Start Time: 16:30 January 1, 0000 5:18 PM ET Lineage Cell Therapeutics, Inc. (NYSE:LCTX) Q2 2022 Earnings Conference Call August 11, 2022, 16:30 PM ET Company Participants Brian Culley - CEO and Interim CFO Gary Hogge - SVP, Clinical and Medical Affairs Ioana Hone - Head of IR Conference Call Participants William Wood - B. Riley Securities Rick Miller - Cantor Fitzgerald Joe Pantginis - H.C. Wainwright Jason McCarthy - Maxim Group Operator Welcome to the Lineage Cell Therapeutics Second Quarter 2022 Confer ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission file number 001-12830 Lineage Cell Therapeutics, Inc. (Exact name of registrant as specified in its charter) California 94-3127919 (State ...

== L I N E A G E The future of cell therapy. Corporate Overview April 25, 2022 Forward-Looking Statements This presentation is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any securities of Lineage Cell Therapeutics, Inc. ("Lineage"). This presentation includes certain information obtained from trade and statistical services, third-party publications, and other sources. Lineage has not independently verified such information and there can be no assurance a ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2022 were approximately $5.2 million, an increase of $4.8 million from the same period in 2021, primarily due to licensing fees from the Roche collaboration agreement [25] - Total operating expenses for the quarter were approximately $11.5 million, an increase of approximately $4.2 million compared to the same period in 2021, driven by a $3.5 million non-recurring accrual related to a potential settlement of the 2019 Asterias merger litigation [26] - The net loss attributable to Lineage for Q1 2022 was $7.1 million or $0.04 per share, with a loss from operations of approximately $6.4 million, a decrease of $0.7 million compared to the same period in 2021 [27] Business Line Data and Key Metrics Changes - The company is working on multiple clinical and regulatory milestones, including initiating a clinical safety trial of a new delivery device for OPC1 and submitting an IND for the VAC2 program [10][11] - The company reported significant progress in its clinical programs, including the presentation of 10-year safety data from the OPC1 clinical trial, indicating no medical or neurological complications [22][23] Market Data and Key Metrics Changes - The company has approximately $78 million in cash and cash equivalents as of Q1 2022, providing multiple years of cash runway to support its programs [8][28] - The company is adapting to the current biotech landscape by focusing on communication, operations, and business development, aiming to enhance its market position [14][20] Company Strategy and Development Direction - The company believes it is well-positioned to navigate the current biotech bear market due to its cash position, near-term milestones, and fundamental profile [7][12] - The company is emphasizing business development and exploring partnerships to advance its assets, particularly in the NK cell space and other therapeutic areas [18][60] Management's Comments on Operating Environment and Future Outlook - Management commented on the overreaction in the biotech sector and expressed confidence in the company's ability to outperform peers in the coming years [6][7] - The company is aware of supply chain disruptions but has not experienced significant impacts, maintaining a focus on in-house manufacturing [24] Other Important Information - The company participated in the Red Bull Wings for Life World Run to raise awareness and funds for spinal cord research, highlighting its commitment to community engagement [23] - The company plans to publish additional papers on OPC1 and other clinical studies in the coming months, further supporting its research credibility [23] Q&A Session Summary Question: Can you provide more color on the settlement of the Asterias litigation? - The company has agreed in principle to a settlement of $10.7 million, with Lineage contributing $3.5 million, which will result in the dismissal of the lawsuit without any admission of liability [35] Question: How does the company reconcile its two-year runway with the growing pipeline? - The company benefits from economies of scale in manufacturing, allowing it to expand its pipeline with only marginal increases in spending [36] Question: Is the device for the OPC1 study ready, and are the doctors trained? - Pre-clinical work has been completed, and while formal training is ongoing, the surgeons have experience with the device [40] Question: What is the strategy for the new programs OPC1 and ANP1? - The company is working on optimizing delivery and scaling up cells for commercial viability, with plans for IND submissions [47] Question: How does the company view partnership opportunities? - The company is open to various partnership strategies, balancing in-house development with external collaborations to maximize value [49] Question: Can you provide an update on the Immunomic Therapeutics collaboration? - The collaboration focuses on using the VAC platform for delivering antigens, with the potential for additional valuable partnerships in the future [63]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission file number 001-12830 Lineage Cell Therapeutics, Inc. (Exact name of registrant as specified in its charter) California 94-3127919 (Stat ...

