Q2 2024 Lineage Cell Therapeutics Inc Earnings Call

Welcome to Galena cell Therapeutics second quarter 'twenty 'twenty four conference calls at this time all participants are in a listen only mode and audio webcast of this call is available on the investors section of <unk> website at Www Dot Liebig.

So that com. 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 <unk>.

Is strictly prohibited as a reminder, today's call is being recorded.

Ms. Hone: I would now like to introduce your host for today's call. MS are you on the hone head of Investor Relations at lineage Ms. Hone. Please go ahead.

Ioana Hone: Thank you. Good afternoon, and thank you for joining us. A press release reporting our second quarter 2024 financial results was issued earlier today, August 8, 2024, 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.

Ms. Hone: Thank you good afternoon, and thank you for joining US a press release reporting our second quarter 2024 financial results was issued earlier today August eight 2024 and can be found on the investors section of our website. Please note that today's remarks and responses to your questions.

Ioana Hone: 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 statement sections in today's press release and in the company's SEC filings, including its annual report on Form 10-K for the year ended December 31, 2023. We caution you not to place 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 Jill Howe, our Chief Financial Officer. I'll now hand the call over to Brian.

Speaker Change: And 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.

Speaker Change: Our results or performance may differ materially from the expectations indicated by such forward looking statements.

Speaker Change: 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 and today's press release and in the company's SEC filings, including its annual report on Form 10-K for the year ended December 31, 'twenty twenty-three, we caution you not to place undue ever.

Brian Culley: 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 Joe Hau, Our Chief Financial Chief Financial Officer, I'll now hand, the call over to Brian.

Brian Culley: Thank you, Ioana. Good afternoon, everyone.

Brian: Thank you Wanna. Good afternoon, everyone. We appreciate you taking the time to join us on the call today.

Brian Culley: We appreciate you taking the time to join us on the call today. There are three things that I plan to discuss today. First, I'll have some brief comments about the macro environment because it's important and we are obviously affected by it.

Speaker Change: There are three things that I plan to discuss today first I'll have some brief comments about the macro environment, because it's important and we obviously are affected by it.

Brian Culley: Second, I will provide an update on our lead program, Oprogen, for the treatment of dry AMD. And third, I will provide an update on our IND amendment for the spinal cord program, alongside some additional progress we've made with our pipeline. First, it's impossible to ignore that the biotech sector remains in an unprecedented bear market. While positive reactions to clinical data, M&A deals, and IPOs still occur in pockets, the overall sentiment for small-cap bio-investors remains extremely cautious, with many investors on the sidelines or, in some cases, outright negative on the sector. And as you know, this regrettably sour environment has been with us for several years.

Speaker Change: I will provide an update on our lead program offer gen for the treatment of dry AMD and third I'll provide an update on our IND amendment for the spinal cord program alongside some additional progress we've made with our pipeline.

Speaker Change: First it's impossible to ignore that the biotech sector remains in an unprecedented bear market.

Speaker Change: While positive reactions to clinical data M&A deals in ipos still occur in pockets.

Speaker Change: Overall sentiment for small cap by investors remain extremely cautious with many investors on the sidelines or in some cases outright negative on the sector and.

Speaker Change: And as you know this regrettably sour environment has been present with us for several years.

Brian Culley: In times like these, it's critical for capital-intensive businesses like ours to manage their cash wisely, to focus only on one or two priorities, and to seek out the best available cost of capital. Some biotech companies have elected not to follow these practices, and a record number of them have suffered as a result. Now, we obviously cannot control interest rates or generous flows, but we can, and we do, seek to optimize things which we can control, such as where our capital comes from, how that capital is deployed, and what we get in return from those investments.

Speaker Change: In times like these it's critical for capital intensive businesses like ours to manage the cash wisely.

Speaker Change: To focus only on one or two priorities and to seek out the best available cost of capital.

Speaker Change: So biotech companies have elected not to follow these practices and a record number of don't have suffered as a result.

Speaker Change: Now, we obviously cannot control interest rates are generous flows, but we can and we do seek to optimize things, which we can control such as where our capital comes from.

Speaker Change: That capital is deployed and what we get in return from those investments.

Brian Culley: Our staged and measured approach, coupled with our deep commitment to fiscal discipline, has ensured that we've been able to weather multiple years of unpredictable market conditions much better than many of our peers. And such sustainability is important because we believe our cell transplant technology can become a very powerful platform. This optimism comes not only from our current programs but also from the continued success being shown by similar cell transplant programs in areas like diabetes and Parkinson's disease. And when the biomarkets do improve, as history suggests they will, we will be prepared to make the necessary and appropriate adjustments to capitalize on that environment as well.

Speaker Change: Our staged and measured approach coupled with our deep commitment to fiscal discipline.

Speaker Change: Because it ensures that we have been able to weather multiple years of unpredictable market environment much better than many of our peers.

Speaker Change: And such sustainability is important because we believe our T cell transplant technology can become a very powerful platform.

Speaker Change: This optimism comes not only from our current programs, but also from the continued success being shown by similar cell transplant programs in areas like diabetes in Parkinson's disease.

Speaker Change: And when the bio markets do improve in history suggest they will we will be prepared to make the necessary and appropriate adjustments to capitalize on that environment as well.

Speaker Change: Yeah.

Brian Culley: With those macro comments out of the way, up next is Oprogen, which is our retinal cell transplant to treat geographic atrophy secondary to age-related macular degeneration. I assume everyone on this call is aware that our partners, Roche and Genentech, are currently conducting a Phase II trial of the Oprogen program with an estimated enrollment of 60 patients. We are happy to announce today that the first ex-U.S. clinical site for this study has been opened.

Speaker Change: But those macro comments out of the way up next is <unk>, which is our retinal cell transplant to treat geographic atrophy secondary to age related macular degeneration.

Speaker Change: I assume everyone on this call is aware that our partners Roche and Genentech are currently conducting a phase two trial of the origin program with an estimated enrollment of 60 patients.

Speaker Change: We are happy to announce today that the first ex U S. Clinical sites for this study has been opened this is an experienced site located in Israel and managed by an investigator who also participated in our phase <unk> study.

Brian Culley: This is an experience site located in Israel and managed by an investigator who also participated in our Phase 1-2a study. We are pleased that the Genentech clinical team continues to expand the number of sites in the OPERGEN trial, which additionally helps to increase exposure to and experience with our lead product candidates because clinical data releases can be significant events for investors. We are often asked when the data from this trial will be available to the public.

Speaker Change: We are pleased that the genentech clinical team continues to expand the number of sites in the opportune trials, which additionally helps to increase exposure and experience with our lead product candidate.

Speaker Change: Because clinical data releases can be significant events for investors.

Speaker Change: We often are asked when the data from this trial will be available to the public.

Brian Culley: The answer, which by the way is a completely normal arrangement for pharma partnerships like ours, is that Lineage does not control the timing or format of data coming from this Genentech-run trial. However, that does not mean we are in an information vacuum.

Speaker Change: The answer which by the way is a completely normal arrangement for pharma partnerships like ours is at lineage does not control the timing or format of data coming from this genentech run trial.

Speaker Change: However that does not mean, we are in an information vacuum.

Brian Culley: There are a number of publicly available items which we believe are encouraging indicators for this program. And I'd like to highlight some of those positive signs for you today because having a clear and comprehensive view of Oprogen is not only critical to the investment thesis for Lineage but also informs the strategic decisions we make for the company. Starting off, it's important to point out that the ongoing trial has three outcome measures. The first outcome measure is the proportion of patients with successful delivery of oprogen to the target region of the eye. The second issue is overall safety.

Speaker Change: There are a number of publicly available items, which we believe are encouraging indicators for this program.

Speaker Change: And I'd like to highlight some of those positive signs for you today, because having a clear and comprehensive view of opportunities not only critical to the investment thesis for lineage.

Speaker Change: But also informs the strategic decisions, we make for the company.

Speaker Change: Starting off it's important to point out that the ongoing trial has three outcome measures. The first outcome measures the proportion of patients with successful delivery of op ridge into the target region of the eye.

Brian Culley: And the third is improvement in retinal structure, which, by the way, is an outcome measure that wasn't even collected in the Cyfovir or Izerbay anti-complement trials because neither of those drugs has shown they can improve retinal structure. We believe even just the fact that our partners are collecting data on things like retinal improvement is an indication that aubergine may offer patients a far superior profile than any of the non-cellular approaches. But, as I was saying, there are three primary and secondary outcomes collected in this study.

Speaker Change: Second is overall safety and the third is improvement in retinal structure, which by the way is an outcome measure that wasn't even collected and the <unk> are either being anti complement trials because neither of those drugs has shown they can improve retinal structure.

Speaker Change: We believe even just the fact that our partners are collecting data on things like retinal improvement is an indication that opportunity may offer patients a far superior profile than any of the non cellular approaches.

Speaker Change: But as I was saying there are three primary and secondary outcomes collected in this study and importantly, they are all assessed at three months post treatment.

Brian Culley: And importantly, they are all assessed at three months post-treatment. And as a reminder, the first patient in this open-label study was enrolled in March of 2023, which means Oprogen is currently in an unblinded, open-label study with outcome measures being collected at three months and which has been running for 17 months. And while we do not know the extent of any analyses which may have been conducted, we nonetheless assume that, based on these facts, some amount of interim clinical data has been collected and reviewed by our partners. While Lineage does not have access to results from this study, we believe an informative amount of data may already be available from patients treated to date. And that relates to my next point.

Speaker Change: And as a reminder, the first patient in this open label study was enrolled in March of 2023.

Speaker Change: Which means op Virgin is currently in an unblinded open label study with outcome measures being collected at three months and which has been running for 17 months.

Speaker Change: And well, we do not know the extent of any analyses, which may have been conducted we nonetheless assume that based on these facts. Some amount of interim clinical data has been collected and reviewed by our partners.

Speaker Change: Well lineage does not have access to the results from this study we believe an informative amount of data may already be available from patients treated to date.

Speaker Change: And that relates to my next point.

Brian Culley: Roche has recently been undertaking a rigorous review of their product candidate pipeline. Last September, Bloomberg News reported that Roche's new CEO, quote, aims to move fast on high-risk, high-reward programs. Then this April, Endpoint News reported that Roche has doubled down on high-impact projects after slashing 20% of their pipeline.

Speaker Change: Roche has recently been undertaking a rigorous review of their product candidate pipeline.

Speaker Change: September Bloomberg news reported that Roche as new CEO quote aims to move fast on high risk high reward programs.

Speaker Change: Then this April endpoint news reported that Roche will double down on high impact projects after slashing 20% of their pipeline.

Brian Culley: We saw evidence of this pipeline prioritization, which in some instances included terminations of license agreements, terminated programs in cell therapy, and terminations in ophthalmology. But against this backdrop of ruthless culling and prioritization, there are signs which suggest to us that Oprogen, which is a licensed ophthalmology cell therapy program, remains in a good place. First, as I reported last quarter, Roche and Genentech electively reported long-term data from the Lineage Run Phase I-IIa study at the Retinal Cell and Gene Therapy Innovation Summit in May, which showed durable increases to BCVA and durable increases to key retinal layers, lasting for at least 24 months.

Speaker Change: We saw evidence of this pipeline prioritization, which in some instances included terminations to license agreements terminated programs in cell therapy, and terminations in ophthalmology, but against this backdrop of ruthless culling and prioritization.

Speaker Change: There are signs, which suggests to us that opportunity.

Speaker Change: Which is a license ophthalmology cell therapy program.

Speaker Change: <unk> is in a good place.

Speaker Change: First as I reported last quarter, Roche and Genentech Electively reported long term data from the lineage run phase Iia study at the retinal cell and gene therapy innovation summit in May which showed durable increases to V CVA and durable increases to key retinal layers lasting for at least 24.

Speaker Change: Four months.

Brian Culley: This is a starkly different result from what anti-complement therapies have demonstrated to date, where vision loss and tissue loss are the expected outcomes over the same time period. Not long after that data update, Genentech entered into a new and additional agreement with Lineage to provide services to support certain development activities for opportunity, including to provide an additional five years of follow-up for the patients enrolled in the Lineage Run Phase I-IIa study. And we have seen this kind of positive sign continue this year.

Speaker Change: This is starkly different result from what anti complement therapies have demonstrated to date, where vision loss and tissue loss are the expected outcome over the same time periods.

Speaker Change: And not long after that data update genentech entered into a new an additional agreement with lineage to provide services, which support certain development activities for opportunities, including to provide an additional five years of follow up for the patients enrolled in the lineage run phase Iia study.

Speaker Change: And we have seen this kind of positive sign continue this year as recently as the Roche virtual Ophthalmology day last month, where the global franchise head for Ophthalmology said quote our interest in geographic Atrophies remains really strong.

