- Reported Encouraging VAC2 Clinical Data in the Ongoing Phase
1 Trial in Non-Small Cell Lung Cancer
- Enrolled Additional Patients in Final Cohort of OpRegen
Phase 1/2a Clinical Trial for the Treatment of Dry Age-Related
Macular Degeneration (AMD)
- Announced Extension of OpRegen Development Grant and New
Grant for Development of a Bio-Retinal Patch from Israel Innovation
Authority
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 third quarter ended September 30, 2020.
Lineage management will host a conference call today at 4:30 p.m.
Eastern Time/1:30 p.m. Pacific Time to discuss its third quarter
2020 financial and operating results and to provide a business
update.
“Lineage moved all three of its clinical programs forward during
the third quarter, particularly by reporting new data on VAC2 and
by advancing closer to the completion of patient enrollment in the
OpRegen trial,” said Brian M. Culley, Lineage CEO. “We look forward
to presenting updated data on OpRegen at the American Academy of
Ophthalmology (AAO) Annual 2020 Meeting in mid-November, and then
completing patient enrollment in our Phase 1/2a clinical study of
OpRegen, anticipated by the end of the year. With respect to VAC2,
we are working closely with Cancer Research UK and anticipate
completing enrollment in the VAC2 Phase 1 study in non-small cell
lung cancer by the end of the first quarter of 2021. We also have
made important progress with OPC1 and are excited to present
details on our manufacturing improvements later this year. The
encouraging data in all three clinical programs to date support
advancing each product candidate into later stage trials. We are
excited by the potential for these product candidates to help
patients who have high unmet medical needs and lack treatment
options. Lineage is financially well-positioned to continue driving
our clinical programs toward key milestones, particularly following
our receipt in August of $24.6 million of non-dilutive cash from
Juvenescence.”
Lineage has the following plans and objectives for the
remainder of 2020 and early 2021:
- Present new and accumulated OpRegen
data from the ongoing Phase 1/2a clinical trial at the
AAO Annual 2020 Meeting in mid-November.
- Complete OpRegen patient
enrollment in the U.S. in the ongoing Phase 1/2a
clinical trial for the treatment of dry AMD by the end of 2020.
- Announce details of manufacturing
improvements achieved with the OPC1 program by the end
of 2020.
- Meet with the U.S. Food and Drug
Administration (FDA) to discuss further development of
the OPC1 program during the first half of 2021.
- Complete VAC2 patient
enrollment in the ongoing Phase 1 clinical trial for the
treatment of non-small cell lung cancer by the end of the first
quarter of 2021.
Balance Sheet and Cash Flow Highlights
Cash, cash equivalents, and marketable securities totaled $38.0
million as of September 30, 2020. Our cash balance includes $24.6
million in proceeds from our note receivable payment from
Juvenescence Limited in August 2020. Marketable securities as of
September 30, 2020 include our ownership of unrestricted securities
in OncoCyte Corporation (OncoCyte), AgeX Therapeutics, Inc. (AgeX)
and Hadasit Bio-Holdings Ltd (Hadasit).
We continue to hold approximately 3.6 million shares of OncoCyte
stock that are valued at $5.6 million as of November 3, 2020, based
on the closing price of its common stock on that date.
Net cash used in operating activities for the nine months ended
September 30, 2020 was approximately $14.1 million, a decrease of
$12.3 million, or 47%, as compared to $26.4 million in the same
period of 2019.
Third Quarter Operating Results
Revenues: Lineage’s revenue is generated primarily from research
grants, royalties and licensing fees. Total revenues for the three
months ended September 30, 2020 were $0.6 million, consistent with
the same period in 2019. A $0.2 million increase in royalties from
product sales and license fees was offset by a $0.1 million
decrease in grant revenues due to the timing of grant related
activities 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 September 30, 2020 were approximately $7.2 million, a
decrease of $1.7 million as compared to $8.9 million for the same
period in 2019.
R&D Expenses: R&D expenses for the three months ended
September 30, 2020 were $3.6 million, a decrease of $0.7 million as
compared to $4.3 million for the same period in 2019. The overall
decrease was primarily related to decreases of $1.5 million in
OpRegen and other ophthalmic application expenses, attributable
primarily to a decrease in manufacturing activities in 2020 as
compared to 2019, $0.8 million in OPC1 expenses, primarily related
to a return of unspent project funds of approximately $0.8 million
from a former Asterias BioTherapeutics, Inc. (Asterias) service
provider and $0.2 million in Renevia and other related expenses,
offset by an increase of $1.8 million in VAC program expenses
related to the accrual of the signature fee of $1.6 million to
Cancer Research UK related to our exercise of the option to acquire
data generated in the Phase 1 clinical trial of VAC2. The signature
fee will be paid in several installments through April 2021.
