Q3 2020 Lineage Cell Therapeutics Inc Earnings Call
This will resume shortly thanks.
Thank you for your patience.
[music].
Welcome to the V.H. gold Therapeutics third quarter, two any journey, calling for in school.
This time, all participants are in a listen only mode.
Gosh, that's difficult it's available on the investors section I don't see aged website at Www Dot then each.
We need shell dot com this.
This call is subject to copyright and is the property of Slaney age and recordings reproduction or transmission of this call without the expressed written consent of Feeney age or is strictly prohibited.
As a reminder city schools being recorded.
I would now like to introduce your host for today's conference.
One at home.
Director of Investor Relations lineage Miss home. Please go ahead.
I think it's you know good afternoon, and thank you for joining US a press release reporting our third quarter 2020 financial results was issued earlier today November 4th 2020 and can be found on the Investor section of our website. Please.
Please note that today's conference call and webcast will contain forward looking statements within the meaning of federal securities laws, including statements regarding our strategy goal data update product candidate planned regulatory meetings clinical trials planned manufacturing improvements financing and Kashmir.
To make matters.
Such statements are subject to significant risks and uncertainties, including those described in our press release issued on November 4th 2020, and our most recent form 10-K and 10-Q filings.
Actual results or performance may differ materially from the expectations indicated by our forward looking statements due to those risks and uncertainties. We caution you not to place undue reliance on any of the forward looking statements, which speak only as of today joining us today, our Chief Executive Officer, Brian Kelly, Our Chief Finance.
No officer, Brandi Roberts, and our senior Vice President of clinical and Medical Affairs, Gary Hope the executive who will provide prepared remarks, then take questions from analysts with that I'd like to turn the call over to Brian Kelley our CEO.
Thank you we want to and good afternoon, everyone. We definitely appreciate you joining us on our quarterly call today I.
This was a highly productive quarter for us in which we reached several key milestones we continued to execute on our overall strategic plan to grow lineage into the preeminent allogeneic cell therapy company.
And this is our mission because we know of no other company that possesses a comparable that mistake in hell cell manufacturing capabilities and is generating promising clinical evidence in three separate diseases, which each represent large unmet medical needs with billion dollar market opportunities.
So far the safety data and early signs of efficacy that weve seen with each of our three product candidates support advancing them ever closer toward later stage trials.
Along the way, we're working to distinguish ourselves among cell therapy companies by putting into place characteristics and attributes of our assets, which reflects greater maturity in commercial viability, and which will center programs up for long term success.
For example, we invest not only in generating compelling clinical data.
But we also develop important areas like pre commercial manufacturing and improved delivery devices, which will help our approach has been successful in later stage trials or track valuable corporate partnerships.
We're also better capitalized than we have been in several years.
Current cash on hand should enable us to reach additional important milestones, which I will discuss today.
And which could create significant clinical and shareholder value over the next few quarters and into 2022.
As we continue to advance our three cell therapy programs and become more widely recognized for our industry leading position in the transplant of differentiated cells I believe our shareholders will be rewarded and today I will review some of the events, which have moved US further along our strategic plan.
First I will outline some of the milestones we reached recently with a critical programs and provide a status update on each program.
Second I will describe some of the future milestones and events that you can look forward to such as our offer just data release in just two weeks and our hope you see one program update early next month.
Third brand he will review our financials and thereafter, we will open up the line for analyst questions.
As a reminder, our three programs are opportune for dry age related macular degeneration with geographic atrophy or dry AMD deal with GE.
Oh P.C., one to improve recovery following an acute spinal cord injury.
And back to for non small cell lung cancer.
All three of these programs are novel cell therapy treatments. They are not traditional drugs and they rely on allogeneic or off the shelf delivery of cells to the patient.
All three product candidates have been well tolerated to date with no unexpected adverse events observed and in some cases, we have indications of unprecedented activity in conditions, where there are no FDA approved treatments.
We think the data so far support our view that lineages cell therapy technology platform had substantial clinical and commercial potential.
We will begin with opera, Jim our product candidate in Trenton intended to treat dry AMD D with geographic atrophy.
Try and deal with GE is one of the leading causes of vision loss in the world. We estimate there are nearly 2 million people in the U.S. suffering from the advanced form of the disease, which is exactly the form we hope to treat.
The disease is caused by the progressive loss of retinal cells and our approach is to grow and transplant brands, new retinal cells to replace the ones that are dysfunctional or have died off and.
And by doing so we believe we may be able to not only slowed the disease process, but also potentially halt or reverse it.
Based on the large number of people with dry AMD D.
Based on the fact, additionally that there are no FDA approved treatment for it and the substantial revenue that has been generated by treatments for wet AMD D, which is far less common than dry AMD d., we believe the commercial opportunity for opportunities at least several billion dollars.
