Issued on behalf of Avant Technologies Inc.VANCOUVER, British Columbia, Nov. 19, 2025 (GLOBE NEWSWIRE) -- USA News Group News Commentary – The autologous cell therapy market surpassed $10.1 billion in 2025 as biotechnology companies race to commercialize therapies that read, replace, and rewrite cellular behavior to combat age-related diseases and metabolic disorders. The cell harvesting infrastructure expanded to support next-generation cell and gene therapy manufacturing, creating momentum across platform ...

Company Overview - Lineage Cell Therapeutics (LCTX) is a regenerative medicine company focused on utilizing pluripotent stem cells to create specialized human cells for organ tissue regeneration [1]. Technology and Applications - The company's platform aims to generate off-the-shelf human cells that can replace damaged tissues in various organs, including potential applications in regenerating the eyes, spinal cord, and auditory systems [1].

Financial Data and Key Metrics Changes - As of September 30, 2025, the overall cash position was $40.5 million, expected to support operations into Q2 2027, one quarter longer than previously guided [25] - Total revenues for Q3 2025 were $3.7 million, a decrease of approximately $0.1 million compared to $3.8 million for the same period in 2024, primarily driven by lower royalty revenue [26] - Operating expenses for Q3 2025 were $7.5 million, a decrease of $0.1 million compared to $7.6 million for the same period in 2024 [27] - The net loss was $29.8 million, or $0.13 per share, compared to a net loss of $3 million, or $0.02 per share, for the same period in 2024, primarily driven by non-cash fair value remeasurement of warrant liabilities [28] Business Line Data and Key Metrics Changes - The R&D expenses for Q3 2025 were $3.3 million, an increase of $0.1 million compared to $3.2 million for the same period in 2024, driven by costs associated with the OPC1 program and preclinical programs [27] - G&A expenses were $4.2 million, a decrease of $0.2 million compared to $4.4 million for the same period in 2024, primarily due to stock-based compensation expenses [27] Market Data and Key Metrics Changes - The company reported a significant potential cash source of approximately $37 million from warrant capital if Roche and Genentech advance OpRegen into a clinical trial [26] Company Strategy and Development Direction - The company aims to create a basket of cell therapy assets, some developed internally and others partnered, focusing on generating multiple product candidates from its platform [18] - The strategic goals include entering into deals to fund existing product candidates, creating new assets to attract external funding, and capitalizing on unique manufacturing capabilities [10][12][13] - The company is optimistic about the OpRegen program's potential to drive positive clinical outcomes and is encouraged by partner commitments [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential for OpRegen to advance into a controlled clinical trial, supported by positive indicators from clinical site expansions and independent validations of clinical findings [10][30] - The company anticipates that the favorable biotech market will improve the cost of capital, allowing for judicious expansion [17] Other Important Information - The company has preserved the right to enter into future clinical or commercial deals with pharmaceutical partners, demonstrating flexibility in its strategic approach [11] - The company is awaiting a decision on a CIRM CLIN2 grant, which could provide up to approximately $7 million in non-dilutive funding [15] Q&A Session Summary Question: Considerations for the iLET Cell program and internal decision-making - Management indicated that the biological ceiling in differentiation protocols limits the opportunity for significant process changes, focusing on maximizing early steps to achieve necessary outputs [32][33] Question: Future partnerships and collaborations - Management highlighted the importance of finding suitable partners, emphasizing that partnerships should align with the company's capabilities and strategic goals [35][36] Question: Updates on the OPC-1 program and patient dosing - Management confirmed that multiple doses could be administered at different sites, and the safety profile for OPC1 remains strong [39][40] Question: Impact of potential CIRM grant funding - Management stated that while the grant would provide significant support, the program would continue regardless of the outcome [59] Question: Future business model considerations - Management expressed a preference to avoid becoming a fee-for-service company, focusing instead on partnerships that allow for significant ownership in the upside [46][47]

