Earnings call transcript: Lineage Cell Therapeutics Q3 2025 reveals earnings miss

Lineage Cell Therapeutics Inc. reported a significant earnings miss for Q3 2025, with earnings per share (EPS) of -$0.13, falling short of the forecasted -$0.02. This resulted in a negative surprise of 550%. The company’s revenue of $3.68 million exceeded the forecast of $2.3 million, but this was overshadowed by the earnings miss. Following the announcement, the stock price fell by 4.95% in after-hours trading, closing at $1.82.

Key Takeaways

• Lineage Cell Therapeutics reported a larger-than-expected net loss.
• Revenue surpassed expectations but was insufficient to offset the earnings miss.
• The stock declined nearly 5% in aftermarket trading.
• The company maintains a strong cash position with a runway into 2027.
• Progress continues in key therapeutic programs.

Company Performance

Lineage Cell Therapeutics faced a challenging third quarter, with a notable increase in net loss compared to the same period last year. Despite exceeding revenue expectations, the company’s financial performance was marred by a significant earnings miss. The decline in total revenues from $3.8 million in 2024 to $3.7 million this quarter highlights ongoing challenges. However, the company continues to make strides in its core therapeutic programs, which may offer long-term growth potential.

Financial Highlights

• Revenue: $3.68 million, down from $3.8 million in 2024.
• Earnings per share: -$0.13, compared to -$0.02 in 2024.
• Operating expenses: $7.5 million, slightly reduced from $7.6 million in 2024.

Earnings vs. Forecast

Lineage Cell Therapeutics reported an EPS of -$0.13, significantly missing the forecast of -$0.02. This represents a negative surprise of 550%. Despite surpassing revenue expectations with $3.68 million against a forecast of $2.3 million, the earnings miss was considerable.

Market Reaction

Following the earnings announcement, Lineage Cell Therapeutics’ stock fell by 4.95% in after-hours trading, closing at $1.82. This decline reflects investor disappointment with the earnings miss, despite the revenue beat. The stock remains below its 52-week high of $2.09.

Outlook & Guidance

Lineage Cell Therapeutics continues to focus on advancing its key programs, including OpRegen and the iLET Cell initiative. The company is exploring further partnerships and anticipates potential funding from a CIRM grant. However, the forward guidance remains cautious, with projected EPS losses in upcoming quarters.

Executive Commentary

CEO Brian Culley emphasized the company’s strategic focus, stating, "We believe our approach offers powerful optionality, which we consider essential for a company at our stage of growth and development." He also highlighted the importance of affordability in product development, saying, "At-scale affordability is, in fact, the entire point of allogeneic off-the-shelf product development."

Risks and Challenges

• The company faces ongoing financial losses, impacting investor confidence.
• Revenue decline poses a challenge for sustained growth.
• High operating expenses relative to revenue remain a concern.
• Potential market saturation in the cell therapy sector.
• Macroeconomic pressures could affect funding and partnerships.

Q&A

During the earnings call, analysts inquired about improvements in the OpRegen device and the scaling challenges of the iLET Cell program. The company addressed its dosing strategy in the OPC-1 study and the potential impact of a CIRM grant.

Full transcript - Lineage Cell Therapeutics Inc (LCTX) Q3 2025:

Conference Operator: Welcome to the Lineage Cell Therapeutics third quarter 2025 conference call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the investor section of Lineage’s website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage. The recordings, reproductions, or transmissions of this call without the express written consent of Lineage are strictly prohibited. As a reminder, today’s call is being recorded. I would now like to introduce your host for today’s call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.

Ioana Hone, Head of Investor Relations, Lineage Cell Therapeutics: Thank you, Angela. Good afternoon, and thank you for joining us. A press release reporting our third quarter 2025 financial results was issued earlier today, November 6, 2025, and can be found on the investor section of our website. Please note that today’s remarks and responses to your questions reflect management’s views as of today only and will contain forward-looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward-looking statements, which are subject to significant risks and uncertainties. The company’s actual results or performance may differ materially from the expectations indicated by such forward-looking statements.

For a discussion of certain factors that could cause the company’s results or performance to differ, we refer you to the forward-looking statement sections in today’s press release and in the company’s SEC filings, including its most recent annual report on Form 10-K and in subsequent SEC filings. We caution you not to place undue reliance on any forward-looking statements, which speak only as of today and are qualified by the cautionary statements and risk factors described in our SEC filings. With us today are Brian Culley, our Chief Executive Officer, and Jill Howe, our Chief Financial Officer. I’ll now hand the call over to Brian.

Brian Culley, Chief Executive Officer, Lineage Cell Therapeutics: Thank you, Ioana. Good afternoon, everyone. We appreciate you taking the time to join us on the call today. I’ll begin with an update on our lead program, OpRegen, then review our progress against the five strategic goals which I outlined for you last quarter. In addition, I’ll provide some insights on our pipeline strategy before concluding with some information on our iLET Cell project. I will hand the call to Jill for a review of our financials before taking questions from our analysts. I want to begin with an update on OpRegen because there have been some very exciting advancements in the ongoing phase 2A GALLOP study. We’re pleased to update you that Genentech is continuing to expand the retinal community’s exposure and experience with OpRegen. In particular, Genentech opened two new clinical sites last month, and five new clinical sites were opened during the prior quarter.

