On August 11, 2022 Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, reported financial and operating results for the second quarter of 2022 (Press release, Lineage Cell Therapeutics, AUG 11, 2022, View Source [SID1234618128]). Lineage management will host a conference call and webcast today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its second quarter 2022 financial and operating results and to provide a business update.
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"We are pleased with the progress on RG6501 (OpRegen) product development under our collaboration with Roche and Genentech. During the second quarter this year, we have made progress across multiple functional areas, including clinical, regulatory, and technology transfer activities," stated Brian M. Culley, Lineage CEO. "As we continue to position Lineage as a leader in regenerative medicine through the transplant of specific cell types, our focus is on completing the necessary clinical, regulatory and related activities which can create value and reduce risk across our portfolio of five cell transplant assets. In particular, our efforts have been focused on preparing for OPC1 and VAC2 regulatory interactions to enable their next phases of clinical testing in spinal cord injury and oncology, respectively. In parallel, we are advancing our auditory neuron and photoreceptor programs through preclinical development activities which are necessary to support initial clinical testing. We believe our disciplined use of capital and our increased strategic business development activities can support multiple years of growth and the achievement of important milestones in the months and years to come."
Second quarter milestones and activities included:
– RG6501 (OpRegen)
Continued execution under our collaboration with Roche and Genentech across multiple functional areas, including:
Conducting additional OpRegen manufacturing runs and supporting Chemistry Manufacturing and Controls (CMC) activities.
Continuing technology transfer activities.
Actively participating in both Joint Advisory and Joint Manufacturing Committees, forums for discussion and planning with respect to next steps in clinical development and related activities.
Continuing long-term follow-up of patients from the Phase 1/2a clinical study of OpRegen:
Enrolled patients have continued to do well, supporting multi-year durability of a treatment effect with RG6501 (OpRegen).
– OPC1
Results from a Phase 1/2a clinical study in subacute cervical spinal cord injury were published in the Journal of Neurosurgery: Spine;
OPC1 has demonstrated an excellent safety profile, and at one-year post-treatment, 96% of patients had recovered one or more levels of neurological function on at least one side of their body, and 32% of patients had recovered two or more levels of neurological function on at least one side of their body.
Preclinical testing of a new thaw and inject formulation of OPC1, manufactured via an improved and larger-scale process, has demonstrated functional recovery, improvement in gait coordination and motor performance with a reduction of the area of cavitation.
A majority of the verification and validation activities for the novel parenchymal spinal delivery (PSD) system, and its preclinical testing in support of a regulatory submission have been completed.
Preclinical activities to support upcoming regulatory interactions are near completion.
Engagement with the California Institute of Regenerative Medicine (CIRM), as well as various patient advocacy organizations and patient advocates, is underway.
– VAC2
Following technology transfer of the program from Cancer Research UK (CRUK) to Lineage and improvement of manufacturing processes, production scale was increased and accordingly the cost of goods has been reduced significantly, along with marked improvements in the purity and functionality of the manufactured material.
CRUK continues to follow patients on the Phase 1 NSCLC clinical study; Lineage has received all necessary clinical information from CRUK required to support U.S., or other, regulatory interactions.
– ANP1 & PNC1
Preclinical activities are continuing, including thought leader engagement to support future preclinical testing.
– Business Development
Broadened collaboration with Advanced BioMatrix, a division of BICO Group AB (STO: BICO), for the HyStem delivery technology to include clinical/commercial GMP (Good Manufacturing Practice) material, increasing the milestone payments and royalty percentages due to Lineage upon ABM reaching certain development milestones and/or product sales.
Continued work under our collaboration with our strategic partner, Immunomic Therapeutics ("ITI"); currently awaiting decision on next steps for ITI’s allogeneic cell-based cancer immunotherapy for the treatment of glioblastoma based on the VAC platform.
Some of the key upcoming milestones and activities anticipated by Lineage include:
– Planned interaction with FDA in Q4 2022 to discuss an OPC1 IND amendment submission to enable clinical performance and safety testing of a novel PSD system.
