Q3 2022 Lineage Cell Therapeutics Inc Earnings Call
Okay.
Welcome to the lineage cell Therapeutics third 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 website at www dot lineage cell dot com.
This call is subject to copyright and is property of lineage recordings reproductions or transmissions of this call without the express written consent of lineage are strictly prohibited as a reminder, today's call is being recorded.
I would now like to introduce you to the host for todays call you want home head of Investor Relations at lineage MS Home. Please go ahead.
Thank you Jack good afternoon, and thank you for joining US a press release reporting our third quarter 2022 financial results was issued earlier today November 10th 2022 and can be found on the investors section of our website. Please note that today's remarks and responses to your questions.
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 sections in today's press release and in the company's SEC filings, including its most recent annual report on Form 10-Q, 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 Garry Hoak, Our senior Vice president of clinical and medical.
[noise] 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 Manav and good afternoon, everyone. We appreciate you joining us on the call today I'd like to begin by welcoming Joel how as our new CFO Jill.
<unk> is an experienced executive with a long track record of successful execution in capital raising and strategic financial management corporate operations and many other areas of finance and accounting and we are fortunate to have someone with his extensive background joining us at this time in the evolution of our company.
Joseph first date will be November 14th and you can expect her to join me on future earnings calls.
Yeah.
Next I want to begin with a few comments about the evolving landscape in dry AMD as everyone. On this call is aware the most advanced program in our pipeline operation isn't RPE cell transplant designed to treat dry AMD with G E.
Dry AMD is a disease, which has attracted a lot of attention lately because there are currently no FDA approved therapies for it but several large trials have read out with potentially approvable results.
One competitor in particular is expected to maintain its late February produce a date towards complement inhibitor to treat dry AMD.
There has been abundant speculation about whether their data will support approval.
While much of the discussion around dry AMD is currently focused on complement we believe <unk> proposed product profile and the data. We have collected to date are superior to that of any complement inhibitors.
For this reason I wanted to take some time today to discuss the possible approval or rejection of a complement inhibitor.
Any impact that that decision might have on the value of the operated program.
I wouldn't ordinarily speak so directly about competitor data, but I've been receiving a lot of questions about complement inhibition lately and if slowing the growth of G. Eight is going to be an approvable endpoint in this disease lineage belongs in those discussions.
In the past year two companies in particular have reported data, indicating that inhibiting the complement pathway with monthly injections into the eye can slow the progression of G. A by some relatively small amount.
Even a small amount is notable because atrophic AMD is a progressive disease and if left untreated. These areas of atrophy will continuously grow and eventually Rob a person of their vision.
Delaying expansion of G. H should therefore be viewed as a good outcome for patients.
It would be an even better outcome. If you can improve a patient's vision at the same time, but no company has shown that to be possible with this approach, which means that if a complement inhibitor is approved that.
That approval will largely be based on anatomical changes then of course acceptable safety.
I believe an approval based on this endpoint whether at 12 18, or 24 months would be a terrific outcome for patients and lineage alike.
The anatomical changes, which we have shown possible with an RPE transplant are far greater than anything we've seen reported to date with a complement inhibitor.
Our effects can also be detected within just a few months rather than having to wait from 18 to 24 months or possibly longer to see some benefits.
And some patients we've seen an area of G remain the same size for a year or longer or even become smaller than at baseline.
While in comparison the competition is left to justify a 20% or so reduction in growth as being clinically meaningful.
Yeah.
To put that in perspective, if you assume a 10 square millimeter area of atrophy.
Grows at the commonly referenced rate of one and a half square millimeters per year than.
And that 10 millimeter lesion should become approximately 25 square millimeters after 10 years.
And if you reduce its growth by about 20% per year, which is approximately what complement inhibitors. Currently offer based on data we've seen to date.
Then that G. A would become 22 square millimeters. After 10 years again, 25, and 'twenty two so to really understand what this theoretical clinical impact I just described could mean.
After this call I encourage you to draw too consistent two concentric circles with areas of 22% and 25 units and look at the <unk> space between the perimeters of those circles.
That narrow strip is the reduction of Gea area, you would anticipate after 10 years of therapy.
Up to 120 injections.