Financial Data and Key Metrics Changes - Total revenues for Q4 2021 were approximately $1.2 million, an increase of $0.8 million from the same period in 2020, primarily due to increased royalties and licensing fees [43] - Total operating expenses for Q4 2021 were approximately $29.2 million, an increase of approximately $23.1 million compared to Q4 2020, driven by $21 million in accruals related to the Roche deal [43] - The net loss attributable to Lineage for Q4 2021 was $29 million, or $0.17 per share, compared to a net loss of $2 million, or $0.01 per share, for the same period in 2020 [44] - For the full year 2021, total revenues were approximately $4.3 million, an increase of $2.5 million compared to 2020 [45] - The net loss for 2021 was $43 million, or $0.26 per share, compared to a net loss of $20.6 million, or $0.14 per share, for 2020 [45] Business Line Data and Key Metrics Changes - The Roche collaboration is expected to provide up to $620 million in additional cash payments based on developmental, regulatory, and commercial milestones, along with tiered double-digit royalties [17] - The company anticipates moving towards additional clinical trials for its other programs in 2022, leveraging the knowledge gained from the OpRegen program [15][30] Market Data and Key Metrics Changes - The company acknowledges that the biotech sector is currently experiencing a significant bear market, impacting share prices across the industry [24] - Despite the market conditions, the company believes it is well-positioned due to its strong balance sheet and ongoing clinical progress [25] Company Strategy and Development Direction - The company aims to be a leader in cell therapy by demonstrating that off-the-shelf cells can deliver compelling safety and efficacy data [35] - Future product development is expected to be faster, cheaper, and easier due to lessons learned from the OpRegen program [28] - The company plans to broaden its regenerative medicine pipeline and is preparing to announce a new product opportunity later this month [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Roche partnership, viewing it as a validation of their technology and a pathway to significant market opportunities [12] - The company is focused on advancing its current pipeline while exploring strategic expansions in areas where it can make a significant impact [35] - Management highlighted the importance of maintaining a disciplined approach to capital spending, with a focus on achieving value-creating milestones [48] Other Important Information - The company reported a cash balance of $83 million as of January 2022, reflecting the receipt of the Roche upfront payment [41] - The company intends to continue its efficient spending strategy while preparing for increased net spending in 2022 to advance its clinical programs [48] Q&A Session Summary Question: How will success be measured for the OPC1 trial? - The next trial for OPC1 will focus on validating a new delivery device, with an emphasis on safety and precise delivery control [57] Question: Will the outcomes differ based on the cause of cell loss? - Management confirmed that different indications will have unique characteristics, and timing of intervention is crucial for success [61][64] Question: What is the justification for delays in the OPC1 and VAC programs? - Delays were primarily due to resource allocation towards completing the Roche agreement, but development is expected to accelerate now [73][77] Question: Can Lineage commercialize OPC1 independently? - Management believes that with the right formulation and device, Lineage could handle commercialization of OPC1 [90] Question: Will future milestone payments follow a similar split as the Roche agreement? - Yes, future milestone payments are expected to follow a similar structure as the Roche agreement [94]

Part I [Business](index=7&type=section&id=Item%201.%20Business) Lineage Cell Therapeutics is a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, leveraging its pluripotent cell technology for internal programs and strategic partnerships, notably with Roche - Lineage is a clinical-stage biotechnology company developing novel cell therapies based on its proprietary pluripotent cell-based technology and manufacturing capabilities[21](index=21&type=chunk) - The company's strategy focuses on advancing its programs, such as OpRegen, OPC1, and VAC, both internally and through strategic partnerships to enhance their value[22](index=22&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - A key strategic achievement in 2021 was the exclusive worldwide collaboration and license agreement with Roche for the development and commercialization of OpRegen, which included a **$50.0 million upfront payment**[22](index=22&type=chunk)[28](index=28&type=chunk)[51](index=51&type=chunk) [Product Candidates](index=7&type=section&id=Product%20Candidates) The