Company Overview - Lineage Cell Therapeutics is a clinical-stage biotechnology company focused on developing novel cell therapies for neurological and ophthalmic conditions [3]. Core Business Focus - The company specializes in the manufacture and delivery of specific cell types to address diseases caused by the loss of certain cell types, with a primary focus on dry age-related macular degeneration (AMD) [3]. Key Product and Application - The most significant application of the company's technology is in treating dry AMD, characterized by the loss of retinal pigment epithelium (RPE) cells, which the company manufactures and delivers to restore lost function [3].

Summary of Lineage Cell Therapeutics FY Conference Call Company Overview - **Company**: Lineage Cell Therapeutics (NYSEAM:LCTX) - **Industry**: Biotechnology, specifically focused on cell therapies for neurological and ophthalmic conditions [1][2] Core Points and Arguments - **Cell Therapy Focus**: Lineage is dedicated to manufacturing and delivering specific cell types to address diseases caused by the loss of certain cell types, with a significant focus on dry age-related macular degeneration (AMD) [2][3] - **New Initiatives**: Introduction of a new initiative called ILT1 aimed at addressing type 1 diabetes, focusing on overcoming manufacturing deficiencies to produce a large number of islet cells necessary for treatment [3][27] - **Partnerships**: Collaboration with William Demant Invest Company for the hearing loss program, which involves manufacturing auditory neurons [4][26] - **Manufacturing Capabilities**: Emphasis on the importance of scalable and affordable manufacturing processes to ensure commercial viability of cell therapies [6][8][27] - **Lead Program - OpRegen**: The lead program for dry AMD has shown promising results in improving both anatomy and function in patients, with a partnership with Roche and Genentech for a Phase 2 clinical trial [9][10][12] - **Clinical Results**: Patients receiving OpRegen have demonstrated significant anatomical improvements and clinically meaningful increases in vision, contrasting with the natural progression of the disease [13][14] Additional Important Content - **Safety Profile**: The clinical studies have shown a favorable safety profile, with only one adverse event potentially related to the therapy out of 534 reported [20][21] - **Long-term Follow-up**: The company has reported follow-up data extending up to 13 years, with no cases of tumor growth or cysts observed in patients [21][22] - **Emerging Field**: Non-oncology cell transplantation is viewed as an emerging and exciting branch of medicine, with Lineage positioned as a leader in this area [23][24] - **Future Directions**: Plans to expand successful methodologies to other areas of interest, including a photoreceptor program and potential gene editing technologies [26][27] - **Challenges in Diabetes Treatment**: Acknowledgment of the significant challenges in scaling cell production for diabetes treatment, with a need for innovative banking and differentiation modalities [27][28] This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic initiatives, clinical advancements, and future directions in the biotechnology sector.

Group 1 - Lineage Cell (LCTX) reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.02, and improved from a loss of $0.03 per share a year ago, representing an earnings surprise of +50.00% [1] - The company posted revenues of $2.77 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 75.00%, compared to year-ago revenues of $1.41 million [2] - Lineage Cell shares have increased approximately 101% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.4% [3] Group 2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The estimate revisions trend for Lineage Cell was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $2.52 million, and -$0.09 on revenues of $7.94 million for the current fiscal year [7] Group 3 - The Medical - Biomedical and Genetics industry, to which Lineage Cell belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, which may impact stock performance [8] - Another company in the same industry, Biofrontera Inc. (BFRI), is expected to report a quarterly loss of $0.45 per share, reflecting a year-over-year change of +59.8%, with revenues anticipated to be $8.2 million, up 4.6% from the previous year [9]

Financial Data and Key Metrics Changes - As of June 30, 2025, the company's cash position was $42.3 million, expected to support operations into 2027 [20] - Total revenues for Q2 2025 were $2.8 million, a net increase of $1.4 million compared to $1.4 million for the same period in 2024, primarily driven by collaboration revenue from the Roche agreement [22] - Operating expenses were $22.5 million, an increase of $5.2 million compared to $7.3 million for the same period in 2024, largely due to a non-cash impairment expense of $14.8 million related to the VAC platform [22][24] - The net loss was $30.5 million or $0.13 per share, compared to a net loss of $5.8 million or $0.03 per share for the same period in 2024 [24] Business Line Data and Key Metrics Changes - The OpRegen program showed a mean gain of vision of nine letters in treated patients over three years, contrasting with an 11-letter loss in untreated eyes, indicating a significant treatment effect [6][7] - The OPC1 program has been administered to 31 individuals with acute severe spinal cord injuries, with promising long-term safety and efficacy data [15] Market Data and Key Metrics Changes - The company noted that there are now four independent groups reporting vision gains from RPE cell transplants, validating the potential of the OpRegen program [8] - The ongoing phase 2a clinical trial run by Genentech is expected to provide insights into surgical procedures and delivery methods, enhancing the company's competitive position [9] Company Strategy and Development Direction - The company is exploring new therapeutic areas to leverage its directed differentiation expertise and recent manufacturing accomplishments, aiming to diversify its pipeline beyond OpRegen [10][11] - The strategy includes entering into deals that fund existing product candidates, creating new assets, and obtaining grants to reduce dependency on equity capital markets [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of OpRegen to drive positive clinical outcomes and highlighted the importance of independent evidence from other RPE cell transplant trials [26] - The company is focused on ensuring that OPC1 has the necessary attributes for later-stage clinical testing and is optimistic about the ongoing developments [26] Other Important Information - The company has a GMP banking and production platform capable of generating millions of doses of product candidates, which is a significant competitive advantage [8] - The company is actively pursuing non-dilutive funding sources, including milestone payments and program grants [21] Q&A Session Summary Question: Context on the dose study and patient enrollment - Management indicated that predicting enrollment is challenging due to limited experience with chronic patients, but they are optimistic about patient interest in the trial [31][32] Question: Enrollment in the Phase 2a study - Management refrained from commenting on enrollment specifics but emphasized ongoing efforts to ensure effective patient recruitment [38] Question: Manufacturing progress and potential partnerships - Management noted that manufacturing is a core focus for 2025 and they expect to see valuable outcomes from their strategies