It seems to us that that leaves a lot of room for improvement.
So F D. A set the precedent next February that anatomical changes in the form of photo rose sector preservation is an acceptable endpoint for this disease I believe option can ultimately dominate if it is approved.
The impact we have demonstrated to date on the retinal structure is far larger than what we have seen from the competition, thus far and our results have been achieved with a one time surgery compared to having to comply with monthly or every other month injections.
Now it may instead be the case that FDA will not accept anatomical changes as an acceptable endpoint in this condition, perhaps FDA will require a functional benefits such as improvement or stabilization of a patient's visit.
To date, we have not seen statistically significant is it.
Complement inhibition can stabilize or improve a patient's visions Inc.
In contrast, as reported by our partners Roche and Genentech at ARVO earlier. This year all five patients in cohort four who received <unk> across most all of their area of atrophy, including the fovea experienced an average of $12 eight letters of improvement in visual acuity at one year.
And as lineage previously reported these gains have been demonstrated to be maintained for years.
We understand this is a small patient population, which we have treated but it also is a disease for which there currently is no expectation of improvement patient vision should only get worse over time not better.
We also understand and acknowledge that BC VA assessments can be variable and larger studies are warranted.
But we also believe that someone losing 40 letters in their untreated eye compared to losing only four letters of vision and they're treated eye, which is an actual result, we saw in one of our patients. After three years is that the least evocative for what is widely accepted to be an irreversible.
Progressive condition.
Yeah.
Because data from hundreds of patients to date across multiple proteins in the complement pathway have failed to show a positive effect on vision.
Our view is it an FDA rejection on the basis of failing to demonstrate a functional benefit would presumably affect the entire class of complement inhibitors and leave oxygen as one of only a handful of remaining viable approaches seeking to address a significantly unmet medical need and commercial opportunity.
So as I've outlined today it appears to us that the regulatory decision on complement inhibition expected in February .
It is a positive for lineage no matter how it reads out.
Either or both of our competitors do receive approval they will leave abundant room for improvement.
As importantly.
We believe we have selected the most capable partner to ensure opportunities developed in a way, which can enjoy the considerable market opportunity presented by dry AMD and we are enthusiastic about the continued and substantial effort being made toward initiation of its next clinical trial.
It is a positive for patients that new therapies for dry AMD are gaining notoriety and I'm excited that with the initiation of the next clinical trial of <unk>, we expect to be more prominently included in those important conversations.
Okay.
Moving next to our two clinical stage assets in spinal cord injury and oncology you will recall that the primary goal. This year for each program has been to collect the data necessary to support their next regulatory interactions.
That FDA feedback is critical because it will inform our next steps for each asset.
For back to we've already reached our primary goal and have submitted the pre IMD meeting package.
We expect to receive a response from FDA around the end of this year.
We expect the feedback we receive to give us valuable insight into the I N E, which we plan to submit for that program next year, and which is cleared would permit us to run clinical studies of <unk> in the U S.
Of particular importance to us is the Fda's view of the enhanced production process and analytical methods, which we proposed to use to manufacturer and characterize our clinical material.
One of the reasons. We acquired this program was that we believed our manufacturing team could improve on the dendritic cell production process as they did successfully with improvements, which they made to offer gen and OTC one.
I think they have been successful yet again, but affirmation of that view, we will need to be received from the FDA.
Provided the FDA responds in their normal timeframe I expect we will have some additional guidance on the timing of our planned IND filing for back to in the next quarter.
<unk> for spinal cord injury. Similarly continues its journey towards its next regulatory interaction, which we expect will occur before the end of the year.
For this program, we're planning to submit information to FDA to support the use of a new delivery device.
Along with the protocol synopsis for a small safety study in both sub acute and chronic patients.
Okay.
We still plan to initiate that trial next year, assuming the necessary clearances are received and as a reminder, this would be the first time OTC. One cells has been administered to a patient with a chronic spinal cord injury. So that would be an exciting milestone for this program.
We also continue to be in frequent contact with the California Institute for regenerative medicine regarding potential support for the <unk> program and we intend to apply for such support after completion of the 30 day waiting period. Following our planned IND amendment submission for OTC one.
