Full Press Release Details
CELL THERAPEUTICS REPORTS FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS AND PROVIDES BUSINESS UPDATE
| Reported Positive Data from Phase 1/2a Clinical Trial of OpRegen ; All Cohort 4 Patients Have Improved Visual Acuity at Twelve Months or as of Last Visit (Gained Between 8-25 Readable Letters) | ||
| Entered into Agreements with Three Companies for Certain IP and Assets | ||
| Provided Positive Clinical Update from SCiStar Trial of OPC1 for Spinal Cord Injury | ||
| Strengthened Extensive IP Portfolio with the Issuance of 3 New U.S. Patents | ||
| Awarded $3.2 Million in Grants from Israel Innovation Authority and NIH | ||
| Extended Anticipated Cash Runway by Implementing Cost Savings Initiatives and Converting Securities into Cash Positions |
CA - March 12, 2020 - Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology
company developing novel cell therapies for unmet medical needs, today reported financial and operating results for the fourth
quarter and full year ended December 31, 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 fourth quarter and full year 2019 financial and operating results and to provide a
was a transformative year for Lineage. We established Lineage as a leading cell therapy company with the goal to usher in a new
branch of medicine based on transplanting intact cells into the body to restore activity lost to aging, injury, or disease,"
stated Brian M. Culley, CEO. "We expanded our clinical pipeline by combining three complementary cell therapy assets under
one roof, and also significantly reduced our cash burn by eliminating non-core activities. We focused our priorities and rebranded
the company with a new leadership team, name, and headquarters in San Diego County. As we enter 2020, we intend to capitalize
on the changes we made in 2019 and continue our positive momentum. Our primary goal is to complete enrollment in our Phase 1/2a
clinical trial of OpRegen for dry AMD and collect the data that will guide our late-stage trial design and partnership discussions.
We also will continue our efforts to advance the OPC1 program into a randomized trial by introducing commercially enabling enhancements
to the manufacturing process. Lastly, we are working with our development partner, Cancer Research UK, and continue to assess
clinical data that is being generated from the ongoing Phase 1 trial of VAC2. We are evaluating whether to exercise our option
to acquire the data generated in the trial if the data supports that decision. We are excited about the three clinical programs
that we are working to advance, each of which represents a potential billion dollar market opportunity."
events and data updates from 2019 and early 2020 include:
| - | Acquired Asterias Biotherapeutics, Inc. in March 2019. As a result of this acquisition, we acquired two additional cell therapy product candidates, OPC1 and VAC2, along with their associated expansion opportunities and other assets. As we integrated the two companies, we reduced costs by about 50% by eliminating duplicate costs and rationalizing non-key projects. | |
| - | Rebranded as Lineage Cell Therapeutics and relocated the corporate headquarters from the San Francisco Bay Area to Carlsbad, California. We also hired experienced biotech professionals to fill critical management positions, including the Chief Financial Officer, General Counsel and Vice President, Business Development. | |
| - | Entered into agreements with three separate companies, with each agreement relating to different parts of Lineage's intellectual property portfolio. All three companies have ongoing commercial operations in areas related to cell therapy. The aggregate up-front cash payment from the three transactions was greater than one million dollars with additional cash and royalties due upon reaching certain development milestones or product sales. | |
| - | Reported a positive clinical update from our ongoing Phase 1/2a clinical trial of OPC1 known as SCiStar for the treatment of acute spinal cord injury (SCI). The overall safety profile of OPC1 remained excellent with robust motor recovery in the arms/hands maintained through year 2 follow-ups to date. Gains in motor function for patients assessed to date continued, representing tremendously meaningful improvements to quality of life and independence. | |
| - | Awarded $3.2 million in grants from the Israel Innovation Authority and the National Institutes of Health and published or presented multiple papers and abstracts describing our work. | |
| - | Obtained patents associated with the manufacture of our unique cell types, adding additional protections to all three of our clinical programs. Also obtained patent rights describing the use of induced pluripotent stem cells, an alternate option for generating differentiated cells for transplant and treatment of diseases, further broadening the potential application of our work. | |
| - | Granted a Conformit Europ enne (CE) Mark for Renevia , the Company's facial aesthetics product, with an intended use in adults for the treatment of facial lipoatrophy. The CE Mark enables us to sell Renevia in Europe and we are actively pursuing a commercialization partner for this activity. | |
