Lineage Cell Therapeutics Reports Second Quarter 2024 Financial Results and Provides Business Update

Rhea-AI Summary

Lineage Cell Therapeutics reported its second quarter 2024 financial results, marking significant developments and collaborations. The company highlighted the ongoing Phase 2a study of OpRegen® for geographic atrophy in partnership with Roche and Genentech, showcasing positive 24-month visual acuity data. They initiated services under a new agreement with Genentech, and continued preparations for the OPC1 spinal cord injury clinical study.

Financially, Lineage posted a net loss of $5.8 million, or $0.03 per share, with revenues dropping to $1.4 million from $3.2 million YoY. Operating expenses decreased to $7.3 million, driven by lower R&D expenses. The company held $38.5 million in cash and equivalents, expected to fund operations into Q4 2025.

Key events included clinical data presentations, the 2nd Annual Spinal Cord Injury Investor Symposium, and continued inclusion in the Russell 3000® Index.

Positive

• Initiated activities under new agreement with Genentech for OpRegen®.
• Maintained inclusion in Russell 3000® Index.
• Positive 24-month visual acuity data for OpRegen®.
• Hosted 2nd Annual Spinal Cord Injury Investor Symposium.
• Cash and equivalents of $38.5 million, supporting operations into Q4 2025.

Negative

• Net loss of $5.8 million, or $0.03 per share.
• Revenue drop to $1.4 million from $3.2 million YoY.
• Increased net loss from operations to $5.9 million.
• Reduction in collaboration and licensing revenue.

Financial Analyst

Lineage Cell Therapeutics' Q2 2024 results show a mixed financial picture. Revenue decreased to $1.4 million from $3.2 million year-over-year, primarily due to lower collaboration revenue from Roche. However, operating expenses decreased by $0.9 million to $7.3 million, mainly from reduced R&D costs.

The company's cash position of $38.5 million is expected to fund operations into Q4 2025, providing a decent runway for ongoing clinical trials. The net loss increased slightly to $5.8 million ($0.03 per share), compared to $5.2 million in Q2 2023. While the financial results aren't stellar, the company's partnership with Roche/Genentech and ongoing clinical progress in key programs like OpRegen and OPC1 suggest potential for future value creation.

Biotechnology Research Analyst

Lineage's Q2 update highlights significant progress in its cell therapy pipeline. The OpRegen program for geographic atrophy (GA) shows promising 24-month data, with a mean BCVA gain of 5.5 letters in Cohort 4 patients. This suggests potential long-term benefits from a single administration, a key advantage in cell therapies.

The expanded collaboration with Roche/Genentech, including a new services agreement, demonstrates external validation of Lineage's technology. The OPC1 program for spinal cord injury is advancing towards clinical trials, addressing a high-unmet need area. While financial results are mixed, the company's focus on cell transplant expertise and cGMP capabilities positions it well in the evolving regenerative medicine landscape. Investors should watch for upcoming clinical milestones, particularly in the OpRegen Phase 2a study.

• 24 Month Visual Acuity Benefits from a Single Administration with OpRegen^® Reported at 2024 Retinal Cell & Gene Therapy Innovation Summit
• Supported OpRegen for Geographic Atrophy in Phase 2a Study in Collaboration with Roche and Genentech
• Initiated Activities Under Recently Established Services Agreement with Genentech to Support Ongoing Development of OpRegen Program
• OPC1 Clinical Study Start Up Preparations Ongoing
• Hosted 2^nd Annual Spinal Cord Injury Investor Symposium

CARLSBAD, Calif.--(BUSINESS WIRE)-- Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today reported its second quarter 2024 financial and operating results. The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss these results and to provide a business update.

