- Announced First Known Reported Finding of Retinal Tissue
Restoration Following OpRegen RPE Cell Transplant
- Exercised Option with Cancer Research UK for VAC
Immuno-Oncology Cell Therapy Program and Initiated Process to
Expand VAC Platform to Develop Coronavirus Vaccine
- Provided Positive Update with OPC1 Program: Manufacturing
Improvements Implemented in Production Process; Patent Position
Strengthened to Protect the Processes, Product, and Methods of
Use
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 second quarter ended June 30, 2020.
Lineage management will host a conference call today at 5:30 p.m.
Eastern Time/2:30 p.m. Pacific Time to discuss its second quarter
2020 financial and operating results and to provide a business
update.
“Lineage has continued to make significant progress across our
entire cell therapy pipeline, with positive milestones on each of
our three programs announced this quarter,” stated Brian M. Culley,
Lineage CEO. “Most importantly, after moving into a cohort of
patients with less advanced disease, we reported the first known
finding of retinal tissue restoration, which we believe could
become a landmark discovery in the treatment of dry AMD.
Specifically, Lineage reported evidence of substantial anatomical
restoration of retinal tissue within an area of geographic atrophy,
or GA. The area of GA was approximately 25% smaller when assessed
at 9 months, compared to the patient’s pre-treatment baseline.
These findings were initially discovered by an independent external
advisor using multiple imaging technologies and were subsequently
confirmed by the reading center and additional experts in the field
of retinal imaging. In light of the significance of this finding,
our objective is to treat and monitor the final three patients in
Cohort 4 of our dry AMD study and seek to demonstrate additional
evidence of this exciting finding. These data also will direct our
clinical, regulatory, and ongoing partnership discussions.
We also recently exercised an option with Cancer Research UK,
which allowed us to assume responsibility for advancing our
dendritic cell vaccine program, strengthening our pipeline and
moving Lineage more prominently into the field of cancer
immunotherapy. The VAC platform will permit us to expand not only
our oncology pipeline, but also enter infectious diseases, with
steps being taken to identify external funding to develop a
SARS-CoV-2 vaccine, based on VAC platform data showing strong
induction of cellular immunity via T cells.
Lastly, we have made significant progress developing and
implementing manufacturing improvements for our OPC1 program to
treat spinal cord injuries. We now are working to develop a
“thaw-and-inject” formulation and are evaluating a superior
delivery system to enable an easier and faster surgical procedure
and facilitate enrollment in a late-stage clinical study.
Our aim is to provide safe and sustained benefits of targeted
cell-based therapies, alongside commercially relevant solutions
with competitive advantages in areas of scale-up, production costs,
and delivery techniques. We believe our holistic approach to
designing new therapeutic solutions will allow us to position
ourselves as the clear leader in the emerging field of cell therapy
transplant medicine.”
Lineage has the following plans and objectives for the second
half of 2020:
- Meet with Biomedical Advanced
Research and Development Authority (BARDA) in August to
discuss our proposal for non-dilutive support for a coronavirus
vaccine candidate.
- Report initial VAC2 clinical
data from patients treated in the ongoing Phase 1 trial
in NSCLC (non-small cell lung cancer) run by Cancer Research
UK.
- Complete patient
enrollment in the U.S. with the Gyroscope Orbit SDS and
new thaw-and-inject formulation in the ongoing Phase 1/2a clinical
trial of OpRegen for the treatment of dry AMD.
- Present new and accumulated OpRegen
data from the ongoing Phase 1/2a clinical trial at the
American Academy of Ophthalmology (AAO) Annual 2020 Meeting the
second week of November.
- Meet with the U.S. Food and Drug
Administration (FDA) to discuss further development of
the OPC1 program.
Balance Sheet and Cash Flow Highlights
Cash, cash equivalents, and marketable securities totaled $20.3
million as of June 30, 2020. Marketable securities include our
remaining ownership of unrestricted securities in OncoCyte
Corporation (OncoCyte), AgeX Therapeutics, Inc. (AgeX) and Hadasit
Bio-Holdings Ltd (Hadasit).
