þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Fiscal Year Ended December 31, 2004 |
Delaware
|
8731 | 68-0359556 | ||
(State or other jurisdiction
of incorporation or organization) |
(Primary Standard Industrial
Identification Number) |
(I.R.S. Employer
Classification Code Number) |
1
| our strategy; | |
| sufficiency of our cash resources; | |
| product development and commercialization of our products; | |
| clinical trials; | |
| revenues from existing and new collaborations; | |
| our research and development and other expenses; | |
| our operational and legal risks; and | |
| our plans, objectives, expectations and intentions and any other statements that are not historical facts. |
2
Item 1. | Business |
3
4
5
| ZFP Therapeutics act at the DNA level to regulate or modify gene expression, allowing direct modulation of the gene; | |
| ZFP Therapeutics circumvent the non-druggable properties of many drug targets; | |
| ZFP TFs can either activate or repress therapeutic gene targets; | |
| ZFP TFs can activate or repress the expression of all variant proteins (isoforms) encoded by a particular gene; |
6
| ZFP TFs may themselves be expressed either transiently, for acute indications, or longer term, for chronic conditions; | |
| ZFNs can be used to correct genes responsible for monogenic diseases or disrupt genes involved in disease processes; and | |
| Permanent gene correction or disruption requires only transient cellular expression of ZFNs. |
7
Clinical | ||||||||||
Indication | Development Stage | Therapeutic Approach | Comments | |||||||
Peripheral artery disease (PAD) Intermittent claudication |
Phase I
clinical trial |
ZFP TF (EW-A-401) up-regulation of VEGF-A to induce angiogenesis, or blood vessel formation, in the lower extremities | Sponsored by our partner, Edwards Lifesciences; evaluating product safety and preliminary evidence of increase in blood flow in lower extremities of patients with intermittent claudication. | |||||||
Diabetic neuropathy (DN) |
IND filed
January 2005 |
ZFP TF (SB-509) up-regulation of VEGF-A to protect and induce growth of neuronal cells | Evidence from animal models suggests that up-regulation of endogenous VEGF- A directly induces the growth and repair of neuronal cells. Trial is designed to evaluate product safety and preliminary trends in efficacy. | |||||||
Peripheral artery disease (PAD) Critical limb ischemia | Preclinical animal efficacy completed | ZFP TF up-regulation of VEGF-A to induce angiogenesis, or blood vessel formation, in the lower extremities | Sponsored by our partner, Edwards Lifesciences who has indicated that they intend to initiate a Phase I clinical trial in the more severe form of PAD at Duke University Medical School in 2005. | |||||||
Ischemic heart disease (IHD) |
Preclinical
(animal efficacy) |
ZFP TF up-regulation of VEGF-A to induce angiogenesis in the ischemic heart | Sponsored by our partner, Edwards Lifesciences; currently evaluating the preclinical efficacy of up-regulation of VEGF-A to induce angiogenesis in a porcine model of blood flow restriction. Edwards has indicated that they expect to have completed animal efficacy studies in 2005 and may initiate a clinical trial at Yale University School of Medicine. |
8
Clinical
Indication
Development Stage
Therapeutic Approach
Comments
Human immunodeficiency virus (HIV) infection and Acquired
immune deficiency syndrome (AIDS)
Research (cell-based studies)
ZFN-mediated disruption of CCR5 gene in circulating T- cells, dendritic cells and stem cells from patients infected with HIV
A well-documented mutation in CCR5 (CCR5 D32) exists in humans
and confers resistance to HIV infection. Sangamo scientists
currently optimizing use of ZFN gene disruption to recapitulate
the effects of this mutation in immune cells.
Congestive heart failure (CHF)
Preclinical
(animal efficacy)
ZFP TF down- regulation of phospholamban (PLN) to increase the contractility of heart muscle
Evidence from cellular and transgenic animal models suggests
that phospholamban plays a critical role in congestive heart
failure. Sangamo scientists currently evaluating the preclinical
efficacy of PLN repression to increase the contractility of
heart muscle in a rat model of congestive heart failure
X-linked severe combined immunodeficiency (X-linked SCID)
Research
(cell-based studies)
ZFN-mediated correction of IL2Rγ mutations in stem cells from patients with X-linked SCID
X-linked SCID is caused by loss-of- function mutations in the
IL2Rγ gene. Sangamo scientists currently optimizing
conditions for efficient gene correction in CD34+ cells.
Neuropathic pain (initial indication: severe cancer-related pain)
Preclinical
(animal efficacy)
ZFP TF down- regulation of cell surface receptors involved in pain signaling
Several pain targets have been identified and validated. Sangamo
scientists currently evaluating various formulations of ZFP TFs
for the down-regulation of cell surface receptor (TrkA), and
ion-channel (PN3) to choose the optimal ZFP TF and target
receptor
Sickle cell anemia (SCA)
Research
(cell-based studies)
ZFN-mediated correction of the ß-globin mutation in stem cells from patients with SCA
Bone marrow transplantation is currently the only efficacious
therapy available for SCA patients; however, most patients lack
matched donors. Currently optimizing conditions for efficient
gene correction at this locus in CD34+ cells
Nerve regeneration (nerve crush and spinal cord injury,
amyotrophic lateral sclerosis (ALS)
Preclinical
(animal efficacy)
ZFP TF up-regulation of VEGF-A to induce nerve regeneration
Sangamo scientists and collaborators are evaluating delivery
methods and dosing of ZFP TF.
9
Clinical
Indication
Development Stage
Therapeutic Approach
Comments
Cancer immunotherapy
Research
(cell-based studies)
ZFP TF up-regulation of GM-CSF and PEDF to induce an antitumor immune response combined with an anti-angiogenic factor.
Sangamo scientists evaluating the combination of ZFP TFs and
replication incompetent adenoviral vector as a means to
stimulate a cell-mediated, antitumor response and reduce the
vascularization of the tumor mass.
Age-related macular degeneration (AMD)
Preclinical
(animal efficacy)
ZFP TF antiangiogenic approach; ZFP TF mediated up- regulation of PEDF and down regulation of VEGF-A in the eye
Sangamo scientists evaluating a combination of ZFP TFs to
inhibit angiogenesis.
Wiskott-Aldrich Syndrome (WAS)
Research
(cell-based studies)
ZFN-mediated correction of the X- linked genetic mutation in the WAS gene in stem cells from infected patients
Sangamo scientists currently optimizing conditions for efficient
gene correction at this locus in CD34+ cells
ß-Thalassemia
Research
(cell-based studies)
ZFN-mediated correction of the genetic mutation in the ß-globin gene in stem cells from patients
Sangamo scientists currently optimizing conditions for efficient
gene correction at this locus in CD34+ cells
Peripheral Artery Disease (PAD) |
Diabetic Neuropathy (DN) |
10
Ischemic Heart Disease (IHD) |
Human Immunodeficiency Virus (HIV) and Acquired Immunodeficiency Syndrome (AIDS) |
11
Congestive Heart Failure (CHF) |
X-linked Severe Combined Immunodeficiency (X-linked SCID) |
Neuropathic Pain (Cancer Pain) |
Sickle Cell Anemia (SCA) |
12
β -Thalassemia |
Nerve Regeneration |
Cancer immunotherapy |
13
14
15
16
Patent No. | Subject | Issue Date | Expiration Date | |||||||||
6,013,453 | Binding proteins for recognition of DNA | January 11, 2000 | August 17, 2015 | |||||||||
6,453,242 | Selection of Sites for Targeting by Zinc Finger Proteins and Methods of Designing Zinc Finger Proteins to Bind to Preselected Sites | September 17, 2002 | January 12, 2019 |
17
Patent No.
Subject
Issue Date
Expiration Date
6,492,117
Zinc Finger Proteins Capable of Binding DNA
Quadruplexes
December 10, 2002
July 12, 2020
6,503,717
Methods of Using Randomized Libraries of Zinc Finger
Proteins for the Identification of Gene Function
January 7, 2003
December 6, 2020
6,511,808
Methods for Designing Exogenous Regulatory Molecules
January 28, 2003
April 27, 2021
6,534,261
Regulation of Endogenous Gene Expression in Cells Using
Zinc Finger Proteins
March 18, 2003
January 12, 2019
6,599,692
Functional Genomics Using Zinc Finger Proteins
July 29, 2003
September 14, 2019
6,607,882
Regulation of Endogenous Gene Expression in Cells Using
Zinc Finger Proteins
August 19, 2003
January 12, 2019
6,610,489
Pharmacogenomics and Identification of Drug Targets by
Reconstruction of Signal Transduction Pathways Based on
Sequences of Accessible Regions.
August 26, 2003
April 27, 2021
6,689,558
Cells for Drug Discovery
February 10, 2004
February 8, 2021
6,706,470
Gene Switches
March 16, 2004
May 30, 2020
6,733,970
Screening System for Zinc Finger Polypeptides for a
Desired Binding Ability
May 11, 2004
November 9, 2019
6,746,838
Nucleic Acid Binding Proteins (ZFP Design Rules)
June 8, 2004
May 26, 2018
6,777,185
Functional Genomics Using Zinc Finger Proteins
August 17, 2004
September 14, 2019
6,780,590
Gene Identification
August 24, 2004
September 14, 2019
6,785,613
Selection of Sites for Targeting by Zinc Finger Proteins
and Methods of Designing Zinc Finger Proteins to Bind to
Preselected Sites
August 31, 2004
January 12, 2019
6,794,136
Iterative Optimization in the Design of Binding
Proteins
September 21, 2004
November 20, 2020
6,824,978
Regulation of Endogenous Gene Expression in Cells Using
Zinc Finger Proteins
November 30, 2004
January 12, 2019
Patent No.
Subject
Issue Date
Expiration Date
5,356,802
Functional domains in
Flavobacterium okeanokoites
(
Fok
I) restriction endonuclease
October 18, 1994
October 18, 2011
5,436,150
Functional domains in Flavobacterium okeanokoites
(
Fok
I) restriction endonuclease
July 25, 1995
July 25, 2012
5,487,994
Insertion and deletion mutants of
Fok
I restriction
endonuclease
January 30, 1996
January 30, 2013
5,789,538
Zinc finger proteins with high affinity new DNA binding
specificities
August 4, 1998
February 3, 2015
5,792,640
General method to clone hybrid restriction endonucleases
using
lig
gene
August 11, 1998
April 3, 2012
5,916,794
Methods for inactivating target DNA and for detecting
conformational change in a nucleic acid
June 29, 1999
April 3, 2012
18
Patent No.
Subject
Issue Date
Expiration Date
5,925,523
Interaction trap assay, reagents and uses thereof
July 20, 1999
August 22, 2017
6,140,466
Zinc finger protein derivatives and methods therefor
October 31, 2000
January 18, 2014
6,200,759
Interaction trap assay, reagents and uses thereof
March 13, 2001
August 22, 2017
6,242,568
Zinc finger protein derivatives and methods therefor
June 5, 2001
June 5, 2018
6,265,196
Methods for inactivating target DNA and for detecting
conformational change in a nucleic acid
July 24, 2001
April 3, 2012
6,410,248
General Strategy for selecting high-affinity zinc finger
proteins for diverse DNA target sites
June 25, 2002
January 29, 2019
6,479,626
Poly-zinc finger proteins with improved linkers.
November 12, 2002
March 1, 2019
6,790,941
Zinc finger protein derivatives and methods therefor
September 14, 2004
January 18, 2014
19
20
21
| Small molecules in development from both in-house drug discovery programs of pharmaceutical companies such as Pfizer, Merck and Eli Lilly, as well as from biotechnology companies with expertise and capabilities in small molecule discovery and development such as Millennium Pharmaceuticals and Exelixis. | |
| Monoclonal antibody companies and product candidates from certain biotechnology firms such as Genentech, Amgen, Medimmune, as well as Abgenix, Medarex, Cambridge Antibody Technology, HGSI and Protein Design Labs. | |
| Protein pharmaceuticals under development at pharmaceutical and biotechnology companies such as Amgen, Genentech, Johnson & Johnson, Lilly and Biogen and numerous other pharmaceutical and small biotechnology firms. | |
| Gene therapy companies who are developing gene-based products in clinical trials. None of these products have yet been approved. Our competitors in this category may include Cell Genesys, which has different versions of the GVAX® cancer vaccine in Phase I Phase II and Phase III clinical studies; GenVec, which is working on gene-based therapies such as BIOBYPASS® for the treatment of coronary artery disease and a gene therapy approach to AMD; and Valentis, which is completing a Phase I human clinical trial of DeltavascTM planning to conduct pivotal clinical studies of VLTS 934 for the treatment of PAD and which may be competitive with Sangamos program in this area. | |
| Antisense therapeutics and RNA interference technology, or RNAi, which are two technologies that may compete with ZFP-Therapeutics in the development of novel therapeutic products acting through the regulation of gene expression. These technologies are being developed by numerous biotechnology companies including Isis, Sirna and Alnylam. |
22
| develop proprietary products; | |
| obtain access to gene transfer technology on commercially reasonable terms; | |
| develop and maintain products that reach the market first and are technologically superior to or are of lower cost than other products in the market; | |
| attract and retain scientific and product development personnel; | |
| obtain and enforce patents, licenses, or other proprietary protection for our products and technologies; | |
| obtain required regulatory approvals; and | |
| formulate, manufacture, market, and sell any product that we develop. |
23
24
25
| must be conducted in conformance with the FDAs good clinical practices and other applicable regulations; | |
| must meet requirements for institutional review board oversight; | |
| must follow Institutional Biosafety Committee (IBC) and NIH RAC guidelines; | |
| must meet requirements for informed consent; | |
| are subject to continuing FDA oversight; | |
| may require large numbers of test subjects; and | |
| may be suspended by our commercial partner, the FDA, or us at any time if it is believed that the subjects participating in these trials are being exposed to unacceptable health risks or if the FDA finds deficiencies in the IND or the conduct of these trials. |
26
27
| rate of adoption by healthcare practitioners; | |
| rate of a products acceptance by the target population; | |
| timing of market entry relative to competitive products; | |
| availability of alternative therapies; | |
| price of our product relative to alternative therapies; | |
| availability of third-party reimbursement; | |
| extent of marketing efforts by us and third-party distributors or agents retained by us; and | |
| side effects or unfavorable publicity concerning our products or similar products. |
28
| attract and retain qualified scientific and technical staff and management, particularly scientific staff with expertise to develop our early-stage technology into therapeutic products; | |
| obtain sufficient capital to support the expense of developing our technology platform and developing, testing, and commercializing products; | |
| develop a market for our products; | |
| successfully transition from a company with a research focus to a company capable of supporting commercial activities; and | |
| attract and enter into research collaborations with research and academic institutions and scientists. |
29
| For ZFP Therapeutics: |
| small molecule drugs | |
| monoclonal antibodies | |
| recombinant proteins | |
| antisense | |
| siRNA approaches |
| For our Enabling Technology Applications: |
| For target validation: antisense, siRNA | |
| For protein production: gene amplification, meganucleases, insulator technology | |
| For high throughput screening: cDNA, naturally occurring cell lines, gene amplification |
| In addition to possessing competing technologies, our competitors include biotechnology companies with: |
| substantially greater capital resources than ours; | |
| larger research and development staffs and facilities than ours; | |
| greater experience in product development and in obtaining regulatory approvals and patent protection; and |
| These organizations also compete with us to: |
| attract qualified personnel; | |
| attract parties for acquisitions, joint ventures or other collaborations; and | |
| license the proprietary technologies of academic and research institutions that are competitive with our technology, which may preclude us from pursuing similar opportunities. |
30
| changes in market valuations of similar companies; | |
| deviations in our results of operations from the guidance given by us or estimates of securities analysts; | |
| announcements by us or our competitors of new or enhanced products, technologies or services or significant contracts, acquisitions, strategic relationships, joint ventures or capital commitments; | |
| regulatory developments; | |
| additions or departures of key personnel; | |
| announcements by us or our partners providing updates on the progress or development status of ZFP Therapeutics; |
31
| future sales of our common stock or other securities by the company, management or directors, liquidation of institutional funds that comprised large holdings of Sangamo stock; and | |
| decreases in our cash balances. |
32
| we or our licensors were the first to make the inventions covered by each of our pending patent applications; | |
| we or our licensors were the first to file patent applications for these inventions; | |
| the patents of others will not have an adverse effect on our ability to do business; | |
| others will not independently develop similar or alternative technologies or reverse engineer any of our products, processes or technologies; | |
| any of our pending patent applications will result in issued patents; | |
| any patents issued or licensed to us or our collaborators or strategic partners will provide a basis for commercially viable products or will provide us with any competitive advantages; | |
| any patents issued or licensed to us will not be challenged and invalidated by third parties; or | |
| we will develop additional products, processes or technologies that are patentable. |
33
34
| states that stockholders may not act by written consent but only at a stockholders meeting; | |
| establishes advance notice requirements for nominations for election to the board of directors or proposing matters that can be acted upon at stockholders meetings; and | |
| limits who may call a special meeting of stockholders. |
35
Item 2. | Properties |
Item 3. | Legal Proceedings |
Item 4. | Submission of Matters to a Vote of Security Holders |
36
Item 5. | Market for the Registrants Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Price | |||||||||
High | Low | ||||||||
Year ended December 31, 2003
|
|||||||||
First Quarter
|
$ | 4.99 | $ | 2.60 | |||||
Second Quarter
|
$ | 5.35 | $ | 2.45 | |||||
Third Quarter
|
$ | 4.09 | $ | 2.60 | |||||
Fourth Quarter
|
$ | 5.50 | $ | 4.05 | |||||
Year ended December 31, 2004
|
|||||||||
First Quarter
|
$ | 8.02 | $ | 5.28 | |||||
Second Quarter
|
$ | 6.87 | $ | 5.60 | |||||
Third Quarter
|
$ | 5.85 | $ | 3.00 | |||||
Fourth Quarter
|
$ | 6.00 | $ | 3.75 |
37
Item 6. | Selected Consolidated Financial Data |
Year Ended December 31, | ||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Statement of Operations Data:
|
||||||||||||||||||||||
Total revenues
|
$ | 1,315 | $ | 2,579 | $ | 4,343 | $ | 4,885 | $ | 3,433 | ||||||||||||
Operating expenses:
|
||||||||||||||||||||||
Research and development
|
11,046 | 10,187 | 12,213 | 12,952 | 8,462 | |||||||||||||||||
General and administrative
|
4,256 | 3,594 | 3,815 | 3,638 | 2,602 | |||||||||||||||||
Stock-based compensation
|
663 | 567 | 1,499 | 3,674 | 4,852 | |||||||||||||||||
Restructuring charge(1)
|
| | 371 | | | |||||||||||||||||
Goodwill impairment(2)
|
| | 15,250 | | | |||||||||||||||||
Patent impairment(2)
|
| | 2,760 | | | |||||||||||||||||
Acquired in-process research and development
|
| | | 13,062 | | |||||||||||||||||
Total operating expenses
|
15,965 | 14,348 | 35,908 | 33,326 | 15,916 | |||||||||||||||||
Loss from operations
|
(14,650 | ) | (11,769 | ) | (31,565 | ) | (28,441 | ) | (12,483 | ) | ||||||||||||
Interest income, net
|
620 | 752 | 1,366 | 3,192 | 3,417 | |||||||||||||||||
Other income
|
212 | 584 | 435 | | | |||||||||||||||||
Net loss
|
(13,818 | ) | (10,433 | ) | (29,764 | ) | (25,249 | ) | (9,066 | ) | ||||||||||||
Deemed dividend upon issuance of convertible preferred stock
|
| | | | (1,500 | ) | ||||||||||||||||
Net loss attributable to common stockholders
|
$ | (13,818 | ) | $ | (10,433 | ) | $ | (29,764 | ) | $ | (25,249 | ) | $ | (10,566 | ) | |||||||
Basic and diluted net loss per common share
|
$ | (0.55 | ) | $ | (0.42 | ) | $ | (1.22 | ) | $ | (1.09 | ) | $ | (0.61 | ) | |||||||
Shares used in computing basic and diluted net loss per common
share
|
25,126 | 24,811 | 24,493 | 23,120 | 17,383 | |||||||||||||||||
(1) | See Note 3 in the footnotes to consolidated financial statements |
(2) | See Notes 1, 4 and 5 in the footnotes to consolidated financial statements |
Year Ended December 31, | |||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||
(In thousands) | |||||||||||||||||||||
Stock-Based Compensation:
|
|||||||||||||||||||||
Research and development stock-based compensation
|
$ | 649 | $ | 451 | $ | 1,150 | $ | 2,562 | $ | 2,885 | |||||||||||
General and administrative stock-based compensation
|
14 | 116 | 349 | 1,112 | 1,967 | ||||||||||||||||
Total stock-based compensation
|
$ | 663 | $ | 567 | $ | 1,499 | $ | 3,674 | $ | 4,852 | |||||||||||
December 31, | ||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash, cash equivalents, marketable securities, and interest
receivable
|
$ | 33,520 | $ | 44,343 | $ | 52,575 | $ | 62,560 | $ | 64,681 | ||||||||||
Working capital
|
32,028 | 43,714 | 52,115 | 61,102 | 64,477 | |||||||||||||||
Total assets
|
34,725 | 46,232 | 56,227 | 85,017 | 68,925 | |||||||||||||||
Long-term debt
|
| | | | | |||||||||||||||
Accumulated deficit
|
(97,115 | ) | (83,297 | ) | (72,864 | ) | (43,100 | ) | (17,851 | ) | ||||||||||
Total stockholders equity
|
32,377 | 44,661 | 54,246 | 82,349 | 66,890 |
38
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
39
Revenue Recognition |
Stock-Based Compensation |
40
Goodwill and Patents Impairment |
Years Ended December 31, 2004, 2003 and 2002 |
Total revenues |
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2004 | 2003 | Change | % Change | 2003 | 2002 | Change | % Change | ||||||||||||||||||||||||||
(In thousands, except percentage values) | |||||||||||||||||||||||||||||||||
Revenues:
|
|||||||||||||||||||||||||||||||||
Collaboration agreements
|
$ | 947 | $ | 2,205 | $ | (1,258 | ) | (57 | )% | $ | 2,205 | $ | 4,106 | $ | (1,901 | ) | (46 | )% | |||||||||||||||
Federal government research grants
|
368 | 374 | (6 | ) | (2 | )% | 374 | 237 | 137 | 58 | % | ||||||||||||||||||||||
Total revenues
|
$ | 1,315 | $ | 2,579 | $ | (1,264 | ) | (49 | )% | $ | 2,579 | $ | 4,343 | $ | (1,764 | ) | (41 | )% |
41
Operating Expenses |
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2004 | 2003 | Change | % Change | 2003 | 2002 | Change | % Change | ||||||||||||||||||||||||||
(In thousands, except percentage values) | |||||||||||||||||||||||||||||||||
Operating expenses:
|
|||||||||||||||||||||||||||||||||
Research and development
|
$ | 11,046 | $ | 10,187 | $ | (859 | ) | (8 | )% | $ | 10,187 | $ | 12,213 | $ | 2,026 | 17 | % | ||||||||||||||||
General and administrative
|
4,256 | 3,594 | (662 | ) | (18 | )% | 3,594 | 3,815 | 221 | 6 | % | ||||||||||||||||||||||
Stock-based compensation
|
663 | 567 | (96 | ) | (17 | )% | 567 | 1,499 | 932 | 62 | % | ||||||||||||||||||||||
Restructuring charge
|
| | | 0 | % | | 371 | 371 | 100 | % | |||||||||||||||||||||||
Goodwill impairment
|
| | | 0 | % | | 15,250 | 15,250 | 100 | % | |||||||||||||||||||||||
Patent impairment
|
| | | 0 | % | | 2,760 | 2,760 | 100 | % | |||||||||||||||||||||||
Total operating expenses
|
$ | 15,965 | $ | 14,348 | $ | (1,617 | ) | (11 | )% | $ | 14,348 | $ | 35,908 | $ | 21,560 | 60 | % |
Research and development expenses |
42
Program | Collaborator | Stage | ||
ZFP Therapeutics
|
Edwards | Clinical | ||
ZFP TF-engineered cell lines for the manufacture of protein
pharmaceuticals
|
Medarex | Research/Marketing |
Program | Stage | |
ZFP Therapeutics
|
Clinical | |
Gene Correction
|
Research | |
ZFP TF-engineered cell lines for small molecule drug discovery
|
Research/Marketing | |
ZFP TF-engineered cell lines for the manufacture of protein
pharmaceuticals
|
Research/Marketing | |
Discovery and validation of gene targets
|
Marketing | |
Agricultural biotechnology
|
Research |
General and administrative expenses |
Restructuring charge |
43
Stock-based compensation |
Impairment charges |
Interest income, net |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2004 | 2003 | Change | % Change | 2003 | 2002 | Change | % Change | |||||||||||||||||||||||||
(In thousands, except percentage values) | ||||||||||||||||||||||||||||||||
Interest income, net
|
$ | 620 | $ | 752 | $ | (132 | ) | (18 | )% | $ | 752 | $ | 1,366 | $ | (614 | ) | (45 | )% |
Interest income, net |
44
Other income |
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2004 | 2003 | Change | % Change | 2003 | 2002 | Change | % Change | |||||||||||||||||||||||||
(In thousands, except percentage values) | ||||||||||||||||||||||||||||||||
Other income
|
$ | 212 | $ | 584 | $ | (372 | ) | (64 | )% | $ | 584 | $ | 435 | $ | 149 | 34 | % |
Other income |
45
Payments Due by Period | ||||||||||||||||||||
Less than | 1-3 | 3-5 | More than | |||||||||||||||||
Contractual Obligations | Total | 1 Year | Years | Years | 5 Years | |||||||||||||||
Operating leases
|
$ | 4,562 | $ | 423 | $ | 1,334 | $ | 1,437 | $ | 1,368 | ||||||||||
License obligations
|
1,436 | 315 | 1,121 | | | |||||||||||||||
Total contractual obligations
|
$ | 5,998 | $ | 738 | $ | 2,455 | $ | 1,437 | $ | 1,368 | ||||||||||
1. A modified prospective method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123R for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of SFAS 123R that remain unvested on the effective date, or | |
2. A modified retrospective method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption. |
46
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
47
Item 8. | Financial Statements and Supplementary Data |
Page | ||||
49 | ||||
51 | ||||
52 | ||||
53 | ||||
54 | ||||
55 |
48
/s/ ERNST & YOUNG LLP |
49
50
/s/
ERNST & YOUNG
LLP
Table of Contents
December 31,
2004
2003
(In thousands, except
share and per share
amounts)
ASSETS
$
8,626
$
9,803
24,634
34,052
260
488
569
658
287
284
34,376
45,285
318
906
31
41
$
34,725
$
46,232
LIABILITIES AND STOCKHOLDERS EQUITY
$
906
$
815
657
636
785
120
2,348
1,571
129,482
127,927
(1
)
(97,115
)
(83,297
)
10
32
32,377
44,661
$
34,725
$
46,232
51
Year Ended December 31,
2004
2003
2002
(In thousands, except
per share amounts)
$
947
$
2,205
$
4,106
368
374
237
1,315
2,579
4,343
11,046
10,187
12,213
4,256
3,594
3,815
663
567
1,499
371
15,250
2,760
15,965
14,348
35,908
(14,650
)
(11,769
)
(31,565
)
620
752
1,366
212
584
435
$
(13,818
)
$
(10,433
)
$
(29,764
)
$
(0.55
)
$
(0.42
)
$
(1.22
)
25,126
24,811
24,493
52
Accumulated
Common Stock
Deferred
Other
Total
Stock
Accumulated
Comprehensive
Stockholders
Shares
Amount
Compensation
Deficit
Income
Equity
24,482,050
127,161
(2,125
)
(43,100
)
413
82,349
176,566
216
216
82,097
252
252
232
(232
)
489
1,342
1,831
(1,116
)
784
(332
)
(158
)
(158
)
(148
)
(148
)
(29,764
)
(29,764
)
(30,070
)
24,740,713
127,234
(231
)
(72,864
)
107
54,246
71,578
14
14
25,000
130
130
116,952
213
213
215
215
388
388
(52
)
15
(37
)
(81
)
(81
)
6
6
(10,433
)
(10,433
)
(10,508
)
24,954,243
127,927
(1
)
83,297
32
44,661
120,740
294
294
62,500
340
340
133,576
259
259
1
1
662
662
(93
)
(93
)
71
71
(13,818
)
(13,818
)
(13,841
)
25,271,059
$
129,482
$
$
(97,115
)
$
10
$
32,377
53
Year Ended December 31,
2004
2003
2002
(In thousands)
$
(13,818
)
$
(10,433
)
$
(29,764
)
611
847
955
360
868
1,146
796
(112
)
74
71
6
340
130
(367
)
15,250
2,760
1
178
1,198
662
388
301
188
228
(56
)
534
89
440
(335
)
7
248
(236
)
91
(122
)
(324
)
21
(33
)
(2
)
665
(255
)
(76
)
(10,164
)
(7,440
)
(8,876
)
(20,702
)
(44,803
)
(36,289
)
29,160
44,028
50,687
4,467
216
79
(24
)
(64
)
(69
)
8,434
(623
)
18,875
553
227
468
(285
)
553
227
183
(187
)
(1,177
)
(7,836
)
9,995
9,803
17,639
7,644
$
8,626
$
9,803
$
17,639
$
$
$
232
$
$
$
3
54
1. | Organization and Summary of Significant Accounting Policies |
55
Gross
Unrealized
Gains/
Estimated
Amortized Cost
(Losses)
Fair Value
$
7,243
$
(2
)
$
7,241
7,087
(42
)
7,045
14,330
(44
)
14,286
3,786
3
3,789
6,586
(27
)
6,559
10,372
(24
)
10,348
$
24,702
$
(68
)
$
24,634
$
7,578
$
8
$
7,586
6,251
19
6,270
13,829
27
13,856
14,175
2
14,177
6,022
(3
)
6,019
20,197
(1
)
20,196
$
34,026
$
26
$
34,052
56
57
58
Year Ended December 31,
2004
2003
2002
(In thousands, except per share data)
$
(13,818
)
$
(10,433
)
$
(29,764
)
663
567
1,499
(4,297
)
(2,515
)
(2,909
)
$
(17,452
)
$
(12,381
)
$
(31,174
)
$
(0.55
)
$
(0.42
)
$
(1.22
)
$
(0.70
)
$
(0.50
)
$
(1.27
)
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Risk-free interest rate
|
3.5 | % | 3.1 | % | 3.8 | % | ||||||
Expected life of option
|
5 yrs | 5 yrs | 5 yrs | |||||||||
Expected dividend yield of stock
|
0 | % | 0 | % | 0 | % | ||||||
Expected volatility
|
1.08 | 1.08 | 1.0 |
59
Year Ended December 31,
2004
2003
2002
$
(13,818
)
$
(10,433
)
$
(29,764
)
25,126
24,816
24,577
(5
)
(84
)
25,126
24,811
24,493
$
(0.55
)
$
(0.42
)
$
(1.22
)
1. A modified prospective method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123R for all share-based payments granted after the effective date and (b) based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of SFAS 123R that remain unvested on the effective date, or | |
2. A modified retrospective method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption. |
2. | Major Customers, Partnerships and Strategic Alliances |
60
61
3. | Acquisition of Gendaq Limited |
4. | Goodwill |
62
5. | Intangible Assets |
6. | Property and Equipment |
December 31, | ||||||||
2004 | 2003 | |||||||
(In thousands) | ||||||||
Laboratory equipment
|
$ | 1,728 | $ | 1,714 | ||||
Furniture and fixtures
|
725 | 716 | ||||||
Leasehold improvements
|
1,658 | 1,658 | ||||||
4,111 | 4,088 | |||||||
Less accumulated depreciation
|
(3,793 | ) | (3,182 | ) | ||||
$ | 318 | $ | 906 | |||||
7. | Commitments |
63
Operating
License
Fiscal Year:
Lease
Agreements
$
423
$
315
434
445
1,121
456
467
2,338
$
4,563
$
1,436
8. | Stockholders Equity |
64
Options Outstanding
Shares Available
Weighted-Average
for Grant of
Number of
Exercise per
Options
Shares
Share Price
1,828,295
2,374,483
$
6.33
856,872
(535,750
)
535,750
$
6.31
(95,946
)
$
0.31
253,554
(253,554
)
$
9.14
2,402,971
2,560,733
$
6.26
865,925
(652,700
)
652,700
$
4.05
(72,495
)
$
0.19
917
$
0.23
179,686
(179,686
)
$
7.99
2,796,799
2,961,252
$
5.81
873,398
(1,001,050
)
1,001,050
$
4.74
(120,740
)
$
2.44
315,466
(315,466
)
$
6.19
2,984,613
3,526,096
$
5.59
Options Outstanding | ||||||||||||||||||||
Weighted Average | ||||||||||||||||||||
Remaining | ||||||||||||||||||||
Contractual Life | ||||||||||||||||||||
Range of Exercise Price | Number of Shares | (In Years) | ||||||||||||||||||
$ | 0.05 | - | $ | 0.17 | 607,583 | 3.29 | ||||||||||||||
$ | 0.23 | - | $ | 3.61 | 592,768 | 8.17 | ||||||||||||||
$ | 3.81 | - | $ | 5.19 | 858,837 | 9.31 | ||||||||||||||
$ | 5.32 | - | $ | 7.49 | 734,750 | 7.24 | ||||||||||||||
$ | 7.57 | - | $ | 14.60 | 603,658 | 6.29 | ||||||||||||||
$ | 14.87 | - | $ | 38.00 | 128,500 | 6.15 | ||||||||||||||
3,526,096 | 7.02 | |||||||||||||||||||
65
2004 Stock Option Plan
|
6,510,709 | |||
2000 Employee Stock Purchase Plan
|
987,764 | |||
7,498,473 | ||||
9. | Comprehensive Loss |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Net loss
|
$ | (13,818 | ) | $ | (10,433 | ) | $ | (29,764 | ) | |||
Unrealized (loss) on investments
|
(93 | ) | (81 | ) | (158 | ) | ||||||
Change in foreign currency translation adjustment
|
| | 219 | |||||||||
Other than temporary loss on investments
|
71 | 6 | | |||||||||
Reclassification of loss on foreign currency translation
adjustment
|
| | (367 | ) | ||||||||
Comprehensive loss
|
$ | (13,840 | ) | $ | (10,508 | ) | $ | (30,070 | ) | |||
10. | Loans to Officers |
66
11. | Income Taxes |
December 31, | |||||||||
2004 | 2003 | ||||||||
Deferred tax assets:
|
|||||||||
Net operating loss carryforwards
|
$ | 18,363 | $ | 12,161 | |||||
Research and development tax credit carryforwards
|
2,774 | 1,697 | |||||||
Capitalized research
|
1,591 | 1,767 | |||||||
Other
|
1,288 | 581 | |||||||
24,016 | 16,206 | ||||||||
Valuation allowance
|
(24,016 | ) | (16,206 | ) | |||||
Net deferred tax assets
|
$ | | $ | | |||||
12. | Accounts Payable and Accrued Liabilities |
December 31, | ||||||||
2004 | 2003 | |||||||
Accounts payable
|
$ | 404 | $ | 139 | ||||
Accrued professional fees
|
383 | 318 | ||||||
Accrued research and collaboration expense
|
65 | 154 | ||||||
Accrued severance
|
| 153 | ||||||
Other
|
54 | 51 | ||||||
Total accounts payable and accrued liabilities
|
$ | 906 | $ | 815 | ||||
67
13. | Quarterly Financial Data (Unaudited) |
Fiscal Year 2004 | Fiscal Year 2003 | |||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||||||||
Revenues
|
$ | 811 | (2) | $ | 132 | $ | 172 | $ | 200 | $ | 551 | $ | 518 | $ | 507 | $ | 1,003 | (3) | ||||||||||||||
Expenses
|
$ | 3,990 | $ | 3,529 | $ | 4,847 | $ | 3,600 | $ | 3,622 | $ | 4,221 | $ | 3,473 | $ | 3,032 | ||||||||||||||||
Net loss
|
$ | (2,942 | ) | $ | (3,262 | ) | $ | (4,571 | ) | $ | (3,043 | ) | $ | (2,895 | ) | $ | (3,274 | ) | $ | (2,584 | ) | $ | (1,680 | ) | ||||||||
Net loss per share(1)
|
$ | (0.12 | ) | $ | (0.13 | ) | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.13 | ) | $ | (0.10 | ) | $ | (0.07 | ) |
(1) | Net loss per share is calculated based on the weighted average number of common shares outstanding during the quarter less repurchase shares in 2003. |
(2) | Q1 2004 revenues include a $600,000 milestone payment that was received upon the filing of the IND for PAD. |
(3) | Q4 2003 revenues include a $400,000 milestone payment that was received upon the completion and delivery to Edwards of research vector constructs and associated supporting data. |
68
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; | |
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and | |
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Item 9B. | Other Information |
69
Item 10. | Directors and Executive Officers of the Registrant |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits, Financial Statement Schedules and Reports on Form 8-K |
1. Financial Statements See Index to Consolidated Financial Statements in Item 8 of the report. | |
2. Financial Statement Schedules None. | |
3. See Index to Exhibits. |
70
71
72
SANGAMO BIOSCIENCES, INC.
By:
/s/
EDWARD O.
LANPHIER II
Edward O. Lanphier II
President, Chief Executive Officer and Director
Signature
Title
Date
/s/
EDWARD O.
LANPHIER II
President, Chief Executive Officer and Director (Principal
Executive Officer)
February 23, 2005
/s/
GREG S. ZANTE
Senior Director, Finance and Administration (Principal Financial
and Accounting Officer)
February 23, 2005
/s/
WILLIAM G.
GERBER, M.D.
Director
February 23, 2005
/s/
JON E. M. JACOBY
Director
February 23, 2005
/s/
JOHN W. LARSON
Director
February 23, 2005
/s/
WILLIAM J.
RUTTER, PH.D.
Director
February 23, 2005
/s/
MICHAEL C. WOOD
Director
February 23, 2005
Table of Contents
Exhibit
Number
Description of Document
3
.1
Amended and Restated Certificate of Incorporation (incorporated
by reference to Exhibit 3.1 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed March 31, 2000).
3
.2
Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 to the Companys Registration Statement on
Form S-1/A (Registration No. 333-30134) filed
March 31, 2000).
4
.1
Form of Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.11 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed March 31, 2000).
10
.1
1995 Stock Option Plan (incorporated by reference to
Exhibit 10.16 to the Companys Registration Statement
on Form S-1/A (Registration No. 333-30134) filed
March 14, 2000.
10
.2^
2000 Stock Incentive Plan (incorporated by reference to
Exhibit 10.1 to the Companys Registration Statement
on Form S-1/A (Registration No. 333-30134) filed
February 24, 2000).
10
.3^
2000 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 10.2 to the Companys Registration Statement
on Form S-1/A (Registration No. 333-30134) filed
February 24, 2000).
10
.4
Form of Indemnification Agreement entered into between Sangamo
and each of its directors and executive officers (incorporated
by reference to Exhibit 10.4 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed February 24, 2000).
10
.5
License Agreement, between Sangamo and Baxter Healthcare
Corporation, dated January 11, 2000 (incorporated by
reference to Exhibit 10.7 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed February 24, 2000).
10
.6
Sublicense Agreement, by and between Sangamo and
Johnson & Johnson, dated May 9, 1996 (incorporated
by reference to Exhibit 10.8 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed February 24, 2000).
10
.7
Second Amendment to License Agreement between Sangamo and
Edwards Lifesciences LLC (formerly Baxter Healthcare
Corporation), dated November 14, 2002 (incorporated by
reference to the Companys Annual Report on Form 10-K,
filed March 27, 2003).
10
.8
Patent License Agreement between Sangamo and Massachusetts
Institute of Technology dated May 9, 1996, (incorporated by
reference to Exhibit 10.12 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed March 14, 2000).
10
.9
License Agreement between Sangamo and the Johns Hopkins
University dated July 16, 1998, as amended (incorporated by
reference to Exhibit 10.13 to the Companys Amendment
No. 2 to the Registration Statement on Form S-1/A
(Registration No. 333-30134) filed March 14, 2000).
10
.10
First Amendment to Research Funding Agreement between Sangamo
and Edwards Lifesciences LLC (formerly Baxter Healthcare
Corporation), dated November 14, 2002 (incorporated by
reference to the Companys Annual Report on Form 10-K,
filed March 27, 2003).
10
.11^
Employment Agreement, between Sangamo and Edward O.
Lanphier II, dated June 1, 1997 (incorporated by
reference to Exhibit 10.15 to the Companys
Registration Statement on Form S-1/A (Registration No.
333-30134) filed March 14, 2000).
10
.12
Research Funding Agreement, by and between Sangamo and Edwards
Lifesciences LLC (formerly Baxter Healthcare Corporation), dated
January 11, 2000 (incorporated by reference to
Exhibit 10.17 to the Companys Registration Statement
on Form S-1/A (Registration No. 333-30134) filed
March 14, 2000).
10
.13
License Agreement by and between The Scripps Research Institute
and Sangamo, dated March 14, 2000 (incorporated by
reference to Exhibit 10.19 to the Companys
Registration Statement on Form S-1/A (Registration
No. 333-30134) filed April 5, 2000).
10
.14
Third Amendment to Research Funding Agreement between Sangamo
and Edwards Lifesciences LLC (formerly Baxter Healthcare
Corporation), dated August 14, 2003 (incorporated by
reference to Exhibit 10.21 to the Companys Annual
Report on Form 10-K/A, filed April 1, 2004).
Table of Contents
Exhibit
Number
Description of Document
10
.15^
Separation Agreement and Release between Sangamo and Carl
Pabo, Ph.D., dated June 20, 2003 (incorporated by
reference to Exhibit 10.22 to the Companys Annual
Report on Form 10-K/A filed April 27, 2004).
10
.16^
Separation Agreement and Release between Sangamo and Janet
Nibel, dated August 13, 2003 (incorporated by reference to
Exhibit 10.23 to the Companys Annual Report on Form
10-K/A filed April 27, 2004).
10
.17^
Separation Agreement and Release between Sangamo and Peter
Bluford, dated October 29, 2004 (incorporated by reference
to Exhibit 99.1 to the Companys Form 8-K filed
November 4, 2004).
10
.18^
2004 Stock Incentive Plan (incorporated by reference to Appendix
C of the Companys Definitive Proxy Statement on Schedule
14A filed April 29, 2004).
10
.19
Triple Net Laboratory Lease, between Sangamo and Point Richmond
R&D Associates II, LLC, dated May 23, 1997
(incorporated by reference to Sangamos Registration
Statement on Form S-1 (Reg. No. 333-30314), as amended.
10
.20
First Amendment to Triple Net Laboratory Lease, between Sangamo
and Point Richmond R&D Associates II, LLC, dated
March 12, 2004.
21
.1
Subsidiaries of the Company (incorporated by reference to
Exhibit 21.1 to the Companys Annual Report on Form
10-K, filed March 27, 2003).
23
.1
Consent of Independent Registered Public Accounting Firm.
31
.1
Rule 13a-14(a) Certification of Chief Executive Officer.
31
.2
Rule 13a-14(a) Certification of Principal Financial Officer.
32
.1
Certification Pursuant to 18 U.S.C. Section 1350.
Confidential treatment has been granted for certain information
contained in this document pursuant to an order of the
Securities and Exchange Commission. Such information has been
omitted and filed separately with the Securities and Exchange
Commission.
^
Indicates management contract or compensatory plan or
arrangement.
73
Exhibit 10.20
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (First Amendment) is entered into as of March 12, 2004 (the Effective Date), by and between POINT RICHMOND R&D ASSOCIATES II, LLC, a California limited liability company, successor-in-interest to Point Richmond R&D II, an LLC (Landlord), and SANGAMO BIOSCIENCES, INC., a Delaware corporation (Tenant), with reference to the following facts:
A. Landlord and Tenant entered into that certain Triple Net Laboratory Lease dated May 23, 1997, together with an Addendum thereto dated May 28, 1997 (collectively, the Original Lease), pursuant to which Landlord leased to Tenant certain premises consisting of approximately 9,770 square feet of rentable area (the Premises) in the building located at 501 Canal Boulevard, Point Richmond, California (the Building). Thereafter, the Original Lease was amended by (i) the letter agreement dated June 15, 1999 (the June 15 Letter), pursuant to which, among other things, additional space in the Building consisting of approximately 5,009 square feet of rentable area was added to the Premises and the term of the Original Lease was extended to August 31, 2004, (ii) the letter dated April 21, 2000 (the April 21 Letter), pursuant to which, among other things, the rentable area of the Premises was amended, and (iii) the letter agreement dated November 3, 2000 (the November 3 Letter), pursuant to which additional space in the Building consisting of approximately 7,000 square feet of rentable area was added to the Premises (the Original Lease, together with the June 15 Letter, the April 21 Letter and the November 3 Letter, are referred to collectively herein as the Lease).
B. The Lease by its terms is scheduled to expire on August 31, 2004, and the parties desire to extend the term of the Lease and amend the Lease in certain other respects, all on the following terms and conditions.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Incorporation of Recitals and Defined Terms . Recitals A and B above are hereby incorporated herein. Capitalized terms which are not otherwise defined in this First Amendment shall have the meanings set forth in the Lease.
2. Confirmation of Premises; Percentage Share . Landlord and Tenant hereby confirm that, as of the Effective Date (a) the Premises contain approximately 21,860 square feet of rentable area and consist of Suites A, A-2 and B in the Building, as shown on Exhibit A attached hereto; and (b) the percentage to be used by the parties for purposes of calculating Tenants Pro Rata Share of Operating Expenses is 26.77%.
3. Condition of Premises; Parking . As of the Effective Date, Tenant is in possession of the Premises and, provided that there is no material change in the condition of the Premises between the Effective Date and the commencement of the Extended Term (defined below) ( i.e. , there has been no material damage or destruction to the Premises), Tenant agrees to accept the Premises as of the commencement of the Extended Term in their as is condition. During the
Extended Term, Tenant shall continue to have the use of 76 unreserved off-street parking spaces, at no cost to Tenant.
4. Extension of Term .
(a) Extended Term . The term of the Lease is hereby extended for a period of 120 months and shall expire on August 31, 2014 (the Extended Expiration Date), unless sooner terminated or extended in accordance with the terms of the Lease (as amended hereby). That portion of the term of the Lease commencing as of September 1, 2004 and ending on the Extended Expiration Date shall be referred to herein as the Extended Term.
(b) Accelerated Expiration . Tenant shall have the one time right (Acceleration Option) to accelerate the Extended Expiration Date to August 31, 2011 (the Accelerated Expiration Date), with respect to the Premises only (specifically excluding any Refusal Space leased by Tenant pursuant to Section 9 below), if (i) Tenant is not in default under the Lease (beyond the expiration of all applicable cure and notice periods) as of the date Tenant provides Landlord with Tenants notice of acceleration (the Acceleration Notice), and (ii) Tenant delivers the Acceleration Notice no later than September 1, 2010. If Tenant exercises the Acceleration Option, (A) Tenant shall remain liable for all Base Monthly Rent, Tenants Pro Rata Share of Operating Expenses, and other sums accrued and due under the Lease up to and including the Accelerated Expiration Date, even though billings for any such items may occur subsequent to the Accelerated Expiration Date, and (B) Landlord shall remain liable for the reconciliation of Operating Expenses for periods prior to the Accelerated Expiration Date in accordance with the terms of Article 4 of the Lease and the prompt refund to Tenant of any excess Operating Expenses paid by Tenant. Tenant shall not be required to pay an early termination fee or penalty in connection with the Acceleration Option. As of the date Tenant provides Landlord with a timely Acceleration Notice, any unexercised rights or options of Tenant to extend the term of the Lease or to expand the Premises (whether pursuant to any expansion options, rights of first or second refusal, rights of first or second offer, or other similar rights), and any tenant improvement allowance not claimed by Tenant in accordance with the Lease, as amended hereby, as of such date, shall immediately be deemed terminated and no longer available or of any further force or effect.
5.
Base
Monthly Rent
. The schedule of Base Monthly Rent payable with respect to the
Premises during the Extended Term is the following:
APPROXIMATE
MONTHLY RATE
PERIOD
PER SQUARE FOOT
BASE MONTHLY RENT
$
1.60
$
34,976.00
$
1.64
$
35,850.40
$
1.68
$
36,746.66
$
1.72
$
37,665.33
2
APPROXIMATE | ||||||||
MONTHLY RATE | ||||||||
PERIOD | PER SQUARE FOOT | BASE MONTHLY RENT | ||||||
September 1, 2008 August 31, 2009
|
$ | 1.77 | $ | 38,606.96 | ||||
|
||||||||
September 1, 2009 August 31, 2010
|
$ | 1.81 | $ | 39,572.13 | ||||
|
||||||||
September 1, 2010 August 31 , 2011
|
$ | 1.86 | $ | 40,561.44 | ||||
|
||||||||
September 1, 2011 August 31, 2012
|
$ | 1.90 | $ | 41,575.47 | ||||
|
||||||||
September 1, 2012 August 31, 2013
|
$ | 1.95 | $ | 42,614.86 | ||||
|
||||||||
September 1, 2013 August 31, 2014
|
$ | 2.00 | $ | 43,680.23 |
6. Cap on Tenants Pro Rata Share of Operating Expenses . During the Extended Term, Tenant shall continue to pay Tenants Pro Rata Share of Operating Expenses in accordance with the terms of the Lease; provided however, that during the Extended Term, Tenants Pro Rata Share of Operating Expenses shall not increase by more than 5% per calendar year on a compounding and cumulative basis throughout the Extended Term (e.g. Tenants Pro Rata Share of Operating Expenses for 2005 shall not exceed 105% of Tenants Pro Rata Share of Operating Expenses for 2004; Tenants Pro Rata Share of Operating Expenses for 2006 shall not exceed 105% of the maximum allowable amount of Tenants Pro Rata Share of Operating Expenses permitted for 2005; etc.), By way of illustration, if Tenants Pro Rata Share of Operating Expenses for 2004 are $0.60 per rentable square foot per month, then Tenants Pro Rata Share of Operating Expenses for 2005 shall not exceed $0.63 per rentable square foot per month, and Tenants Pro Rata Share of Operating Expenses for 2006 shall not exceed $0.6615 per rentable square foot per month. If Tenant exercises the Extension Option(s) provided in Section 8 below, Tenants Pro Rata Share of Operating Expenses during each Option Term (defined below) shall be subject to the foregoing 5% per annum cap, with the cap on Tenants Pro Rata Share of Operating Expenses for the first calendar year during each Option Term to be 5% in excess of the maximum allowable amount of Tenants Pro Rata Share of Operating Expenses permitted for the calendar year immediately preceding the first calendar year of the applicable Option Term; provided, however, Landlord shall have the right, by written notice delivered to Tenant no later than sixty (60) days prior to the commencement date of the applicable Option Term, to designate that the cap on Tenants Pro Rata Share of Operating Expenses for the first calendar year during such Option Term shall instead be 5% in excess of the actual Tenants Pro Rata Share of Operating Expenses for the calendar year immediately preceding the first calendar year of such Option Term.
7. Tenant Improvement Allowance .
(a) Landlord agrees to contribute the sum of $43,720.00 per year (collectively, the Extended Term Allowance) for each year during the Extended Term ( i.e . each 12 month period from September 1 through August 31 during the Extended Term) toward Tenants cost of performing Alterations in the Premises in accordance with the terms and conditions of Section 7.3 of the Lease (the Extended Term Alterations). The first annual increment of the Extended Term Allowance shall be available to Tenant, on and after September 1, 2004, and each subsequent annual increment of the Extended Term Allowance shall be available to Tenant on and after each September 1 thereafter through August 31, 2014.
3
If Tenant does not submit a request for full payment of any annual increment of the Extended Term Allowance to Landlord for any year in which such annual increment of the Extended Term Allowance is available, such unused amount shall be added to the increment of the Extended Term Allowance available to Tenant during the subsequent years. Any portion of the Extended Term Allowance that is not claimed by Tenant prior to August 31, 2014, shall accrue to the sole benefit of Landlord, and Tenant shall not be entitled to any credit, abatement or other concession in connection therewith. The Extended Term Allowance may only be used for hard and/or soft costs in connection with the Extended Term Alterations; and in no event shall the Extended Term Allowance be used for the purchase of equipment, furniture or other items of personal property of Tenant. Tenant shall be responsible for all elements of the design of Tenants plans for the Extended Term Alterations (including, without limitation, compliance with law, functionality of design and the structural integrity of the design), and Landlords approval of Tenants plans therefor shall in no event relieve Tenant of the responsibility for such design.
(b) The Extended Term Allowance shall be paid to Tenant or, at Landlords option, to the order of the contractor that performed the applicable Extended Term Alterations, within thirty (30) days following receipt by Landlord of receipted bills or invoices covering all labor and materials expended and used in such Extended Term Alterations. Notwithstanding anything herein to the contrary, Landlord shall not be obligated to disburse any portion of the Extended-Term Allowance during the continuance of a default by Tenant under the Lease (beyond the expiration of all applicable cure and notice periods), and Landlords obligation to disburse shall only resume when and if such default is cured. Landlord and Tenant acknowledge that all Extended Term Alterations shall, without compensation or credit to Tenant, become part of the Premises and the property of Landlord at the time of their installation and shall remain in the Premises, unless, at the time of Landlords consent to the applicable Extended Term Alterations, Landlord notified Tenant in writing that Landlord would require removal of such Extended Term Alterations from the Premises upon the expiration or earlier termination of the Lease. Landlord shall not be entitled to receive (or deduct from the Extended Term Allowance) any construction management fee or oversight fee in connection with any Extended Term Alterations, Notwithstanding the foregoing, Landlord and Tenant agree that if the property management company (currently Wareham Property Group) provides construction management or administrative services in connection with any Extended Term Alterations, such property management company shall be entitled to a construction management or administration fee in connection with any Extended Term Alterations in accordance with the schedule contained on Exhibit D attached hereto.
8. Extension Options .
(a) Landlord hereby grants Tenant options to extend the Extended Term (each, an Extension Option) for two (2) additional periods of five (5) years each (each, an Option Term), commencing immediately after the expiration of the Extended Term, in the case of the first Extension Option, or the expiration of the first Option Term, in the case of the Second Extension Option. Each Extension Option shall be upon the terms and conditions contained in the Lease (as amended hereby), except that (1) the initial Base Monthly Rent for the Premises during each Option Term shall be equal to 95% of the fair market rent for the Premises as of the commencement of the applicable Option Term ( i.e. , the rate that a willing, comparable, new ( i.e. , non-renewal), non-equity tenant would pay, and that a willing landlord of
4
comparable research and development laboratory space in Richmond, California would accept at arms length), determined in the manner set forth in subparagraph (b) below, and (2) Tenant shall not be entitled to the Extended Term Allowance during the Option Terms. The fair market rent shall not take into account any Alterations constructed by Tenant and paid for by Tenant without any reimbursement from Landlord. Tenants election to exercise an Extension Option (Tenants Extension Notice) must be given to Landlord in writing not less than twelve (12) full calendar months prior to the expiration of the then current term of the Lease. Notwithstanding anything to the contrary contained herein, an Extension Option exercised by Tenant shall, at Landlords option, be null and void and of no further force or effect if Tenant is in default under the Lease (beyond the expiration of all applicable cure and notice periods) as of the date of Tenants Extension Notice for such Extension Option.
(b) If Tenant properly exercises an Extension Option, the initial Base Monthly Rent during the applicable Option Term shall be determined in the following manner. Landlord shall advise Tenant in writing of Landlords good faith, reasonable determination of the fair market rent (based on the definition of fair market rental set forth above) for the Premises as of the commencement of the applicable Option Term (Landlords Fair Market Proposal) no less than two hundred seventy (270) days prior to the commencement of the applicable Option Term, provided Landlords notification to Tenant of Landlords Fair Market Proposal shall specifically state that Tenant shall have one hundred twenty (120) days after receipt of Landlords Fair Market Proposal within which to approve or disapprove Landlords Fair Market Proposal. If Tenant does not disapprove in writing Landlords Fair Market Proposal within one hundred ten (110) days after receipt of Landlords Fair Market Proposal, Landlord shall provide Tenant written notice (Second Notice) that Tenants failure to respond within a period of ten (10) days shall be deemed Tenants approval of Landlords Fair Market Proposal. Tenants failure to respond within ten (10) days after Landlords delivery of the Second Notice shall be deemed to be an approval of Landlords Fair Market Proposal and Landlords Fair Market Proposal shall be final and binding upon the parties. In the event Tenant timely disapproves in writing Landlords Fair Market Proposal, Landlord and Tenant shall attempt in good faith to agree upon the fair market rent within thirty (30) days of Tenants notice of disapproval. If after such thirty (30) day period, Landlord and Tenant have not agreed in writing as to the fair market rent, the parties shall determine the fair market rent in accordance with the procedure set forth below.
(i) Within ten (10) days after the expiration of such thirty (30) day period, Tenant shall notify Landlord of the name and address of the broker appointed to represent Tenant (Tenants Broker). Tenants Broker shall be licensed in the State of California, engaged in the brokerage business in the San Francisco-East Bay commercial real estate market for at least the immediately preceding five (5) years, and familiar with the research and development laboratory market in Richmond, California. Within thirty (30) days of the appointment of Tenants Brokers, Tenant shall advise Landlord in writing of Tenants Brokers good faith, reasonable determination of the fair market rent for the Premises as of the commencement of the applicable Option Term (Tenants Brokers Fair Market Proposal). Landlord shall have ten (10) days after receipt of Tenants Brokers Fair Market Proposal within which to approve or disapprove Tenants Brokers Fair Market Proposal. In the event Landlord disapproves in writing Tenants Brokers Fair Market Proposal, Landlord and Tenant shall attempt in good faith to agree upon the fair market rent within thirty (30) days of Landlords notice of disapproval. If after such thirty (30) day period, Landlord and Tenant have not agreed
5
in writing as to the fair market rent, the parties shall determine the fair market rent in accordance with the procedure set forth below.
(ii) If Landlord and Tenant are unable to agree upon the fair market rent within such second (2 nd ) thirty (30)-day period, Landlord and Tenants Broker shall, within ten (10) days thereafter, appoint a third broker meeting the qualifications set forth above with the added qualification that such third broker shall not have previously acted for either Landlord or Tenant. Within thirty (30) days following the appointment of the third broker, the third broker shall deliver his or her written determination of the fair market rent to Landlord and Tenant. If the third brokers determination of fair market rent falls between Landlords Fair Market Proposal and Tenants Brokers Fair Market Proposal, the third brokers determination shall be deemed to be the fair market rent for purposes of determining the initial Base Monthly Rent for the Premises for the applicable Option Term. If the third brokers determination falls outside of Landlords Fair Market Proposal and Tenants Brokers Fair Market Proposal, whichever of Landlords Fair Market Proposal and Tenants Brokers Fair Market Proposal most closely reflects the fair market rent as determined by the third broker shall be deemed to be the fair market rent for purposes of determining the initial Base Monthly Rent for the Premises for the applicable Option Term, and such determination shall be binding on both Landlord and Tenant. Tenant shall pay all costs, commissions and fees of Tenants Broker in connection with such determination of the fair market rent. The costs and fees of the third broker shall be paid one-half by Landlord and one-half by Tenant.
(c) If the amount of the fair market rent has not been determined in accordance with this Section 8 as of the commencement of the applicable Option Term, then Tenant shall continue to pay the Base Monthly Rent in effect at the expiration of the Extended Term or the expiration of the first Option Term, as applicable, until the amount of the fair market rent is determined. When such determination is made, Tenant shall pay any deficiency to Landlord within thirty (30) days after such determination or Landlord shall credit any overpayment by Tenant against Tenants next accruing rent under the Lease, as appropriate.
(d) The Base Monthly Rent payable hereunder during each Option Term shall be increased by two percent (2%) on each anniversary of the commencement date of the applicable Option Term.
9. Right of First Refusal .
(a) Commencing on the Effective Date and continuing throughout the Extended Term (the Right of First Refusal Period), Tenant shall have the right of first refusal (the Right of First Refusal) to lease the space known as Suite C and Suite C-2, as shown on Exhibit B attached hereto (each, a Refusal Space) as and when such Refusal Space becomes available to lease during the Extended Term.
(b) During the Right of First Refusal Period, prior to entering into a letter of intent with a bona fide third party prospective tenant with respect to any Refusal Space, Landlord shall give Tenant a written notice (Offer Notice), accompanied by the letter of intent for the applicable Refusal Space which identifies the Refusal Space, the rental rate, parking terms, the term of the lease, any tenant improvement allowances or improvements, alterations or other
6
monetary concessions to be provided by Landlord in connection with such prospective tenant, and all other material terms with respect to the proposed lease of the Refusal Space (collectively, the Material Terms). Tenant shall have a period of five (5) business days after Tenants receipt of the Offer Notice in which to notify Landlord (Response Notice) whether Tenant desires to lease such Refusal Space on the Material Terms.
(c) If Tenant provides a Response Notice agreeing to lease the Refusal Space on the Material Terms, Landlord shall prepare an amendment to the Lease (the Expansion Amendment) adding such Refusal Space to the Premises on the Material Terms set forth in the Offer Notice. The Expansion Amendment shall reflect changes in the Base Monthly Rent, rentable area of the Premises, Tenants Pro Rata Share of Operating Expenses and other appropriate terms. A copy of the Expansion Amendment shall be (i) sent to Tenant within ten (10) days after Landlords receipt of the Response Notice, and (ii) executed by Landlord and Tenant within thirty (30) days after Tenants receipt of same, but, upon Landlords receipt of a Response Notice, an otherwise valid exercise of Tenants Right of First Refusal shall be fully effective whether or not the Expansion Amendment is executed.
(d) Unless otherwise provided in the Offer Notice, and provided that there has been no material change in the condition of the Refusal Space after the date of the Response Notice ( i.e. , there has been no material damage or destruction to the Refusal Space), each Refusal Space (including improvements and personalty, if any) shall be accepted by Tenant in its condition and as-built configuration existing on the date the term for such Refusal Space commences.
(e) The rights of Tenant under this Section 9 with respect to a particular Refusal Space shall terminate, with respect to such Refusal Space only, if Landlord has delivered two (2) Offer Notices for such Refusal Space and Tenant has failed to timely provide a Response Notice for each such Offer Notice. In addition, the rights of Tenant under this Section 9 shall terminate upon Tenants failure to cure a monetary default under the Lease after the expiration of applicable notice and cure periods at any time during the thirty six (36) months immediately preceding the date Landlord would have been obligated to provide Tenant an Offer Notice.
(f) The Right of First Refusal granted herein is subject and subordinate to the expansion rights (whether such rights are designated as a right of first offer, right of first refusal, expansion option or otherwise) of other existing tenants of the Building with respect to the Refusal Space that are reflected in such tenants leases as of the Effective Date, as such rights are summarized on Exhibit C attached hereto.
10. Deleted Provisions . The rights of first refusal contained in Section 19.12.3 of the Original Lease and Section 6 of the June 15 Letter, and the options to extend contained in Section 3.1 of the Original Lease and the November 3 Letter are hereby deleted in their entireties and of no further force or effect.
11. Real Estate Fee . Within ten (10) business days after the mutual execution and delivery of this First Amendment, Landlord shall pay CB Richard Ellis, Inc. a fee in connection with this First Amendment in the amount of $87,440.00. Landlord shall indemnify, defend and hold Tenant harmless from and against any and all claims for the $87,440.00 fee payable to CB
7
Richard Ellis, Inc. described above, and any and all claims by any other real estate broker, salesperson or finder claiming to have represented Landlord for a commission, finders fee or other compensation in connection with this First Amendment. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, other than the $87,440.00 fee payable to CB Richard Ellis, Inc. described above, by any real estate broker, salesperson or finder claiming to have represented Tenant for a commission, finders fee or other compensation in connection with this First Amendment. Notwithstanding anything to the contrary contained in this Section 11, Tenant shall be solely responsible for any commission, fees or costs payable to any real estate broker, sales person or finder claiming to have represented Tenant in connection with any future amendment to the Lease or Tenants exercise of the Extension Options or Right of First Refusal contained herein.
12. Notices . Section 19.2 of the Lease is hereby amended to provide that Tenants address for notices under the Lease is as follows:
Sangamo BioSciences, Inc.
501 Canal Boulevard, Suite A100
Richmond, California 94804
Attn: Mr. Greg Zante
13. Authority . This First Amendment shall be binding upon and inure to the benefit of the parties, their respective heirs, legal representatives, successors and assigns. Each party hereto and the persons signing below warrant that the person signing below on such partys behalf is authorized to do so and to bind such party to the terms of this First Amendment.
14. Status of Lease . Except as amended hereby, the Lease is unchanged, and, as amended hereby, the Lease remains in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have entered into this First Amendment as of the date first set forth above.
TENANT:
|
LANDLORD: | |||||||
|
||||||||
SANGAMO BIOSCIENCES, INC.,
a Delaware-corporation |
POINT RICHMOND R&D ASSOCIATES II, LLC,
a California limited liability company |
|||||||
|
||||||||
By:
|
/s/ Edward O. Lanphier II | By: | /s/ Richard K. Robbins | |||||
|
||||||||
Print Name:
|
Edward O. Lanphier II | Print Name: | Richard K. Robbins | |||||
Its:
|
President + CEO | Its: | Managing Member |
8
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 333-34196
and 333-64642) and in the Registration Statements (Form S-3 No. 333-113062 and 333-68066) and in
the related prospectuses of Sangamo BioSciences, Inc. of our reports dated February 23, 2005, with
respect to (1) the consolidated financial statements of Sangamo BioSciences, Inc., and (2)
managements assessment of the effectiveness of internal control over financial reporting and the
effectiveness of internal control over financial reporting of Sangamo BioSciences, Inc., included
in its Annual Report (Form 10-K) for the year ended December 31, 2004.
Palo Alto, California
/s/ ERNST & YOUNG LLP
February 23, 2005
Exhibit 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATE
I, Edward O. Lanphier II, certify that:
Date: February 23, 2005
1.
I have reviewed this annual report on Form 10-K of Sangamo BioSciences, Inc. (the Registrant);
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;
4.
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a
15(f) and 15d 15 (f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c)
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
(d)
Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting; and
5.
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors:
(a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
(b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
/s/ Edward O. Lanphier II
Edward O. Lanphier II
President, Chief Executive Officer and Director
(Principal Executive Officer)
Exhibit 31.2
PRINCIPAL FINANCIAL OFFICER CERTIFICATE
I, Greg S. Zante, certify that:
Date: February 23, 2005
1.
I have reviewed this annual report on Form 10-K of Sangamo BioSciences, Inc.
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report;
4.
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a
15(f) and 15d 15 (f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c)
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
(d)
Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting; and
5.
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors:
(a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
(b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
/s/ Greg S. Zante
Greg S. Zante
Senior Director, Finance and Administration
(Principal Financial and Accounting Officer)
Exhibit 32.1
Certification Pursuant to 18 U.S.C. §1350, as Adopted
Each of the undersigned hereby certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to
§ 906 of the Sarbanes-Oxley Act of 2002 in his capacity as an officer of Sangamo BioSciences, Inc.
(the Company), that:
(1) the Annual Report of the Company on Form 10-K for the period ending December 31, 2004, as filed
with the Securities and Exchange Commission (the Report) fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
Pursuant to §906 of the Sarbanes-Oxley Act of 2002
/s/ Edward O. Lanphier II
Edward O. Lanphier II
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 23, 2005
/s/ Greg S. Zante
Greg S. Zante
Senior Director, Finance and Administration
(Principal Financial and Accounting Officer)
February 23, 2005