by year-end [38] Question: Preclinical data from the hearing loss program - Management confirmed that preclinical work is ongoing, but no specific timeline for reportable data was provided [51] Question: Expansion of sites for the dose study - Management stated that they are focusing on experienced sites and have already initiated the process for a second site [68] Question: Follow-up duration for patients - Management confirmed that they plan to follow patients for at least ten years, emphasizing the importance of long-term data collection [71] Question: Differences in benefit thresholds for chronic vs. subacute patients - Management acknowledged that chronic patients may have different clinical meaningfulness thresholds compared to subacute patients, which will be considered in data analysis [75]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents Lineage Cell Therapeutics, Inc.'s unaudited interim financial statements and management's discussion [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Lineage Cell Therapeutics, Inc.'s unaudited condensed consolidated interim financial statements and detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific interim dates | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | $42,271 | $45,789 | | Marketable securities | $17 | $2,016 | | Total current assets | $43,844 | $50,997 | | Intangible assets, net | $31,700 | $46,540 | | TOTAL ASSETS | $90,799 | $113,218 | | LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------ | :---------------- | | Total current liabilities | $10,756 | $13,977 | | Warrant liabilities | $18,801 | $6,161 | | TOTAL LIABILITIES | $43,687 | $36,206 | | Total shareholders' equity | $47,112 | $77,012 | - Total assets decreased from **$113.2 million** at December 31, 2024, to **$90.8 million** at June 30, 2025, primarily due to a decrease in intangible assets and cash/marketable securities[22](index=22&type=chunk) - Warrant liabilities significantly increased from **$6.2 million** to **$18.8 million**, reflecting changes in fair value[22](index=22&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss for the interim periods | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Collaboration revenues | $2,532 | $1,098 | $3,802 | $2,285 | | Total revenues | $2,765 | $1,408 | $4,267 | $2,852 | | Research and development | $3,106 | $2,868 | $6,220 | $5,878 | | General and administrative | $4,560 | $4,363 | $9,417 | $9,360 | | Loss on impairment of intangible asset| $14,840 | $— | $14,840 | $— | | Total operating expenses | $22,545 | $7,275 | $30,552 | $15,380 | | Loss from operations | $(19,780) | $(5,867) | $(26,285) | $(12,528) | | Change in fair value of warrant liability | $(12,740) | $— | $(10,435) | $— | | NET LOSS ATTRIBUTABLE TO LINEAGE | $(30,464) | $(5,760) | $(34,603) | $(12,302) | | Net loss per common share (basic & diluted) | $(0.13) | $(0.03) | $(0.15) | $(0.07) | - Total revenues increased by **96%** for the three months ended June 30, 2025, and by **50%** for the six months ended June 30, 2025, primarily driven by higher collaboration revenues[24](index=24&type=chunk) - A significant non-cash impairment charge of **$14.8 million** on an intangible asset (VAC platform) was recorded for both the three and six months ended June 30, 2025[24](index=24&type=chunk) - Net loss attributable to Lineage increased substantially to **$(30.5) million** for the three months and **$(34.6) million** for the six months ended June 30, 2025, largely due to the intangible asset impairment and a negative change in the fair value of warrant liability[24](index=24&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement presents the net loss and other comprehensive income (loss) components for the interim periods | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | NET LOSS | $(30,364) | $(5,773) | $(34,507) | $(12,331) | | Foreign currency translation adjustment | $(1,417) | $307 | $(1,217) | $605 | | COMPREHENSIVE LOSS ATTRIBUTABLE TO LINEAGE COMMON SHAREHOLDERS | $(31,881) | $(5,459) | $(35,825) | $(11,704) | - Comprehensive loss attributable to Lineage common shareholders significantly increased to **$(31.9) million** for the three months and **$(35.8) million** for the six months ended June 30, 2025, compared to the prior year, primarily driven by the increased net loss and negative foreign currency translation adjustments[26](index=26&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Outlines the changes in the company's equity accounts over the interim periods | (in thousands) | Balance - December 31, 2024 | Shares issued through registered direct financing | Stock-based compensation | Net income (loss) | Balance - June 30, 2025 | | :------------- | :-------------------------- | :---------------------------------------------- | :----------------------- | :---------------- | :---------------------- | | Common Shares | 220,416 | 7,895 | — | — | 228,356 |\ | Amount | $484,722 | $3,795 | $2,455 | — | $490,551 |\ | Accumulated Deficit | $(403,465) | — | — | $(34,603) | $(438,068) |\ | Total Shareholders' Equity | $77,012 | $3,795 | $2,455 | $(34,507) | $47,112 | - Total shareholders' equity decreased from **$77.0 million** at December 31, 2024, to **$47.1 million** at June 30, 2025, primarily due to the net loss of **$(34.5) million**, partially offset by proceeds from registered direct financing and stock-based compensation[29](index=29&type=chunk) - Common shares outstanding increased by **7,940 thousand shares** during the six months ended June 30, 2025, mainly from registered direct financing[29](index=29&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports cash flows from operating, investing, and financing activities for the interim periods | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Operating activities | $(10,425) | $(10,959) | | Investing activities | $1,889 | $(8,831) | | Financing activities | $4,737 | $14,126 | | Net increase in cash, cash equivalents, and restricted cash | $(3,579) | $(5,822) | | Cash, cash equivalents and restricted cash at end of period | $42,775 | $30,170 | - Net cash used in operating activities decreased slightly to **$(10.4) million** for the six months ended June 30, 2025, from **$(11.0) million** in the prior year[32](index=32&type=chunk) - Investing activities provided **$1.9 million** in cash for the six months ended June 30, 2025, a significant improvement from **$8.8 million** used in the prior year, primarily due to maturities of U.S. Treasury securities[32](index=32&type=chunk) - Cash provided by financing activities decreased to **$4.7 million** for the six months ended June 30, 2025, from **$14.1 million** in the prior year, reflecting lower proceeds from equity offerings[32](index=32&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) Provides additional information and explanations for the figures presented in the financial statements [1. Organization, Basis of Presentation and Liquidity](index=11&type=section&id=1.