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Sangamo BioSciences Reports Fourth Quarter And Full Year 2013 Financial Results

Companies mentioned in this article: Sangamo BioSciences, Inc.

RICHMOND, Calif., Feb. 11, 2014 /PRNewswire/ -- Sangamo BioSciences, Inc. (Nasdaq: SGMO) today reported fourth quarter and full year 2013 financial results and accomplishments.

(Logo: http://photos.prnewswire.com/prnh/20130102/SF35903LOGO)

For the fourth quarter ended December 31, 2013, Sangamo reported a consolidated net loss of $8.1 million, or $0.13 per share, compared to a net loss of $3.5 million, or $0.07 per share, for the same period in 2012. As of December 31, 2013, the Company had cash, cash equivalents, marketable securities and interest receivable of $131.8 million.

Revenues were $6.9 million for the fourth quarter of 2013, compared to $8.9 million for the same period in 2012. Fourth quarter 2013 revenues were generated from the Company's collaboration agreements with Shire International GmbH, formerly Shire AG (Shire), Dow AgroSciences (DAS) and Sigma-Aldrich Corporation (Sigma), and research grants. The revenues recognized for the fourth quarter of 2013 consisted of $6.6 million in collaboration agreements and $0.3 million in research grants, compared to $8.5 million and $0.4 million, respectively, for the same period in 2012.

The decrease in collaboration agreement revenues was primarily due to the timing of reimbursable research services under the Company's collaboration and license agreement with Shire. Sangamo recognized $2.9 million of revenues related to research services performed under the collaboration agreement with Shire in the fourth quarter. In addition, pursuant to the agreement entered into with Shire in January 2012, Sangamo received an upfront payment of $13.0 million, which is being amortized on a straight-line basis over the initial six-year research term, of which the Company recognized $0.5 million as revenue for the fourth quarter of 2013.

Research and development expenses were $10.8 million for the fourth quarter of 2013, compared to $9.3 million for the same period in 2012. The increase in research and development expenses was primarily related to increases in personnel-related expenses, including stock-based compensation, and external research expenses associated with our preclinical programs. General and administrative expenses were $4.2 million for the fourth quarter of 2013, compared to $3.0 million for the same period in 2012. The increase in general and administrative expenses was primarily related to increases in personnel-related expenses, including stock-based compensation, and professional services expenses.

Total operating expenses for the fourth quarter of 2013 were $15.0 million, compared to $12.3 million for the same period in 2012.

Full Year Results

For the year ended December 31, 2013, the consolidated net loss was $26.6 million, or $0.48 per share, compared to a consolidated net loss of $22.3 million, or $0.42 per share, for the year ended December 31, 2012. Revenues were $24.1 million in 2013, compared to $21.7 million in 2012, with the increase primarily due to Sangamo's collaboration agreement with Shire, partially offset by lower revenues from DAS and lower revenues from research grants. Total operating expenses were $50.8 million for 2013, compared to $43.9 million for 2012, with the increase primarily due to internal and external research expenses associated with our preclinical programs.

