Lineage Cell Therapeutics, Inc.

Thank you for standing by. My name is Roselle and I will be your conference operator today. At this time, I would like to welcome everyone to the Lineage Cell Therapeutics fourth quarter and full year 2024 conference call. At this time, all participants are in listen-only mode. An audio webcast of this call is available on the investor section of Lineage's website at www.lineagesell.com. This call is subject to copyright and is the property of Lineage, and 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, Iona Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.

Thank you, Rochelle. Good afternoon and thank you for joining us. A press release reporting our fourth quarter and full year 2024 financial results was issued earlier today, March 10, 2025, and can be found on the Investors 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. 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.

Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us on the call. There are three topics which I plan to cover today. I'll start with an update on OpraGin and some recent developments in the field of RPE transplants, which we think reflect favorably on our program. Then I'll transition to scalable GMP manufacturing, which is a topic of rising importance to the cell therapy field. And then I'll provide a few words on our in-house program OPC1 and our recently initiated spinal cord trial and some plans for the future. As most of you know, our lead candidate operagin for patients with dry AMD with geographic atrophy is an allogeneic cell transplant comprised of RPE cells. Operagin is delivered as a suspension to the subretinal space in a one-time surgical procedure, and it's currently in a phase 2A study called the GALET study that's being managed by our partners, Roche and Genentech. We believe the ongoing GALET study is progressing well. This is an open-label study with 90-day primary and secondary endpoints, and it has been enrolling for nearly two years. So we believe that a sufficient amount of data should have been collected and reviewed by now from which to make a decision on whether or not to continue investing in this program. This is relevant because Roche recently underwent a comprehensive review of its pipeline, during which they trimmed nearly 30% of their development programs, including some partnered cell therapy programs. We were not affected by those pipeline reductions, and instead, we've observed since that time what appears to be an increase in opportune activity in the past year. For example, about a year after the trial began, Roche and Genentech entered into an additional agreement with Lineage to provide services for things like manufacturing training and long-term follow-up of our Phase I-IIa patients. They continue to open clinical sites in the ongoing galette study, and they recently sought and obtained our MAP designation for Oprogen. I want to be clear that Lineage has not received any interim data from Roche's ongoing Phase 2A trial, and we do not know when any such data will be made available. But these actions by our partners appear to us, more likely than not, to reflect things moving in a positive direction. I will add that our rising confidence is reflected in certain actions that we are taking, such as structuring warrants around a positive-operative clinical milestone, which, if it occurs, would accelerate the maturity date of those warrants. If the share price exceeds the warrant strike price at that time, that could provide us with an additional $36 million of capital. We did this, in part, to reduce concerns about a post-event financing overhang something which is often associated with major clinical announcements. We continue to be unable to guide to the timing of any Phase IIa updates from Genentech, and we don't yet know the process by which findings from the GLET study will become available, but I do want to remind everyone that a decision to advance to a next study could happen at any time. There is no regulatory requirement that we are aware of which requires Genentech to complete enrollment in the ongoing study or to announce galette data before launching a controlled study. Even if Genentech wanted to keep the galette study highlights confidential from competitors, they still would be required to post a new clinical trial on clinicaltrials.gov, which would trigger acceleration of the maturity date of the warrants. While we all eagerly await information from the ongoing Phase IIa trial, there are two things in the meantime which I'd like to highlight for you today. The first is that we have learned that Roche and Genentech plan to provide a three-year clinical update from the Phase I-II-A trial which Lineage conducted. For those of you who recall the two-year update at last year's Retinal Cell and Gene Therapy Innovation Summit, Genentech reported changes to key anatomical structures and, more importantly, average gains to BCVA of five to seven letters, which persisted for two years. I'm not able to provide the details about the forthcoming three-year data, but Genentech have reviewed the anatomical and functional benefits, which were reported at two years, and I can report today that those benefits have indeed continued to persist for another consecutive year. To date, five patients from the Lineage Phase 1-2A trial have demonstrated durable anatomical and functional improvements, and I will remind everyone that these effects have not been shown to occur spontaneously. Observing vision gains lasting for three years despite dry AMD being a degenerative and irreversible disease is to us indicative of a powerful and durable treatment effect, one which may prove in future clinical trials to be superior to currently available therapies because patients on those treatments continue to lose vision. One