Q2 2022 Lineage Cell Therapeutics Inc Earnings Call
Welcome to the lineage cell therapeutics second quarter 2022 conference call.
At this time all participants are in a listen only mode.
An audio webcast of this call is available on the investors section of lineage M Web site at Www dot lineage cell dotcom.
This call is subject to copyright and is the property of lineage and recording reproduction or transmission of this call without the expressed written consent of lineage are strictly prohibited.
As a reminder, today's call is being recorded.
I would now like to introduce your host for today's call you'll want to hone head of Investor Relations at lineage Ms. Helen. Please go ahead.
Thank you Breanna good afternoon, and thank you for joining US a press release reporting our second quarter 2022 financial results was issued earlier today August 11th 2022 and can be found on the investors section of our website. Please note that today's remarks and responses to your questions reflect.
Management's views as of today, only and will contain forward looking statements within the meaning of federal Securities laws statements made during this discussion that are not statements of historical fact should be considered forward looking statements, which are subject to significant risks and uncertainties the company's actual results.
Or performance may differ materially from the expectations indicated by such forward looking statements for a discussion of certain factors that could cause the company's results or performance to differ we refer you to the forward looking statements section in today's press release and in the company's SEC filings, including its.
Most recent annual report on Form 10-K, and its subsequent quarterly reports on Form 10-Q, we caution you not to place undue reliance on any forward looking statements, which speak only as of today and are qualified by the cautionary statements and risk factors described in our SEC filings.
With us today are Brian Culley, our Chief Executive Officer, and interim Chief Financial Officer, and Gary Ho, Our senior Vice President of clinical and Medical Affairs, Brian will provide some prepared remarks, and then he and Gary will be available for questions from analysts with that I'd like to turn the call over to Brian .
Thank you Ana and good afternoon, everyone. We appreciate you joining us on the call today.
As you know is currently serving on an interim basis as the company's CFO several weeks ago, we initiated a nationwide CFO search with an accomplished recruiting firm and we already are connected some great candidates.
We will have that position filled soon and we will update you accordingly.
But before I provide the business update today and identify a few events you can look forward to.
Typically like to start off with a few general comments about the biotech environment in particular.
Hershey lineage within the field of cell therapy.
Along those lines. One notable recent event was yet another non cancer cell therapy company catching the attention of a much larger acquirer in this case I'm of course, referring to the acquisition of <unk> by vertex.
Although many investors focus on the oncology side of cell therapy, and indeed that is where cell therapy has established its strongest full additional success continues to occur among non cancer cell therapy companies such as through the acquisitions of Soma Blue rock and most recently by site and I would.
Also include the partnership, which we struck with Roche and Genentech.
Another significant event for the field of cell transplant medicine, reflecting.
Positively on both Ibs, NDS companies, and especially compared to some of the setbacks, we have seen with certain bazooka molar undifferentiated cell therapy companies.
And as this field matures as more and more clinical data are generated at increasingly appears that cell transplants when deployed in the right setting with the right delivery tools have the potential to become an important new branch of medicine.
For this reason and others, we need to we'll continue to try and position ourselves as a leader in this space through the combination of internal and partnered product development efforts.
Thinking next about where lineage this within this emerging and promising field as a business and as an investment.
I believe we continue to be in an environment, where companies with three key characteristics may be in a better position than others to create value in the coming months and years.
Those three characteristics are one having multiple years of cash too.
<unk>, having deals with big pharma companies and three having diversification through a portfolio of assets preferably clinical stage assets because those typically offer shorter timelines to approval then do preclinical ones.
And those three features cash validation in our pipeline are attributes of lineage, which I believe put us in a strong position to attract shareholder interest in the months and years ahead and I'd like to touch on each of them briefly today.
Starting with cash it is clear that the biotech industry continues to be in a period of uncertainty and volatility and for this reason we have persisted with our disciplined use of capital.
As of the end of the second quarter, we had a projected cash runway of at least two years.