We also believe that option, which maybe a one time treatment performed in about 30 minutes Pepsi substantial advantage over the potential competitors, which require monthly or semi monthly injections.
Our knowledge those treatments also have not shown much evidence in clinical trials to date that they can improve patient vision.
We believe offer just can provide this benefit that are collecting data in support of that claim.
The option program is currently enrolling patients in a phase one to a clinical trial at clinical centers in the U.S. and in Israel.
As you will recall in June we reported evidence of what we believe was the first known finding of anatomical restoration of retinal tissue in a patient who received a transplant of our operation retinal pigmented deal themselves or our P cells.
This is an unprecedented finding because human lack the ability to regrow or repair retinal tissue.
That's the reason why most of our competitors are attempting to simply slowed the rate of disease progression. They can't realistically expect they're.
They're small molecules or their antibodies can rescue affected tissue.
However.
Data from our cell transplants approach supports the hypothesis that operate in our PE cells, maybe able to reverse dry AMD and potentially rescue tissue.
Earlier stage patients.
In particular, the patient retreated with our option cells had end stage disease, yet showed substantial restoration of retinal tissue within the area of GA.
Leading to a 25% reduction in GA area at nine months compared to baseline.
We didnt see this phenomenon in any of the first 12 patients we treated but those patients had such advanced disease that they were all legally blind so it's pretty reasonable to assume their disease was to advanced to expect any recovery.
But we have more recently moved into patients with less advanced disease, and better baseline vision, which is a setting in which we observed this restoration effect in this patient.
Weve also hypothesized that this particular patient may have done better than others due to more complete placement of cells over their area of GA and for this reason we have sought to replicate this finding in additional patients by delivering the cells more aggressively across the g. eight.
We will be monitoring these more recently treated patients to see if we can replicate this finding which we believe could disrupt the overall therapeutic landscape in this disease.
In the meantime, please keep in mind that we found this first case of restoration, just a few months ago and it probably takes between six and 12 months before you can detect it depending on how quickly a patient's GA is growing so we wouldn't have expected to see get this soon in any of the more recently treated patients. However, this does make the coming months very.
Citing because those more recently treated patients will be reaching the same timeframe in which the case of restoration was identified and confirmed by our experts.
In addition to the retinal restoration discovery, we also have observed additional benefits in some of our other patients including increases in visual acuity reductions in the growth rate of HCA and increases in reading speed.
These are additive to the improvements Weve previously reported in retinal architecture through some reduction and the multi year durability of the transplants.
Notably we have not observed a single case of acute or delayed transplant rejection, despite eliminating immunosuppressive therapy, a few weeks to a few months after treatment.
At one time it was thought that patients receiving allogeneic cells would require lifetime immunosuppression, but our initial patients were taken off immune suppressive therapy. After one year without rejection and patients treated more recently have been taken off immune cells immune suppressive therapy, just a few months post treatment.
We believe the body of evidence we're collecting increasingly supports a new paradigm for what is possible in the treatment of dry MD and is refusing some of the early concerns about tolerance safety and rejection.
It is our primary objective to show that directed differentiation and transplant of oxygen RP cells can provide clinically meaningful outcomes in this disease and do so in the context of a clinical trial, which can serve as the basis for an approval.
We also are exploring ways in which we might improve the delivery of cells as well as the overall surgical experience and ease of use for physicians.
To that end, we continue to evaluate the gyroscope orbit Sds device as an enhanced way to deliver sells to the sub retinal space.
As a reminder, this device helps the surgeon placed the cells across the area of GA without puncturing the retina.
We're interested in this device because it should reduce the incidence of EFI retinal membrane formation or E. ERM and in fact, we've seen the rate of CRM formation dropped to zero in patients we've treated to date with this FDI approved device.
That's clearly an excellent start and we intend to continue to evaluate this device and we plan to have an update on this as well as on option at the American Academy of Ophthalmology Annual conference also known as a Oh, which will be held in approximately two weeks.
Speaking of Ale, the reason I'm unable to say much more about our operation data today is that we will have an overall study update at the A.O. Virtual conference on November 13th and 15 Dr.
Dr. Allen home one of our investigators from Wills eye in Philadelphia is including origin data in his talk on the 13th and Dr. Christopher Reman. Another one of our principal investigators he's from Cincinnati Eye Institute, he will be presenting a summary of our up data data on the 15th and as a follow up we're planning separately to.
Host the call with Dr. agreement on Tuesday, the 17th at one P.M. Pacific to provide a forum for more in depth discussion and to take questions from analysts.
KNL event will be open to everyone.
We hope you find time to join because it has been some time since we provided a data update on for Jim and we know everyone is looking forward to hearing how that program has been doing lately, especially with the cove and related restrictions.
Moving mix now to OPGC, one our clinical stage program for spinal cord injury.
You see one treatment involves manufacturing and transplanting a specific type of glial cells pulled in oligodendrocyte progenitor.
