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THERAPEUTIC PRODUCT DEVELOPMENT

ZFP Therapeutic Product Development Programs

Figure 4:

Sangamo’s ZFP Therapeutic pipeline.Pipeline

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Clinical Stage Programs

Table 1: Summary of our ongoing clinical trials evaluating our ZFP Therapeutics.trials.

(*Investigator sponsored trial)

+ N.Eng. J. Med. 2014: 370:897-906 “Gene Editing of CCR5 in Autologous CD4 T-cells of Persons Infected with HIV.”

ZFP Therapeutic Programs

Human Immunodeficiency Virus (HIV) and Acquired Immunodeficiency Syndrome (AIDS)

HIV infection results in the death of immune system cells, particularly CD4⁺CD4+ T-cells, and thus leads to AIDS, a condition in which the body’s immune system is depleted to such a degree that the patient is unable to fight off common infections. Ultimately, these patients succumb to opportunistic infections or cancers. According to UNAIDS/WHO, over 2.5 million people were newly infected with HIV in 2011. An estimated 1.7 million people died of AIDS in the same year. There are now over 34 million people living with HIV and AIDS worldwide.most recent data from The United States Centers for Disease Control and Prevention (CDC) estimates that,over 2 million people were newly infected with HIV in 20092014. An estimated 1.2 million people died of AIDS-related illnesses in the United States alone,same year. There are now over 36 million people living with HIV and AIDS worldwide. At the end of 2012, (the most recent data available) it is estimated that there were 1.2 million people living with HIV/AIDS.AIDS in the United States, of which approximately 13% were unaware that they were infected. It is estimated that approximately 50,000 people are newly infected with HIV each year in the United States. Approximately 50,00048,000 new infections occurred each year between 2006 and 2009,in 2010, and more than 21,00013,700 people with AIDS died in 2009.

Current Treatments and Unmet Medical Need

Currently, there are over 30 antiretroviral drugs approved by the U.S. Food and Drug Administration (FDA) to treat people infected with HIV. TheseWhile these drugs fall into four major classes: reverse transcriptase inhibitors, protease inhibitors, integrase inhibitors and entry and fusion inhibitors. This latter class also includes a small molecule antagonist of the CCR5 receptor, Selzentry^® (maraviroc). This drug is being used in combination with other antiretroviral agents for treatment-experienced adult patients infected with CCR5-tropic HIV-1 strains that are resistant to multiple antiretroviral agents. The drug carries a black box warning of liver toxicity.

As HIV reproduces, variants of the virus emerge, including some that are resistant to antiretroviral drugs. Therefore, doctors recommend that people infected with HIV take a combination of antiretroviral drugs known as highly active antiretroviral therapy, or HAART. This strategy typically combines drugs from at least three different classes of antiretroviral drugs. Currently available drugs do not cure HIV infection or AIDS. They can suppress virus in the virus, evenblood to undetectable levels, but they cannot eliminate the reservoir of cells containing genomically-integrated HIV from the body. Hence, peopleindividuals infected with HIV need to take antiretroviral drugs continuously. The drugs are expensive and can have significant side effects over time. There is no therapeutic approach available which protects CD4+ T-cells, reducessuppresses viral load, reduces the viral reservoir and does not require daily dosing.

Sangamo’s Therapeutic Approach

Our therapeutic approach aims to use our ZFN-mediated genegenome editing technology to replicate a naturally occurring human mutation which renders individuals largely resistant to infection with the most common strain of HIV. CCR5 is a co-receptor for HIV

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entry into T-cells and if CCR5 is not expressed on their surface HIV infects them with lower efficiency. A population of individuals that is immune to HIV infection, despite multiple exposures to the virus, has been identified and extensively studied. The majority of these individuals have a natural mutation, CCR5delta-32, of both of their CCR5 gene copies (homozygous), resulting in the expression of a shortened or truncated, and non-functional CCR5 protein. This mutation appears to have no observable deleterious effect. Individuals who carry the CCR5 delta-32 mutation onin only one of their two CCR5 gene copies (heterozygotes), tend to take longer to develop AIDS and are classified as so-called “long term“long-term non-progressors.” In addition, a study published inBlood in December 2010 reported an effective cure when an AIDS patient with leukemia received a bone marrow transplant from a “matched” donor withwho was homozygous for this CCR5 delta-32 mutation. This approach transferred the hematopoietic stem cells (HSCs)HSPCs residing in the bone marrow from the delta-32 donor, and provided a self-renewable and potentially lifelong source of HIV-resistant immune cells. After transplantation, the AIDS patient was able to discontinue all anti-HIV drug treatments, CD4 counts increased and viral load dropped to an undetectable level, demonstrating effective transplantation of protection from HIV infection.

We are using our ZFN-mediated gene disruptiongenome editing technology to disrupt the CCR5 gene in cells of a patient’s immune system to make these cells permanently resistant to HIV infection. The aim is to provide a population of HIV-resistant cells that can fight HIV and opportunistic infections mimicking the situation in individuals that carry the natural CCR5 delta-32 mutation. In December 2008,

We began clinical trials in collaboration with scientists atthis program in late 2009 and over the Universitypast six years have conducted several studies in different populations of Pennsylvania, an Investigative New Drug application (IND) was filed for a Phase 1 trial of our CCR5 ZFP Therapeutic, SB-728-T. This single-dose, investigator-sponsored trial began enrollingHIV infected subjects in February 2009, at the University of Pennsylvania. In September 2009, we filed an IND application and initiated a dose-escalation Phase 1 clinical trial (SB-728-902) of SB-728-T. Both Phase 1 studies were in HIV-infected individuals who were on HAART. The studies were designed primarily to evaluate, the safety and tolerability of this ZFP Therapeutic approach; however,SB-728-T treatment.  We have treated over 80 subjects and to date these studies have shown that the treatment is well-tolerated.  In addition we have evaluated the effect of SB-728-T on subjects’ CD4 T-cell counts, levels of CCR5-modified T-cells, and viral burden wereduring a treatment interruption (TI) from anti-retroviral therapy (ART) and levels of HIV DNA in peripheral blood mononuclear cells as a measure of the viral reservoir.  We have also monitored. Preliminary data fromstudied the effect of Cytoxan preconditioning on levels of cell engraftment, treatment with modified CD4 T-cells alone and treatments that include both trials were presented in the first quarter of 2011modified CD4 and demonstrated that the approach was well-tolerated in these subjects.CD8 T-cells. In addition we observedour studies have compared the effectiveness of the SB-728-T cell product when  ZFNs were delivered to T-cells using either Adenovirus or mRNA and electroporation. The data have demonstrated durable engraftment and persistence of SB-728-T, the ability of thesethe ZFN-modified cells to traffic to the gut mucosa and that the modified cells have a survival advantage over unmodified cells during a TI from ART.  In addition, our studies have demonstrated improvements in the overall CD4 T-cell count and the CD4:CD8 ratio in multiple subjects.