I will add that those two years do not include any cash milestones from the Roche agreement, which we may receive during that period.
This runway also does not include any revenues from business development deals, although we are putting greater efforts behind that area as well.
As noted in today's press release, we expanded one of our existing agreements last quarter and have initiated multiple discussions for additional corporate alliances, which might help fund or otherwise enhance our assets.
And as you know we continue to be in close contact with CERN and intend to seek grant support for the <unk> One program.
We may consider serve support for other programs as well so as I have said before and can reiterate again today. We believe lineage continues to be in a period of good financial health, which allows us to focus on creating value across the spectrum of short medium and most importantly long term timeframe.
With respect to the second attribute validation from Big Pharma, everyone was aware of the alliance, we entered into with Roche and Genentech last year for the development of <unk> for dry AMD with GAA or as it is now called by Roche RG 6501.
Although were not be able to share specifics, we're extremely pleased with the progress on origin developments since entering our collaboration with Roche and Genentech and the resources, which have been allocated to us further.
Most of the details are internal to the two companies, but I am able to say that during the second quarter. We made progress across all of the primary functional areas, including clinical regulatory and manufacturing technology transfer activities, which are reflected in the additional $4 $1 million of revenue recognized in the second.
Quarter.
Lineage successfully completed additional manufacturing runs of oxygen along with their associated CMC activities.
We continued with the planned technology transfer activities.
And held a series of joint Advisory and separately Joint manufacturing Committee meetings, which are collaborative forum for discussion and planning for the next steps for all for joining us related activities.
Long term follow up of patients from the Phase Iia clinical study, which lineage conducted is also ongoing and most notably those enrolled patients are still doing well, which supports the multi year durability of treatment effect with opportunities.
Bolstered by the compelling body of data, which we generated from operation.
Early clinical trial, we will continue to work closely with the teams at Roche and Genentech to offer our support and experience and advanced opportunity ever closer to later stage trials.
We believe the results we have observed to date with origin compare favorably against the various efforts focused on complement inhibition, which require a lifetime of frequent dosing.
After only a modest effect on gea progression and to our knowledge have no or minimal effect or benefit on visual acuity.
For these reasons and many others. We're excited about generating further clinical data from this program as soon as possible.
And thirdly with respect to the diversification, which are promising and recently expanded pipeline offers to investors. The team made excellent progress in multiple areas with a particular focus on advancing certain clinical and regulatory steps, which are not only necessary to support any future trials, but also reduce risk across our portfolio.
In particular efforts were made to prepare for regulatory interactions for both our <unk> and back to programs, which are necessary to support their next phases of clinical testing in spinal cord injury and oncology respectively.
And we also continue to engage in manufacturing and preclinical activities for our newly launched cell transplant programs for hearing loss and vision disorders.
I'll add that activities, which will support our regulatory interactions for OTC <unk> are nearing completion.
Which I believe is a positive reflection of our efforts to reduce cell therapy development timelines.
Our new thaw and inject formulation of <unk>, one, which we manufactured via an improved and larger scale process has been undergoing preclinical testing and I'm pleased to share today for the first time that our OTC one cells from the improved formulation and process hub successfully demonstrated functional recovery.
<unk> in a clinically relevant animal model for spinal cord injury, including improvement in gate coordination and motor performance, along with selling Grafman, which manifests as a reduction of the area of cavitation in the spinal cord.
These findings are consistent with prior data generated from our less efficient and lower scale manufacturing process. So we are delighted that our new and improved process has performed as intended in these studies.
We expect that these results will be submitted and available for publication and review.
Okay.
In conjunction with our efforts on the sell side.
The other sell side, we have been working on an improved delivery system for <unk> one.
We believe the novel delivery system, which we licensed from near gain we will offer a steeper and easier to use method for delivering OTC, one and unable to share today, but most of the verification and validation activities for this delivery system, including its preclinical testing in support of our regulatory submission have been completed which.
Moves us closer to our goal of filing an IND amendment and testing the DSD clinically.