Recent Highlights

    --  Collaboration with Biogen Idec to Develop Potentially Curative ZFP
        Therapeutics for Hemoglobinopathies. On January 8, 2014, Biogen Idec
        (Biogen) and Sangamo entered into an exclusive worldwide collaboration
        and license agreement focused on the development of therapeutics for
        hemoglobinopathies, specifically sickle cell disease (SCD) and
        beta-thalassemia, based on Sangamo's zinc finger nuclease (ZFN)
        genome-editing technology. Under the terms of the agreement, Sangamo is
        responsible for all research and development activities through the
        first clinical proof of concept trial in beta-thalassemia, and both
        companies will perform activities to enable submission of an
        Investigational New Drug (IND) application for SCD.  Biogen will be
        responsible for subsequent worldwide clinical development and
        commercialization of products arising from the alliance. Sangamo retains
        an option to co-promote any licensed product to treat SCD and
        beta-thalassemia in the United States. Biogen will provide Sangamo with
        an upfront payment of $20 million and will reimburse Sangamo for its
        internal and external research and development program-related costs.
        Sangamo may also receive additional payments of approximately $300
        million based on the achievement of certain development, regulatory,
        commercialization and sales milestones. Sangamo is also eligible to
        receive royalties that are tiered double-digit percentages of annual
        product sales.
    --  Presentation of Preclinical Proof of Concept Data from In Vivo Protein
        Replacement Platform (IVPRP) and ZFP Therapeutic Program for Treatment
        of Hemoglobinopathies at American Society of Hematology (ASH) Meeting.
        New preclinical data were presented demonstrating therapeutic levels of
        gene modification in non-human primates (NHPs) from Sangamo's IVPRP.
        Based on its ZFN genome-editing technology, the platform enables the
        permanent production of therapeutic proteins from a specific genomic
        site in the liver with a single systemic treatment, potentially
        providing curative treatments for a range of monogenic diseases such as
        hemophilia and lysosomal storage disorders (LSD), including Gaucher
        disease and Fabry disease. In addition, preclinical and clinical
        manufacturing data were presented for the first time from Sangamo's ZFP
        Therapeutic program for the treatment and potential cure of both SCD and
        beta-thalassemia. Sangamo subsequently entered into a collaborative
        agreement with Biogen to develop and commercialize this product and
        expects to file an IND application for the beta-thalassemia program in
        2014.
    --  Presentations of Clinical Data from all Cohorts of Sangamo's HIV Studies
        (SB-728-902 Cohort 5 and SB-728-1101:Cohorts 1-3): Consolidation of
        Relationship Between Engraftment of SB-728-T and Effect on Viral Load,
        Evidence for Long-Term Immune Reconstitution, Reduction in the HIV DNA
        Reservoir and Sustained Control of Viremia. Clinical data from Sangamo's
        program to develop a ZFP Therapeutic® for HIV/AIDS were presented at
        scientific and medical meetings in the fourth quarter of 2013.  Data
        were presented from all cohorts of Sangamo's studies designed to
        maximize the engraftment of ZFN-modified cells in which both copies of
        the CCR5 gene are disrupted (bialleleic modification) using either 
        Cytoxan preconditioning (SB-728-1101), or treatment of CCR5 delta-32
        heterozygotes (SB-728-902 Cohort 5).  The data consolidated the
        observation of a statistically significant relationship (p= 0.008)
        between levels of such cells and a reduction in viral load in
        SB-728-T-treated subjects during a treatment interruption (TI) from
        their antiretroviral therapy (ART). Studies are ongoing in a further six
        subjects to test higher doses of Cytoxan. Other data presented
        demonstrate a reduction in the HIV DNA reservoir as measured by HIV DNA
        in peripheral blood mononuclear cells over a period of three years
        (median 0.9 log decrease at Month 36) in nine of nine HIV-infected
        subjects on long-term ART, despite a median duration of HIV infection of
        21 years and baseline CD4 T-cell counts prior to SB-728-T treatment of <
        500 cells/µl.  New data demonstrating sustained control of HIV viral
        load (VL) at or below the limit of detection for 20 weeks (at last
        measurement) in an SB-728-T- treated HIV-infected subject who was on a
        TI from ART were also presented. The CCR5 delta-32 heterozygote subject
        is enrolled in the SB-728-902 Cohort 5 study and the TI is ongoing. Data
        from Sangamo's ongoing clinical trials in HIV will be presented at the
        upcoming Conference on Retroviruses and Opportunistic Infections (CROI
        2014) in early March 2014.
    --  Presentation of Phase 1 Clinical Data from Alzheimer's Disease Program.
        Data were presented from the Phase 1 clinical trial of CERE-110
        (AAV-NGF), a gene therapy approach designed to deliver nerve growth
        factor (NGF) for the treatment of Alzheimer's disease.  The data
        demonstrate long-term expression of bioactive Nerve Growth Factor (NGF)
        and apparent stabilization of brain cell metabolic activity in treated
        subjects, as determined by PET-scans measuring glucose use, which may
        reflect a slowing of cell deterioration. The treatment was
        well-tolerated at all dose levels.  This novel product was developed by
        Ceregene, Inc., which was acquired by Sangamo in August 2013. A Phase 2
        trial to evaluate safety and efficacy in mild to moderate Alzheimer's
        disease is ongoing and data are expected in 2015.
    --  Presentation of First Demonstration of In Vivo Efficacy of Novel ZFP
        Therapeutic for Huntington's Disease (HD) at 2013 Annual Meeting of the
        Society for Neuroscience. Positive preclinical data were presented
        demonstrating the use of a ZFP transcription factor to achieve selective
        repression of the expression of the mutant and disease-causing form of
        the huntingtin gene (HTT) in a mouse model (R6/2) of the disease. 
        Positive effects on both molecular markers and physical indications of
        disease were observed in the animals. In the ZFP Therapeutic-treated
        regions of the animals' brains, scientists observed a reduction of
        mutant huntingtin protein aggregates, levels of which are associated
        with the severity of the disease in humans, also increased evidence of
        biomarkers indicative of protection of critical nerve cells that are
        progressively lost in the brains of HD patients.  Delivery of the ZFP
        Therapeutic to the brain of R6/2 mice resulted in a statistically
        significant reduction in "clasping behavior" compared to controls.
        "Clasping" is an HD-associated symptom exhibited by R6/2 animals that
        mimics the motor symptoms of the human disease.  Sangamo is developing
        this ZFP Therapeutic in partnership with Shire and plans to file an IND
        application in 2015.
    --  Promotion of Philip Gregory, D. Phil. In January 2014, Dr. Gregory, who
        joined the company in 2000 and has served as Sangamo's vice president,
        research and chief scientific officer (CSO) since July 2009, was
        promoted to Senior Vice President, Research and CSO.