We also continue to engage in manufacturing and preclinical activities for our more recently disclosed cell transplant programs in hearing loss and vision disorders.
Initial preclinical studies from our Photoreceptor program are currently ongoing.
And we have a major goal of initiating preclinical testing of our auditory neurons program prior to year end.
Speaking of auditory neurons are next want to take a moment to highlight one of the important but possibly underappreciated differences between lineage and many other companies with platform technologies.
The hearing loss program I, just mentioned didn't exist at lineage a year ago and yet we're now on the cusp of starting preclinical animal testing.
We've been able to make this progress while spending to date less than $1 million of our R&D budget on this program.
That speed and return on our R&D investments are illustrative of the efficiency and versatility of the lineage platform, we have the ability to advance from little more than a product concept.
And developed new methods to generate intellectual property and execute on the manufacturer of specific cell types. Then proceed into preclinical testing in less than 12 months and with an investment of less than $1 million.
This is possible largely because our targets are already validated they are specific cell types performing defined tasks in the human body and we know with certainty that the pluripotent cell lines, which we start with are by definition capable of differentiating into that desire to sell.
Our job is largely to figure out how to make that desired cell and to do so in a reproducible and scalable manner.
That is very different from small molecule drug discovery, because with molecular approaches you don't even know if your target is biologically relevant or whether your compound library has the structures within it which can lead to an agonist or antagonist effect and even if you do find a hit with one of those structures you may need to spend a tremendous amount of time and money on synthetic organic chemistry to generate a lead which.
And then finally advance into animal testing, assuming it has drug like characteristics, which are suitable.
As I previously said I think cell therapy can also have advantages over some kinds of gene therapy, because replacing the entire cell means you don't have to select for patients who carry a specific genetic defect.
We think this offers cell therapy approaches larger addressable markets, while matching the advantages of the one and done treatment schedule of gene therapy.
There arent many companies like lineage and as we continue to work to expand and improve our capabilities.
And if we successfully demonstrate those capabilities I think it will become increasingly apparent that the lineage platform has tremendous untapped potential and our goal will be to unlock that value in the months and years ahead.
Moving on I want to highlight three near term and program specific objectives, which I'd like you to be aware of.
First we have a regenerative medicine advanced therapy, or <unk> submission to the FDA planned before year end and regarding an OTC one IND amendment, which is expected to enable clinical testing of the near gain spinal cord delivery system.
Second responses from FDA are expected around year end to a recently submitted pre IND information package, which should provide clarity on our CMC non clinical and clinical package to support the clinical development of <unk> in the U S.
And third completion.
Completion of an R&D manufacturing process, which is sufficient to support preclinical testing and the initiation of such testing of our A&H A&P one program for the treatment of hearing loss a milestone which is also anticipated prior to year end.
We of course have additional activities ongoing but these three items in particular, we will provide important regulatory and spending clarity in the near term and advance our programs further along their respective development paths.
Yes.
Overall, our efforts at this time remained primarily focused in two areas.
One conducting our share of the operating and development activities under our agreement with Roche and Genentech, which includes the continued support for its clinical development and manufacture.
And two we also will be working to advance our internal programs ever closer to their respective milestones some of which I just outlined in detail.
Importantly, I believe the company is well capitalized to conduct these activities, which I will address further in the financial section.
Beginning with our balance sheet I believe we continue to be efficient with our spending and are well capitalized to conduct the near term activities, which I described a moment ago.
Longer term based on current operational plans, we have approximately two years of runway as of the end of Q3 and that does not account for any of the Roche and Genentech milestones, which we may receive in the next two years, nor for any business development or grant revenues, which we may received in the same period.
Our reported cash cash equivalents and marketable securities at the end of Q3 totaled approximately $66 million, while our normalized net operational spending for the year will likely come in below $30 million.
Total revenues recorded for the third quarter were approximately $3 million, a net increase of <unk> $7 million, representing an increase of over 32% compared to the same period in 2021.
The increase was driven primarily by license 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 origin manufacturing costs, but also included personnel materials and clinical consulting expenses.
As you May recall, we received the $50 million upfront payment from Roche this year on a cash basis, but on a GAAP basis, we are recognizing that $50 million over time, using 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 eight percentage of completion methodology, but may vary from quarter to quarter, depending on the current period collaborations spending and any updates to the collaboration budget.