With both the cell and delivery activities, making excellent progress. This past quarter, we have re engaged with the California Institute of regenerative medicine or served to open discussions about providing some financial support for this trial.
We also have been re engaging with various industry and caregiver groups such as spinal cord outcomes partnership endeavor in the American spinal injury Association.
As well as with the contemporary thought leadership in spinal cord injuries and with prior study participants.
Everything seems to be coming together nicely for the <unk>, One program, which I will remind you will include for the first time administering <unk> to patients with chronic spinal cord injuries, not just sub acute injuries in our planned clinical trial to evaluate the safety and performance of the novel delivery device.
As obesity, one gets increasingly closer to returning to clinical testing. It's worth remembering why we are so excited to continue this program.
Now I won't repeat my usual comments about the enormous unmet medical need or the absence of any approved treatments, but refer you instead to prior clinical data.
The full study results from the 25 patients enrolled in the phase Iia clinical study and sub acute cervical spinal cord injury were recently published in the journal of Neurosurgery spine.
In that publication it was reported that <unk> demonstrated an excellent safety profile and at one year post treatment, 96% of patients had recovered one or more levels of neurological function on at least one side of their body compared to an expected control rate of approximately 68% According to diesel.
In addition, 32% of patients in that study recovered two or more levels of neurological function on at least one side of their body, which again is higher than what's steves at all would have anticipated.
For these reasons and because there are many lessons learned from the initial trial OTC, one, which we aimed to incorporate into the next study. We are very excited to put <unk> back into clinical testing and evaluate the potential for our replace and restore technology to provide outsized clinical outcomes in spinal cord injury.
Not unlike our experience to date with the restoration of retinal tissue observed with origin in the setting of dry AMD.
Moving next to our back to program. We have similarly continued to make progress toward an IND submission in preparation for potential U S clinical testing next year.
I'd like to remind everyone first that cancer research U K continues to follow patients in the phase one clinical study of <unk> in non small cell lung cancer.
In the public release of clinical study results is entirely subject to their discretion and control. However.
However, our team has received all the necessary clinical information, which is required to support the regulatory interactions, which we are working toward in the U S.
Depending on the outcome from those FDA interactions, we will be permitted to conduct clinical testing of <unk> two at U S centers for the first time.
As we work toward those FDA interactions I can update you today to share the following technology transfer of the Vac two programs from cancer research UK to lineage the lineage team engaged in efforts to optimize the manufacturing process.
The manufacturing team was able to successfully increase the production scale to a level compatible with early stage testing, while also significantly reducing our cost of goods.
I will add that part of the reduction in the cost of goods was due to scale, but a large amount of that reduction was attributable to new methods of production, which we deployed.
The team also made marked improvements in the purity and functionality of the product candidate reflected in surface marker expression in in vitro functionality tests.
I Wanna diverged for just a moment to highlight something which I think has gone under the radar for some time.
This manufacturing achievements, which I'm describing today reflect the third time for which lineages manufacturing team was able to meet ambitious production goals.
<unk>, which were unattainable by multiple prior sponsors and contract manufacturers.
Manufacturing specific cell populations in a reproducible and consistent manner is extremely difficult and doing so using a process that can not only support initial clinical testing, but also have a line of sight onto our commercial platform is something we've done twice first with <unk>, then again with LPC, one and now we've nearly comps.
For the third time with our dendritic cell program.
I don't think we get full credit for our manufacturing capabilities today, but I do think awareness is rising about how the manufacturing portion of cell therapy product development is so critical and doing it well can greatly reduce development cycles and avoid regulatory delays the likes of which we have seen some other companies.
But I also believe that with additional time and success the capabilities and know how for lineage manufacturing team will be more fully appreciate it.
Yes.
Returning back to our pipeline programs I'll conclude by adding that we also have continued to advance our auditory neuron in photoreceptor programs. They both are proceeding through the required preclinical development manufacturing activities, which are necessary to support initial clinical testing and as we generate data or have other interesting events, which we can share with you you can expect us.