We have continued to fund our operations primarily by selling a
portion of our marketable securities. In the six months ended June
30, 2020, we sold approximately 4.8 million shares of OncoCyte
common stock for net proceeds of $10.9 million. We continue to hold
approximately 3.6 million shares of OncoCyte stock that are valued
at $6.8 million as of August 4, 2020, based on the closing price of
its common stock on that date. All of our marketable securities are
now in companies in which we hold less than 10% of the outstanding
shares.
In 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 later this
month, on August 30, 2020. As of June 30, 2020, the outstanding
principal and accrued interest on the note was $24.4 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.
Net cash used in operating activities for the six months ended
June 30, 2020 was approximately $9.3 million, a decrease of $9.7
million as compared to $19.0 million in the same period of 2019.
Additionally, net cash used in the three months ended June 30, 2020
of $4.3 million is $0.7 million lower than net cash used in the
three months ended March 31, 2020 of $5.0 million.
Second Quarter Operating Results
Revenues: Lineage’s revenue is generated primarily from research
grants, royalties and licensing fees. Total revenues for the three
months ended June 30, 2020 were $0.4 million, a decrease of $0.4
million as compared to $0.8 million for the same period in 2019.
The decrease was primarily related to a $0.2 million decrease in
grant revenue due to the timing of grant related activities for
OpRegen and other ophthalmic applications and a $0.1 million
decrease in the sale of research products and services due to the
cessation of such sales.
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 June 30, 2020 were approximately $6.7 million, a decrease of
$4.8 million as compared to $11.5 million for the same period in
2019.
R&D Expenses: R&D expenses for the three months ended
June 30, 2020 were $2.8 million, an approximate decrease of $2.4
million as compared to $5.2 million for the same period in 2019.
The overall decrease was primarily related to decreases of $1.7
million in OpRegen and other ophthalmic application expenses,
attributable primarily to a decrease in manufacturing activities in
2020 as compared to 2019, and $0.7 million in OPC1 expenses,
primarily related to a decrease in development activities in 2020
as compared to 2019 when technology transfer was a focus to support
OPC1 coming in-house with the acquisition of Asterias.
G&A Expenses: G&A expenses for the three months ended
June 30, 2020 were $3.9 million, a decrease of $2.4 million as
compared to approximately $6.3 million for the same period in 2019.
The decrease was primarily attributable to a $1.6 million reduction
in expenses related to our merger with Asterias Biotherapeutics,
Inc. (Asterias), a $0.2 million reduction in compensation expenses,
a $0.2 million reduction in investor and public relations expenses,
a $0.2 million reduction in accounting expenses, a $0.1 million
reduction in travel expenses, a $0.1 million reduction in rent
expenses and a $0.1 million reduction in consulting expenses,
offset by a $0.2 million increase related to the cessation of
shared services reimbursements.
Loss from Operations: Loss from operations for the three months
ended June 30, 2020 was $6.4 million, a decrease of $4.4 million as
compared to $10.8 million for the same period in 2019.
Other (Expense) Income, Net: Other income/(expenses), net for
the three months ended June 30, 2020 reflected other expense, net
of ($0.1) million, compared to other expense, net of ($20.5)
million for the same period in 2019. The variance was primarily
related to changes in the value of equity method investments and
marketable equity securities for the applicable periods, as well as
foreign currency translation adjustments related to Lineage’s
international subsidiaries. The value of Lineage’s OncoCyte shares
decreased by $21.4 million in the three months ended June 30, 2019,
which contributed greatly to the overall balance in other expense,
net for that period.
Net loss attributable to Lineage: The net loss attributable to
Lineage for the three months ended June 30, 2020 was $6.5 million,
or $0.04 per share (basic and diluted), compared to a net loss
attributable to Lineage of $30.0 million, or $0.20 per share (basic
and diluted), for the same period in 2019.
