Lineage Cell Therapeutics, Inc. Q3 FY2022 Earnings Call

Welcome to the Lineage Cell Therapeutics Third Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagecell.com. This call is subject to copyright and is property of Lineage. Recordings, reproductions, or transmissions of this call without the express written consent of Lineage are strictly prohibited. As a reminder, today's call is being recorded. I would now like to introduce you to the host for today's call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.

Thank you, Jack. Good afternoon and thank you for joining us. A press release reporting our third quarter 2022 financial results was issued earlier today, November 10, 2022, and can be found on the Investors section of our website. Please note that today's remarks and responses to your questions reflect management's views as of today only and will contain forward-looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward-looking statements, which are subject to significant risks and uncertainties. The company's actual results or performance may differ materially from the expectations indicated by such forward-looking statements. For a discussion of certain factors that could cause the company's results or performance to differ, we refer you to the forward-looking statement sections in today's press release and in the company's SEC filings, including its most recent annual report on Form 10-K and its subsequent quarterly reports on Form 10-Q. We caution you not to place undue reliance on any forward-looking statements which speak only as of today and are qualified by the cautionary statements and risk factors described in our SEC filings. With us today are Brian Culley, our Chief Executive Officer and Interim Chief Financial Officer; and Gary Hogge, our Senior Vice President of Clinical and Medical Affairs. Brian will provide some prepared remarks and then he and Gary will be available for questions from analysts. With that, I'd like to turn the call over to Brian.

