- New Data from Phase I/IIa Clinical Study of OpRegen®
Presented at 2019 AAO Meeting; All Cohort 4 Patients Have Better
Visual Acuity as of Last Visit
- Implemented Significant Additional Cost-Cutting Measures to
Reduce Budget for 2020
- Received CE Mark Approval for Renevia®; Working to Identify
European Commercial Partner
- Conducted Sales of 6.25 Million Shares of OncoCyte
Corporation for $10.7 Million in Net Proceeds
- Strengthened Extensive IP Portfolio with the Issuance of 3
New U.S. Patents
- Awarded Additional NIH Grant for Innovative Vision
Restoration Program
Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX),
a clinical-stage biotechnology company developing novel cellular
therapies for unmet medical needs, reported financial and operating
results for the third quarter ended September 30, 2019. 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 third
quarter 2019 financial results and to provide a business
update.
“We are excited about our cell therapy programs and how they may
benefit patients with serious medical conditions such as dry AMD,
spinal cord injury, and cancer,” stated Brian M. Culley, CEO of
Lineage. “We believe that Lineage has one of the largest and most
comprehensive patent estates in cell therapy and that our
clinical-stage programs are making important advances. We also
recently implemented additional cost-cutting measures that will
reduce our planned 2020 net operational spend to $16 million, $8
million to $12 million less than our previous estimate of $24
million to $28 million. Under this plan, our primary goal will be
to complete enrollment in our Phase I/IIa clinical study of OpRegen
early next year and collect the follow-up data to guide our
late-stage study design and partnership discussions. We also have
completed the transfer of OPC1 to our manufacturing facility and
will continue our efforts to introduce manufacturing enhancements
to OPC1 in preparation for the initiation of a randomized clinical
study in 2021. We believe reducing our cash burn and focusing on
OpRegen, our nearest-term high value asset, as well as on finding a
strong marketing partner for Renevia, is the best way to create
near-term shareholder value. In August 2020, we also are entitled
to receive our final payment of $24.6 million in principal and
interest for the 2018 sale of AgeX Therapeutics shares to
Juvenescence, an amount which exceeds our anticipated cash needs
from now through the end of next year.”
“Additionally, we are looking forward to hosting two therapeutic
area experts in ophthalmology and spinal cord injury at Solebury
Trout’s KOL Event for analysts and investors in New York City on
November 15, 2019,” added Mr. Culley. “Our executive team will be
joined by renowned experts Allen C. Ho, M.D. FACS, Wills Eye
Hospital Attending Surgeon and Director of Retina Research, and
John Steeves, B.Sc., Ph.D., Emeritus Principal Investigator at
ICORD and Professor in the Department of Neuroscience at the
University of British Columbia. We will be providing an update on
our OpRegen and OPC1 clinical programs, as well as an update on the
SCiStar Clinical Study for the treatment of spinal cord
injury.”
Recent Significant Highlights
- Provided an update of our Phase I/IIa clinical study of OpRegen
in patients with dry age-related macular degeneration (dry AMD)
with geographic atrophy at the 2019 American Academy of
Ophthalmology Annual Meeting (AAO 2019) in San Francisco, CA on
October 14, 2019. Data from the study demonstrated that treatment
with OpRegen continued to be well tolerated and, at the furthest
time point collected, all four Cohort 4 patients treated to date
had better visual acuity on an Early Treatment Diabetic Retinopathy
Scale (ETDRS) in the treated eye (range +8 to +19 letters) than in
the untreated eye (range -2 to +7 letters). The largest increase
recorded at any single timepoint in a Cohort 4 patient was +22
letters. Cohort 4 patients have better baseline vision and less
advanced disease than Cohorts 1-3 patients, who were legally blind
at baseline. Previously reported structural improvements in the
retina and decreases in drusen density observed in some patients
were maintained and there was evidence of the continued presence of
transplanted OpRegen cells in patients treated in the first 3
cohorts, some over 3 years following administration. Of note, the
first patient successfully dosed using the Orbit Subretinal
Delivery System (Orbit SDS) as well as a new Thaw-and-Inject (TAI)
formulation of OpRegen was also demonstrating signs of improved
visual acuity, having gained 13 letters in the 3 months following
administration as assessed by ETDRS. Overall, OpRegen appeared well
tolerated with preliminary evidence of improved structural changes
and potential improvement in visual acuity following treatment in
some patients.
