Lineage Cell Therapeutics, Inc. [LCTX] Filings

10-Q 1 lctx-20240930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

     
☒

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ________

Commission file number 001-12830

Lineage Cell Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

    California

    94-3127919

    (State or other jurisdiction of
incorporation or organization)

    (IRS Employer
Identification No.)

2173 Salk Avenue, Suite 200

Carlsbad, California 92008

(Address of principal executive offices) (Zip code)

(Registrant’s telephone number, including area code) (442) 287-8990

Securities registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol	Name of exchange on which registered
Common shares	LCTX	NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of common shares outstanding as of November 8, 2024 was 188,837,375.

Lineage Cell Therapeutics, Inc.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	5
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Changes in Shareholders' Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to the Condensed Consolidated Interim Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Result of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38
Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION	39
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures		41

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. The forward-looking statements are contained principally in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report, but are also contained elsewhere in this report. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this report are forward-looking statements. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. Forward-looking statements in this report include, but are not limited to, statements about:

•

the potential to receive developmental, regulatory, and commercialization milestone and royalty payments under our Collaboration and License Agreement with F. Hoffmann-La Roche Ltd and Genentech, Inc.;

•

our plans to research, develop and commercialize our product candidates;

•

the initiation, progress, success, cost and timing of our clinical trials and other product development activities;

•

the therapeutic potential of our product candidates, and the indications for which we intend to develop our product candidates;

•

our ability to successfully manufacture our product candidates for clinical development and, if approved, for commercialization, and the timing and costs of such manufacture;

•

the potential of our cell therapy platform;

•

our ability to obtain additional capital to fund our operations;

•

our expectations and plans regarding existing and potential future collaborations with third parties such as pharmaceutical and biotechnology companies, government agencies, academic laboratories, and research institutes for the discovery, development, and/or commercialization of novel cell therapy products;

•

the size and growth of the potential markets for our product candidates and our ability to serve those markets;

•

the potential scope and value of our intellectual property rights; and

•

the effects on our operations of the Israel-Hamas war and broader regional conflict, other geopolitical conflicts, political and economic instability, public health emergencies and macroeconomic conditions.

Forward-looking statements reflect our views and expectations as of the date of this report about future events and our future performance and condition, and involve known and unknown risks, uncertainties and other factors that may cause our actual activities, performance, results or condition to be materially different from those expressed or implied by the forward-looking statements. You should refer to “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 10-K”) as filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2024, for a discussion of important factors that may cause our actual activities, performance, results and condition to differ materially from those expressed or implied by our forward-looking statements. As a result of a variety of factors, including those discussed in Part I, Item 1A of the 2023 10-K, our forward-looking statements may prove to be inaccurate, and the inaccuracy may be material. Accordingly, you should not place undue reliance on any forward-looking statement. We anticipate that subsequent events and developments may cause our current views and expectations to change. However, while we may elect to update the forward-looking statements in this report at some point in the future, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date after the date of this report.

You should read this report completely and with the understanding that our actual future performance, results and condition may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

MARKET DATA AND TRADEMARKS

This report may also contain market data, industry forecasts and other data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.

All brand names or trademarks appearing in this report are the property of their respective owners. Solely for convenience, the trademarks and trade names in this report are referred to without the symbols ® and TM, but such references should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

******

Unless otherwise stated or the context requires otherwise, references in this report to “Lineage,” the “Company,” “our company,” “we,” “us,” and “our” refer collectively to Lineage Cell Therapeutics, Inc. and its consolidated subsidiaries.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

(UNAUDITED)


	September 30, 2024			December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	27,750		$	35,442
Marketable securities		4,961			50
Accounts receivable, net		405			745
Prepaid expenses and other current assets		1,285			2,204
Total current assets		34,401			38,441

NONCURRENT ASSETS
Property and equipment, net		2,013			2,245
Operating lease right-of-use assets		2,362			2,522
Deposits and other long-term assets		606			577
Goodwill		10,672			10,672
Intangible assets, net		46,540			46,562
TOTAL ASSETS	$	96,594		$	101,019

