- Completed Enrollment in Phase 1/2a Clinical Trial of OpRegen
for the Treatment of Dry Age-Related Macular Degeneration
- Announced First Known Report of Human Retinal Tissue
Restoration; Persisted to 23 Months with Improved Vision
- Made Significant Improvements to OPC1 Manufacturing,
Including to Process, Purity, and Scale
- Reacquired the VAC Immuno-Oncology Platform and Reported
Initial Data in Ongoing Phase 1 Clinical Trial in Non-Small Cell
Lung Cancer
- Received $24.6 Million Installment Payment from Juvenescence
Ltd. Related to Sale of AgeX Therapeutics
- Current Cash Position Expected to Support Operations Well
Into 2023
Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX),
a clinical-stage biotechnology company developing allogeneic cell
therapies for unmet medical needs, today reported financial and
operating results for the fourth quarter and full year 2020.
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 2020 financial and operating results and to
provide a business update.
“Our goal is to build Lineage into the preeminent allogeneic
cell transplant company, and we hit our stride in 2020, reaching
significant clinical, manufacturing, and business milestones and
creating substantial value for our shareholders. We also positioned
ourselves for success in 2021 and beyond,” stated Brian M. Culley,
Lineage CEO. “We know of no other company that possesses a
comparable combination of cell therapy patent breadth, in-house
manufacturing capabilities, and encouraging clinical evidence in
three distinct disease areas, each with large unmet needs and
billion-dollar commercial opportunities. We believe the field of
cell therapy is poised for explosive growth in the months and years
ahead. Our objective is to be positioned for that growth by
continuing to provide evidence that allogeneic approaches can
generate safety and efficacy data which leads to commercial and
clinical advantages over alternate approaches. Importantly, Lineage
also recently added $35.9 million in new capital through the timely
sales of our equity and marketable securities. We believe this new
capital will ensure we are funded to deliver additional significant
milestones from our novel cell therapy pipeline and provide us with
optionality in ongoing partnership discussions.”
Some of the significant milestones we achieved during 2020
include:
- Completion of enrollment in a 24 patient Phase 1/2a clinical
study of OpRegen® for the treatment of dry age-related macular
degeneration (AMD) with geographic atrophy (GA) with encouraging
preliminary signs of tolerability and efficacy;
- Announcing the first known finding of retinal tissue
restoration in a patient who received a retinal pigment epithelium
(RPE) cell transplant which had persisted to 23 months with further
improvements to visual acuity;
- Making major manufacturing improvements to our OPC1 acute
spinal cord injury (SCI) program, including to the process, purity,
and scale, and to the development of a “ready-to-inject”
formulation, enabling use at a much larger number of treatment
centers;
- The early exercise of our option with Cancer Research UK to
bring the VAC immuno-oncology platform in-house;
- Reporting encouraging preliminary Phase 1 clinical study
results with VAC2 for the treatment of non-small cell lung cancer
with evidence of high levels of antigen-specific immunogenicity
observed in all patients treated to date;
- Receiving a new research & development grant from the
Israel Innovation Authority under their bio-convergence initiative,
for the development of a novel bio-retinal patch for the treatment
of retinal diseases in partnership with Precise Bio Ltd.;
- Announcing the extension of an OpRegen development grant from
the Israel Innovation Authority;
- Receiving a $24.6 million payment from Juvenescence Ltd. for
principal and interest due under a convertible promissory note
issued as partial payment for the sale of common stock of AgeX
Therapeutics, Inc.; and
- Successfully monetizing portions of Lineage’s non-core patent
portfolio.
Some of the events and milestones that our shareholders can
look forward to in 2021 include:
- Present new and accumulated OpRegen data from the ongoing
Phase 1/2a clinical study on two occasions during the first and
second quarters of 2021;
- Plan to meet with the FDA to discuss further clinical
development of the OpRegen program, anticipated in the third
quarter of 2021;
- Complete VAC2 patient enrollment in the ongoing Phase 1
clinical study for the treatment of non-small cell lung cancer,
anticipated in the second quarter of 2021;
- Evaluate the Neurgain Parenchymal Spinal Delivery (PSD) system
for OPC1, currently ongoing and throughout 2021;
- Plan to meet with the FDA to discuss plans to evaluate the
Neurgain Parenchymal Spinal Delivery (PSD) system for OPC1,
anticipated in the second quarter of 2021;
- Complete OPC1 process development to support a late-stage
clinical trial, currently ongoing and throughout 2021;
- Introduce manufacturing enhancements to the VAC2 program,
anticipated throughout 2021;
- Report results from the ongoing Phase 1 clinical study of VAC2
for the treatment of non-small cell lung cancer, anticipated in the
fourth quarter of 2021;
- Plan to meet with the FDA to discuss further development of
the OPC1 program and manufacturing improvements, including a
late-stage clinical study, anticipated in the fourth quarter of
2021;
- Evaluate opportunities for new VAC product candidates based on
newly discovered tumor antigens/neoantigens, throughout 2021;
and
- Evaluate partnership opportunities and expansion of existing
external collaborations and identification of new collaborations
for OpRegen, OPC1 and VAC2, currently ongoing and throughout
2021.