Brian Culley: As recently as Virtual Ophthalmology Day last month, where the Global Franchise Head for Ophthalmology said, quote, "our interest in geographic atrophies remains really strong." But, at the same time, we noted that they terminated another Phase II program in GA. So, from our perspective...

Speaker Change: While at the same time, we noted that they terminated another phase II.

Speaker Change: Phase two program in G E.

Speaker Change: So from our perspective.

Brian Culley: While we are waiting for Oprigen data, we are encouraged that these statements from our partners continue to confirm their strong focus on geographic atrophy, and to our knowledge, Oprigen is the only clinical program they currently have in this indication. Again, it's important for me to emphasize that, as of today, we do not have any information about the results of the ongoing trial. We also don't know to what extent our partners have or have not reviewed any interim data.

Speaker Change: While we are waiting for opportune data. We are encouraged that these statements from our partners continued to confirm their strong focus in geographic atrophy and to our knowledge option is the only clinical program. They currently have in this indication.

Speaker Change: Again, it's important for me to emphasize that as of today, we do not have information about the results of the ongoing trial.

Speaker Change: We also don't know to what extent our partners have or have not reviewed any interim data. All we're providing today is management's perspective of the situation based on our assumptions as well as on publicly available actions and statements, which we believe in the aggregate more likely indicate positive rather than <unk>.

Brian Culley: All we are providing today is management's perspective of the situation based on our assumptions as well as on publicly available actions and statements, which we believe, in the aggregate, more likely indicate positive rather than negative progress with opportunity.

Speaker Change: <unk> progress with opportunity.

Brian Culley: At a minimum, whatever is known to Genentech appears to have been sufficiently supportive of Oprogen's continued development at a time when Roche is making deep cuts to their product pipeline. So, we are encouraged by these signs and remain hopeful that additional signs like the ones I've highlighted for you today will increase investor interest in the coming months. While we await further news and progress from the DRY-AMD program, we remain optimistic about our future because we believe the fundamental mechanism of cell replacement, which has been partly validated by the successful partnering and continued clinical testing of the OPRGEN program, offers important advantages over small molecules and antibodies, and that cell transplants could be applied to many other areas of the body. We've seen evidence of this idea recently.

Speaker Change: At a minimum whatever is known to Genentech appears to have been sufficiently supportive of opportunities continued development at a time when Roche is making deep cuts to their product pipeline. So we are encouraged by these signs and remain hopeful that additional signs like the ones are highlighted for you today will increase investor.

Speaker Change: Interest in the coming months.

Speaker Change: Well, we have further news and progress from the dry AMD program, we remain optimistic about our future because we believe the fundamental mechanism of cell replacement, which has been partly validated by the successful partnering and continued clinical testing of the origin program.

Speaker Change: Offers important advantages over small molecules and antibodies and cell transplants could be applied to many other areas of the body.

Speaker Change: We've seen evidence of this idea recently in.

Brian Culley: In the surge of CAR T assets, which have moved into early stage autoimmune disease trials, CAR T is a tremendously crowded area. We believe the far more exciting and untapped opportunity for cell therapy lies not in indication hunting with undifferentiated CAR-T assets but rather in using the appropriate cell type in the many non-oncology indications for which chronic degeneration is a prominent feature. A number of large companies, including Bayer, Novo Nordisk, Astellas, and Vertex, have made major investments in this field, as well as newer entities that have raised significant capital from high-caliber investors.

Speaker Change: And the surge of car T assets, which have moved into early stage autoimmune disease trials, but car T is a tremendously crowded area.

Speaker Change: We believe the far more exciting and untapped opportunity for cell therapy lies not in indication hunting with undifferentiated car T assets, but rather than using the appropriate cell type in the many non oncology indications for which chronic degeneration is a prominent feature.

Speaker Change: A number of large companies, including Bayer Novo Nordisk Astellas and vertex have made major investments in this field.

Speaker Change: As well as newer entities, which have raised significant capital from high caliber investors and while we welcome. These new entrance for the additional validation they may bring to our approach we remain comforted by our two decades of experience.

Brian Culley: And while we welcome these new entrants for the additional validation they may bring to our approach, we remain comforted by our two decades of experience. Those working in this field know well that affordably scaled and well-controlled manufacturing, like ours, is extremely difficult to master, even by large, well-funded companies.

Speaker Change: Those working in this field know well that affordably scaled and well controlled manufacturing like ours are extremely difficult to master even by large well funded companies.

Brian Culley: We also continue to be one of very few, perhaps the only pure play publicly traded company, which can offer investors access to this technology via equity holding. For these and other reasons, we believe we can remain a leader in this growing and powerful branch of medicine for many years to come. We have several pipeline programs which we're excited about, such as Auditory Neurons for Hearing Loss and an as yet undisclosed program in neurology, but our next most clinically advanced pipeline program is OPC-1, which is our cell transplant program for spinal cord injury.

Speaker Change: We also continue to be one of very few perhaps the only pure play publicly traded company, which can offer investors access to this technology via equity holdings.

Speaker Change: For these and other reasons, we believe we can remain a leader in this growing and powerful branch of medicine for many years to come.

Speaker Change: Okay.

Speaker Change: We have several pipeline programs, which we're excited about such as auditory neurons for hearing loss and an as yet undisclosed program in neurology, but our next most clinically advanced pipeline program is obesity, one which is our cell transplant program for spinal cord industry injured.

Brian Culley: The objective of this program is to replace damaged cells located in the spinal cord in order to restore or provide function to people who have been paralyzed by a spinal cord injury. This approach is of great interest and importance to the SCI field, and Lineage has more experience, clinical data, and years of patient follow-up in SCI cell transplant therapy than any other company. We are manufacturing and transplanting cells that closely resemble those found naturally in the spinal compartment, which, by the way, is the same basic approach that has yielded positive clinical results in the ocular compartment with our dry AMD program.

Speaker Change: The objective of this program is to replace damage cells located in the spinal cord in order to restore or provide function to people who have been paralyzed by spinal cord injury.

Speaker Change: This approach is a great interest and importance to the Sci field lineage has more experience clinical data and years of patient follow up in Sci cell transplant therapy than any other company.

Speaker Change: We are manufacturing and transplanting cells, which closely resemble those found naturally in the spinal compartment, which by the way is the same basic approach that has yielded positive clinical results in the ocular compartment with our dry AMD program.

Speaker Change: Yes.

Brian Culley: Similar to Oprogen, we manufacture our spinal cord cells at a CGMP facility, which we own and control, rather than outsourcing this difficult work to a CDMO. We've collected and published as long as 10 years of safety and efficacy data on our SCI patients and believe the adjustments we've made recently to increase the purity and scale of our cells will further improve their quality and commercial profile, which we've already demonstrated for this program.

Speaker Change: Similar to operation, we manufacture our spinal cord cells at a cgmp facility, which we own and control rather than outsourcing this difficult work to a C. D M O.

Speaker Change: We've collected and published as long as 10 years of safety and efficacy data on our Sci patients and believe the adjustments. We've made recently to increase the purity and scale of ourselves will further improve the quality and commercial profile, which we've already demonstrated for this program.

Brian Culley: And in addition to improving the material we transplant, we're simultaneously investigating superior ways to deliver our cells to patients. As we finalize the information package for FDA, which will support our new manufacturing process, our most immediate objective for the OPC-1 program is to improve upon the delivery system. The original system used in previous studies was adequate but not optimized for that purpose.

Speaker Change: And in addition to improving the material we transplant, we're simultaneously investigating superior ways to deliver ourselves to patients.

Speaker Change: As we finalize the information package for FDA, which will support our new manufacturing process. Our most immediate objective. The LPC one program is to improve upon the delivery system.

Speaker Change: The original system used in previous studies with adequate but not optimized for that purpose.

Brian Culley: We have licensed rights to and have helped develop for our intended use a novel delivery system called MyPSD, which can administer OPC-1 to the spinal parenchyma in both chronic and subacute SCI patients. This offers several advantages over the original device, including the ability to maintain patient respiration while the cells are being delivered. We believe MyPSD will offer a safer and easier to use solution for this therapy. We have filed an IND amendment with the FDA, which, when cleared by FDA, would allow us to initiate our planned study to evaluate the safety and performance of this novel delivery device.

Speaker Change: We have licensed rights too and have helped develop for our intended use a novel delivery system called my PST, which can administer <unk> to the spinal parenchyma in both chronic and sub acute sci patients.

Speaker Change: This offers several advantages over the original device, including the ability to maintain patient respiration, while the sales are being delivered.

Speaker Change: We believe my PST will offer a safer and easier to use solution for this therapy.

Speaker Change: We have filed an IND amendment with the FDA, which when cleared by FDA would allow us to initiate our planned study to evaluate the safety and performance of this novel delivery device.

Brian Culley: As I reported on a prior earnings call, the FDA advised us to expect a delayed process for review of our INDA due to their significant workload and conflicting PDUFA priorities. As a promising sign, we nevertheless have received a number of information requests from the FDA, and we promptly submitted our responses to those requests. In response to our most recent request for further information, the FDA advised in early July that their review was complicated by the requirement for inter-center review, specifically CBER and CDRH, and they were unable to provide a timeline for completion of their review but that they were working to the best of their ability to deliver a response to us as soon as possible.

Speaker Change: As I reported on a prior earnings call. The FDA advised us to expect a delayed process for review of our NDA due to their significant workload and conflicting doofer priorities.

Speaker Change: As a promising sign we nevertheless have received a number of information requests from the FDA and we promptly submitted our responses to those requests.

Speaker Change: In response to our most recent request for further information the FDA advised in early July that their review was complicated by the requirement of Inter Center review, specifically Seaborn C. D. R. H and they were unable to provide a timeline for completion of their review, but that they were working to.

Speaker Change: The best of their ability to deliver response to us as soon as possible.

Brian Culley: Fortunately, we heard this week from the project manager that a call with the FDA review team is being arranged for us, so we're hopeful to have a positive update soon. I will add that we do not believe there are any unusual aspects to our INDA, especially considering that we're proposing to evaluate an externally positioned device with a therapy that has already been tested in 30 patients. And, in fact, we have heard from a number of external advisors, both from the regulatory and legal fields, that other cell and gene therapy sponsors have been experiencing these kinds of delays in the FDA's review process as a result of a heavy workload.

Speaker Change: Fortunately, we heard this week from the project manager that a call with the FDA review team is being arranged with us. So we're hopeful to have a positive update Susan.

Speaker Change: I will add that we do not believe there are any unusual aspects to our NDA, especially considering that we're proposing to evaluate and externally position device with a therapy that already has been tested in 30 patients and in fact, we have heard from a number of external advisors, both from the regulatory and legal.

Speaker Change: Fields that other cell and gene therapy sponsors had been experiencing these kinds of delays in the Fda's review process as a result of a heavy workload.

Brian Culley: So, while that is unfortunate, we have, in the meantime, been conducting a number of customary trial preparations to support opening the first clinical study site, something which we continue to target as soon as feasible, pending receipt of FDA feedback. And we also, concurrently, are working on resubmitting our CIRM grant application to support the DOST study.

Speaker Change: So while that is unfortunate we have in the meantime been conducting a number of customary trial preparations to support opening the first clinical study site, something which we continue to target as soon as feasible pending receipt of Fda's feedback and we also concurrently or working on resubmitting, our CERN grant application to support the dose.

Speaker Change: Study.

Brian Culley: We continue to be very excited about the possibility of significantly reducing the cost of that trial through a CIRM CLIN-2 grant, but the timing of our submission is contingent on receipt of FDA clearance of our INDA. So while we wait for FDA's clearance, we will take advantage of this additional time to continuously improve the application and give it the best chance of success. I'll also add that an unattended benefit of FDA taking a long time for its review is that we have not assumed many of the projected expenses associated with initiating this trial, so we end up in a better-than-expected cash position for the period, which Jill can talk about in her section.

Speaker Change: We continue to be very excited about the possibility of significantly reducing the cost of that trial via <unk> claimed to grant, but the timing of our submission is contingent on receipt of FDA clearance of our Anda. So while we wait for FDA clearance, we will take advantage of this additional time to continuously improve the.

Speaker Change: <unk> and give it the best chance of success.

Speaker Change: I'll also add that an unintended benefit of F. D. A taking a long time for its review is it we've not assumed many of the projected expenses associated with initiating this trial. So we ended up in a better than expected cash position for the period, which Joe can talk about in her section.

Brian Culley: The last two things I'd like to mention today are a reminder that we have very exciting preclinical programs in both sensorineural hearing loss and in an as-yet-undisclosed indication with our gene editing partner, Eterna. The Hearing Loss Program, ANP1, is a cell transplant comprised of a population of auditory neuronal cells delivered to the inner ear to replace the cells which have become dysfunctional due to damage or degeneration.