%20Organization,%20Basis%20of%20Presentation%20and%20Liquidity) Describes the company's business, financial statement presentation, and liquidity assessment - Lineage is a clinical-stage biotechnology company focused on allogeneic cell therapies for neurological and ophthalmic conditions, leveraging a proprietary cell-based technology platform for scalable and cost-effective manufacturing[34](index=34&type=chunk)[35](index=35&type=chunk)[139](index=139&type=chunk) - Key product candidates include **OpRegen®** for geographic atrophy (in Phase 2a with Roche/Genentech), **OPC1** for spinal cord injury (initiating DOSED study for subacute and chronic SCI), and preclinical programs like ANP1, PNC1, and RND1[37](index=37&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) - As of June 30, 2025, the company had **$42.3 million** in cash, cash equivalents, and marketable securities, which management believes will be sufficient to fund operations for at least the next twelve months[47](index=47&type=chunk)[190](index=190&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods used in preparing the financial statements - No changes to significant accounting policies occurred during the six months ended June 30, 2025[53](index=53&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) effective for interim periods within fiscal years beginning after December 15, 2024, which did not have a significant impact[54](index=54&type=chunk) - The company is assessing the impact of recently issued ASUs 2024-03 (Disaggregation of Income Statement Expenses) and 2023-09 (Income Taxes) which are effective for fiscal years beginning after December 15, 2026, and 2025, respectively[56](index=56&type=chunk)[57](index=57&type=chunk) [3. Revenue](index=18&type=section&id=3.%20Revenue) Provides details on the company's revenue recognition policies and disaggregated revenue streams | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Collaboration revenues | $2,532 | $1,098 | $3,802 | $2,285 | | Royalties, license and other revenues | $233 | $310 | $465 | $567 | | Total revenue | $2,765 | $1,408 | $4,267 | $2,852 | - Collaboration revenues increased significantly, with a **$1.4 million** increase for the three months and **$1.5 million** for the six months ended June 30, 2025, primarily due to continued progress on the Roche Agreement and recognition of **$0.7 million** from the termination of the Immunomic Therapeutics, Inc. license agreement[58](index=58&type=chunk)[157](index=157&type=chunk) - The aggregate transaction price allocated to remaining performance obligations as of June 30, 2025, was **$19.9 million**, with **$18.0 million** reported as deferred revenues, expected to be converted to revenue by December 2026[59](index=59&type=chunk) [4. Marketable Securities](index=19&type=section&id=4.%20Marketable%20Securities) Describes the company's investments in marketable debt and equity securities | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Marketable debt securities (within cash & cash equivalents) | $22,853 | $17,432 | | Marketable debt securities (within marketable securities) | $— | $1,992 | | Marketable equity securities (within marketable securities) | $17 | $24 | - The company holds U.S. Treasury securities as available-for-sale debt securities, with all maturing in one year or less as of June 30, 2025[62](index=62&type=chunk)[63](index=63&type=chunk) - Marketable equity securities, classified as trading securities, primarily consist of Hadasit Bio-Holdings Ltd. shares, with a net unrealized loss of **$(7) thousand** for the six months ended June 30, 2025[64](index=64&type=chunk)[65](index=65&type=chunk) [5. Property and Equipment, Net](index=20&type=section&id=5.%20Property%20and%20Equipment,%20Net) Details the company's property, plant, and equipment, including depreciation policies | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Equipment, furniture and fixtures | $4,615 | $4,131 | | Leasehold improvements | $2,486 | $2,300 | | Right-of-use assets - finance lease | $214 | $204 | | Accumulated depreciation and amortization | $(5,060) | $(4,384) | | Property and equipment, net | $2,255 | $2,251 | - Property and equipment, net, remained relatively stable at **$2.3 million** as of June 30, 2025, compared to December 31, 2024[67](index=67&type=chunk) - Depreciation and amortization expense for property and equipment was **$335 thousand** for the six months ended June 30, 2025, an increase from **$295 thousand** in the prior year[67](index=67&type=chunk) [6. Goodwill and Intangible Assets, Net](index=20&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets,%20Net) Provides information on the company's goodwill and other intangible assets, including impairment assessments | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Goodwill | $10,672 | $10,672 | | Acquired IPR&D – OPC1 | $31,700 | $31,700 | | Acquired IPR&D – VAC | $— | $14,840 | | Intangible assets, net | $31,700 | $46,540 | - The VAC platform IPR&D intangible asset was deemed abandoned as of June 30, 2025, resulting in a non-cash pre-tax impairment charge of **$14.8 million**[68](index=68&type=chunk)[72](index=72&type=chunk)[164](index=164&type=chunk) - Goodwill was assessed qualitatively and no impairment was recognized as of June 30, 2025[69](index=69&type=chunk) [7. Accounts Payable and Accrued Liabilities](index=22&type=section&id=7.%20Accounts%20Payable%20and%20Accrued%20Liabilities) Presents the breakdown of the company's short-term liabilities | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Accounts payable | $1,497 | $1,174 | | Accrued compensation | $2,161 | $3,066 | | Accrued liabilities | $793 | $1,197 | | Total | $4,451 | $5,437 | - Total accounts payable and accrued liabilities decreased to **$4.5 million** at June 30, 2025, from **$5.4 million** at December 31, 2024, primarily due to a decrease in accrued compensation and other accrued liabilities[70](index=70&type=chunk) [8. Fair Value Measurements](index=22&type=section&id=8.%20Fair%20Value%20Measurements) Explains the valuation techniques and inputs used for assets and liabilities measured at fair value | (in thousands) | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :------------- | :------------------------- | :----------------------------- | | Money market fund | $12,806 | $21,570 | | Marketable debt securities | $22,853 | $19,424 | | Marketable equity securities | $17 | $24 | | Warrant liabilities | $18,801 | $6,161 | - Warrant liabilities, classified as Level 3, increased significantly from **$6.2 million** to **$18.8 million** during the six months ended June 30, 2025, primarily due to a **$10.4 million** change in fair value recognized in the consolidated statement of operations[74](index=74&type=chunk)[75](index=75&type=chunk) - Key Level 3 inputs for valuing warrant liabilities include expected stock price volatility (**71.78%-74.46%**), risk-free interest rate (**3.68%-4.25%**), and expected term (**2.89-3.32 years**)[75](index=75&type=chunk) [9. Related Party Transactions](index=24&type=section&id=9.%20Related%20Party%20Transactions) Discloses transactions between the company and its related parties - In January 2025, Lineage sold **7,894,737 common shares** and an accompanying warrant to Broadwood Partners, an affiliate of a board member, as part of the November 2024 Registered Direct Offering[77](index=77&type=chunk)[92](index=92&type=chunk) - Broadwood Partners also participated in the February 2024 Registered Direct Offering, purchasing **6,730,770 common shares**[76](index=76&type=chunk) [10. Shareholders' Equity](index=24&type=section&id=10.%20Shareholders'%20Equity) Provides details on the components of shareholders' equity, including common stock and equity offerings - As of June 30, 2025, Lineage had **228,356,290 common shares** issued and outstanding, an increase from **220,416,326** at December 31, 2024[79](index=79&type=chunk) - The company completed the November 2024 Registered Direct Offering, issuing **39,473,688 common shares** and accompanying warrants, generating **$30.0 million** in gross proceeds[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - As of June 30, 2025, **$39.97 million** remained available for sale under the at-the-market (ATM) offering program[84](index=84&type=chunk) [11. Stock-Based Awards](index=27&type=section&id=11.