Overall, eight clinical sites have been opened in just the past six months, bringing us to a total of 15 unique locations. In comparison, Genentech opened only one new site in all of 2024, so we take this site expansion to be a positive sign. As a reminder, we don’t have full visibility into the GALEP study enrollment or its findings, but the study has been running for more than two years, and it is an open-label trial for which all primary and secondary outcome measures are captured at 90 days. Given that there has been abundant time for Genentech to collect outcomes data in year one and they more than doubled the number of sites in year two, we interpret this acceleration of their clinical efforts to be a positive signal for the future of this program.

The rising number of clinical sites is, of course, just one element contributing to our belief that things are going well for OpRegen. There is a growing body of additional publicly available information which, in the aggregate, provides further evidence that OpRegen could be advanced into a controlled clinical trial, possibly in parallel with continued efforts at surgical optimization of this new technology. For example. Since the GALLOP study began, Genentech reported its own 24 and 36-month analyses from the Lineage phase 1/2A trial. That data showed that, as a group, patients who received a one-time dose of OpRegen RPE cells across large areas of their GA enjoyed improvements in retinal structure, consistent and durable increases in visual acuity, and an acceptable safety profile. These are remarkable clinical findings because patients with GA don’t self-heal.

Earlier this year, these outcomes were independently validated by similar reports coming from three other groups, each using their own version of an RPE suspension. One of those competing entities is a multinational pharmaceutical company which we believe further supports the commercial potential of our cell transplant approach. As a further reminder, about a year ago, Roche was streamlining its pipeline and eliminated a set of development programs to focus on those with "best-in-class" potential. Some investors had asked about how these pipeline cuts could affect the OpRegen program, but OpRegen was not affected. A few months later, we actually entered into an additional and expanded services agreement with Genentech to further support OpRegen development. Around the same time, Roche elected to seek and successfully received RMAT designation for OpRegen.

More recently, Genentech shared that they would be evaluating two next-generation delivery devices acquired specifically for the OpRegen program and which have the potential to not only improve the safety and success of the cell transplant procedure but may also offer a significant competitive advantage over companies that lack both this specialized equipment and the extensive delivery experience of our partner, Roche. When you aggregate all of these publicly available actions—and I did not list all of them today—I hope you will appreciate why we are bullish on the future of OpRegen to treat GA patients and why we are taking steps to try to repeat the success with other cell types.

Given what appears to be a steadily growing list of asymmetrically positive indicators for the successful advancement of OpRegen into a controlled clinical trial, and while still noting the ultimate decision to advance the program is solely with our partners, Roche and Genentech, we have increasingly been thinking about how we can create value from the clinical, technical, and financial success that we’re anticipating from OpRegen. With that in mind, I will turn next to some statements I made on our prior quarterly call to get a scorecard on how we’ve been doing. Last quarter, I outlined five areas of focus through the end of this year, and I’m pleased to report that we have already successfully delivered on several of those strategic initiatives, and we still have nearly two months to go. Our first goal was to enter into deals which partly or completely fund existing product candidates.

We accomplished this goal through the partnership we announced with William Demant Invest, WDI, which is expected to fund up to $12 million in research and collaboration costs for all planned preclinical development of Resonance, our first internally developed cell transplant program for the treatment of hearing loss. Resonance was an important test for our business model because it showed that we could conceive of and successfully manufacture a new cell-based product candidate, generate new intellectual property, and advance it into initial preclinical testing in approximately one year and with a modest initial investment. Soon thereafter, we signed a collaboration agreement with WDI, which is a world-leading hearing healthcare company, securing external funding leading to an IND or CTA if the data supports it. It also provides access to technology expertise and a network of hearing health leaders.

We and William Demant Invest also have preserved the right to enter into a future clinical and/or commercial deal with a pharma partner if such an opportunity does arise. I believe this collaboration was an important demonstration of the speed, efficiency, and return on investment that the Lineage platform can provide and provides evidence to support our strategy of replicating our OpRegen success with other cell transplant programs. In addition to funding existing assets, our second goal was creating new assets which could attract external funding or collaborations. While we have not yet said anything publicly about what we’re doing in this category, I can share this year we conducted initial wet lab work on multiple target cell types. If that work continues to go well, our expectation is that we would then disclose our next intended indication before our next quarterly call.

Our third goal was to capitalize on our unique manufacturing capability, which we believe could solve issues which impede others’ programs from success. Our new initiative in iLET cell production is an example of how we’re trying to meet this goal. Specifically, we’re looking to tackle the major limitations in production scale, which must be solved in order to have a commercially viable cell therapy product for type 1 diabetes. If we are successful with this initiative, our innovations could be applicable to other programs, potentially opening the door to conditions previously thought to be too big and too expensive to address with cell therapy. At-scale affordability is, in fact, the entire point of allogeneic off-the-shelf product development. Achieving this goal would mark a crucial moment for the field. Our fourth goal was to obtain a CIRM CLIN2 grant, which we applied for earlier this year.