- Announced that Renevia, the Company’s facial aesthetics
product, has been granted a Conformité Européenne (CE) Mark.
Renevia received a Class III classification with an intended use in
adults as a resorbable matrix for the delivery of autologous
adipose tissue preparations to restore and/or augment facial volume
after subcutaneous fat volume loss for the treatment of facial
lipoatrophy. The CE Mark provides Lineage, or its authorized agent,
the authority to market and distribute Renevia throughout the
European Union (EU) and in other countries that recognize the CE
Mark. The Company has engaged an EU-based business development
agent to identify opportunities to partner this asset and has begun
the process of engaging with commercially capable partners for
Renevia.
- Completed the launch of our new corporate brand and identity as
well as a change in corporate name to Lineage Cell Therapeutics,
Inc., reflecting our commitment to becoming an innovative,
leading cell therapy company and highlighting our extensive cell
therapy platform. In conjunction with the name change, the
Company's ticker symbol was changed to "LCTX" on August 12,
2019. The Company also relocated its corporate headquarters to
Carlsbad, California, effective August 12, 2019, a move which
provides proximity to world-leading academic centers, public and
private cell therapy peers, and offers more centralized
decision-making, cost-savings, and access to an extensive network
of experienced staff. The Company also terminated shared services
with OncoCyte Corporation (OncoCyte, NYSE American: OCX) and AgeX
Therapeutics, Inc. (AgeX, NYSE American: AGE) on September 30,
2019, an important step in our plan to simplify our business
structure.
- Converted approximately 43% of our investment in OncoCyte into
cash to support our operations with the sale of 6,250,000 shares of
OncoCyte common stock for net proceeds totaling $10.7 million.
Lineage continues to own approximately 16% or 8.4 million shares of
OncoCyte’s outstanding common stock. Based on the closing price of
OncoCyte’s common stock on November 8, 2019, the value of our
remaining OncoCyte shares is approximately $14.1 million.
Near Term Milestones for 2019 and 2020
- Complete patient enrollment in the United States with the Orbit
SDS in the ongoing Phase I/IIa clinical study of OpRegen for the
treatment of dry AMD, expected in Q1 2020.
- Obtain VAC2 immunogenicity data from the initial patients in
the ongoing Phase I study in NSCLC (non-small cell lung cancer) run
by Cancer Research UK, expected around year end.
- Present new OpRegen data from the ongoing Phase I/IIa clinical
study at the Association for Research in Vision and Ophthalmology
Meeting (ARVO) in May 2020.
- Advance the OPC1 manufacturing program by introducing
enhancements to the manufacturing process in our GMP manufacturing
facility, ongoing throughout 2020.
- Meet with the FDA to discuss the manufacturing and clinical
development of OPC1, around the middle of 2020.
- Identify an external partner for commercialization of Renevia
in Europe, targeted for the first half of 2020.
- Continue engagement with the investment and medical communities
with participation at medical and healthcare industry conferences,
ongoing throughout 2020.
- Strengthen existing partnerships with the National Institutes
of Health, the Israel Innovation Authority, the California
Institute for Regenerative Medicine and Cancer Research UK.
Balance Sheet Highlights
Cash, cash equivalents and marketable securities totaled $35.7
million as of September 30, 2019. Marketable securities include our
remaining ownership stakes in OncoCyte, AgeX and Hadasit
Bio-Holdings Ltd (Hadasit), which are now all under 20% of their
respective total outstanding shares. Lineage sold 6,250,000 shares
of OncoCyte’s common stock in the third quarter of 2019 for net
proceeds of $10.7 million. Lineage also sold 651,839 shares of AgeX
common stock in the third quarter of 2019 for net proceeds of $1.6
million and 647,397 shares of Hadasit common stock in July 2019 for
net proceeds of $1.2 million.