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	4,477		$	6,270
Operating lease liabilities, current portion		1,083			830
Finance lease liabilities, current portion		54			52
Deferred revenues, current portion		8,250			10,808
Total current liabilities		13,864			17,960

LONG-TERM LIABILITIES
Deferred tax liability		273			273
Deferred revenues, net of current portion		16,050			18,693
Operating lease liabilities, net of current portion		1,533			1,979
Finance lease liabilities, net of current portion		80			91
TOTAL LIABILITIES		31,800			38,996

Commitments and contingencies (Note 13)

SHAREHOLDERS’ EQUITY
Preferred shares, no par value, 2,000 shares authorized; none issued and outstanding as of September 30, 2024 and December 31, 2023		—			—
Common shares, no par value, 450,000 shares authorized as of September 30, 2024 and December 31, 2023; 188,837 and 174,987 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		469,268			451,343
Accumulated other comprehensive loss		(2,890	)		(3,068	)
Accumulated deficit		(400,192	)		(384,856	)
Lineage's shareholders’ equity		66,186			63,419
Noncontrolling deficit		(1,392	)		(1,396	)
Total shareholders’ equity		64,794			62,023
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	96,594		$	101,019

See accompanying notes to the condensed consolidated interim financial statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
REVENUES:
Collaboration revenues	$	3,386		$	957		$	5,671		$	5,949
Royalties, license and other revenues		393			289			960			908
Total revenues		3,779			1,246			6,631			6,857

OPERATING EXPENSES:
Cost of sales		38			169			180			415
Research and development		3,171			3,741			9,049			11,799
General and administrative		4,410			4,041			13,770			13,014
Total operating expenses		7,619			7,951			22,999			25,228
Loss from operations		(3,840	)		(6,705	)		(16,368	)		(18,371	)

OTHER INCOME (EXPENSES):
Interest income		397			433			1,322			1,225
Loss on marketable equity securities, net		(6	)		(60	)		(21	)		(170	)
Foreign currency transaction gain (loss), net		448			(827	)		(284	)		(1,796	)
Other income (expense)		—			1			19			544
Total other income (expenses)		839			(453	)		1,036			(197	)

LOSS BEFORE INCOME TAXES		(3,001	)		(7,158	)		(15,332	)		(18,568	)

Provision for income tax benefit		—			—			—			1,803

NET LOSS		(3,001	)		(7,158	)		(15,332	)		(16,765	)

Net (income) loss attributable to noncontrolling interest		(33	)		48			(4	)		54

NET LOSS ATTRIBUTABLE TO LINEAGE	$	(3,034	)	$	(7,110	)	$	(15,336	)	$	(16,711	)

Net loss per common share attributable to Lineage basic and diluted	$	(0.02	)	$	(0.04	)	$	(0.08	)	$	(0.10	)

Weighted-average common shares used to compute basic and diluted net loss per common share		188,835			174,868			186,860			171,880

See accompanying notes to the condensed consolidated interim financial statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(IN THOUSANDS)

(UNAUDITED)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
NET LOSS	$	(3,001	)	$	(7,158	)	$	(15,332	)	$	(16,765	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment		(432	)		518			173			1,337
Unrealized gain on marketable debt securities		12			9			5			150
COMPREHENSIVE LOSS		(3,421	)		(6,631	)		(15,154	)		(15,278	)
Less: Comprehensive (income) loss attributable to noncontrolling interest		(33	)		48			(4	)		54
COMPREHENSIVE LOSS ATTRIBUTABLE TO LINEAGE COMMON SHAREHOLDERS	$	(3,454	)	$	(6,583	)	$	(15,158	)	$	(15,224	)

See accompanying notes to the condensed consolidated interim financial statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(IN THOUSANDS)

(UNAUDITED)


