Lineage Cell Therapeutics, Inc.

Welcome to the Lineage Cell Therapeutics 3rd 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 Sections of Lineage website at www.lineagecel.com. This call is subject to copyright and is the property of Lineage. Any recordings, reproductions, or transmissions of this call without the express written concept 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 Hohn, Head of Investor Relations at Lineage. Ms. Hohn, please go ahead.

Thank you, Demi. Good afternoon and thank you for joining us. A press release reporting our fourth quarter and full year 2025 financial results was issued earlier today March 5th, 2026 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 meeting 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 statements section in today's press release and in the company's SEC filings, including its most recent annual report on Form 10-K filed today. 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, Yvonne, and good afternoon, everyone. We appreciate you taking the time to join us on the call today. We have a great call planned, highlighted by recent warrant exercises that further extend our runway. and a positive result for our initial go-no-go development milestone in our islet cell research initiative. But I want to start by reminding everyone that we have a significant number of employees who live and work in Israel. And while our manufacturing facility is not located near a metropolitan center, some of our staff do commute from larger cities. Their safety is our top priority, and we are of course monitoring the situation. To date, And as expected, a few employees and employee spouses have been called into military service, which is similar to what we've experienced and successfully navigated in 2023. We cannot know what the future holds, but thanks to the incredible dedication of the team we've hired, our operations are continuing, and we expect things will continue to progress. Thank you also for the many messages of concern and support I've received from our colleagues and shareholders alike. Moving ahead, as many of you know, cell therapy has revolutionized oncology, saving lives and creating tremendous shareholder value. But the use of cell therapy in oncology is maturing, while the application of cell therapy to fields outside of cancer remains in the early stages. For this reason, we are focused on delivering the next wave of innovation and value creation in this emerging branch of medicine. We'll begin with the exciting results seen from our lead program in geographic atrophy as a testimonial to what cell therapy is capable of. And as that program matures, we have begun turning our focus to how we can apply our manufacturing success and the lessons we have learned from the Oprogen program to evaluate other medical conditions that also arise from the loss of critical cellular function. Our focus on replacing cells that have become dysfunctional or destroyed may fundamentally reshape many treatment and recovery paradigms. And based on our conviction that the Oprogen program has the potential to drive future value, we believe we are uniquely positioned to capitalize on opportunities to develop other kinds of mature, differentiated cells for patients, which in our view could lead to clinical outcomes currently beyond the reach of conventional approaches. Our work was productive last year. highlighted by us achieving the first milestone under our Roche Genentech Alliance, entering into a funded research collaboration for preclinical development of Resonance, which is our first internally developed product candidate, and more recently, the launch of our new Islet Cell Research Initiative, something which I will provide an update on later in the call. But first, I want to discuss two developments in particular from last year that reinforce our confidence in the company's long-term outlook, and which helped shape our plans for 2026. First, after relying on just seven clinical sites for more than two years, Roche and Genentech have somewhat suddenly opened ten new clinical sites in the GLEC study in the past nine months, including one announced earlier this week at Duke Eye Center. While we don't have any guidance to share on the timing of any additional trials or data disclosures, We view this surge of site openings as a favorable sign because this activity could support preparations for later stage trials. And as I've shared on prior calls, there are other actions and readouts that have occurred in the past year that similarly suggest positive forward progress of Oprogen could be underway. The second item we enjoyed last year were the enhancements and milestones we hit with our manufacturing platform, Alisco. Alloscope purposefully stands for allogeneic, scalable, consistent, off-the-shelf, very potent cell engineering. This acronym highlights the key elements of our core technology. Many of you are familiar with the challenges of autologous cell therapy, such as its high manufacturing cost and donor variability. But with Alloscope, we address those challenges by using the same source cell line for all patients, built on a platform we believe is capable of scaling into millions of doses and trillions of cells. This is something that has long been aspired to, or sometimes even promised, by the field of allogeneic cell therapy. But to our knowledge, very few companies, possibly none, have actually shown that they can perform a large-scale pluripotent cell production process in a GMP setting and use that resulting material in an FDA-cleared clinical trial. But here at Lineage, we successfully established a GMP master cell bank from which we established a GMP working cell bank and generated product that has been used in the clinic. And because the hundreds of vials which comprise those banks are identical, we are confident that we can successfully repeat the process as many times as needed. We believe this achievement provides credible evidence that the Alloscope cell banking system we built is capable of generating millions of vials of our product candidate. This is no small achievement because it's easy to say you plan to rely on the self-renewing capability of pluripotent cells to generate phase one trial material. But with complex biologics like cell therapies, the process is the product. So if your early clinical process isn't capable of satisfying commercial scale, then you're developing product candidates that won't be able to supply the market. This is an essential but often overlooked aspect of cell therapy product development and requires certain investments and commitments to occur in the early stages. As a company with many years of experience in this field, we have had the time to make these investments. This also explains why we embrace a mantra of better from the beginning. We strive to only initiate programs that have a clear line of sight to commercial scale and other critical product features. And from these two significant developments, specifically