%20Stock-Based%20Awards) Describes the company's stock option and restricted stock unit plans and related compensation expense | (in thousands, except per share amounts) | Balance at December 31, 2024 | Options granted | Options expired/forfeited/cancelled | Balance at June 30, 2025 | | :------------------------------------- | :--------------------------- | :-------------- | :--------------------------------- | :----------------------- | | Number of Options Outstanding (2021 Plan) | 16,658 | 7,328 | (157) | 23,829 | | Weighted Average Exercise Price (2021 Plan) | $1.30 | $0.53 | $1.12 | $1.07 | | Number of RSUs Outstanding | 501 | — | (167) | 334 | - Total stock-based compensation expense was **$2.455 million** for the six months ended June 30, 2025, slightly higher than **$2.432 million** in the prior year[99](index=99&type=chunk) - As of June 30, 2025, **$8.5 million** in unrecognized compensation costs related to unvested stock options and RSUs is expected to be recognized over weighted average periods of **2.8 years** and **0.9 years**, respectively[99](index=99&type=chunk) [12. Income Taxes](index=30&type=section&id=12.%20Income%20Taxes) Explains the company's income tax position, including deferred tax assets and valuation allowances - Lineage established a full valuation allowance as of December 31, 2018, due to the uncertainty of realizing future tax benefits from net operating loss carryforwards and other deferred tax assets[103](index=103&type=chunk)[170](index=170&type=chunk) - No deferred tax benefit or provision expense was recorded for the six months ended June 30, 2025, or 2024[105](index=105&type=chunk) - The company is analyzing the tax impacts of the 'One Big Beautiful Bill Act' signed on July 4, 2025, but does not expect a material impact on its financial statements[104](index=104&type=chunk) [13. Commitments and Contingencies](index=30&type=section&id=13.%20Commitments%20and%20Contingencies) Outlines the company's contractual obligations, potential liabilities, and legal matters - Lineage has real property leases in Carlsbad, California, and its subsidiary CCN leases office and laboratory space in Jerusalem, Israel, with total future minimum lease commitments of **$2.2 million** for operating leases and **$0.1 million** for finance leases as of June 30, 2025[106](index=106&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk) - Under the Roche Agreement, Lineage is eligible for up to **$620.0 million** in developmental, regulatory, and commercialization milestone payments, plus tiered double-digit percentage royalties on net sales of OpRegen[115](index=115&type=chunk) - The company is obligated to pay the Israel Innovation Authority (IIA) approximately **24.1%** of any milestone and royalty payments received under the Roche Agreement, up to an aggregate cap of approximately **$96.4 million** as of June 30, 2025[121](index=121&type=chunk)[182](index=182&type=chunk) - The CRT License Agreement for the VAC platform was terminated effective June 30, 2025, leading to an impairment charge of **$14.8 million** for the VAC platform IPR&D intangible asset[127](index=127&type=chunk) - A legal proceeding initiated by Hadasit Bio-Holdings Ltd. (HBL) alleges that an intercompany agreement between Lineage and CCN was not fairly priced; a third-party valuation firm's report in June 2025 stated the consideration was insufficient, and the parties are to advise the Court on settlement by September 7, 2025[130](index=130&type=chunk)[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Result%20of%20Operations) Management's perspective on financial condition, operations, business developments, performance, and liquidity [Company and Business Overview](index=39&type=section&id=Company%20and%20Business%20Overview) Overview of the company's strategic focus, product pipeline, and operational highlights - Lineage is a clinical-stage biotechnology company developing allogeneic cell therapies for neurological and ophthalmic conditions, utilizing a proprietary cell-based technology platform for scalable and cost-effective manufacturing[139](index=139&type=chunk)[140](index=140&type=chunk) - The lead program, **OpRegen®**, for geographic atrophy, is being developed under a collaboration with Roche/Genentech, which received RMAT designation in September 2024 and presented positive 36-month visual acuity results in June 2025[142](index=142&type=chunk)[143](index=143&type=chunk) - The most advanced internally owned candidate, **OPC1** for spinal cord injury, initiated the DOSED clinical study in February 2025, including chronic SCI patients for the first time, with the first chronic patient treated in July 2025[144](index=144&type=chunk) - Operations at the Jerusalem, Israel facility, where all manufacturing is conducted, have not been materially impacted by the Israeli regional conflict as of the filing date, but long-term disruptions remain a risk[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [Critical Accounting Estimates](index=45&type=section&id=Critical%20Accounting%20Estimates) Discusses accounting policies requiring significant judgment and estimation by management - There have been no material changes to the company's critical accounting policies during the six months ended June 30, 2025[156](index=156&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Analyzes the company's revenues, expenses, and overall financial performance for the reporting periods Revenue Comparison (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Dollar Increase (Decrease) | Percent Increase (Decrease) | | :------------- | :------------------------------- | :------------------------------- | :------------------------- | :-------------------------- | | Collaboration revenues | $2,532 | $1,098 | $1,434 | 131% | | Royalties, license and other revenues | $233 | $310 | $(77) | (25)% | | Total revenues | $2,765 | $1,408 | $1,357 | 96% | | Revenue Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Dollar Increase (Decrease) | Percent Increase (Decrease) | | :------------- | :----------------------------- | :----------------------------- | :------------------------- | :-------------------------- | | Collaboration revenues | $3,802 | $2,285 | $1,517 | 66% | | Royalties, license and other revenues | $465 | $567 | $(102) | (18)% | | Total revenues | $4,267 | $2,852 | $1,415 | 50% | Operating Expenses Comparison (in thousands) | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Dollar Increase (Decrease) | Percent Increase (Decrease) | | :------------- | :------------------------------- | :------------------------------- | :------------------------- | :-------------------------- | | Cost of royalties | $39 | $44 | $(5) | (11)% | | Research and development | $3,106 | $2,868 | $238 | 8% | | General and administrative | $4,560 | $4,363 | $197 | 5% | | Loss on impairment of intangible asset | $14,840 | $— | $14,840 | 100% | | Total operating expenses | $22,545 | $7,275 | $15,270 | 210% | | Expense Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Dollar Increase (Decrease) | Percent Increase (Decrease) | | :------------- | :----------------------------- | :----------------------------- | :------------------------- | :-------------------------- | | Cost of royalties | $75 | $142 | $(67) | (47)% | | Research and development | $6,220 | $5,878 | $342 | 6% | | General and administrative | $9,417 | $9,360 | $57 | 1% | | Loss on impairment of intangible asset | $14,840 | $— | $14,840 | 