Speaker Change: The last two things I'd like to mention today as a reminder, that we have a very exciting preclinical programs in both sensorineural hearing loss and in an as yet undisclosed indication with our gene editing partner Aeterna.

Speaker Change: The hearing loss program A&P, one is a cell transplant comprised of a population of auditory neuronal cells delivered to the inner ear to replace the cells, which have become dysfunctional due to damage or degeneration.

Brian Culley: The manufacturing process for ANP1 has been built upon the same platform as the Oprogen program, which allowed us to accelerate its development and move rapidly into preclinical animal testing. And, in fact, a functional test in an animal model is currently underway. In parallel, the manufacturing team wanted to highlight some of their recent accomplishments and are planning to present preliminary data at a scientific conference next month. I learned yesterday that the abstract for that data was accepted, so we will provide those details soon, which is something we can all look forward to.

Speaker Change: The manufacturing process for A&P, one has been built upon the same platform as the <unk> program, which allowed us to accelerate its development and move rapidly into preclinical animal testing and in fact, a functional test in an animal model is currently underway.

Speaker Change: In parallel the manufacturing team wanted to highlight some of their recent accomplishments and are planning to present preliminary data at a scientific conference next month.

Speaker Change: I learned yesterday that the abstract for that data was accepted so we will provide those details soon which is something we can all look forward to.

Brian Culley: I also want to add that the AMP1 product candidate was created from investments we made in our in-house R&D team. It is an entirely homegrown program that was not licensed from an academic lab and did not involve any external financial support or require any technology licensing.

Speaker Change: I also want to add that the A&P one product candidate was created from investments we made in our in house R&D team. It is an entirely homegrown program, which was not licensed from an academic lab and did not involve any external financial support or require any technology licenses.

Brian Culley: Being able to design and then, in some cases, own nearly 100% of a pipeline program is an underappreciated advantage which we have created from our experience and capabilities with directed differentiation and process development. Well, there is abundant attention on Oprigen today, and for good reasons. I don't want us to lose sight of the long-term value which our development engine could create for this company. For this reason, we're continuing to grow our pipeline and engage in partnership discussions which align with this strategy.

Speaker Change: Being able to design and then in some cases or nearly a 100% of our pipeline program is an underappreciated advantage, which we have created from our experience and capabilities with directed differentiation and process development.

Speaker Change: Well there is abundant attention on opportune today and for good reasons.

Speaker Change: Don't want us to lose sight of the long term value, which our development engine could create for this company.

Speaker Change: Okay.

Speaker Change: For this reason, we're continuing to grow our pipeline and engaged in partnership discussions, which align with this strategy.

Brian Culley: The ongoing efforts to generate a hypoimmune cell line with our gene editing partner, Eterna, continue to make progress, and we look forward, later this year, to announcing an initiative we started for an entirely new indication. So to wrap up,

Speaker Change: The ongoing efforts to generate a hypo immune cell lines with our gene editing partner Aeterna continues to make progress and we look forward later this year to announcing an initiative we started an entirely new indication.

Speaker Change: So to wrap up I will offer three things investors may want to watch for in the coming period.

Brian Culley: I will offer three things investors may want to watch for in the coming period. The first is to monitor for any further updates, indications, or other information on Oprogen coming from either us or our partners. The second is us receiving a clear path forward from FDA to initiate the safety study of the new OPC-1 delivery device and to apply for the CIRM clinical grant. And the third would be an update on the ANP1 program for sensory-neural hearing loss, which, as I mentioned just today, is expected next month. With that, I will turn things over to Jill for a review of our financials.

Speaker Change: The first is to monitor for any further updates indications or other information on op region coming from either us or our partners.

Speaker Change: The second is us receiving a clear path forward from FDA to initiate the safety study of the new OTC, one delivery device and to apply for certain clinical grant.

Jill: And the third would be an update on the A&P one program for sensorineural hearing loss, which is our updated yesterday is expected next month with that I will turn things over to Jill for a review of our financials. Thanks, Brian and good afternoon, everyone.

Jill Howe: Thanks, Brian, and good afternoon, everyone. Our reported cash, cash equivalents, and marketable securities of $38.5 million as of June 30, 2024 is expected to support plant operations into Q4 2025. Now, this extension of our cash runway may be further than you might have expected. However, as Brian mentioned earlier, this is primarily due to the delay we are experiencing with the FDA on the dose trial along with other smart cost-saving measures which have extended our current runway.

Jill: Our reported cash cash equivalents and marketable securities of $38 5 million as of June 32024 is expected to support planned operations into Q4 2025.

Jill: Now this extension of our cash runway, maybe further than you might have expected. However, as Brian mentioned earlier. This is primarily due to the delay we are experimenting with that.

Brian Culley: The dose trial, along with other smart.

Jill: Sure.

Jill Howe: Next, I will review our second quarter operating results. Our revenue is generated primarily from collaboration revenues and royalties. Total revenues were approximately $1.4 million, a net decrease of $1.8 million, as compared to $3.2 million for the same period in 2023. The decrease was primarily driven by lower collaboration and licensing revenues recognized from deferred revenues under the Collaboration and License Agreement with Roche. Our operating expenses are comprised of research and development expenses and general and administrative expenses.

Jill: Our current run rate.

Speaker Change: Our second quarter operating results.

Speaker Change: Our revenue was generated primarily from collaboration revenue and royalties.

Jill: Total revenues were approximately $1 4 million.

Speaker Change: The decrease of $1 8 million as compared to $3 2 million for the same period in 2023. The decrease was primarily driven by lower collaboration and licensing revenue recognized from deferred revenue under the collaboration and license agreement with <unk> or.

Jill Howe: Total operating expenses were $7.3 million, a decrease of $0.9 million as compared to $8.2 million for the same period in 2023. R&D expenses were $2.9 million, a net decrease of $1 million, as compared to $3.9 million for the same period in 2023. The net decrease was primarily driven by $0.6 million for our OPC-1 program and $0.3 million for our preclinical program. G&A expenses were $4.3 million, a net increase of approximately $0.1 million, as compared to $4.2 million for the same period in 2023.

Speaker Change: Our operating expenses are comprised of research and development expenses and general and administrative expenses.

Speaker Change: Total operating expenses were $7 3 million a decrease of <unk> 9 million as compared to $8 2 million for the same period in 2023.

Speaker Change: R&D expenses were $2 9 million, a net decrease of $1 million as compared to $3 9 million for the same period in 2023.

Speaker Change: And that decrease was primarily driven by <unk> 6 million for OCC, One program and <unk> 3 million for our preclinical programs.

Speaker Change: G&A expenses were $4 3 million.

Speaker Change: That increase of approximately $1 million as compared to $4 2 million for the same period in 2023. The increase was primarily driven by stock based compensation expenses and personnel costs.

Jill Howe: The increase was primarily driven by stock-based compensation expenses and personnel costs. Loss from operations was $5.9 million, an increase of $0.9 million as compared to $5 million for the same period in 2023. Other income and expenses reflect other income of $0.1 million as compared to other expenses of $0.2 million for the same period in 2023. The change was primarily driven by exchange rate fluctuations related to our international subsidiaries, fair market value changes in marketable equity securities, and interest income earned within our money market accounts.

Speaker Change: Loss from operations were $5 9 million, an increase of <unk> 9 million as compared to $5 million for the same period in 2023.

Speaker Change: Other income and expenses reflect other income of <unk> 1 million as compared to other expenses of <unk> 2 million for the same period in 2023. The change was primarily driven by exchange rate fluctuations related to our international subsidiaries fair market value changes in marketable equity securities and interest income earned within our money market.

Speaker Change: Counts.

Jill Howe: Our net loss is $5.8 million, or $0.03 per share, compared to a net loss of $5.2 million, or $0.03 per share, for the same period in 2023. We continue to uphold our commitment to physical discipline, and we are confident that this approach will continue to support our plans for achieving pivotal milestones in generating shareholder value through our ongoing investment in our program. Now I will hand the call back. Great, thanks, Jill. So to briefly summarize three key points for today, I will make one

Speaker Change: Our net loss was $5 8 million or <unk> <unk> per share compared to a net loss of $5 2 million or <unk> <unk> per share for the same period in 2023.

Speaker Change: We continue to uphold our commitment to fiscal discipline and we are confident that this approach will continue to support our plans of achieving pivotal.

Speaker Change: Milestones and generating shareholder value through our ongoing investment in our program.

Speaker Change: Now I will hand, the call back to Brian.

Brian Culley: Great, thanks Jill. So, to briefly summarize, three key points for today. One, we recognize the continued challenges of the macro situation, and we're taking the appropriate measures to cope with those challenges. Second, we continue to be extremely happy with our recently expanded alliance with Roshan Genentech, reflected in the Oprogen data update that was provided in May, the new service agreement we entered into also in May, as well as the additional site opening, which I disclosed today.

Brian Culley: Great. Thanks, Neil So to briefly summarize three key points for today, one we recognize the continued challenges of the macro situation and we're taking the appropriate measures to cope with those challenges.

Operator: Welcome to the Lineage Cell therapeutic second quarter 2024 conference call. At this time, all participants are in a listen only mode. An audio webcast of this call is available on the investor sections of Lineage website at www.LineageCell.com.

Brian Culley: Second we continue to be extremely happy with our recently expanded alliance with Roche and Genentech reflected by the operation data update that was provided in May the New service agreement. We entered into also in May as well as the additional site opening which I disclosed today and third while we unfortunately are unable to predict how much longer.

Operator: This call is subject copyright and is the property of Lineage. And recording, reproduction, or transmission of this call without the express written consent of Lineage are strictly prohibited. As a reminder, the day's call is being recorded.

Brian Culley: And third, while we unfortunately aren't able to predict how much longer the review of our INDA will take, we are taking steps to hit the ground running with the initiation of the dose study and the submission of a CIRM grant to provide financial support for that clinical study. I appreciate your attention today, and with that, Operator, we are ready to take any analyst questions.

Brian Culley: A review of our NDA will take.

Brian Culley: We are taking steps to hit the ground running with the initiation of the dose study and the submission of the CERN grant to provide financial support for that clinical study.

Ioana Hone: I would now like to introduce your host for today's call, Ms. Ioana Hone, head of investor relations at Lineage. Ms. Hone, please go ahead. Thank you. Good afternoon and thank you for joining us. A press release reporting our second quarter 2024 financial results was issued earlier today, August 8, 2024, and can be found on the investor's 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.

Brian Culley: I appreciate your attention today and with that operator, we are ready to take any analyst questions.

Operator: Hello. Our question and answer session begins now. Our first question comes from the line of Mayank Mamtani with B. Riley.

Speaker Change: Hello, Hello, a question and answer session begins now our first question begins.

Meyer month: Comes from the line of Meyer month, ending with B Riley.

Speaker Change: Please go ahead.

Ioana Hone: 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 statement sections and today's press release and in the company's SEC filings, including its annual report on form 10K for the year ended December 31, 2023. We caution you not to place under 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.

Kevin Kuo: This is Kevin Kuo on the call for Mayank. Thanks for taking our question and congrats on the progress. So, really appreciate the information on the collaboration with Roche. I understand that you cannot control the timing of it, but just wondering if you can maybe provide more color on how the new services agreement has enhanced the partnership, maybe on the manufacturing scale, like any updates so far regarding support for your development of commercial manufacturing.

Brian Culley: This is Kevin call on the call for my Yang Thanks for taking our questions and congrats on the progress so.

Brian Culley: That would be very helpful. Thank you. I appreciate the question.

Speaker Change: Really appreciate the information on the collaboration with Roche and understood that you cannot control the timing of that.

Speaker Change: But just wondering if you can maybe provide more color on how the new services agreement has enhanced the partnership may be manufacturing scale like any updates so far regarding support your development up to commercial manufacturing.

Speaker Change: That would be very helpful. Thank you.

Speaker Change: I appreciate the question. Thank you.

Brian Culley: Similar to the original license agreement that we entered into, there are limits to what I am able to share with respect to the services agreement. That said, reading between the lines, I think there are some positive signs that can be taken from it. The most obvious one is that it was entered into after..., what we believe is a period of time that permits Genentech to form an opinion on the OPRGEN program. We do know that in our hands, the clinical observations of improved vision and improved retinal structure tended to occur very quickly, certainly within 90 days, sometimes even just within a few days.

Speaker Change: Similar to the original license agreement that we entered into there are limits to what I am able to share with respect to the services agreement.

Speaker Change: That said reading between the lines I think there are some positive signs that can be taken from it.

Ioana Hone: With us today, our Brian Cully, our Chief Executive Officer, and Jill Howe, our Chief Financial Officer. I'll now hand the call over to Brian. Thank you.

Speaker Change: The most obvious one is that it was entered into.

Speaker Change: After.

Speaker Change: What we believe is a period of time.