Total operating expenses for the third quarter were approximately $8 million a decrease of approximately <unk> $1 million compared to the same period in 2021.
Although our total operating expenses were largely flat year over year, our research and development costs increased by 0.8 million, mostly related to increased manufacturing costs for <unk>.
The increase in our research and development costs were offset by a <unk> $9 million decrease in general and administrative costs due to lower legal and lower litigation related expenses.
The net loss attributable to lineage for the third quarter was $6 $1 million or <unk> <unk> per share.
As we often pause to say at this point in the call. It's important to remember that the variance between our loss from operations in 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.
Yes.
Additionally, this quarter, we recorded a tax expense related to intercompany transaction, which was partially offset by interest income we recorded from our new investments and marketable debt securities.
While these non operational fluctuations are important we tend to utilize loss from operations is a more relevant measurement of our spending in regard to our clinical programs.
Overall, we intend to maintain the same spending discipline that we have adhered to for years, and which have served us well in the past.
Today, notwithstanding the biotech markets continue to face uncertainty. So we believe that maintaining disciplined with our spending.
Alongside our existing cash balance puts us in a good position to reach meaningful milestones and create value for shareholders from our investments in our programs.
Okay.
Our guiding principle at lineage continues to be to advance the emerging technology of cell transplantation and demonstrate the potential for cell transplants to become clinically and commercially successful medicines.
We believe we have not only generated evocative data from our current clinical programs.
Lately demonstrated by our $670 million bio Bucks partnership with Roche and Genentech.
But also have the opportunity to create meaningful value from our newer and earlier stage initiatives.
We have made significant investments in and improvements to areas such as production scale purity and the delivery of our differentiated sales, which overall, we believe is a proven path to creating best in class products for end users and strong competitive advantages over the long term.
We also are working hard to identify and execute on measures, which may reduce cell therapy developmental timelines, which we believe is a new area of opportunity and what is still a young field.
To conclude we are confident that our corporate alliances and diverse product portfolio offer investors an attractive opportunity to participate in the growing field of cell therapy.
We sincerely appreciate your support of the company 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 analyst questions. Thank you.
Certainly at this time, if you'd like to ask a question. Please press star one on your telephone keypad.
Pause for a moment to compile the Q&A roster.
Jack Allen with Baird. Your line is open.
Hello. This is Ben on for Jack Allen.
Two questions.
First off where are you in a regulatory process as it relates to getting approval for the use of the novel delivery device for LPC one program in spinal cord injury, and then moving forward.
What are the plans as it relates to advancing this program.
Quickly do you expect to enroll patients and then how quickly do you think you could move this into a pivotal study.
I think we'll both.
Answer that question Ben Thank you for for that Gerry could you start with the regulatory process for the device sure. So.
What we've done is we've interactive agency on a number of preclinical animal testing and.
Proof of the device.
Tenant safety and use.
So we initially provided our responses to their questions. They in turn are versus additional questions. As we've gone about to complete those additional experiments and answers to their questions and we'll again as Brian said some of those shortly.
And then with respect to advancing the spinal cord injury program. There are three chunky steps that I think about we have to get the device cleared because it's a better way of delivering the cells.
Have a new method of manufacturing the cells, which I've shown this data many times it appears to be significantly superior to the old way. So we have to bridge those new cells in and then we need to conduct a large trials that can support approval in terms of the three factors that come to mind.
How long things will take speed quality and probability of success.
I think speed is something that we are going to have a wonderful opportunity to improve upon compared to the last study as a reference I would and I hope I get these these correct, but in the oxygen program I think it took about two years to get the first four patients.
But it only took about six weeks to get the last for patients. So that reflects improvements in how this company has been able to conduct and enroll patients in trials and obviously a significant improvement.
In terms of quality, we will never go fast so fast that we are sacrificing quality. So sometimes people would like to see us move quicker, but we also want to ensure that our quality is at a very high level.
And then with respect to the third item, which would be <unk>.