100% | | Total operating expenses | $30,552 | $15,380 | $15,172 | 99% | - Total operating expenses increased by **210%** for the three months and **99%** for the six months ended June 30, 2025, primarily due to a **$14.8 million** non-cash impairment charge on the VAC platform intangible asset[162](index=162&type=chunk)[164](index=164&type=chunk) - Research and development expenses increased by **8%** and **6%** for the three and six months, respectively, driven by preclinical programs[162](index=162&type=chunk) - A significant change in fair value of warrant liability resulted in a **$(12.7) million** loss for the three months and **$(10.4) million** loss for the six months ended June 30, 2025, compared to no such loss in the prior year, driven by an increase in the company's common share price[165](index=165&type=chunk)[167](index=167&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to generate and manage cash flow, and its future funding requirements - As of June 30, 2025, the accumulated deficit was **$438.1 million**, with a net loss from operations of **$26.3 million** and negative cash flow from operations of **$10.4 million** for the six months ended June 30, 2025[171](index=171&type=chunk) - The company had **$42.3 million** in cash, cash equivalents, and marketable securities as of June 30, 2025, and believes this is sufficient to fund planned operations for at least the next twelve months[172](index=172&type=chunk)[190](index=190&type=chunk) - In January 2025, **$5.4 million** in net proceeds were raised from the second closing of the November 2024 Registered Direct Offering, and up to an additional **$36 million** in gross proceeds could be received from the full cash exercise of OpRegen clinical milestone-linked warrants[172](index=172&type=chunk) - The company expects to incur significant operating losses for the foreseeable future and will require additional capital, which may be sought through equity offerings, debt financings, grants, or strategic alliances[188](index=188&type=chunk)[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Lineage is exempt from market risk disclosures - The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[191](index=191&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures as effective, with no material changes in internal control - Disclosure controls and procedures were evaluated and determined to be effective as of June 30, 2025[192](index=192&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by the report[193](index=193&type=chunk) [PART II. OTHER INFORMATION](index=54&type=section&id=PART%20II.%20OTHER%20INFORMATION) Includes legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to material legal proceedings, referring to Note 13 for specific details - The company is not currently a party to any material legal proceedings, beyond ordinary routine litigation incidental to its business[195](index=195&type=chunk) - For details on specific legal proceedings, including the HBL books and records request, refer to Note 13 (Commitments and Contingencies)[195](index=195&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) Investment in common shares involves high risk, particularly regarding consistent, cost-effective cGMP manufacturing - Investment in common shares involves a high degree of risk, with detailed risks outlined in the 2024 10-K[196](index=196&type=chunk) - A key risk factor is the uncertainty of consistently manufacturing clinical quantities of product candidates in accordance with cGMP, or at a cost-effective or commercially viable scale[197](index=197&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[198](index=198&type=chunk) [Item 3. Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - No defaults upon senior securities occurred[199](index=199&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[200](index=200&type=chunk) [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20Information) No other material information is reported, and no Rule 10b5-1 trading arrangements were adopted or terminated - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[201](index=201&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including organizational documents, amendments, and certifications - Exhibits include Restated Articles of Incorporation, Certificate of Ownership, Second Amended and Restated Bylaws, Amendment No. 2 to the 2021 Equity Incentive Plan, CEO and CFO certifications (31.1, 31.2, 32.1), and XBRL documents[202](index=202&type=chunk)[203](index=203&type=chunk) [Signatures](index=57&type=section&id=Signatures) Confirms the official signing and submission of the report by authorized officers - The report was signed on August 12, 2025, by Brian M. Culley, Chief Executive Officer, and Jill Ann Howe, Chief Financial Officer[207](index=207&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Lineage reported Q2 2025 results, highlighting positive OpRegen clinical data, OPC1 program advancements, and enhanced manufacturing capabilities [Company Overview](index=1&type=section&id=Company%20Overview) Lineage Cell Therapeutics reported its second quarter 2025 financial and operating results, highlighting continued confidence in the OpRegen RPE cell therapy program's potential, especially after positive 36-month clinical data - Positive 36-month clinical data for OpRegen RPE cell therapy program suggests long-term anatomical and functional benefits, challenging the view that Geographic Atrophy (GA) is an irreversible condition[3](index=3&type=chunk) - First chronic patient treated in the OPC1 program for spinal cord injury using a new parenchymal spinal delivery system[3](index=3&type=chunk) - Achieved in-house GMP production for two separate cell-based product candidates from a master and working cell bank system, capable of supporting millions of doses for a single-administration product[3](index=3&type=chunk) [Select Business Highlights](index=1&type=section&id=Select%20Business%20Highlights) Lineage provided updates on its key programs, including positive 36-month clinical results for OpRegen, advancements in its manufacturing capabilities, and the treatment of the first chronic patient in the OPC1 spinal cord injury program [RG6501 (OpRegen Cell Therapy)](index=1&type=section&id=RG6501%20%28OpRegen%20Cell%20Therapy%29) Positive 36-month Phase 1/2a clinical data for OpRegen demonstrated sustained visual acuity gains and durable effects in geographic atrophy patients - Positive 36-month Phase 1/2a clinical study results for RG6501 (OpRegen) showed sustained gains in Best Corrected Visual Acuity (BCVA) in Cohort 4 patients[6](index=6&type=chunk) **Mean Change in BCVA (ETDRS letters) for Treated Eyes:** | Time Point | All Patients (n=10) | Extensive Coverage (n=5) | | :--------- | :------------------ | :----------------------- | | 24 Months | +5.5 | +7.4 | | 36 Months | +6.2 | +9.0 | - Data suggests OpRegen cell therapy may counteract RPE cell dysfunction and loss in GA, with durable effects through at least 36 months after a single administration[6](index=6&type=chunk) - Ongoing collaboration with Roche and Genentech includes support for the Phase 2a GAlette Study and additional technical training for commercial manufacturing strategies[6](index=6&type=chunk) [Manufacturing Capability](index=3&type=section&id=Manufacturing%20Capability) The company successfully completed cGMP production runs for two product candidates, demonstrating scalable and cost-effective allogeneic cell product manufacturing - Successfully completed a production run for two different product candidates using a customized, two-tiered