In October 2010, we also initiatedsubjects as well as a new Phase 1/2 study (SB-728-1002)decrease in the viral reservoir and the ability of certain subjects to evaluate SB-728-Tcontrol their viral loads for prolonged periods in HIV-infected individuals who are not yet on HAART. We have completed accrualthe absence of this trial. In January 2012, we

announced the initiation of two new studies (SB-728-1101 and SB-728-902, Cohort 5), based onART. The data from our first Phase 1 trials that demonstrated a correlation betweenstudy were published in the estimated numbersNew England Journal of engrafted cellsMedicine in which both copies of the CCR5 gene were modified (biallelic modification) and the reduction in viral load in treated subjects that underwent a HAART treatment interruption (TI)2014 (N.Eng. J. Med. 2014: 370:897-906).  Using different approaches, both studies aim to increase the numbers of biallelically modified engrafted cells in SB-728-T-treated subjects and to evaluate the effect of increasing the numbers of these cells on the immune system and on viral load during a TI. These trials are ongoing and we expect to present data from them in 2013.

We also have a preclinical stage programPhase 1/2 clinical study (SB-729mR-HSPC) to investigate this approach to treatingtreat HIV in hematopoietic stem cells. Together with our collaborators at Cityprogenitor cells (HSPCs), using electroporation of Hope Medical Center andmRNA to deliver the University of Southern California, we have funding for this program from a $14.5 million Disease Team Research Award granted by theZFNs. In May 2014 California Institute for Regenerative Medicine (CIRM) in October 2009,agreed to fund a $5.6 million Strategic Partnership Award for clinical studies of which we expect to receive a total of $5.2 million during the term of our four-year collaboration. In 2014, we expect to file an IND application for AIDS-based lymphoma based on this work.

Other Clinical Development Programs

Cliniciansprogram at City of Hope (COH) are evaluating a ZFP Therapeutic that uses our ZFN technology to disrupt the expression of the gene encoding the glucocorticoid receptor in T-cells expressing an engineered protein known as an IL-13 “zetakine.” The engineered T-cells would thus be able to seek out and destroy glioblastoma cells in the brain even in the presence of glucocorticoids whichHope.

Hemophilia B

We have a neutralizing effect on T-cells but are frequently used to treat patients after surgery to remove the tumor.

In 2009, our collaborators at COH filed an investigator-sponsored IND application for a Phase 11/2 open-label, dose-escalation clinical trial of this therapeutic and have an ongoing Phase 1 trial in subjects with recurrent/refractory GBM. However, due to changes in the standard of care for glioblastoma patients – namely the introduction of Avastin – subjects with recurrent GBM are not presenting with the same pattern of recurrent tumor as when the trial protocol was conceived. Thus, subjects whose clinical profiles fit the original trial design have been difficult to recruit. We expect that our collaborators will report data if, and when, they have treated an appropriate number of subjects.

In October 2011, we discontinued development of our product candidate SB-509 which was previously being evaluated for the treatment of diabetic neuropathy, Amyotrophic Lateral Sclerosis (ALS), stroke, spinal cord injury and traumatic brain injury.

ZFP Therapeutic Pre-Clinical Stage Programs

Programs Partnered with Shire

Hemophiliahemophilia B.

Hemophilia, a rare bleeding disorder in which the blood does not clot normally, is an example of a monogenic disease (a disease that is caused by a genetic defect in a single gene). There are several types of hemophilia caused by mutations in genes that encode factors which help the blood clot and stop bleeding when blood vessels are injured. Individuals with hemophilia experience bleeding episodes after injuries and spontaneous bleeding episodes that often leadslead to joint disease such as arthritis. The most prevalent form of the disease, hemophilia A, is caused by a defect in clotting Factor VIII, while defects in clotting Factor IX lead to hemophilia B. The most severe forms of hemophilia affect males. According to the National Hemophilia Foundation and the World Federation of Hemophilia, hemophilia A occurs in about one in every 5,000 male births in the US with approximately 25,00016,000 males currently affected in the US, and hemophilia B in about 1 in every 25,000 male births with approximately 5,0004,000 males currently affected. The standard treatment for individuals with hemophilia is replacement of the defective clotting factor with regular infusion of recombinant clotting factors or plasma concentrates. These therapies are expensive carry the risk of transmission of blood-borne diseases such as hepatitis and other viral infections and sometimes stimulate the body to produce antibodies against the factors that inhibit the benefits of treatment. In these situations, other clotting factors such as Factor VII and X may be used to treat patients.

Sangamo’s Therapeutic Approach

We have developed a platform strategy, our In collaboration with Shire weVivo Protein Replacement Platform™ (IVPRP™), to address hemophilia A and B and other monogenic diseases that are working on four gene targets, clotting factors VII, VIII, IX and X to develop ZFP Therapeutics to treat hemophilia.currently treated using enzyme or protein replacement therapy. Using our ZFN genome editing technology we are pursuing two approaches in the development of these therapeutics: correction of the disease-causing mutation in the endogenousadding a new therapeutic copy of the Factor VIII or IX gene and addition of a new correct copy of the Factor VIII or XI geneprecisely into a safe-harbor site, the Albumin gene or locus, and using our In Vivo Protein Replacement Platform.the powerful Albumin promoter to drive expression of the newly inserted gene. We have published data demonstrating functional correctionthe potential utility of the human factorthis platform for several different monogenic disease applications (Blood. 2015 Oct 8;126(15):1777-84).

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Preclinical studies of our IVPRP approach, have demonstrated that therapeutic levels of Factor IX gene in the liver by direct intravenous delivery of ZFNscould be generated in a mouse model of the disease. We have ongoing preclinical studiesdose-dependent manner in non-human primates (NHPs). There were no significant alterations in circulating albumin levels.  Studies in mice also demonstrated stable Factor IX production for over 1 year. The IVPRP is designed to develop therapiesbe a broadly applicable strategy for hemophilia A and B whichgene replacement that will provide a permanent correction thatfor the lifetime of the patient, thus increasing its potential usefulness in a pediatric population and would reduce or eliminate the need for chronic infusions of replacement proteins or clotting factor products. Our hemophilia B program was reviewed by the NIH Recombinant DNA Advisory Committee (RAC) and an IND application for the program was cleared by the FDA in December 2015. We expect to begin enrolling subjects into a Phase 1/2, open-label, dose-escalation clinical trial in the first half of 2016.  Our goal is to submitfile an IND application for our hemophilia A program in the second half of 2016.

Lysosomal Storage Disorders

Lysosomal storage disorders (LSDs) are a heterogeneous group of inherited disorders including Fabry disease, Gaucher disease, Mucopolysaccharidosis type I (MPS I, Hurler syndrome) and Mucopolysaccharidosis Type II (MPS II Hunter syndrome) and many others. They are caused by defects in genes that encode proteins known as enzymes, which break down and eliminate unwanted substances in cells. These enzymes are found in structures called lysosomes which act as recycling sites in cells, breaking down unwanted material into simple products. A defect in a lysosomal enzyme leads to the accumulation of toxic levels of the substance that the enzyme would normally eliminate and resulting cell damage which can lead to serious health problems. There are nearly 50 of these disorders altogether and they may affect different parts of the body, including the skeleton, skin, heart and CNS. While their individual incidence tends to be rare, this group as a whole has an incidence of more than 1:5,000 live births according to the National Institute of Neurological Disorders and Stroke.