Three Months Ended September 30, 2024
											Accumulated
											Other			Total
	Common Shares				Accumulated			Noncontrolling			Comprehensive			Shareholders’
	Shares		Amount		Deficit			Deficit			Income / (Loss)			Equity
BALANCE - June 30, 2024		188,824	$	467,928	$	(397,158	)	$	(1,425	)	$	(2,470	)	$	66,875
Shares issued upon exercise of stock options		13		10		—			—			—			10
Stock-based compensation		—		1,330		—			—			—			1,330
Unrealized gain on marketable debt securities		—		—		—			—			12			12
Foreign currency translation adjustment		—		—		—			—			(432	)		(432	)
Net loss		—		—		(3,034	)		33			—			(3,001	)
BALANCE - September 30, 2024		188,837	$	469,268	$	(400,192	)	$	(1,392	)	$	(2,890	)	$	64,794


Three Months Ended September 30, 2023
												Accumulated
												Other			Total
	Common Shares					Accumulated			Noncontrolling			Comprehensive			Shareholders’
	Shares		Amount			Deficit			Deficit			Income / (Loss)			Equity
BALANCE - June 30, 2023		174,439	$	448,249		$	(372,971	)	$	(1,409	)	$	(2,611	)	$	71,258
Shares issued through ATM		538		784			—			—			—			784
Financing related fees		—		(28	)		—			—			—			(28	)
Shares issued upon exercise of stock options		10		8			—			—			—			8
Stock-based compensation		—		1,269			—			—			—			1,269
Unrealized gain on marketable debt securities		—		—			—			—			9			9
Foreign currency translation adjustment		—		—			—			—			518			518
Net loss		—		—			(7,110	)		(48	)		—			(7,158	)
BALANCE - September 30, 2023		174,987	$	450,282		$	(380,081	)	$	(1,457	)	$	(2,084	)	$	66,660

See accompanying notes to the condensed consolidated interim financial statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CONTINUED)

(IN THOUSANDS)

(UNAUDITED)


Nine Months Ended September 30, 2024
												Accumulated
												Other			Total
	Common Shares					Accumulated			Noncontrolling			Comprehensive			Shareholders’
	Shares		Amount			Deficit			Deficit			Income / (Loss)			Equity
BALANCE - December 31, 2023		174,987	$	451,343		$	(384,856	)	$	(1,396	)	$	(3,068	)	$	62,023
Shares issued through registered direct financing		13,462		14,000			—			—			—			14,000
Shares issued through ATM		56		70			—			—			—			70
Financing related fees		—		(113	)		—			—			—			(113	)
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		45		(23	)		—			—			—			(23	)
Shares issued upon exercise of stock options		287		229			—			—			—			229
Stock-based compensation		—		3,762			—			—			—			3,762
Unrealized gain on marketable debt securities		—		—			—			—			5			5
Foreign currency translation adjustment		—		—			—			—			173			173
Net loss		—		—			(15,336	)		4			—			(15,332	)
BALANCE - September 30, 2024		188,837	$	469,268		$	(400,192	)	$	(1,392	)	$	(2,890	)	$	64,794


Nine Months Ended September 30, 2023
												Accumulated
												Other			Total
	Common Shares					Accumulated			Noncontrolling			Comprehensive			Shareholders’
	Shares		Amount			Deficit			Deficit			Income / (Loss)			Equity
BALANCE - December 31, 2022		170,093	$	440,280		$	(363,370	)	$	(1,403	)	$	(3,571	)	$	71,936
Shares issued through ATM		4,775		6,625			—			—			—			6,625
Financing related fees		—		(221	)		—			—			—			(221	)
Shares issued upon vesting of restricted stock units, net of shares retired to pay employees’ taxes		53		(37	)		—			—			—			(37	)
Shares issued upon exercise of stock options		66		55			—			—			—			55
Stock-based compensation		—		3,580			—			—			—			3,580
Unrealized gain on marketable debt securities		—		—			—			—			150			150
Foreign currency translation adjustment		—		—			—			—			1,337			1,337
Net loss		—		—			(16,711	)		(54	)		—			(16,765	)
BALANCE - September 30, 2023		174,987	$	450,282		$	(380,081	)	$	(1,457	)	$	(2,084	)	$	66,660

See accompanying notes to the condensed consolidated interim financial statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)