Financial Performance - Total revenues for Q3 2025 were $3,681,000, a decrease of 2.6% compared to $3,779,000 in Q3 2024[25]. - Net loss attributable to Lineage for Q3 2025 was $29,781,000, compared to a net loss of $3,034,000 in Q3 2024, representing an increase in loss of 878.5%[25]. - The company reported a comprehensive loss of $29,940,000 for Q3 2025, compared to a comprehensive loss of $3,421,000 in Q3 2024, an increase of 772.5%[27]. - For the nine months ended September 30, 2025, Lineage Cell Therapeutics reported a net loss of $64.384 million, compared to a net loss of $15.336 million for the same period in 2024, indicating a significant increase in losses[33]. - Total revenue for the three months ended September 30, 2025, was $3,681,000, a decrease of 2.6% compared to $3,779,000 for the same period in 2024[59]. - Total revenue for the nine months ended September 30, 2025, was $7,948,000, an increase of 19.9% compared to $6,631,000 for the same period in 2024[59]. Assets and Liabilities - Total assets decreased to $89,639,000 as of September 30, 2025, down from $113,218,000 as of December 31, 2024, a decline of 20.9%[23]. - Total liabilities increased significantly to $68,843,000 as of September 30, 2025, compared to $36,206,000 as of December 31, 2024, an increase of 90.2%[23]. - The company’s accumulated deficit increased to $467,849,000 as of September 30, 2025, compared to $403,465,000 as of December 31, 2024, an increase of 15.9%[23]. - The total shareholders' equity decreased to $20,796,000 as of September 30, 2025, down from $77,012,000 as of December 31, 2024, a decline of 73.0%[23]. - The total cash, cash equivalents, and restricted cash at the end of September 30, 2025, was $40.977 million, a decrease from $28.306 million at the end of September 30, 2024[33]. Research and Development - Research and development expenses for Q3 2025 were $3,271,000, slightly up from $3,171,000 in Q3 2024, an increase of 3.2%[25]. - The company is developing multiple allogeneic cell therapy programs, including OPC1 for spinal cord injuries and PNC1 for vision loss, indicating a broad pipeline of therapeutic candidates[37]. - Lineage's lead cell therapy program, OpRegen, is currently in a Phase 2a clinical trial for geographic atrophy secondary to age-related macular degeneration, with potential milestone payments of up to $620 million from Roche[36]. - The company is conducting the DOSED clinical study for OPC1, which includes participants with chronic spinal cord injuries, with the first participant dosed in August 2025[39]. - OpRegen is currently in a Phase 2a clinical trial for geographic atrophy (GA) secondary to age-related macular degeneration (AMD), with positive 36-month visual acuity results showing a mean change in Best Corrected Visual Acuity (BCVA) of +9.0 ETDRS letters[144]. Financing and Capital - The company issued 7,895 common shares through registered direct financing, raising $3.795 million during the nine months ended September 30, 2025[31]. - The company has $40.5 million in cash, cash equivalents, and marketable securities as of September 30, 2025, which is expected to support operations for at least the next twelve months[48]. - The company has received a $14.3 million grant from the California Institute for Regenerative Medicine (CIRM) to support OPC1 clinical development and has applied for an additional $7.0 million[39]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $6.6 million, consisting of net proceeds from the sale of common shares and warrants[184]. - The company may seek additional capital through equity offerings, debt financings, or strategic alliances, but there is no assurance that adequate capital will be available on favorable terms[193]. Operational Highlights - The company has produced scalable cGMP banking systems for three product candidates, supporting a production capability exceeding the expected patient population for OpRegen and OPC1[41]. - The company is responsible for completing activities related to its ongoing phase 1/2a clinical study for OpRegen, with enrollment now complete[113]. - The company has obligations to licensors and government entities that may result in future payments, but the timing and amounts are uncertain[51]. - The company has incurred significant operating losses since inception, primarily funded through equity securities and research grants[49]. - The company plans to leverage its scalable cGMP cell therapy production capability to produce cost-effective allogeneic cell transplant products[149]. Legal and Regulatory - The company has not recorded a deferred tax benefit or provision expense during the nine months ended September 30, 2025, or 2024[105]. - Lineage has not recorded any liabilities for indemnification agreements as of September 30, 2025, and maintains liability insurance policies to limit financial exposure[134]. - The company has not accrued for a contingent liability related to a legal proceeding involving HBL, as the likelihood of a material adverse effect is not probable nor estimable[131]. - The Israeli regional conflict has temporarily impacted operations, but as of the report date, there has been no material adverse effect on operations[154]. Stock and Equity - The company issued and sold 1.0 million common shares under its at-the-market offering program for gross proceeds of $1.3 million during the nine months ended September 30, 2025[178]. - As of September 30, 2025, the company had 230,327,537 common shares issued and outstanding, an increase from 220,416,326 shares as of December 31, 2024[80]. - The company is authorized to issue up to 450,000,000 common shares, with no preferred shares issued or outstanding as of the reporting dates[79]. - The balance of outstanding stock options increased from 16,658,000 at December 31, 2024, to 23,976,000 at September 30, 2025, with a weighted average exercise price of $1.06[98]. - Total stock-based compensation expense for the three months ended September 30, 2025, was $1.199 million, compared to $1.330 million for the same period in 2024[99].

