Press Releases

Sangamo BioSciences Reports Fourth Quarter and Full Year 2009 Financial Results

Company Ends Year with Cash and Investments of $85.3 Million

RICHMOND, Calif., Feb. 3 /PRNewswire-FirstCall/ -- Sangamo BioSciences, Inc. (Nasdaq: SGMO) today reported fourth quarter and full year 2009 financial results and accomplishments and provided an outlook for 2010.

For the fourth quarter ended December 31, 2009, Sangamo reported a consolidated net loss of $2.4 million, or $0.05 per share, compared to a net loss of $2.6 million, or $0.06 per share, for the same period in 2008. As of December 31, 2009, the company had cash, cash equivalents, marketable securities and interest receivable of $85.3 million.

Revenues for the fourth quarter of 2009 were $10.2 million, compared to $6.8 million for the same period in 2008. Fourth quarter 2009 revenues were from the Company's collaboration agreements with Sigma-Aldrich Corporation and Dow AgroSciences, enabling technology agreements and research grants. The revenue recognized for the fourth quarter of 2009 consisted of $10.2 million in collaboration agreements and $70,000 in research grants. The increase in revenues was primarily due to the license payment of $15.0 million received from Sigma-Aldrich as part of its expanded agreement with the Company which provides Sigma exclusive rights to develop and distribute zinc finger DNA-binding protein (ZFP)-modified cell lines for commercial production of protein pharmaceuticals and ZFP-engineered transgenic animals.  The payment is being recognized as revenue over the remaining period of the Company's original research collaboration with Sigma-Aldrich.

Research and development expenses were $8.7 million for the fourth quarter of 2009, compared to $6.7 million for the same period in 2008.  The increase in research and development expenses was primarily due to expenses related to the initiation of new clinical trials, including a Phase 2b clinical study of SB-509 in moderately severe diabetic neuropathy (DN) and Sangamo's ZFP Therapeutic for the treatment of recurrent glioblastoma, as well as the prosecution of clinical trials for Sangamo's ZFP Therapeutic for HIV/AIDS and increased personnel costs, including non-cash employee stock-based compensation.  

General and administrative expenses were $4.0 million for the fourth quarter of 2009, compared to $2.3 million for the same period in 2008. The increase in general and administrative expenses was primarily due to increased personnel costs, including non-cash employee stock-based compensation, and professional fees.

Total operating expenses for the fourth quarter of 2009 were $12.7 million, compared to $9.0 million for the same period in 2008.

Net interest income and other income / expense were recorded as income of $22,000 for the fourth quarter of 2009, compared to an expense of $375,000 for the same period in 2008.  The increase was due to a foreign currency translation loss during the prior year quarter.

Full Year Results

For the year ended December 31, 2009, the consolidated net loss was $18.6 million, or $0.44 per share, compared to a net loss of $24.3 million, or $0.60 per share, for the year ended December 31, 2008.  Revenues were $22.2 million for 2009, compared to $16.2 million in 2008. The increase in revenues for 2009 was primarily attributable to revenues from the Company's expanded agreement with Sigma-Aldrich. Total operating expenses were $41.6 million in both 2009 and 2008.