And transplanting those cells directly into the site of a spinal cord injury in order to provide greater mobility and functions of patients after a paralyzing injury.
We took over this program through the acquisition of the serious accompany which had generated compelling clinical data, but was never actually able to manufacture the cells in a way which is required to move into subsequent clinical trials.
Part of the rationale for buying a serious was that we were confident that our manufacturing team lineage, which has been wildly successful at manufacturing readiness cells to figure out how to replicate their success with oligodendrocytes.
It means our manufacturing team was asked to make improvements to the production process in areas like scale purity reproducibility and other attributes, which the FDA requires and which are needed for the commercial viability of a product.
The team also need to develop a spa and inject formulation just like they did for oxygen to eliminate the need to manipulate cells. One day prior to their administration, which is an excessive burden for a product seeking approval.
All of this work will create a more compelling product profile and lead us to an arm out meeting with FDA, which we expect will occur during the first half of next year and that which we will discuss these improvements were making to the LPC one program.
Once that meeting is complete the manufacturing side of the LPC. One program will have caught up with the impressive clinical data generated to date and open the door to later stage clinical testing.
And to that point, we believe that the next study of OPGC, one can be positioned as a registrational study and we will seek to gain agreement from the agency on this path.
Manufacturing, sometimes seems like a black box and they're often isn't much attention placed on that particular aspect of a development program, but I'd like you to keep in mind that we're working with whole cells not small molecules are anti bodies and some of the things we have been doing behind the scenes. During this year, our pioneering the field of cell therapy in value.
Okay and proprietary ways. So it's not always in our best interest to advertise them, but with that said I'm pleased to share today that we plan to provide an update on the LPC. One program in early December with an emphasis on a recent manufacturing achievements and we think that update will help garner new and positive interest not.
Only in what we're doing in the area of spinal cord injury, but also contribute to the growing body of evidence that the obstacles to widespread adoption of cell therapy are continuing to fall as companies like lineage going forward modern solutions to historic limitations.
Moving next to back to.
For which we recently announced some interim clinical data this.
This is our off the shelf dendritic cell cancer vaccine.
Kindred excels at the most potent antigen presenting cells in the body and we harness their activity to deliver hand picked antigens and approach, which is re emerging as an attractive therapeutic modality based on the consistent safety profile and increased knowledge of how to deploy dendritic cells in a clinical setting.
Back to is comprised of mature dendritic cells, which we manufacture from proprietary established cell banks and load with a tumor specific targets or antigen to instruct the body's immune system about which sells it should attack and eliminate.
And by using dendritic cells to educate your T cells to seek out destroy cancer cells back to acts like a highly trained booster for your immune system.
During the third quarter, we announced encouraging preliminary results from our ongoing phase one study of back to in patients with non small cell lung cancer.
And specifically back to demonstrated potent induction of immune responses in all four patients tested to date.
Providing us with mechanistic validation and reinforcing the data obtained in the Vac one clinical trials.
Antigen reactive pentameter staving induced by back to and supported by at least spot data suggested that our vaccine is highly potent inducing significantly higher levels of antigen specific T cells compared with the levels invoked by alternative approaches such as DNA and already based vaccines.
A particular note one of the four patients experienced a radiological response following chemotherapy subsequent to back to treatment, which the primary investigator was highly enthusiastic about.
While this clinical response was anecdotal and occurred after the patient had completed the two study responses in this setting are rare and clearly support further investigation.
So on the basis of these early findings and following completion of the ongoing clinical study. We believe the best path ahead for back to may be to evaluated in combination with therapies considered biologically synergistic to a dendritic cell vaccine such as chemotherapy or the immune cell protecting properties.
[noise] offered by anti PD, one checkpoint inhibitors as.
As you probably know several pharmaceutical companies are generating billions of dollars of revenue from anti PD, one checkpoint inhibitors, but nonetheless are still running combination trials of their drugs along with other treatments to try to obtain higher efficacy because not all patients benefit from checkpoint inhibitors alone.
We believe that too could be an attractive option in a combination trial of this kind because of its expected high level of tolerability and its potential to increase efficacy by elevating the patient's immune response. After the cancer has been made susceptible by the checkpoint inhibitor.
While the back to program continues to enroll in its ongoing clinical trial in non small cell lung cancer, we have a number of improvements and modernizations, we'd like to make on the manufacturing side, which can help prepare back to for later stage trials and provide competitive advantages for any future back programs. We may design.
For this reason we have directed the manufacturing team to begin working on production enhancements to increase the commercial appeal and utility of the Vac platform.
Although our partner cancer research UK collected some valuable clinical data just like a serious did with LPC one for spinal cord injury cancer.
Cancer Research UK did not have the process development expertise to develop the necessary improvements to the program across.