Phase III studies or whatever comparative study design would be sufficient to gain approval. There is no precedent right now for therapeutic intervention in spinal cord injury. So we don't really know we have to sit down with the agency. After we've crossed some of these earlier steps and then have a discussion about what they would need to see.
And I do think that that will be a two way discussion because I happen to believe that there is a bit of a gap.
GAAP between the assessment tools that people naturally think of in this setting and what matters really to patients who suffer from these debilitating spinal cord injury. So I.
I don't know that that necessarily means an S. P. A but I think there needs to be a real interesting conversation about how best to derma.
Demonstrate that <unk> cells can lead to greater mobility after therapy compared to not having received those cells.
Okay.
I appreciate those commentary much. Thank you and then just a quick follow up on G E.
Could you maybe just frame again your thoughts regarding the read through from your competitors ongoing regulatory discussions to the offer Gen program. Please.
Okay.
When wind.
I won't go through everything but.
If anatomy.
Is the basis for an approval I think our anatomical data is better than any ones.
Functional improvement is required where we've demonstrated functional improvement it's in small numbers, but we know that the complement inhibitors have not shown a functional benefit to patients. So I.
I don't intend to be glib, but win win.
Got it yes. Thank you for that and then just real quick lastly, obviously recognizing that the program is driven by royalty, but wondering if you had any updated comments as to their plans to advance the operation asset moving forward.
Okay.
I am only able to direct you to.
Several quarters now of revenue that we have recognized under the collaboration which is obviously a reflection of the work that is being performed.
Some of that has to do with the manufacturing, but there are other aspects of readiness that are ongoing so.
You know I'm able to characterize that we're very satisfied very happy with the progress, but unfortunately I'm not able to provide you today with any specificity as to when the next study would initiate but you could expect that that initiation would appear on the clinical trial.
<unk> Dot Gov website, so that would be a good place where youll be able to get some new information on that study when it becomes available.
Understood. Thank you very much.
Thank you Beth.
Okay.
Compounding with B Riley Securities. Your line is open.
This is really more on for Myles monotonic nice to see you continued progress here, Brian just a couple of questions from us.
So in regards to the.
It could be op region discussion that we.
So to put forth I was curious what is your awareness on the FDA stance of thinking about newer probably much more transformative modalities, especially be recognized trial conduct could get challenging.
If these initial pretty marginal drugs are approved and then Additionally, also could you provide some references of what our control arm could be in a Gi study.
And should we be looking at sort of more of a gene.
A gene editing trials I think other than our appropriate reference.
Yeah. Thanks, William for the question.
With respect to trial conduct and sort of an appetite for new modalities.
I don't have any.
Different insight than most people on this call what I do is read the same tea leaves around fda's commitment to.
Guidance around cell and gene therapy, and their commitment to working with companies. So I think that as modalities change and become more prominent and ultimately become mainstream if not dominant that the agency has a history of adapting to that.
Even going back and looking at the history of a somewhat of a transition from small molecules to antibodies. So we see that happening with gene therapy, we see that happening with cell therapy, and I expect that that would continue to occur and would have some pertinence to the ophthalmology setting for dry AMD as well because clear.
There are differences between Inge.
Injections or oral compounds and cellular transplants like ours.
Okay.
Yes go ahead, Ed is again.
<unk> is addressing the next.
Phase of the development for origin.
Certainly in our discussions with the therapeutic area experts.
In other regulatory consultants, we certainly believe that an untreated control arm.
When we were considering moving the study forward wood.
Would make the most sense was the most ethical and allow them to crossover to treatment provide the safety and efficacy profile. So look the same but again that was those were plans that were that we had long ago genetic Roche certainly has their own development pathway.
Got it I appreciate that and then just one more.
You've got the newer news our U S R&D facility and the expanded facility in Israel on which really allow you to ramp up both your clinical and preclinical efforts.
<unk> potentially the RP manufacturing for the oxygen program.
Curious if you could add any color on how youre potentially using those facilities, whether it's specifically for the RPE manufacturing or.
Maybe potentially how you plan to capitalize those new facilities going forward in general.
Yes.
It will evolve and be slightly different for each of them. So.
Okay.
Starting up a new laboratory is typically a slow process. So initially youre just cleaning it and then you're equipping it and then your staffing it before you can finally actually.
