Lineage Cell Therapeutics(LCTX) - 2025 Q2 - Quarterly Results

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