SRM has employed a new review process, and our understanding of that process is that only seven applications were advanced out of an initial larger pool of candidates. We were among those seven finalists. Since that selection to the final seven, we have answered a series of questions from the grant’s working group, but we have not received a grant score or any indication of whether we ultimately will receive a grant or not. However, we believe the finalists will be voted on at the next SRM ICOC meeting on December 11th. Therefore, assuming SRM maintains its planned timing and we have interpreted their plans correctly, we should know our status toward meeting our fourth goal in about four or five weeks. By the way, if we do receive SRM funding, it would provide a very nice non-dilutive offset of up to approximately $7 million.

From the ongoing dose study of OPC-1 for spinal cord injury. The last of the five goals I outlined for the quarter was to complete activities leading to milestone revenues from our partnership with Roche and Genentech. As you already know, I cannot speak to our milestones or their amounts until such time as they are met. It remains an important activity. It is a top priority, and I am pleased with our progress related to this effort. As a final point, most of the goals we have focused on are tied in some way to an expansion of our business. For example, expanding the scope of the OPC-1 study via CIRM grant or expanding the output of new assets from our in-house manufacturing platform. These are intentional moves by us because they reflect the convergence of three key factors.

One, the reduction to practice of our high-scale GMP banking system, which we announced a few months ago. Two, the emergence of a more favorable biotech market, which has improved the cost of capital from which we can fund judicious and stepwise expansion. Three, the belief that the OpRegen program will continue to advance under our Roche Genentech alliance and provide us with the credibility, confidence, and capital to take our platform further than where it is today. We have been eagerly awaiting a time when this accumulation of factors would align and permit us to elevate Lineage’s growth trajectory. We believe this momentum began in the second half of this year and expect it to continue during 2026.

I should add at this point that while we aim in time to create a basket of cell therapy assets, some of which we might choose to develop internally and some of which we might partner, I have been asked on occasion how we, as a small company which has long demonstrated such fiscal discipline, how would we manage a larger portfolio. The answer is clear. Our core technology, our platform, generates assets which share essential traits in common. Those traits occur early enough in a project that they’re not dependent on us having a huge body of disease-specific expertise. Our technology is based foremost on the directed differentiation of pluripotent cells into discrete and scalable cell types of the human body.

While each product candidate is, of course, intended for a different condition and each cell line behaves in a unique manner, the early and necessary steps of process development, control, scale, and purity are largely common features in the way we apply them, which allows us to expand the scope of our pipeline without losing the focus necessary to succeed or without requiring an excessive amount of capital investment. By adapting or initiating each program on the same process development modality, we are generating more shots on goal per dollar invested. With platform expansion as a convenient transition point, I’ll turn lastly to an explanation of our recently revealed iLET Cell Initiative. The human body is comprised of about 200 discrete cell types.

Because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into new product candidates. When we were nearly 100% focused on OpRegen, this selection process was largely running in the background. Our initial pilot effort from this strategy was our program in auditory neurons because we knew auditory neurons represented a high-quality opportunity. Based on our recent collaboration with William Demant Invest, that has proven to be true. There are many other cell types we could tackle. As OpRegen’s future brightened, we have increasingly emphasized and acted on our plans to repeat our OpRegen success. To that end, we hired a former venture capitalist who built for us a proprietary opportunity tracker.

The basic idea for that tracker is that you matrix each of your product opportunities against dozens of product characteristics, such as the addressable market, the quality of translational models, and many other aspects, including, of course, our proprietary manufacturing insights. From the thousands of data points which are generated, we can identify our best potential returns on investments. One of the top outputs from this proprietary process was the opportunity for us to enter the type 1 diabetes space. Our work identified three main obstacles preventing cell transplantation from providing a commercially feasible functional cure for type 1 diabetes patients. The first of these was the mechanism. Multiple companies have since shown that, indeed, an iLET cell transplant can achieve insulin independence for patients. The second obstacle is the need for lifetime immunosuppression, which is not a commercially feasible solution for the vast majority of patients.

Several attempts to eliminate the need for immunosuppression have been explored, such as capsules or droplets. We find the recent evidence from genetically edited hypoimmune cells to be the most attractive approach, one which has created a line of sight on breaching that second obstacle. That leaves only the third major hurdle, which is production scale. Cadavers are not a sustainable or stable source of iLET cells. Pluripotent cells are self-renewing, so they can solve those deficiencies. However, while a single pluripotent cell can give rise to thousands of RPE cells in our system, you can only get a dozen or so iLET cells from each pluripotent cell that you start with.

