will collect some kind of biopsy. For α-Gal A and a substrate, just how often do you collect? Are we talking about weekly or biweekly? Oh, sorry. Once every two weeks or monthly, if you can give a little bit more color in terms of frequency. Also, vector shedding, at what point, how frequently will you do the collecting the data?
Sandy Macrae (CEO)
Oh, Gena, you always ask such detailed questions. The protocol allows flexibility in discussion with the safety monitor committee of the dose that we choose when we escalate. We have not and will not reveal how often we measure α-Gal A and viral shedding. We are going to put together a package once all three cohorts have been dosed so that we can share with you something that would be comprehensive and give you a chance to fully understand the effect of our medicine.
Gena Wang (Managing Director of Biotech Equity Research)
Okay.
Sandy Macrae (CEO)
You asked the second question about TXCell. We found when we acquired TXCell that they have got a really good process. We continue to work on it and understand Tregs, but there is nothing fundamental that we have done since the acquisition. That was why we acquired them, because we believed in them and we believed they were good at developing Tregs.
Gena Wang (Managing Director of Biotech Equity Research)
Okay. If I recall, if it's 2018, they actually were planning to enter clinical in 2019 with their existing TX200. Just wondering, would it take additional time, any additional prep, or it seems construct hasn't changed? What additional steps do you take in order to move to the clinic? Also, once you enter clinic, what kind of data, if you can share a little bit more color on what type of data you'll be collecting and sharing with us?
Sandy Macrae (CEO)
I don't think we ever expected to be in the clinic in 2019. I think there was a hope that we would get in 2020. The tech transfer process in the time of COVID just takes a little longer. We are now, we feel, in a good place and looking forward to getting into the clinic and dosing a patient later this year. The first patients that we share the data, we will be sharing as much as we can of the biochemistry and biomarkers around their renal function. Our ultimate hope is that the patients are able to reduce their immunosuppression. That data will clearly be later. The program's moving ahead. I'm very pleased with its progress. I look forward to sharing more data with you on that next year.
Gena Wang (Managing Director of Biotech Equity Research)
Great. Thank you very much.
Sandy Macrae (CEO)
Thanks, Gena.
Operator (participant)
Thank you. Our next question is from Yanan Zhu with Wells Fargo Securities. Your question, please.
Yanan Zhu (Research Analyst)
Great. Thanks for taking my questions and congrats on the progress. First, a few questions, maybe just a couple of questions on the Fabry disease program. I think you said the second dose cohort has treated the first patient. How many patients are to be treated in the second dose cohort? How many patients in total are in the dose escalation cohorts? By year end, when you present data, will we see all patients from these dose escalating cohorts? Any chance to see dose expansion cohort as well at year end? Thank you.
Sandy Macrae (CEO)
Bettina?
Bettina Cockroft (CMO)
Yes, of course. The first cohort had two patients. As far as cohort two and cohort three are concerned, we are expecting to dose at least two patients per cohort. We will need two patients dosed in cohort two to then move on to cohort three once we've accumulated sufficient data from those first two patients. We do have the objective of recruiting up to four patients in cohort two. We will also have the possibility of going beyond two patients in cohort three. Obviously, as you can imagine, the commitment to presenting data at the end of the year will be also COVID-dependent. We are confident to be able to share, as things are looking right now, data from the three cohorts after dose escalation at the end of the year.
How many patients that will be will really be COVID-dependent and whether we will have patients from the expansion cohort enrolled by that time as well. We will see.
Yanan Zhu (Research Analyst)
Got it. That's great. A few questions on TX200. Great to see the program is progressing closer and closer to the clinic. Just curious about the manufacturing process. How do you purify Tregs? Is it through surface markers? With that process, what kind of purity can be achieved? What level of contamination with effector T cells could be tolerated? Lastly, perhaps if you can talk about how comfortable are you with your potency assay since this is kind of a first-of-its-kind T cell therapy. Are you comfortable with the way you measure Treg function that could be seen as okay by the regulators? Thank you.
Sandy Macrae (CEO)
Important questions. That's the secret sauce that we acquired when we acquired TxCell. They are understanding in how to purify Tregs. Jason, is there anything you can say about knowing the purity of a Treg?
