On February 9, 2016 Sangamo BioSciences, Inc. (NASDAQ: SGMO), the leader in therapeutic genome editing, reported its fourth quarter and full year 2015 financial results and accomplishments(Press release, Sangamo BioSciences, FEB 9, 2016, View Source [SID:1234509022]).

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"2015 was an important and very productive year for Sangamo, and we enter 2016 poised to initiate the first human clinical trials of in vivo therapeutic genome editing," said Edward Lanphier, Sangamo’s president and chief executive officer. "Our zinc finger nuclease (ZFN) technology leads the therapeutic genome editing field and we have established the core competencies necessary to move our ground-breaking genome editing programs through IND enabling studies and into clinical trials. We believe our IVPRP clinical studies will provide fundamental proof-of-concept data and significantly differentiate the technical advantages of our ZFN platform from other genome editing technologies of bacterial origin as well as conventional gene therapy approaches. In addition to our two new open IVPRP INDs we plan to file six more IND applications in 2016 for our other IVPRP-based programs, and our hemoglobinopathies programs which we are developing in collaboration with Biogen. We began the year with approximately $210 million in cash, which puts Sangamo in a strong financial position and will allow us to accomplish all of our goals in 2016."

Recent Highlights

Announcement of FDA clearance of IND application for Phase 1/2 clinical trial of MPS I (Hurler syndrome) program. In February 2016, Sangamo announced that its Investigational New Drug (IND) application for the Company’s SB-318 program was cleared by the U.S. Food and Drug Administration (FDA) and is now active. SB-318 is an application of the Company’s proprietary In Vivo Protein Replacement Platform (IVPRP) genome editing approach, for the treatment of MPS I. In December 2015, the NIH Recombinant DNA Advisory Committee (RAC) unanimously approved the clinical protocol for SB-318.
Announcement of FDA clearance of IND application for Phase 1/2 clinical trial of hemophilia B program. In December 2015, Sangamo announced that an IND application for SB-FIX, the Company’s IVPRP genome editing approach for the potential cure of hemophilia B, has been cleared by the FDA and is now active.

Presentation of Phase 2 clinical data from SB-728-T HIV studies demonstrating superiority of adenoviral delivery of zinc finger nucleases to T-cells for viral load control and reservoir reduction. In December 2015, Sangamo presented Phase 2 clinical data from ongoing clinical trials of the Company’s SB-728-T HIV program, SB-728-1101 Cohort 3* and SB-728mR-1401. The preliminary comparative data suggest that adenoviral delivery of ZFNs to T-cells may be uniquely immune-stimulatory for both acute viral load control and HIV reservoir reduction. The trial is currently ongoing with the accrual of five additional subjects in ‘1101 Cohort 3*.
Presentation of data at the 2015 American Society of Hematology (ASH) (Free ASH Whitepaper) meeting (ASH) (Free ASH Whitepaper) highlighting ZFP Therapeutic programs for hemophilia and hemoglobinopathies. In December 2015, Sangamo presented data at ASH (Free ASH Whitepaper) demonstrating the production of therapeutic levels of Factor IX (FIX) clotting protein in non-human primates (NHPs) from its hemophilia B program, and clinical scale manufacturing and engraftment of ZFN-modified hematopoietic stem and progenitor cells (HSPCs) for the treatment of beta-thalassemia.

Publication of improved method for efficient targeted integration in HSPCs and T-cells. In November 2015, Sangamo announced the publication in Nature Biotechnology of data demonstrating efficient ZFN-mediated, targeted gene insertion in HSPCs, as well as a study in Nucleic Acids Research, demonstrating a similarly efficient process in primary human T-cells.
Internal Organization. Sangamo promoted Stewart Craig, Ph.D., from Vice President to Senior Vice President of Technical Operations. Dr. Craig joined Sangamo in May 2014 and has led the development of the Company’s successful and growing manufacturing capabilities. Fyodor Urnov, Ph.D., Senior Scientist, was promoted to Vice President of Discovery & Translational Research. Dr. Urnov is a key contributor to the development of Sangamo’s ZFP Therapeutic technology platform and leads Sangamo’s hemoglobinopathies research collaboration with Biogen Inc. (Biogen). Nathalie Dubois-Stringfellow, Ph.D. was promoted from Senior Director to Vice President of Product Development & Management. Dr. Dubois-Stringfellow, with extensive experience in pre-clinical drug development and project management, established an effective cross-functional team-based culture at Sangamo, enabling the Company’s successful and timely IND submissions.