current Good Manufacturing Practice (cGMP) cell banking system[6](index=6&type=chunk) - The demonstrated cGMP production process enables the ability to produce millions of doses of a cost-effective, scalable, and consistent supply of allogeneic, cell-based products from a single initial cell line[6](index=6&type=chunk) [OPC1 Program](index=3&type=section&id=OPC1%20Program) The first chronic spinal cord injury patient was treated in the DOSED study using a novel delivery system, alongside hosting an investor symposium - The first chronic spinal cord injury patient was treated in the DOSED clinical study, successfully receiving a one-time injection of OPC1 using a novel delivery system[6](index=6&type=chunk) - Hosted the 3rd Annual Spinal Cord Injury Investor Symposium in partnership with the Christopher & Dana Reeve Foundation[6](index=6&type=chunk) [Financial Highlights & Operating Results](index=2&type=section&id=Financial%20Highlights%20%26%20Operating%20Results) The company reported its Q2 2025 financial performance, including cash position, revenue growth, and a significant net loss driven by impairment and warrant revaluation [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2025, Lineage reported $42.3 million in cash, cash equivalents, and marketable securities, which is projected to support planned operations into the first quarter of 2027 **Cash, Cash Equivalents, and Marketable Securities (in thousands):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $42,271 | $45,789 | | Marketable securities | $17 | $2,016 | | **Total** | **$42,288** | **$47,805** | - The current cash position is expected to support planned operations into Q1 2027[9](index=9&type=chunk) [Second Quarter Operating Results](index=2&type=section&id=Second%20Quarter%20Operating%20Results) Lineage experienced a significant increase in net loss for Q2 2025, primarily driven by a non-recurring impairment expense related to the VAC platform and a substantial change in the fair value of warrant liabilities [Revenues](index=2&type=section&id=Revenues) Total revenues increased in Q2 2025, primarily due to higher collaboration revenue from the Roche Agreement and VAC platform termination **Total Revenues (Three Months Ended June 30, in thousands):** | Year | Amount | | :--- | :----- | | 2025 | $2,765 | | 2024 | $1,408 | | **Change** | **+$1,357** | - The increase was primarily driven by more collaboration revenue recognized from deferred revenues under the Roche Agreement and upon termination of the VAC platform-related collaboration agreement[10](index=10&type=chunk)[11](index=11&type=chunk) [Operating Expenses](index=4&type=section&id=Operating%20Expenses) Total operating expenses significantly increased in Q2 2025, primarily driven by a non-recurring impairment loss related to the VAC platform intangible asset **Total Operating Expenses (Three Months Ended June 30, in thousands):** | Year | Amount | | :--- | :----- | | 2025 | $22,545 | | 2024 | $7,275 | | **Change** | **+$15,270** | - The overall increase was driven by a **$14.8 million** expense recognized for the loss on impairment for the intangible asset related to the VAC platform[12](index=12&type=chunk) [R&D Expenses](index=4&type=section&id=R%26D%20Expenses) Research and development expenses saw a slight increase in Q2 2025, mainly due to ongoing activities in preclinical programs **R&D Expenses (Three Months Ended June 30, in thousands):** | Year | Amount | | :--- | :----- | | 2025 | $3,106 | | 2024 | $2,868 | | **Change** | **+$238** | - The net increase was primarily driven by ongoing activities within preclinical programs[13](index=13&type=chunk) [G&A Expenses](index=4&type=section&id=G%26A%20Expenses) General and administrative expenses increased in Q2 2025, primarily due to higher costs for third-party services **G&A Expenses (Three Months Ended June 30, in thousands):** | Year | Amount | | :--- | :----- | | 2025 | $4,560 | | 2024 | $4,363 | | **Change** | **+$197** | - The net increase was primarily driven by more costs incurred for services provided by third parties[14](index=14&type=chunk) [Loss from Operations](index=4&type=section&id=Loss%20from%20Operations) The loss from operations significantly widened in Q2 2025, predominantly due to the non-recurring impairment expense for the VAC platform **Loss from Operations (Three Months Ended June 30, in thousands):** | Year | Amount | | :--- | :------- | | 2025 | $(19,780) | | 2024 | $(5,867) | | **Change** | **$(13,913)** | - This increase in loss was primarily driven by the **$14.8 million** impairment expense related to the VAC platform, which is a non-recurring transaction[15](index=15&type=chunk) [Other Income/(Expenses)](index=4&type=section&id=Other%20Income%2F%28Expenses%29) Other income and expenses showed a substantial negative change in Q2 2025, primarily due to the fair value remeasurement of warrant liabilities **Total Other Income (Expenses) (Three Months Ended June 30, in thousands):** | Year | Amount | | :--- | :-------- | | 2025 | $(10,584) | | 2024 | $94 | | **Change** | **$(10,678)** | - The net change was primarily attributable to the quarterly fair value remeasurement of warrant liabilities of **$12.7 million**, mainly due to an increase in share price[16](index=16&type=chunk) - Partially offset by **$1.7 million** for exchange rate fluctuations related to Lineage's international subsidiaries[16](index=16&type=chunk) [Net Loss Attributable to Lineage](index=4&type=section&id=Net%20Loss%20Attributable%20to%20Lineage) The net loss attributable to Lineage significantly increased in Q2 2025, driven by the impairment expense and warrant liability revaluation **Net Loss Attributable to Lineage (Three Months Ended June 30, in thousands, except per share data):** | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Net Loss Attributable to Lineage | $(30,464) | $(5,760) | | Net Loss Per Share (basic & diluted) | $(0.13) | $(0.03) | - The change was primarily driven by the loss on impairment expense related to a 2019 acquisition and the quarterly fair value remeasurement of the warrant liabilities[17](index=17&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section provides details about Lineage Cell Therapeutics, including its mission, pipeline, forward-looking statements, and investor contact information [Conference Call and Webcast](index=4&type=section&id=Conference%20Call%20and%20Webcast) Lineage Cell Therapeutics hosted a conference call and webcast on August 12, 2025, to discuss Q2 2025 results and provide a business update, with replay options available - A conference call and live webcast were held on August 12, 2025, to discuss financial results and provide a business update[18](index=18&type=chunk) - A replay of the webcast is available on Lineage's website for 30 days, and a telephone replay was available through August 19, 2025[18](index=18&type=chunk) [About Lineage Cell Therapeutics, Inc.](index=4&type=section&id=About%20Lineage%20Cell%20Therapeutics%2C%20Inc.) Lineage Cell Therapeutics is a clinical-stage biotechnology company focused on developing allogeneic cell therapies for serious neurological and ophthalmic conditions, leveraging its proprietary cell-based technology platform and manufacturing capabilities - Lineage Cell Therapeutics is a clinical-stage biotechnology company developing allogeneic cell therapies for serious neurological and ophthalmic conditions[19](index=19&type=chunk) - The company's pipeline includes OpRegen (retinal pigment epithelial cell therapy), OPC1 (oligodendrocyte progenitor cell therapy), ReSonance (ANP1, auditory