Conference Call and Webcast
Lineage will host a conference call and webcast today, at 2:30
pm PT/5:30 pm ET to discuss its second quarter 2020 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 August 14, 2020, 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
6649516.
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 robust proprietary cell-based
therapy platform and associated in-house 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 to either 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
programs are in markets with billion dollar opportunities and
include three allogeneic (“off-the-shelf”) product candidates: (i)
OpRegen®, a retinal pigment epithelium transplant therapy in Phase
1/2a 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 1/2a
development for the treatment of acute spinal cord injuries; and
(iii) VAC, an allogeneic dendritic cell therapy platform for
immuno-oncology and infectious disease, currently in clinical
development for the treatment of non-small cell lung cancer and in
preclinical development for additional cancers and as a vaccine
against infectious diseases, including SARS-CoV-2, the virus which
causes COVID-19. 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
manufacturing plans, financing plans, enrollment activities, data
presentations, clinical trial advancement, proposed expansion of
the VAC platform in immune-oncology and infectious diseases,
expected net operational spend, planned meetings with the FDA and
partnership evaluations. 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 12, 2020 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.
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS)
June 30, 2020
(Unaudited)
December 31, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
12,676
$
9,497
Marketable equity securities
7,575
21,219
Promissory note from Juvenescence
24,372
23,616
Trade accounts and grants receivable,
net
193
317
Receivables from affiliates, net
7
7
Prepaid expenses and other current
assets
1,377
2,863
Total current assets
46,200
57,519
NONCURRENT ASSETS
Property and equipment, net
7,142
8,175
Deposits and other long-term assets
649
864
Goodwill
10,672
10,672
Intangible assets, net
47,417
48,248
TOTAL ASSETS
$
112,080
$
125,478
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities
$
5,948
$
5,226
Financing lease and right of use lease
liabilities, current portion
1,241
1,223
Deferred revenues, current portion
297
45
Liability classified warrants, current
portion
33
-
Total current liabilities
7,519
6,494
LONG-TERM LIABILITIES
Deferred tax liability
3,315
3,315
Deferred revenues, net of current
portion
-
200
Right-of-use lease liability, net of
current portion
3,276
3,868
Financing lease, net of current
portion
62
77
Liability classified warrants, net of
current portion
215
277
TOTAL LIABILITIES
14,387
14,231
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, authorized
2,000 shares; none issued and outstanding as of June 30, 2020 and
December 31, 2019
-
-
Common shares, no par value, 250,000
shares authorized; 149,831 shares issued and outstanding as of June
30, 2020 and 149,804 shares issued and outstanding as of December
31, 2019
388,271
387,062
Accumulated other comprehensive loss
(486
)
(681)
Accumulated deficit
(288,343
)
(273,422)
Lineage Cell Therapeutics, Inc.
shareholders’ equity
99,442
112,959
Noncontrolling deficit
(1,749
)
(1,712
)
Total shareholders’ equity
97,693
111,247
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
112,080
$
125,478
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
(UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
REVENUES:
Grant revenue
$
287
$
529
$
635
$
1,278
Royalties from product sales and license
fees
99
140
265
226
Sale of research products and services
-
110
-
203
Total revenues
386
779
900
1,707
Cost of sales
(75
)
(107
)
(169
)
(175
)
Gross profit
311
672
731
1,532
OPERATING EXPENSES:
Research and development
2,805
5,235
6,144
10,196
General and administrative
3,908
6,258
8,427
14,918
Total operating expenses
6,713
11,493
14,571
25,114
Loss from operations
(6,402
)
(10,821
)
(13,840
)
(23,582
)
OTHER INCOME/(EXPENSES):
Interest income, net
380
437
785
879
Gain on sale of marketable securities
2,470
-
3,728
-
Unrealized (loss) gain on marketable
equity securities
(4,146
)
(607)
(5,484
)
1,324
(Loss)/gain on equity method investment in
OncoCyte at fair value
-
(21,425
)
-
16,288
Gain on equity method investment in
Asterias at fair value
-
-
-
6,744
Unrealized (loss) gain on warrant
liability
(6
)
234
29
271
Other income (expense), net
1,174
882
(176
)
1,688
Total other (expense) income, net
(128
)
(20,479)
(1,118
)
27,194
(LOSS)/INCOME BEFORE INCOME
TAXES
(6,530
)
(31,300)
(14,958
)
3,612
Deferred income tax benefit
-
1,248
-
5,632
NET (LOSS)/INCOME
(6,530
)
(30,052)
(14,958
)
9,244
Net loss attributable to noncontrolling
interest
8
20
37
34
NET (LOSS)/INCOME ATTRIBUTABLE TO
LINEAGE CELL THERAPEUTICS, INC.