Thanks, Ioana, and good afternoon, everyone. We appreciate you joining us on the call today. I'd like to begin by welcoming Jill Howe as our new CFO. Jill is an experienced executive with a long track record of successful execution in capital raising, strategic financial management, corporate operations, and many other areas of finance and accounting. And we are fortunate to have someone with Jill's extensive background joining us at this time in the evolution of our company. Jill's first day will be November 14th, and you can expect her to join me on future earnings calls. Next, I want to begin with a few comments about the evolving landscape in dry AMD. As everyone on this call is aware, the most advanced program in our pipeline, OpRegen, is in RPE cell transplant designed to treat dry AMD with GA. Dry AMD is a disease that has attracted a lot of attention lately because there are currently no FDA approved therapies for it, but several large trials have read out with potentially approvable results. One competitor, in particular, is expected to maintain its late February PDUFA date for its complement inhibitor to treat dry AMD. There has been abundant speculation about whether their data will support approval. While much of the discussion around dry AMD is currently focused on complements, we believe OpRegen’s proposed product profile and the data we have collected to date are superior to that of any complement inhibitors. For this reason, I want to take some time today to discuss the possible approval or rejection of a complement inhibitor and the impact that decision might have on the value of the OpRegen program. I wouldn't ordinarily speak so directly about competitor data. But I've been receiving a lot of questions about complement inhibition lately and if slowing the growth of GA is going to be an approvable endpoint in this disease, Lineage belongs in those discussions. In the past year, two companies, in particular, have reported data indicating that inhibiting the complement pathway with monthly injections into the eye can slow the progression of GA by some relatively small amount. Even a small amount is notable because atrophic AMD is a progressive disease. And if left untreated, these areas of atrophy will continuously grow and eventually rob a person of their vision. Delaying the expansion of GA should therefore be viewed as a good outcome for patients. It would be an even better outcome if you could improve a patient's vision at the same time, but no company has shown that to be possible with this approach, which means that if a complement inhibitor is approved, that approval will largely be based on anatomical changes and, of course, acceptable safety. I believe an approval based on this endpoint, whether at 12, 18 or 24 months, would be a terrific outcome for patients and Lineage alike because the anatomical changes we have shown possible with an RPE transplant are far greater than anything we've seen reported to date with a complement inhibitor. Our effects can also be detected within just a few months rather than having to wait from 18 to 24 months or possibly longer to see some benefits. In some patients, we've seen an area of GA remain the same size for a year or longer or even become smaller than at baseline. While in comparison, the competition is left to justify a 20% or so reduction in growth as being clinically meaningful. To put that in perspective, if you assume a 10-square millimeter area of atrophy grows at the commonly referenced rate of 1.5 square millimeters per year, then that 10-millimeter lesion should become approximately 25 square millimeters after 10 years. And if you reduce its growth by about 20% per year, which is approximately what complement inhibitors currently offer based on data we've seen to date, then that GA would become 22 square millimeters after 10 years. Again, 25 and 22. So to really understand what this theoretical clinical impact I just described could mean, after this call, I encourage you to draw two concentric circles with areas of 22 and 25 units and look at the thin space between the perimeters of those circles. That narrow strip is the reduction of GA area you would anticipate after 10 years of therapy and up to 120 injections. It seems to us that that leaves a lot of room for improvement. So if the FDA sets a precedent next February that anatomical changes in the form of photoreceptor preservation are an acceptable endpoint for this disease, I believe OpRegen can ultimately dominate if it is approved. The impact we have demonstrated to date on the retina structure is far larger than what we have seen from the competition thus far. And our results have been achieved with a one-time surgery compared to having to comply with monthly or every other month injections. Now, it may instead be the case that the FDA will not accept anatomical changes as an acceptable endpoint in this condition. Perhaps the FDA will require a functional benefit such as improvement or stabilization of a patient's vision. To date, we have not seen statistically significant evidence that complement inhibition can stabilize or improve a patient's vision. In contrast, as reported by our partners, Roche and Genentech at ARVO earlier this year, all five patients in cohort 4, who received OpRegen across most all of their area of atrophy, including the fovea experienced an average of 12.8 letters of improvement in visual acuity at one year. And as Lineage previously reported, these gains have been demonstrated to be maintained for years. We understand this is a small patient population that we've treated, but it also is a disease for which there currently is no expectation of improvement. Patient vision should only get worse over time, not better. We also understand and acknowledge that BCVA assessments can be variable and larger studies are warranted. But we also believe that someone losing 40 letters in their untreated eye compared to losing only four letters of vision in their treated eye, which is an actual result we saw in one of our patients after three years, is at the least evocative for what is widely accepted to be an irreversible and progressive condition. Because data from hundreds of patients to date across multiple proteins in the complement pathway have failed to show a positive effect on vision, our view is that an FDA rejection on the basis of failing to demonstrate