Financial Performance - Total revenues for Q3 2025 were $3.7 million, a decrease of approximately $0.1 million compared to $3.8 million in Q3 2024[14] - Total revenues for the three months ended September 30, 2025, were $3,681,000, a decrease of 2.6% compared to $3,779,000 for the same period in 2024[30] - Net loss attributable to Lineage for Q3 2025 was $29.8 million, or $0.13 per share, compared to a net loss of $3.0 million, or $0.02 per share, in Q3 2024[20] - Net loss attributable to Lineage for the nine months ended September 30, 2025, was $64,384,000, significantly higher than the net loss of $15,336,000 for the same period in 2024[32] - Collaboration revenues for the three months ended September 30, 2025, increased to $3,544,000, up from $3,386,000 in the same period of 2024, representing a growth of 4.7%[30] Operating Expenses - Operating expenses for Q3 2025 were $7.5 million, a decrease of $0.1 million from $7.6 million in Q3 2024[16] - Total operating expenses for the nine months ended September 30, 2025, were $38,019,000, an increase of 65.5% compared to $22,999,000 for the same period in 2024[30] Cash and Liquidity - Cash, cash equivalents, and marketable securities totaled $40.5 million as of September 30, 2025, expected to support operations into Q2 2027[13] - Cash and cash equivalents decreased to $40,977,000 as of September 30, 2025, from $46,354,000 at the beginning of the period[32] - The company experienced a net cash used in operating activities of $14,041,000 for the nine months ended September 30, 2025, compared to $16,746,000 for the same period in 2024[32] Research and Development - R&D expenses increased to $3.3 million in Q3 2025, up from $3.2 million in Q3 2024, driven by $0.2 million for the OPC1 program[17] - Lineage continues to pursue grant funding from the California Institute for Regenerative Medicine (CIRM) for the OPC1 program[3] - Lineage initiated a manufacturing scale project for Type 1 Diabetes cell therapy, focusing on large-scale production of islet cells[6] Clinical Studies and Collaborations - Lineage reported positive results from the RG6501 (OpRegen) Phase 1/2a clinical study, suggesting sustained gains in visual acuity[5] - A collaboration with William Demant Invest A/S was established to develop ReSonance (ANP1) for sensorineural hearing loss, with up to $12 million in development costs covered by WDI[9] - The first chronic spinal cord injury participant was treated in the DOSED clinical study, with no significant safety events reported after sixty days[15] Liabilities and Impairments - The total liabilities increased to $68,843,000 as of September 30, 2025, compared to $36,206,000 as of December 31, 2024[28] - The company reported a loss on impairment of intangible assets of $14,840,000 for the nine months ended September 30, 2025[30] - The change in fair value of warrant liability resulted in a loss of $36,992,000 for the nine months ended September 30, 2025[30] Share Information - The weighted-average common shares used to compute basic and diluted net loss per common share for the nine months ended September 30, 2025, were 227,765, compared to 186,860 for the same period in 2024[30]

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)