There are no cures for LSDs, and treatments have not yet been developed for many of these diseases. For certain disorders, including Gaucher, Fabry, MPS I and MPS II, enzyme replacement therapies (ERTs) are available. However, these require frequent administration, are costly and there is a risk that over time patients develop an immune response to the administered protein reducing its efficacy.

Our IVPRP has the potential to provide a broadly applicable genetic approach to enzyme replacement for several LSDs.  

MPS I

MPS I is caused by mutations in the gene encoding the alpha-L-iduronidase (IDUA) enzyme, resulting in a deficiency of IDUA which is required for the degradation of the glycosaminoglycans (GAGs) dermatan sulfate and heparin sulfate. The inability to degrade GAGs leads to their accumulation within the lysosomes throughout the body and individuals with this mutation experience multi-organ dysfunction and damage. Depending on the severity of the mutations and degree of residual enzyme activity, affected individuals may develop organomegaly, joint stiffness, skeletal deformities, corneal clouding, hearing loss and mental retardation. Three forms of MPS I, in order of increasing severity, include Scheie, Hurler-Scheie and Hurler syndromes. According to the National MPS Society, one in 500,000 births in the U.S. will result in Scheie syndrome, one in 115,000 births in Hurler/Scheie, and one in 100,000 births results in Hurler syndrome. There are approximately 2,000 MPS I patients in the U.S.

The current therapies for individuals with MPS I include hematopoietic stem cell transplantation (HSCT) for those with the most severe form of the disease (Hurler) and enzyme replacement therapy (ERT) for patients with the attenuated forms of the disease (Hurler-Scheie, Scheie).  However, the reported mortality rate after HSCT is approximately 15% and the survival rate with successful engraftment is 56%. Most patients with milder forms of the disease receive weekly enzyme replacement therapy (ERT), usually in a doctor’s office. For MPS I, IDUA infusions take on average four to six hours, however within hours, the replacement enzyme cannot be detected in the circulation. We expect to initiate a Phase 1/2 open-label, dose-escalation clinical trial in MPS I in mid-2016.

Pre-clinical Programs

MPS II

MPS II is an X-linked disorder primarily affecting males and caused by mutations in the gene encoding the iduronate-2-sufatase (IDS) enzyme.  This results in a deficiency of IDS which is required for the degradation of GAGs. The inability to degrade GAGs leads to their accumulation within the lysosomes throughout the body and individuals with this mutation experience multi-organ dysfunction and damage. Children with MPS II appear normal at birth but begin showing symptoms of developmental delay by age 2 – 3 years.  Depending on the severity of the mutations and degree of residual enzyme activity, affected individuals may develop delayed development, enlarged internal organs, cardiovascular disorders, stunted growth and skeletal abnormalities and hearing loss. The disorder is progressive and symptoms range from mild (normal cognitive function) to severe (cognitively impaired). According to the National MPS Society, one in 100,000 male births in the U.S. will result in MPS II. There are approximately 500 MPS II patients in the U.S.

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The current therapy for individuals with MPS II includes weekly ERT. In contrast with Hurler syndrome, hematopoietic stem cell transplantation (HSCT) does not ameliorate neurologic symptoms.

Gaucher disease

Gaucher disease is caused by mutations in the gene encoding beta-glucocerebrosidase. Deficiency of this enzyme results in the accumulation of glucocerebroside and related substances in white blood cells, called macrophages, within the patient’s spleen, liver, bone marrow and other organs, leading to damage to several tissues and organs within the body. Clinical manifestations of Type 1 Gaucher’s disease, which occurs more frequently in people of Ashkenazi Jewish heritage, are diverse and include liver and/or spleen enlargement, skeletal weakness, bone disease, anemia, thrombocytopenia, and leukopenia but not CNS involvement.  Patient symptomology may be masked or not attributed to the disease, leading to delayed diagnosis or misdiagnosis.  Type 2 and 3 Gaucher disease affect the CNS. According to the National Gaucher Foundation approximately one in 50,000-75,000 live non-Ashkenazi Jewish births and one in 600 Ashkenazi Jewish births will lead to Gaucher disease. There are approximately 5,000-7,000 Gaucher patients in the US and 5,000-15,000 in Europe, however, the prevalence is likely under-reported due to delayed diagnosis or misdiagnosis.  The current therapies for individuals with Gaucher disease include oral substrate inhibitor therapy once or twice a day and ERT every two weeks.

Fabry disease

Fabry disease is caused by mutations in the alpha galactosidase gene resulting in a deficiency of the alpha-galactosidase A enzyme and leading to the accumulation of a type of fat molecule, called globotriaosylceramide, in cells lining blood vessels in the skin and cells in the kidneys, heart, and nervous system. Patients with Fabry’s disease may experience nerve pain, kidney damage, left ventricular hypertrophy and neurological damage. Symptoms may appear at any point from childhood to middle age, but their appearance largely depends on whether there is some residual enzymatic activity. The incidence of the disease is unknown but it is estimated that there are approximately 2,700 – 8,000 patients in the US. The current therapy for individuals with Fabry disease therapy is recombinant alpha-galactosidase A ERT every two weeks which leads to stabilization, but not reversal of organ damage caused by the accumulation of alpha-galactosidase A enzyme substrate.

Sangamo’s Therapeutic Approach

Beginning with MPS I and MPS II our aim is use this approach to enable the patient’s liver to produce therapeutic quantities of the corrective enzymes, IDUA and IDS, respectively.

Our third and fourth IVPRP LSD targets are Gaucher disease and Fabry disease, respectively.  Similar to MPS I and MPS II, our aim is to enable the patient’s liver to produce therapeutic quantities of the corrective enzymes, beta-glucocerebrosidase for Gaucher and alpha-galactosidase A for Fabry disease.  

An IND application for our product candidate for MPS I was filed in 2015 and was cleared by the FDA in early February 2016.We expect to begin a Phase 1/2, open-label, dose escalation, clinical trial for this program in mid-2016.  We are in preclinical development for MPS II , Gaucher disease and Fabry disease  Our goal is to file an IND application for our product candidate for MPS II in the first half of 2016 and two additional IND applications for Gaucher disease and Fabry disease in the second half of 2016.

Programs Partnered with Biogen

Hemoglobinopathies: Sickle cell disease and Beta-thalassemia

Mutations in the gene encoding beta-globin, the oxygen carrying protein of red blood cells, lead to hemoglobinopathies such as SCD and beta-thalassemia. The mutation that gives rise to SCD causes the red blood cells to form an abnormal sickle or crescent shape. The cells are fragile and deliver less oxygen to the body’s tissues. They can also get stuck more easily in small blood vessels and break into pieces that can interrupt healthy blood flow which further decrease the amount of oxygen flowing to body tissues. Almost all patients with SCD experience these painful vaso-occlusive crises, which can last from hours to days and may cause irreversible organ damage. Current standard of care is to manage and control symptoms, and to limit the number of crises. Treatments include administration of hydroxyurea, blood transfusions, iron-chelation therapy, pain medications and antibiotics. The CDC estimates that there are 90,000 to 100,000 Americans living with SCD which occurs in approximately 1 out of every 500 African-American births and 1 out of every 36,000 Hispanic-American births.