the evidence supporting Oprigen's potential advancement by Genentech, along with a successful demonstration of commercially viable pluripotent cell production, we have developed the conviction to apply our platform to the furtherance of developing other cell-based products with the potential to treat various diseases and conditions. I will say a few things about our recent and planned pipeline development later in the call, but first, I want to briefly review the status of our lead programs, Oprogen for dry AMD with geographic atrophy, OPC1 for spinal cord injury, and Resins for hearing loss. Oprogen is the most advanced program in our pipeline and serves as a critical case study for our approach to cell transplantation. Dry AMD with GA is an increasingly established indication, but suffers from underwhelming treatment options. Initial reports from our Phase I-IIa clinical study included improved anatomy, halting of atrophic progression, and improved vision in patients with dry AMD, and were unprecedented at the time. And from Roshan Genentech's additional analysis of our Phase I-IIa data, it has been observed that a single dose of ophrogen cells can provide visual improvement lasting for at least three years among patients who receive the cells at the target location. This is an exceptionally promising finding because dry AMD is a condition that has not been shown to self-resolve and only leads to worsening vision. Equally importantly, three independent groups pursuing RPE transplants have recently reported short-term outcomes similar to ours providing further evidence in support of this novel mechanism. Although data remains forthcoming from Galette, Roche, and Genentech's ongoing Phase IIa study, it is encouraging to see that our partners have continued to expand the retinal community's exposure and experience with Oprogen. As a reminder, Galette is a surgical optimization study designed for approximately 60 patients. This study has been running for three years and is an open-label study for which all primary and secondary outcome measures are captured in 90 days. So we infer that Roche has collected and reviewed long-term data from patients treated in that trial, which we expect has informed their recent site expansion decisions. Specifically, after adding only a single site in 2024, Genentech suddenly increased its pace and opened nine new clinical sites in 2025, bringing this study to a total of 17 new unique locations, including the new site just added last week. In addition, Genentech previously acquired novel and proprietary surgical delivery devices from a competitor and sought and received RMAP designation for Oprogen. We believe these are all positive indicators that support our expectation of Roche and Genentech's continued advancement of the Oprogen program. And in December, Lineage received its first $5 million payment from the achievement of a development milestone, highlighting our contribution to this process. When you aggregate these and other publicly available actions, we believe they point to a positive future. And while Oprogen reflects a new technology, we believe we have a set of attributes, including scalable manufacturing, proprietary delivery tools, long-term safety and efficacy data, and a world-class partnership that adds abundant clinical insights and commercial capabilities. For these reasons and others, I hope you will appreciate why we are so bullish on the potential for Oprogen to capture the multi-billion and still largely unaddressed GA market, and also why we are taking steps to try to recreate this promise with other cell types. Moving to our next cell type, oligodendrocyte progenitors, we are developing OPC1, an off-the-shelf cell transplant designed to increase mobility for people who have suffered from a spinal cord injury. OPC1 has been administered in two Phase I and II safety trials in subacute patients, and the long-term safety and efficacy data we have collected so far is both promising and worthy of further investigation. We currently are enrolling patients in the DOST study, the third clinical study of OPC1, which is evaluating the safety of a novel and proprietary system to deliver our cells to the area of injury without stopping patient ventilation. In addition to testing the safety and performance of the new device, we also will be collecting functional assessments on all patients, giving us the opportunity to investigate any signals of efficacy that may arise. This is important because last year, we treated our first ever chronic SCI patient. That was an important milestone because chronic injuries represent an additional and larger potential addressable population for this experimental therapy. And unlike subacute patients, many chronic patients have reached a functional plateau, making any physical improvement easier to detect and rely upon. DOST is an open-label study and that first participant I mentioned recently had their six-month safety follow-up visit with no significant safety events reported following treatment. Equally important, the device performed as planned, which provides significant de-risking of the device that we plan to employ in a larger trial. Last month, we expanded DOST to the greater Los Angeles area by opening our second clinical site at the Rancho Research Institute, in conjunction with Rancho Los Amigos National Rehab Center. Jill and I had the pleasure of hosting Dr. Charles Liu, the principal investigator, and his team for dinner a few weeks ago, and we are extremely excited to have their group involved with the OPC1 program. Moving next to Resonance. This is an auditory neuronal cell transplant being developed to treat hearing loss and also marks our first internally developed program. One of our goals during 2025 was to strike deals which partly or completely funded existing product candidates. We accomplished this goal through the partnership we announced with William DeMond Invest, which is expected to fund all planned preclinical development for the AMP1 program up to the IND stage. Resonance was an important test for our business model because it demonstrated that we could conceive of and successfully manufacture a completely new cell-based product candidate on our Alliscope platform in a rapid and efficient way. With a modest investment, we were able to generate new intellectual property and advance resonance into preclinical testing within one year. This early data was sufficient to establish a partnership with a world-leading hearing healthcare company, which also brought us access to specialized technology, auditory experience, and a network of hearing health leaders. We believe this collaboration was an important demonstration of the speed, efficiency, and return on investment that the Alloscope platform can provide, and evidence of our ability to replicate our Oprigen collaboration success with another cell transplant program. I next will spend just a moment on Alloscope to provide context to my upcoming remarks