Financial Guidance for 2014

    --  Cash and Investments: Starting 2014 with $131.8 million, Sangamo expects
        that its cash, cash equivalents and marketable securities will be at
        least $135 million at the end of 2014, inclusive of research funding and
        certain milestone payments from Shire and Biogen but exclusive of funds
        arising from any additional new collaborations or partnerships, equity
        financings or other new sources.
    --  Revenues: Sangamo expects that revenues will be in the range of $45 to
        $50 million in 2014, inclusive of research funding and certain milestone
        payments from Shire and Biogen. In line with the company's previous
        accounting treatment of upfront fees, Sangamo expects that the $20
        million upfront payment from Biogen will be amortized on a straight line
        basis over a period of approximately four years, which is approximately
        $5 million per year or $1.25 million per quarter.
    --  Operating Expenses: Sangamo expects that operating expenses will be in
        the range of $65 to $70 million for 2014.

2014 Annual Meeting of Stockholders
Sangamo will host its 2014 Annual Meeting of Stockholders at 9:00 am PT on Monday, April 21, 2014 at its headquarters in Richmond, California. Details about the 2014 Annual Meeting will be provided in a notice and proxy statement to be distributed to stockholders and filed with the Securities and Exchange Commission.

Conference Call
Sangamo will host a conference call today, February 11, 2014 at 5:00 p.m. ET, which will be open to the public. The call will also be webcast live and can be accessed via a link on the Sangamo BioSciences website in the Investor Relations section under "Events and Presentations" http://investor.sangamo.com/events.cfm. The webcast replay will also be available for two weeks after the call. During the conference call, the Company will review these results, discuss other business matters, and provide guidance with respect to 2014.

The conference call dial-in numbers are 877-377-7553 for domestic callers and 678-894-3968 for international callers. The passcode for the call is 54551426. For those unable to listen in at the designated time, a conference call replay will be available for one week following the conference call, from approximately 8:00 p.m. ET on February 11, 2014 to midnight ET on February 18, 2014. The conference call replay numbers for domestic and international callers are (855) 859-2056 and (404) 537-3406, respectively. The conference ID number for the replay is 54551426.