Because the anticipated dose levels are as high as a billion cells per patient, you’re not really a commercially viable product until and unless you can overcome the biological ceiling imposed by the generally accepted differentiation processes that exist today. I obviously cannot go into detail for competitive reasons, but the gist of the matter is that we have conducted some early work that suggests we may be able to increase our already large-scale production process by many thousandfold. If we are successful, this could increase our relevance in the race to develop a functional cure for type 1 diabetes. Our initial goal for this program is to demonstrate our capability with one of our proprietary and best-behaving cell lines. This initial work is ongoing and intended to lead to a go, no-go decision on further development, which we will expect to occur next quarter.

If the initial work with an internal cell line is successful, we believe it could accelerate partnership conversations for this program. In parallel with any such talks, we would also seek to demonstrate system compatibility with a hypoimmune cell line, either internally or externally sourced, which would be a more suitable line from which to support a clinical campaign. Depending, of course, on the results and feedback we collect along the way, we may elect to do this work for a partner or retain the product internally for a longer period. To summarize, we believe we can reach an initial feasibility decision on this T1D initiative with a modest investment and just a few more months of work. Even if our overall goal isn’t met, we might still discover some things which we can apply to improve the efficiency of our existing programs.

With that, I’ll turn things over to Jill for a review of our financials. Thanks, Brian, and good afternoon, everyone. As of September 30, 2025, our overall cash position was $40.5 million. This amount is expected to support our planned operations into Q2 of 2027, which is one quarter longer than we guided to on our last call. The biggest contributor to the longer runway we are reporting today is cash we have already received from our new alliance with William Demant Invest. We also continue to pursue other sources of funding, like the SRM grant, to support the dose study and milestone payments we are eligible for under the Roche Genentech Collaboration Agreement, as well as any additional partnerships which we may elect to enter into in the future.

Separately, a large additional source of potential cash is the approximately $37 million of warrant capital we may receive if Roche and Genentech publicly disclose their intent to advance OpRegen into a clinical trial with a competitor arm and our investors exercise their warrants in cash. Now, let me review our third quarter results. Our revenue is generated primarily from collaboration revenues, royalties, and other revenues. Total revenues were $3.7 million, a decrease of approximately $0.1 million as compared to $3.8 million for the same period in 2024. The decrease is primarily driven by lower royalty revenue and other service revenues recognized of $0.3 million, partially offset by more collaboration revenues of $0.2 million. Our operating expenses are primarily comprised of R&D and G&A expenses.

Total operating expenses for the third quarter were $7.5 million, a decrease of $0.1 million as compared to $7.6 million for the same period in 2024. Our R&D expenses were $3.3 million, an increase of $0.1 million as compared to $3.2 million for the same period in 2024. The net increase was primarily driven by $0.2 million for our OPC1 program, $0.4 million for our preclinical programs, and other undisclosed programs, partially offset by $0.5 million for our OpRegen program. Our G&A expenses were $4.2 million, a decrease of $0.2 million as compared to $4.4 million for the same period in 2024. This decrease is primarily attributable to stock-based compensation expenses and services provided by third parties. Loss from operations was $3.8 million, which was in line with the comparative prior period. Loss.

Other income expenses reflected other expenses of $26 million compared to other income of $0.8 million for the same period in 2024. The change was largely attributable to the non-cash quarterly fair value remeasurement of the warrant liabilities of $26.6 million, primarily due to change in our share prices compared to the prior year, and $0.2 million for exchange rate fluctuations related to Lineage’s international subsidiaries. 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. The change was primarily driven by the aforementioned warrant liabilities. Our financial results continue to reflect our ongoing dedication to responsible fiscal management, and we remain focused on balancing our cost of capital with the investments we make to grow and strengthen our pipeline. With that, I’ll hand the call back to Brian. Thanks, Jill.

I will quickly summarize by repeating two key themes. First, we remain confident in the potential for OpRegen to drive positive clinical outcomes in dry AMD, and we are encouraged by our partners’ signs of commitment to the program. We also believe the independent evidence generated by others’ RPE cell transplant trials supports and elevates our replace and restore philosophy. Second, we’re preparing for a successful future by making new investments in our cell transplant platform and using our recent manufacturing innovations as a foundation from which additional pipeline programs can be advanced, either via funded partnerships or independently. We believe our approach offers powerful optionality, which we consider essential for a company at our stage of growth and development. We appreciate your support and belief in our vision. With that, Operator, we are ready to take analyst questions. Thank you.

We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Thank you. Your first question comes from the line of Miyank Mantani with B. Reilly Securities. Your line is now open. Hi, yes, thanks. Sorry for the pause there. This is William Owen from Miyank. Congratulations on a very nice quarter. A couple from us, if we may. Just kind of curious. In terms of the considerations for your iLET Cell program, you mentioned that there was sort of a go, no-go decision in the works. I was curious what the internal considerations are incorporated into that. On how to move forward. And then.