Lineage’s promissory note due from Juvenescence Limited had an
outstanding balance (principal plus accrued interest) of $23.2
million as of September 30, 2019. Unless earlier converted into
Juvenescence ordinary shares, the promissory note is payable in
cash, plus accrued interest at 7% per year, at maturity in August
2020. If Juvenescence completes an initial public offering (IPO)
resulting in gross proceeds of not less than $50.0 million, the
promissory note automatically converts into the Juvenescence
securities issued in the IPO based on the per-share price to the
public in the IPO, subject to an upward adjustment in the number of
shares that would be issued to Lineage upon such conversion if the
20-day volume-weighted average trading price of one share of common
stock of AgeX before the IPO is priced above $3.00. If the
promissory note is converted, the Juvenescence ordinary shares will
be a marketable security that Lineage may use to supplement its
liquidity, as needed and as market conditions allow.
In summary, as of September 30, 2019, the value of the Company’s
cash, marketable securities, and the balance of a promissory note
due to it in August 2020 were in excess of $58.9 million.
Lineage expects to spend approximately $6 million in the fourth
quarter of 2019. The Company has implemented significant cost
savings initiatives and now anticipates that net operational spend
for 2020 will be $16 million. This planned spending level
represents a significant reduction from 2019 forecasted spending
levels of $34 million and 2018 spending levels of $43 million for
Lineage and Asterias Biotherapeutics, Inc. (Asterias) combined.
Lineage acquired Asterias on March 8, 2019.
Third Quarter Operating Results
Note regarding AgeX: On August 30, 2018, Lineage deconsolidated
AgeX from its consolidated financial statements due to the sale by
Lineage of 14,400,000 shares of AgeX common stock to Juvenescence
and the related decrease of Lineage’s ownership position in AgeX
from 80.4% to 40.2%. Accordingly, Lineage ceased recognizing
revenue and expenses related to AgeX and its programs on such
date.
Revenues: Lineage’s revenue is generated primarily from research
grants, licensing fees and royalties. Total revenues for the three
months ended September 30, 2019 were $0.6 million, a decrease of
$0.4 million as compared to the same period in 2018. The decrease
was primarily related to a $0.4 million decrease in grant revenues,
which is primarily based on the timing of grant-related
activities.
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 September 30, 2019 were $8.9 million, a decrease of $2.4
million as compared to the same period in 2018.
R&D Expenses: R&D expenses for the three months ended
September 30, 2019 were $4.3 million, a decrease of $0.6 million as
compared to the same period in 2018. The decrease was primarily
related to a $0.8 million decrease from the AgeX deconsolidation
and the absence of AgeX R&D expenses incurred after August 30,
2018, offset by a net increase of $0.2 million in Lineage programs
primarily related to: (1) an increase of $1.4 million in OPC1 and
VAC2 expenses (these programs were acquired in the Asterias merger)
offset by (2) decreases of $1.2 million in Renevia, OpRegen and
other research-related expenses.
G&A Expenses: G&A expenses for the three months ended
September 30, 2019 were $4.6 million, a decrease of $1.8 million as
compared to the same period in 2018. The decrease was primarily
attributable to a $0.8 million decrease in AgeX related general and
administrative expenses, a $0.5 million reduction in legal and
patent expenses, a $0.4 million decrease in salaries, benefits and
severance costs primarily related to terminated personnel and a
$0.3 million reduction in consulting expenses, offset by a $0.2
million increase in rent expense, which is primarily related to the
implementation of ASC 842 Leases in 2019.
Loss from Operations: Loss from operations for the three months
ended September 30, 2019 was $8.4 million, a decrease of $2.0
million as compared to the same period in 2018.
Other Income/(Expenses), Net: Other income/(expenses), net for
the three months ended September 30, 2019 reflected other expense,
net of ($9.1) million, compared to other income, net of $76.9
million for the same period in 2018. The variance was primarily
related to the gain on the deconsolidation of AgeX in 2018 and the
changes in the value of investments in marketable equity securities
for the applicable periods.
Conference Call and Webcast
Lineage will host a conference call and webcast today, at 1:30pm
PT/4:30pm ET to discuss its third quarter 2019 financial results
and to provide a business update. Interested parties may access the
conference call by dialing (866) 888-8633 from the U.S. and Canada
and (636) 812-6629 from elsewhere outside the U.S. and Canada and
should request the “Lineage Cell Therapeutics Call”. 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 November 19, 2019, by dialing (855)
859-2056 from the U.S. and Canada and (404) 537-3406 from elsewhere
outside the U.S. and Canada and entering conference ID number
1473397.