a functional benefit would presumably affect the entire class of complement inhibitors and leave OpRegen as one of only a handful of remaining viable approaches, seeking to address the significantly unmet medical need and commercial opportunity. So as I've outlined today, it appears to us that the regulatory decision on complement inhibition expected in February is a positive for Lineage no matter how it reads out. If either or both of our competitors receive approval, they will leave abundant room for improvement. As importantly, we believe we have selected the most capable partner to ensure OpRegen is developed in a way that can enjoy the considerable market opportunity presented by dry AMD, and we are enthusiastic about the continued and substantial efforts being made toward the initiation of its next clinical trial. It is a positive for patients that new therapies for dry AMD are gaining notoriety. And I'm excited that with the initiation of the next clinical trial of OpRegen, we expect to be more prominently included in those important conversations. Moving next to our two clinical stage assets in spinal cord injury and oncology, you will recall that the primary goal this year for each program has been to collect the data necessary to support their next regulatory interactions. That FDA feedback is critical because it will inform our next steps for each asset. For VAC2 we've already reached our primary goal and have submitted the pre-IND meeting package. We expect to receive a response from the FDA around the end of this year. We expect the feedback we receive to give us valuable insight into the IND which we plan to submit for that program next year, and which if cleared would permit us to run clinical studies of VAC2 in the U.S. Of particular importance to us is the FDA's view of the enhanced production process and analytical methods we propose to use to manufacture and characterize our clinical material. One of the reasons we acquired this program was that we believed our manufacturing team could improve on the dendritic cell production process, as they did successfully with improvements which they made to OpRegen and OPC1. I think they have been successful yet again, but affirmation of that view will need to be received from the FDA. Provided the FDA responds in their normal timeframe, I expect we will have some additional guidance on the timing of our planned IND filing for VAC2 in the next quarter. OPC1 for spinal cord injury similarly continues its journey toward its next regulatory interaction, which we expect will occur before the end of the year. For this program, we're planning to submit information to the FDA to support the use of a new delivery device, along with a protocol synopsis for a small safety study in both subacute and chronic patients. We still plan to initiate that trial next year, assuming the necessary clearances are received. And as a reminder, this would be the first time OPC1 cells have been administered to a patient with a chronic spinal cord injury. So that would be an exciting milestone for this program. We also continue to be in frequent contact with the California Institute for Regenerative Medicine regarding potential support for the OPC1 program, and we intend to apply for such support after completion of the 30-day waiting period following our planned IND amendment submission for OPC1. We also continue to engage in manufacturing and preclinical activities for our more recently disclosed cell transplant programs in hearing loss and vision disorders. Initial preclinical studies from our photoreceptor program are currently ongoing. And we have a major goal of initiating preclinical testing of our auditory neuron program prior to year-end. Speaking of auditory neurons, I next want to take a moment to highlight one of the important but possibly underappreciated differences between Lineage and many other companies with platform technologies. The hearing loss program I just mentioned didn't exist at Lineage a year ago. And yet, we're now on the cusp of starting preclinical animal testing. We've been able to make this progress while spending to date less than $1 million of our R&D budget on this program. That speed and return on our R&D investments are illustrative of the efficiency and versatility of the Lineage platform. We have the ability to advance from little more than a product concept, then develop new methods to generate intellectual property and execute on the manufacture of specific cell types, then proceed into preclinical testing in less than 12 months and with an investment of less than $1 million. This is possible largely because our targets are already validated. They are specific cell types performing defined tasks in the human body. And we know with certainty that the pluripotent cell lines, which we start with are by definition capable of differentiating into that desired cell. Our job is largely to figure out how to make that desired cell and to do so in a reproducible and scalable manner. That is very different from small molecule drug discovery, because with molecular approaches, you don't even know if your target is biologically relevant or whether your compound library has structures within it, which can lead to an agonist or antagonist effect. And even if you do find a hit with one of those structures, you may need to spend a tremendous amount of time and money on synthetic organic chemistry to generate a lead, which can then finally advance into animal testing, assuming it has drug-like characteristics which are suitable. As I've previously said, I think cell therapy can also have advantages over some kinds of gene therapy, because replacing the entire cell means you don't have to select for patients who carry a specific genetic defect. We think this offers cell therapy approaches larger addressable markets while matching the advantages of the one-and-done treatment schedule of gene therapy. There aren't many companies like Lineage. And as we continue to work to expand and improve our capabilities and if we successfully demonstrate those capabilities, I think it will become increasingly apparent that the Lineage platform has tremendous untapped potential. And our goal will be to unlock that value in the months and years ahead. Moving on, I want to highlight three near-term and program-specific objectives which I'd like you to be aware of. First, we