Upcoming Events in the First Half of 2016

Initiation of Phase 1/2 clinical trials for IVPRP-based SB-FIX-1501 (hemophilia B) and SB-318-1502 (MPS I / Hurler syndrome) programs. The trials will be the first two in vivo clinical studies of genome editing in humans and the first clinical programs based on Sangamo’s IVPRP approach. Sangamo expects to initiate the Phase 1/2 trial for hemophilia B in the first half of 2016, and the Phase 1/2 trial for MPS I in mid-2016.

Presentation of clinical data from Sangamo’s HIV program at the 2016 Annual Conference on Retroviruses and Opportunistic Infections (CROI). Sangamo’s collaborator, Rafick Pierre Sekaly, Ph.D., will present further immunologic and viral reservoir analyses of clinical data from the Company’s SB-728-1101 study, suggesting potential mechanisms of viral control post-treatment with SB-728-T.

Preclinical data presentation from Sangamo’s MPS I and MPS II programs at the 2016 Annual WORLDSymposium Meeting. Sangamo expects to present data from its animal model studies for the Company’s IVPRP-based MPS I and MPS II (Hunter syndrome) programs for lysosomal storage disorders (LSDs). The meeting is being held in San Diego, CA from February 29 to March 4, 2016.
Submission of IND applications for Sangamo’s SB-913 (MPS II) program and beta-thalassemia program. Sangamo expects to file both IND applications in the first half of 2016. SB-913, for the treatment of MPS II, is the second LSD application of the Company’s proprietary IVPRP approach. The beta-thalassemia program, which is being developed in collaboration with Biogen, employs Sangamo’s ZFN-mediated ex vivo genome editing approach to knockout the BCL11A Enhancer.

Fourth Quarter 2015 Results

For the fourth quarter ended December 31, 2015, Sangamo reported a consolidated net loss of $14.0 million, or $0.20 per share, compared to a net loss of $4.3 million, or $0.06 per share, for the same period in 2014. As of December 31, 2015, the Company had cash, cash equivalents, marketable securities and interest receivable of $209.3 million.

Revenues for the fourth quarter of 2015 were $9.1 million, compared to $15.0 million for the same period in 2014. Fourth quarter 2015 revenues were generated from the Company’s collaboration agreements with Biogen, Shire International GmbH (Shire), and Dow AgroSciences, enabling technology agreements and research grants. The revenues recognized for the fourth quarter of 2015 consisted of $9.0 million in collaboration agreements and approximately $0.2 million in research grants, compared to $14.5 million and approximately $0.4 million, respectively, for the same period in 2014.

The decrease in collaboration agreement revenues was primarily a result of an amendment to the Company’s collaboration and license agreement with Shire in the third quarter of 2015, returning the rights to the hemophilia programs to Sangamo. In the fourth quarter of 2015, Sangamo recognized $1.9 million of revenues related to research services performed under the collaboration agreement with Shire, and $1.9 million of revenues related to research services performed under the collaboration agreement with Biogen. In addition, pursuant to the agreements entered into with Shire in January 2012 and Biogen in January 2014, Sangamo received upfront payments of $13.0 million and $20.0 million, respectively. These payments are being recognized as revenue on a straight-line basis over the initial six-year research term for Shire and approximately 40 months for Biogen. The Company recognized $0.5 million of the Shire upfront payment and $1.6 million of the Biogen upfront payment as revenue for the fourth quarter of 2015.

Research and development expenses were $19.9 million for the fourth quarter of 2015, compared to $15.1 million for the same period in 2014. The increase was primarily due to increases in manufacturing expenses, external research expenses associated with our preclinical programs, and personnel-related expenses, including stock-based compensation. General and administrative expenses were $4.9 million for the fourth quarter of 2015, compared to $4.3 million for the same period in 2014.

Total operating expenses for the fourth quarter of 2015 were $24.8 million, compared to $19.4 million for the same period in 2014.

Full Year 2015 Results

For the year ended December 31, 2015, the consolidated net loss was $40.7 million, or $0.58 per share, compared to a consolidated net loss of $26.4 million, or $0.39 per share, for the year ended December 31, 2014. Revenues were $39.5 million for the year ended December 31, 2015, compared to $45.9 million for the same period in 2014. Total operating expenses were $86.4 million for the year ended December 31, 2015, compared to $72.7 million for the same period in 2014.

Financial Guidance for 2016

Cash and Investments: Sangamo expects that its cash, cash equivalents and marketable securities will be at least $150 million at the end of 2016, inclusive of research funding from existing collaborators but exclusive of funds arising from any additional new collaborations or partnerships, equity financings or other new sources.
Revenues: In light of the amendment to our collaboration and licensing agreement with Shire, that returned the rights of the hemophilia programs to Sangamo, the Company expects that revenues will be in the range of $20 million to $25 million in 2016, inclusive of research funding from existing collaborations.
Operating Expenses: Sangamo expects that operating expenses will be in the range of $85 million to $95 million for 2016.