2009 Accomplishments and Recent Highlights

Therapeutic Programs and Research

    --  Clinical Development Progress in Sangamo's Lead Therapeutic Program in
        DN and Renewed Program Support from JDRF: In January 2010, Sangamo
        initiated a Phase 2b trial of SB-509 in subjects with moderately severe
        DN. The Juvenile Diabetes Research Foundation International (JDRF) also
        renewed its support for this program and will provide up to $3.0 million
        of funding for the trial. Sangamo's double blind, repeat-dosing, placebo
        controlled Phase 2b study, SB-509-901, is designed to finalize dose,
        schedule and primary and secondary approvable endpoints for pivotal
        Phase 3 trials. Inclusion criteria for the trial are based upon
        accumulated data from Sangamo's earlier Phase 1 and Phase 2 clinical
        trials in subjects with DN that defined a drug-responsive population.
        The data included top-line, statistically significant data from the
        company's Phase 2 trial, SB-509-601, that established a mechanistic
        proof of concept for the neuroregenerative effects of SB-509 treatment
        as demonstrated by statistically significant increases in intraepidermal
        nerve fiber density (IENFD). In addition, improvements in clinically
        relevant outcomes were observed in Neurologic Impairment Score of the
        Lower Limb (NIS-LL), a quantification of the neurologic exam, and sural
        nerve conduction velocity (sNCV).
    --  Presentation of Preliminary Data from Phase 2 Trial to Evaluate SB-509
        for the Treatment of Amyotrophic Lateral Sclerosis (ALS):In December
        2009, preliminary data were presented from the first subjects enrolled
        in Sangamo's Phase 2 clinical trial, SB-509-801. The data demonstrated
        an approximate doubling of the frequency of improved muscle function at
        day 120 post-treatment in subjects with ALS who received two treatments
        of SB-509 (32%) compared to matched historic controls (17%).
    --  Initiation of Two Clinical Trials of a ZFP Nuclease (ZFN)-based
        Therapeutic for HIV and Presentation of Preliminary Data From a Treated
        Subject: In February 2009, Sangamo and its collaborators at the
        University of Pennsylvania Medical School initiated the first Phase 1
        safety trial of SB-728-T for the treatment of HIV/AIDS and in September
        2009, the Company announced the initiation of a second Sangamo-sponsored
        Phase 1 trial. Preliminary data from the University of Pennsylvania
        investigator-sponsored study were presented in January 2010. The data
        were from a single HIV- positive subject treated with SB-728-T who, as
        part of the study, began a defined structured treatment interruption
        (STI). During the study, the subject's CD4+ T-cell count, number of
        circulating ZFN-modified cells and viral load were measured
        periodically. In addition, rectal biopsies were taken prior to treatment
        and at the end of the STI period to monitor levels of CD4+ and
        ZFN-modified T-cells in the gut associated lymphoid tissue (GALT), a
        major reservoir of immune cells and a critical reservoir of HIV
        infection. As expected, the subject's viral load increased during the
        STI period; however, the return of the virus was delayed. CD4+ T-cells
        and ZFN-modified T-cells were found to be stable and were observed in
        the GALT. The data suggest that the modified cells were able to expand
        and were circulating and trafficking normally in the body.
    --  Initiation of Phase 1 Clinical Trial to Evaluate ZFN-Therapeutic for the
        Treatment of Glioblastoma: Sangamo announced in January 2010 that the US
        Food and Drug Administration had reviewed and accepted an
        Investigational New Drug application to initiate this open-label,
        multi-dosing Phase 1 clinical trial. The Phase 1 glioblastoma trial is
        being initiated by Sangamo's collaborators at City of Hope and is
        designed to evaluate the safety and tolerability of a modified CD8+
        cytotoxic T lymphocyte (CTL) product that has been made resistant to
        glucocorticoid steroids using Sangamo's ZFN-based technology. The study
        will accrue subjects with recurrent/refractory malignant glioblastoma
        multiforme.
    --  Sangamo Scientists and Collaborators Receive Grant Funding from Several
        Sources to Develop ZFP Therapeutic Candidates:
        o Grand Challenges Explorations Grant from the Bill & Melinda Gates
          Foundation was awarded to Sangamo scientists in May 2009. The grant of
          $100,000 supports an innovative global health research project
          conducted by Sangamo scientists and titled "Zinc Finger Nucleases for
          In Vivo Treatment of HIV Infection."
        o Doris Duke Innovations in Clinical Research Award from the Doris Duke
          Charitable Foundation was awarded to Donald B. Kohn, M.D., Professor
          of Microbiology, Immunology and Molecular Genetics (MIMG) and
          Pediatrics, the Director of the UCLA Human Gene Medicine Program and
          member of the Broad Stem Cell Research Center and Philip Gregory, D.
          Phil., Sangamo's chief scientific officer and vice president, research
          in September 2009. The $486,000 grant, which will be paid over three
          years, will support an innovative research project conducted by Dr.
          Kohn and Sangamo scientists and titled "Beta-globin Gene Correction in
          Hematopoietic Stem Cells for Sickle Cell Disease."
        o California Institute for Regenerative Medicine (CIRM) granted a $14.5
          million Disease Team Research Award to develop an AIDS-related
          lymphoma therapy based on the application of its ZFN gene-editing
          technology in stem cells. The four year grant supports an innovative
          research project conducted by a multidisciplinary team of
          investigators led by John Zaia, M.D. the Aaron D. and Edith Miller
          Chair in Gene Therapy and chair of virology, City of Hope. The grant
          application entitled, "Zinc Finger Nuclease-Based Stem Cell Therapy
          for AIDS," won the highest score of all grants CIRM received in this
          first round of Disease Team Research Award funding.
    --  Sangamo Scientists and Their Collaborators Published Groundbreaking
        Science in Major Journals:Published work included the demonstration of
        ZFN-mediated gene-editing in plant agriculture, transgenic animals,
        human embryonic and induced pluripotent stem cells and cell lines for
        the production of protein pharmaceuticals.