Balance Sheet Highlights
Cash, cash equivalents, and marketable securities totaled $41.6
million as of December 31, 2020. Marketable securities as of
December 31, 2020 include our remaining ownership of unrestricted
securities in OncoCyte, and Hadasit Bio-Holdings Ltd (Hadasit).
During 2020, we funded our operations primarily by receiving
payment in full for a total of $24.6 million on the Juvenescence
promissory note, and by selling a portion of our marketable
securities, resulting in net proceeds of approximately $13.1
million.
Additionally, during 2020, we selectively sold 3,094,322 of our
common shares under the ATM offering for gross proceeds of
approximately $5.1 million (which excludes $0.3 million of cash in
transit related to 2020 sales that settled in 2021).
2021 fundraising activities
From January 1, 2021 through March 5, 2021, we sold an
additional portion of our marketable securities, resulting in net
proceeds of approximately $10.1 million and an additional $19.9
million in gross proceeds through sales of 7,941,122 of our common
shares under the ATM offering (which includes $0.3 million in cash
in transit related to 2020 sales that settled in 2021). As of March
5, 2021, the value of the Company’s cash and cash equivalents were
in excess of $57 million.
As of March 5, 2021, we hold 1,122,401 shares of OncoCyte stock
valued at approximately $4.2 million and 169,167 shares of Hadasit
stock valued at approximately $330,000, in each case based on the
closing prices of those shares on March 5, 2021.
The Company anticipates that net operational spend for 2021 will
be approximately $20.0 to $22.0 million, which is similar to 2020
spending levels. The Company believes that it is well funded into
2023 as a result of sustained cost savings initiatives in 2020 and
recent fundraising activities.
Fourth Quarter Operating Results
Revenues: Lineage’s revenue is generated primarily from research
grants, royalties, and licensing fees. Total revenues for the three
months ended December 31, 2020 were approximately $0.4 million, a
decrease of $0.8 million as compared to $1.2 million for the same
period in 2019. The decrease was primarily related to an
approximate $0.6 million decrease in royalties and licensing fees,
which was primarily driven by the absence of a $0.6 million upfront
payment from a new license agreement in 2019, and a $0.2 million
decrease in grant revenues due to the timing of grant related
activities.
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 December 31, 2020 were $6.1 million, a decrease of $1.9
million as compared to $8.0 million for the same period in
2019.
R&D Expenses: R&D expenses for the three months ended
December 31, 2020 were $2.6 million, a decrease of $0.9 million as
compared to $3.5 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, and $0.1 million in Renevia and HyStem related
expenses, offset by an increase of $0.5 million in OPC1 expenses,
attributable primarily to an increase in manufacturing activities,
and a $0.3 million increase in VAC program expenses.
G&A Expenses: G&A expenses for the three months ended
December 31, 2020 were $3.5 million, a decrease of $1.0 million as
compared to $4.5 million for the same period in 2019. The decrease
was primarily attributable to decreases of $0.4 million in legal
and patent expenses, $0.3 million in rent expense, $0.3 million in
expenses related to our merger with Asterias Biotherapeutics, Inc.
(Asterias Merger) and $0.2 million in accounting and 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 December 31, 2020 was $5.9 million, a decrease of $1.0
million as compared to $6.9 million for the same period in
2019.
Other Income/(Expenses), Net: Other income/(expenses), net for
the three months ended December 31, 2020 reflected other income,
net of $6.9 million, compared to other income, net of $1.5 million
for the same period in 2019. The variance was primarily related to
the gain on sale of marketable securities and changes in the value
of marketable equity securities for the applicable periods, as well
as foreign currency translation adjustments related to Lineage’s
international subsidiaries.
Net Income/(Loss) attributable to Lineage: The net income
attributable to Lineage for the three months ended December 31,
2020 was $2.0 million, or $0.01 per share (basic and diluted),
compared to a net loss attributable to Lineage of ($4.5) million,
or ($0.03) per share (basic and diluted), for the same period in
2019.