	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Lineage	$	(15,336	)	$	(16,711	)
Net loss attributable to noncontrolling interest		4			(54	)
Adjustments to reconcile net loss attributable to Lineage Cell Therapeutics, Inc. to net cash used in operating activities:
Loss on marketable equity securities, net		21			170
Accretion of income on marketable debt securities		(184	)		(647	)
Depreciation and amortization expense		436			419
Change in right-of-use assets and liabilities		(31	)		86
Amortization of intangible assets		22			98
Stock-based compensation		3,762			3,580
Deferred income tax benefit		—			(1,803	)
Foreign currency remeasurement and other loss		309			1,892
Changes in operating assets and liabilities:
Accounts receivable		339			(141	)
Prepaid expenses and other current assets		891			56
Accounts payable and accrued liabilities		(1,778	)		(3,456	)
Deferred revenue		(5,201	)		(6,036	)
Net cash used in operating activities		(16,746	)		(22,547	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of marketable equity securities		18			196
Purchases of marketable debt securities		(8,761	)		(16,403	)
Maturities of marketable debt securities		4,000			53,497
Purchase of equipment		(200	)		(583	)
Net cash (used in) provided by investing activities		(4,943	)		36,707

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from employee options exercised		229			88
Common shares received and retired for employee taxes paid		(23	)		(37	)
Proceeds from sale of common shares		14,070			6,625
Payments for offering costs		(113	)		(199	)
Repayment of finance lease liabilities		(40	)		(41	)
Net cash provided by financing activities		14,123			6,436
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(120	)		(532	)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(7,686	)		20,064

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
At beginning of the period		35,992			11,936
At end of the period	$	28,306		$	32,000

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	6		$	8

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Property and equipment expenditures in accounts payable	$	11		$	8

Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents	$	27,750		$	31,474
Restricted cash included in deposits and other long-term assets (see Note 13 (Commitments and Contingencies))		556			526
Total cash, cash equivalents, and restricted cash	$	28,306		$	32,000

See accompanying notes to the condensed consolidated interim financial statements.

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization and Business Overview

We are a clinical-stage biotechnology company developing novel allogeneic, or “off-the-shelf”, cell therapies to address unmet medical needs. Our programs are based on our proprietary, cell-based technology platform, and associated development, formulation, delivery and manufacturing capabilities. From this platform, we design, develop, manufacture, and test specialized human cells with anatomical and physiological functions similar or identical to cells found naturally in the human body. The cells we manufacture are created by applying directed differentiation protocols to established, well-characterized, and self-renewing pluripotent cell lines. These protocols generate cells with characteristics associated with specific and desired developmental lineages. Cells derived from such lineages which are relevant to the underlying condition are transplanted into patients in an effort to (a) replace or support cells that are absent or dysfunctional due to degenerative disease, aging, or traumatic injury, and (b) restore or augment the patient’s functional activity.

Our business strategy is to efficiently leverage our technology platform and our development and manufacturing capabilities to advance our programs internally or in conjunction with strategic partners to further enhance their value and probability of success.

A significant area of focus is a collaboration we entered into with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (collectively or individually, “Roche” or “Genentech”), under which our lead cell therapy program known as OpRegen®, is being developed for the treatment of ocular disorders, including geographic atrophy (“GA”) secondary to age-related macular degeneration (“AMD”). OpRegen (also known as RG6501) is a suspension of human allogeneic retinal pigmented epithelial (“RPE”) cells and is currently being evaluated in a Phase 2a multicenter clinical trial in patients with GA secondary to AMD. OpRegen subretinal delivery has the potential to counteract RPE cell loss in areas of GA lesions by supporting retinal cell health and improving retinal structure and function. Under the terms of the Collaboration and License Agreement we entered into with Roche in December 2021 (the “Roche Agreement”), we received a $50.0 million upfront payment in January 2022 and are eligible to receive up to an additional $620.0 million in developmental, regulatory, and commercialization milestone payments. We also are eligible to receive tiered, double-digit-percentage royalties on net sales of OpRegen in the U.S. and other major markets. On May 7, 2024, we entered into a service agreement with Genentech pursuant to which we will provide supplemental clinical, technical, training, manufacturing, and procurement services to support the ongoing advancement and optimization of the OpRegen program. In September 2024, Roche and Genentech announced receipt of Regenerative Medicine Advanced Therapy (“RMAT”) designation from the U.S. Food and Drug Administration (“FDA”) for OpRegen for the treatment of GA secondary to dry AMD.