have a Regenerative Medicine Advanced Therapy or RMAT submission to the FDA planned before year-end and regarding an OPC1 IND amendment, which is expected to enable clinical testing of the Neurgain spinal cord delivery system. Second, responses from the FDA are expected around year-end to our recently submitted pre-IND information package, which should provide clarity on a CMC non-clinical and clinical package to support the clinical development of VAC2 in the U.S. And third, completion of an R&D manufacturing process sufficient to support preclinical testing and the initiation of such testing of our ANP1 program for the treatment of hearing loss, a milestone which is also anticipated prior to year-end. We, of course, have additional activities ongoing, but these three items in particular will provide important regulatory and spending clarity in the near term and advance our programs further along their respective development paths. Overall, our efforts at this time remain primarily focused in two areas. One, conducting our share of the OpRegen development activities under our agreement with Roche and Genentech, which includes continued support for its clinical development and manufacture. And two, we will also be working to advance our internal programs ever closer to their respective milestones, some of which I just outlined in detail. Importantly, I believe the company is well capitalized to conduct these activities which I will address further in the financial section. Beginning with our balance sheet, I believe we continue to be efficient with our spending and are well capitalized to conduct the near-term activities which I described a moment ago. Longer term, based on current operational plans, we have approximately two years of runway as of the end of Q3, and that does not account for any of the Roche and Genentech milestones which we may receive in the next two years, nor for any business development or grant revenues which we may receive in the same period. Our reported cash, cash equivalents, and marketable securities at the end of Q3 totaled approximately $66 million. While our normalized net operational spending for the year will likely come in below $30 million. Total revenues recorded for the third quarter were approximately $3 million, a net increase of $0.7 million, representing an increase of over 32% compared to the same period in 2021. The increase was driven primarily by license fees in connection with the Roche collaboration agreement and reflecting our share of collaboration responsibilities. The largest portion of the activity attributed to this revenue was OpRegen manufacturing costs, but also included personnel, materials, and clinical consulting expenses. As you may recall, we received the $50 million upfront payment from Roche this year on a cash basis. But on a GAAP basis, we are recognizing that $50 million over time, using an input method of costs incurred over total estimated costs to complete our performance obligations. The accounting recognition for the Roche upfront payment generally resembles a percentage of completion methodology, but may vary from quarter to quarter depending on the current period collaboration spending and any updates to the collaboration budget. Total operating expenses for the third quarter were approximately $8 million, a decrease of approximately $0.1 million compared to the same period in 2021. Although our total operating expenses were largely flat year-over-year, our research and development costs increased by $0.8 million, mostly related to increased manufacturing costs for OpRegen. The increase in our research and development costs was offset by a $0.9 million decrease in general and administrative costs due to lower legal and litigation-related expenses. The net loss attributable to Lineage for the third quarter was $6.1 million or $0.04 per share. As we often pause to say at this point in the call, it's important to remember that the variance between our loss from operations and our overall net loss is impacted by changes in the value of our investments, as well as by foreign currency exchange rate fluctuations related to our international subsidiaries. Additionally, this quarter, we recorded a tax expense related to intercompany transactions which was partially offset by interest income we recorded from our new investments in marketable debt securities. While these non-operational fluctuations are important, we tend to utilize loss from operations as a more relevant measurement of our spending in regard to our clinical programs. Overall, we intend to maintain the same spending discipline that we have adhered to for years and which has served us well in the past. Today, notwithstanding the biotech markets continue to face uncertainty, we believe that maintaining discipline with our spending alongside our existing cash balance puts us in a good position to reach meaningful milestones and create value for shareholders from our investments in our programs. Our guiding principle at Lineage continues to be to advance the emerging technology of cell transplantation and demonstrate the potential for cell transplants to become clinically and commercially successful medicines. We believe we have not only generated evocative data from our current clinical programs, poignantly demonstrated by our $670 million biobucks partnership with Roche and Genentech, but also have the opportunity to create meaningful value from our newer and earlier stage initiatives. We have made significant investments in and improvements to areas such as production, scale, purity, and the delivery of our differentiated cells, which overall, we believe is a proven path to creating best-in-class products for end users and strong competitive advantages over the long term. We are also working hard to identify and execute on measures which may reduce cell therapy developmental timelines, which we believe is a new area of opportunity in what is still a young field. To conclude, we are confident that our corporate alliances and diverse product portfolio offer investors an attractive opportunity to participate in the growing field of cell therapy. We sincerely appreciate your support of the company as we continue to position Lineage to become a leader in cell therapy and cell transplant medicine. And with that, operator, we are ready to respond to any analyst questions. Thank you.