Business

    --  Major Expansion of ZFP Technology License Agreement with Sigma-Aldrich:
        In October 2009, Sigma-Aldrich Corporation and Sangamo announced a major
        expansion of their existing license agreement to include the exclusive
        rights to develop and distribute ZFP-modified cell lines for commercial
        production of protein pharmaceuticals. Additionally, Sigma-Aldrich
        licensed rights to certain ZFP-engineered transgenic animals for
        commercial applications. Sigma made initial payments of $20.0 million to
        Sangamo, consisting of an upfront license payment of $15.0 million and
        $5.0 million through the purchase of 636,133 shares of Sangamo common
        stock at the then current market price ($7.86 per share). Sangamo is
        eligible to earn additional contingent commercial license fees of up to
        $5.0 million based on certain conditions, and thereafter a royalty based
        upon a percentage of net sales and sublicensing revenue. Sangamo is also
        eligible to receive commercial milestone payments ranging from $2.0
        million to $10.0 million, up to a total of $25.0 million, based upon
        cumulative product sales.


Financials and Operations

    --  In October 2009, the Company completed an underwritten public offering
        of 3.0 million shares of common stock priced at $7.20 per share that
        resulted in net proceeds of $20.9 million.
    --  In January 2010, the Company expanded its senior clinical development
        team, appointing Shirley M. Clift to serve as Vice President of
        Regulatory Affairs and Winson W. Tang, M.D., as Vice President of
        Clinical Research.


2010 Objectives

In today's conference call members of Sangamo's management team will discuss the company's plans and objectives for 2010 that include:

Therapeutic Programs

    --  Prosecution of Sangamo's ongoing Phase 2b Trial SB-509-901 in moderately
        severe DN.
    --  Prosecution of a Phase 1 clinical trial of a ZFN-based therapeutic in
        subjects with recurrent or refractory glioblastoma by Sangamo's
        collaborators at City of Hope.
    --  Continued prosecution of Sangamo's Phase 1 trial of SB-728-T for
        HIV/AIDS and of the SB-728-T Phase 1 study by collaborators at the
        University of Pennsylvania School of Medicine.
    --  Data Presentations from the Company's Phase 2 clinical trials of SB-509
        for ALS (SB-509-801) and for severe DN (SB-509-701B).
    --  Data Presentation from the SB-728-T– HIV / AIDS program.


Business - Strategic Collaborations & Enabling Technology Agreements

    --  Achievement of milestones and royalties in agreement with Sigma-Aldrich.
    --  Achievement of commercial sublicenses and milestones in agreement with
        Dow AgroSciences.
    --  Pursue strategic partnerships in ZFP Therapeutics including SB-509.
    --  Continue to present and publish data from research collaborations in
        ZFP-platform enabled biology.


Financials and Operations

    --  Maintain year-end 2010 cash and investments balance of at least $60.0
        million.


Conference Call

Sangamo will host a conference call today 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.  A replay of the webcast 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 2010.  