About Lineage Cell Therapeutics, Inc.
Lineage Cell Therapeutics is a clinical-stage biotechnology
company developing novel cell therapies for unmet medical needs.
Lineage’s programs are based on its proprietary cell-based therapy
platform and associated development and manufacturing capabilities.
With this platform Lineage develops and manufactures specialized,
terminally-differentiated human cells from its pluripotent and
progenitor cell starting materials. These differentiated cells are
developed either to replace or support cells that are dysfunctional
or absent due to degenerative disease or traumatic injury or
administered as a means of helping the body mount an effective
immune response to cancer. Lineage’s clinical assets include (i)
OpRegen®, a retinal pigment epithelium transplant therapy in Phase
I/IIa development for the treatment of dry age-related macular
degeneration, a leading cause of blindness in the developed world;
(ii) OPC1, an oligodendrocyte progenitor cell therapy in Phase
I/IIa development for the treatment of acute spinal cord injuries;
and (iii) VAC2, an allogeneic cancer immunotherapy of
antigen-presenting dendritic cells currently in Phase I development
for the treatment of non-small cell lung cancer. Lineage is also
evaluating potential partnership opportunities for Renevia®, a
facial aesthetics product that was recently granted a Conformité
Européenne (CE) Mark. For more information, please visit
www.lineagecell.com or follow the Company on Twitter
@LineageCell.
Forward-Looking Statements
Lineage cautions you that all statements, other than statements
of historical facts, contained in this press release, are
forward-looking statements. Forward-looking statements, in some
cases, can be identified by terms such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,”
“could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,”
“contemplate,” project,” “target,” “tend to,” or the negative
version of these words and similar expressions. Such statements
include, but are not limited to, statements relating to Lineage’s
cost-savings efforts, manufacturing plans, enrollment activities,
data presentations, clinical study advancement, drug evaluation,
and anticipated net operational spend for the fourth quarter of
2019 and full year 2020. Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
Lineage’s actual results, performance or achievements to be
materially different from future results, performance or
achievements expressed or implied by the forward-looking statements
in this press release, including risks and uncertainties inherent
in Lineage’s business and other risks in Lineage’s filings with the
Securities and Exchange Commission (the SEC). Lineage’s
forward-looking statements are based upon its current expectations
and involve assumptions that may never materialize or may prove to
be incorrect. All forward-looking statements are expressly
qualified in their entirety by these cautionary statements. Further
information regarding these and other risks is included under the
heading “Risk Factors” in Lineage’s periodic reports with the SEC,
including Lineage’s Annual Report on Form 10-K filed with the SEC
on March 14, 2019 and its other reports, which are available from
the SEC’s website. You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on
which they were made. Lineage undertakes no obligation to update
such statements to reflect events that occur or circumstances that
exist after the date on which they were made, except as required by
law.
Tables to follow
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS)
September 30, 2019 (Unaudited)
(Notes 1 and 3)
December 31, 2018 (Notes 1 and
6)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
14,366
$
23,587
Marketable equity securities
21,318
7,154
Promissory note from Juvenescence (Note
5)
23,238
-
Trade accounts and grants receivable,
net
157
767
Receivables from affiliates, net (Note
10)
164
2,112
Prepaid expenses and other current
assets
2,342
2,738
Total current assets
61,585
36,358
NONCURRENT ASSETS
Property and equipment, net (Notes 7 &
15)
8,844
5,835
Deposits and other long-term assets
826
505
Promissory note from Juvenescence (Note
5)
-
22,104
Equity method investment in OncoCyte, at
fair value (Note 4)
-
20,250
Equity method investment in Asterias, at
fair value (Note 3)
-
13,483
Goodwill
12,977
-
Intangible assets, net
48,746
3,125
TOTAL ASSETS
$
132,978
$
101,660
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities
$
4,842
$
6,463
Financing lease and right of use lease
liabilities, current portion (Note 15)
1,138
237
Promissory notes, current portion
-
70
Deferred grant revenue
182
42
Total current liabilities
6,162
6,812
LONG-TERM LIABILITIES
Deferred tax liability
6,343
-
Deferred revenues, net of current
portion
240
-
Deferred rent liabilities, net of current
portion
-
244
Right-of-use lease liability, net of
current portion (Note 15)
4,087
1,854
Financing lease, net of current
portion
87
104
Liability classified warrants, net of
current portion, and other long-term liabilities
540
400
TOTAL LIABILITIES
17,459
9,414
Commitments and contingencies (Note
15)
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, authorized
2,000 shares; none issued and outstanding as of September 30, 2019
and December 31, 2018
-
-
Common shares, no par value, 250,000
shares authorized; 149,790 shares issued and outstanding as of
September 30, 2019 and 127,136 shares issued and outstanding as of
December 31, 2018
386,454
354,270
Accumulated other comprehensive income
(357
)
1,426
Accumulated deficit
(268,940
)
(261,856
)
Lineage Cell Therapeutics, Inc.