Brian Culley: You want to get up to noon, everyone. We appreciate you taking the time to join us on the call today. There are three things that I plan to discuss today. First, I'll have some brief comments about the macro environment because it's important, and we obviously are affected by it. Second, I will provide an update on our lead program offered for the treatment of dry AMD. Third, I'll provide an update on our IND amendment for the spinal cord program alongside some additional progress we've made with our pipeline.

Speaker Change: That permits genentech to form an opinion on the option program.

Speaker Change: We do know that in our hands the clinical observations of improved vision and improve retinal structure tended to occur very quickly certainly within 90 days, sometimes even just in a few days and so we're hopeful that the willingness and enthusiasm for an expanded agreement.

Brian Culley: And so we're hopeful that the willingness and enthusiasm for an expanded agreement is indicative of enthusiasm for the program. But again, I must iterate that I don't have specific knowledge of that. It is just an interpretation.

Speaker Change: Is indicative of enthusiasm for the program, but again I must iterate that I don't have specific knowledge of that it is just an interpretation.

Brian Culley: First, it's impossible to ignore that the biotech sector remains in an unprecedented bear market, while positive reactions to clinical data, M&A deals, and IPOs still occur in pockets. The overall sentiment for small-cap bio-investors remains extremely cautious with many investors on the sidelines or in some cases outright negative on the sector. And as you know, this regrettably sour environment has been present with us for several years. In times like these, it's critical for capital intensive businesses like ours to manage their cash wisely, to focus only on one or two priorities and to seek out the best available cost of capital.

Brian Culley: But one of the component parts of that service agreement, as I mentioned in my prepared remarks, is follow-up, a long five-year follow-up from the patients, and an additional five-year follow-up from the patients that we enrolled in the Phase I-IIa. So, again, without specific knowledge, my view of that is that a partner being interested in following Phase I patients for an additional five years is consistent with enthusiasm and interest in a program rather than a lack of interest or a lack of enthusiasm.

Speaker Change: But one of the component parts of that service agreement as I mentioned in my prepared remarks.

Speaker Change: As a follow up along five year follow up from the patients and additional five year follow up from the patients that we enrolled in the phase one two way so again without specific knowledge my view of that is that a.

Speaker Change: Partner being interested in following phase one patients for an additional five years is consistent with enthusiasm and interest in our program rather than a lack of interest or a lack of enthusiasm. There are of course expenses associated with the service agreements. So it's not just linear is providing services.

Brian Culley: There are, of course, expenses associated with the service agreement, so it's not just Lineage providing services out of goodwill, but we are compensated for such services. So I'm encouraged by the additional investment that has also occurred. There was also in that service agreement some additional support that we provided on the manufacturing side of things. As you may or may not be aware, Lineage continues to be the manufacturer of clinical material for Oprogen currently.

Brian Culley: Some biotech companies have elected not to follow these practices, and a record number of them have suffered as a result. Now we obviously cannot control interest rates or generous flows, but we can, and we do, seek to optimize things which we can control, such as where our capital comes from, how that capital is deployed and what we get in return from those investments. Our staged and measured approach, coupled with our deep commitment to fiscal discipline, has ensured that we've been able to weather multiple years of unpredictable market environment much better than many of our peers.

Speaker Change: Is out of goodwill, but we are compensated for such services. So I'm encouraged by the additional investment that has also occurred.

Speaker Change: There were also in.

Speaker Change: And that service agreement to some additional support that we provide in the manufacturing side of things as you may or may not be aware lineage continues to be the manufacturer of clinical material for opportune. Currently however, the plan and this was the plan from the begin.

Brian Culley: However, the plan, and this was the plan from the beginning, is that Roshen Genentech would receive technology transfer training from Lineage until such time as they could complete their own manufacturing of clinical material, and then, subsequent to that, commercial material. So it continues to be the plan of both companies that Roshen Genentech will be the commercial manufacturer of this product. But, as you probably can appreciate, technology transfer is a very long process, and this process that we have developed over many years is not easily mimicked from just reading a batch record.

Brian Culley: And such sustainability is important because we believe our cell transplant technology can become a very powerful platform. This optimism comes not only from our current programs, but also from the continued success being shown by similar cell transplant programs in areas like diabetes and Parkinson's disease. And when the biomarkets do improve and history suggests they will, we will be prepared to make the necessary and appropriate adjustments to capitalize on that environment as well.

Speaker Change: <unk> is the Roche and Genentech would receive technology transfer training from lineage until such time as they could complete their own manufacturing of clinical material and then subsequent to that commercial material.

Speaker Change: So it is.

Speaker Change: It continues to be the the plan of both companies that Roche Genentech will be the commercial manufacturer of this product, but as you probably can appreciate technology transfer is a very long process and this process that we have developed over many years is not easily mimic.

Brian Culley: With those macro comments out of the way, up next is operogen, which is our retinal cell transplant to treat geographic atrophy, secondary to age-related macular degeneration. I assume everyone on this call is aware that our partners, Rochen Genentech, are currently conducting a phase 2 trial of the operogen program with an estimated enrollment of 60 patients. We are happy to announce today that the first XUS clinical site for the study has been opened.

Brian Culley: There is personal, one-on-one training that is required in order to be able to conduct it correctly, which is a great barrier to entry for us with respect to others, but it also means that tech transfer can take a while, especially at the level of quality that you would expect for a commercially viable product. So hopefully, that answers as much as I can to answer your question while remaining within the bounds of confidentiality that I am beholden to.

Speaker Change: From just reading a batch record there is.

Speaker Change: Personal one on one training that is required in order to be able to conduct it correctly, which is a great barrier to entry for us with respect to others.

Speaker Change: But it also means that tech transfer can take a while especially at the level of quality that you would expect for a commercially viable product so hopefully that does.

Brian Culley: This is an experienced site located in Israel and managed by an investigator who also participated in our phase 1-2A study. We are pleased that the Genentech clinical team continues to expand the number of sites in the operogen trial, which additionally helps to increase exposure of and experience with our relief product candidate. Because clinical data releases can be significant events for investors, we often are asked when the data from this trial will be available to the public.

Speaker Change: As much as I can to answer your question, while remaining within the bounds of confidentiality that I'm beholden to.

Speaker Change: Yes. Thank you.

Operator: Our next question comes from the line of Joe Pantginis with HC Wainwright. Please go ahead. Hey, everybody.

Speaker Change: So our next question comes from the line of Gil Thank goodness with H C. Wainwright. Please go ahead.

Joe Pantginis: Thanks for taking the questions. First, I'm not going to talk about potential data around OPERGEN, but I wanted to, I guess, also take a little foray into confidentiality. And I wanted to focus on potential milestone payments. First, your current cash guidance, which is fantastic, by the way, taking into account future milestone payments from Roche. And do you have any, at least at the minimum, directional guidance with regard to, I'm assuming, you know, once Phase 2 data start to roll out, there might be some cash associated with that?

Joe Pantginis: Hey, everybody. Good afternoon.

Speaker Change: Everybody. Good afternoon. Thanks for taking the questions. So first I'm not going to talk about potential data around upper Jan but I wanted to I guess also take a little foray into confidentiality and I wanted to focus on.

Brian Culley: The answer, which by the way is a completely normal arrangement for pharma partnerships like ours, is that lineage does not control the timing or format of data coming from this Genentech run trial. However, that does not mean we are in an information vacuum. There are a number of publicly available items which we believe are encouraging indicators for this program. I would like to highlight some of those positive signs for you today because having a clear and comprehensive view of operogen is not only critical to the investment thesis for lineage, but also informs the strategic decisions we make for the company.

Speaker Change: Potential milestone payments and first is.

Speaker Change: Is your current cash guidance, which is fantastic by the way taking into account future milestone payments from Roche and do you have any at least at the minimum directional.

Speaker Change: Guidance with regard to I'm, assuming you know once phase two data start to roll out there might be some cash associated with that.

Speaker Change: Okay.

Brian Culley: So there are two parts. I'll do the second part first.

Speaker Change: So two part helped I'll do the second part first so.

Speaker Change: So the second part is no we are not able to.

Speaker Change: And disclose the triggers for the milestones.

Brian Culley: Starting off, it is important to point out that the ongoing trial has three outcome measures. The first outcome measures the proportion of patients with successful delivery of operogen to the target region of the eye. The second is overall safety, and the third is improvement in retinal structure, which by the way is an outcome measure that wasn't even collected in the syphobery or iservate anti-complement trials because neither of those drugs has shown they can improve retinal structure.

Brian Culley: So the second part is, no, we are not able to... disclose the triggers for the milestones. The only information we've been able to disclose is A, that there are $620 million in milestone dollars for which we are eligible. And then B. We have previously said, and I will repeat today, that this is not a particularly unusual deal. It's not an absurdly backloaded deal. There are milestone payments and eligibility that would be meaningful to this company in the medium and shorter term.

Speaker Change: The only information we've been able to disclose.

Speaker Change: Is a that there are $620 million of milestone dollars for which we are eligible and then b. We have previously said and I'll repeat today that it's not a particularly unusual deal it's not a a.

Speaker Change: Thirdly back loaded deal there are.

Speaker Change: Milestone payments and Eligibilities that would be meaningful to this company and a medium in shorter term. So its not an unusual deal I would characterize it as a very normal looking deal, but as you can appreciate.

Brian Culley: We believe even just the fact that our partners are collecting data on things like retinal improvement is an indication that oxygen may offer patients a far superior profile than any of the non-cellular approaches but as I was saying there are three primary and secondary outcomes collected in this study and importantly they are all assessed at three months post-treatment and as a reminder the first patient in this open label study was enrolled in March of 2023 which means oxygen is currently in an unblinded open label study with outcome measures being collected at three months and which has been running for 17 months and while we do not know the extent of any analyses which may have been conducted we nonetheless assume that based on these facts some amount of interim clinical data has been collected and reviewed by our partners while Lineage does not have access to results from the study we believe an informative amount of data may already be available from patients treated to date and that relates to my next point Roch has recently been undertaking a rigorous review of their product candidate pipeline last September Bloomberg news reported that Roch's new CEO quote aims to move fast on high risk, high reward programs then this April endpoint news reported that Roch's quote doubled down on high impact projects after slashing 20% of their pipeline we saw evidence of this pipeline prioritization which in some instances included terminations to license agreements, terminated programs and cell therapy and terminations in ophthalmology but against this backdrop of ruthless culling and prioritization there are signs which suggest to us that opportunity which is a licensed ophthalmology cell therapy program remains in a good place first as I reported last quarter Roch and Genentech collectively reported long term data from the lineage run phase one to a study at the retinal cell and gene therapy innovation summit in May which showed durable increases to BCVA and durable increases to key retinal layers lasting for at least 24 months this is a starkly different result from what anti-complement therapies have demonstrated to date where vision loss and tissue loss are the expected outcome over the same time period and not long after that data update Genentech entered into a new and additional agreement with lineage to provide services which supports certain development activities for opportunity including to provide an additional five years of follow up for the patients enrolled in the lineage run phase one to a study and we have seen this kind of positive sign continue this year as recently as the Roch virtual ophthalmology day last month where the global franchise head for archaeology said quote our interest in geographic atrophies remains really strong while at the same time we noted that they terminated another phase two phase two program in GA so from our perspective while we are waiting for operative data we are encouraged that these statements from our partners continue to confirm their strong focus in geographic atrophy and to our knowledge operative is the only clinical program they currently have in this indication Again, it's important for me to emphasize that as of today, we do not have information about the results of the ongoing trial. We also don't know to what extent our partners have or have not reviewed any interim data.

Brian Culley: So it's not an unusual deal. I would characterize it as a very normal-looking deal, but as you can appreciate, it is typical for big pharma to not want to disclose all of the various triggers and amounts because that information can be used by other people they're negotiating with. And so we will just have to work hard as we are to meet those milestones, and then they will appear on the balance sheet, and then you'll become aware of them.

Speaker Change: It is typical for big pharma to not want to disclose all of the various triggers and amounts because that information can be used by other people they are negotiating with.

Speaker Change: And so we will just have to work hard as we are to meet those milestones and then they will appear on the balance sheet and then youll become aware of them.

Speaker Change: Yeah wonderful and you all I'll add to that is the initial question you had around the current runway, including milestones and no. We don't actually have those baked into that current runway negating speaks to how we think about being thoughtful and conservative with our cash and our cash investments and making sure we.

Jill Howe: Yeah. wonderful. And, Joe, I'll add to that. The initial question you had around the current runway, including milestones, and no, we don't actually have those baked into that current runway, I think it speaks to how we think about being thoughtful and conservative with our cash and our cash investments and making sure we really have a holistic understanding of being able to do that, continue through this tough environment.

Speaker Change: Have a holistic understanding of of being able to.

Speaker Change: Through this tough environment.

Joe Pantginis: No, that's great to hear. Thanks. And then, if I could just switch over to OPC-1 for a little bit. I guess, you know, looking forward to the start of the study, what kind of activities can you describe specifically around, say, patient identification and screening and processing and, you know, even if there's a backlog of patients that you'd be able to use to recruit for the study?