company's clinical pipeline includes OpRegen® for dry AMD (partnered with Roche), OPC1 for spinal cord injuries (RMAT designated), and the VAC immuno-oncology platform with VAC2 in a Phase 1 trial for NSCLC - OpRegen® is an RPE cell replacement therapy in a Phase 1/2a trial for dry AMD with GA, showing evidence of retinal tissue restoration and statistically significant visual acuity improvement in Cohort 4[25](index=25&type=chunk)[43](index=43&type=chunk)[49](index=49&type=chunk) - OPC1 is an oligodendrocyte progenitor cell therapy for SCI, with the Phase 1/2a SCiStar trial demonstrating improved motor function and receiving Regenerative Medicine Advanced Therapy (RMAT) and Orphan Drug designations from the FDA[25](index=25&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) - VAC is an allogeneic cancer immunotherapy platform, with VAC2 in a Phase 1 trial for NSCLC funded by Cancer Research UK, showing potent immune response induction, and a separate VAC-based candidate for glioblastoma in preclinical development with Immunomic Therapeutics, Inc (ITI)[25](index=25&type=chunk)[65](index=65&type=chunk)[68](index=68&type=chunk) [Collaboration Agreements](index=19&type=section&id=Collaboration%20Agreements) Lineage has established key strategic collaborations, most notably with Roche for OpRegen, involving a **$50 million upfront payment** and up to **$620 million in milestones**, and with Immunomic Therapeutics, Inc (ITI) for a VAC-based immunotherapy for glioblastoma - On December 17, 2021, Lineage entered into an exclusive worldwide collaboration with Roche to develop and commercialize OpRegen for ocular disorders, receiving a **$50.0 million upfront payment** and eligible for up to **$620.0 million in milestones** plus tiered double-digit royalties[73](index=73&type=chunk)[75](index=75&type=chunk) - A portion of the payments from Roche are owed to the Israel Innovation Authority (IIA) and Hadasit Medical Research Services, with Lineage obligated to pay the IIA approximately **24.3% of payments received** (up to a cap of ~**$102.7 million**) and Hadasit up to **21.5% of upfront/milestone payments** and up to **50% of royalties**[76](index=76&type=chunk)[77](index=77&type=chunk) - In April 2021, Lineage entered a worldwide license and collaboration agreement with ITI to develop a VAC-platform based immunotherapy for glioblastoma, entitling Lineage to **$2.0 million in upfront fees** and up to **$67.0 million in milestones**, plus royalties up to **10%**[69](index=69&type=chunk)[81](index=81&type=chunk) [Intellectual Property](index=22&type=section&id=Intellectual%20Property) The company protects its technology through patents, trade secrets, and licensing agreements, with portfolios covering OpRegen (expiring 2028-2036), OPC1 (expiring 2023-2036), and the VAC platform (expiring 2022-2041) - The OpRegen patent portfolio includes issued patents with expiration dates from 2028 to 2036 and pending applications that would expire between 2028 and 2041, with these rights licensed to Roche[92](index=92&type=chunk) - The OPC1 patent portfolio, including rights acquired from Geron, covers neural cells and methods of production, with expiration dates ranging from 2023 to 2036, and pending applications extending to 2042[93](index=93&type=chunk) - The VAC platform is protected by patents covering dendritic cells and immunogenic compositions, with expiration dates for patents and pending applications ranging from 2022 to 2041[94](index=94&type=chunk) [Manufacturing and Operations](index=24&type=section&id=Manufacturing%20and%20Operations) Lineage operates a cGMP cell therapy manufacturing facility in Jerusalem, Israel, for all clinical-stage product candidates, employs 61 individuals as of year-end 2021, and relies on third-party, sometimes sole-source, suppliers for key manufacturing components - The company conducts all cGMP manufacturing for its cell therapy candidates at its facility in Jerusalem, Israel, which includes process development labs and is designed for both clinical and potential commercial scale production[98](index=98&type=chunk) - As of December 31, 2021, the company had **61 employees**, with **43** located at its subsidiary Cell Cure in Israel[97](index=97&type=chunk) - Lineage depends on third-party manufacturers and suppliers for key components required for its cell therapy products, including some sole-source suppliers, and does not have long-term supply agreements for certain key components[99](index=99&type=chunk) [Government Regulation](index=26&type=section&id=Government%20Regulation) The company's products are subject to extensive regulation by the FDA and foreign authorities, covering development, manufacturing (cGMP), and marketing, along with compliance requirements for healthcare fraud, abuse, data privacy, and human embryonic stem cell research - Products are regulated as