| - | Announced that after reviewing promising preliminary data from the ongoing OpRegen Phase 1/2a clinical trial, our independent data safety monitoring board removed the protocol-mandated treatment stagger. Accordingly, we are opening two new U.S. clinical sites to accelerate patient enrollment and broaden surgical experience among dry AMD experts. |
key events for 2020:
| - | Complete patient enrollment in the U.S. with the Gyroscope SDS in the ongoing Phase 1/2a clinical trial of OpRegen for the treatment of dry AMD. | |
| - | Present new OpRegen data from the ongoing Phase 1/2a clinical trial in May 2020 and as available throughout the year. |
| - | Meet with the U.S. Food and Drug Administration (FDA) to discuss the further clinical development of OpRegen. | |
| - | Evaluate partnership opportunities for the OpRegen program. | |
| - | Enhance commercial utility of OPC1 program by introducing commercially enabling improvements to the manufacturing process in our GMP manufacturing facility. | |
| - | Meet with the FDA to discuss the manufacturing and further clinical development of OPC1. | |
| - | Provide further clinical updates from the SCiStar Trial for SCI. | |
| - | Evaluate partnership opportunities for Renevia in Europe. | |
| - | Evaluate VAC2 clinical data from the initial patients in the ongoing Phase 1 trial in NSCLC (non-small cell lung cancer) run by Cancer Research UK and evaluate potential early exercise of option to acquire data. | |
| - | 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. |
cash equivalents, and marketable securities totaled $30.7 million as of December 31, 2019. Marketable securities include our remaining
ownership of unrestricted securities in OncoCyte, AgeX Therapeutics, and Hadasit Bio-Holdings Ltd (Hadasit).
2019, we were able to fund our operations primarily by selling a portion of our marketable securities. We sold 6,250,000 shares
of OncoCyte's common stock for net proceeds of approximately $10.7 million. We also sold 765,889 shares of AgeX common stock
for net proceeds of approximately $1.8 million and 1,048,147 shares of Hadasit common stock for net proceeds of approximately
$1.7 million. On January 2, 2020, we sold 2,383,090 shares of OncoCyte stock for net proceeds of approximately $5.0 million. We
continue to hold approximately 6 million shares of OncoCyte stock that are valued at $13.8 million as of March 10, 2020. All of
our marketable securities are now in companies in which we hold less than 10% of the outstanding shares.
conjunction with the sale of AgeX shares to Juvenescence Limited (Juvenescence) in 2018, we also hold a $21.6 million promissory
note bearing 7% annual interest that matures on August 30, 2020. As of December 31, 2019, the outstanding principal and accrued
interest on the note was $23.6 million. If, prior to August 30, 2020, Juvenescence completes an initial public offering resulting
in gross proceeds of at least $50.0 million, the promissory note automatically converts into the Juvenescence securities. Lineage
has the right to review Juvenescence's financial statements twice per year.
summary, as of December 31, 2019, the value of the Company's cash, cash equivalents, marketable securities, and the balance
of the Juvenescence promissory note due August 2020 were in excess of $54 million.
Company has implemented significant cost savings initiatives and anticipates that net operational spend for 2020 will be approximately
$16 million. This planned spending level represents a significant reduction from 2019 spending levels of $32 million and 2018
spending levels of $43 million for Lineage and Asterias combined. Lineage acquired Asterias on March 8, 2019. Assuming the Juvenescence
note is paid in cash at maturity, the Company believes that it is funded well into 2021 as a result of these cost savings initiatives.
Quarter Operating Results
Lineage's revenue is generated primarily from royalties, licensing fees, research grants and the sale of research products.
Total revenues for the three months ended December 31, 2019 were $1.2 million, an increase of $0.4 million as compared to $0.8
million for the same period in 2018. The increase was primarily related to a $0.7 million increase in royalties and licensing
fees, offset by a $0.2 million decrease in grant revenue and $0.1 million decrease in the sale of research products.
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 December 31, 2019 were $8.0 million, a decrease of $2.8 million
as compared to $10.8 million for the same period in 2018.
Expenses: R&D expenses for the three months ended December 31, 2019 were $3.5 million, a decrease of $0.3 million as compared
to $3.8 million for the same period in 2018. The decrease was primarily related to decreases of $0.7 million in Renevia and HyStem
expenses and a decrease of $0.2 million in OpRegen expenses, offset by an increase of $0.6 million in OPC1 and VAC2 expenses (these
programs were acquired in the Asterias merger).