Speaker Change: That's great to hear thanks, and then if I could just switch over to a <unk> one for a little bit I guess, you know looking forward to the start of the study I guess, what kind of activities can you describe.

Speaker Change: Excuse me specifically around say, you know patient identification and screening in processing and you know even if there is a backlog of patients that you'd be able to use to attract for the study.

Brian Culley: Sure, I can address some of that. There are a lot of activities that you are able to conduct if a site is willing. You know, training and familiarity with the program, discussion about protocols, and implementation. The boundary condition is typically when you involve a patient. So if you do not have an open IND, you don't have all of the regulations and protections in place for patient safety and information flow, you really aren't able to cross that line.

Speaker Change: Sure I can address all of that there are a lot of activities that you are able to conduct conduct if a site is willing to.

Speaker Change: Training and familiarity.

Speaker Change: With the program discussion about protocols and implementation.

Speaker Change: The.

Speaker Change: The boundary condition is when you typically when you involve a patient. So if you do not have an open eye and D. You don't have all of the regulations and protections in in place for patient safety and information flow.

Speaker Change: You really arent able to cross that line. So you could think of this as sort of you are in a non solicitation zone. So you can get ready, but you really can't initiate <unk>.

Brian Culley: You can think of this as sort of a non-solicitation zone. So you can get ready, but you really can't initiate the gameplay, active gameplay, until you have all of the contracts and documentation in place. So there are some things that we can do to get ready, and there are some things that we are prohibited from doing.

Speaker Change: The game play active gameplay until you have all of the contracts and documentation in place. So there are some things that we can do to get ready and there are some things that we are prohibited from doing.

Brian Culley: But there is something that we hypothesized many months ago about this study, and that hypothesis was that it would be easier to identify patients that have a chronic injury than patients that have a subacute injury because the subacute treatment window is between 21 and 42 days. So you need an event to occur in order to have an eligible patient, whereas a patient with a chronic injury who maybe had that injury a year ago or two years ago or three years ago may or may not be under active physical therapy, but certainly exists on a list somewhere as being under a physician's care. Those people would be easier to identify.

Speaker Change: But there is something that we hypothesized many months ago about this study and our hypothesis was that it would be easier to identify patients that have a chronic injury than patients that have a sub acute injury because the sub acute treatment window is between.

Speaker Change: <unk>.

Speaker Change: 21, and 42 days, so you need an event to occur in order to have an element gibble patient, whereas a patient with chronic injury, who maybe had an injury a year ago or two years ago or three years ago.

Speaker Change: May or may not be under active physical therapy, but certainly exists on a list somewhere.

Brian Culley: Those questions have been asked specifically of the sites, and we've received encouraging information that our hypothesis would be correct and that once we are, in fact, permitted to initiate patient outreach, it would be relatively straightforward. But I would also add to that that we, of course, intend to implement various sorts of social media websites and targeted type campaigns through the relationships that we've built with the Spinal Cord Committee over the last few years to help support our outreach efforts and identify interested patients.

Speaker Change: As as under a physician's care those people would be easier to identify.

Speaker Change: Those questions have been asked specifically of the sites and we have received encouraging information than our hypothesis would be correct and that once we are in fact permitted to initiate patient outreach that it would be relatively straightforward, but I would also add to that that we of course intend to implement.

Speaker Change: <unk>.

Speaker Change: The various sort of.

Speaker Change: Social media website and targeted type campaigns through the relationships that we've built with the spinal cord committee over the last few years to help.

Brian Culley: All we are providing today is management's perspective of the situation based on our assumptions, as well as on publicly available actions and statements, which we believe in the aggregate more likely indicate positive rather than negative progress with the operative. At a minimum, whatever is known to Genentech appears to have been sufficiently supportive of operative continued development at a time when Rosh is making deep cuts to their product pipeline. So we are encouraged by these signs and remain hopeful that additional signs like the ones that have highlighted for you today will increase investor interest in the coming months.

Speaker Change: Support our outreach efforts and identify interested patients because of course, it's a small study and the faster we can get it completed the better especially in light of the fact that it is a safety study with a primary outcome measure at 30 days. So we don't have to wait two years to see how a patient.

Brian Culley: Because, of course, it's a small study, and the faster we can get it completed, the better, especially in light of the fact that it is a safety study with a primary outcome measure at 30 days. So we don't have to wait two years to see how a patient is doing. We will collect that information, but that is not the information that the study was designed to generate. The study was simply designed to generate data to support using MyPSD in much larger campaigns later.

Speaker Change: Is doing we will collect that information, but that is not the information that the study was designed to generate the study was simply designed to generate data to support using my PSD and much larger campaigns later.

Brian Culley: That's extremely helpful, Brian, and I could just ask one logistical question, and I appreciate your indulgence. Logistically speaking, for your CIRM grant, and of course, a few pieces have to come into play, like you said the INDS has to be approved, etc. Are you looking for a potential range of money that you could be awarded and what is the general, I know you alluded to this a little bit, what is the general or potential offset for the cost of the studies, like proportional?

Brian Culley: Well, we have a further news and progress from the dry AMD program. We remain optimistic about our future because we believe the fundamental mechanism of cell replacement, which has been partly validated by the successful partnering and continued clinical testing of the operative program. It offers important advantages over small molecules and antibodies and that cell transplants could be applied to many other areas of the body. We've seen evidence of this idea recently.

Speaker Change: That's extremely helpful, Brian and if I could just ask one logistical question I appreciate your indulgence.

Speaker Change: Logistically speaking for your served grant.

Speaker Change: Of course, a few pieces have to come into play like you said the idea is to be approved et cetera are you looking for a potential range of money that you can be awarded and what is the general I know you alluded to this a little bit what is the general or.

Speaker Change: You know potential offset for the cost of the studies like proportionately.

Brian Culley: Yeah, we are disclosing what our ask is in the grant. It's based on a very detailed budget that gets built, and there are all sorts of assumptions and milestones, but if you were to go to the CIRM website and dig deeply, you'd probably find that, typically, around half of the cost of a study can end up being covered through a CIRM grant. So we're talking about meaningful amounts. This is not like low single million dollars; these are meaningful offsets, and I would love to add the point that I feel that CIRM grants reflect or represent some of the most attractive cost of capital because the obligations to share in the upside of the program come at commercialization and are extremely reasonable.

Brian Culley: In the surge of CARTI assets, which have moved into early stage autoimmune disease trials, but CARTI is a tremendously crowded area. We believe the far more exciting and untapped opportunity for cell therapy lies not in indication hunting with undifferentiated CARTI assets, but rather in using the appropriate cell type in the many nononcology indications for which chronic degeneration is a prominent feature. A number of large companies, including Bayer, Nova Nordisk, Estellus, and Vertex, have made major investments in this field, as well as newer entities which have raised significant capital from high caliber investors.

Speaker Change: Yeah, we are disclosing what our ask is in the grant it's based upon a very detailed budget.

Speaker Change: Budget that gets built in there is all sorts of assumptions in milestones, but if you were to go to.

Speaker Change: The <unk> website and dig deeply you'd probably find that typically around half of the cost of a study can end up being covered through a CERN grant. So we're talking about meaningful amounts is that this is not like low single million dollars. Like these are meaningful offsets and I love to add the point that I feel that serve.

Speaker Change: Grants reflect or represent some of the most attractive cost of capital because the obligations to share in the upside of the program come.

Brian Culley: And while we welcome these new entrants for the additional validation they may bring to our approach, we remain comforted by our two decades of experience. Those working in this field know well that affordably scaled and well controlled manufacturing, like ours, are extremely difficult to master even by large well-funded companies. We also continue to be one of very few, perhaps the only peer play publicly traded company which can offer investors access to this technology via equity holdings. For these and other reasons, we believe we can remain a leader in this growing and powerful branch of medicine for many years to come.

Speaker Change: Come at commercialization and are extremely reasonable.

Brian Culley: So I love this as a way to help pay for this study because it's a large amount of capital that can be available and can be granted to companies like ours, and the hook that it comes with in terms of some repayment is really affordable relative to almost anything else that we could imagine. So we're hopeful and eager that we will be successful in our grant efforts, and I think that the profile of OPC-1 and its prior success in receiving capital from CIRM is going to put us in a very good position with respect to receiving that capital.

Speaker Change: So I love this as a way to help pay for this study because it's a large amount of capital that can be available and can be.

Speaker Change: Granted to companies like ours and the <unk>.

Speaker Change: Look that it comes with in terms of some repayment is really affordable relative to almost anything else that that we could imagine. So we're we're hopeful and eager that we will be.

Speaker Change: Successful in our grant efforts and I think that the profile of <unk> and its prior success and receiving capital from CERN is.

Brian Culley: We have several pipeline programs which we're excited about, such as auditory neurons for hearing loss and an as yet undisclosed program in neurology, but our next most clinically advanced pipeline program is OPC-1, which is our cell transplant program for spinal cord injury. The objective of this program is to replace damaged cells located in the spinal cord in order to restore or provide function to people who have been paralyzed by spinal cord injury.

Speaker Change: <unk> going to put us in a very good.

Speaker Change: Our position with respect to receiving that capital right.

Joe Pantginis: Thank you for all the details. I appreciate those questions.

Speaker Change: Thank you for all the details.

Jill Howe: I appreciate those questions, Jill. Thank you.

Speaker Change: I appreciate those questions Joe Thank you.

Speaker Change: Okay.

Operator: Our next question comes from the line of Jack Allen with Braille.

Speaker Change: Our next question comes from the line of Alan.

Alan Behr: Behr paint.

Speaker Change: Please go ahead.

Jack Allen: Dovetailing off of the last question about CIRM, I wanted to ask about the ability to access that capital when the IND is cleared. Are those grants taken on a rolling basis, and how quickly could you potentially access CIRM capital to run the DOS study? And then I have one follow-up as well.

Alan Behr: Great. Thanks, so much for taking the questions and congratulations on your progress.

Brian Culley: This approach is of great interest and importance to the SCI field. Lineage has more experience, clinical data, and years of patients follow up in SCI cell transplant therapy than any other company. We are manufacturing and transplanting cells, which closely resemble those found naturally in the spinal compartment, which, by the way, is the same basic approach that has yielded positive clinical results in the ocular compartment with our dry AMD program. Similar to operogen, we manufacture our spinal cord cells at a CGMP facility which we own and control, rather than outsourcing this difficult work to a CDMO.

Speaker Change: Maybe dovetailing off of the last question around <unk> I wanted to ask about the ability to access that capital when the IMD is cleared.

Speaker Change: Are those correct set out on a rolling basis, and how quickly could you potentially.

Speaker Change: Excess of firm capital.

Speaker Change: To run the dose study and then I have one follow up as well.

Jill Howe: Yeah, Jack, I'm happy to address that question, but I think there will be a little bit of a delay, certainly in just the timing of us being able to submit that grant. So CIRM has come out recently talking about the massive amount of influx and applications they've received, so they've had to slow down their process a little bit. So we certainly are involved in that process, but I do believe we've had great communications with CIRM behind the scenes, we continue to manage that relationship, and they're aware that we are in this conundrum, if you will, with the FDA to be able to submit, and I think it's all very positive for us to move forward. And again, it's not a lump sum that will be coming, you know; it will be gradual over time as we work through the trial, if that's helpful at all.

Speaker Change: Yes, Jack I'm happy to address that question is that I think there will be a little bit of a delay certainly in just the timing of us being able to submit that grant. This service come out recently with talking about the <unk>.

Speaker Change: Also the amount of influx.

Speaker Change: Applications, they've received so they've had to slow down their process a little bit. So we certainly are collected in that process.

Brian Culley: We've collected and published as long as 10 years of safety and efficacy data on our SCI patients and believed the adjustments we've made recently to increase the purity and scale of our cells will further improve the quality and commercial profile, which we've already demonstrated for this program. And in addition to improving the material we transplant, we're simultaneously investigating superior ways to deliver our cells to patients. As we finalize the information package for FDA, which will support our new manufacturing process, our most immediate objective to the OPC-1 program is to improve upon the delivery system.

Speaker Change: I do believe we've had great communications with third behind the scenes, we continue with managing that relationship and they are aware that we're in this conundrum has evolved with the FDA to be able to submit and I think it's all very positive for us to move forward.

Speaker Change: And again, it's not a lump sum that will be coming in it will be gradual over time as we work through the trial.

Speaker Change: Helpful at all.

Jack Allen: Got it, that's very helpful. And then I also wanted to touch on one of the comments made by Brian about the service agreement. I understand there are a lot of confidentiality issues as it relates to that agreement, but I think you mentioned that they're extending the follow-up period for the Phase I-II patients by five years. I guess, any context around when that follow-up period was set to sunset and how we should think about the extension for an additional five years in the context of the agreement being signed?