drugs, biologics, or medical devices by the FDA and foreign authorities, requiring a rigorous review process including preclinical testing and multi-phase clinical trials before a Biologics License Application (BLA) can be approved[108](index=108&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) - The company is subject to various federal and state fraud and abuse laws, including the Anti-Kickback Statute and False Claims Act, as well as health information privacy laws like HIPAA and data security laws like CCPA and GDPR[124](index=124&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk) - The use of human embryonic stem (hES) cells is regulated by NIH guidelines for federally funded research and state laws like California's, which require oversight, with the company's hES cell lines on the NIH registry and meeting federal funding standards[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of operating losses, dependence on the Roche collaboration, the need for additional capital, lengthy and uncertain clinical development, stringent government regulation, intellectual property challenges, and operational disruptions from events like the COVID-19 pandemic - The company has a history of significant operating losses (**$49.2 million in 2021**) and an accumulated deficit of **$337.1 million**, with no certainty of achieving profitability[151](index=151&type=chunk) - Lineage is heavily dependent on its collaboration with Roche for the development and commercialization of OpRegen, where failure by Roche or termination of the agreement would result in the loss of a significant source of potential revenue[155](index=155&type=chunk)[156](index=156&type=chunk) - Clinical development is a lengthy, expensive, and uncertain process, where early positive results are not predictive of future success, and product candidates may fail in later-stage trials or fail to receive regulatory approval[197](index=197&type=chunk)[200](index=200&type=chunk) - The business is subject to extensive government regulation, including potential bans or restrictions on the use of hES cells, and complex healthcare fraud, abuse, and data privacy laws, which could result in substantial penalties if non-compliant[174](index=174&type=chunk)[178](index=178&type=chunk) - The ongoing COVID-19 pandemic has affected and may continue to adversely affect operations, including the conduct of clinical trials, manufacturing, and the operations of third-party partners[226](index=226&type=chunk)[227](index=227&type=chunk)[229](index=229&type=chunk) [Properties](index=69&type=section&id=Item%202.%20Properties) The company's corporate headquarters are in a **8,841 square foot** leased office space in Carlsbad, California, while its subsidiary Cell Cure leases approximately **19,328 square feet** of office and laboratory space in Jerusalem, Israel, housing its cGMP manufacturing facility - Corporate headquarters are in Carlsbad, California, in a leased space of **8,841 square feet**[309](index=309&type=chunk) - Subsidiary Cell Cure leases approximately **19,328 square feet** (**1,796 sq. meters**) of office and laboratory space in Jerusalem, Israel, under leases expiring in December 2025[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) [Legal Proceedings](index=69&type=section&id=Item%203.%20Legal%20Proceedings) Lineage is a defendant in a putative class action lawsuit in Delaware Chancery Court challenging the 2019 merger with Asterias Biotherapeutics, alleging breach of fiduciary duty, inadequate merger consideration, and misleading disclosures, which the company is vigorously defending - A putative class action lawsuit (Ross v. Lineage Cell Therapeutics, Inc., et al.) is pending in Delaware Chancery Court, challenging the 2019 merger with Asterias[314](index=314&type=chunk) - The complaint alleges breach of fiduciary duty, inadequate consideration, and misleading proxy statements, with a five-day trial scheduled for October 17-21, 2022[314](index=314&type=chunk) - Lineage believes the claims lack merit but cannot assess if the outcome will have a material adverse effect on its financial position[315](index=315&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=71&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE American and the Tel Aviv Stock Exchange under 'LCTX', with **375 record holders** as of March 1, 2022, and no cash dividends have ever been paid or are anticipated, as earnings will be retained for business operations - Lineage's common stock is traded on the NYSE American and the Tel Aviv Stock Exchange under the symbol LCTX[318](index=318&type=chunk) - The company has never paid dividends and intends to retain future earnings to finance business growth[320](index=320&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=72&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2021, revenues increased to **$4.3 million** from **$1.8 