There are several forms of beta-thalassemia. Broadly, the disorder results in greatly impaired production of healthy red blood cells despite bone marrow over activity, leading to life-threatening anemia, enlarged spleen, liver and heart, and bone abnormalities. Beta-thalassemia major is a severe form of thalassemia that requires regular, often monthly, blood transfusions and subsequent iron-chelation therapy to treat iron overload. The CDC estimates that 1,000 people have beta-thalassemia major in the United States, and an

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unknown number carry the genetic trait and can pass it on to their children. Thalassemia is most common among people of Mediterranean descent and is also found among people from Southeast Asia, the Arabian Peninsula, Iran, Africa and Southern China.

In collaboration with Biogen, we are developing ZFP Therapeutics for both SCD and beta-thalassemia based on the use of our ZFN genome editing technology to modify a patient’s own (autologous) HSPCs. Our ZFN genome editing technology enables multiple approaches to the correction of SCD and beta-thalassemia. Both diseases manifest in 2014.the months after birth, when patients switch from producing functional fetal gamma-globin to a mutant form of adult beta-globin, which results in their condition. Naturally occurring increased levels of fetal hemoglobin have been shown to reduce the severity of both SCD and beta-thalassemia disorders. In HSPCs, our genome editing technology can be used to precisely disrupt regulatory sequences that control the expression of key transcriptional regulators, such as BCL11A, to reverse the switch from expression of the mutant adult beta-globin back to the production of functional fetal gamma-globin.

Huntington’s diseaseA bone marrow transplant (BMT), of HSPCs from a “matched” related donor (allogeneic BMT) is curative for both diseases. However, this therapy is limited due to the scarcity of matched donors and the significant risk of Graft versus Host Disease (GvHD) after transplantation of the foreign cells. By performing genome editing in HSPCs that are isolated from and subsequently returned to the same patient (i.e. an autologous HSPC transplant), our approach eliminates both the need for a matched donor and the risk of acute and chronic GvHD. The goal of this approach is to develop a one-time long-lasting treatment for SCD and beta-thalassemia.

We expect to file an IND application for our beta-thalassemia program in the first half of 2016. Biogen expects to file an IND application for the SCD program in the second half of 2016.

Programs Partnered with Shire

Huntington’s disease (HD)

HD is an inherited, progressive neurologic disease for which there is no treatment or cure. The disease is caused by a particular type of mutation in a single gene, the Huntingtin (HTT)HTT gene. Most patients inherit one normal and one defective or mutant copy of the HTT gene, which is enough to causecauses HD. The mutation is characterized by expansion of a repeated stretch of DNA sequence within the gene called a “CAG repeat.” A normal copy of the HTT gene usually has 10 to 29 of these CAG repeats but a defective copy has many more—generally greater than 39 repeats. While the protein produced by the normal copy of the gene appears to be essential for development (mice lacking the gene do not survive to birth), the product of the mutated gene is damaging to nerve cells. Symptoms, which include deterioration of muscle control, cognition and memory, usually develop between 35 and 44 years of age. It is known that the greater the number of CAG repeats, the earlier the onset. HD is usually fatal within 1015 to 20 years after the onset of symptoms. The disease has a high prevalence for an inherited disorder, affectingdisorder. According to the Huntington’s disease Society of America (HDSA) approximately 30,000 people (one in 10,000) in the US. An additional 150,000 people in the U.S. carry a 50%have HD. In addition, it is estimated that approximately 200,000 people in the U.S. are at risk of developing the disease.

Research in animal models of the disease has shown that lowering the levels of the defectivemutant HTT protein can prevent, or even reverse, disease progression. However, to date most “HTT-lowering” methods decrease levels of both the normal and mutant forms of HTT, raising potential safety concerns given the importance of normal HTT protein. In collaboration with Shire, we are developing ZFP TFs that can selectively repress the expression of the mutant disease-causing form of HTT while leaving expression levels of the normal gene unchanged. Preclinical studies in animal models of the disease are ongoing and our goalShire is to file anresponsible for all clinical development activities including filing the IND application for a ZFP Therapeutic for HD in 2015.application.

Proprietary Programs

Hemoglobinopathies

Mutations in the genes encoding globin, the oxygen carrying protein of red blood cells, lead to the hemoglobinopathies, sickle cell disease (SCD) and ß-thalassemia. The mutation that gives rise to SCD causes the red blood cells to form an abnormal sickle or crescent shape. The cells are fragile and deliver less oxygen to the body’s tissues. They can also get stuck more easily in small blood vessels and break into pieces that can interrupt healthy blood flow. These problems further decrease the amount of oxygen flowing to body tissues. Almost all patients with SCD have painful episodes (called crises), which can last from hours to days. Current standard of care is to manage and control symptoms, and to limit the number of crises. Treatments include blood transfusions, iron-chelation therapy and administration of hydroxyurea, pain medications and antibiotics. The CDC estimates that there are 90,000 to 100,000 Americans living with SCD which occurs in approximately 1 out of every 500 African-American births and 1 out of every 36,000 Hispanic-American births.

There are several forms of ß-thalassemia. Broadly, the disorder results in excessive destruction of red blood cells leading to life-threatening anemia, enlarged spleen, liver and heart, and bone abnormalities. Cooley’s anemia (beta thalassemia major) is a severe form of thalassemia that requires regular, often monthly, blood

transfusions and subsequent iron-chelation therapy to treat iron overload. The CDC estimates that 1,000 people have Cooley’s anemia in the United States, and an unknown number carry the genetic trait and can pass it on to their children. Thalassemia is most common among people of Mediterranean descent and is also found among people from the Arabian Peninsula, Iran, Africa, Southeast Asia, and Southern China.

Bone marrow or stem cell transplants can be curative for both of these indications; however they are currently not an option for most patients as they are often unable to find well-matched cell donors. We are developing ZFP Therapeutics for both SCD and ß-thalassemia based on the use of our ZFN gene editing technology in a patient’s own (autologous) bone marrow stem cells. We are in currently in preclinical development and our goal is to file an IND application for a product in 2014.

Lysosomal Storage Disorders

Lysosomal storage disorders (LSDs) are heterogeneous group of inherited disorders including Fabry disease, Gaucher disease, Pompe disease and Hurler syndrome. They are caused by defects in genes that encode proteins known as enzymes, which break down and eliminate unwanted substances in the cells of the body. These enzymes are found in structures called lysosomes which act as recycling sites in cells, breaking down unwanted material into simple products for the cell to use to build new materials. A defect in a lysosomal enzyme leads to the accumulation of toxic levels of the substance that the enzyme would normally eliminate and resulting cell damage which can lead to serious health problems. There are nearly 50 of these disorders altogether and they may affect different parts of the body, including the skeleton, brain, skin, heart and central nervous system. While their individual incidence tends to be rare, this group as a whole has a prevalence of more than 1:5,000 live births according to the National Institute of Neurological Disorders and Stroke.

There is no cure for LSDs, and treatments have not yet been developed for many of these diseases. For certain disorders, including Gaucher and Fabry, enzyme replacement therapies (ERTs) are available. However, these require frequent administration, are costly and there is a risk of immunogenicity.

We are developing a genetic approach to enzyme replacement for several LSDs based on systemic delivery of our ZFN gene editing technology to the liver to enable production of the corrective enzyme by the body. We are in preclinical development with several product candidates and our goal is to file two IND applications for such product candidates in 2015.