need look no farther than the 1,211 GA patients who were treated as part of the Hexetocoplin Phase III studies and reported in the Lancet in 2023, where the mean vision change on that best available therapy was a loss of eight to nine letters. And the untreated patient control similarly lost seven letters. More recently, a long-term study of more than 18,000 people with dry AMD and who did not develop neovascular AMD during the observation period experienced BCVA losses of 12 letters at 36 months. And among the cohort of the oldest patients with moderate vision loss at baseline, or moderate vision, rather, at baseline, the mean loss was 20 letters. Based on the information I shared today, about mean BCVA of those opergen patients remaining above baseline at three years, the performance to date between opergen and anti-complement or opergen and an untreated control is not just that patient vision is moving in opposite directions, but that that delta is getting wider over time. The second opergen item I wanted to highlight is some recent news emerging from competing RPE companies, which I think is extremely positive for us. First, a small U.S.-based company which uses RPE cells which they source from cadavers recently reported gains in vision at 12 months using their approach. Second, a different small competitor, this one based outside of the U.S., but using a cell line as a source of RPE. plans to share data from their RPE program at the ARVO conference in May. We've seen some of their top line data, and it is both positive and consistent with our original findings. And then third, according to a recent news article, Astellas' RPE therapy is, quote, very close to proof of concept results. We haven't seen their data, but we assume it will be positive or we don't think this program would be highlighted by their chief strategy officer. If you're surprised that I would highlight our competitors in such a positive way, it's because we're working with a completely new modality and it's normal for people to be unconvinced by a relatively small number of patients, especially when we're all making claims about uncommonly positive clinical outcomes. but every time a company independently reports positive data from an RPE transplant and those data points get aggregated, it can become a powerful endorsement of our mechanism and add conviction to this approach. At this point, there are four, and probably soon there will be five, independent reports of functional gains from an RPE transplant. From among those companies, Investors will presumably try to sort out which among us is best positioned to win the large addressable market. And given everything that is required to successfully manufacture and commercialize an allogeneic cell therapy product for such a large patient population, I feel confident that the combination of Lineage's manufacturing process, Genentech's development strategy, and Roche as the commercialization partner provides us with a triumvirate of advantages over these other programs. And while we wait for the story to play out, these other programs may also provide our shareholders with validating endorsements that we're on the right track. This topic actually leads nicely into my discussion of scalable cell therapy manufacturing. Lineage has been making investments of time and capital into our manufacturing capability for many years. which has generated new intellectual property, but perhaps more poignantly, has helped us achieve specific and measurable milestones in that area. I think we're all aware that unlike five years ago, exceptional clinical data is no longer sufficient to drive high valuations. In connection with increased awareness of modern cell therapy practices, investors have learned much from the crowded and undifferentiated CAR-T space and increasingly appreciate that if you don't have a credible path to commercial-scale manufacturing, then maybe you really don't have a viable product candidate. And that concern is especially true for allogeneic cell therapy programs because the main reason allogeneic is attractive is because it's supposed to offer affordable production of consistent material. But that is not the definition of allogeneic. Allogeneic just means the cells are sourced from a donor instead of from the patient. The term allogeneic should not be expanded to assume affordable production or immediate use products. In some cases, allogeneic might only mean a donor provides a single source or a single dose of a therapy, such as the case for an organ transplant. In better instances, companies might be generating 10, 100, or maybe up to 1,000 doses of their therapy from a bag of donated blood. But while those programs are allogeneic by definition, they aren't maximally reducing the cost of production. Our view is that you're not actually delivering on the benefit of an allogeneic therapy unless your production system can deliver millions of doses. And that's where we're working to establish a leading position in allogeneic process development, production, and scale. I want to explain why we believe this is a credible path. Given the large patient population, we've always known that Oprogen would require a commercially viable manufacturing platform. So for years, we've invested heavily in process development and other cell therapy manufacturing capabilities. But those investments do not need to be limited only to Oprogen. In many cases, the methods, trade secrets, insights, and know-how we have acquired can be, and in some cases already has been, applied to our other programs. In this way, over time, we are enabling lineage to develop multiple programs, each possessing the necessary dyad of clinical evidence and commercially viable production. The main reason I speak on this topic so often is that when I look at the cell therapy landscape, especially