The process development is a core competency for lineage. So in order to fully exploit the potential of the vac platform, we intend to modernize its Mac manufacturing profile just as we did with our option program and just as we are doing now with our OVC one program as I discussed earlier.
As part of this manufacturing enhancements, we also aim to enhance the flexibility of the platform.
Because you could theoretically insert any number of antigenic molecules into the dendritic cells.
The Vac platform is capable of producing nearly a limitless number of product candidates. Each one distinguished only by the specific antigen, which the kindred excels or carry you could select those antigens using artificial intelligence you could select them empirically from animal studies or you could use combinations of multiple antigens from across.
US different tumor types. So conceptually. This approach also opens up a large number of potential corporate partnerships by allowing us to use our dendritic cells as carriers for other companies antigens, while simultaneously retaining the option to advance our own carefully selected antigens.
This platform approach could permit us to generate a pipeline of different product candidates targeting many different types of cancer and we feel this product platform nature of that.
Will enable us to become a much more prominent player in the immuno oncology field in the coming years, especially as we validate and mature the production process scale and other important commercial attributes effect, while awaiting further clinical data.
From the ongoing phase one trial, which is currently being conducted by cancer Research UK.
So as we've said all three of our clinical programs are seeking to address high unmet medical needs representing large market opportunities.
Patients currently have few or no approved treatments available to them for the severe conditions. So we're very excited about the clinical data, we have been able to generate so far.
Our additional focus on enhancing in modernizing our manufacturing processes serves as an additional barrier to competition and makes us capable of advancing these products more quickly through later stage trials.
Modernizing the production process is also opens the door to potential collaborations with larger corporate partners and this total development approach is part of the mission. We took on two years ago and had been working toward it ever since.
The reason for our focused investment in cell transplant therapy is that we believe the ultimate safety profile with our approach and our unique efficacy observations such as retinal restoration and reducing cavitation after spinal cord injury.
I'd better chances for success in late stage clinical settings, then do traditional approaches.
And as a reminder, we make no genetic modifications to ourselves and we focus in areas of low immunogenicity, such as the spinal cord, which may avoid outdated concerns about these treatments.
We always look for ways to move faster, but at least over the last two years. This team has consistently produced positive news and we will strive to continue this record as we advance these programs.
So turning now to upcoming milestones and events, which we think you will want to keep an eye on a first we will be providing new interim data from the option clinical trial at the A.O.L. conference in just two weeks.
There are two presentations at a level, which will include opportune data.
That data update will be followed by a publicly available KFL call on the 17th with one of our principal investigators and we hope that interested investors will tune into that call, which we think will be helpful to further understand the promise of the option program.
Second in the first week of December we plan to provide an update on manufacturing improvements, which we have made to the LPC, one program, which should facilitate its commercial utility and regulatory path.
Third we expect to complete enrollment of the fourth and final patient cohort in the origin study before the end of the year.
And then finally early in 2021, we expect that CRUK excuse me that's cancer research UK, we'll be able to treat the final two patients in the back to study and complete enrollment in that trial. So we have a considerable amount of value, creating news coming up and I think this will help us up help us be set up for a very successful 2020.
One.
We believe further that we've been demonstrating with each quarterly report that lineage is making excellent progress with its three cell therapy programs basically converting what was once an academic science into compelling and rigorous clinical data and I'm also pleased that we've been able to make this progress over the past several years without diluting our shareholders with cap.
It'll raises that unattractive valuations and as Randy will discuss in just a moment, we're still well capitalized into 2022.
As we continue to advance our programs through their current trials and prepare them to enter later stage clinical trials. We think lineage is on the right path to create enormous value for patients and for shareholders.
So with that I will hand things over to Brandi to review, our financials and discuss some additional plans we have for this year.
Thank you, Brian I'll start off with the statement of operations for the third quarter of Twentytwenty total.
Total revenues for the third quarter of Twentytwenty were $600000 consistent with the same period last year, an increase of $200000 and royalties from product sales and license fees was offset by a decrease of $100000 in grant revenues and a decrease of $100000 in the sale of research products and services to this.
Station of such sales.
Operating expenses are comprised of research and development expenses and general and administrative expenses.
Total operating expenses for the third quarter of Twentytwenty were approximately $7.2 million, a decrease of $1.7 million as compared to $8.9 million. The same period in 2019.
Our R&D expenses for the third quarter of Twentytwenty were $3.6 million, a decrease of $700000 as compared to $4.3 million for the same period last year.
The overall reduction was primarily related to a decrease of $1.5 million and offer gen and other ups on mic application expenses, which was primarily reduce related to a reduced level of manufacturing activity in the third quarter of this year as compared to the same period last year.
Additionally, there was an $800000 reduction in open C., one expenses, primarily related to a return of unspent project funds from a former a serious service provider and the $200000 reduction and Renevia and other related expenses.