ZFP Therapeutic Research Programs

We have research stage programs in other monogenic diseases, including certain immunodeficiency disorders.in CNS disorders and in cancer immunotherapy.

CORPORATE RELATIONSHIPS

We have established collaborative and strategic partnerships in non-therapeutic areas and for several of our ZFP Therapeutic programs and in non-therapeutic areas.programs. We will continue to pursue further partnerships when appropriate with selected pharmaceutical, biotechnology and chemical companies to fund internal research and development activities and to assist in product development and commercialization. We are applying our ZFP technology platform to several commercial applications in which our products provide us and our strategic partners and collaborators with potential technical, competitive and economic advantages.

Therapeutic Collaborations

Collaboration and License Agreement with Biogen Inc. in Human Therapeutics and Diagnostics

In January 2014 we entered into an exclusive worldwide collaboration and license agreement with Biogen to develop therapeutics for hemoglobinopathies, focused on beta-thalassemia and SCD. Under the agreement, the two companies will jointly

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conduct two research programs: the beta-thalassemia program and the SCD program. In the beta-thalassemia program, we are responsible for all discovery, research and development activities through the first human clinical trial. In the SCD program, both parties are responsible for research and development activities through the submission of an IND application for ZFP therapeutics intended to treat SCD. Biogen reimburses us for agreed upon internal and external program-related costs.

Under both programs, Biogen is responsible for subsequent worldwide clinical development, manufacturing and commercialization of licensed products developed under the agreement. At the end of the specified research terms for each program or under certain specified circumstances, Biogen retains the right to step in and take over any of our remaining activities. Furthermore, we have an option to co-promote in the U.S. any licensed product to treat beta-thalassemia and SCD developed under the agreement, and Biogen will compensate us for such co-promotion activities. Subject to the terms of the agreement, we have granted Biogen an exclusive, royalty-bearing license, with the right to grant sublicenses, to use certain ZFP and other technology controlled by Sangamo for the purpose of researching, developing, manufacturing and commercializing licensed products developed under the agreement. We have also granted Biogen a non-exclusive, worldwide, royalty-free, fully paid license, with the right to grant sublicenses, of our interest in certain other intellectual property developed pursuant to the agreement.

Under the agreement, we received an upfront license fee of $20.0 million and are eligible to receive development milestone payments upon the achievement of specified regulatory, clinical development and commercialization milestones. The total amount of potential regulatory, clinical development, commercialization and sales milestone payments, assuming the achievement of all specified milestones in the agreement, is $293.8 million, including Phase 1 milestone payments of $7.5 million for each of the beta-thalassemia and SCD programs. In addition, we will also receive royalty payments for each licensed product that are a tiered double-digit percentage of annual net sales of each product.

The Agreement may be terminated by (i) us or Biogen for the uncured material breach of the other party, (ii) us or Biogen for the bankruptcy or other insolvency proceeding of the other party; (iii) Biogen, upon 180 days’ advance written notice to us and (iv) Biogen, for certain safety reasons upon written notice to, and after consultation with, us. As a result, actual future milestone payments could be lower than the amounts stated above.

Amended Collaboration and License Agreement with Shire AGInternational GmbH (formerly Shire AG) in Human Therapeutics and Diagnostics

OnIn January 31, 2012 we entered into a collaboration and license agreement with Shire pursuant to which we are collaborating to research, develop and commercialize human therapeutics and diagnostics based on our

ZFP technology. Under the agreement, thewe received an upfront license fee of $13.0 million. The two companies mayagreed to develop potential human therapeutic or diagnostic products for seven gene targets. The initial four gene targets arewere blood clotting Factors VII, VIII, IX and X, and products developed for such initial gene targets would be used for treating or diagnosing hemophilia. In June 2012, Shire selected a fifth gene target for the development of a ZFP therapeutic for Huntington’s disease.treating HD. Shire hashad the right, subject to certain limitations, to designate two additional gene targets. Pursuant to the agreement, we have granted Shire an exclusive, world-wide, royalty-bearing license, with the right to grant sublicenses, to use our ZFP technology for the purpose of developing and commercializing human therapeutic and diagnostic products for the gene targets.

The initialOn September 1, 2015, the Shire Agreement was amended such that Shire agreed to return to Sangamo the exclusive, world-wide rights to gene targets for the development and commercialization of ZFP Therapeutics for hemophilia A and B.  Shire retains the rights and will continue to develop a ZFP Therapeutic for Huntington’s disease and a ZFP Therapeutic for one additional gene target yet to be named.  Sangamo will provide certain target feasibility services, and upon Shire’s request, certain research term ofactivities according to a research plan as agreed upon by both companies. Such research activities performed by Sangamo will be reimbursed by Shire. Shire’s rights with respect to other targets contemplated in the original agreement is six years and is subjectrevert to extensions upon mutualSangamo. Under the revised agreement, and under other specified circumstances. We areeach company is responsible for all research activities throughexpenses associated with its own programs and will reimburse the submission of an IND or European Clinical Trial Application (CTA), whileother for any ongoing services provided. Shire is responsible for clinical developmentreimbursement of expenses related to obligations prior to the amendment date which will be recognized as revenue as expenses are incurred. Sangamo has granted Shire a right of first negotiation to license the hemophilia A and commercializationB IVPRP programs. Under the amended agreement, Shire does not have any milestone payment obligations with respect to the retained programs, but it is required to pay single digit percentage royalties to Sangamo, up to a specified maximum cap, on the commercial sales of ZFP Therapeutic products generated from such programs. Under the research program fromAgreement, Sangamo has full control over, and after the acceptance of an IND or CTAfull responsibility for the product. Shire will reimburse us for our internal and external research program-related costs.

Under the agreement, we received an upfront license fee of $13.0 million. In addition, for each gene target, we are eligible to receive $33.5 million in payments upon the achievement of specified research, regulatory, clinical development milestones, as well as $180 million in payments upon the achievement of specified commercialization and sales milestones. The total amount of potential milestone payments for eachcosts of, the seven gene targets, assuminghemophilia programs returned to the achievementCompany, subject to certain diligence obligations and Shire’s right of allfirst negotiation to obtain a license to such programs under certain circumstances. Sangamo is required to pay single digit percentage royalties to Shire, up to a specified milestones in the Agreement, is $213.5 million. The milestone payments for each gene target through the acceptance of an IND or CTA submission total $8.5 million. We will also receive royalty payments that are a tiered double-digit percentage of netmaximum cap, on commercial sales of ZFP Therapeutic products developed under the collaboration. To date, we have not received any payments from Shire related to milestone or royalty payments.such returned programs.  

The agreement may be terminated by (i) us or Shire, in whole or in part, for the uncured material breach of the other party, (ii) us or Shire for the bankruptcy or other insolvency proceeding of the other party and (iii) Shire, in its entirety, beginning 24 months after the effective date of the agreement upon at least 90 daysdays’ advance written notice. In addition, Shire may terminate the agreement with respect to an individual gene target at any time, and under certain circumstances may designate a replacement gene target for a terminated gene target. As a result, actual future milestone payments could be lower than the amounts stated above.