Full Year Operating Results
Revenues: Lineage’s revenue is generated primarily from research
grants, royalties, and licensing fees. Total revenues for the year
ended December 31, 2020 were $1.8 million, a decrease of $1.7
million as compared to $3.5 million for the same period in 2019.
The decrease was primarily related to a $1.0 million decrease in
grant revenue due to less grant-related activities, $0.4 million
decrease in royalties from product sales and license fees, and a
$0.3 million decrease in the sale of research products and services
due to the cessation of such sales.
Operating Expenses: Operating expenses are comprised of R&D
expenses and G&A expenses. Total operating expenses for the
year ended December 31, 2020 were $27.9 million, a decrease of
$14.1 million as compared to $42.0 million for the same period in
2019.
R&D Expenses: R&D expenses for the year ended December
31, 2020 were $12.3 million, a decrease of $5.6 million as compared
to $17.9 million for the same period in 2019. The overall decrease
was primarily related to a decrease of $6.5 million in OpRegen and
other ophthalmic application expenses, attributable primarily to a
decrease in manufacturing activities in 2020 as compared to 2019, a
decrease of $0.8 million in Renevia and other related expense as we
are spending less and actively looking for a commercialization
partner, and a $0.5 million decrease in OPC1-related expenses,
primarily driven by a return of unspent project funds of
approximately $0.8 million from a former Asterias service provider,
offset by a $2.2 million increase in VAC program expenses,
primarily related to the accrual of the signature fee of £1.25
million ($1.6 million) to Cancer Research UK.
G&A Expenses: G&A expenses for the year ended December
31, 2020 were $15.6 million, a decrease of approximately $8.4
million as compared to $24.0 million for the same period in 2019.
The decrease was primarily attributable to a $5.5 million decrease
in Asterias Merger related expenses, a $2.1 million reduction in
compensation costs as a result of headcount reductions in 2019, a
$0.9 million reduction in accounting expenses, a $0.5 million
reduction in rent and utilities, a $0.3 million reduction in travel
expenses, a $0.3 million reduction in office and information
technology related expenses and a $0.2 million reduction in
consulting expenses, offset by a $0.9 million increase related to
the cessation of shared services reimbursements and a $0.5 million
increase in legal and patent expenses.
Loss from Operations: Loss from operations for the year ended
December 31, 2020 was $26.4 million, a decrease of $12.5 million as
compared to $38.9 million for the same period in 2019.
Other Income, Net: Other income, net for the year ended December
31, 2020 reflected other income, net of $4.5 million, compared to
other income, net of $19.6 million for the same period in 2019. The
variance was primarily related to the changes in the value of
equity method investments and marketable equity securities for the
applicable periods, gain on sale of marketable securities for the
applicable periods, as well as foreign currency translation
adjustments related to Lineage’s international subsidiaries.
Net loss attributable to Lineage: The net loss attributable to
Lineage for the year ended December 31, 2020 was $20.6 million, or
$0.14 per share (basic and diluted), compared to a net loss
attributable to Lineage of $11.7 million, or $0.08 per share (basic
and diluted), for 2019.
Conference Call and Webcast
Lineage 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 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 March 19, 2021, 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 4176568.
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
anticipated net operational spend for 2021, 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 most recent Annual Report on Form 10-K filed
with the SEC 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
CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS)
December 31, 2020
December 31, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
32,585
$
9,497
Marketable equity securities
8,977
21,219
Promissory note from Juvenescence
-
23,616
Trade accounts and grants receivable,
net
4
317
Receivables from affiliates, net
-
7
Prepaid expenses and other current
assets
2,433
2,863
Total current assets
43,999
57,519
NONCURRENT ASSETS
Property and equipment, net
5,630
8,175
Deposits and other long-term assets
616
864
Goodwill
10,672
10,672
Intangible assets, net
47,032
48,248
TOTAL ASSETS
$
107,949
$
125,478
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities
$
6,813
$
5,226
Financing lease and right-of-use
liabilities, current portion
762
1,223
Deferred revenues
193
45
Liability classified warrants, current
portion
1
-
Total current liabilities
7,769
6,494
LONG-TERM LIABILITIES
Deferred tax liability
2,076
3,315
Deferred revenues, net of current
portion
-
200
Right-of-use lease liability, net of
current portion
2,514
3,868
Financing lease, net of current
portion
26
77
Liability classified warrants and other
long-term liabilities
437
277
TOTAL LIABILITIES
12,822
14,231
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred shares, no par value, authorized
2,000 shares; none issued and outstanding as of December 31, 2020
and 2019, respectively
-
-
Common shares, no par value, authorized
250,000 shares; 153,096 and 149,804 shares issued and outstanding
as of December 31, 2020 and 2019, respectively
393,944
387,062
Accumulated other comprehensive loss
(3,667
)
(681
)
Accumulated deficit
(294,078
)
(273,422
)
Lineage Cell Therapeutics, Inc.