“The second quarter was highlighted by clinical and preclinical execution alongside expanded awareness and data updates on our lead program,” stated Brian M. Culley, Lineage CEO. “As the cell transplant field expands and continues to deliver exciting clinical outcomes, we are excited about our validating partnership and the collective expertise of the team at Roche and Genentech, as well as their ongoing leadership of the OpRegen program through presentations at scientific conferences and internal thought leader events, including Roche’s Virtual Ophthalmology Day, hosted just last month. We continue to support the ongoing Phase 2a clinical study and also have initiated activities under the recently established services agreement with Genentech, enabling our partners to take advantage of our cell transplant expertise to more fully investigate the potential of the OpRegen program. In parallel, we are focused on activities in support of returning our second cell transplant program, OPC1, into the clinic this year for the treatment of spinal cord injury, a condition with growing awareness of its unmet need and commercial opportunity.”

“Importantly, our continued inclusion within the Russell 3000^® Index, can help our efforts to broaden investor awareness of, and support for, Lineage as a uniquely positioned cell transplant company, one with a pharma-validated lead program and a platform technology of internally-owned clinical and preclinical assets, which is focused on growing our internally-owned cGMP capabilities in support of process and intellectual property development,” added Mr. Culley.

Recent Operational Highlights

• RG6501 (OpRegen)
  • Continued execution under our collaboration with Roche and Genentech, a member of the Roche Group, across multiple functional areas, including support for the ongoing Phase 2a clinical study in patients with geographic atrophy (GA) secondary to age-related macular degeneration (AMD).
  • Initiated activities under recently established services agreement with Genentech to support ongoing development of OpRegen. Lineage is providing additional clinical, technical, training and manufacturing services, fully funded by Genentech, that further support the ongoing advancement and optimization of the OpRegen program and include: (i) activities to support the ongoing Phase 1/2a study and currently-enrolling Phase 2a study; and (ii) additional technical training and materials related to Lineage’s cell therapy technology platform to support commercial manufacturing strategies.
  • Positive clinical data from long-term follow-up of patients from the Phase 1/2a clinical study of OpRegen presented by David Telander, MD, PhD, Retinal Consultants Medical Group, at the 2024 Retinal Cell & Gene Therapy Innovation Summit.
    • Mean best corrected visual acuity (BCVA) gain of 5.5 letters at 24 months (n=10) in Cohort 4 patients (less advanced GA)
    • Mean BCVA gains greater among patients with improvement in outer retinal structure (n=5, +7.4 letters)
    • Maintenance or increases in external limiting membrane (ELM) and retinal pigment epithelium (RPE) layer area at 24 months observed in patients with extensive coverage of OpRegen across the areas of GA (n=5)
    • Data suggest OpRegen may counteract RPE cell dysfunction and cell loss in patients with GA by providing support to remaining retinal cells, with multi-year effects observed following a single administration
  • Preclinical results from a surgical development study of OpRegen presented by Rachel N. Andrews, DVM, PhD, DACVP, Genentech, a member of the Roche Group, at 2024 Association for Research in Vision and Ophthalmology Annual Meeting (2024 ARVO).
    

• OPC1
  • DOSED (Delivery of Oligodendrocyte Progenitor Cells for Spinal Cord Injury: Evaluation of a Novel Device) clinical study for the treatment of subacute and chronic spinal cord patient start-up activities continue.
  • Hosted the 2^nd Annual Spinal Cord Injury Investor Symposium, in partnership with the Christopher & Dana Reeve Foundation.

Balance Sheet Highlights

Cash, cash equivalents, and marketable securities of $38.5 million as of June 30, 2024 is expected to support planned operations into Q4 2025.

Second Quarter Operating Results

Revenues: Lineage’s revenue is generated primarily from collaboration revenues and royalties. Total revenues for the three months ended June 30, 2024 were $1.4 million, a net decrease of $1.8 million as compared to approximately $3.2 million for the same period in 2023. The decrease was primarily driven by less collaboration and licensing revenue recognized from deferred revenues under the collaboration and license agreement with Roche.

Operating Expenses: Operating expenses are comprised of research and development (R&D) expenses and general and administrative (G&A) expenses. Total operating expenses for the three months ended June 30, 2024 were $7.3 million, a decrease of $0.9 million as compared to $8.2 million for the same period in 2023.