million** in FY2020, driven by higher royalties and new collaboration revenues, while operating expenses rose significantly to **$52.1 million** from **$27.9 million**, primarily due to a **$21.0 million** one-time expense related to the Roche collaboration, resulting in a net loss attributable to Lineage of **$43.0 million**, with **$58.4 million** in cash, cash equivalents, and marketable securities at year-end, deemed sufficient to fund operations for at least the next 12 months, further bolstered by the **$50 million** upfront payment from Roche received in January 2022 [Results of Operations](index=78&type=section&id=Results%20of%20Operations) Total revenues for 2021 increased by **138%** to **$4.3 million**, primarily due to a **$2.0 million** increase in royalties and **$1.1 million** from new collaboration agreements, while research and development expenses surged to **$33.9 million** from **$12.3 million** in 2020, largely due to **$21.0 million** in royalty and redemption fee expenses related to the Roche deal, leading to a net loss of **$43.0 million** Revenues and Gross Profit Comparison (2021 vs. 2020) | | Year Ended December 31, | | $ Increase/ (Decrease) | % Increase/ (Decrease) | | :--- | :--- | :--- | :--- | :--- | | | **2021 (in thousands)** | **2020 (in thousands)** | | | | Royalties | $2,776 | $773 | $2,003 | 259% | | Collaboration revenues | $1,120 | $- | $1,120 | 100% | | Grant revenues | $445 | $1,053 | $(608) | (58)% | | **Total revenues** | **$4,341** | **$1,826** | **$2,515** | **138%** | | Cost of sales | $(1,426) | $(385) | $(1,041) | 270% | | **Gross profit** | **$2,915** | **$1,441** | **$1,474** | **102%** | Operating Expenses Comparison (2021 vs. 2020) | | Year Ended December 31, | | $ Increase | % Increase | | :--- | :--- | :--- | :--- | :--- | | | **2021 (in thousands)** | **2020 (in thousands)** | | | | Research and development expenses | $33,914 | $12,317 | $21,597 | 175% | | General and administrative expenses | $18,212 | $15,571 | $2,641 | 17% | - The **$21.6 million** increase in R&D expenses was primarily driven by a **$19.9 million** increase in the OpRegen program, which includes a **$12.1 million** redemption fee to the IIA and an **$8.9 million** royalty expense to Hadasit related to the Roche agreement[361](index=361&type=chunk)[362](index=362&type=chunk) [Liquidity and Capital Resources](index=82&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2021, Lineage had **$58.4 million** in cash, cash equivalents, and marketable securities, which, supplemented by the **$50 million** upfront payment from Roche received in January 2022 and available ATM program capacity, is believed sufficient to fund planned operations for at least the next twelve months, with net cash used in operating activities at **$23.6 million** and net cash provided by financing activities at **$36.9 million** in 2021 - The company had **$58.4 million** in cash, cash equivalents, and marketable securities at year-end 2021, a position strengthened by a **$50.0 million** upfront payment from Roche received in January 2022[378](index=378&type=chunk)[380](index=380&type=chunk) - Net cash used in operating activities was **$23.6 million** for the year ended December 31, 2021[383](index=383&type=chunk) - Net cash provided by financing activities was **$36.9 million** in 2021, mainly from **$29.8 million** in net proceeds from at-the-market (ATM) offerings and **$7.2 million** from the exercise of employee stock options[387](index=387&type=chunk) [Financial Statements and Supplementary Data](index=84&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements for the year ended December 31, 2021, report total assets of **$174.5 million**, total liabilities of **$83.6 million**, total shareholders' equity of **$90.9 million**, and a net loss of **$43.3 million** on total revenues of **$4.3 million** Consolidated Balance Sheet Highlights (as of Dec 31, 2021) | Metric | Amount (in thousands) | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | $55,742 | | Total current assets | $111,549 | | Total assets | $174,545 | | **Liabilities & Equity** | | | Accounts payable and accrued liabilities | $27,969 | | Deferred revenues | $50,573 | | Total liabilities | $83,647 | | Total shareholders' equity | $90,898 | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2021) | Metric | Amount (in thousands) | | :--- | :--- | | Total revenues | $4,341 | | Research and development | $33,914 | | General and administrative | $18,212 | | Loss from operations | $(49,211) | | Net loss attributable to Lineage | $(43,019) | | Net loss per share (Basic & Diluted) | $(0.26) | [Controls and Procedures](index=127&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal control over financial reporting during the fourth quarter - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[593](index=593&type=chunk) - Management assessed the effectiveness