I’m just also kind of curious in terms of partnerships. You obviously mentioned the William Demant collaboration. How should we be thinking about additional partnerships? Are you still looking to extend additional collaborations, or sort of what’s the ballpark or the goalpost, internal goal that you’re looking for to complete, and whether it’s based on sort of capital or capacity-wise? Thank you, William. Great question. With respect to the iLET Cell program, due to the biological ceiling which exists in differentiation protocols today, the opportunity to really step function change the process by which you differentiate is probably fairly limited and probably not a solution that would lead to the kind of scale that we’re talking about. If you can start with a much larger number of cells, that biological ceiling becomes less relevant. Our efforts are aimed at some of the earliest steps.

So that by the time you get to the later steps, which are, let’s say, capped, you’re already on track for the kinds of output that you need to get. At the end of the day, it’s a mathematical formula where you start with, let’s say, 100 trillion cells per year, and you need to work backwards through various sizes of vessels, how long does it take to turn around a batch of product, and ultimately all the way back to the earliest steps. If you do not maximize the earliest steps sufficiently, you will never reach the kind of output that is required to have a commercially viable product. You would perhaps create an interesting niche product, but that’s not really our objective here. We have a lot of experience with this part of the process development activity. We are working on some.

Fairly straightforward efforts. If we can knock down the barriers in the earliest steps, we think that provides a credible line of sight to conduct the same activities with some other cell lines that potential partners could have or be able to do it with our own cell line and be able to just continue on the process. Obviously, we are not saying that we can or need to, in the initial days, show someone that we can make 100 trillion cells. Rather, we want to show the modality, the platform, has that capability. Of course, there is risk inherent in actually reducing that fully to practice. That is partnered all the time in this industry. People partner preclinical programs or phase one programs, not knowing if they will ever generate revenues. It is analogous to that.

It just happens to have an emphasis in the early-stage scale. The second question you asked was regarding partnerships. I’m very proud of the team for identifying William Demant Invest as a bit of an atypical partner for us. However, they’re ideal for us because of their hearing expertise. We don’t have an a priori objective to find atypical partnerships, nor do we oppose them. They must be fit for purpose. Because we lack hearing loss expertise, William Demant Invest is a terrific choice for us. We reserve the right with them if we want to partner with some traditional pharma later. We can still do that. You asked about our vision for partnerships and future partnerships.

Ultimately, because our platform is capable of generating multiple assets, multiple product candidates, we envision having a basket of assets, some of which are partnered and some of which are retained for longer. The specific question as to whether an asset gets partnered or not has many inputs. One of those inputs certainly is, what is the cost and what is the risk, and when would it be appreciated by the investment community versus being appreciated by a partner? That is not a question that we can really answer because it depends in large part on our cost of capital. If we have an unattractive share price, it makes sense to rely on partners to advance programs. If we have a more reasonable share price, we have the lovely opportunity to hold on to things a little bit longer, create more value.

It really comes back ultimately to the business of value creation and value creation per share. There are other factors. I won’t go into them, but ultimately, all of the factors come together, and we then make an assessment of whether now is the right time to do a partnership and with whom. Got it. That’s very helpful. Thank you, Brian. One more, if I may, just briefly on OPC-1. Congratulations on your first SBI patient being dosed. I was just curious, based on sort of if a patient is affected, say, in this case, from T1 to T10, I believe originally, at least preclinically, OPC-1 or OPCs in general could migrate approximately about 5 centimeters.

Just thinking about the span of injury there, even if it’s originally at a single site, is there a potential here for OPC1 to be administered or dosed at multiple sites to achieve greater coverage along the spinal cord? Yeah. Your question is correct. The first patient was a thoracic injury patient. We have, in prior cases, had patients who received cells in two separate locations during the same surgery. I would describe it as saying approximately half the dose was administered on one side of the lesion, and the remainder of the dose was delivered on the other side of the lesion. You’re asking a very interesting question. Can you deliver multiple doses, multiple locations? The short answer is yes. Is there benefit from redosing down the road? We don’t know the answer to that yet.

We have what we consider to be a very strong safety profile for OPC1. It would be something that we would like to investigate. We know of no reason why one could not receive multiple doses of the product, even at the full dose of 20 million cells. Got it. Thanks, Brian. Congratulations again, and we’ll hop back to the queue. Thank you, William. Your next question comes from the line of Joe Bantanis with H.C. Wainwright. Your line is now open. Hey, everybody. Good afternoon. Thanks for taking the questions. Brian, first, I want to go to your comments around the potential for the CIRM grant, whether it’s $7 million or what have you. I wanted to simply ask, based on your commentary, how you feel the additional funding might expand or accelerate the program. Thanks, Joe.

Yeah, we don’t know if we will get—we don’t know a final amount because the way that the funding works is there’s a bit of a bring-down exercise where they check on your budget to make sure it aligns with your original application. Nothing significant has changed. In the ideal case for us, we would be somewhere maybe just a little north of $7 million. This would accomplish multiple things for us. The first is that we would feel emboldened to expand the number of sites and be more aggressive about recruiting patients because we have both acute and chronic injury patients that will be enrolled. Acute injury patients are harder to find because you have a window where they are eligible for your trial. It’s good to cast a wide net.