These reductions were offset by an increase of $1.8 million in Vac program expenses, primarily related to the accrual of the signature fee of $1.6 million real.
Related to the cancer research UK exercise of our option to acquire data generated in the phase one clinical trial of back to.
This signature fee will be paid in several installments through April 2021.
Excluding the onetime transactions related to cancer research UK and the return of Unspent project funds for OPGC, one R&D expenses for the third quarter of Twentytwenty would have been $2.7 million.
A decrease of $1.6 million from the same period in 2019.
DNA expenses for the third quarter of 2020 were $3.6 million, a decrease of $1 million as compared to $4.6 million for the same period last year the.
The decrease was primarily attributable to the following reductions.
$900000 in compensation expenses $200000 in a serious merger related expenses and $100000 in each of these expenses travel accounting and office related expenses.
These decreases were offset by a $300000 increase in patent and legal expenses and a $200000 increase related to the cessation of shared services reimbursements.
Our loss from operations for the third quarter of 2020 was $6.7 million a reduction of $1.7 million as compared to $8.4 million for the same period in 2019.
Other expense net for the third quarter of Twentytwenty reflected other expense net of $1.2 million compared to other expense net of $9.1 million for the same period in 2019.
Note that the variances in this area are primarily related to changes in the values of our marketable equity securities gains on sales of our marketable securities as well as foreign currency translation adjustments related to our international subsidiaries.
The values of our marketable securities can go up and down from period to period and for the third quarter of Twentytwenty, We had an unrealized loss of $2 million.
In the same period for 2019, there were unrealized losses of $12.7 million those losses were offset by $2.1 million in gains on the sales of marketable securities.
Our net loss attributable to lend against for the third quarter of 2020 was $7.8 million or five cents per share as compared to a net loss attributable to lineage of $16.5 million or 11 cents per share for the same period in 2019.
I'll focus my next remarks around cash management.
As of September Thirtyth, Twentytwenty cash cash equivalents and marketable securities totaled $38 million I'm happy to report that on August 28, we added $24.6 million to that cash balance with the receipt of our final payment from do you have in essence for our HX shares that were sold back in 2018.
Team.
We believe that our cash puts us in a good position to fund our operations well into 2022, and this will help US fund several other value, creating milestones Brian discussed earlier.
We continue to focus on efficient spending while making good progress on our clinical programs.
Our net cash used in operating activities for the third quarter of Twentytwenty was $4.8 million, a 2.6 million dollar or 35% reduction versus the third quarter of 2019.
Our net cash used in operating activities for the first nine months of Twentytwenty was $14.1 million, a $12.3 million or 47% reduction over the same period in 2019.
In general our third quarter cash activity was in line with our expectations, we have been able to keep our 2020 quarterly burn between $4 million to $5 million due to our significant cost reduction efforts over the last year.
We expect our fourth quarter burn to be in a similar range, maybe a bit more due to our first payment of roughly $650000 to cancer research UK for the early exercise of back to.
Even though we have made tremendous cost reductions already we continue to identify additional ways to streamline our operations in September we terminated our leases in the San Francisco area and signed a sublease for a much smaller portion of one of our buildings.
This will enable us to save over $780000 and facility costs over the next two years or so.
We probably note that it has been over three years since lineage has done a traditional equity financing.
We have been able to successfully fund the transition of this company into an emerging leader in the cell therapy space not through dilutive financings, but instead with a combination of smart, but aggressive expense reductions and timely sales of our marketable securities.
I'll note that we continue to hold approximately 3.6 million shares of Oncotype stocks that are valued at $5.6 million as of November 3rd Twentytwenty.
For completeness I also will add that in addition to the more substantial milestones. We reached this quarter. We also have been productive with our business development and grant activity, including expanding a license agreement we have with the Korean partner for a legacy product and receiving a new grant for more than $500000 of support for the development of a novel.
Bio retinal patch to treat certain retinal diseases.
We are committed to demonstrating the power of our cell technology to treat various diseases and conditions.
During the past two quarters and moving forward, Brian and I have significantly expanded and we will continue to grow the breadth of our investor media and analyst outreach.
Following our next option data released at AA Oh in mid November we expect to advance the partnering discussions we've already been having with leading pharmaceutical companies and explore options for funding the next clinical trial.
With only a few patients to enroll in our current study now is the time to get more people interested in our story. We're excited about the future not only for operation, but also for opioid OVC one end the vac platform as well.
All three of these therapies are designed to address severe unmet medical needs all with potential market opportunities that could exceed $1 billion. This is an exciting time for lineage and the patients who desperately need treatment options with that I will turn the call back over to Brian.
Great. Thanks, Brandy so for the remainder of this year as always our goal is to advance our clinical programs and we've got a number of things that you can track and monitor our progress.
We plan to present, new and accumulated opera Gen data at the annual meeting November 15th.
We will be hosting that offer Gen data review call with a therapeutic area expert and Pi on November 17th.