Start to generate meaningful data from different programs in there. So you can expect that that process at normal process is one that we will be following in a stepwise manner.
For RPE, which you specifically asked about the the base case is technology transfer to Roche and genentech for them to be able to conduct the manufacturing. So that is an area of considerable effort. At this time because that is the that is the intended outcome from the program that Roche and Genentech.
We'll be able to internalize the capabilities of manufacturing the cells from the line, which we utilize and to do so in a commercial manner.
And then more broadly.
Internalizing, some R&D and being less reliant on vendors I think is now more important than ever.
Not only help with obvious things like reducing costs and.
Being able to have greater control, but you can find yourself availed of new intellectual property that may be a vendor would not have come across you can find yourself with greater flexibility around your timelines.
And in this environment. Its still is the case that supply chains are unpredictable.
And in some of the aspects of what we do you really can't hoard. Some of these reagents media has got a exploration date growth factors and enzymes and proteins. They have expiration dates you don't want mrna sitting around for too long even at very cold temperatures. So.
Internalizing that gives us additional flexibility in order to control our supply chain and make sure that we are neither over over equipped and.
Finding wastage.
Our inventory, nor having a situation where we are underprepared and can't initiate work because we don't have the right equipment reagents in place so three really big.
Aspects of internalizing some of our R&D at this time.
Yes.
Right no that makes a lot of things.
Follow up on that.
My understanding obviously, please correct me if I'm wrong on that.
Ed.
Lineage, we'll supply the opportunity material through the end of phase two and so I was curious.
Essentially this sort of scale out in R&D.
Potentially a correlation with the scale up for our RPE and or if I'm, just reading too much sort of into the tea leaves there.
No I can understand how those dots could could appear to be connected but the the facility that we've established in.
In San Diego.
Is more intended to support internal programs than the partnered program with Roche and Genentech and the expansion in Israel is something that we had considered for a while as.
You do know we have five programs now that we've disclosed so we.
Do not I would not want you to think that the additional space that we acquired in Israel.
Connected to our existing facility is connected in a meaningful way. It simply provides some additional space for us to utilize across all of our programs, but it's not directly involved and not indicative of anything in particular with the <unk> program.
Yes, no that makes a lot of sense I appreciate it Brian and again congratulations.
The broader lineage team.
Thank you William.
Kristen <unk> with Cantor Fitzgerald.
Gerald Your line is open.
Hi, everyone. This is Blake on for Christian. Thank you for taking our question now that you are undertaking preclinical work for the photo receptor program. How has the previous experience with preclinical characterization for opera Jan help to expedite this process and do you have anything you can say about when we may see preclinical data from the photo receptor program.
<unk>.
I would say it is incredibly valuable to.
Incredibly valuable but difficult to describe or measure the benefits of the prior experience with the RPE program. So the know how that is established for being process development experts in differentiator directed differentiation.
Spills over into other programs not even limiting that two ophthalmology programs I E photo receptors, but directed differentiation and control of cellular fate more broadly and additionally, the development of the analytical methods to support the characterization of yourselves. So when I said it.
At the end of my prepared remarks that we are investigating ways to accelerate timelines in cell therapy, you knowingly or unintentionally have actually picked up on one of those which is the experience that the team gets with these methods are allows us to go faster because we retain those learnings in <unk>.
Messenger and can apply them to other programs.
The second question around.
Preclinical data I think we provided a just a teaser.
Some <unk> data when we first revealed that we were also working on photo receptors I do not have an additional timeline for when additional data would be provided but the company has historically been quite open about that.
Photo receptors are difficult to work with and I'm sure that if we have something that we're comfortable sharing on a noncompetitive basis and publicly we will be willing and excited to do so.
Okay.
Alright, that's great. Thank you very much.
Thank you Rick.
Okay.
Michael Oaken, which with Maxim Your line is open.
Okay.
Okay.
Hi, there sorry, I was on mute.
The questions.
So I guess first off I'd like to do.
If you could expand a bit on the broader opportunities for the business.
Neuronal cells.
I guess, which condition.
Actually involved the loss of those cells.
For context, one of the reason the Baskin.
Because of some of the activity we've seen in the auditory to the space in particular with really picking up its preclinical.