$
(6,522
)
$
(30,032)
$
(14,921
)
$
9,278
NET (LOSS)/INCOME PER COMMON SHARE:
BASIC
$
(0.04
)
$
(0.20)
$
(0.10
)
$
0.07
DILUTED
$
(0.04
)
$
(0.20)
$
(0.10
)
$
0.07
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
BASIC
149,821
149,582
149,814
141,270
DILUTED
149,821
149,582
149,814
141,270
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Six Months Ended June
30,
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) income attributable to Lineage
Cell Therapeutics, Inc.
$
(14,921
)
$
9,278
Net loss allocable to noncontrolling
interest
(37
)
(34
)
Adjustments to reconcile net (loss) income
attributable to Lineage Cell Therapeutics, Inc. to net cash used in
operating activities:
Unrealized gain on equity method
investment in OncoCyte at fair value
-
(16,288
)
Unrealized gain on equity method
investment in Asterias at fair value
-
(6,744
)
Gain on sale of marketable securities
(3,728
)
-
Unrealized (gain) loss on marketable
equity securities
5,484
(1,324
)
Deferred income tax benefit
-
(5,632
)
Depreciation expense, including
amortization of leasehold improvements
423
513
Amortization of right-of-use asset
18
27
Amortization of intangible assets
831
992
Stock-based compensation
1,232
2,202
Change in unrealized loss on warrant
liability
(29
)
(271
)
Write-off of security deposit
150
-
Foreign currency remeasurement and other
(gain) loss
236
(1,461
)
Changes in operating assets and
liabilities:
Accounts and grants receivable, net
125
(863
)
Accrued interest receivable
(756
)
(756
)
Receivables from OncoCyte and AgeX, net of
payables
-
2,185
Prepaid expenses and other current
assets
1,442
(1
)
Accounts payable and accrued
liabilities
214
(804
)
Deferred revenue and other liabilities
51
-
Net cash used in operating activities
(9,265
)
(18,981
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from the sale of OncoCyte common
shares
10,941
-
Proceeds from the sale of AgeX common
shares
985
-
Cash and cash equivalents acquired in the
Asterias Merger
-
3,117
Purchase of equipment and other assets
(16
)
(364
)
Security deposit paid and other
48
(1
)
Net cash provided by investing
activities
11,958
2,752
CASH FLOWS FROM FINANCING
ACTIVITIES:
Common shares received and retired for
employee taxes paid
(13
)
(77
)
Reimbursement from landlord on tenant
improvements
-
744
Repayment of financing lease
liabilities
(17
)
(14
)
Proceeds from Paycheck Protection Program
(“PPP”) Loan
523
-
Proceeds from sale of subsidiary
warrants
-
(40
)
Repayment of principal portion of
promissory notes
-
(70
)
Net cash provided by financing
activities
493
543
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(38
)
83
NET INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
3,148
(15,603
)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH:
At beginning of the period
10,096
24,399
At end of the period
$
13,244
$
8,796
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005799/en/
Lineage Cell Therapeutics, Inc. IR Ioana C. Hone
(ir@lineagecell.com) (442) 287-8963 Solebury Trout IR
Gitanjali Jain Ogawa (Gogawa@troutgroup.com) (646) 378-2949
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