– A pre-IND regulatory interaction in Q4 2022 to seek feedback on a VAC2 CMC, nonclinical, and clinical package to support U.S. clinical development; pre-IND briefing package submission in Q3 2022.
– Submission of a grant application to the California Institute for Regenerative Medicine (CIRM) for the continued support of the clinical development of OPC1.
– Clinical data update from the ongoing VAC2 Phase 1 non-small cell lung cancer (NSCLC) study, pending release from CRUK.
– Preclinical activities for both the ANP1 and PNC1 programs.
– Additional OPC1 publications, including preclinical study results utilizing a new thaw and inject formulation of OPC1, manufactured via an improved and larger-scale process.
– An additional OPC1 manuscript from a Phase 1/2a clinical study in subacute cervical spinal cord injury, focused on MRI data.
– Evaluation of new partnership opportunities and/or expansion of existing collaborations.
– Continued participation in investor and partnering meetings and medical and industry conferences to broaden awareness of our mission and accomplishments.
Balance Sheet Highlights
Cash, cash equivalents, and marketable securities totaled $72 million as of June 30, 2022, which is expected to support operations through Q2 2024.
Second Quarter Operating Results
Revenues: Lineage’s revenue is generated primarily from licensing fees, royalties, collaboration revenues, and research grants. Total revenues for the three months ended June 30, 2022 were approximately $4.6 million, a net increase of $4.0 million as compared to $0.5 million for the same period in 2021. The increase was primarily related to licensing fees recognized from deferred revenues in connection with the $50.0 million upfront licensing payment received in the first quarter of 2022 from Roche.
Operating Expenses: Operating expenses are comprised of research and development ("R&D") expenses and general and administrative ("G&A") expenses. Total operating expenses for the three months ended June 30, 2022 were $8.6 million, an increase of $1.1 million as compared to $7.5 million for the same period in 2021.
R&D Expenses: R&D expenses for the three months ended June 30, 2022 were $3.3 million, a net increase of $0.4 million as compared to $2.9 million for the same period in 2021. The net increase was driven by $0.1 million in higher OpRegen related expenses to support the Roche Collaboration. Another $0.2 million and $0.1 million of the increase was related to R&D spending on the new auditory neuron and photoreceptor cell therapy programs, respectively.
G&A Expenses: G&A expenses for the three months ended June 30, 2022 were $5.3 million, a net increase of approximately $0.7 million as compared to $4.5 million for the same period in 2021. The increase was primarily attributable to $0.4 million in payroll and related benefits expense, and $0.5 million in share-based compensation, partially offset by $0.2 million in lower investor relations expense.
Loss from Operations: Loss from operations for the three months ended June 30, 2022 was $4.2 million, a decrease of $2.9 million as compared to $7.1 million for the same period in 2021.
Other Income/(Expenses), Net: Other income (expenses), net for the three months ended June 30, 2022 reflected other expense, net of ($2.5) million, compared to other income, net of $2.1 million for the same period in 2021. The net change was primarily driven by exchange rate fluctuations related to Lineage’s international subsidiaries, as well as a decrease in the value of marketable equity securities, and partially offset by the gain on extinguishment of debt from Lineage’s Paycheck Protection Program loan forgiveness recognized in the prior year’s quarter.
Net Loss Attributable to Lineage: The net loss attributable to Lineage for the three months ended June 30, 2022 was $6.8 million, or $0.04 per share (basic and diluted), compared to a net loss attributable to Lineage of $4.8 million, or $0.03 per share (basic and diluted), for the same period in 2021.
Conference Call and Webcast
Interested parties may access today’s conference call by dialing (800) 715-9871 from the U.S. and Canada and (646) 307-1952 from elsewhere outside the U.S. and Canada and should request the "Lineage Cell Therapeutics Call" or provide conference ID number 6448886. A live webcast of the conference call will be available online in the Investors section of Lineage’s website. A replay of the webcast will be available on Lineage’s website for 30 days and a telephone replay will be available through August 18, 2022, by dialing (800) 770-2030 from the U.S. and Canada and entering conference ID number 6448886.