Jack Allen with Baird.

This is Ben on for Jack Allen. We have a few questions. First off, where are you in the regulatory process as it relates to getting approval for the use of the novel delivery device for the OPC1 program in spinal cord injury? And then moving forward, what are the plans as it relates to advancing this program? How quickly do you expect to enroll patients? And then how quickly do you think you could move this into a pivotal study?

I think we'll both answer that question. Ben, thank you for that. Gary, can you start with the regulatory process for the device?

Sure. So what we've done is we've interacted with the agency on a number of preclinical animal testing and proof of the device and intended safety and use. So we've initially provided our responses to their questions. They, in turn, have asked us additional questions. And we've gone about to complete those additional experiments and answers to their questions. And we'll again, as Brian said, submit those shortly.

Regarding the advancement of the spinal cord injury program, we have three significant steps to consider. First, we need to obtain clearance for the device, as it offers a superior method for delivering the cells. We have developed a new manufacturing process for these cells, which appears to be much better than the previous one. Therefore, we need to integrate the new cells and then conduct extensive trials to support our approval. When considering the timeline, three key factors come to mind: speed, quality, and probability of success. I believe we have a great opportunity to enhance our speed compared to our last study. For example, in the OpRegen program, it took about two years to enroll the first four patients, but only six weeks for the last four. This illustrates the improvements we have made in conducting and enrolling patients in trials. However, we will never prioritize speed at the expense of quality. While some may wish for us to move faster, we remain committed to maintaining high-quality standards. Regarding the third aspect, which involves Phase 3 studies or other comparative study designs required for approval, there isn’t currently a precedent for therapeutic interventions in spinal cord injury, so we don’t have clear guidelines. We will need to engage with the regulatory agency after completing some preliminary steps and discuss what they will require. I anticipate this will be a collaborative dialogue since I believe there is often a disconnect between the assessment tools commonly considered and what is truly important to patients suffering from these challenging spinal cord injuries.

And then just a quick follow up on GA. Could you maybe just frame again your thoughts regarding the read-through from your competitors' ongoing regulatory discussions to the OpRegen program, please?

Win-win. I won't go through everything but if anatomy is the basis for an approval, I think our anatomical data is better than anyone's. If functional improvement is required, well, we've demonstrated functional improvement. It's in small numbers, but we know that the complement inhibitors have not shown a functional benefit to patients. So I don't intend to be glib, but win-win.

And then just real quick, lastly. Obviously, recognizing that the program is driven by Roche, I wonder if you had any updated comments as to their plans to advance the OpRegen asset moving forward?

I am only able to direct you to several quarters now of revenue that we have recognized under the collaboration, which is obviously a reflection of the work that is being performed. Some of that has to do with the manufacturing, but there are other aspects of readiness that are ongoing. So, I'm able to characterize that we're very satisfied, very happy with the progress. But unfortunately, I'm not able to provide you today with any specificity as to when the next study would initiate. But you could expect that initiation would appear on the clinicaltrials.gov website. So that would be a good place where you'll be able to get some new information on that study when it becomes available.

Mayank Mamtani with B. Riley Securities.

This is William Wood on from Mayank Mamtani. Nice to see your continued progress here, Brian, just a couple of questions from us. So in regards to the OpRegen discussion that you've sort of put forth, I was curious what is your awareness on the FDA stance of thinking about newer, probably much more transformative modalities, especially if they recognize trial conduct could get challenging if these initial pretty marginal drugs are approved? And then additionally, also, could you provide some references of what a control arm could be in a GA study? And should we be looking at sort of more of a gene editing trial to think of it as an appropriate reference?

Thanks, William, for the question. With respect to trial conduct and sort of an appetite for new modalities, I don't have any different insight than most people on this call. What I do is read the same tealeaves around the FDA's commitment to guidance around selling gene therapy and their commitment to working with companies. So I think that as modalities change and become more prominent and ultimately become mainstream, if not dominant, that the agency has a history of adapting to that, even going back and looking at the history of somewhat of a transition from small molecules to antibodies. So we see that happening with gene therapy, we see that happening with cell therapy, and I expect that that would continue to occur and would have some pertinence to the ophthalmology setting for dry AMD as well, because clearly there are differences between injections or oral compounds and cellular transplants like ours.