about our new iLitCell initiative. Alloscope describes a platform on which we can bank and scale pluripotent cells to great numbers before differentiating those cells into discrete types of cells of the human body. It delivers what we consider to be the table stakes necessary to create a commercially successful allogeneic cell therapy, and it is being applied by us across multiple programs and cell lines. Alloscope is a proprietary differentiation and production platform on which our cell-based products are derived from a single initial cell line, conferring consistent, cost-effective, and scalable production. These features should enable us to support the production of millions of doses of a consistent and cost-effective cell-based product. Using Alloscope, we have successfully completed a CGMP production run from our two-tiered cell banking system for two of our product candidates, one of which has been utilized in the clinic. This achievement is notable because it demonstrates our ability to scale a process with the purity, potency, and regulatory quality required to support clinical use, a standard which we believe sits beyond the reach of many companies and which can become a valuable differentiator for lineage. With that background provided, I'll remind you that the human body is comprised of about 200 discrete cell types and because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into the development of additional potential product candidates. When thinking about where we might generate the greatest value from our process development and directed differentiation expertise, We recently announced a new research initiative in type 1 diabetes, and specifically an opportunity we saw to address a major obstacle to a successful type 1 diabetes cell transplant treatment. We've been getting a lot of questions about our entry into this space, so I'm going to take some time today to walk you through our plans in some detail. The headline is that we met our initial internal go-no-go development milestone, which means we will continue to our next phase of internal development. Now I need to explain why that's important. We already know that islet cell transplants can work. Dozens of patients are functionally cured each year using islet cells from cadavers, meaning patients can regulate their blood sugar without proactive and daily disease management. However, a major unsolved problem is supply. Cadavers cannot support a commercially viable source of islet cells. Immunosuppression, patient eligibility, and hypoimmunity are all additional hurdles that need to be overcome. But we believe, the elephant in the room, is that we know of no company that can make islets at the scale required for a commercial product. And we believe the greatest value in the islet cell transplant space will accrue to whoever solves that scale problem. The explanation for this gap is that the required dose of islet cells may be as high as a billion cells per patient, but mature islets do not expand readily in culture. Meanwhile, our calculations indicate that commercial viability begins in the range of thousands of doses per batch, implying that commercially relevant processes will have to be done on the scale of at least an 80-liter bioreactor. But carrying out a differentiation process in an 80-liter vessel requires feeding that vessel with billions of undifferentiated stem cells, which retain their full pluripotency capability and their genetic stability. And that is the problem. Conventional 3D expansion introduces excessive passaging, risking loss of control and genetic aberrations. But generating billions of cells required from conventional 2D approaches demands impractical surface areas and high aseptic risk. There is unavoidable conflict and trade-off between having reproducible control and scale. Our strategy has two aspects. The first is to use the Alloscope platform to combine the control advantages of 2D culture with the volumetric efficiency of 3D systems, or what we refer to as 5D engineering. And I'm proud to report today, for the first time, that we have actually achieved this milestone and reduced it to practice multiple times at a half-liter scale, successfully reaching our first go-no-go decision point with this initiative. We're now evaluating whether we can translate this capability to the next step up, into a multi-liter vessel. Demonstrating reproducible performance at an even larger scale is the next step on the path to feeding 80-liter bioreactors, a scale which should be capable of producing thousands of therapeutic doses of islet cells per run. Importantly, this work is all being done pre-differentiation, which means this stage of development is not dependent on finalizing our immune suppression strategies. The second important aspect of our strategy is that we are looking to tackle the bioreactor feeding problem first. we are inverting the traditional development paradigm by focusing on the scale-up of undifferentiated cells first, because once you've shown that you can actually produce your material at scale, we believe the risk profile for the rest of the islet cell project changes materially. That's because we already know that islets can be an effective intervention and have been shown by multiple groups to be successful in preclinical and clinical settings. Similarly, Editing strategies and differentiation protocols already exist and provide risk-reducing information in those areas. And we may be able to leverage that information if our scale initiative is successful. But no one yet has shown that they can scale islets. We think it's far more prudent to focus first on the unresolved scale problem rather than performing years of expensive studies and deferring the issue of scale for later. Our strategy doesn't fit easily onto a bumper sticker, but if we wanted to print one, it might say, better from the beginning. That is how I describe our development philosophy. We enter fields only when we can see the entire path from cell banking through commercial delivery. We look to identify clear go-no-go decision points along the way, and we strive to include improvements or solutions to existing methods, processes, delivery, or to the cells themselves, in order to have the best overall product profile. I'll conclude by saying that our platform generates assets which share certain essential traits in common, so that each dollar we spend on innovation may apply across multiple programs. While each product candidate is of course intended for a different condition, and each cell line behaves in a unique manner, the early steps of banking, process development, control, purity, and scale have somewhat common features in the way we apply them, which allows us to expand the scope of our pipeline without losing the focus required to succeed in each indication and uses our capital in an efficient way. I hope that it helps explain our exciting business update, and with that, I'll turn things over to Jill for a review of our financials.