Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were approximately $2.9 million, a net increase of $0.8 million compared to $2.1 million for the same period in 2023, primarily driven by increased collaboration revenue from Roche [43] - Total operating expenses for Q4 2024 were $7.8 million, a decrease of $0.4 million compared to $8.2 million for the same period in 2023 [44] - The net loss attributable to Lineage for Q4 2024 was $3.3 million or $0.02 per share, compared to a net loss of $4.8 million or $0.03 per share for the same period in 2023 [46] Business Line Data and Key Metrics Changes - R&D expenses for Q4 2024 were $3.4 million, a decrease of $0.5 million compared to $3.9 million for the same period in 2023, driven by a decrease in OPC1 program expenses [44] - G&A expenses for Q4 2024 were $4.4 million, consistent with expenses for the same period in 2023 [44] Market Data and Key Metrics Changes - The company reported a year-end cash position of $47.8 million as of December 31, 2024, which supports operations into Q1 2027 [40] - The November 2024 financing included a milestone warrant that could provide an additional $36 million if clinical milestones are achieved [41] Company Strategy and Development Direction - The company is focused on advancing its lead candidate OpRegen for dry AMD and is confident in its potential to drive positive clinical outcomes [52] - Investments in scalable GMP manufacturing are seen as critical for the success of allogeneic cell therapy products, with a goal to produce millions of doses [30][22] - The company is also advancing its OPC1 program for spinal cord injury, with plans for a larger clinical trial once necessary improvements are in place [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing GAlette Study for OpRegen, noting that independent evidence from other RPE transplant trials supports their belief in the treatment's efficacy [52] - The competitive landscape for RPE cell therapies is acknowledged, but management believes their partnerships with Roche and Genentech provide a significant advantage [60] Other Important Information - The company has continued to add value to its patent portfolio, with two additional OpRegen patents issued earlier in the year [38] - The company is working on a new delivery device for the OPC1 program, which is expected to enhance the administration process [34] Q&A Session Summary Question: What is the company doing to protect its market leadership in RPE cell placements? - Management emphasized the importance of having the right attributes for success, including strong manufacturing capabilities and partnerships with Genentech and Roche [60] Question: When will the updated three-year data for OpRegen be available? - Management indicated that inquiries regarding the timeline for the three-year data should be directed to Genentech, as they control the announcement schedule [64] Question: Can you describe any changes in logistics for getting patients to the surgical suite faster? - Management noted improvements in training and the development of an immediate use formulation to streamline the process [77] Question: Will the FDA require proof of device safety before fully enrolling in the DOSED study? - Management confirmed that there is a staging process for safety measures, starting with thoracic patients before moving to broader enrollment [83] Question: What are the plans for the resonance program given market uncertainty? - Management stated that while the resonance program remains important, they are being prudent with investment decisions in the current market environment [88]

Lineage Cell Therapeutics, Inc. (NYSE:LCTX) Q4 2024 Earnings Conference Call March 10, 2025 4:30 PM ET Company Participants Ioana Hone - Head of Investor Relations Brian Culley - Chief Executive Officer Jill Howe - Chief Financial Officer Conference Call Participants Jack Allen - Baird Joseph Pantginis - H.C. Wainwright Michael Okunewitch - Maxim Group Mayank Mamtani - Riley Securities Albert Lowe - Craig-Hallum Sean McCutcheon - Raymond James Operator Thank you for standing by. My name is Rochelle and I wi ...

Financial Performance and Profitability - The company has incurred operating losses since inception and is uncertain when it will attain profitability[20] - The company anticipates needing to raise substantial additional capital to fund operations and product development, which may dilute existing shareholders[20] Product Development and Regulatory Risks - The company relies on third-party collaboration with F. Hoffmann-La Roche Ltd and Genentech, Inc. for the development and commercialization of RG6501 (OpRegen), which is critical for potential revenue[20] - The FDA granted orphan drug designation to OPC1 for the treatment of acute spinal cord injuries, but maintaining this designation is not guaranteed[21] - The company has limited experience in manufacturing its product candidates on a commercial scale, which poses risks for clinical development and regulatory approval[21] Market and Competitive Landscape - The commercial success of product candidates will depend on market acceptance by physicians, patients, and third-party payors[21] - The company faces significant competition, which may impact its ability to successfully commercialize its product candidates[21] - The company has no marketing and sales force or distribution capabilities currently in place[21] Stock Market and Geopolitical Risks - The market price of the company's common shares has been and may continue to be volatile[21] - The company is exposed to geopolitical risks that could disrupt operations, particularly at its facility in Jerusalem, Israel[20]

Financial Performance - Total revenues for Q4 2024 were approximately $2.9 million, a net increase of $0.8 million compared to $2.1 million in Q4 2023, primarily driven by collaboration revenue from Roche[13] - Total revenues for the full year 2024 were $9.5 million, a net increase of $0.6 million compared to $8.9 million in 2023, driven by collaboration revenue from Roche[19] - Total revenues for the year ended December 31, 2024, increased to $9,499,000, representing a 6.2% growth from $8,945,000 in 2023[34] - Collaboration revenues rose to $8,149,000, up from $7,588,000, indicating an 7.4% increase year-over-year[34] Operating Expenses - Total operating expenses for Q4 2024 were $7.8 million, a decrease of $0.4 million compared to $8.2 million in Q4 2023[14] - Total operating expenses for the full year 2024 were $31.0 million, a decrease of $2.7 million compared to $33.7 million in 2023[20] - Total operating expenses declined to $30,977,000, down 8.0% from $33,678,000 in the previous year[34] Research and Development - R&D expenses for Q4 2024 were $3.4 million, a decrease of $0.5 million compared to $3.9 million in Q4 2023[15] - R&D expenses for the full year 2024 were $12.5 million, a decrease of $3.2 million compared to $15.7 million in 2023[21] - Research and development expenses decreased to $12,472,000 from $15,705,000, a reduction of 20.0%[34] Net Loss - Net loss attributable to Lineage for Q4 2024 was $3.3 million, or $0.02 per share, compared to a net loss of $4.8 million, or $0.03 per share, for Q4 2023[18] - Net loss attributable to Lineage for the full year 2024 was $18.6 million, or $0.09 per share, compared to a net loss of $21.5 million, or $0.12 per share, for 2023[25] - Net loss attributable to Lineage for 2024 was $18,609,000, compared to a net loss of $21,486,000 in 2023, reflecting a 13.1% improvement[34] Financial Position - Cash and cash equivalents increased to $45,789,000 as of December 31, 2024, up from $35,442,000, a growth of 29.0%[32] - Total assets grew to $113,218,000, compared to $101,019,000 in 2023, marking a 12.0% increase[32] - Total liabilities decreased to $36,206,000 from $38,996,000, a reduction of 4.6%[32] - Lineage's shareholders' equity increased to $78,381,000, up from $63,419,000, representing a 23.5% rise[32] - The company anticipates sufficient cash, cash equivalents, and marketable securities to support operations into the first quarter of 2027[29] Regulatory and Clinical Updates - OpRegen received RMAT designation from the FDA, and the ongoing GAlette Study is expanding to additional clinical sites[12] Financing Activities - Lineage completed two financings totaling $44 million in gross proceeds, with potential for an additional $36 million upon full cash exercise of clinical milestone-linked warrants[5]

Core Viewpoint - Lineage Cell (LCTX) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to significant buying or selling activity that affects stock prices [4]. Company Performance and Outlook - Rising earnings estimates for Lineage Cell suggest an improvement in the company's underlying business, which could attract investor interest and drive the stock price higher [5]. - The Zacks Consensus Estimate for Lineage Cell has increased by 15% over the past three months, with expectations of -$0.12 per share for the fiscal year ending December 2024, indicating no year-over-year change [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Lineage Cell's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Core Viewpoint - Lineage Cell (LCTX) has experienced significant selling pressure, resulting in a 43.1% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating potential for recovery [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) for LCTX is currently at 28.88, suggesting that the stock is oversold and may be nearing a reversal point due to exhausted selling pressure [5]. - The stock's price has fluctuated, with a recent price of 0.86 as of November 15, 2024, and an RSI of 46.749, indicating a potential for price appreciation [6]. Group 2: Earnings Estimates - There has been a strong consensus among sell-side analysts to raise earnings estimates for LCTX, leading to a 28.9% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7]. - LCTX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential for a turnaround [8].

Core Viewpoint - Lineage Cell (LCTX) has experienced a significant downtrend, with a 26.3% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to analysts' positive earnings outlook [1]. Group 1: Stock Performance - LCTX's stock has declined 26.3% in the last four weeks, indicating strong selling pressure [1]. - The Relative Strength Index (RSI) for LCTX is currently at 29.61, suggesting that the heavy selling may be exhausting itself, which could lead to a price rebound [4]. Group 2: Analyst Sentiment - There is a strong consensus among sell-side analysts regarding LCTX's ability to report better earnings than previously predicted, with a 12.8% increase in the consensus EPS estimate over the last 30 days [5]. - LCTX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a favorable outlook for a potential turnaround [5].

Financial Data and Key Metrics Changes - The company reported cash, cash equivalents, and marketable securities of $32.7 million as of September 30, 2024, which is expected to support planned operations into Q1 2026, extending the runway by a quarter compared to the previous quarter [25][26] - Total revenues for Q3 2024 were $3.8 million, a net increase of $2.5 million compared to $1.2 million for the same period in 2023, primarily driven by increased collaboration revenue from Roche [27] - Operating expenses totaled $7.6 million, a decrease of $0.3 million from $7.9 million in Q3 2023, with R&D expenses at $3.2 million, down from $3.7 million, and G&A expenses at $4.4 million, up from $4 million [28][29] Business Line Data and Key Metrics Changes - The lead program, OpRegen, is currently in a Phase 2a study conducted by Genentech, with preliminary efficacy data expected to be collected [8][9] - The company is optimistic about OpRegen due to Roche's prioritization of the program and the recent RMAT designation, which may provide regulatory benefits [10][13] Market Data and Key Metrics Changes - The company highlighted the importance of commercially viable manufacturing in cell therapy, emphasizing the need for affordable and consistent production processes [15][16] - The competitive landscape for hearing loss treatments is noted, with the company positioning its ANP1 program as a potential solution that addresses a broader patient population compared to gene therapies [53] Company Strategy and Development Direction - The company aims to leverage its manufacturing expertise to establish a scalable process for allogeneic cell therapies, which is seen as a significant barrier to entry in the field [17][18] - Future plans include advancing multiple cell transplant programs in areas of high unmet need, with OpRegen data expected to validate the technology and business model [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing collaboration with Roche and Genentech, interpreting their actions as positive indicators for OpRegen's progress [31] - The company anticipates a clear path to initiating enrollment in the DOSED study for OPC1, with preliminary safety data expected to be available soon after commencement [32] Other Important Information - The company is preparing to submit a CIRM grant application for financial support of the DOSED study, with expectations that the grant portal will reopen in spring [21] - The ANP1 program has shown promising preclinical results, with successful administration and survival of cells in the inner ear [22] Q&A Session Summary Question: Timeline for OPC1 study - Management clarified that the amendment review by the FDA is expected to be completed in Q1 2025, with overlapping activities to prepare for the study while awaiting FDA feedback [35][39] Question: Coverage of cells in ANP1 program - Management noted that preclinical studies showed transplanted cells migrating within the cochlea, which may indicate effective coverage, although the exact percentage remains uncertain [41][43] Question: Activities under the services agreement with Genentech - Management indicated that continued patient follow-up for the Phase 1/2a trial for an additional five years suggests positive outcomes, reflecting supportive progress [45] Question: Future disclosures for OpRegen - Management stated that future disclosures will depend on Roche and Genentech's strategies, but they are encouraged by the regulatory precedents set for similar treatments [57][60] Question: CIRM grant and study initiation - Management confirmed that they will proceed with study preparations before the CIRM grant approval, ensuring careful cash management [69]

Group 1 - Lineage Cell (LCTX) reported a quarterly loss of $0.02 per share, better than the Zacks Consensus Estimate of a loss of $0.04, representing an earnings surprise of 50% [1] - The company posted revenues of $3.78 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 222.99%, compared to $1.25 million in the same quarter last year [2] - Over the last four quarters, Lineage Cell has surpassed consensus EPS estimates three times and topped revenue estimates two times [2] Group 2 - The stock has underperformed, losing about 16.2% since the beginning of the year, while the S&P 500 gained 25.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $2.02 million, and for the current fiscal year, it is -$0.15 on revenues of $6.06 million [7] - The Zacks Industry Rank for Medical - Biomedical and Genetics is in the top 29% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Performance - Total revenues for the three months ended September 30, 2024, were $3,779,000, a 203% increase compared to $1,246,000 for the same period in 2023[13]. - Collaboration revenues increased to $3,386,000 for the three months ended September 30, 2024, compared to $957,000 in the same period of 2023, representing a 254% growth[13]. - The net loss attributable to Lineage for the three months ended September 30, 2024, was $3,034,000, an improvement from a net loss of $7,110,000 in the same period of 2023[13]. - Total operating expenses for the three months ended September 30, 2024, were $7,619,000, a slight decrease from $7,951,000 in the same period of 2023[13]. - Comprehensive loss attributable to Lineage common shareholders for the three months ended September 30, 2024, was $3,454,000, compared to $6,583,000 in the same period in 2023[14]. - The net loss for the nine months ended September 30, 2024, was $15,336,000, compared to a net loss of $16,711,000 for the same period in 2023, indicating a reduction in losses of about 8.3%[19]. - Total revenue for the nine months ended September 30, 2024, decreased by $226,000, or 3%, to $6.6 million compared to $6.9 million for the same period in 2023[141]. Cash and Liquidity - Cash and cash equivalents decreased to $27,750,000 as of September 30, 2024, down from $35,442,000 as of December 31, 2023[11]. - The total cash, cash equivalents, and restricted cash at the end of the period was $28,306,000, down from $35,992,000 at the beginning of the period, reflecting a decrease of approximately 21%[19]. - As of September 30, 2024, the company had $32.7 million in cash, cash equivalents, and marketable securities, indicating sufficient liquidity for planned operations for at least the next twelve months[34]. - The company raised approximately $13.8 million in net proceeds through a registered direct offering of common shares in February 2024[158]. - Cash provided by financing activities for the nine months ended September 30, 2024 was $14.1 million, primarily from the sale of common shares[165]. Research and Development - Research and development expenses for the three months ended September 30, 2024, were $3,171,000, compared to $3,741,000 in the same period of 2023[13]. - Total research and development expenses for the three months ended September 30, 2024, were $3.171 million, a decrease of 15% compared to $3.741 million in the same period of 2023[146]. - For the nine months ended September 30, 2024, total research and development expenses were $9.049 million, down 23% from $11.799 million in the prior year[147]. - The OpRegen program accounted for 55% of total research and development expenses for the three months ended September 30, 2024, compared to 34% in the same period of 2023[149]. Shareholder Equity - The company's shareholders' equity increased to $64,794,000 as of September 30, 2024, up from $62,023,000 as of December 31, 2023[12]. - Total shareholder equity increased to $64,794,000 as of September 30, 2024, up from $62,023,000 at the end of 2023, reflecting a growth of approximately 4.5%[17]. - The weighted-average common shares used to compute basic and diluted net loss per common share were 188,835 for the three months ended September 30, 2024, compared to 174,868 for the same period in 2023[13]. - As of September 30, 2024, Lineage had 188,837,375 common shares issued and outstanding, an increase from 174,986,671 shares as of December 31, 2023[71]. Legal and Regulatory Matters - Lineage incurred approximately $626,000 in legal expenses related to shareholder class action lawsuits from inception through July 2023[68]. - In February 2023, Lineage and certain insurers paid $10.65 million to settle a class action lawsuit related to the Asterias Merger, with Lineage contributing approximately $3.53 million[119]. - The company is subject to legal proceedings, but management believes that the outcomes will not materially harm its financial position[116]. Future Outlook and Funding - The company plans to apply for additional funding from the California Institute for Regenerative Medicine for the continued clinical development of OPC1, which has already received a $14.3 million grant[23]. - Future funding requirements indicate that the company expects to continue incurring losses for several years, necessitating significant additional capital[172]. - 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[173]. Collaboration and Agreements - The company received a $50 million upfront payment from Roche in January 2022 and is eligible for up to $620 million in milestone payments related to the OpRegen program[22]. - Under the Roche Agreement, Lineage received a $50.0 million upfront payment and is eligible for up to $620.0 million in milestone payments, along with tiered royalties on net sales of OpRegen[102]. - Lineage has obligations under the Roche Agreement, which includes a maximum of 21.5% of milestone payments and up to 50% of royalty payments, capped at 5% of net sales of products[111]. Market and Operational Impact - The ongoing Israel-Hamas war has not materially impacted the company's operations as of the report date, although there are safety concerns and potential disruptions[136][137]. - The company has business continuity plans in place to address potential medium- or long-term disruptions due to the ongoing conflict[138].