R&D Expenses: R&D expenses for the three months ended June 30, 2024 were $2.9 million, a net decrease of $1.0 million as compared to $3.9 million for the same period in 2023. The net decrease was primarily driven by $0.6 million for our OPC1 program and $0.3 million for our preclinical programs.

G&A Expenses: G&A expenses for the three months ended June 30, 2024 were approximately $4.3 million, a net increase of approximately $0.1 million as compared to $4.2 million for the same period in 2023. The increase was primarily driven by stock-based compensation expense and personnel costs.

Loss from Operations: Loss from operations for the three months ended June 30, 2024 were $5.9 million, an increase of $0.9 million as compared to $5.0 million for the same period in 2023.

Other Income/(Expenses): Other income (expenses) for the three months ended June 30, 2024 reflected other income of $0.1 million, compared to other expenses of ($0.2) million for the same period in 2023. The change was primarily driven by exchange rate fluctuations related to Lineage’s international subsidiaries, fair market value changes in marketable equity securities, and interest income earned within our money market accounts.

Net Loss Attributable to Lineage: The net loss attributable to Lineage for the three months ended June 30, 2024 was $5.8 million, or $0.03 per share (basic and diluted), compared to a net loss attributable to Lineage of $5.2 million, or $0.03 per share (basic and diluted), for the same period in 2023.

Conference Call and Webcast

Interested parties may access the conference call on August 8^th, 2024, by dialing (800) 715-9871 from the U.S. and Canada and should request the “Lineage Cell Therapeutics Call.” A live webcast of the conference call will be available online in the Investors section of Lineage’s website. A replay of the webcast will be available on Lineage’s website for 30 days and a telephone replay will be available through August 15^th, 2024, by dialing (800) 770-2030 from the U.S. and Canada and entering conference ID number 6024260.

About Lineage Cell Therapeutics, Inc.

Lineage Cell Therapeutics is a clinical-stage biotechnology company developing novel or "off-the-shelf," cell therapies to address unmet medical needs. Lineage’s programs are based on its proprietary cell-based technology platform and associated development and manufacturing capabilities. From this platform, Lineage designs, develops, manufactures, and tests specialized human cells with anatomical and physiological functions similar or identical to cells found naturally in the human body. These cells are created by applying directed differentiation protocols to established, well-characterized, and self-renewing pluripotent cell lines. These protocols generate cells with characteristics associated with specific and desired developmental lineages. Cells derived from such lineages are transplanted into patients in an effort to replace or support cells that are absent or dysfunctional due to degenerative disease, aging, or traumatic injury, and to restore or augment the patient's functional activity. Lineage’s neuroscience focused pipeline currently includes: (i) OpRegen, a retinal pigment epithelial cell therapy in Phase 2a development under a worldwide collaboration with Roche and Genentech, a member of the Roche Group, for the treatment of geographic atrophy secondary to age-related macular degeneration; (ii) OPC1, an oligodendrocyte progenitor cell therapy in Phase 1/2a development for the treatment of spinal cord injuries; (iii) ANP1, an auditory neuronal progenitor cell therapy for the potential treatment of auditory neuropathy; (iv) PNC1, a photoreceptor neural cell therapy for the potential treatment of vision loss due to photoreceptor dysfunction or damage; and (v) RND1, a novel hypoimmune induced pluripotent stem cell line being developed in collaboration with Eterna Therapeutics Inc. For more information, please visit www.lineagecell.com or follow the company on X/Twitter @LineageCell.