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Strategic Partnerships in Non Therapeutic Applications of the Technology

Agreement with Sigma-Aldrich Corporation in Laboratory Research Reagents, Transgenic Animal and Commercial Protein Production Cell-line Engineering

In July 2007 we entered into a license agreement with Sigma. Under the license agreement, we agreed to provide Sigma with access to itsour proprietary ZFP technology and the exclusive right to use the technology to develop and commercialize research reagents products and services in the research field, excluding certain agricultural research uses that we previously licensed to Dow AgroSciences LLC. Under the agreement, we and Sigma agreed to conduct a three-year research program to develop laboratory research reagents using our ZFP technology during which time we assisted Sigma in connection with its efforts to market and sell services employing our technology in the research field. We transferred the ZFP manufacturing technology to Sigma.DAS.

In October 2009 we expanded the license agreement with Sigma. In additionSigma to the original terms of the license agreement, Sigma receivedinclude exclusive rights to develop and distribute ZFP-modified cell lines for commercial production of protein pharmaceuticals and certain ZFP-engineered transgenic animals for commercial applications. Under the terms of the agreement, Sigma made an upfront cash payment of $20.0 million, consisting of a $4.9 million purchase of 636,133 shares of our common stock, valued at $4.9 million, and a $15.1 million upfront license fee. The upfront license fee was recognized on a straight-line basis from the effective date of the expanded license through July 2010, which represents the period over which we were obligated to perform research services for Sigma. Under the terms of the agreement, we arewere eligible to

receive commercial license fees of $5.0 million based on a percentage of net sales and sublicensing revenue and thereafter a reduced royalty rate of 10.5% of net sales and sublicensing revenue. During the term of the license agreement, Sigma is obligated to pay us minimum annual payments, a share of certain revenues received by Sigma from sublicensees and royalty payments on the sale of licensed products and services. Sigma also has the right to sublicense the ZFP technology for research applications and we will receive 50% of any sublicensing revenues in the first two years and 25% of any sublicensing revenues thereafter.revenues. We retain the sole right to use and license our ZFP technology for GMP production purposes, for the production of materials used in or administered to humans, and for any other industrial commercial use. In addition, upon the achievement of certain cumulative commercial milestones Sigma will make milestone payments to us up to an aggregate of $25.0 million. The agreements may be terminated by Sigma at any time with a 90-day notice or by either party upon an uncured material breach of the other party. As a result, actual future milestone payments could be lower than the amounts stated above. In the event of any termination, all rights to use our ZFP technology will revert to us, and Sigma will no longer be permitted to practice our ZFP technology or to develop or, except in limited circumstances, commercialize any products derived from our ZFP technology.

Other Programs and Partners in Transgenic Animal and Commercial Protein Production Cell-line Engineering

Prior to our agreement with Sigma, we marketed our ZFP TF and ZFN technology and intellectual property in products and areas outside ZFP Therapeutics directly to the pharmaceutical and biotechnology industry andindustry. We established agreements in cell line engineering for pharmaceutical protein production with Genentech and in the development of transgenic animals.animals with Open Monoclonal Technology, Inc. (OMT) and F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (collectively, Roche).

Pharmaceutical Protein Production

In April 2007, we entered into a research and license agreement with Genentech, Inc. pursuant to which we provided Genentech with access to our proprietary ZFN technology for use in mammalian cell-based protein pharmaceutical production. Under this agreement, we developed and delivered to Genentech ZFNs capable of making certain targeted modifications to the genome of an identified Genentech cell line to generate cell lines with novel characteristics for protein pharmaceuticals. We also granted Genentech a non-exclusive, worldwide, sublicensable right to use our ZFNs to generate cell lines with novel characteristics for protein pharmaceutical production purposes and to generate the same targeted modifications in the Genentech cell lines using our ZFN technology. Genentech has continuing obligations to pay us an annual technology access fee and, for each product developed by Genentech containing a protein expressed by the modified cell line created using our ZFN technology, aggregate milestone payments of up to $5.4 million upon achievement of specified milestones relating to the development and commercialization of such products. The research and license agreement continues until the later of ten years or expiration of specified patents relating to our ZFN technology covered under the agreement.

In February 2008, our relationship with Genentech was expanded under similar terms to the original agreement increasing the number of potential targets in the genome of the identified Genentech cell line against which Genentech may use or apply our ZFN technology in mammalian cell-based protein pharmaceutical production. The expanded agreement continues until the later of ten years or expiration of specified patents relating to our ZFN technology covered under the agreement.

Transgenic Animals

In April 2008, we entered into a license agreement with Open Monoclonal Technology,December 2015 Ligand Pharmaceuticals Inc. (OMT), pursuant to which we granted a royalty-bearing, non-exclusive, sublicensable worldwide license to OMT for the commercial use of a transgenic animal generated using our ZFN technology.(Ligand) acquired OMT.  For any given OMTOMT-derived product, OMTLigand has the right to buy out its future royalty payment obligations under the license agreement by paying a lump sum fee to us. OMT may terminate the license agreement at any time. Either party may terminate the agreement upon a material breach by the other party.

In July 2008, we entered into a research and license agreement with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (collectively, Roche), pursuant to which we provided Roche with access to aspects of our proprietary ZFN technology to generate ZFN-modified cell lines and animals having targeted modifications in a specified gene in a specified species, solely for research purposes. In December 2009, pursuant to the research and license agreement, Roche exercised an option to receive an exclusive, worldwide license to use such animals in the production of therapeutic and diagnostic products. This exclusive commercial license shall continue, on a country-by-country and product-by-product basis, until the later of 10 years after the first commercial sale in such country or the expiration of the last valid patent claim covering such product. Roche paid us an additional research fee upon the delivery of the ZFN specified in the research and license agreement, a quarterly ongoing research maintenance fee during the research term and will pay milestone payments upon the achievement of certain clinical development milestones relating to products produced under such commercial license, and low-single digitlow-single-digit royalties on sales of such products. The aggregate milestone payments for therapeutic products will not exceed $5.75$5.8 million, but the diagnostics milestone payments are not similarly capped. Under the research and license agreement, on a product-by-product basis, Roche has the right to buy out its future royalty payment obligations by paying specified fixed amountsamounts.

Agreement with Dow AgroSciences in Plant Agriculture

We and our collaborators have shown that ZFNs and ZFP TFs can be used to regulate and modify genes in plants. The ability to regulate gene expression with engineered ZFP TFs may lead to the creation of new plants that increase crop yields, lower production costs and are more resistant to herbicides, pesticides, and plant pathogens, which could permit the development of branded agricultural products with unique nutritional and processing characteristics. In addition, ZFNs may be used to facilitate the efficient and reproducible generation of transgenic plants.

In October 2005 we entered into an exclusive commercial license with DAS. Under this agreement, we provided DAS with access to our proprietary ZFP technology and the exclusive right to use the technology to modify the genomes or alter the nucleic acid or protein expression of plant cells, plants, or plant cell cultures. DAS also obtained a license to sell products incorporating or derived from plant cells generated using our ZFP technology, including agricultural crops, industrial products and plant-derived biopharmaceuticals. We have retained rights to use plants or plant-derived products to deliver ZFNs and ZFP TFs into humans or animals for diagnostic, therapeutic, or prophylactic purposes. Our agreement with DAS provided for an initial three-year research term. In June 2008, DAS exercised its option under the agreement to obtain a commercial license to sell products incorporating or derived from plant cells generated using our ZFP technology, including agricultural crops, industrial products and plant-derived biopharmaceuticals.