About Sangamo
Sangamo BioSciences, Inc. is focused on Engineering Genetic Cures(TM )for monogenic and infectious diseases by deploying its novel DNA-binding protein technology platform in therapeutic gene regulation and genome editing. The Company has ongoing Phase 2 clinical trials to evaluate the safety and efficacy of a novel ZFP Therapeutic(®) for the treatment of HIV/AIDS (SB-728-T) and NGF-AAV for Alzheimers disease (CERE-110). Sangamo's other therapeutic programs are focused on monogenic and rare diseases. The company has formed a strategic collaboration with Shire International GmbH to develop therapeutics for hemophilia, Huntington's disease and other monogenic diseases, and with Biogen Idec for hemoglobinopathies, such as sickle cell disease and beta-thalassemia. It has also established strategic partnerships with companies in non-therapeutic applications of its technology, including Dow AgroSciences and Sigma-Aldrich Corporation. For more information about Sangamo, visit the Company's website at www.sangamo.com.
ZFP Therapeutic(®) is a registered trademark of Sangamo BioSciences, Inc.

This press release contains forward-looking statements regarding Sangamo's current expectations. These forward looking statements include, without limitation, references to anticipated cash and investment balance, operating expenses, revenue and potential milestone and royalty payments, the research and development of ZFNs and ZFP TFs, clinical trials and therapeutic applications of Sangamo's ZFP technology platform, achievement of research milestones and objectives, strategic partnership and commercial license agreements with collaborators, including Shire and Biogen, presentation of data from research collaborations, expected timing for IND filings, recognition of revenues under collaboration agreements and statements relating to the 2014 Annual Meeting of Shareholders. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ include, but are not limited to, the early stage of ZFP Therapeutic development, the lengthy and uncertain regulatory approval process, uncertainties related to the timing of initiation and completion of clinical trials, whether clinical trial results will validate and support the safety and efficacy of ZFP Therapeutics, and the ability to establish strategic partnerships. Further, there can be no assurance that the necessary regulatory approvals will be obtained or that Sangamo and its partners will be able to develop commercially viable gene-based therapeutics. Actual results may differ from those projected in forward-looking statements due to risks and uncertainties that exist in Sangamo's operations and business environments. These risks and uncertainties are described more fully in Sangamo's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date and Sangamo undertakes no duty to update such information except as required under applicable law.


    SELECTED CONSOLIDATED FINANCIAL DATA

    (in thousands, except per share data)

    (unaudited)


                                          Three Months Ended           Twelve Months Ended

                                             December 31,                  December 31,
                                            ------------                  ------------

                                                                 2013                         2012      2013      2012
                                                                 ----                         ----      ----      ----

    Statement
     of
     Operations
     Data:

    Revenues:

     Collaboration
     agreements                                                $6,613                       $8,520   $21,678   $18,186

    Research
     grants                                                       256                          411     2,455     3,469
                                                                  ---                          ---     -----     -----

    Total
     revenues                                                   6,869                        8,931    24,133    21,655


    Operating
     expenses:

    Research
     and
     development                                               10,778                        9,281    36,979    31,709

    General and
     administrative                                             4,205                        3,019    13,800    12,144

    Change in
     fair value
     of
     contingent
     liability                                                     60                            -        60         -
                                                                                               ---                 ---

    Total
     operating
     expenses                                                  15,043                       12,300    50,839    43,853
                                                               ------                       ------    ------    ------

    Loss from
     operations                                                (8,174)                      (3,369)  (26,706)  (22,198)

    Interest
     and other
     income,
     net                                                           30                         (109)       82       (66)

    Net loss                                                  $(8,144)                     $(3,478) $(26,624) $(22,264)
                                                              =======                      =======  ========  ========


    Basic and
     diluted
     net loss
     per common
     share                                                     $(0.13)                      $(0.07)   $(0.48)   $(0.42)


    Shares used
     in
     computing
     basic and
     diluted
     net loss
     per common
     share                                                     61,871                       52,968    55,974    52,741
                                                               ======                       ======    ======    ======





    SELECTED
     BALANCE
     SHEET DATA

                                          December 31, 2013             December 31, 2012
                                          -----------------             -----------------

                                             (Unaudited)

    Cash, cash
     equivalents,
     marketable
     securities
     and
     interest
     receivable                                              $131,814                      $76,321

    Total
     assets                                                   140,838                       82,533

    Total
     stockholders'
     equity                                                   121,710                       64,896

SOURCE Sangamo BioSciences, Inc.