<unk> from time to time on those two programs.
Overall, our efforts at this time remained focused on conducting our share of the opportune development activities as well as successfully completing a diverse set of regulatory preclinical and clinical events for our pipeline.
Events, which will provide not only clarity on our development timelines, but also help de risk and increase the value of our various assets and because we're doing this work among the tail winds of multiple years of cash a big pharma partnership and a diverse set of unique yet related cell therapy assets I'm encouraged by what the fuel.
Your may hold for lineage.
A handful of specific goals and objectives, which I'd like to invite you to be aware of include a planned interaction with the FDA in Q4, where we intend to discuss our OTC one IND amendment submission to enable the clinical performance and safety testing of the novel delivery system in acute and chronic spinal cord injury pay.
<unk>.
Second a <unk> regulatory interaction with the FDA also in Q4 to seek feedback on our back to CMC non clinical and clinical package to support U S clinical development.
Third evaluation of new partnership opportunities <unk> expansion of existing collaborations you saw recently that we were successful in expanding an existing collaboration with ADM for our <unk> technology and that we continue to work with our partner Immunomedics Therapeutics, but we also would like to enter into additional alliances.
With larger economic benefit for lineage and are aggressively seeking to identify opportunities to enter into such corporate alliances and help advance our assets.
Fourth we intend to submit a grant application to serve for the continued support of the clinical development of <unk> and fifth we intend to generate.
Clinical data to support a pre IND meeting with the FDA for our new auditory neurons program.
We of course have other goals, but the ones that highlighted today in particular, we will provide additional regulatory spending clarity and potential derisking of our programs. We believe that execution of these goals. We will continue to demonstrate our ability to successfully advance novel cell therapy product candidates.
Okay with that let me put on my interim CFO hat and turn next to our financial results with respect to our balance sheet. We continue to be in a comfortable position as we expect to have more than two years of liquidity not accounting for any of the Roche Genentech milestones, which we may receive in the next two years.
Nor for any business development or grant revenues, which we may receive.
Our reported cash cash equivalents in marketable securities as of Q2 totaled approximately $72 million.
In comparison, our normalized net operational spending for the past two years was between 20 and $25 million. So even though we likely will see that amount be closer to $30 million. This year, we have more than double that amount in the bank and can continue to just focus on running the business.
Total revenues for the second quarter were approximately $4 6 million an increase of $4 million.
Representing an increase of over 700% compared to the same period of 2021.
The increase was due primarily to licensing fees in connection with the Roche collaboration agreement and reflecting our share of collaboration responsibilities.
The largest portion of the activity attributed to this revenue was opportune manufacturing costs, but also included personnel materials and clinical consulting expenses.
As you May recall, we received a $50 million upfront payment from Roche in January on a cash basis, one on a GAAP basis, we are recognizing that $50 million over time as opposed to a point in time and.
And utilizing an input method of cost incurred over total estimated costs to complete our performance obligations.
The accounting recognition for the Roche upfront payment generally resembles a percent complete methodology, but as a reflection of our proportional contribution that may vary from quarter to quarter.
Overall, our revenue recognition for the second quarter was largely in line with our expectations.
Total operating expenses for the second quarter were approximately $8 $6 million, an increase of approximately $1 1 million compared to the same period. In 2021. The increase was a result of increased R&D spending of approximately $400000 primarily related to development activities in our new auditory neurons and photoreceptor.
Our cell therapy programs as well as an increase in operating related expenses to support the Roche collaboration.
Furthermore, G&A expenses were up by approximately $700000.
Related to higher stock based compensation and payroll and related benefits expense.
Our loss from operations for the second quarter was approximately $4 $2 million, a decrease of $2 million compared to the same period in 2021, resulting from the aforementioned $4 million increase in revenues and offset with a $1 1 million increase in operating expenses.
The net loss attributable to lineage for the second quarter was $6 $8 million or four cents per share and as we always say at this point in the call. It's important to remember that the variance between our loss from operations and our overall net loss is impacted by changes in the value of our investments as well as by foreign.
Currency exchange rate fluctuations related to our international subsidiaries.
While these non operational fluctuations are important we tend to utilize loss from operations as a more relevant measurement with regard to our clinical programs.
Turning to the balance sheet, we reported cash and cash equivalents in marketable securities of approximately $72 million as of quarter end and Additionally, as disclosed as a subsequent event in our recently filed 10-Q. During July . We also received approximately <unk> $9 million in net proceeds from a warrant exercise.
At our subsidiary in Israel.
As I mentioned earlier, we anticipate a modest increase in our normalized net spending this year compared to the prior year because our programs increased in number and continue to advance toward the next clinical trials and we have certain performance obligations under the Roche agreement such as supplying oxygen cells for the next clinical trial, but as I also noted earlier.
We estimate our net operational spend for 2022 on a normalized basis will be less than $30 million.
Overall, we intend to maintain the same spending discipline that we have adhered to so far and which has served us well in the past.
We believe that the spending discipline alongside our cash balance puts us in a good position to create value for shareholders from our investments.
Our guiding principle at lineage is to advance the emerging technology of cell transplant medicine.
And to show the potential for those transplants to outperform traditional approaches by providing the product attributes and rigorous clinical testing necessary to achieve commercially successful medicines in areas of high unmet need.
To that end we.
We believe we have not only generated evocative data from our current clinical programs, but also have the opportunity to do so with our earlier stage initiatives.
We've made significant investments in and improvements to areas such as production scale purity and delivery of our differentiated cells, which overall, we believe is a proven path to creating best in class products for end users and strong competitive advantages to protect lineages in our current and potential partner sales over the long term.
Term.
We also are working hard to identify and execute on measures, which can reduce cell therapy development timelines, which we believe is a new area of opportunity in this young field.
Wrapping up.
As I speak with you today, we are confident in our cash position, our corporate alliances and our divorce diverse portfolio of assets from which we can seek to optimize attractive mix of development partnerships and internally developed programs.
There is a lot to like about where we are today and much to anticipate from us in the coming weeks months and years.
We sincerely appreciate your support as we continue to position lineage to become a leader in cell therapy and cell transplant medicine.
And with that operator, we are ready to respond to any questions from research analysts, which may be income.
Thank you.
At this time I would like to remind everyone in order to ask a question you May press star followed by the number one on your telephone keypad, well pause for just a moment to compile the Q&A roster.
Okay.
Your first question comes from my young mens Tommy.
B Riley Securities. Your line is now open.
Thank you. So much this is Lauren wood on for Mark Montana.
Brian Congratulations to you and the lineage team for another.
Very productive quarter on just a couple of questions from US here just thinking about <unk> one.
Maybe even in terms of op region, where it sometimes takes a little bit longer for.
The sales to get in and really do what they're supposed to do and to really get the results. You are looking for obviously already shown very nice results without the Q1 at one year just curious about some of the longer term data.
Our efficacy essentially maintenance or even improvements.
Or alternatively.
Degradation.
Of the recovery.
Or youre Obeche, one treated from the five star or potentially even from earlier trials at that.
Sure.
Okay.
The recovery is maintained.
Any extra color there would be great.
Yeah. Thanks, William I appreciate your amount.
So I'll I'll invite Gerry hoag too to comment I think I'll just preface by saying it's a question we all have.
Durable already sells they they continue to persist in patients and so potentially they will essentially outlive the people that they are transplanted into but.
Gary can be a little more specific about how long, we monitor patients and how long we've seen these kinds of benefits issues. Thanks, Bryan. So Williams, what we've observed to date is that the cells appear to persist episode of administration. So they don't migrate anywhere they stayed with where they were put in all suggestions on MLR MRI fundings to date would say.
But they are durable.
Up to the length of follow up which is greater than 10 years in some patients at this point.
So.
As.
We've completed some of the additional animal models.
And looked for durability of response and those in the animals.
Do you think that that will fall through with individual patients.
And one thing that we're doing shortly as therapy management looking at MRI funding specifically to show that those improvements there.
The size of administration or maintain for a period of time.
As Brian said, sometimes to the patients with the rehab also continued to improve even if they don't necessarily gain multiple levels on the different assessments.
But individual ability to move fingers are digits or risks can definitely improve quality of life.
We're also looking at be able to publish some of those data.
Okay.
I appreciate that extra color very helpful.
Also curious.
You've discussed a lot with potential partnerships or <unk>.
Collaborations I'm, just curious where you've seen the most interest as far as from external programs looking at your specific internal programs.
Even considering also there's the most interest in manufacturing side of things and then maybe kind of in addition to that if there is a scenario where you potentially see sort of your manufacturing side spin out from.
The.
Clinical development side or something to that degree depending asher.
Information then.
Yeah. So.
Again, as you know I can't comment specifically on any discussions or any specific companies.
What I'm able to say is that we are aware.
In particular in an environment like we're in right now in biotech that.
These trends benefit if you have a platform technology of.
Working with multiple corporate partnerships.
Because you were able to just conduct so much more many more shots on goal, which is so much more productivity when you've got multiple parties working the challenge for any company is if you have choices deciding how to sort of <unk>.
Divide up a large either intellectual property estate for different parts of technology and sometimes parts of the technology overlap. For example, there may be there may be certain applications of intellectual property with respect to our manufacturing process, which we can deploy across.
Related indications and so sometimes you have to make decisions about where youre going to how are you going to kind of divide up the pie. If you're if you. If you have the opportunity to to make those choices. So we're really keen to.
To accelerate our product development, because we obviously cannot manage five simultaneous pivotal trials. So we're really supportive and interested in business development generally.
With respect to.
More strategic considerations like manufacturing I can imagine scenarios, where.
<unk>.
They're utilizing our manufacturing expertise could be valuable to our company, but I want to caution everyone that that does not mean turning into a lower margin manufacturing CRM business.
We will always want to have a meaningful piece of the upside for any program. So.
I want to be clear that our jobs here involve creating value.
And sometimes that might mean, Hugo and an unexpected direction in order to create that value and that's okay.
But I do think that we recognize that our contribution and getting the best economics for many future deal is going to be driven by having a lot of.
Our value behind our contribution and not <unk>.
I would say diminishing yet or allowing us to get into relationships, where we're not going to be pairing paid a fair value for our contribution. So I recognize it does very very sort of a generic sort of response for reasons that you're already aware of.
But nonetheless. These these are these are the realities of how we review our business and what we have to offer.
Yes, no that's very helpful.
I think I'll leave it there I appreciate it Brian Congratulations again to you and came in.
Congratulations.
Thank you William.
Your next question comes from Kristen <unk> with Cantor Fitzgerald. Your line is now open.
Good afternoon. This is Blake on for Chris then thank you for taking our questions.
We have two for you here in the photo receptor program with the caveat that of course Tien preclinical development still on Galloway are you thinking about how are you thinking about potential learnings that might be carried over from the op region program in terms of delivery and the importance of covering affected areas of tissue in the ophthalmology space.
Yeah.
Yeah. Thanks, Rick I mean, I think one of the nice things about introducing another ophthalmology program is that there is much that we can learn and we already have very established relationships in that space. So it was an easier area for us to get into but let me again invite Gerry to address some more specifics to your question sure.
One thing is we've certainly got the.
Experts in retinal disease and.
These processes.
Second call at this point because they are very engaged with the opportune data.
So one thing we've learned from opportunity is delivery delivery delivery is critical if you make the cells.
Earlier.
Most functional they will do their job as intended so the key learning for that would be early intervention.
Appropriate delivery.
Area that.
Targeted to make a difference so there are a number of diseases that affect the photo receptors.
As you can imagine and we're certainly open to considering all of those.
Okay, and maybe just one more looking ahead to.
Regulatory interactions around O P. C. One how are you thinking about how the preclinical activities that you mentioned could fit into the meeting what do you believe regulators are looking for here.
Well, it's a tough question because.
It's a it's sort of a moving answer I think the FDA has been evolving and its own state of maturation in the field of cell and gene therapy.
For example, I think that FDA has been increasingly interested in functional assay data from cell therapy manufacturers just to provide one example.
We do know that they wanted to see specific to the <unk> one program information about the device before they reviewed the information about the the new process that we are utilizing so we're going to follow a sequential path there that they've outlined for us.
But this is I won't say new territory, but there are not a large number of precedents for delivering cells like this to the spinal cord. So it's it's difficult for us to know and that in fact is part of the reason why we're trying to be comprehensive with our submission.
And get the agency as much information as we think they are looking for.
So that we can have some positive outcomes in an area, which is breaking some new ground.
Okay.
That's great. Thank you very much.
Thank you Rick.
Your next question comes from Joe <unk> with H C. Wainwright. Your line is now open.
Hey, everybody. Good afternoon, thanks for taking the question.
If you don't mind I'd like to ask our CFO , Brian a question first.
I.
She ate that you give the guidance about little under $30 million or so for net spend this year, but I was curious more specifically about the G&A line that line tends to be a little choppy obviously there are some.
Noncash items that are in better included there, but I guess I would ask the question this way.
Or does this quarter's or I'm, sorry, second quarter number represent a baseline or.
How should we sort of view that with regard to the current right sizing of the Companys ftes.
Well. Thank you Joe as you know this is my second tour of duty as an interim CFO of course, I'm well prepared to answer that question.
G&A was up.
Only about 700000, a lot of that is in fact related to personnel I am aware that many companies have been laying people off and that we are a bit of a salmon going in the opposite direction.
That's wonderful I mean that reflects that we're confident that we have the capital to be able to.
Expand sensibly in this environment and I also believe that we have a wonderful choices out there attributable to the fact that some very high caliber companies are laying people off and those people are going to be increasingly interested in the company like lineage that has capital and some validation from big.
Pharma et cetera.
I think that I think that you could consider it to be more of a new baseline rather than a.
Standalone, one off increase in quarter, because a lot of it's connected to personnel and we want to keep those personnel, but I think thats great.
No change through growth and adding people is also going to turn into greater productivity and.
The breadth of what we're able to accomplish so.
I'm really happy with where we've come in and our continued disciplined use of capital and I'm, particularly excited about some of the new hires that we've made and some of the candidates that we're continue to looking at.
That's helpful. And then I guess my next question surrounding Roche and I know a lot of the details around my question.
In the weeds of the confidential documents, but I guess I'll ask it this way how far.
Will you be taking or what do you feel you can share with us with regard to what you are.
Yeah.
Remaining responsibilities are with regard to manufacturing and CMC.
So you are correct.
The weeds or in some places so thick that they're redacting the hand information, so I'm not able to say really anything beyond what I've shared today.
Primarily our contributions are around manufacturing for the next clinical study.
Completing the phase Iia study, which we already complete enrollment for but you have to follow up patients.
And we have a <unk>.
Sorted additional contributions largely in the form of sort of advisory.
Characterize them as advisory contributions.
So it's really difficult for me to say.
Anything more than that however, as we do get closer and as some of the public information does get released it will be easier for us to be able to.
Either connect some dots or be able to make some explicit statements about the program its timeline revenue recognition and everything in between those two.
Got it got it thanks for that and then my last question is more of a pie in the Sky question, because look you're you're very fortunate to have a strong cash balance, especially in this environment.
And I'll preface my question by saying, obviously, you have a lot going on so but with that said.
Would you be considering at any point or are you even bothering to look at any potential technologies or assets to bring in that might be complementary because of the depressed valuations that are out there.
Okay.
Thank you for the question I think the right answer is always yes.
I think that in some environments, you're in a stronger position to be able to consider that.
If you've got a high equity price and a lot of capital.
But I think the reality is that we are always looking at ways that we can accelerate the development of our programs.
Are we spending more time thinking about those opportunities than we were one year ago, Yes, we hired some additional personnel in business development and licensing and Thats one of their areas of effort.
But I would not say that we have an explicit campaign with narrow search criteria and in an engaged investment bank to work on a project that would be beyond the scope of what we're doing but when the phone rings and people want to talk about alliances, we always pick up and.
Sometimes we're the ones that are that are dialing. So so the answer is yes, but I also.
Don't want to make more of it than than our normal course of business looking for ways that we can.
Add or enhance to our business.
Got it thank you Brian .
Thank you Jeff.
Sure.
Your next question comes from Jason Mccarthy with Maxim Group. Your line is now open.
Brian Thanks for taking the questions two questions.
One specific around back to and.
One more broadly refer back to can you give us a sense of when we could see the cancer research U K phase one data in long is that going to be this year.
And how is that data going to be used.
To present, the regulators for development in the U S and my second question is more broadly you had mentioned the vertex via site acquisition, but can you talk just a little bit about how.
Now.
What we see is essentially most big pharma and big biotech are now aligned or aligning themselves.
With cell therapy non oncology initiatives.
Yeah. Thanks, Dr. Mccarthy question, one is like it's south of two parter when Vac too and then and then how would we use it so I'll I'll do part one so when it's up to cancer research UK and I'll just be very direct that one of the factors that led us.
US to exercising our option to bring that program back was that we felt that it would move quicker in lineage his hands than than where it was so we don't know when that data will be available are published or presented it's not our decision and it's not under.
Our control.
But.
When it does become available we certainly will want to share it with with everyone.
And then I'll hand off to Gary for for how how the information that we have collected can be useful to a U S filing yes. So one thing to keep in mind that that the endpoints.
One on <unk> Dot Gov.
Our primarily safety at five years and signs of.
Immune effector efficacy at two years the loss patient came on in February of this year.
Personable two years till February of.
<unk>.
Slide three so.
24, so we've got a ways to go for that patient hopefully with 17, two well we have.
The complete annual safety update no.
And toward unexpected adverse events or serious adverse events.
Behaved as expected everything has been mild and multiple already and so those safety data.
Contribute to our regulatory submissions in discussions with the agency.
And again, we're focused on the FDA, but there are other regulatory bodies that we'd like to potentially consider as well.
And then returning back to your second question.
This is a really this is a really exciting time in cell therapy, because I think what we're seeing.
And it would be a debated point, but my view of what we're seeing is that as data continues to be generated.
The most promising data in my mind is emerging in the area of differentiated cell types youre going after areas like type one diabetes in Parkinson's, it's not with the undifferentiated.
Adult cells, the mesenchymoma cells from adipose or umbilical cell I think what's exciting in the seat that I sit in at lineage and is shared with some of the companies that you have in mind when you're when you're asking. This question are these non oncology. So I E. Non T cell non NK cell <unk>.
Specific differentiated cell types that are used much like a bone marrow transplant you are just manufacturing the cell type the cell has a specific function.
Deliveries you have to have a solution for Howard can remain durable and not be rejected but if the cells are there and they're functional they may be able to provide that normal natural biological function that is somehow lost under certain conditions.
Right.
Hi, AMD with Ta or Parkinson's disease, or diabetes, and I agree with you entirely that it seems that more and more interest is being reflected by.
The international Big Pharma community and they are.
Sometimes making baby steps, sometimes making massive pipes, but there does seem to be a trend in this direction, which I think is incredibly exciting because it is still a relatively early techs.
<unk> technology and early technologies get better with time, and so I think youre going to see explosive growth in this field have been saying that for a couple of years and I think there's increasing.
Evidence to support that and it will just be a question of how high is the ceiling on this and I believe it's very high indeed.
Great. Thank you for taking my question.
Okay.
There are no further questions at this time. This concludes today's conference call you may now disconnect.
Thank you everyone Goodbye.
Okay.
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