Forward-Looking Statements

Lineage cautions you that all statements, other than statements of historical facts, contained in this press release, are forward-looking statements. Forward-looking statements, in some cases, can be identified by terms such as “believe,” “aim,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “can,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “contemplate,” “project,” “target,” “tend to,” or the negative version of these words and similar expressions. Lineage’s forward-looking statements are based upon its current expectations and beliefs and involve assumptions that may never materialize or may prove to be incorrect. Such statements include, but are not limited to, statements relating to: the benefits of our new services agreement with Genentech and its impact on advancing the OpRegen program; the commencement of the DOSED clinical study for OPC1; that our cash, cash equivalents and marketable securities is sufficient to support our planned operations into the fourth quarter of 2025; the impacts to Lineage of our continued inclusion within the Russell 3000 Index; and the potential of our platform technology and/or manufacturing capabilities to create value. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Lineage’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements in this press release, including, but not limited to, the following risks: that we may need to allocate our cash to unexpected events and expenses causing us to use our cash, cash equivalents and marketable securities more quickly than expected; that clinical trials of our product candidates may not commence, progress or be completed as expected due to many factors within and outside of our control; that positive findings in early clinical and/or nonclinical studies of a product candidate may not be predictive of success in subsequent clinical and/or nonclinical studies of that candidate; that OpRegen may never be proven to provide durable anatomical functional improvements in dry-AMD patients, that competing alternative therapies may adversely impact the commercial potential of OpRegen; that Roche and Genentech may not successfully advance OpRegen or be successful in completing further clinical trials for OpRegen and/or obtaining regulatory approval for OpRegen in any particular jurisdiction; that the ongoing Israel-Hamas war may materially and adversely impact our manufacturing processes, including cell banking and product manufacturing for our cell therapy product candidates, all of which are conducted by our subsidiary in Jerusalem, Israel; that Lineage may not be able to manufacture sufficient clinical quantities of its product candidates in accordance with current good manufacturing practice; and those risks and uncertainties inherent in Lineage’s business and other risks discussed in Lineage’s filings with the Securities and Exchange Commission (SEC). Further information regarding these and other risks is included under the heading “Risk Factors” in Lineage’s periodic reports with the SEC, including Lineage’s most recent Annual Report on Form 10-K filed with the SEC and its other reports, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Lineage undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law. All forward-looking statements are expressly qualified in their entirety by these cautionary statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
		June 30, 2024				December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	29,622			$	35,442
Marketable securities			8,874				50
Accounts receivable, net			235				745
Prepaid expenses and other current assets			1,659				2,204
Total current assets			40,390				38,441
NONCURRENT ASSETS
Property and equipment, net			2,018				2,245
Operating lease right-of-use assets			2,584				2,522
Deposits and other long-term assets			598				577
Goodwill			10,672				10,672
Intangible assets, net			46,540				46,562
TOTAL ASSETS		$	102,802			$	101,019
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities		$	5,018			$	6,270
Operating lease liabilities, current portion			1,069				830
Finance lease liabilities, current portion			46				52
Deferred revenues, current portion			9,142				10,808
Total current liabilities			15,275				17,960
LONG-TERM LIABILITIES
Deferred tax liability			273				273
Deferred revenues, net of current portion			18,543				18,693
Operating lease liabilities, net of current portion			1,768				1,979
Finance lease liabilities, net of current portion			68				91
TOTAL LIABILITIES			35,927				38,996
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, 2,000 shares authorized; none issued and outstanding as of June 30, 2024 and December 31, 2023			—				—
Common shares, no par value, 450,000 shares authorized as of June 30, 2024 and December 31, 2023; 188,824 and 174,987 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively			467,928				451,343
Accumulated other comprehensive loss			(2,470	)			(3,068	)
Accumulated deficit			(397,158	)			(384,856	)
Lineage's shareholders’ equity			68,300				63,419
Noncontrolling deficit			(1,425	)			(1,396	)
Total shareholders’ equity			66,875				62,023
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	102,802			$	101,019