Yes. I mean to add is again, we have Roche and Genentech addressing the next phase of development for OpRegen but certainly in our discussions with the therapeutic area experts and other regulatory consultants. We certainly believe that an untreated control arm, when we were considering moving the study forward, would make the most sense, was the most ethical and allow them to cross over then to treatment, providing the safety and efficacy profiles. So look the same. But again, those were plans that we had long ago and Genentech and Roche certainly have their own development pathway.

You have the new U.S. R&D facility and the expanded facility in Israel, which should help you enhance both your clinical and preclinical efforts, including the potential RPE manufacturing for the OpRegen program. I’m interested to hear how you plan to utilize those facilities, whether specifically for RPE manufacturing or more broadly in terms of how you intend to leverage these new facilities in the future.

It will evolve and be slightly different for each of them. So starting up a new laboratory is typically a slow process. So initially, you're just cleaning it and then you're equipping it and then you're staffing it before you can finally start to generate meaningful data from different programs in there. So you can expect that, that process, that normal process is one that we will be following in a stepwise manner. For RPE, which you specifically asked about, the base case is technology transfer to Roche and Genentech for them to be able to conduct the manufacturing. So, that is an area of considerable effort at this time because that is the intended outcome from the program that Roche and Genentech will be able to internalize the capabilities of manufacturing the cells from the line which we utilize and to do so in a commercial manner. And then more broadly, internalizing some R&D and being less reliant on vendors, I think is now more important than ever. This can not only help with obvious things like reducing costs and being able to have greater control, but you can find yourself availed of new intellectual property that maybe a vendor would not have come across, you can find yourself with greater flexibility around your timelines. And in this environment, it still is the case that supply chains are unpredictable. And in some of the aspects of what we do, you really can't hoard some of these reagents. Media has got an expiration date, growth factors and enzymes and proteins, they have expiration dates. You don't want mRNA sitting around for too long, even at very cold temperatures. So internalizing that gives us additional flexibility in order to control our supply chain and make sure that we are neither over-equipped and finding wastage of our inventory, nor having a situation where we are underprepared and can't initiate work because we don't have the right equipment or reagents in place. So three really big aspects of internalizing some of our R&D at this time.

Just a follow-up on that. It's my understanding, obviously, please correct me if I'm wrong, that Lineage will supply the OpRegen material through the end of Phase 2. And so I was curious if potentially this sort of scale out in R&D had potentially a correlation with a scale-up for RPE and/or if I'm just reading too much sort of into the tealeaves there?

No, I can see how those dots might seem connected. However, the facility we've established in San Diego is primarily meant to support our internal programs rather than the partnership with Roche and Genentech. The expansion in Israel is something we have been considering for some time. As you know, we currently have five programs disclosed. I wouldn't want you to think that the additional space we acquired in Israel, which is related to our existing facility, is connected in any significant way. It simply offers us more space to utilize across all our programs, but it is not directly tied to or indicative of anything specific regarding the OpRegen program.

Kristen Kluska with Cantor Fitzgerald.

Hi everyone. This is Rick on for Kristen. Thank you for taking our questions. Now that you are undertaking preclinical work for the photoreceptors program, how has the previous experience with preclinical characterization for OpRegen helped to expedite this process? And do you have anything you can say about when we may see preclinical data from the photoreceptor program?

I would say it is extremely valuable but challenging to articulate or quantify the advantages of our prior experience with the RPE program. The expertise we've gained in process development for directed differentiation translates to other programs, not just in ophthalmology, such as photoreceptors, but also in broader applications of directed differentiation and cellular fate control, along with the development of analytical methods to characterize our cells. When I mentioned at the end of my prepared remarks that we are exploring ways to accelerate timelines in cell therapy, you have picked up on one of those aspects—our team's experience with these methods enables us to move faster because we can leverage those insights for other programs. Regarding your second question about preclinical data, we provided a brief glimpse of some engraftment data when we first announced our work on photoreceptors. I cannot provide a specific timeline for when additional data will be shared, but the company has generally been transparent about this. Working with photoreceptors is challenging, and if we have information we are confident sharing publicly without competitive concerns, we will be eager to do so.