G&A Expenses: G&A expenses for the three months ended
September 30, 2020 were $3.6 million, a decrease of $1.0 million as
compared to approximately $4.6 million for the same period in 2019.
The decrease was primarily attributable to a $0.9 million reduction
in compensation expenses, a $0.2 million reduction in expenses
related to our merger with Asterias, a $0.1 million reduction in
travel expenses, a $0.1 million reduction in accounting expenses
and a $0.1 million reduction in office related expenses, offset by
a $0.3 million increase in patent and legal expenses and $0.2
million increase related to the cessation of shared services
reimbursements.
Loss from Operations: Loss from operations for the three months
ended September 30, 2020 was $6.7 million, a decrease of $1.7
million as compared to $8.4 million for the same period in
2019.
Other (Expense) Income, Net: Other (expense)/income, net for the
three months ended September 30, 2020 reflected other expense, net
of ($1.2) million, compared to other expense, net of ($9.1) million
for the same period in 2019. The variance was primarily related to
the gain on sale of marketable equity securities and equity method
investments and changes in the value of remaining marketable equity
securities and equity method investments 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 $8.3 million in the three
months ended September 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 September 30, 2020 was $7.8
million, or $0.05 per share (basic and diluted), compared to a net
loss attributable to Lineage of $16.5 million, or $0.11 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 1:30
pm PT/4:30 pm ET to discuss its third 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 November 12, 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 7780879.
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. 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
planned announcement of manufacturing improvements, expected
enrollment in the Phase 1/2a clinical study of OpRegen and Phase 1
study of VAC2, data presentations, clinical trial advancement,
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)
September 30, 2020
(Unaudited)
December 31, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
32,565
$
9,497
Marketable equity securities
5,481
21,219
Promissory note from Juvenescence
-
23,616
Trade accounts and grants receivable,
net
276
317
Receivables from affiliates, net
-
7
Prepaid expenses and other current
assets
1,414
2,863
Total current assets
39,736
57,519
NONCURRENT ASSETS
Property and equipment, net
4,849
8,175
Deposits and other long-term assets
666
864
Goodwill
10,672
10,672
Intangible assets, net
47,167
48,248
TOTAL ASSETS
$
103,090
$
125,478
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities
$
7,214
$
5,226
Financing lease and right of use lease
liabilities, current portion
488
1,223
Deferred revenues
46
45
Liability classified warrants, current
portion
3
-
Total current liabilities
7,751
6,494
LONG-TERM LIABILITIES
Deferred tax liability
3,137
3,315
Deferred revenues, net of current
portion
-
200
Right-of-use lease liability, net of
current portion
1,800
3,868
Financing lease, net of current
portion
29
77
Liability classified warrants, net of
current portion
189
277
TOTAL LIABILITIES
12,906
14,231
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, authorized
2,000 shares; none issued and outstanding as of September 30, 2020
and December 31, 2019
-
-
Common shares, no par value, 250,000
shares authorized; 149,991 shares issued and outstanding as of
September 30, 2020 and 149,804 shares issued and outstanding as of
December 31, 2019
388,190
387,062
Accumulated other comprehensive loss
(821
)
(681
)
Accumulated deficit
(296,103
)
(273,422
)
Lineage Cell Therapeutics, Inc.