Jason Fontenot (Chief Scientific Officer)
Yes. I mean, this is a critical part of the process, is obtaining a very pure population of regulatory T cells as we go into the engineering and expansion of the cells. We are very confident about the process that we have developed. We achieve extremely high purities. In terms of the assays that we use, we have a wide variety of assays that are kind of the benchmark standards in the field for measuring regulatory T cell function, both in vitro assays in a dish and cell culture and in animal models. We are using all of those assays to interrogate the function of our cells. Obviously, we are very happy with what we are seeing. That is why we are so excited to be moving this forward into the clinic.
Yanan Zhu (Research Analyst)
Got it. Very helpful. Thank you.
Operator (participant)
Thank you. Our next question comes from Eric Joseph with JPMorgan. Your question, please.
Hi. Good afternoon. This is Hannah on for Eric. Thanks for taking our questions. Just a couple from us. First, regarding Fabry, with the recent data from lentiviral-mediated approaches showing pretty compelling efficacy in Fabry's patients, they have been accompanied by some notable potential safety concerns. With that set up, would you anticipate that AAV therapies might have a lower bar to meet as it relates to efficacy? Also in that vein, what dynamic do you think we might expect in a market with both an AAV gene therapy and a lentiviral gene therapy for Fabry? Is there anything in your view that would prevent a patient who's received a lentiviral therapy from going on to be treated with AAV in a commercial setting? I have another one after that.
Sandy Macrae (CEO)
Okay. Thank you. It's easier to do them one at a time. Mark, this seems like your area.
Mark McClung (Chief Business Officer)
Sorry. I had some difficulty hearing your questions, but I think.
Sandy Macrae (CEO)
The question is the pros and cons of the Avro cell therapy for Fabry versus AAV. Is there a place for both of them in the market?
Mark McClung (Chief Business Officer)
Yeah. We think that obviously, a liver-directed gene therapy delivered as a one-time IV infusion and does not require any preconditioning regimens would be a better option than patients having to do the preconditioning and go through the leukapheresis and other things like that. We also believe that in terms of where the patients are getting their treatments, there is a rationale to make sure that you can have a broad kind of distribution of the agent into the market. I'm not the expert in terms of whether or not someone that would have the cell therapy would be a candidate. Obviously, one of the things that would be important is whether they exhibit neutralizing antibodies that would make them a non-candidate for the therapy.
I think we need more evidence in the clinic to see what would happen in terms of patients post the Avrobios cell therapeutic and whether they would be candidates. We won't have that answer, obviously, through the initial phases of our ongoing clinical trial work. That'll be something that will need to be done once they've reached the market.
Okay. Thank you. That's helpful. Thinking about the Zinc finger technology, just wondering how we should be thinking about clinical strategy here in terms of advancement across CNS indications. Then specifically for ST-501, do you have any idea of what level of tau and mRNA replacement reductions in humans would point to a clinically meaningful benefit?
Sandy Macrae (CEO)
I'm sorry. We lost the latter part of your question. Can you just repeat that again, please?
Oh, for ST-501, just wondering if you have any sense of what level of tau protein or mRNA reduction would be clinically meaningful in humans.
That is with our friends at Biogen. They will lead that conversation. That is why we partner with Biogen because they are the experts in Alzheimer's and understand the biology much more than we do. We are delighted with the capability of the zinc finger platform. Now it is a matter of matching the technology with the right indication. The zinc finger itself takes you to a zip code in the genome. Then through a series of attachments, whether it is nucleases, transcription enhancers, transcription repressors, base editors, there is a whole range of things that we can attach to it, which allows us to offer a unique set of capabilities that would require a collection of CRISPR companies to do.
Okay. That's helpful. Thanks for taking the question.
Operator (participant)
Thank you. Our next question comes from Ritu Baral with Cowen. Your question, please.
Ritu Baral (Equity Research Analyst)
Hi, guys. Thanks for taking the question. Back on your Fabry study, remind me again what the gating protocols are for dose escalation and dose treatment. I believe there was a certain amount of follow-up that you needed for each patient before you could dose up. I'm wondering when that gating might end such that enrollment and treatment could increase as far as its pace. I'm wondering, do you have a pool of screened patients or pre-screened patients that you could quickly treat in order to get to critical mass of data such that you could pick an expansion dose by the end of the year?
Sandy Macrae (CEO)
Bettina, do you want to try that? Maybe Rob, you could comment afterwards about the plans we have.
Bettina Cockroft (CMO)
Yes. In terms of the amount of data, I think we've mentioned before, we have an SMC in place, a safety monitoring committee that will look at data. We need two weeks of data from two patients to assess the data and move to the next cohort. Yes, we do have patients pre-screened and lined up. That's why earlier on I was mentioning that we feel pretty confident, obviously COVID permitting, to be able to reach the stage at the end of the year to be sharing data from our escalation cohort.