POS targeting gene therapy company for I think a half of $1 billion.
Yes. Thank you Michael for the question on our auditory neuron program I think it's premature of me to define a clear patient population at this time there are many causes of loss of hearing aging of course is a.
Factor.
Sometimes the stimulus loud loud.
Sounds concussive forces certain kinds of of medicine in particular certain types of chemo can cause hearing loss.
Hi.
Expect that we will be doing is investigating multiple forms of hearing loss in preclinical studies in order to gain some insights into how we would select the correct patient population.
I'm aware of the <unk> acquisition by Lilly I thought that was tremendously positive for the field that the valuation of that company given its stage of development seem to be.
Remarkable and I think that's a positive for us to be working in this space.
And I think more broadly self.
Cell therapy can be if not indifferent at least more.
Compass sing around patient selection because unlike <unk>.
Certain theories, which exist or hypotheses, which exist in the hearing loss world around how impaired different neurons may be and whether they need to be rescued or replaced most of the gene therapy approaches.
Not all but most of them are challenged by.
Providing perhaps one gene product or trying to address one deficiency. Our approach of course is to replace the entire cell, which which may gave us greater breadth with respect to patient selection or ultimately patients who get treated with this therapy, but again I do want to.
Stress that it would be premature and purely speculative for me to try to define a clear patient population at this time, but I am hopeful that some of the preclinical studies will.
Throw some light on that question and direct us down anymore.
Our path, which is more likely to be successful.
Alright, thank you for that Brian .
And then I guess one.
More of like a follow up on operating data and in particular how.
You could.
C offer gen being up.
Being applied in a market, where there are approved complement inhibitors.
Would it be thought what could it be thought of as compliments being used as almost a bridge to cell therapy, because it might be viewed as a bit of a surgical procedure because it is a cell transplant or because it is that one time injection would you expect our project could be.
First thing that.
Doctors will Gulfport, and then possibly use complement as a maintenance therapy to prevent any further progression.
Thanks, Michael that's a great question my preference of course is for op Virgin to just be a permanent solution and to sit alone and the absence basically taking people off of complement inhibitors, if theyre on them or giving people a better option rather.
The onetime surgery, rather than in a monthly.
Monthly or every other month injection.
The.
The reality of the dynamics of commercial marketplaces is that more likely than not there would be a constellation of different ways that people would use different therapies.
If we were to presume a stabilization or improvement in visual acuity with a utilization of opportune and that that exists in a package insert and days sales rep can can speak to in detail off of that information and that information is not present in competitor therapies.
I think this is a quite a compelling argument to be made that could get stronger over time is as we follow these patients for longer.
<unk> ends up being the that really the only practical choice or the greatly preferred choice but.
There's also the factor of of conducting clinical trials in an environment, where there may be some changing in the landscape of therapies I E from no therapy to one or more complement inhibitor. So you didn't ask this but I can invite gerry to comment on his.
Thoughts on how we might be able to.
Still our Roche and Genentech could still conduct large trials, if theres, a changing background of complement inhibition, either coming into or coming into having high adoption or low adoption.
We're not being present at all.
Yes, so we definitely have the considered complement again the visibility is good thing for patients, but it's not necessarily a bad thing for origin.
You can look at it is.
Physicians might use it in initial stages to decrease any type of inflammatory effects that are ongoing and then treat with opportune after that.
The opportunity greater chance of success Alternatively, it might be used option may be used in an earlier stage patient since we've shown a benefit when the area of atrophy is less.
Then what we did in the earlier cohorts. So you can see.
<unk> scenario, where <unk> is used early and covenants to perhaps use in later stage patients. So.
And.
The factors that may be used in.
Potential trial patients again.
Also as a percentage of growth but.
But I don't think that that would necessarily limit the pool of potential available patients to enter the study.
Alright. Thank you very much I appreciate the answers to my questions.
Thank you Michael.
There are no further questions at this time I would now like to turn the call back to Brian Colley for final remarks.
Thanks, everyone for joining us today I Hope. This was helpful to you and we look forward to following up and continuing to make some great progress here at lineage and have a great afternoon.
This concludes today's call. We thank you for your participation you may now disconnect.
[music].