We expect to complete not just the orbit evaluation a portion of the clinical trial, but also the overall operation patient enrollment, we expect to complete that by the end of the year, we plan to announce details of manufacturing improvements, which we have made to the OVC. One program that is scheduled for early December.
And then early next year, we hope to see crop cancer research UK complete patient enrollment in the ongoing phase one clinical trial of that too.
As Randy mentioned you also see an increase continued increased presence at various events as we engage with the investment communities media medical communities through all sorts of different channels. So I think overall this is a very exciting time and Carter lineage, we have an opportunity to make found impact on millions of people and if youd like to understand better what that means.
Personal level, we've provided a lot of videos about spinal cord patients and people, losing their vision due to dry MD. This is an impactful business on many levels, but it is important that we keep in mind that those patients served as our inspiration each and every day.
So with that I will thank you all for joining us today and operator the team is happy to take any analyst questions. We may have at this time.
Okay. So as a reminder to ask the question you will be to press star one on your telephone to lose all your question for us to turnkey again that is star one on the telephone please stand by while we composite revenue roster.
For the first question reads you have Jason Mccarthy from Maxim Group, you know lives.
Hi, Brian.
I guess, we'll I'll save questions around op region for the for the event next week or about a week and a half from now could you talk a little bit about the old you see one program and you said you're going to have an update on manufacturing improvements.
Possibly the next steps forward before the end of this year.
Can you give us a little bit more clarity on that and can you talk from a high level, what's been happening in the spinal cord space because weve noticed.
A month ago or so abbvie has a monoclonal antibody that's got fast track to got orphan for spinal cord injury and don't really typically see these big companies.
In this space, which we think bodes well for you can you talk a little bit about that in the third thing as it relates to LPC.
And your cell therapies in general is that there is another vote that seems to be happening.
Political really.
California, not service proposition 14 for its $5.5 billion in funding potentially and is that something may seek.
A portion of four okay.
Well, yes stuck in regard to grid good questions. The the third one is particularly astute we have been watching the CIRM vote very carefully I should.
Provide a little bit of background. So there is a ballot measure in California, which is the.
Built upon prop 71, which is about 15 years old where an entity was formed to support stem cell research.
And it's called the California suit regenerative medicine or CIRM.
That money has all been deployed.
And in fact lineage has enjoyed a receipt of about $14 million from CIRM and so a ballot measure went before the California voters to it.
Establishments, new bond measure for a new five and a half billion dollars and I think 72 or 78% of the vote has gone in I watch it all night and it vacillated between 51 and 52% approval. So we are optimistic that the ballot measure.
Sure we'll pass because it's very good for Stemcells 10.
Technologies in general.
But in particular for lineage all three of our programs could conceivably be eligible for additional grant support it we FCC if it is granted to us so.
The CIRM ballot measure is trending the right way and that makes us very happy and we're hopeful that that will see some some closure on that and that that could be.
Provide a new opportunity for non equity dilutive capital, which obviously is something that lineage as benefited substantially for with each of our programs.
With respect to the update next Mark.
In the past I have made some fairly generic comments about manufacturing.
Improvements and needing to put into place some improvements to the manufacturing process in areas like purity scale control analytical methods.
What I will be doing next month is actually showing some data.
I want to give folks an idea of exactly how far we have come in areas like scale in areas like purity, and just being able to point to specifics rather than generalizations.
And we think that this is a good times, we're far enough in the process and we've accomplished enough that we feel that it did it change the value of the assets and we want to share that information so we'll be doing that.
I think thats scheduled for the first week of December we'll have some kind of forum to provide some specifics on with some data that.
The more technically oriented folks out there, we'll be able to to dig into.
And then thirdly, you asked about abbvie or other large companies. They had received abbvie in particular received orphan drug designation for spinal cord injury program. We love that I mean, nothing is more validating then the big smart wealthy companies investing in the area that we are.
Operating in so that is fantastic with respect to what I view as a competitive threats.
Which is the flip side of the affirmation of the validation of a commercial opportunity is always the competitive threat I'm not too worried about all of the approaches which can grow axon theres a lot of different molecules that people have shown have the ability to grow axons and they make pretty pictures and it makes you feel.
Good because you see these dendrites extending but at the end of the day those actions need to be functional they need to have a mile and present the protein Mylan present, we know that our oligodendrocytes produce mylan the small molecule approaches.
They they may be gross.
Positive they maybe growth factors, but they're not doing anything with respect to Mylan and if you don't have the mile and you're not firing you're not the way that this works in the in the body is that nerves that wire together fire together and so you can get axon outgrowth that is basically dysfunctional or nonfunctional.
But were making pretty publications and so we think that those approaches might be helpful. If added onto ours, but you need that foundation and you've got to be able to fill the cavity with mylan producing cells like our oligodendrocytes and that gives you the best chance to be able to reprogram and read.