Rob Schott (Head of Development)
Rob here. Now, less than four weeks into my journey with Sangamo, so I'll keep my comments at a higher level. We'll move as fast as we can as the data allows. We're completely data-driven. I feel the urgency about getting treatments to patients as quickly as we can as the data allow us to do that. We are looking at this very carefully and look forward to sharing what we've learned at the end of the year.
Sandy Macrae (CEO)
We're planning for success. We're planning for expansion cohorts, phase III. That is one of the main focuses of the company to ensure that we're ready when this medicine hopefully works to drive forward into phase III and, as Rob says, get us into patients.
Ritu Baral (Equity Research Analyst)
Two quick follow-ups to that. One, what treatment duration do you think that you'll have across the cohorts when you pick your expansion dose? Two, when you enter the expansion dose, are you going to be in a good shape CMC-wise to say that that is your final commercial product?
Sandy Macrae (CEO)
When did we treat the first patient, Bettina? Bettina, we can't hear you. I think you're on mute with the record.
Bettina Cockroft (CMO)
Apologies. We did treat the first patients in cohort one around Q3 last year. We will have a year's worth of follow-up by the time we report out towards the end of this year for the first cohort.
Sandy Macrae (CEO)
As regards the manufacturing processes, we're continually working to improve. That is what one does in this field. We do not see this as something that is gating moving into phase III and beyond.
Ritu Baral (Equity Research Analyst)
Great. Thanks for taking all the questions.
Sandy Macrae (CEO)
Thank you.
Operator (participant)
Thank you. Our next question comes from Ben Burnett with Stifel. Your question, please.
Ben Burnett (Analyst)
Hi. Thank you very much. I wanted to ask also another question about the TX200 program. I guess, how do you think about dosing in the TX200 program? Do you expect CAR Treg cells to expand? I am really just trying to get at what's the expectation for efficacy in the low-dose cohorts in the solid organ transplant study. Thank you.
Sandy Macrae (CEO)
We never guide to the first dose of any study. It is always a balance between prudence and hoping that that patient will get some benefit. But until you do the study, you do not know. Jason, Treg expansion or what happens to Treg when it is given?
Jason Fontenot (Chief Scientific Officer)
Yes. Thanks, Sandy. We definitely expect the Tregs to expand in the patient upon encounter with the cognate ligand for the CAR receptor that we're engineering the Tregs with. We certainly anticipate, and that's by design, that when the Tregs get to the tissue where the antigen is expressed, they will be activated through their CAR receptor. That will trigger them to proliferate and to acquire their kind of immunoregulatory and immunosuppressive properties. That's what we expect to see. That's what we've seen in the preclinical data that we've shown and the preclinical data that our partner, Megan Levings, our academic partner, Megan Levings, has published. We definitely expect expansion.
Bettina Cockroft (CMO)
If I may add something to what Jason has summarized, in terms of initiating the study this year, we do intend to initiate the study. Similar to other genetically engineered cell therapy approaches, patients will undergo a leukapheresis procedure from which the Treg cells will be isolated and engineered and cryopreserved. The HLA-A2 negative patient will subsequently undergo transplantation surgery. Following a recovery period, the patient will receive a personalized TX200 drug candidate. As a result of this detailed process, we expect that dosing of patients will occur several months after their enrollment. As such, dosing may be this year or next year. We are not committing to dosing this year, but certainly to initiating the clinical trial this year.
Ben Burnett (Analyst)
Okay. Okay. Very helpful. I also just wanted to see if—and apologies if I missed it—but if you could provide any additional color on the timeline for selecting candidates under the Novartis collaboration.
Sandy Macrae (CEO)
We know their targets. They made the choice to, instead of coming up with a laundry list of 10 potential targets, that they would decide on three. They shared them with us. We know their targets and are working closely with them.
Ben Burnett (Analyst)
Okay. I should have asked that differently. In terms of disclosing those targets, any expectation there?
Sandy Macrae (CEO)
That's Novartis' choice when they choose to disclose it.
Ben Burnett (Analyst)
Got it. Okay. All right. Thank you very much.
Sandy Macrae (CEO)
Thank you.
Operator (participant)
Thank you. Our next question is from Andreas Argerides with Wedbush Securities. Please go ahead.