Our most advanced unpartnered product candidate is OPC1, an allogeneic oligodendrocyte progenitor cell therapy designed to improve recovery following a spinal cord injury (“SCI”). OPC1 has been tested in two clinical trials to date: a five patient Phase 1 clinical trial in acute thoracic SCI, where all subjects are followed for at least 10 years; and a 25 patient Phase 1/2a multicenter clinical trial in subacute cervical SCI, where all subjects were evaluated for at least two years. Results from both studies have been published in the Journal of Neurosurgery Spine. OPC1 clinical development has been supported in part by a $14.3 million grant from the California Institute for Regenerative Medicine (“CIRM”). We plan to apply for additional funding from CIRM for continued clinical development of OPC1 for the treatment of SCI. In December 2023, we filed an Investigational New Drug (“IND”) amendment for OPC1 as it relates to our proposed DOSED (Delivery of Oligodendrocyte Progenitor Cells for Spinal Cord Injury: Evaluation of a Novel Device) clinical study, to evaluate the safety and utility of a novel spinal cord delivery device to administer OPC1 to the spinal parenchyma in subacute and chronic SCI patients. In March 2024, we received written correspondence from the FDA, advising us that due to significant workload and conflicting PDUFA priorities at the agency, its review of our IND amendment and the DOSED study protocol is still ongoing. Since that time we have been engaging with the FDA to aid in their review, including through an informal teleconference meeting with the CBER and CDRH divisions of the FDA held on November 12, 2024. Based on that discussion we plan to submit an additional amendment to the IND and final protocol with clarifying information to the FDA by the end of the year. We currently anticipate that the FDA will complete its review of this amendment in Q1 2025 and we do not expect any further feedback or additional information requests that would delay start of the study. We currently plan to commence enrolling the DOSED study as soon as feasible after submitting these updates.

Our pipeline of allogeneic, or “off-the-shelf”, cell therapy programs currently includes:

•

RG6501 (OpRegen), an allogeneic RPE cell replacement therapy currently in a Phase 2a multicenter, open-label, single arm clinical trial, being conducted by Roche, for the treatment of GA secondary to AMD, also known as atrophic or dry AMD.

•

OPC1, an allogeneic oligodendrocyte progenitor cell therapy which we plan to evaluate in the DOSED clinical study, to test the safety and utility of a novel spinal cord delivery device in both subacute and chronic spinal cord injuries and

LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

continues to be evaluated in long-term follow-up from a Phase 1/2a multicenter clinical trial for subacute cervical spinal cord injuries.

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ANP1, an allogeneic auditory neuron progenitor cell transplant currently in preclinical development for the treatment of debilitating hearing loss.

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PNC1, an allogeneic photoreceptor cell transplant currently being developed for the treatment of vision loss due to photoreceptor dysfunction or damage.

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RND1, a novel, hypoimmune iPSCs line being developed in collaboration with Factor Bioscience Limited, as assignee from Eterna Therapeutics, Inc., which will be evaluated for differentiation into cell transplant product candidates for central nervous system diseases and other neurology indications.

Other Programs

We have additional undisclosed product candidates being considered for development and we may consider others which cover a range of therapeutic areas and unmet medical needs. Generally, these product candidates are based on the same platform technology and employ a similar, guided cell differentiation and transplant approach as most of the product candidates described above, but in some cases may also include genetic modifications designed to enhance efficacy and/or safety profiles.

In addition to seeking to create value for shareholders by developing product candidates and advancing those candidates through clinical development, we also may seek to create value from our intellectual property or related technologies and capabilities, through licensing collaborations and/or strategic transactions, such as our business development approach to our VAC dendritic cell therapy platform.

2. Basis of Presentation, Liquidity and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated interim financial statements were prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. In accordance with those rules and regulations, certain information and footnote disclosures normally included in comprehensive consolidated financial statements have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements at that date but does not include all the information