at the non-cancer allogeneic field, I can only find vague and aspirational statements about stable cell banks or theoretical projections about manufacturing scale, I have not yet found evidence that these companies have produced their drug product by a scalable process in a GMP environment. So while they may be allogeneic by definition, they haven't yet shown a believable line of sight to the primary reason for pursuing an allogeneic approach, which is a large-scale production capability. And in our view, If you can't deliver on large scale production, you aren't going to be able to affordably address a large patient population. So what we've been working on is to become the first company to reduce to practice a clear and convincing case of a scalable GMP production process. We believe doing this will set a high bar for allogeneic economics and help make Lineage an attractive company and partner. To explain in detail what this looks like, If you were to generate 100 vials of a master cell bank in a GMP lab and randomly select one of those vials to manufacture another 100 vials of a working cell bank, and then you randomly select one of those vials to make 100 vials of your product, you will have credibly demonstrated that you have reduced to practice a production capability of 1 million vials. We don't believe any of the allogeneic companies we monitor has achieved this milestone, yet we believe it is a necessary component to commercial success in a large market indication. So we are focusing on this goal as a way to capitalize further on our investments in Oprigen and help differentiate us from our peers in this area. Next and thirdly, I'll briefly comment on our second clinical stage allogeneic program, OPC1. You might have seen this program highlighted on CNN back in January, and if not, the interview we did with Sanjay Gupta is still available on our website. OPC-1 is designed to help increase recovery and mobility for people who have suffered from a spinal cord injury. It is comprised of a population of the myelin generating cells of the spinal cord, and these cells help control the messages between your brain and your muscles. Our approach to addressing paralysis due to spinal cord injury is to manufacture replacement cells of the spinal cord and deliver them right to the site of injury, which is basically the same approach that produced successful outcomes to date in dry AFD. OPC1 has been tested in 30 individuals with severe spinal cord injuries, and while the long-term safety and efficacy data we have collected so far is promising and merits further investigation, This was an acquired program, and we have two areas of improvement we'd like to complete before we would feel ready to move OPC-1 into a later stage trial. The first area of improvement is delivery. We recently began a small clinical study called the DOST study to test the safety and performance of a novel delivery device. We believe the device we are testing in this study will be superior to the original delivery system in two ways. First, it's easier to use and deploy to clinical sites. And more importantly, the new device allows a dose of cells to be administered to patients over four to five minutes without stopping the patient's respiration. Previously, it was necessary to stop ventilation when you delivered the cells, so this is a significant enhancement to the procedure. In addition to the safety and the performance of the new device, we also will be collecting functional assessments on all patients which gives us the opportunity to investigate any signals of efficacy that may arise. That is important because this study will be the first time OPC1 is administered to patients with a chronic spinal cord injury, which represents an additional and larger patient population for this experimental therapy. The first site for this clinical study is just down the road at UC San Diego Health, and patient enrollment is expected to commence next quarter. The second area of OPC-1 improvement is our new manufacturing process, which actually has two subparts. We first applied lessons from our OPRGEN program to increase the scale, purity, and control of the cells we make. And second, we developed a new immediate use formulation, which eliminates the lengthy dose preparation steps that were required in prior studies. Subject to obtaining clearance from FDA, we plan to introduce the cells we make from this improved process and the new formulation into the dose of the trial. In parallel with these two ongoing enhancements to the OPC1 program, we also are working on the design of a larger trial with a focus on collecting more sensitive and clinically relevant endpoints, which we think will help overcome the complexity of data capture in this patient population. When all three of these necessary activities have been concluded, the design, the device, and the cells, we believe we, either alone or with a future partner, will be in a position to conduct a larger clinical trial of OPC-1. And I should add that we still plan to apply for a CIRM clinical grant as soon as they begin accepting applications, which CIRM has indicated will occur this spring. Last comment I want to make before we review our financials is that we don't often highlight individual patent issuances, but just so that you are aware, we have continued to add value to our patent portfolio. For example, earlier this year, two additional Oprigen patents issued, which included claims covering certain aspects of how we manufacture ourselves. Some of the discoveries we make, we patent, while others we intentionally retain as trade secrets. But overall, we aim to increase our proprietary position for Oprigen and all of our development programs in the best possible way. And with that, I will turn things over to Jill for a review of our financials.