Speaker Change: Got it that's very helpful. And then I also wanted to touch on one of the comments made by Brian around the service agreement I understand there's a lot of confidence.

Speaker Change: What are the issues as it relates to that agreement, but I think you'd mentioned that theyre extending the.

Brian Culley: The original system used in previous studies was adequate, but not optimized for that purpose. We have licensed rights to and have developed for our intended use, a novel delivery system called MyPSD, which can administer OPC-1 to the spinal pharynchema in both chronic and subacute SCI patients. This offers several advantages over the original device, including the ability to maintain patient respiration while the cells are being delivered. We believe MyPSD will offer a safer and easier to use solution for this therapy.

Speaker Change: Follow up period for the phase one two patients by five years I guess any comments around when that follow up period was set to sunset and how we should think about that expansion for an additional five years.

Todd: Thanks Todd.

Brian Culley: Well, the original study had a five-year follow-up period, five years post-administration. And because the patients were enrolled at different points, of course, each person had a different five-year follow-up. There have been, as you can imagine, been a long time, a number of patients that have fallen off the study, but there are some other patients who have remained on study. I can only speculate about why Genentech was interested in following up those patients for an extended period.

Speaker Change: The original study had a five year follow up period.

Speaker Change: Post administration and because the patients were enrolled at different points of course, each person had a different five year follow up.

Brian Culley: We have filed an I&D amendment with the FDA, which, when cleared by FDA, would allow us to initiate our plan study to evaluate the safety and performance of this novel delivery device. As I reported on a prior earnings call, the FDA advised us to expect a delayed process for review of our I&DA due to their significant workload and conflicting pedoopal priorities. As a promising sign, we nevertheless have received a number of information requests from the FDA, and we promptly submitted our responses to those requests.

Speaker Change: There have been as you can imagine since it's been a long time, a number of patients that have fallen off study, but there are some other patients who have remained on study.

Speaker Change: I can only speculate about why genentech is interested in following up those patients for an extended period.

Brian Culley: My belief.., is, and this belief is based upon the kinds of investor questions that I get, my belief is that everybody would like to know how long this therapy lasts. And so if you have people who received it five years ago and they may be continuing to enjoy an increase in vision, or their vision may be stabilized, or perhaps they're losing vision, we haven't said anything beyond 24 months, but the fundamental question of how long does this treatment last is really important, to the value proposition, you know, are patients going to, is the product profile akin to gene therapy, which would be one time and done, which would be extremely attractive compared to the monthly treatment of the competing drugs that are out there?

Speaker Change: My belief.

Speaker Change: Is it in.

Speaker Change: This belief is based upon the kinds of investor questions that I get my belief is that everybody would like to know how long. This therapy lasts and so if you have people who received it five years ago and they may be continuing to enjoy an increase in vision or their vision, maybe stabilized or perhaps.

Brian Culley: In response to our most recent requests for further information, the FDA advised in early July that their review was complicated by the requirement of Intercenter Review, specifically SEBER and CDRH, and they were unable to provide a timeline for completion of their review, but that they were working to the best of their ability to deliver response to us as soon as possible. Fortunately, we heard this week from the Project Manager that a call with the FDA review team is being arranged with us, so we're hopeful to have a positive update soon.

Speaker Change: They're losing vision, we haven't said anything beyond 24 months, but the fundamental question of how long does this treatment last is really important.

Speaker Change: Two the value proposition.

Speaker Change: Are patients going to is the product profile.

Speaker Change: <unk>, two gene therapy, which would be one time and done with.

Speaker Change: It would be extremely attractive compared to the monthly treatment of the competing drugs that are out there is it more a therapy that maybe last two or three years, but I actually still think that that's a hell of a lot more attractive than 'twenty four injections into your eye ball, but I think that these are questions that.

Brian Culley: Is it more therapy that maybe lasts two or three years? I actually still think that that's a hell of a lot more attractive than 24 injections into your eyeball, but I think that these are questions that, as usual, they do include safety components, but I would presume that the greater level of interest here is that you have a set of patients that have a long history. If they are continuing to benefit, you'd like to see how long that benefit is lasting.

Brian Culley: I will add that we do not believe there are any unusual aspects to our I&DA, especially considering that we're proposing to evaluate an externally positioned device with a therapy that already has been tested in 30 patients. And in fact, we have heard from a number of external advisors, both from the regulatory and legal fields, that other cell and gene therapy sponsors have been experiencing these kinds of delays in the FDA's review process as a result of a heavy workload.

Speaker Change: As usual they do include safety components, but I would presume that the greater level of interest here is that you have a set of patients that have a long history, if they're continuing to benefit you'd like to see how long that benefit is lasting but again I have to emphasize that that is Brian speculation and that.

Brian Culley: But again, I have to emphasize that that is Brian's speculation and that no part of the intent of following the patients for an additional five years is included in the service agreement itself, only the continued monitoring of those patients. Thank you so much, and maybe just one more question, if I may.

Brian Culley: Code. So, while that is unfortunate, we have, in the meantime, been conducting a number of customary trial preparations to support opening the first clinical study site, something which we continue to target as soon as feasible, pending receipt of FDA's feedback. And we also, concurrently, are working on resubmitting our SIRM grant application to support the dose study. We continue to be very excited about the possibility of significantly reducing the cost of that trial via the SIRM CLIN2 grant, but the timing of our submission is contingent on receipt of FDA clearance of our INDA.

Speaker Change: No part of the intent of following the patients for an additional five years is included in the service agreement itself only the continued monitoring of those patients.

Jack Allen: God, thank you so much, and maybe just one more if I may, um, I know they announced that it's I don't see that many thoughts you have around. The study of three-year data, as it writes in the chronology, a follow-up in the study. Specifically, on the additional five...

Speaker Change: Got it and maybe just one more if I may.

Speaker Change: They announced.

Speaker Change: Okay.

Speaker Change: Any thoughts you have around.

Speaker Change: Three year data is it right to the Corelogic falloff in that study and then just.

Speaker Change: On the on the additional five years.

Speaker Change: Eric.

Brian Culley: So, while we wait for FDA's clearance, we will take advantage of this additional time to continuously improve the application and give it the best chance of success. I'll also add that an unintended benefit of FDA taking a long time for its review is that we have not assumed many of the projected expenses associated with initiating this trial. So, we end up in a better than expected cash position for the period, which Jill can talk about in her section.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: I don't want it.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Was that.

Speaker Change: Do you have any sense.

Jack Allen: Jack, I'm going to, I'm going to have to let you know that I did sort out the first question. You were very broken up there.

Speaker Change: Okay.

Speaker Change: Jack I'm going to I'm going to have to let you know that I did.

Speaker Change: Did sort out the first question, you're very broken up there I can restate. Your first question I believe you were asking about any guidance as to when 30, when or whether 36 month data from the phase one study could be available.

Brian Culley: I can restate your first question. I believe you were asking for any guidance as to when 30, when or whether 36-month data from the Phase 1 study could be available. No, that data presumably exists, but as has been the case since we entered into the agreement, the ultimate decision as to when and how such data is disclosed is a decision that's largely controlled by Roche and Genentech. However, based on their past behavior, which has been very supportive of disclosing Oprigen data, I would presume that at some point, that data would become available, and I'm hopeful that that would be the case. With respect to the second question, I'll give you an opportunity, in case the line has stabilized here, see if you can ask the second question again, and I'd be happy to answer it.

Brian Culley: The last two things I'd like to mention today is a reminder that we have very exciting preclinical programs in both sensoronuria hearing loss and in an as yet undisclosed indication with our gene editing partner, ETERNA. The hearing loss program, ANP-1, is a cell transplant comprised of a population of auditory neuronal cells delivered to the inner ear to replace the cells which have become dysfunctional due to damage or degeneration. The manufacturing process for ANP-1 has been built upon the same platform as the oxygen program, which allowed us to accelerate its development and move rapidly into preclinical animal testing, and in fact, a functional test in an animal model is currently underway.

Speaker Change: No that data presumably exists.

Speaker Change: But as it has been the case since we entered into the agreement.

Speaker Change: The ultimate decision as to when and how such data is disclosed is decision that.

Speaker Change: Largely controlled by Roche and Genentech.

Speaker Change: However.

Speaker Change: Based on their past behavior, which has been very supportive of disclosing opportune data I would presume that at some point that data would become available and I'm hopeful that what would be the case.

Speaker Change: With respect to the second question I'll give you an opportunity in case. The line has stabilized here see if I can ask the second question again and I'd be happy to answer it.

Brian Culley: In parallel, the manufacturing team wanted to highlight some of their recent accomplishments and are planning to present preliminary data at a scientific conference next month. I learned yesterday that the abstract for that data was accepted, so we will provide those details soon, which is something we can all look forward to. I also want to add that the ANP-1 product candidate was created from investments we made in our in-house R&D team. It is an entirely home-grown program, which was not licensed from an academic lab and did not involve any external financial support or require any technology licenses.

Jack Allen: Hey, Brian, I appreciate that you were able to catch the first question. I don't know if you can hear me more clearly now. Yes, sir. Okay.

Speaker Change: Hey, Brian I appreciate that.

Brian Culley: We're able to catch the first question I don't know if you can hear me more clearly now.

Brian Culley: Yes, Sir.

Brian Culley: I just wanted to touch really briefly on the additional five years in the service agreement. It seems like it was in addition to the five original years. My understanding is that the FDA has typically looked at 15 years of follow-up for novel cell and gene therapies. Do you have any thoughts around the choice of maybe 10 here as opposed to 15, or was 15 in the discussion as well?

Brian Culley: Okay.

Speaker Change: I just wanted to touch real briefly on the additional five years and the service agreement. It seems like it was in addition to five original years my understanding that the FDA has typically looked at 15 years of follow up for novel cell and gene therapies.

Speaker Change: Do you have any thoughts around the choice of maybe 10 here as opposed to 15 or was <unk> 15 in the discussion as well.

Brian Culley: And my recollection is that it's been a moving target for FDA. I hope I'm not incorrect in this assumption, but certainly, when this study was put in place, five years was the agreed-upon protocol that was cleared by FDA, and of course, we have annual safety reports that we provide to FDA. So we, had we still been independently managing the program, presumably we would have concluded it at five years, and that would have been sufficient.

Speaker Change: And my recollection is that it's been a moving target for F. D. A.

Speaker Change: If I'm not incorrect in this assumption, but certainly when this study was put in place five years was the agreed upon protocol that was cleared by FDA and of course, we have annual safety reports that we provide to the FDA. So we.

Brian Culley: Being able to design, and then in some cases, own nearly 100 percent of a pipeline program, is an underappreciated advantage, which we have created, from our experience and capabilities with directed differentiation and process development. While there is abundant attention on operagen today, and for good reasons, I don't want us to lose sight of the long-term value which our development engine could create for this company. For this reason, we are continuing to grow our pipeline and engage in partnership discussions, which align with this strategy.

Speaker Change: Had we still been independently managing the program, presumably we would have concluded at five years and that would have been sufficient.

Speaker Change: So there was two to our knowledge there was no change in the regulation and a requirement to follow patients longer although I have seen 15 years, certainly with some gene therapies and I have seen some other companies that have.

Brian Culley: So, to our knowledge, there was no change in the regulation and a requirement to follow patients longer, although I have seen 15 years, certainly with some gene therapies, and I have seen some other companies that have electively done longer follow-up. So it cannot be written off as a possibility, but it is not, to our knowledge, specifically applicable to this program, which FDA had blessed and let us conduct and, I presume, would have been fine to have concluded after five years. I got it.

Brian Culley: The ongoing efforts to generate a high pool of immune cell line with our gene-editing partner Eternut continues to make progress, and we look forward later this year to announcing an initiative we started an entirely new indication.

Speaker Change: Electively done longer follow up so it cannot be written off as a possibility, but it is not to our knowledge specifically applicable to this program, which are FDA had blessed and let us conduct and I presume would have been fine to have concluded after five years.

Brian Culley: So to wrap up, I will offer three things investors may want to watch for in the coming period. The first is to monitor for any further updates, indications, or other information on operagen coming from either us or our partners. The second is us receiving a clear path forward from FDA to initiate the safety study of the new OPC-1 delivery device and to apply for the SIRM clinical grant. And the third would be an update on the AMP-1 program for sensory neural hearing loss which as I update in just today is expected next month.

Jack Allen: Got it. Thanks so much for taking the questions and congratulations again on the progress.

Speaker Change: Got it thanks, so much for taking the questions and congratulations again on the progress.

Jack: Thank you Jack.

Speaker Change: Okay.

Operator: Our next question comes from the line of Michael Okunewitch with Maxim Group. Please go ahead.

Michael <unk>: Our next question comes from the line of Michael <unk> with Maxim Group. Please go ahead.