Wire and regained activity in the setting of spinal cord injury. So we welcome them, we're happy to have big pharma, playing in spinal cord injury.
We've had we've got an awfully long head start in this area and I really like the application of cell therapy in that setting for the reason I just described.
Great. Thank you and we'll see you soon at Apio.
Thank you.
Next one on the Q is Joe Pantginis from each year, we write fewer normalized.
Thanks for taking the question Hope you are all doing well.
Actually Brian without front front running into the upper Hunton date I wanted to focus on that for a second.
And I guess the question really of as you're looking at retinal restoration are there any anecdotes you can share about how the surgeries have been going with regard to placement of the cells.
And beyond and secondly, you mentioned today, obviously, you're working with the orbit Sds this system, but you've talked about.
Improvements in delivery always looking for those things I was just curious if you have anything particular in mind with regard to these kinds of improvements. Thanks.
Yes. Thank you Joe also.
Also very good questions. There theyre related right. We we are exploring the use of the orbit STS because we think it may be do it may be able to provide better placement of cells than the traditional approach. We don't know that for sure because we haven't dosed 100 people to really.
We have that evaluation, but what we have seen importantly is that we have seen a complete elimination of the EFI retinal membranes, which are formed from the influx of cells into the vitriol space and that is what the orbit SCS was designed to do it was designed to deliver the cells.
Call it underneath the retina, rather than coming in from above puncturing, the retina and delivering the cells that way. So we're happy that on one axis that we care about the orbit Sds has been doing really well and you are correct that we will have some additional information on the orbit STS at the conference.
With respect to the the surgical procedures that we are conducting in order to demonstrate a second case of retinal restoration, but.
The biggest frustration there is that the disease.
Occurs slowly.
His areas of GA, even when they are fast growing you're talking about a couple of millimeters a year. So its very frustrating that we have to wait so long to see if there is a change or a benefit but what I can tell you is that when we evaluated that first patient and it was discovered that they had.
Such a profound effect. We asked every question of ourselves about what was different what was unique how were they special we really feel strongly that there was nothing genetically unique about that patient, meaning we feel strongly that we will be able to demonstrate additional cases of.
This.
We just need to copy it we need to learn more about how to administer the cells and we think that more complete coverage is beneficial we think it will be easier to see the effect with more aggressive placement to sell so when we have gone and spoken with physicians about that we asked the question right. After.
The surgery how did it go do you think you covered the area do you think you got partial coverage do you think you were adjacent.
And without saying too much I can tell you that I just learned this morning that yesterday surgery that the physician reported that you had near complete coverage and you did use the orbit device. So there is a good example of the patients who right now their clock may have begun ticking on being able to be that second taste or maybe.
You that patient that second patient has already been treated Ms and follow up or maybe it will be someone that we treat that later this week and it remains to be seen but we definitely are trying to be more aggressive and learn from what we observed in that one special patient. So that we can demonstrate that it was not a onetime event.
And I think the second event would really validate it even though it was convincing to the therapeutic experts that they believe quite wholly that there was evidence of restoration of tissue everyone wants to know if you can repeat it because that tells you that it wasnt somehow unique to that one patient.
Got it Thats fantastic I appreciate the extra color Brian.
Thank you Joe.
Hi.
Next question comes from who would be immune from noble capital markets fewer in all lines.
Now, let's see here, everybody, saying Oh.
So my first question I think well have a cartoon Brian.
On the agenda data again, I think that the leading asset and you have a data update coming up I am curious playing if you could you disclose data from cohorts for follow up from the patient. So are you planning to are we going to see any data from the patients.
Well Hello, and welcome. We appreciate that you are a new covering analyst for lineage. Thank you for that and we intend to provide a comprehensive update so it will not be selective.
Just cohort four patients will be able to provide that.
Data from across the across the study as a whole so you'll have a pretty nice update on on what we've seen but we do make a real emphasis on cohort for patients because those are the patients that more accurately represent what we think are the future customers for this therapy.
We don't think that patients with very advanced disease, and very large areas of GA that have completely atrophied really fit and match up well with our therapy compared to someone who is very early in the season has a much smaller area of atrophy and Thats certainly good from a commercial reason, but also by a logic.
Lee.
And so just like in the spinal cord program, we often talk about the the last 22 patients. We don't talk a lot about the first three because the first three got a sub clinical dose. They only receive 2 million cells. So we don't really expect much. That's why we have the same thing we have safety data from the first 12, we don't really expect much in efficacy.
From this first of all patients. So we make a point of emphasizing patience 13 through x. because those are really the patients that were hoping to be able to help when the old when the program advances into the next study and thereafter.
Okay. Thank you Brian. So my second question will be on the map program I know carries folco technique cancer UK focused his lung cancer. There as you are doing that that's most manufacturing capabilities, saying the right combination I am also curious if we can go any other direction.
Pipeline can't there as.
Hi, saving less crowded spaces or any any other combinations that you are thinking out.
Yes, that's a very good question.
One of the ironies that I'm not sure people are aware of but that I certainly take notice of is the cancer research UK has a major charity, they're very interested in areas.
They they don't always have perfect overlap with the commercial interests of their partners and so non small cell lung cancer from a biological perspective is not actually the best place for the antigen that we're using in that clinical program.
Certainly there are patients available and and the antigen is expressed in many cases in non small cell lung cancer, but there are other tumor types that actually have higher levels more consistently high levels of the antigen, we're using and so you can imagine that if patients.
Not expressed high levels it doesn't react to that that antigen dips.
They're probably not going to get a clinical benefit so they represent noise in that clinical trial. So I.
I suspect that we will find a better place for our next study.
But I cant and we've done some matrix in the heat mapping on this to look at the competitive landscape and kind of anticipate the direction that things are going in we are definitely not at a point that we would be making announcement because we have the the study ongoing right now in non small cell lung, but one of the things that we benefit that weve achieved or received by exercising.
The option was an ability to go into other tumor types and so we're looking at that quite seriously now to see if there is a better place for the back to program to be deployed.
Okay facing now okay. Thank you, Brian and my last question I will refer to Brandy I know I want them, Neil young and Amelia increasing R&D expense that was not the reason for that brand. It can I get a little bit more color on that.
Sure happy to do that so our R&D expenses were really impacted by those two one time transactions that we had during the quarter. So we had a 1.6 million dollar accrual for our signature fee related to cancer research UK and our our ARR.
Early option for you to bring back to in house. So that was all done in Q3, and then that was offset by about $800000. Because we had a return of and some unspent project funds from a former asterias service provider on OPGC. One so we saw about an $800000.
All are increase just from those one time those onetime transaction otherwise work, we're continuing to see reductions quarter over quarter based on where we're at right now with the opera Gen program, primarily in the manufacturing side.
Okay. Thank you so much and I'm really excited some follow the story and congrats on the typical BARDA. Thank you for taking my question.
Thank you.
Next one on the Q is clearly not cave from Chardan your normalized.
Thank you.
Brian are you able to say how many patients in cohort for you now treated.
Okay I I.
I would like to but we're going to save that for example in two weeks.
Okay, well, let me ask this question what does the available Q of patients who meet the criteria that you're looking for.
How how is that looking at this point.
That is an easier question for me to address is looking great I feel very comfortable with today's guidance. It will finish the study enrollment before the end of the year.
And it's attributable to the hard work of the team I think it might be attributable in part to some of the awareness of the program. So it makes it a little bit easier to say to a prospective patients would you like to try this experimental therapy and the patient says will tell me about it and the docs or the study coordinators are able to say.
That it's been in X. people now and here's what's been seen so I think overall the program is just.
Moving smoother and also the sites have been able to implement some co.
Co vivid.
Covance.
A little bit appropriate measures, where they're able to still see patients even elective patients signing up for clinical trials. So I think all those things together have had led to an improvement in the situation which is.
Notable.
Okay, and then switching to OPGC one.
Once you meet with the FDA next year do.
Do you have an expectation of when you might look to commence that possible registration study.
Yeah.
You know it will still come in part based on what we hear from the agency and the reason why I say that is a larger study that would be suitable for approval would require opening many more sites than for example.
30 patients comparative study or something like that so until.
Until we have crossed a couple more milestones, including notably developing a fun inject formulation, which we've done before and other cell types. So I think we'll be successful, but that's actually really important because many sites don't have the ability to manipulate the cells. The day before they are administered and so that.
With limits the number of sites you have open so very difficult for me to say exactly when we would be able to to initiate it but we will have that information.
In part after we've got the sawn inject formulation developed and after we are able to speak with us speak with the agency about the program.
So okay, great and then just a final question Randy I know you've mentioned this but.
In terms of the monthly payments to crop for the option, let's see.
What's the amount through April yeah.
Yeah. So we have a we have three payments that will make to CRUK. So they're in they're in British pounds and so the first one is being made there.
This month and then there will be another one in January of 500000 pounds and then there'll be another one in April for 250000 pounds. So the total is 1.25 million pounds, which relates to about 1.6 million us dollars in total.
Okay, great. Thanks, so much thats all help us.
And there are no further questions I will now turn it back to Mr., Brian Cooley.
So thanks, everyone I really appreciate you joining us this afternoon I know, there's a lot of stuff going on with the elections and there's hundreds of new company. So I'm glad you participated in our call today. We're excited about our plans. We appreciate your support and look forward to staying in touch with everyone about our progress. Thank you.
Ladies and gentlemen. This concludes today's conference call you may now disconnect.
[music].
[music].
[music].
[music].