We also have had the first utilization of the new device, and that has had some level of de-risking. Just as we are now more comfortable having more patients come on the study, we’ve learned what we needed to learn. We also are meeting, hopefully, with a successful outcome from the CIRM grant that’ll help fund that. The second part of the answer is the funding, is that we have in our budget, in our plans for our business, a meaningful number of millions of dollars that will fund this trial. If, in fact, we are offsetting approximately 50% of this study, that frees up cash that we would otherwise plan to spend on this trial. It’s a very nice pickup. Just to be clear, if anyone who’s listening is not certain about this.

CIRM does not hand you a check for the full amount. It is essentially a reimbursement. There is a delay and a stagger. If you conduct all the activities and the program continues, you are likely to collect the full amount of the grant over the multi-year period. That is very helpful. Thank you for that. Next question, a bit of housekeeping, probably a little rhetorical. For Jill. With regard to your cash runway, are any of the Roche milestones or beyond included in that runway, or it is basically you will update when they happen? Yeah, that is right, Joe. It is not included, and we do plan to update when we are able to achieve those milestones and they get added into our forward runway, excuse me. Perfect. Brian, my last question is really about your longer-term business model.

You obviously have a foundational platform with all of the different cell directions you can take here. Looking deep into the future, and I know this is difficult, can you tell us how or why or why not Lineage could become a tool or cell services company as part of its approach? I hope we never do. Is my answer. The problem is that I think it remains difficult to do the work that we do. We have the lovely advantage of having been around and involved in this technology for over 20 years. I think we’ve gotten quite good at it. Nevertheless, it’s difficult to price the development of the recipe by which you develop a cell because you don’t know how long it’s going to take. It’s not a widget that you can easily price.

The other factor with respect to sort of behaving like a CDMO is that those margins tend to be unattractive to me. I want, through our partnerships, to have significant ownership in the upside. We’re not particularly interested in doing fee-for-service work. We do have an exquisitely well-trained team, but we also have a small facility. We don’t really have the capacity to do that. There are some scenarios that I think are worth considering, which are whether we have some intellectual property or some other technology that perhaps an alliance with one of those CDMOs would make sense, especially in areas that we have deemed not to be of interest to us. Because there are plenty of people who are working on cell therapy programs that we wouldn’t touch.

The fact that they have raised capital and perhaps some of that capital could find its way to flow back to Lineage would be fantastic. Do we have formulation technology or storage technology or process technology? Could that be utilized by others in sort of a multi-handed deal? I think that is a really interesting idea, but it is not our ambition to become a two-sided business where we are developing products for ourselves on one side and we are doing fee-for-service. To the extent that fee-for-service does bring in capital that you can use for innovation, I would rather do that by separating, by getting a big return on investment, i.e., separating the amount of money required to launch a new program from the amount of money we get from a partnership.

I think that both the Roche agreement and the WDI agreements are really good examples of that. Our upfront or our reimbursed amount is greater than the amount that we put in to invent these things. I think if we can continue to find those opportunities, we will be less reliant on the capital markets than perhaps we would if we did not conduct those strategies. Great. Really appreciate that answer as well as all the others. Thanks a lot. Thank you, Joe. Your next question comes from the line of Jack Allen from Bayer. Your line is now open. Hi. This is Charlie Yawn for Jack. Thank you for taking our questions. Just to start with the dose study, could you remind us of any inner patient stagger requirements there, how quickly you could dose patients, and what sort of data set you envision collecting.

Before announcing initial data, as well as with this first chronic patient, could you let us know when they were dosed and how we should think about the stability of their motor function prior to dosing? Thanks. I have a follow-up afterward. Thank you. A lot to unpack there. The dose study does have a stagger. The first patient was a thoracic A, and the next patient will be a thoracic B. The third patient will be thoracic A or B, and then we can do our first cervical patient. Those sets that I outlined can be either chronic or subacute at that point. We then go into open enrollment for an additional two to six patients. The data set, we have already provided initial data.

We have shared that the new device had performed, had delivered the cells in its intended way. That is the primary objective of this study, to assess the safety and performance. However, I recognize that the investment community is more intrigued by the possibility of seeing some functional improvement in patients, especially chronic patients. I think that’s the right thing to be excited about. The status of the patient, the stability of the patient, is not known to me. In any case, the patient was dosed on July 30th, so approximately two months ago. We would assume that that would be too soon to report on any sort of functional changes that they might be experiencing if they are experiencing any at all.

That is because there can be some variability even among chronic injury patients, and we would not want to get ahead of the story. I would point no further than the OpRegen program. When we first identified retinal restoration, we did not go public for nine months because it was such an extraordinary claim. Frankly, we needed to make sure we had a lot of independent and blinded reviews of that data before we went out to speak about it. By doing so, we were able to speak quite credibly about it. We would imagine the same approach with respect to the dose study. We will continue to watch this patient. There is a stagger. The patients go approximately a month, and you have to pull together your DSMB. Then they go through the review before you get cleared.