shareholders’ equity
96,199
112,959
Noncontrolling interest (deficit)
(1,072
)
(1,712
)
Total shareholders’ equity
95,127
111,247
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
107,949
$
125,478
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
Year Ended December
31,
2020
2019
REVENUES:
Grant revenue
$
1,053
$
2,037
Royalties from product sales and license
fees
773
1,221
Sale of research products and services
-
257
Total revenues
1,826
3,515
Cost of sales
(385
)
(412
)
Gross profit
1,441
3,103
OPERATING EXPENSES:
Research and development
12,317
17,948
General and administrative
15,571
24,031
Total operating expenses
27,888
41,979
Loss from operations
(26,447
)
(38,876
)
OTHER INCOME, NET:
Interest income, net
1,039
1,685
Gain on sale of marketable securities
4,560
2,421
Gain on sale of equity method investment
in OncoCyte
-
546
Unrealized loss on marketable equity
securities
(3,782
)
(2,898
)
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
Unrealized (loss) gain on warrant
liability
(174
)
611
Other income, net
2,880
2,532
Total other income, net
4,523
19,642
LOSS BEFORE INCOME TAXES
(21,924
)
(19,234
)
Income tax benefit
1,239
7,407
NET LOSS
(20,685
)
(11,827
)
Net loss attributable to noncontrolling
interest
36
118
NET LOSS ATTRIBUTABLE TO
LINEAGE
$
(20,649
)
$
(11,709
)
NET LOSS PER COMMON SHARE:
BASIC AND DILUTED
$
(0.14
)
$
(0.08
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
BASIC AND DILUTED
150,044
145,533
LINEAGE CELL THERAPEUTICS,
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(IN THOUSANDS)
Year Ended December
31,
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss attributable to Lineage
$
(20,649
)
$
(11,709
)
Net loss attributable to noncontrolling
interest
(36
)
(118
)
Adjustments to reconcile net loss
attributable to Lineage 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 equity
securities
(4,560
)
(2,967
)
Unrealized loss on marketable equity
securities
3,782
2,898
Income tax benefit
(1,239
)
(7,407
)
Depreciation expense, including
amortization of leasehold improvements
823
1,002
Amortization of right-of-use assets
72
129
Amortization of intangible assets
1,216
1,998
Stock-based compensation
2,227
3,580
Common stock issued for services
119
-
Change in unrealized loss (gain) on
warrant liability
174
(611
)
Write-off of security deposit
150
-
Amortization of deferred license fee
(200
)
-
Foreign currency remeasurement and other
(gain) loss
(2,957
)
(2,367
)
(Gain) loss on sale of assets
(20
)
273
Realized loss on warrant exercise
44
-
Dividend received
-
182
Changes in operating assets and
liabilities:
Accounts and grants receivable, net
287
467
Accrued interest receivable
(1,008
)
(1,512
)
Receivables from affiliates, net of
payables
7
2,105
Prepaid expenses and other current
assets
1,575
(260
)
Accounts payable and accrued
liabilities
308
(2,885
)
Deferred revenue and other liabilities
132
-
Net cash used in operating activities
(19,753
)
(31,947
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from sale of OncoCyte common
shares
10,941
10,738
Proceeds from the sale of AgeX common
shares
1,290
1,734
Proceeds from the sale of Hadasit common
shares
830
1,743
Cash and cash equivalents acquired in the
Asterias Merger
-
3,117
Purchase of property and equipment
(64
)
(440
)
Proceeds from sale of assets
23
82
Security deposit paid and other
18
(17
)
Net cash provided by investing
activities
13,038
16,957
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from payment of Juvenescence
promissory note
24,624
-
Common shares received and retired for
employee taxes paid
(27
)
(110
)
Proceeds from sale of subsidiary
warrants
-
(40
)
Proceeds from sale of common shares
5,127
103
Payments for offering costs
(356
)
-
Repayment of financing lease
liabilities
(26
)
(30
)
Proceeds from Paycheck Protection Program
(“PPP”) Loan (Note 8)
523
-
Reimbursement from landlord on tenant
improvements
-
764
Repayment of principal portion of
promissory notes
-
(70
)
Net cash provided by financing
activities
29,865
617
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(63
)
70
NET INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
23,087
(14,303
)
At beginning of year
10,096
24,399
At end of year
$
33,183
$
10,096
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210311005828/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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