Andreas Argerides (VP in Equity Research)
Thank you. And good evening. Thank you for taking our question. This is Andreas for Auliana Musatos. Two questions. I know everyone's asked about Fabry, but just what can we expect from updates throughout the year? How regularly would we be getting them? Would they be milestone-based updates on dose selection, etc.? Just broadly speaking on partnerships and how you guys are thinking about those. You've done an excellent job in the past. How are those discussions progressing? Any thoughts on additional indications, etc.? Thank you.
Sandy Macrae (CEO)
Thank you for your questions. We've said that we won't give any more indication of the Fabry trial, either doses or efficacy or the safety profile, until we've dosed all three cohorts. It will be the end of the year before we see anything significant. Mark, do you want to talk about partnerships?
Mark McClung (Chief Business Officer)
Sure. Thanks, Sandy. We have had the opportunity to see multiple collaborations with blue-chip pharma companies that we believe reinforce the promise of our science and our platforms. Most recently, obviously, with the Biogen and Novartis deals completed in 2020. These collaborations have really important financial and strategic benefits for us. They have provided about $815 million in upfront and milestone payments. We have got a potential across these partnerships to earn about $7 billion in milestones in addition to royalty payments. The way we look at partnerships is where they can bring a therapeutic or clinical experience or expertise, I should say, as well as their commercial resources to more rapidly bring these medicines to patients, we would look at those. In many ways, the way we take a look at this is it is an expansion of our R&D portfolio.
In many cases, they're coming to us with targets within disease areas that they're experts in and have identified things that our team has not even thought about applying our technology to. Going forward, we believe that there's an opportunity to create value for the industry and, more importantly, to patients. We will continue to take a look at where we can address markets, leveraging our partners' resources and expertise in those areas. We really want to underpin that we have a real focus now on creating a portfolio of products which are wholly owned and will allow Sangamo to take these all the way through to patients.
Andreas Argerides (VP in Equity Research)
Okay. I appreciate that. Sandy, just to clarify, and maybe I also didn't phrase the question correctly, you have provided updates on dosing the different cohorts. Are we to expect no update until data whatsoever on where the program stands, etc., until the end of the year? We won't ask any questions on the future calls, etc.? Just we.
Sandy Macrae (CEO)
So we.
Andreas Argerides (VP in Equity Research)
Yeah.
Sandy Macrae (CEO)
Let me try and navigate that one. At our quarterly calls, we'll tell you the progress of the study. We won't tell you dose or results or biochemistry and those kind of things. Simply because our experience now is the story is more understandable if you can see the three cohorts and some period of data. We want to get this to you as quickly as possible. Look forward to speaking at the end of the year.
Andreas Argerides (VP in Equity Research)
Okay. Much appreciated. Congrats on all the progress. Looking forward to the updates. Thank you.
Operator (participant)
Thank you. Our last question comes from Debjit Chattopadhyay with Guggenheim Securities. Your question, please.
Aaron Hall (Analyst)
Hi, guys. This is Aaron on for Debjit. Thanks for taking my questions. On the Fabry program, can you talk about the type of patients that you would expect to enroll in the treatment, such as are they perhaps not responsive to ERT, they have poor renal function, or are there other sort of disease symptoms that may push them towards using a gene therapy as opposed to perhaps remaining on ERTs or going to ERTs? If you can comment.
Sandy Macrae (CEO)
We haven't given any detail. We haven't given any detail about the type of patient. Because it's a very, there are several categories of Fabry patient. The one you choose for these studies is something that each of the companies is guarding carefully and thinking about with great input from outside experts.
Aaron Hall (Analyst)
Okay. If you can comment at all about if you incorporate any learnings into the steroid regimen being used in the Fabry trial from the hemophilia program.
Sandy Macrae (CEO)
We have learned a lot about liver function tests and use of steroids from hemophilia. We have applied that learning to what we do in Fabry, but we have not said what we are doing in Fabry.
Aaron Hall (Analyst)
Okay. Looking forward to finding out. All right. Thanks, guys. Thank you.
Sandy Macrae (CEO)
Thank you very much.
Operator (participant)
Thank you. This concludes our Q&A session. I would like to turn the call back to Aron Feingold for the final remarks.
Aron Feingold (Head of Corporate Communications)
Thank you once again for joining us today and for your questions. We look forward to keeping you updated on our future developments. Hope you all have a great night.
Operator (participant)
With that, ladies and gentlemen, we thank you for participating in today's program. You may now disconnect. Have a wonderful night.