Expenses: G&A expenses for the three months ended December 31, 2019 were $4.5 million, a decrease of $2.5 million as compared
to $7.0 million for the same period in 2018. The decrease was primarily attributable to a $1.8 million decrease in salaries, benefits
and severance costs primarily related to terminated personnel, a $0.5 million reduction in severance, legal, accounting and other
expenses related to the Asterias Merger, a $0.3 million reduction in accounting and consulting expenses and a $0.2 million reduction
in travel expenses, offset by a $0.2 million increase in rent expense, which is primarily related to the implementation of ASC
from Operations: Loss from operations for the three months ended December 31, 2019 was $6.9 million, a decrease of $3.2 million
as compared to $10.1 million for the same period in 2018.
Income/(Expenses), Net: Other income/(expenses), net for the three months ended December 31, 2019 reflected other income,
net of $1.5 million, compared to other expense, net of ($35.2) million for the same period in 2018. The variance was primarily
related to changes in the value of equity method investments and marketable equity securities for the applicable periods.
loss attributable to Lineage: The net loss attributable to Lineage for the three months ended December 31, 2019 was
$4.5 million, or $0.03 per share (basic and diluted), compared to a net loss attributable to Lineage of $45.0 million, or $0.35
per share (basic and diluted), for the same period in 2018.
Year Operating Results
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. Accordingly, Lineage ceased
recognizing revenue and expenses related to AgeX and its programs on such date.
Lineage's revenue is generated primarily from royalties, licensing fees, research grants and the sale of research products.
Total revenues for the year ended December 31, 2019 were $3.5 million, a decrease of $1.5 million as compared to $5.0 million
for the same period in 2018. The decrease was primarily related to a $1.5 million decrease
in grant revenue and a $0.7 million decrease in subscription and advertising revenues, partially offset by a $0.8 million increase
in royalties from product sales and license fees.
Expenses: Operating expenses are comprised of R&D expenses and G&A expenses. Total operating expenses for the year
ended December 31, 2019 were $42.0 million, a decrease of $4.5 million as compared to $46.5 million for the same period in 2018.
Expenses: R&D expenses for the year ended December 31, 2019 were $17.9 million, a decrease of $3.9 million as compared
to $21.8 million for the same period in 2018. The decrease was primarily related to a decrease of $4.6 million related
to the AgeX deconsolidation and the absence of AgeX R&D expenses incurred after August 30, 2018,
a decrease of $3.8 million in Renevia and HyStem expenses and a decrease of $0.2 million in OpRegen expenses, offset by
an increase of $4.8 million in OPC1 and VAC2 expenses (these programs were acquired in the Asterias merger).
Expenses: G&A expenses for the year ended December 31, 2019 were $24.0 million, a decrease of $0.7 million as compared
to $24.7 million for the same period in 2018. The decrease was primarily attributable to a $3.1 million decrease
in AgeX related general and administrative expenses, a $1.4 million decrease in salaries, benefits and severance costs
primarily related to terminated personnel, a $1.1 million reduction in legal and patent expenses and a $0.7 million reduction
in consulting expenses, offset by a $5.6 million increase in severance, legal, accounting and other expenses related to the Asterias
from Operations: Loss from operations for the year ended December 31, 2019 was $38.9 million, a decrease of $2.9 million as
compared to $41.8 million for the same period in 2018.
Income/(Expenses), Net: Other income/(expenses), net for the year ended December 31, 2019 reflected other income, net of $19.6
million, compared to other expense, net of ($5.3) million for the same period in 2018. The variance was primarily related to the
2018 gain on the sale of AgeX shares and deconsolidation of AgeX and changes in the value of equity method investments and marketable
equity securities for the applicable periods.
loss attributable to Lineage: The net loss attributable to Lineage for the year ended December 31, 2019 was $11.7 million,
or $0.08 per share (basic and diluted), compared to a net loss attributable to Lineage of $46.0 million, or $0.36 per share (basic
and diluted), for 2018.
will host a conference call and webcast today, at 1:30 pm PT/4:30 pm ET to discuss its fourth quarter and full year 2019 financial
results and to provide a business update. Interested parties may access the conference call by dialing (866) 888-8633 from the