Michael Okunewitch with Maxim.

So I guess first off, I'd like to see if you could expand a bit on the broader opportunities for the auditory neuronal cells. I guess which condition actually involves the loss of those cells? For context, one of the reasons I'm asking is because of some of the activity we've seen in the auditory disease space, in particular, with really picking up its preclinical OTOF-targeting gene therapy company for, I think, $0.5 billion.

Thank you, Michael, for your question about our auditory neuron program. It's too early for me to specify a clear patient population at this stage. There are various causes of hearing loss, with aging being a significant factor. Other contributors can include exposure to loud sounds, concussive forces, and certain medications, particularly some chemotherapy drugs. Our plan is to explore multiple types of hearing loss in preclinical studies to better understand how to identify the right patient population. I am aware of Lilly's acquisition of Akouos, which I view as a very positive development for the field, considering the remarkable valuation of that company given its developmental stage. This creates a favorable environment for us to operate in this area. Additionally, I believe that cell therapy offers a broader potential for patient selection. Unlike some theories and hypotheses in the hearing loss domain that focus on the impairment of specific neurons and whether they need to be rescued or replaced, many gene therapy strategies face challenges by addressing a single gene product or deficiency. Our approach, in contrast, aims to replace the entire cell, which may enhance our ability to select appropriate patients for treatment. However, I want to emphasize that it would be premature and purely speculative for me to define a specific patient population at this moment. I remain hopeful that our preclinical studies will provide insights that guide us toward a more promising path for success.

And then I guess, one more question like to follow up on OpRegen. In particular, how you could see OpRegen being applied in a market where there are approved complement inhibitors? Could it be thought of as complements being used as almost a bridge to cell therapy because it might be viewed as a bit of a surgical procedure because it is a cell transplant? Or because it is that one-time injection, would you expect OpRegen could be the first thing that doctors will go for, and then possibly use complements as a maintenance therapy to prevent any further progression?

Thank you for the question. My preference is for OpRegen to serve as a permanent solution, allowing patients to discontinue complement inhibitors if they are using them, or providing a better option with a single surgery instead of regular injections. However, in the reality of commercial markets, it is likely that different therapies will be used in various combinations. If we assume that OpRegen leads to stabilization or improvement in vision, and this is documented in its product information, our sales representatives could effectively use that information to differentiate OpRegen from competitor therapies. This could strengthen our case over time as we monitor these patients, making OpRegen the most practical or preferred choice. Additionally, we need to consider conducting clinical trials in a shifting landscape of therapies, particularly regarding the use and adoption of complement inhibitors. Although you didn’t ask, I’d like to invite Gary to share his thoughts on how Roche and Genentech might still pursue large trials amid changes in the use of complement inhibitors.

We definitely need to consider the role of complement. It is efficient and beneficial for patients, but it doesn't negatively affect OpRegen. Physicians may use it in the early stages to reduce ongoing inflammatory effects, and then administer OpRegen afterward to enhance its chances of success. Alternatively, OpRegen might be used in earlier stage patients since we have observed benefits when the area of atrophy is less than in previous cohorts. Therefore, one scenario could involve using OpRegen early while complement is used in later stage patients. Additionally, it could be utilized in potential trial patients. Ultimately, this would depend on Genentech and Roche, but I don't believe it would restrict the pool of potential patients for the study.

There are no further questions at this time. I would now like to turn the call back to Brian Culley for final remarks.

Wonderful. Thanks, everyone, for joining us today. I hope this was helpful to you and we look forward to following up and continuing to make some great progress here at Lineage. Have a great afternoon.

This concludes today's call. We thank you for your participation. You may now disconnect.