What I really can only say about the patient at this point is that there have been no significant safety events, and that’s through the first 60 days following the treatment. That’s great. The device seemed to work the way it was intended. That’s great. We will continue. I think it’s really more of a 2026 story for this trial. Wonderful. Thank you for the color there and helping to unpack that multifaceted question. For the follow-up, just curious, excuse me, on the OpRegen program, has Roche given you a sense for the degree of follow-up they’d like to see from patients treated in the GALET study prior to moving into a pivotal trial? Is there any kind of description of a data package they’re working toward that we should keep in mind? That’ll do it for us. Thank you.

Thank you, Charlie. The degree of follow-up is known. The primary and secondary assessments are through 90 days. So the two primaries and the secondary assessment occur within 90 days. So now, that is not inclusive of longer-term functional data. So those data, of course, do get collected. Those patients are on study for years. But the initial questions that should be framing decisions occur very rapidly. So that’s in part why we’re so encouraged by seeing the expansion and the continuation of this program, is that if it were a disaster, presumably that would be quite easy to know. But we do not know what the plans are for the data package. And it’s probably worth reminding everyone that this is not a conventional phase two study. There is no pre-specified endpoint. It is not a responders analysis the way that we often see phase two responders analysis.

This is surgical optimization. A large number of patients could have very bad outcomes. If enough of them using one particular set of criteria are encouraging, then presumably Roche would follow that set of criteria as they consider moving into a subsequent trial. The truth of the matter is that we do not have that information. We are not part of that discussion. We do not know what that plan will be or when it will occur. We just know that it’s an endpoint that is difficult to miss. It occurs very rapidly. There seem to be a lot of activities, which I outlined on the call today, that would suggest that things are going well. We’re hopeful that we’re correct in interpreting these events and that at some point in the future, we will all learn the very specific answer to your question.

I would add to that. This is a new technology. Surgical optimization presumably could continue for many, many years. That would not be unusual to me in any way. At some point, saying that you feel comfortable enough to continue development because there’s a clock ticking. Of course, there are some competitors, and there are hopes for revenues out there. I think that there is tension between optimizing to perfection, which is an unrealistic goal in the short term, and moving forward into aggressive development. I trust that our partners, who have been so profoundly successful in ophthalmology product development, know exactly what they are doing. I have no problem saying they surely know better about how to do this than we do. We believe the asset is in the very best and most capable hands possible.

If through their work, they are ultimately increasing the future peak sales of this product, if they are increasing the probability of success of this product, then we are quite comfortable waiting for their timelines to hit so that we can all enjoy success. Wonderful. Makes a lot of sense. Thanks so much for the thorough answer, Brian. Thank you, Charlie. Your next question comes from the line of Boris Peaker with Titan Pipe Partners. Your line is now open. Great. Thanks, Cristian. Just quickly on OpRegen, are there any conferences where you think the next data update could be presented, or have you spoken to Genentech Roche on their intention of presenting more data? We speak with them very frequently, perhaps surprisingly frequently. From time to time, we do have discussions about upcoming presentations, and we share content at some point before.

With respect to what I believe you’re really aiming at, which is a disclosure of fulsome GALET data or at least some form of GALET data, we do not know their plans. We, just like you, look at the calendar, and we just imagine different events and forums where that could occur. We do not know. It could be something that spontaneously comes out ad hoc, a pharma day, an ophthalmology day, a random day, Monday. We just do not know. Got it. Maybe on the CIRM grant. I guess what happens if you do not get CIRM funding? How does that impact your program? It is a few tears shed in the beer for the hard work of the team to go through the effort to put together a really fantastic application.

It’s probably a phone call to really try to understand why, because we feel like the fit for this program is right in the center of the bullseye for CIRM’s mission. Ultimately, it changes very little. The program will continue. We will continue to find and identify patients. We need to demonstrate that this new device is adequate and sufficient to support a larger trial. We need to bridge in the new cells that we have prepared and tested. All of that work will continue. We would just regret that we were not successful in securing some external and very good cause of capital support for the program in the way that we’ve envisioned it for so long. The runway, by the way, that we described does not include any CIRM dollars.

So potentially, there would be a pickup depending on how close to the edges we are on a quarter there. Great. Thank you very much for taking my questions. Thank you, Boris. Your next question comes from the line of Sean McCutchen with Raymond James. Your line is now open. Hi, guys. Thanks for the questions. And Brian, I think you helped bridge into my first one. Can you speak to the process of potentially getting the new OPC formulation into the dose study, how much that could truncate the timeline versus a separate bridging study, and whether or not you’re in dialogue with FDA on that front? And then a second question. Could you provide a sightline to getting more patients treated in the dose study, maybe remind us of the safety waiting period and the progress you’re making in terms of identifying patients to be treated? Thanks.