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
REVENUES:
Collaboration revenues		$	1,098			$	2,871			$	2,285			$	4,992
Royalties, license and other revenues			310				354				567				619
Total revenues			1,408				3,225				2,852				5,611
OPERATING EXPENSES:
Cost of sales			44				127				142				246
Research and development			2,868				3,873				5,878				8,058
General and administrative			4,363				4,249				9,360				8,973
Total operating expenses			7,275				8,249				15,380				17,277
Loss from operations			(5,867	)			(5,024	)			(12,528	)			(11,666	)
OTHER INCOME (EXPENSES):
Interest income			463				382				925				792
Loss on marketable equity securities, net			(10	)			(150	)			(15	)			(110	)
Foreign currency transaction loss, net			(378	)			(497	)			(732	)			(969	)
Other income			19				86				19				543
Total other income (expenses)			94				(179	)			197				256
LOSS BEFORE INCOME TAXES			(5,773	)			(5,203	)			(12,331	)			(11,410	)
Provision for income tax benefit			—				—				—				1,803
NET LOSS			(5,773	)			(5,203	)			(12,331	)			(9,607	)
Net (income) loss attributable to noncontrolling interest			13				(26	)			29				6
NET LOSS ATTRIBUTABLE TO LINEAGE		$	(5,760	)		$	(5,229	)		$	(12,302	)		$	(9,601	)
Net loss per common share attributable to Lineage basic and diluted		$	(0.03	)		$	(0.03	)		$	(0.07	)		$	(0.06	)
Weighted-average common shares used to compute basic and diluted net loss per common share			188,813				170,592				185,861				170,361

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
		Six Months Ended June 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Lineage		$	(12,302	)		$	(9,601	)
Net loss attributable to noncontrolling interest			(29	)			(6	)
Adjustments to reconcile net loss attributable to Lineage Cell Therapeutics, Inc. to net cash used in operating activities:
Loss on marketable equity securities, net			15				110
Accretion of income on marketable debt securities			(102	)			(516	)
Depreciation and amortization expense			295				276
Change in right-of-use assets and liabilities			(20	)			81
Amortization of intangible assets			22				65
Stock-based compensation			2,432				2,311
Deferred income tax benefit			—				(1,803	)
Foreign currency remeasurement and other loss			767				1,011
Changes in operating assets and liabilities:
Accounts receivable			508				(147	)
Prepaid expenses and other current assets			516				(270	)
Accounts payable and accrued liabilities			(1,245	)			(3,941	)
Deferred revenue			(1,816	)			(5,080	)
Net cash used in operating activities			(10,959	)			(17,510	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of marketable equity securities			18				—
Purchases of marketable debt securities			(8,761	)			(12,635	)
Maturities of marketable debt securities			—				47,664
Purchase of equipment			(88	)			(444	)
Net cash (used in) provided by investing activities			(8,831	)			34,585
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from employee options exercised			219				80
Common shares received and retired for employee taxes paid			(23	)			(37	)
Proceeds from sale of common shares			14,070				5,789
Payments for offering costs			(113	)			(174	)
Repayment of finance lease liabilities			(27	)			(29	)
Net cash provided by financing activities			14,126				5,629
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(158	)			(192	)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			(5,822	)			22,512
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
At beginning of the period			35,992				11,936
At end of the period		$	30,170			$	34,448

 

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Lineage Cell Therapeutics, Inc. IR

Ioana C. Hone

(ir@lineagecell.com)

(442) 287-8963

LifeSci Advisors

Daniel Ferry

(daniel@lifesciadvisors.com)

(617) 430-7576

Russo Partners – Media Relations

Nic Johnson or David Schull

(Nic.johnson@russopartnersllc.com)

(David.schull@russopartnersllc.com)

(212) 845-4242

Source: Lineage Cell Therapeutics, Inc.

FAQ

What were Lineage Cell Therapeutics' financial results for Q2 2024?

Lineage Cell Therapeutics reported a net loss of $5.8 million, or $0.03 per share, with revenues of $1.4 million, down from $3.2 million YoY.

What is the significance of the OpRegen® Phase 2a study results?

The 24-month data showed positive visual acuity benefits, supporting OpRegen®'s potential in treating geographic atrophy.

How is Lineage Cell Therapeutics collaborating with Genentech?

Lineage initiated activities under a new services agreement with Genentech, providing clinical, technical, training, and manufacturing services for OpRegen®.

What is the status of the OPC1 clinical study?

Preparations for the OPC1 clinical study for spinal cord injury are ongoing, aiming to return the program to the clinic later this year.

What was Lineage Cell Therapeutics' cash position as of June 30, 2024?

The company held $38.5 million in cash, cash equivalents, and marketable securities, expected to support planned operations into Q4 2025.