The conference call dial-in numbers are 888-819-8046 for domestic callers and 913-312-0671 for international callers. The passcode for the call is 7172741.  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 3, 2010 to 11:59 p.m. ET on February 10, 2010. The conference call replay numbers for domestic and international callers are 888-203-1112 and 719-457-0820 respectively. The conference ID number for the replay is 7172741.

About Sangamo

Sangamo BioSciences, Inc. is focused on the research and development of novel DNA-binding proteins for therapeutic gene regulation and modification.  The most advanced ZFP Therapeutic(TM) development program is currently in a Phase 2b clinical trial for evaluation of safety and clinical effect in patients with diabetic neuropathy and a Phase 2 trial in ALS. Sangamo also has two Phase 1 clinical trials to evaluate safety and clinical effect of a treatment for HIV/AIDS and another Phase 1 trial to evaluate safety and clinical effect of a treatment for recurrent glioblastoma multiforme. Other therapeutic development programs are focused on neuropathic pain, nerve regeneration, Parkinson's disease and monogenic diseases.  Sangamo's core competencies enable the engineering of a class of DNA-binding proteins known as zinc finger DNA-binding proteins (ZFPs).  By engineering ZFPs that recognize a specific DNA sequence Sangamo has created ZFP transcription factors (ZFP TFs) that can control gene expression and, consequently, cell function.  Sangamo is also developing sequence-specific ZFP Nucleases (ZFNs) for gene modification.  Sangamo has 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 web site at http://www.sangamo.com/.

This press release contains forward-looking statements regarding Sangamo's current expectations.  These forward looking statements include, without limitation, references to the research and development of ZFP TFs and ZFNs, 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, presentation of data from research collaborations and anticipated cash and investments balance. 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, 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 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 the company's operations and business environments. These risks and uncertainties are described more fully in the company'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 will not be updated.

    
    
    
    
    SELECTED CONSOLIDATED FINANCIAL DATA                                     
    (in thousands, except per share data)                                     
    (unaudited)                                                               
                                                                              
    STATEMENT OF OPERATIONS DATA:                                             
                                                                    
                                     Three Months Ended    Twelve Months Ended
                                        December 31,           December 31,   
                                       --------------         --------------  
                                     2009           2008      2009      2008 
                                     ----           ----      ----      ---- 
                                                                              
    Revenues:                                                                 
      Collaboration agreements     $10,171         $6,834   $21,553   $14,492 
      Research grants                   70              -       634     1,694 
                                       ---            ---       ---     ----- 
        Total revenues              10,241          6,834    22,187    16,186 
                                                                              
    Operating expenses:                                                       
      Research and development       8,685          6,737    28,984    31,229 
      General and                                                             
       administrative                3,971          2,296    12,605    10,332 
        Total operating                                                       
         expenses                   12,656          9,033    41,589    41,561 
                                    ------          -----    ------    ------ 
    Loss from operations            (2,415)        (2,199)  (19,402)  (25,375)
    Interest and other income /                                               
      expense, net                      22           (375)      815     1,073
                                       ---           ----       ---     ----- 
    Net loss                       $(2,393)       $(2,574) $(18,587) $(24,302)
                                   =======        =======  ========  ======== 
                                                                              
    Basic and diluted net loss                                                
     per common share               $(0.05)        $(0.06)   $(0.44)   $(0.60)
                                                                              
    Shares used in computing                                                  
     basic and diluted net loss                                               
     per common share               44,780         41,018    42,048    40,825 
                                    ======         ======    ======    ====== 
                                                                              
                                                                              
                                                                              
                                                                              
    SELECTED BALANCE SHEET DATA                                               
                                December 31,    December 31,            
                                     2009          2008               
                                -------------  -------------           
    Cash, cash equivalents,                                                   
     marketable securities and                                                
     interest receivable           $85,281        $65,025                     
    Total assets                    87,439         67,850                     
    Total stockholders' equity      71,782         55,396                     
    
    

SOURCE Sangamo BioSciences, Inc.

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