neuronal progenitor cell therapy), PNC1 (photoreceptor neural cell therapy), and RND1 (novel hypoimmune induced pluripotent stem cell line)[19](index=19&type=chunk) - Lineage's technology platform uses directed differentiation protocols to generate specialized human cells from well-characterized pluripotent cell lines to replace or support dysfunctional cells[19](index=19&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding potential therapeutic benefits, program advancements, manufacturing capabilities, and financial outlook, subject to known and unknown risks and uncertainties - All statements other than historical facts in the press release are forward-looking statements, identifiable by terms such as 'believe,' 'aim,' 'may,' 'will,' 'estimate,' etc[21](index=21&type=chunk) - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from expectations[21](index=21&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the date they were made, and Lineage undertakes no obligation to update them except as required by law[21](index=21&type=chunk) [Investor Relations Contact](index=6&type=section&id=Investor%20Relations%20Contact) Contact information for Lineage Cell Therapeutics' Investor Relations and Media Relations is provided for inquiries - Investor Relations contact: Ioana C. Hone (ir@lineagecell.com, (442) 287-8963)[22](index=22&type=chunk) - Media Relations contact: Nic Johnson or David Schull of Russo Partners (Nic.johnson@russopartnersllc.com, David.schull@russopartnersllc.com, (212) 845-4242)[22](index=22&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and statements of cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from **$113.2 million** at December 31, 2024, to **$90.8 million** at June 30, 2025, primarily due to a reduction in intangible assets and current assets **Condensed Consolidated Balance Sheets (in thousands):** | ASSETS | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $42,271 | $45,789 | | Marketable securities | $17 | $2,016 | | Total current assets | $43,844 | $50,997 | | Intangible assets, net | $31,700 | $46,540 | | **TOTAL ASSETS** | **$90,799** | **$113,218** | | LIABILITIES | | | | Total current liabilities | $10,756 | $13,977 | | Warrant liabilities | $18,801 | $6,161 | | **TOTAL LIABILITIES** | **$43,687** | **$36,206** | | Total shareholders' equity | $47,112 | $77,012 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, total revenues increased to **$2.8 million** from **$1.4 million** in the prior year, while total operating expenses significantly rose to **$22.5 million** from **$7.3 million**, primarily due to a **$14.8 million** impairment loss **Condensed Consolidated Statements of Operations (Three Months Ended June 30, in thousands, except per share data):** | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Total revenues | $2,765 | $1,408 | | Total operating expenses | $22,545 | $7,275 | | Loss on impairment of intangible asset | $14,840 | $— | | Loss from operations | $(19,780) | $(5,867) | | Change in fair value of warrant liability | $(12,740) | $— | | **NET LOSS ATTRIBUTABLE TO LINEAGE** | **$(30,464)** | **$(5,760)** | | Net loss per common share (basic and diluted) | $(0.13) | $(0.03) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities slightly decreased to **$10.4 million** from **$11.0 million** in 2024, while net cash provided by investing activities significantly improved to **$1.9 million** from **$8.8 million** used in 2024 **Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands):** | Metric | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Net cash used in operating activities | $(10,425) | $(10,959) | | Net cash (used in) provided by investing activities | $1,889 | $(8,831) | | Net cash provided by financing activities | $4,737 | $14,126 | | **NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH** | **$(3,579)** | **$(5,822)** | | Cash, cash equivalents and restricted cash at end of period | $42,775 | $30,170 |

Financial Data and Key Metrics Changes - The company received a $50 million upfront payment from Roche as part of their partnership agreement, with potential additional developmental and commercialization milestones totaling $620 million and double-digit royalties [13][15][18] Business Line Data and Key Metrics Changes - The lead program, OpRegen, has shown significant results in a small patient trial, with treated patients gaining an average of seven letters of vision over two years, contrasting with untreated patients who typically lose vision [7][10][12] Market Data and Key Metrics Changes - The competitive landscape includes other companies manufacturing RPE cells, which have reported positive outcomes in similar patient populations, providing independent validation of the mechanism [35][36] Company Strategy and Development Direction - The company aims to leverage its manufacturing capabilities to expand into other areas beyond dry AMD, including spinal cord injury and auditory neuron treatments, indicating a broader strategic vision [43][44] - The focus is on improving delivery methods for cell therapies to enhance clinical outcomes and reduce adverse effects, which is seen as a more promising approach than merely increasing efficacy [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Roche's capabilities and the ongoing study's potential, emphasizing that the timing of data release is less critical than the asset's increasing value [28][30] - The company believes that the independent validation from competitors strengthens its position and reduces perceived risks associated with its approach [36][37] Other Important Information - The company has made significant advancements in manufacturing capabilities, allowing for the production of millions of vials of therapy, which is crucial for affordability and accessibility [40][41][42] Q&A Session Summary Question: Can you provide an update on the OpRegen program and its clinical outcomes? - The OpRegen program has shown unprecedented results, with treated patients gaining vision over a two-year period, contrasting with the expected decline in untreated patients [7][10][12] Question: What are the terms of the partnership with Roche? - The partnership includes a $50 million upfront payment, potential milestones of $620 million, and double-digit royalties, reflecting strong economic terms for the company [13][15] Question: How does the company view the competitive landscape? - The company sees independent validation from competitors as a positive sign but does not view them as significant threats due to its superior manufacturing and clinical development capabilities [35][36] Question: What is the company's strategy moving forward? - The strategy includes expanding into new therapeutic areas and improving delivery methods for cell therapies, aiming for better clinical outcomes and reduced risks [22][43]

Financial Performance - Lineage Cell reported a quarterly loss of $0.02 per share, which aligns with the Zacks Consensus Estimate, an improvement from a loss of $0.04 per share a year ago [1] - The company posted revenues of $1.5 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 31.73%, but showing a slight increase from $1.44 million year-over-year [2] - Over the last four quarters, Lineage Cell has surpassed consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2][1] Stock Performance - Lineage Cell shares have declined approximately 4.7% since the beginning of the year, compared to a decline of 0.6% for the S&P 500 [3] - The current Zacks Rank for Lineage Cell is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $2.25 million, and for the current fiscal year, it is -$0.07 on revenues of $16.05 million [7] - The trend of estimate revisions for Lineage Cell is mixed, which could change following the recent earnings report [6] Industry Context - Lineage Cell operates within the Medical - Biomedical and Genetics industry, which is currently ranked in the top 35% of over 250 Zacks industries [8] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Data and Key Metrics Changes - As of March 31, 2025, the company's cash position was $47.9 million, expected to support operations into Q1 2027 [24] - Total revenues for Q1 2025 were $1.5 million, a net increase of $0.1 million compared to $1.4 million for the same period in 2024, primarily driven by collaboration revenue from Roche [25] - Operating expenses for Q1 2025 were $8 million, a decrease of $0.1 million compared to $8.1 million in Q1 2024 [26] - The net loss for Q1 2025 was $4.1 million or $0.02 per share, compared to a net loss of $6.5 million or $0.04 per share for the same period in 2024 [26] Business Line Data and Key Metrics Changes - OpRegen is currently in a Phase 2a study called the GALET study, which is exploring surgical delivery parameters to optimize the risk-benefit profile [8] - The OPC1 program has been tested in 30 individuals with severe spinal cord injuries, with promising long-term safety and efficacy data [18] Market Data and Key Metrics Changes - The company is encouraged by recent independent validation from competing RPE companies, indicating that RPE transplants can drive clinical outcomes beyond currently approved therapies [13] - Genentech plans to report three-year data from the Phase 1/2a trial of OpRegen, which is expected to provide additional support for the treatment's efficacy [10] Company Strategy and Development Direction - The company aims to capitalize on its investments in cell manufacturing and expand its capabilities through partnerships beyond OpRegen and OPC1 [29] - The manufacturing platform is seen as a competitive advantage, allowing for low-cost production of allogeneic therapies [15] Management's Comments on Operating Environment and Future Outlook - Management remains confident in OpRegen's potential to drive positive clinical outcomes in dry AMD and is encouraged by partners' commitment to the program [28] - The company is optimistic about the future of cell and gene therapies, especially in light of supportive regulatory comments from the new CBER director [84] Other Important Information - The company has completed GMP production runs of a product candidate from a single pluripotent cell line, marking a significant achievement in manufacturing capabilities [16] - The company is collaborating with the Christopher and Dana Reeve Foundation for the third annual SCI Investor Symposium, which will be held virtually [22] Q&A Session Summary Question: Can you compare your manufacturing capabilities to peers? - The CEO noted that direct comparisons are challenging as many peers do not disclose sufficient details about their capabilities, but emphasized that the company's manufacturing system is highly differentiated [33][36] Question: What potential tariff impacts might you expect with your manufacturing site in Israel? - The CFO indicated that they do not expect tariff impacts and have measures in place to mitigate production issues by purchasing materials in advance [38] Question: Can you elaborate on potential partnership opportunities related to your new manufacturing capabilities? - The CEO mentioned that each opportunity will be specific, and the company is not aiming to become a contract manufacturer but is open to collaborations that could involve success payments and ownership in assets [45][46] Question: When might we expect data from the OPC1 program? - The CEO stated that initial safety data from the dose study would be available within 30 days, while functional assessments would take longer, typically 6 to 12 months [54][55] Question: What does a successful delivery outcome look like for the OPC1 dose study? - The CEO explained that success will largely depend on the usability of the new delivery device and the absence of unexpected complications, with a focus on enabling a better surgical delivery method [62] Question: Can you comment on the design of the spinal cord injury trial? - The CEO provided details on the staggered enrollment process, indicating that the first three patients will be thoracic injury patients, followed by cervical patients, before moving to open enrollment [86]

Financial Data and Key Metrics Changes - As of March 31, 2025, the company's cash position was $47.9 million, expected to support operations into Q1 2027 [23] - Total revenues for Q1 2025 were $1.5 million, a net increase of $0.1 million compared to $1.4 million for the same period in 2024, primarily driven by collaboration revenue from Roche [24] - Operating expenses for Q1 2025 were $8 million, a decrease of $0.1 million compared to $8.1 million in Q1 2024 [24] - The net loss for Q1 2025 was $4.1 million or $0.02 per share, compared to a net loss of $6.5 million or $0.04 per share for the same period in 2024 [25] Business Line Data and Key Metrics Changes - OpRegen is currently in a Phase 2a study called the GALET study, which is exploring various parameters of surgical delivery [7] - The OPC1 program has been tested in 30 individuals with severe spinal cord injuries, with promising long-term safety and efficacy data [18] Market Data and Key Metrics Changes - The company is encouraged by recent positive data from competing RPE companies, which supports the potential of RPE transplants to drive clinical outcomes beyond currently approved therapies [13] Company Strategy and Development Direction - The company aims to capitalize on investments in cell manufacturing and expand capabilities through partnerships beyond OpRegen and OPC1 [27] - The manufacturing platform is seen as a competitive advantage, allowing for low-cost production of allogeneic therapies [15] Management's Comments on Operating Environment and Future Outlook - Management remains confident in OpRegen's potential to drive positive clinical outcomes in dry AMD and is encouraged by partners' commitment to the program [27] - The company is preparing for success by seeking additional partnerships and funding opportunities [27] Other Important Information - The company has completed GMP production runs capable of producing millions of doses from a single cell line, marking a significant achievement in manufacturing capabilities [16] Q&A Session Summary Question: Comparison of manufacturing capabilities with peers - Management expressed frustration over the lack of detailed comparisons from peers but emphasized their differentiated capabilities in manufacturing [31][33] Question: Potential tariff impacts due to manufacturing site in Israel - Management does not expect tariff impacts and has measures in place to mitigate production issues [36][37] Question: Thoughts on potential partnerships around new manufacturing capabilities - Management indicated that partnerships would vary by opportunity, focusing on success payments and ownership in assets rather than becoming a contract manufacturer [44] Question: Expected data from the OPC1 program - Initial data from the dose study is expected to be available within 30 days, with functional assessments potentially lagging by several months [54] Question: Design of the spinal cord injury trial - The trial will enroll between six and ten patients, with a staggered approach for thoracic and cervical patients [90]