We agreed to supply DAS and its sublicensees with ZFNs and ZFP TFs for both research and commercial use over the initial three year period of the agreement and have amended and extended this provision. 16

The agreement also provides for minimum sublicense fees each year due to us every October, provided the agreement is not terminated by DAS. Annual fees range from $250,000 to $3.0 million and total $25.3 million over 11 years. Furthermore, DAS has the right to sublicense our ZFP technology to third parties for use in plant cells, plants, or plant cell cultures, and we will be entitled to 25% of any cash consideration received by DAS under such sublicenses. We do not have any performance obligations with respect to the sublicensing activities to be conducted by DAS. DAS has the right to terminate the agreement at any time; accordingly, our actual sublicense fees over the term of the agreement could be lower than $25.3 million. In addition, each party may terminate the agreement upon an uncured material breach of the agreement by the other party. In the event of any termination of the agreement, all rights to use our ZFP technology will revert to us, and DAS will no longer be permitted to practice our ZFP technology or to develop or, except in limited circumstances, commercialize any products derived from our ZFP technology. We amended the agreement with DAS to extend the period of reagent manufacturing and research services through December 31, 2012.

Funding from Research Foundations

California Institute for Regenerative Medicine

In October 2009, the California Institute for Regenerative Medicine (CIRM),May 2013 CIRM granted us a State of California entity, granted a $14.5$6.4 million Disease Team ResearchStrategic Partnership Award to develop an AIDS-related lymphoma therapya potentially curative ZFP Therapeutic for beta-thalassemia based on the application of our ZFN genegenome editing technology in stem cells.HSPCs. The four year grant supportsprovides matching funds for preclinical work that will support an innovative research project conducted byIND application and a multidisciplinary team of investigators, including investigators from the University of Southern California,Phase 1 clinical trial in transfusion-dependent beta-thalassemia patients which will be carried out at Children’s Hospital & Research Center Oakland, and City of Hope National Medical Centerin collaboration with our partner in this program, Biogen. In May 2015 Sangamo announced a consolidated development path for its beta-thalassemia and SCD programs using the “BCL11A Enhancer” target.  Due to the switch to the BCL11A Enhancer strategy, CIRM and Sangamo BioSciences. We expectterminated the Strategic Partnership Award as of June 30, 2015.  Sangamo returned $3.0 million in unused funds received from CIRM under the award during the three months ended September 30, 2015.  

In May 2014 CIRM agreed to receive total funding upfund a $5.6 million Strategic Partnership Award to $5.2 million from the total amount awardedfund clinical studies of a potentially curative ZFP Therapeutic for HIV/AIDS based on expenses incurred for research and development efforts by us as prescribedthe application of our ZFN genome editing technology in the agreement.HSPCs. The award is intendedfour year grant provides matching funds to substantially fundsupport evaluation of our research and development efforts related to the agreement.stem cell-based ZFP Therapeutic in a clinical trial in HIV-infected individuals conducted at City of Hope. The State of California has the right to receive, subject to the terms and conditions of the agreement paymentsbetween us and CIRM, payment from us, resultingor our collaborators, from sales of a commercial product resulting from research and development efforts supported by the grant, not to exceed two times the amount we receivegrants, in funding under the agreementaccordance with CIRM. Through December 31, 2012, we have received $2.4 million in funding from CIRM under this agreement.Title 17, California Code of Regulations, Section 100600.

CHDI Foundation, Inc.

In April 2011, Sangamo entered into an agreement with the CHDI Foundation (CHDI) to develop a novel therapeutic for Huntington’s disease based on Sangamo’s proprietary ZFP technology. The ZFP therapeutic approach targets the gene that causes Huntington’s disease. Under the agreement, CHDI paid the Company $1.3 million, the total funds due over a period of one year which substantially funded the Company’s research efforts related to the agreement. During 2012, the agreement was amended to extend the project through August 2012 and to increase total potential funding from $1.3 million to $2.1 million, plus reimbursement for certain direct expenses related to the project. The agreement with CHDI terminated on August 31, 2012. Through December 31, 2012, we have received $2.2 million in funding from CHDI and we do not expect receive any further funding under this agreement.

The Juvenile Diabetes Research Foundation International

In October 2006, we announced a partnership with the Juvenile Diabetes Research Foundation International (JDRF) to provide financial support to one of our Phase 2 human clinical studies of SB-509, a ZFP Therapeutic that was in development for the treatment of diabetic neuropathy. Under the agreement JDRF was obligated to pay us an aggregate amount of up to $3.0 million which was received in full by the end of 2009.

In January 2010, we amended the agreement and subject to its terms and conditions, JDRF agreed to provide additional funding of up to $3.0 million for our Phase 2b trial in diabetic neuropathy which partially funded expenses related to the trial. In October 2011, we announced that the Phase 2b trial had failed to meet both its primary and secondary end-points and further development of SB-509 was discontinued. We received $2.8 million of the total $3.0 million available under the amended agreement with JDRF and we do not expect receive any further funding under this agreement.

The Michael J. Fox Foundation

In January 2007, we entered into a partnership with the Michael J. Fox Foundation for Parkinson’s Research (MJFF) to provide financial support of our program to develop ZFP TFs to activate the expression of glial cell line-derived neurotrophic factor (GDNF) . Under the agreement with MJFF and subject to its terms and conditions, MJFF paid us $1.0 million, the total funds due under the agreement, over a period of two years. In June 2010, we received a commitment for additional funding of $0.9 million from MJFF to support further studies of ZFP TF activators of GDNF and intended to substantially fund our research efforts related to the agreement. Through December 31, 2012, we have received the entire $1.9 million in funding available under the agreements with MJFF and we do not expect to receive any further funding under this agreement.

INTELLECTUAL PROPERTY AND TECHNOLOGY LICENSES

Patents and licenses are important to our business. Our strategy is to file or license patent applications to protect technology, inventions and improvements to inventions that we consider important for the development of our genome editing and gene regulation technology. We seek patent protection and licenses that relate to our technology and candidates in our pipeline and/or may be important to our future. We have filed numerous patents and patent applications with the United States Patent and Trademark Office (USPTO) and foreign jurisdictions. This proprietary intellectual property includes methods relating to the design of zinc finger, and TALE (Transcription activator-like effector) proteins and CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats)/Cas editing systems, therapeutic applications of genome editing technology, enabling technologies related to our platform and enabling technologies.the use of genome editing across a variety of applications. We rely on a combination of patent, copyright, trademark, proprietary know–how, continuing technological innovations, trade secret laws, as well as confidentiality agreements, materials transfer agreements, research agreements and licensing agreements, to establish and protect our proprietary rights.

Technology Licenses

We have licensed intellectual property directed to the design, selection, and use of ZFPs, ZFNs and ZFP TFs for genome editing and gene modification and regulation from the Massachusetts Institute of Technology, Johnson & Johnson, The Scripps Research Institute, The Johns Hopkins University, Harvard University, the Medical Research Council, the California Institute of Technology, City of Hope and the University of Utah. These licenses grant us rights to make, use and sell ZFPs, ZFNs and ZFP TFs under 15 families of patent filings. As of February 1, 2013,2016, these patent filings have resulted in 2117 issued U.S. patents and 4041 granted foreign patents, with 64 currently pending U.S. patent applications and 309 pending applications in foreign patent offices.