of internal control over financial reporting and concluded it was effective as of December 31, 2021, based on the 2013 COSO framework[597](index=597&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Other Matters](index=129&type=section&id=Items%2010-14) Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, certain relationships and related transactions, director independence, and principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting of Shareholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the registrant's definitive proxy statement for its 2022 Annual Meeting of Shareholders[603](index=603&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk)[608](index=608&type=chunk)[609](index=609&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=130&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements filed with the report and provides an index of all exhibits filed, including material contracts such as the Merger Agreement with Asterias, various equity incentive plans, and key collaboration and license agreements with partners like Roche and Cancer Research UK - This section contains the index to the consolidated financial statements and a list of exhibits filed with the Form 10-K[611](index=611&type=chunk)[614](index=614&type=chunk)

Financial Data and Key Metrics Changes - Total revenues for Q3 2021 were approximately $2.3 million, an increase of $1.7 million from the same period in 2020, primarily due to increased royalty revenue [25] - Total operating expenses for Q3 2021 were approximately $8.1 million, an increase of approximately $900,000 compared to the same period in 2020, mainly due to increased litigation expenses and share-based compensation [25] - The net loss attributable to the company for Q3 2021 was $7.8 million, consistent with the net loss of $7.8 million in the same period last year [25][26] Business Line Data and Key Metrics Changes - The OpRegen program showed positive clinical data, indicating potential for retinal restoration in patients with dry age-related macular degeneration [5][9] - The OPC1 program for spinal cord injury is advancing with improvements in manufacturing processes and a new delivery device [16][19] - The VAC2 cancer vaccine program is facing enrollment challenges due to COVID-19 restrictions, but efforts are being made to modernize the manufacturing process [22][23] Market Data and Key Metrics Changes - The company is positioned in the regenerative medicine market, focusing on cell therapy approaches that do not involve gene editing, which is seen as a competitive advantage [6][7] - The company anticipates significant growth in the cell therapy field, particularly with scalable allogeneic off-the-shelf approaches [29] Company Strategy and Development Direction - The company aims to become a leading cell therapy company by advancing its proprietary differentiation protocols and enhancing manufacturing capabilities [7][29] - The focus is on developing clinical programs that demonstrate meaningful clinical benefits, with an emphasis on anatomical endpoints rather than traditional metrics like visual acuity [46][80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential of their cell therapy approaches, particularly in light of recent clinical data and upcoming FDA interactions [27][29] - The company is preparing for multiple engagements with the FDA to discuss product designations and clinical trial strategies [27][28] Other Important Information - The company ended the quarter with approximately $65 million in cash, cash equivalents, and marketable securities, providing a solid financial foundation for ongoing projects [26] - The company is actively working on improving its manufacturing processes to ensure the scalability and reproducibility of its cell therapy products [16][23] Q&A Session Summary Question: Upcoming FDA interactions for OpRegen - Management confirmed that data from the recent study will be incorporated into discussions with the FDA regarding potential designation changes and future clinical studies [31][33] Question: Improvements in OPC1 cell inject formulation - The new formulation aims to simplify the administration process, reducing handling complexity and the risk of dosing errors [36][38] Question: Impact of global supply chain issues - The company has proactively stockpiled critical materials to mitigate potential supply chain disruptions [49][50] Question: Business development discussions for additional antigens - Management refrained from providing specific details on business development activities, emphasizing a cautious approach to partnerships [52] Question: Primary endpoint for pivotal study with OpRegen - The company plans to monitor the change in geographic atrophy over time, utilizing OCT as the assessment tool [79][80]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2021, including balance sheets, statements