Thanks, Sean. Yeah. The idea that we have was that we could accelerate things. By. Not having the new cells be a separate study. So our strategy is to have the cells introduced more or less at the end of the dose study. Does that mean that the dose study gets larger? Not necessarily. It depends on the next part of your question, which is the FDA dialogue. So we have been preparing the package to take all of that information to FDA so that we could find out what. Exactly the path will need to be. So potentially, the agency would say, "You can introduce these cells into the dose study in the last. Four or five patients, the last one or two patients.

Maybe it’ll ask us to add four or five patients at the end. We’re trying to accelerate and compress timelines by not doing it as a separate campaign. With respect to the gating of patients and the waiting period, I think I mentioned before, it’s about a month, but then you’ve got this sort of practical reality of collecting your data, preparing your data, assembling it for your data safety monitoring board, getting them to discuss and say everything is okay, and then going back to your sites and saying it’s okay to go. I mean, it’s hard for me to estimate because we don’t have a lot of experience running spinal cord trials. The prior data was collected by others. I would estimate that the turnaround time would be quarterly because you’ve got the explicit stagger and then you’ve got the implied stagger.

But it also will be a function of additional sites. So one of the convenient. Nuances of what we’ve done here is we wanted to start slowly because we wanted to make sure that the new device was going well. And we also had to start slowly because we had a stagger. But conveniently, we’ve been waiting for a CERM output. So CERM’s not funding any of this currently. So just at the time that we would hope to be getting out of a stagger and opening more sites, we may be having partial reimbursement from CERM. So it all sort of is coming together in the most economically feasible way. And I think that makes sense for. Where we are as a business and, as I said before, around our cost of capital. So you can expect to see more activity with the study.

You can expect us to see having that FDA engagement. And you can expect to hear more detail from us on timing as we secure that timing and information from FDA. Understood. Thanks, Brian. Awesome. Thank you, Sean. Your next question comes from the line of Albert Lowe. Your line is now open. Hi. I noticed that. Roche highlighted the OPRIGEN program in an investor event they held in September and discussed these new devices that they acquired for the procedure. Can you just give us some more color around the capability of these devices? Thanks, Albert. I’d be happy to. There are. Two basic ways to access the subretinal space. And everyone should be reminded that you must deliver the OPRIGEN cells to the subretinal space. These cells are not working at big distances. They are a transplant. So they have to go where the RPE cells belong.

And you can go through the front of the eye, which is transvitreal. Or there’s a newer technology or a newer method, which is supercoroidal, which goes around and accesses the subretinal space from the back of the eye. So front door or back door. Each of those devices that Roche described on their recent pharma day or ophthalmology day, I don’t recall which. Each of those is a next-generation version. So the transvitreal is an improved version of what is off the shelf. And the supercoroidal is also an improved version of the technology that we first demonstrated in these patients in our phase one study that we acquired a license to Gyroscope that was then acquired by Novartis. So they have trade-offs. The front of the eye and the back of the eye are just different.

We do not know, and I don’t know if Roche and Genentech have decided, but we do not know as lineage which of the two is superior. One is very straightforward. You can see everything you’re doing. It’s very off the shelf. The other requires some specialized training and some specialized tools, but it may have some advantages. Ultimately, we’re going to have to wait and see what kind of information from these devices comes from it. And I do want to caution everyone that there’s no guarantee that our partners are going to tell us all what they found. When I look at some of the competitor data, I feel that they are advantaged in a way because we, at Lineage, showed them where to put the cells.

So if you go around telling everyone every piece of data that you discover, in a way, you can be enabling your competitors. So it is very important because the warrant, the $37 million of warrant capital that Jill described, that was intentionally designed with milestone language that. Was uncoupled from specific devices or data presentations. It simply and solely required our partners to disclose their intent to run a controlled or comparative arm study. So it’s somewhat of a lower bar, but it was intentionally written that way to capture the possibility that they might say that they’re going forward and not tell everyone why. But that’s okay. We still would stand to. Interpret that as a very big positive. But of course, we’re hopeful that they will be comfortable sharing everything that they’d like. And I think, given that, at one of those conferences.

The global franchise head said that they wanted to pioneer innovation in vision restoration. In the context of words talking about going beyond complement. I think that they’re going to find some interesting things. I think they’re going to be proud. I think they’re going to want to show off. And I think that’ll be great for us and our shareholders. Great. Thank you. Thank you, Albert. There are no further questions. I will now turn the call back over to Mr. Brian Cullea for closing remarks. Well, thank you so much. Everybody, I’ve been reading the headlines. I think it’s a bit of misfortune that there’s a lot of. Discouraging news around cell and gene therapy. We’ve all seen the news from Takeda and Galapagos and Novo. I think it’s important to keep in mind that. Lineage is not doing autologous CAR-T. What we are doing is quite different.

And the criticisms that may be levied against certain kinds of cell therapy may not be entirely applicable to what we’re doing. So I invite everyone to go deeper and really consider how we are distinguishing ourselves through manufacturing and our basic approach of developing allogeneic off-the-shelf cell transplants. And then please contact us if you have any questions. We’re really happy about how things are going. Thanks for your attention. Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

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