We believe that these in-licensed patents and patent applications include several of the early and important patent filings directed at the design, selection, composition and use of ZFPs, ZFNs and ZFP TFs, particularly thethose licensed under agreements with Johns Hopkins University, the Massachusetts Institute of Technology, the University of Utah, Johnson & Johnson and The Scripps Research Institute.

Johns HopkinsWe have licensed intellectual property directed to the composition of two AAV vectors (AAV5 and AAV6) from the National Institute of Health and the University of Washington, respectively. The AAV5 license from the National Institute of Health is a nonexclusive license that will expire in 2021. The AAV6 license from the University of Washington is also a non-exclusive license

We entered into a license agreement with17

and will expire in 2017. Additionally, Sangamo has licensed intellectual property from the Johns Hopkins University on June 29, 1995, as subsequently amended, whereby Johns Hopkins University granted us a worldwide exclusive license to technology and patentsNational Institutes of Health (NIH) relating to nuclease and gene targeting technology for all fieldsmethods of use, including the right to sublicense. Under theproduction of production of AAV. This license agreement, we are obligated to pay low single-digit royalties on licensed product sales, a low single-digit percentage of license fees received from sublicensees and a high single-digit or low teens percentage of sublicense royalties received from sublicensees for sales of products. We are subject to an annual minimum royalty, which we currently pay. The license agreement expires upon the expiration of the last patent covered by the license agreement. Although many of the JHU in-licensed patents have now expired, based on currently issued patents, the license agreement will terminate on or about February 10, 2014. Johns Hopkins University may terminate the license agreement upon a material default by us that remains uncured following written notice. We may terminate the license agreement at any time upon six months’ written notice.expire in 2021.

Massachusetts Institute of Technology

We entered into a patent license agreement with the Massachusetts Institute of Technology, or MIT, on May 9, 1996, as subsequently amended, whereby MIT granted us a worldwide exclusive license to technology and patents relating to the design, selection and use of ZFPs for all fields of use, including the right to sublicense. Under the patent license agreement, we are obligated to pay an annual license fee, low single-digit royalties of product sales, an up-front sublicense and annual sublicense fees, a percentage of its sublicense revenues, and milestone payments upon achievement of certain commercial development milestones. The aggregate milestone payments under the patent license agreement are $450,000, of which $150,000 has been paid. At the request of Sangamo, the patent license has been amended to remove some of the intellectual property in this license agreement that does not affect the development of our technology. The patent license agreement still expires upon the expiration of the last patent covered by the patent license agreement. Based on currently issuedlicensed patents, and

currently filed patent applications, the patent license agreement will terminate on or about September 13, 2022.October 9, 2019. MIT may terminate the license agreement upon a material default by us that remains uncured following written notice. We may terminate the license agreement at any time upon six months’ written notice.

University of Utah Research Foundation

We entered into a patent license agreement with the University of Utah Research Foundation, on September 8, 2004, as subsequently amended, whereby Utah granted us a worldwide license to technology and patents relating to the use of ZFNs for all fields of use, including the right to sublicense. Under the patent license agreement, we are obligated to pay an annual license fee, low single-digit royalties of product sales, an up-front sublicense and annual sublicense fees, a percentage of its sublicense revenues, and milestone payments upon achievement of certain commercial development milestones. The license agreement expires on the expiration of the last patent covered by the patent license agreement.  Based on currently issued patents, the license agreement will terminate on or about March 2, 2025.  Utah may terminate the license agreement upon a default by us that remains uncured following written notice.  We may end the agreement at any time upon 90 days written notice.  

Johnson & Johnson

We entered into a sublicense agreement with Johnson & Johnson on May 9, 1996, whereby Johnson & Johnson granted us a worldwide exclusive sublicense to technology and patents for the research, development and commercialization of human and animal therapeutic and diagnostic products using engineered ZFPs, including the right to sublicense. These patents were originally exclusively licensed by Johnson & Johnson from The Scripps Research Institute. Under the sublicense agreement, we will pay low single-digit royalty payments based upon sales of license products by us or our sublicensees and a milestone payment upon the achievement of a commercial development milestone. The sublicense agreement expires upon the expiration of the last patent covered by the sublicense agreement. Based on currently issued patents and currently filed patent applications, the sublicense agreement will terminate on or about October 3, 2025.June 5, 2018. Johnson & Johnson has the right to terminate the sublicense agreement upon a breach or default by us that remains uncured following written notice of such default. We may terminate the sublicense agreement at any time upon sixty days’ written notice.

The Scripps Research Institute

We entered into a license agreement with The Scripps Research Institute on March 14, 2000, as subsequently amended, whereby The Scripps Research Institute granted us a worldwide exclusive license to technology and patents for the research, development and commercialization of products and services using engineered ZFPs, excluding the use of these engineered ZFPs in plant agriculture, therapeutics and diagnostics. Under the license agreement, we are required to pay a low-single digit royalty on sales of licensed products by us and our sublicensees, subject to an annual minimum. The license agreement expires upon the expiration of the last patent covered by the license agreement. Based on currently issued patents and currently filed patent applications, the license agreement will terminate on or about June 5, 2018. Each party may terminate the license agreement upon a material default by the other party that remains uncured following written notice.

Therapeutic Licenses

We have entered into licenses potentially useful for specific therapeutic uses of our genome editing technologies with the Regents of the University of California and the Children's Medical Center Corporation.  The patents included in these licenses relate to CNS disorders and hemoglobinopathies, respectively. These license include 3 patent families, including 5 issued foreign patents, 9 issued US patents, 34 pending foreign patents and 2 pending US patents.

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Sangamo Intellectual Property

In addition to our in-licensed patent portfolio, as of February 1, 2013,2016, we had 107141 families of Sangamo-owned or co-owned patent filings, including 84the acquired Ceregene patent estate, which totaled approximately 144 issued U.S. patents, 221510 granted foreign patents, 111110 pending U.S. patent applications and 361470 pending foreign patent applications. These patent filings are directed to the design, composition and use of ZFPs, ZFNs, and ZFP TFs and TALE proteins. Theproteins and CRISPR/Cas systems.

As of February 1, 2016, the earliest active patents in our portfolio are set to begin expiring in 2015,2017, with the majorityaverage expiration of our currently issued patents expiring between 2019 and 2021.being mid-2025. However, these patents in our estateportfolio may be subject to Patent Term Adjustment (due to delays in patent prosecution by the USPTO), Patent Term Extension (due to review of a patented product by a regulatory agency) or terminal disclaimer. Additionally, patents that may be issued from our pending applications will extend the patent exclusivity of our patent estate. Accordingly, all dates given above for patent expirations are estimates and the actual dates of expirations may differ.

We believe that our licensed patents and patent applications, as well as the issued Sangamo patents and pending Sangamo patent applications, in the aggregate, will provide us with a substantial intellectual property position in our commercial development of ZFP technology. In this regard, patents issued to us, applied for by us, or exclusively and non-exclusively licensed to us, cover the following types of inventions, processes and products: