1001233--3/5/2010--SANGAMO_BIOSCIENCES

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{property, intellectual, protect}

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Risks Relating to Development, Commercialization and Regulatory Approval of our Products and Technology ZFP Therapeutics have undergone limited testing in humans and our ZFP Therapeutics may fail safety studies in clinical trials. The results of early Phase 1 and Phase 2 trials are based on a small number of patients over a short period of time, and our progress may not be indicative of results in a large number of patients or of long-term efficacy in late stage clinical trials. We have limited experience in conducting clinical trials. We may not be able to find acceptable patients or may experience delays in enrolling patients for our clinical trials. Our potential therapeutic products are subject to a lengthy and uncertain regulatory process, and we may encounter unanticipated toxicity or adverse events or fail to demonstrate efficacy, causing us to delay, suspend or terminate the development of a ZFP Therapeutic. If these potential products are not approved, we will not be able to commercialize those products. As we cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates, we cannot predict the timing of any future revenue from these product candidates. Regulatory approval, if granted, may be limited to specific uses or geographic areas, which could limit our ability to generate revenues. Commercialization of our technologies will depend, in part, on strategic partnering with other companies. If we are not able to find strategic partners in the future or our strategic partners do not diligently pursue product development efforts, we may not be able to develop our technologies or products, which could slow our growth and decrease the value of our stock. We have increased the focus of our research and development programs on human therapeutics, which will increase operating expenditures and the uncertainty of our business. We are conducting proprietary research to discover ZFP Therapeutic product candidates. These programs increase our financial risk of product failure, may significantly increase our research expenditures, and may involve conflicts with future collaborators and strategic partners. We may be unable to license gene transfer technologies that we may need to commercialize our ZFP TF technology. We do not currently have the infrastructure or capability to manufacture therapeutic products on a commercial scale. Even if our technology proves to be effective, it still may not lead to commercially viable products. Even if our product development efforts are successful and even if the requisite regulatory approvals are obtained, our ZFP Therapeutics may not gain market acceptance among physicians, patients, healthcare payers and the medical community. Risks Relating to our Industry If our competitors develop, acquire, or market technologies or products that are more effective than ours, this would reduce or eliminate our commercial opportunity. Our gene regulation and gene modification technology is relatively new, and if we are unable to use this technology in all our intended applications, it would limit our revenue opportunities. Adverse events in the field of gene therapy may negatively impact regulatory approval or public perception of our potential products. Laws or public sentiment may limit the production of genetically modified agricultural products in the future, and these laws could reduce our partner s ability to sell these products. Risks Relating to our Finances We anticipate continuing to incur operating losses for the next several years. If material losses continue for a significant period, we may be unable to continue our operations. We may be unable to raise additional capital, which would harm our ability to develop our technology and products. We are at the development phase of operations and may not succeed or become profitable. Risks Relating to our Collaborative Relationships If conflicts arise between us and our collaborators, strategic partners, scientific advisors, or directors, these parties may act in their self-interest, which may limit our ability to implement our strategies. If we establish drug development collaborations, our collaborators may control aspects of our clinical trials, which could result in delays and other obstacles in the commercialization of our proposed products. Our collaborators or strategic partners may decide to adopt alternative technologies or may be unable to develop commercially viable products with our technology, which would negatively impact our revenues and our strategy to develop these products. If we do not successfully commercialize ZFP-based research reagents, ZFP-modified cell lines for commercial protein production, or ZFP-engineered transgenic animals under our license agreement with Sigma-Aldrich Corporation or ZFP-based agricultural products with Dow AgroSciences, or if Sigma or Dow AgroSciences terminates our agreements, our ability to generate revenue under these license agreements may be limited. If we do not successfully commercialize certain ZFP Therapeutic programs relating to diabetic neuropathy under our agreement with JDRF, they may have the right to continue to advance the program and we may lose control of the intellectual property generated in the collaboration and development of the product and may only receive a portion of the revenue generated if commercialization by JDRF is successful. Our collaborations with outside scientists may be subject to change, which could limit our access to their expertise. Risks Relating to our Intellectual Property and Business Operation Because it is difficult and costly to protect our proprietary rights, and third parties have filed patent applications that are similar to ours, we cannot ensure the proprietary protection of our technologies and products. If we use biological and hazardous materials in a manner that causes injury or violates laws, we may be liable for damages. Failure to attract, retain, and motivate skilled personnel and cultivate key academic collaborations will delay our product development programs and our research and development efforts. Risks Relating to our Common Stock and Corporate Organization Our stock price has been volatile and may continue to be volatile, which could result in substantial losses for investors. Our common stock is relatively thinly traded, which means large transactions in our common stock may be difficult to conduct in a short time frame. Our stock price is also influenced by public perception of gene therapy and government regulation of potential products. Anti-takeover provisions in our certificate of incorporation and Delaware law could make an acquisition of the Company more difficult and could prevent attempts by our stockholders to remove or replace current management. Insiders have influence over Sangamo and could delay or prevent a change in corporate control.

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1001233--3/5/2010--SANGAMO_BIOSCIENCES_INC