Michael Okunewitch: Hey, Brian, thank you so much for taking my questions today. I guess... Just to take it in the context of your comments at the top of the call, are there any plans to move some of the preclinical programs like AMP1 into functional models of hearing loss or IND-enabling studies in the near term, or should we expect the focus to remain on careful spend on OPC1 until market conditions start to improve for microcap biotech and small-cap biotech?

Michael: Hey, Brian. Thank you so much for taking my questions today.

Michael:

Speaker Change: I guess.

Speaker Change: Just to take taken in the context of your comments at the top of the call.

Jill Howe: With that, I will turn things over to Jill for a review of our financials. Thanks, Brian, and good afternoon, everyone. I reported cash, cash equivalent, and marketable security of $38.5 million as of June 30, 2024. He's expected to support plant operations in QQ4 2025. Now, this extension of our cash runway may be further than you might have expected. However, as the delay we are experiencing with the escalation of the dose trial, along with other smart cost-making measures which have extended our current runway.

Speaker Change: Any plans to move.

Speaker Change: Some of the preclinical programs like A&P wanted a functional model of hearing loss or IND, enabling studies in the near term or should we expect the focus to remain on careful spend on OTC, one until market conditions start to improve for microcap biotech and small cap biotech.

Brian Culley: Thank you, Michael. You've asked one of my favorite questions, because...

Speaker Change: But thank you Michael asked one of my favorite questions because.

Brian Culley: I like to think of the answer this way: there is an efficient frontier of spending, an efficient frontier of investment, which is going to change depending on the macroeconomic environment, the availability of capital, and the cost of that capital. So there are extremes where you bunker, do nothing, and wait, but that is not efficient. And there are extremes where you overspend, hope for better days, and you're wrong, and you essentially ruin the company. And I won't name names, but my goodness, there's evidence of that over the last few years clearly.

Speaker Change: I like to think of the I'd like to think of the answer. This way there is an efficient frontier of spending an efficient frontier of investment.

Jill Howe: Next, I will review our second quarter operating results. Our revenue is generated primarily from collaboration revenues and royalties. Total revenues were approximately 1.4 million, a net decrease of 1.8 million as compared to 3.2 million for the same period in 2023. The decrease is primarily driven by lower collaboration and licensing revenues, recognized from deferred revenues under the collaboration and license agreement with disruption.

Michael: Which is going to change depending on the macroeconomic environment the availability of capital the cost of the of that capital. So there there are extremes, where you bunker do nothing and wait but that is not efficient and there are extremes, where you overspend hope for better days.

Jill Howe: Our operating expenses are comprised of research and development expenses and general and administrative expenses. Total operating expenses were 7.3 million, a decrease of 0.9 million as compared to 8.2 million for the same period in 2023. R&D expenses were 2.9 million, a net decrease of 1 million as compared to 3.9 million for the same period in 2023. The net decrease is primarily driven by 0.6 million for our OPC-1 program and 0.3 million for our preclinical programs.

Speaker Change: And you're wrong and you essentially ruined the company and I won't name names, but my goodness, there's evidence of that over the last few years clearly.

Brian Culley: What we are trying to do, which I believe is the most efficient way to create value for Lineage and the platform we have, is to essentially make modest but impactful investments in early-stage programs to have a larger pipeline while waiting for the Oprogen program to generate additional data and conviction for the markets. Because my belief system here is that when Oprogen is finally appreciated for what it can do for patients, the value of this company will look very different, and thus, the capital that we would use to move into early clinical trials, which are, of course, much more expensive than animal studies, would be raised at much more affordable prices. So the real answer to your question is that both are occurring.

Michael: What we are trying to do which I believe is the most efficient way to create value for lineage and the platform we have.

Michael: Is to essentially make.

Jill Howe: GNA expenses were 4.3 million, a net increase of approximately 0.1 million as compared to 4.2 million for the same period in 2023. The increase is primarily driven by stock-based compensation expenses and personnel costs. Laws from operations were 5.9 million and increase of 0.9 million as compared to 5 million for the same period in 2023. Other income and expenses reflect other income of 0.1 million as compared to other expenses of 0.2 million for the same period in 2023.

Michael: Modest, but impactful investments in early stage programs to have a larger pipeline, while waiting for the opportune program to generate additional data and conviction for the markets because my belief system here.

Michael: Is that when <unk> is finally appreciated for what it can do for patients that the value of this company will look very different and thus the capital that we would use to move into early clinical trials, which of course are much more expensive than animal studies would be raised at much more affordable prices. So the.

Jill Howe: The change was primarily driven by exchange rate fluctuations related to our international subsidiaries, fair market value changes in marketable equity securities, and interest income earned within our money market accounts. Our net loss of 5.8 million or 3 cents per share compared to a net loss of 5.2 million or 3 cents per share for the same period in 2023.

Speaker Change: The answer to your question is that both are occurring we are making very smart very prudent investments in the pipeline for a affordable investments in areas, where we can capitalize on having duplication such as using the manufacturing platform of opera Gen on other programs.

Michael Okunewitch: We are making very smart, very prudent investments in the pipeline, very affordable investments in areas where we can capitalize on having duplications, such as using the manufacturing platform of Oprogen on other programs. We have been investing in a knowledge database about where the best opportunities for cell transplantation can occur, which is very difficult and laborious work, but it's also very affordable information, and it sets you up for success later. And not being tempted to rush aggressively into trials that we're not ready for or we cannot reasonably afford, especially in an environment that's not giving companies credit for it.

Michael: <unk>, we have been investing in.

Jill Howe: We continue to uphold our commitment to fiscal discipline, and we are confident that this approach will continue to support our plans of achieving pivotal milestones in generating shareholder values through our ongoing investment in our programs. Now I will hand the call back to Brian. Thanks, Jill.

Michael: Our knowledge database about where the best opportunities for cell transplantation can occur, which is very difficult and laborious work, but it's also very affordable information and it sets you up for success later and not being tempted to rush aggressively into trials that were not.

Brian Culley: So to briefly summarize three key points for today one, we recognize the continued challenges of the macro situation, and we're taking the appropriate measures to cope with those challenges. 2nd, we continue to be extremely happy with our recently expanded alliance with Roshan Genentech reflected by the operative data update that was provided in May, the new service agreement we entered into also in May as well as the additional site opening which I disclosed today.

Michael: Ready for or we cannot reasonably afford especially in an environment, that's not giving companies credit for it so whether people agree or not that we have selected the right place and the efficient frontier our philosophy for long term growth of this company and to become a dominant entity in this new <unk>.

Michael Okunewitch: So whether people agree or not that we've selected the right place in the efficient frontier, our philosophy for long-term growth of this company and to become a dominant entity in this new frontier of medicine is to benefit from the success of Oprogen in the study that is being run right now and to use that success as the lever to move these early stage seeds forward and harvest them either through internal ownership or through partnerships in the future. That is our business,

Brian Culley: All right, thank you for that. And then, just a quick follow-up. I wanted to see if you could provide any more color on what sort of data the manufacturing group is planning to present.

Michael: Frontier of medicine.

Michael: Is to benefit from the success of <unk> in the study that is being run right now and to use that success as the lever to move these early stage seeds forward and harvest them either through internal ownership or through partnerships in the future that is our business.

Brian Culley: And third, what we unfortunately aren't able to predict how much longer the review of our INDA will take, we are taking steps to hit the ground running with the initiation of the DOES study and the submission of a SIRM grant to provide financial support for that clinical study.

Operator: I appreciate your attention today and with that operator, we are ready to take any analyst questions.

Speaker Change: Alright, Thank you for that and then.

Speaker Change: One more just quick follow up I wanted to see if you could provide any more color on what sort of data the manufacturing group is planning to present.

Operator: Hello, our question and answer session begins now.

Kevin Kuo: Our first question begins, comes from the line of Mayank Mamtani with BeReilly. Please go ahead. This is Kevin Kuo on the call for Mayank. Thanks for taking our question and congrats on the progress. So I really appreciate the information on the collaboration with Roshan and understood that you cannot control the timing of it.

Michael: Yeah.

Brian Culley: I haven't seen the deck, but the abstract was just approved yesterday, so I can say, as a general matter, I've seen some really wonderful work on things like scale, purity, the kinetics of identity markers, and so forth. The functional animal model for ANP1, which is ongoing, would not be part of that update. But, of course, that is a fascinating and really important piece of data that we are working on generating. So at some point, we will aim to have that information available. But I think you can expect for the ANP1 update next month that it will look a lot more like process development data rather than activity data in an animal model.

Speaker Change: I haven't seen the deck.

Speaker Change: The the abstract was just approved yesterday.

Speaker Change: So I can say as a general matter I've seen some really wonderful work on things like scale purity, the kinetics of identity markers and so forth.

Speaker Change: The functional animal model for A&P, one, which is ongoing would not be part of that update but of course that is a fascinating and really important piece of data that we are working on generating so at some point, we will aim to have that information available.

Brian Culley: But just wondering if you can maybe provide more color on how the new service agreement has enhanced the partnership maybe on manufacturing scale, like any updates so far regarding support, your development of commercial manufacturing that would be very helpful. Thank you. I appreciate the question. Thank you.

Speaker Change: But I think you can expect for the.

Speaker Change: A&P one update next month that it will look a lot more like process development data rather than act.

Speaker Change: Activity data in an animal model.

Brian Culley: Similar to the original license agreement that we entered into, there are limits to what I am able to share with respect to the services agreement. That said, reading between the lines, I think there are some positive signs that can be taken from it. The most obvious one is that it was entered into after what we believe is a period of time that permits Genentech to form an opinion on the international structure tend to occur very quickly, certainly within 90 days, sometimes even just in a few days.

Michael Okunewitch: All right. Well, thank you very much for taking my questions today, Brian, and congratulations on the progress. I appreciate that, Michael. Thank you.

Speaker Change: Alright, well. Thank you very much for taking my questions today, Brian and congrats on the progress.

Brian Culley: I appreciate that Michael; thank you also.

Speaker Change: I appreciate that Michael Thank you also.

Brian Culley: That concludes our question and answer session. I will now turn the call back over to CEO Brian Culley for closing remarks. Thank you.

Brian <unk>: That concludes our question and answer session I will now turn the call back over to CEO, Brian <unk> for closing remarks.

Brian Culley: Thank you, RV. There's nothing more to add. I appreciate everyone's time today and thank you very much. We'll look forward to being with you next time.

Harvey: Thank you Harvey.

Brian Culley: Nothing more to add I appreciate everyone's time today and thank you very much we'll look forward to being with you next time.

Speaker Change: Okay.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

Speaker Change: Ladies and gentlemen, that's been good they call. Thank you all for joining you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Brian Culley: And so we are hopeful that the willingness and enthusiasm for an expanded agreement is indicative of enthusiasm for the program. But again, I must iterate that I don't have specific knowledge of that. It is just an interpretation.

Speaker Change: Yeah.

Brian Culley: But one of the component parts of that service agreement, as I mentioned in my prepared remarks, is a follow-up, a long five-year follow-up from the patients, an additional five-year follow-up from the patients that we enrolled in the Phase 1-2-A. So again, without specific knowledge, my view of that is that a partner being interested in following Phase 1 patients for an additional five years is consistent with enthusiasm and interest in a program rather than a lack of interest or lack of enthusiasm.

Brian Culley: There are, of course, expenses associated with the service agreement, so it's not just linear providing services out of goodwill, but we are compensated for such services. So I'm encouraged by the additional investment that has also occurred.

Brian Culley: There were also in that service agreement some additional support that we provide in the manufacturing side of things as you may or may not be where Lineage continues to be the manufacturer of clinical material for the operation currently. However, the plan, and this was the plan from the beginning, is that Roche and Genentech would receive technology transfer training from Lineage until such time as they could complete their own manufacturing of clinical material and then subsequent to that commercial material.

Brian Culley: So it continues to be the plan of both companies that Roche and Genentech will be the commercial manufacturer of this product but as you probably can appreciate technology transfer is a very long process and this process that we have developed over many years is not easily mimicked from just reading a batch record. There is personal one-on-one training that is required in order to be able to conduct it correctly which is a great barrier to entry for us with respect to others but it also means that tech transfer can take a while especially at the level of quality that you would expect for a commercial viable product.

Brian Culley: So hopefully that does as much as I can to answer your question while remaining within the bounds of confidentiality that I am beholden to. Yes, thank you.

Gil Pantginis: So our next question comes from the line of Gil Pantginis with H.C. Wainwright. Please go ahead. Hey everybody, good afternoon. Thanks for taking the questions.

Brian Culley: So first I'm not going to talk about potential data around opergen but I want to do I guess also take a little foray into confidentiality and I wanted to focus on potential milestone payments and first is your current cash guidance which is fantastic by the way. Taking into account future milestone payments from Roach and do you have any at least at the minimum directional guidance with regard to I'm assuming you know once phase two data start to roll out there might be some cash associated with that.