of operations, comprehensive loss, cash flows, and notes on key accounting policies and contingencies [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $60,809 | $32,585 | | Total current assets | $68,344 | $43,999 | | Total Assets | $131,212 | $107,949 | | **Liabilities & Equity** | | | | Total current liabilities | $8,791 | $7,769 | | Total Liabilities | $11,623 | $12,822 | | Total shareholders' equity | $119,589 | $95,127 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $2,270 | $571 | $3,173 | $1,471 | | Loss from operations | $(6,843) | $(6,725) | $(20,973) | $(20,565) | | Net Loss | $(7,834) | $(7,772) | $(14,080) | $(22,730) | | Net Loss Per Share (Basic & Diluted) | $(0.05) | $(0.05) | $(0.09) | $(0.15) | Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(17,688) | $(14,112) | | Net cash provided by investing activities | $9,891 | $12,136 | | Net cash provided by financing activities | $35,976 | $25,051 | | Net increase in cash | $28,145 | $23,039 | [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20Financial%20Statements) - The company is a clinical-stage biotechnology firm with three main allogeneic cell therapy programs: OpRegen for dry AMD, OPC1 for spinal cord injuries, and VAC2 for non-small cell lung cancer[21](index=21&type=chunk)[26](index=26&type=chunk) - Management has evaluated projected cash flows and believes its **$65.1 million** of cash, cash equivalents, and marketable equity securities are sufficient to fund planned operations for at least the next twelve months from the report's issuance date[36](index=36&type=chunk) - For the three and nine months ended September 30, 2021, the company recorded additional royalty revenues of approximately **$1.8 million** from a specific customer based on updated communications, which was paid in October 2021[44](index=44&type=chunk) - As of September 30, 2021, the company had issued 14,908,735 common shares for gross proceeds of **$35.9 million** under its Controlled Equity Offering Sales Agreement (ATM facility)[35](index=35&type=chunk)[95](index=95&type=chunk) - A putative class action lawsuit challenging the 2019 Asterias Merger remains pending in Delaware Chancery Court, with a five-day trial scheduled for October 2022[131](index=131&type=chunk)[132](index=132&type=chunk) The company believes the allegations lack merit[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an overview of the business, critical accounting policies, and a detailed analysis of financial results for the three and nine months ended September 30, 2021, covering revenues, operating expenses, other income/expenses, and liquidity, highlighting key performance drivers and confirming sufficient liquidity [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Revenue Comparison (in thousands) | Period | 2021 | 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30** | $2,270 | $571 | $1,699 | 298% | | **Nine Months Ended Sep 30** | $3,173 | $1,471 | $1,702 | 116% | - The significant increase in revenues for both the three and nine-month periods was primarily driven by a **$1.8 million** increase in royalties from a specific customer, based on updated communications regarding royalties due[175](index=175&type=chunk)[176](index=176&type=chunk) Operating Expense Comparison (in thousands) | Expense Category | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,811 | $3,566 | $9,136 | $9,710 | | General and administrative | $5,317 | $3,628 | $13,788 | $12,055 | - The decrease in R&D expenses for Q3 2021 was mainly due to a prior year signature fee accrual of **$1.6 million** to Cancer Research UK, partially offset by increased OPC1 program expenses[186](index=186&type=chunk) The increase in G&A expenses was primarily due to higher litigation costs related to the Asterias merger and increased share-based compensation[187](index=187&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2021, the company had **$65.1 million** in cash, cash equivalents, and marketable equity securities[205](index=205&type=chunk) - Management believes that current cash, cash equivalents, and marketable securities are sufficient to fund planned operations for at least the next twelve months[206](index=206&type=chunk) - For the nine months ended September 30, 2021, net cash used in operating activities was **$17.7 million**[209](index=209&type=chunk) Net cash provided by financing activities was **$36.0 million**, primarily from the sale of common shares (**$29.8 million** net) and proceeds from employee stock option exercises (**$6.3 million**)[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2021, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[217](index=217&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[218](index=218&type=chunk) [PART II - OTHER INFORMATION](index=45&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing litigation, primarily a putative class action