shareholders’ equity
91,266
112,959
Noncontrolling deficit
(1,082
)
(1,712
)
Total shareholders’ equity
90,184
111,247
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
103,090
$
125,478
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,
2020
2019
2020
2019
REVENUES:
Grant revenue
$
229
$
350
$
864
$
1,628
Royalties from product sales and license
fees
342
164
607
390
Sale of research products and services
-
53
-
256
Total revenues
571
567
1,471
2,274
Cost of sales
(102
)
(114
)
(271
)
(289
)
Gross profit
469
453
1,200
1,985
OPERATING EXPENSES:
Research and development
3,566
4,266
9,710
14,462
General and administrative
3,628
4,609
12,055
19,527
Total operating expenses
7,194
8,875
21,765
33,989
Loss from operations
(6,725
)
(8,422
)
(20,565
)
(32,004
)
OTHER INCOME/(EXPENSES):
Interest income, net
252
399
1,037
1,278
Gain on sale of marketable securities
120
2,055
3,848
2,055
Gain on sale of equity method in OncoCyte
Corporation (“OncoCyte”)
-
546
-
546
Unrealized loss on marketable equity
securities
(2,003
)
(4,458
)
(7,487
)
(3,134
)
Unrealized (loss)/gain on equity method
investment in OncoCyte at fair value
-
(8,287
)
-
8,001
Unrealized gain on equity method
investment in Asterias at fair value
-
-
-
6,744
Unrealized gain on warrant liability
55
79
84
350
Other income, net
351
582
175
2,270
Total other (expense) income, net
(1,225
)
(9,084
)
(2,343
)
18,110
LOSS BEFORE INCOME TAXES
(7,950
)
(17,506
)
(22,908
)
(13,894
)
Income tax benefit
178
991
178
6,623
NET LOSS
(7,772
)
(16,515
)
(22,730
)
(7,271
)
Net loss attributable to noncontrolling
interest
12
10
49
44
NET LOSS ATTRIBUTABLE TO LINEAGE CELL
THERAPEUTICS, INC.
$
(7,760
)
$
(16,505
)
$
(22,681
)
$
(7,227
)
NET LOSS PER COMMON SHARE:
BASIC
$
(0.05
)
$
(0.11
)
$
(0.15
)
$
(0.05
)
DILUTED
$
(0.05
)
$
(0.11
)
$
(0.15
)
$
(0.05
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
BASIC
149,973
149,659
149,868
144,097
DILUTED
149,973
149,659
149,868
144,097
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Nine Months Ended September
30,
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss attributable to Lineage Cell
Therapeutics, Inc.
$
(22,681
)
$
(7,227
)
Net loss allocable to noncontrolling
interest
(49
)
(44
)
Adjustments to reconcile net loss
attributable to Lineage Cell Therapeutics, Inc. to net cash used in
operating activities:
Unrealized gain on equity method
investment in OncoCyte at fair value
-
(8,001
)
Unrealized gain on equity method
investment in Asterias at fair value
-
(6,744
)
Gain on sale of marketable securities
(3,848
)
(2,601
)
Unrealized loss on marketable equity
securities
7,487
3,134
Income tax benefit
(178
)
(6,623
)
Depreciation expense, including
amortization of leasehold improvements
623
766
Amortization of right-of-use asset
47
59
Amortization of intangible assets
1,080
1,500
Stock-based compensation
1,733
2,961
Common stock issued for services
59
-
Gain on write-off and sales of assets
(154
)
-
Change in unrealized gain on warrant
liability
(84
)
(349
)
Write-off of security deposit
150
-
Amortization of deferred license fee
(200
)
-
Foreign currency remeasurement and other
gain
(116
)
(1,911
)
Changes in operating assets and
liabilities:
Accounts and grants receivable, net
44
634
Accrued interest receivable
(1,008
)
(1,134
)
Receivables from OncoCyte and AgeX, net of
payables
7
1,948
Prepaid expenses and other current
assets
1,634
(136
)
Accounts payable and accrued
liabilities
1,342
(2,788
)
Deferred revenue and other liabilities
-
132
Net cash used in operating activities
(14,112
)
(26,424
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from the sale of OncoCyte common
shares
10,941
10,738
Proceeds from the sale of AgeX common
shares
1,196
1,586
Proceeds from the sale of Hadasit common
shares
3
1,231
Cash and cash equivalents acquired in the
Asterias Merger
-
3,117
Purchase of equipment and other assets
(40
)
(433
)
Proceeds from sale of equipment
18
-
Security deposits and other
18
(2
)
Net cash provided by investing
activities
12,136
16,237
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from payment of Juvenescence
promissory note
24,624
-
Common shares received and retired for
employee taxes paid
(19
)
(101
)
Reimbursement from landlord on tenant
improvements
-
750
Proceeds from sales of common shares
-
103
Payments for offering costs
(53
)
-
Repayment of financing lease
liabilities
(24
)
(20
)
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
25,051
622
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(36
)
128
NET INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
23,039
(9,437
)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH:
At beginning of the period
10,096
24,399
At end of the period
$
33,135
$
14,962
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201104005525/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
Russo Partners – Media Relations Nic Johnson or David
Schull Nic.johnson@russopartnersllc.com
David.schull@russopartnersllc.com (212) 845-4242
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