Brian Culley: So two parts I'll do the second part first. So the second part is no we are not able to disclose the triggers for the milestones. The only information we've been able to disclose is A that there are 620 million dollars of milestone dollars for which we are eligible and then B we have previously said and I will repeat today that it's not a particularly unusual deal. It's not a you know absurdly backloaded deal.

Brian Culley: There are milestones, payments and eligibility that would be meaningful to this company in a medium and shorter term. So it's not an unusual deal I would characterize it as a very normal looking deal but as you can appreciate it is typical for big pharma to not want to disclose all of the various triggers and amounts because that information can be used by other people they're negotiating with and so you know we will just have to work hard as we are to meet those milestones and then they will appear on the balance sheet and then you'll become aware of Yeah, wonderful.

Jill Howe: And, Joel, I'll add to that, the initial question you had around the current runway, including milestones, and no, we don't actually have those baked into that current runway. And I think speaks to how we think about being thoughtful and conservative with our cash and our cash investments and making sure we really have a holistic understanding of being able to continue through this tough environment. No, that's great to hear, thanks.

Brian Culley: And then, if I could just switch over to OPC-1 for a little bit, I guess, looking forward to the start of the study, I guess, what kind of activities can you describe, specifically around, say, you know, patient identification and screening and processing, and even if there's a backlog of patients that you'd be able to use to attract for the study. Sure, I can address some of that. There are a lot of activities that you are able to conduct, conduct, if a site is willing, you know, training and familiarity with the program, discussion about protocols and implementation.

Brian Culley: The boundary condition is when you, typically, when you involve a patient. So if you do not have an open I&D, you don't have all of the regulations and protections in place for patient safety and information flow, you really aren't able to cross that line. So you can think of this as sort of, you're in a non-solicitation zone. So you can get ready, but you really can't initiate the gameplay, active gameplay until you have all of the contracts and documentation in place.

Brian Culley: So there are some things that we can do to get ready, and there are some things that we are prohibited from doing. But there is something that we hypothesized many months ago about this study, and that hypothesis was that it would be easier to identify patients that have a chronic injury, then patients that have a subacute injury, because the subacute treatment window is between 21 and 42 days. So you need an event to occur in order to have an eligible jibble patient, whereas a patient with a chronic injury who maybe had that injury a year ago or two years ago or three years ago, may or may not be under active physical therapy, but certainly exists on a list somewhere there, as under a physician's care.

Brian Culley: Those people would be easier to identify. Those questions have been asked specifically of the sites, and we've received encouraging information that our hypothesis would be correct, and that once we are, in fact, permitted to initiate patient outreach, that it would be relatively straightforward. But I would also add to that, that we of course intend to implement the various sort of social media website and targeted type campaigns through the relationships that we've built with the Spinal Accord Committee over the last few years to help support our outreach efforts and identify interested patients.

Brian Culley: Because of course, it's a small study, and the faster we can get it completed, the better, especially in light of the fact that it is a safety study with a primary outcome measure at 30 days. So we don't have to wait two years to see how a patient is doing. We will collect that information, but that is not the information that the study was designed to generate. The study was simply designed to generate data that support using my PSD in much larger campaigns later.

Brian Culley: That's extremely helpful, Brian, and if I could just ask one logistical question, and I appreciate your indulgence, logistically speaking for your SIRM grant, and of course a few pieces have to come into play like you said to INDS to be approved, etc. Are you looking for a potential range of money that you could be awarded, and what is the general, I know you alluded to this a little bit, what is the general or potential offset for the cost of the studies, like proportionally.

Brian Culley: Yeah, we are disclosing what our ask is in the grant. It's based upon a very detailed budget that gets built, and there's all sorts of assumptions and milestones, but if you were to go to the SIRM website and dig deeply, you'd probably find that typically around half of the cost of a study can end up being covered through a SIRM grant. So we're talking about meaningful amounts. This is not like low single million dollars, like these are meaningful offsets, and I love to add the point that I feel that SIRM grants reflect or represent some of the most attractive cost of capital because the obligations to share in the upside of the program come at commercialization and are extremely reasonable.

Brian Culley: So I love this as a way to help pay for this study because it's a large amount of capital that can be available and can be granted to companies like ours, and the hook that it comes with in terms of some repayment is really affordable relative to almost anything else that we could imagine. So we're hopeful and eager that we will be successful in our grant efforts, and I think that the profile of OPC-1 and its prior success in receiving capital from SIRM is going to put us in a very good position with respect to receiving that capital.

Brian Culley: Thank you for all the details. I appreciate those questions, Jill.

Operator: Thank you.

Jack Allen: Our next question comes from the line of Jack Allen with Breyer. Please go ahead. Great.

Jack Allen: Thanks so much for taking the questions and congratulations on the progress. Maybe dubtelling off of the last question around SIRM. I wanted to ask about the ability to access that capital when the IND is cleared. Are those grants taken on a rolling basis and how quickly could you potentially access the SIRM capital to run the dose study? And then I have one follow up as well. Yeah, Jack, I'm happy to address that question.

Jack Allen: So I think there will be a little bit of a delay, certainly in just the timing of us being able to submit that grant. The SIRM has come out recently with talking about the massive amount of influx and applications they've received, so they've had to slow down their process a little bit. So, you know, we've certainly are collected in that process, but I do believe we've had great communications with SIRM behind the scenes.

Jack Allen: We continue with managing that relationship, and they're aware that we are in this commendium with Ebola with the FDA to be able to submit, and I think it's all very positive for us to move forward. The SIRM has come out, and I think it's all very positive for us to move forward. And again, it's not a lump sum that will be coming, you know, it will be gradual over time as we work through the trial if that's helpful at all. Got it.

Jack Allen: That's very helpful.

Jack Allen: And then I also wanted to touch on one of the comments made by Brian around the serious agreement. I understand there's a lot of confidentiality issues as it relates to that agreement. But I think you mentioned that they're extending the follow-up period for the phase one, two patients by five years.

Brian Culley: I guess any context around when that follow-up period was set to sunset, and how we should think about the expansion per an additional five years in the context of the agreement being signed. Well, the original study had a five-year follow-up period, five-year post administration. And because the patients were enrolled at different points, of course, each person had a different five-year follow-up. There have been, as you can imagine, since it's been a long time, a number of patients that have fallen off study, but there are some other patients who have remained on study.

Brian Culley: I can only speculate about why Genentech was interested in following up those patients for an extended period. My belief is, and this belief is based upon the kinds of investor questions that I get. My belief is that everybody would like to know how long this therapy lasts. And so if you have people who received it five years ago, and they may be continuing to enjoy an increase in vision, or their vision may be stabilized, or perhaps they're losing vision, we haven't said anything beyond 24 months.

Brian Culley: But the fundamental question of how long does this treatment last is really important to the value proposition. Are patients going to, is the product profile akin to gene therapy, which would be one time and done, which would be extremely attractive compared to the monthly treatment of the competing drugs that are out there? Is it more therapy that maybe lasts two or three years? I actually still think that that's held a lot more attractive than 24 injections into your eyeball, but I think that these are questions that, as usual, they do include safety components, but I would presume that the greater level of interest here is that you have a set of patients that have a long history. If they are continuing to benefit, you'd like to see how long that benefit is lasting.

Brian Culley: But again, I have to emphasize that that is Brian's speculation and that no part of the intent of following the patients for an additional five years is included in the service agreement itself, only the continued monitoring of those patients.

Jack Allen: God, thank you so much.

Jack Allen: Or maybe just one more if I may. I know they announced that it's two days. I believe it means all two have three or three years data as it writes to the chronology of follow-up in the study. And then just typically on the additional five years or ten years. I'm keeping this up. I don't want to use it.

Brian Culley: Jack, I'm going to have to let you know that I did sort out the first question. You were very broken up there. I can restate your first question. I believe you were asking about any guidance as to when or whether 36-month data from the Phase I study could be available. Know that data presumably exists, but as it has been the case since we entered into the agreement, the ultimate decision as to when and how such data is disclosed is a decision that's largely controlled by Russian Genentech. However, based on their past behavior, which has been very supportive of disclosing operative data, I would presume that at some point that data would become available and I'm hopeful that would be the case.

Brian Culley: With respect to the second question, I'll give you an opportunity in case the line has stabilized here so you can ask the second question again and I'd be happy to answer it. Hey, Brian, I appreciate that you were able to catch the first question. I don't know if you can hear me more clearly now. Yes, sir. Okay, I just wanted to touch real briefly on the additional five years in the service agreement.

Brian Culley: It seems like it was in addition to five original years. My understanding that the FDA has typically looked at 15 years of follow-up for novel cell and gene therapies. Do you have any thoughts around that the choice of maybe 10 here as opposed to 15 or was 15 in the discussion as well? And my recollection is that it's been a moving target for FDA. I hope I'm not incorrect in this assumption, but certainly when this study was put in place five years was the agreed-upon protocol that was cleared by FDA.

Brian Culley: And of course, we have annual safety reports that we provide to the FDA. So we had we still been independently managing the program. Presumably, we would have concluded at five years and that would have been sufficient. So there was to our knowledge, there was no change in the regulation and a requirement to follow patients longer. Although I have seen 15 years certainly with some gene therapies and I have seen some other companies that have collectively done longer follow-up.

Brian Culley: So it cannot be written off as a possibility, but it is not to our knowledge specifically applicable to this program which FDA had blessed and let us conduct and I presume would have been fine to have concluded after five years.

Jack Allen: Got it. Thanks so much for taking the questions and congratulations again on the progress. Thank you, Jack.

Michael Konowicz: Our next question comes from the line of Michael Konowicz with Maxine Group. Please go ahead. Ryan, thank you so much for taking my questions today.

Michael Konowicz: I guess just to take taking in the context of your comments at the top of the call, are there any plans to move some of the preclinical programs like AMP1 and the functional model of hearing law or I&D enabling studies in the near term or should we expect the focus to remain on careful spend on OPC-1 until you know market commissions start to improve for microcap biotech and small cap biotech. Thank you, Michael.

Michael Konowicz: You've asked one of my favorite questions because I like to think of the answer this way. There is an efficient frontier of spending, an efficient frontier of investment, which is going to change depending on the macroeconomic environment, the availability of capital, the cost of that capital. There are extremes where you bunker do nothing and wait, but that is not efficient. There are extremes where you overspend hope for better days and you're wrong and you essentially ruin the company.

Michael Konowicz: I won't name names, but my goodness, there's evidence of that over the last few years clearly. What we are trying to do, which I believe is the most efficient way to create value for lineage and the platform we have is to essentially make modest but impactful investments in early-stage programs to have a larger pipeline while waiting for the operation program to generate additional data and conviction for the markets because my belief system here is that when operagen is finally appreciated for what it can do for patients, that the value of this company will look very different and thus the capital that we would use to move into early clinical trials, which of course are much more expensive than animal studies, would be raised at much more affordable prices.

Michael Konowicz: The real answer to your question is that both are occurring. We are making very smart, very prudent investments in the pipeline, very affordable investments in areas where we can capitalize on having duplications such as using the manufacturing platform of operagen on other programs. We have been investing in a knowledge database about where the best opportunities for cell transplantation can occur, which is very difficult and laborious work, but it's also very affordable information and it sets you up for success later and not being tempted to rush aggressively into trials that we're not ready for or we cannot reasonably afford, especially in an environment that's not giving companies credit for it.

Michael Konowicz: Whether people agree or not that we've selected the right place in the efficient frontier, our philosophy for long-term growth of this company and to become a dominant entity in this new frontier of medicine is to benefit from the success of operagen in the study that is being run right now and to use that success as the lever to move these early stage seeds forward and harvest them either through internal ownership or through partnerships in the future. That is our business. All right, thank you for that.

Brian Culley: Then one more just quick follow-up. I wanted to see if you could provide any more color on what sort of data the manufacturing group is planning to present. I haven't seen the deck. The abstract was just approved yesterday, so I can say as a general matter, I've seen some really wonderful work on things like scale purity, the kinetics of identity markers and so forth. The functional animal model for ANP1, which is ongoing, would not be part of that update, but of course that is a fascinating and really important piece of data that we are working on generating, so at some point we will aim to have that information available, but I think you can expect for the ANP1 update next month that it'll look a lot more like process development data, rather than activity data in an animal model.

Michael Konowicz: Alright, well thank you very much for taking my questions today Brian, I can grab some the progress. I appreciate that Michael, thank you also.

Operator: Let's conclude our question and answer session.

Brian Culley: I will now turn the call back over to CVO, Brian Coley for closing remarks. Thank you RV, nothing more to add, I appreciate everyone's time today and thank you very much, we'll look forward to being with you next time.

Operator: Yeah, this is Angel Man, that's the end of today's call, thank you all for joining, you