lawsuit in Delaware Chancery Court challenging the 2019 Asterias Merger, which the company believes lacks merit - The company is involved in a putative class action lawsuit filed in Delaware Chancery Court challenging the Asterias Merger, with a trial scheduled for October 2022[131](index=131&type=chunk)[132](index=132&type=chunk) - Lineage believes the allegations in the action lack merit and intends to vigorously defend the claims asserted[133](index=133&type=chunk) The company has not recorded any accrual for a contingent liability as it is not considered probable or estimable[133](index=133&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section outlines material risks and uncertainties, including those related to business operations, capital requirements, government regulation, clinical development, intellectual property, third-party dependence, and common stock [Risks Related to Business Operations and Capital Requirements](index=45&type=section&id=Risks%20Related%20to%20Business%20Operations%20and%20Capital%20Requirements) - The company has a history of significant operating losses, with a total operating loss of **$21.0 million** for the nine months ended September 30, 2021, and an accumulated deficit of **$308.1 million**[224](index=224&type=chunk) - The company will need to issue additional equity or debt to raise capital for operating expenses, and there is no assurance that such financing will be available on favorable terms, if at all[229](index=229&type=chunk) - The value of the company's investment in OncoCyte is volatile and could be negatively affected by business, regulatory, and market risks applicable to OncoCyte[242](index=242&type=chunk) [Risks Related to Government Regulation](index=50&type=section&id=Risks%20Related%20to%20Government%20Regulation) - The company's operations are subject to extensive federal and state healthcare fraud and abuse laws, and non-compliance could lead to substantial penalties[244](index=244&type=chunk) - Obtaining regulatory approvals from the FDA and foreign authorities is a lengthy, expensive, and uncertain process that is required before any products can be sold[248](index=248&type=chunk) - Commercial success is dependent on securing and maintaining reimbursement and coverage from government and private payors, which is uncertain[249](index=249&type=chunk) [Risks Related to Clinical Development and Commercial Operations](index=57&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Commercial%20Operations) - Clinical studies are costly, time-consuming, and subject to risks that could delay or prevent commercialization[269](index=269&type=chunk) Early positive results are not necessarily predictive of future success[272](index=272&type=chunk) - The COVID-19 pandemic has impacted and may continue to adversely affect clinical trial enrollment, timelines, and overall operations, including potential disruptions to the supply chain[300](index=300&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) - The company relies on third parties for manufacturing and conducting clinical trials[295](index=295&type=chunk) Any failure by these parties to perform their obligations could significantly delay or halt development programs[342](index=342&type=chunk) [Risks Related to our Intellectual Property](index=68&type=section&id=Risks%20Related%20to%20our%20Intellectual%20Property) - The company's patent position is uncertain, and its intellectual property may be insufficient to protect its products from competition or provide meaningful commercial advantages[329](index=329&type=chunk)[330](index=330&type=chunk) - The company's success depends on its ability to obtain and enforce patents and protect trade secrets, which can be costly and time-consuming, with no guarantee of success[331](index=331&type=chunk) [Risks Pertaining to Our Common Shares](index=70&type=section&id=Risks%20Pertaining%20to%20Our%20Common%20Shares) - The market price of the company's common stock is highly volatile, which is common for biotechnology companies[348](index=348&type=chunk) - As of September 30, 2021, insiders owned approximately **24.6%** of outstanding common shares, giving them substantial influence over company matters[350](index=350&type=chunk) - Future issuance of shares, including through the ongoing at-the-market (ATM) offering, will be dilutive to existing shareholders[351](index=351&type=chunk)[354](index=354&type=chunk)

The future of cell therapy. Corporate Overview September 15, 2021 Forward-Looking Statements This presentation is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any securities of Lineage Cell Therapeutics, Inc. ("Lineage"). This presentation includes certain information obtained from trade and statistical services, third-party publications, and other sources. Lineage has not independently verified such information and there can be no assurance as to its accu ...