shareholders’ equity
117,157
93,840
Noncontrolling interest (deficit)
(1,638
)
(1,594
)
Total shareholders’ equity
115,519
92,246
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
132,978
$
101,660
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(UNAUDITED)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
REVENUES:
Grant revenue
$
350
$
718
$
1,628
$
2,985
Royalties from product sales and license
fees
164
85
390
312
Subscription and advertisement
revenues
-
119
-
691
Sale of research products and services
53
60
256
242
Total revenues
567
982
2,274
4,230
Cost of sales
(114
)
(35
)
(289
)
(250
)
Gross profit
453
947
1,985
3,980
OPERATING EXPENSES:
Research and development
4,266
4,882
14,462
17,175
Acquired in-process research and
development
-
-
-
800
General and administrative
4,609
6,422
19,527
17,585
Total operating expenses
8,875
11,304
33,989
35,560
Loss from operations
(8,422
)
(10,357
)
(32,004
)
(31,580
)
OTHER INCOME/(EXPENSES):
Interest income, net
399
174
1,278
278
Gain on sale of marketable equity
securities
2,055
-
2,055
-
Gain on sale of equity method investment
in OncoCyte
546
-
546
-
Gain on sale of equity method investment
in Ascendance
-
-
-
3,215
Gain on sale of AgeX shares and
deconsolidation of AgeX
-
78,511
-
78,511
Unrealized (loss) gain on marketable
equity securities
(4,458
)
23
(3,134
)
635
Unrealized (loss) gain on equity method
investment in OncoCyte at fair value
(8,287
)
(734
)
8,001
(31,550
)
Unrealized (loss) gain on equity method
investment in Asterias at fair value
-
(1,087
)
6,744
(20,660
)
Unrealized gain on warrant liability
79
21
350
372
Other income (expense), net
582
(7
)
2,270
(1,021
)
Total other (expense) income, net
(9,084
)
76,901
18,110
29,780
(LOSS)/INCOME BEFORE INCOME
TAXES
(17,506
)
66,544
(13,894
)
(1,800
)
Deferred income tax benefit
991
-
6,623
-
NET (LOSS)/INCOME
(16,515
)
66,544
(7,271
)
(1,800
)
Net loss attributable to noncontrolling
interest
10
181
44
762
NET (LOSS)/INCOME ATTRIBUTABLE TO
LINEAGE CELL THERAPEUTICS, INC.
$
(16,505
)
$
66,725
$
(7,227
)
$
(1,038
)
NET (LOSS)/INCOME PER COMMON SHARE:
BASIC
$
(0.11
)
$
0.53
$
(0.05
)
$
(0.01
)
DILUTED
$
(0.11
)
$
0.53
$
(0.05
)
$
(0.01
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
BASIC
149,659
126,878
144,097
126,872
DILUTED
149,659
126,973
144,097
126,872
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112006063/en/
Lineage Cell Therapeutics, Inc. IR Ioana C. Hone
(ir@lineagecell.com) (510) 871-4188
Solebury Trout IR Gitanjali Jain Ogawa
(Gogawa@troutgroup.com) (646) 378-2949
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