Lineage Cell Therapeutics, Inc. (AMEX:LCTX) Q1 2026 Earnings Call Transcript

Lineage Cell Therapeutics, Inc. (AMEX:LCTX) Q1 2026 Earnings Call Transcript May 12, 2026

Lineage Cell Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.03 EPS, expectations were $-0.02.

Operator: Welcome to the Lineage Cell Therapeutics First Q 26 Conference Call. At this time, all participants are in a listen only mode. An audio webcast of this call is available on the Investors section of Lineage website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage Any recordings, reproductions, or transmissions of this call without the expressed written consent of Lineage are strictly prohibited. As a reminder, today’s call is being recorded. I would now like to introduce your host for today’s call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.

Ioana C. Hone: Thank you, Demi. Good afternoon, and thank you for joining us. A press release reporting our first quarter 26 financial results was issued earlier today, 05/12/2026, and can be found on the Investors section of our website. Please note that today’s remarks and responses to your questions reflect management’s views as of today only and will contain forward looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward looking statements. Which are subject to significant risks and uncertainties. The company’s actual results or performance may differ materially from the expectations indicated by such forward looking statements.

For a discussion of certain factors that could cause the company’s results or performance to differ, we refer you to the forward looking statements sections in today’s press release and in the company’s SEC filings including its most recent annual report on Form 10 and in the Form 10 Q filed today. 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 Jill Ann Howe, our Chief Financial Officer. I will now hand the call over to Brian.

Brian Culley: Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us today. We have a lot of great things to cover. I am going to try and keep it short so that we can have plenty of time for analyst questions. I do definitely want to highlight the successful expansion of AlloSCOPE, our proprietary cell manufacturing platform, most notably because it led to the launch of COR1, our new wholly owned corneal endothelial cell transplant program, We also successfully met our first internal milestone with our ILT1 manufacturing initiative and established a new scientific advisory board and attracted and recognized established cell therapy executive as its founding member. But before I share those and other updates, I will begin with the status of our lead clinical program, OpRegen.

Data we reported several years ago from the OpRegen Phase 1/2a clinical study included improved anatomy of the retina, halting or reversal of atrophic progression, and improved vision in patients with dry AMD. These are compelling data because they are not known to occur naturally in human beings. And since we made these initial reports, 2 additional and very important advancements have occurred in the field. The first of these is that 3 other companies have reported similar results with their own version of an RPE transplant. Independently providing further evidence in support of the mechanism and its treatment effects. The second is that Roche and Genentech’s long term analysis of our data show that vision gains persisted for at least 3 years following a single administration of cells among patients who receive those cells to the target location.

Taken together, these data appear to us to be consistent with continued forward progress of the OpRegen program. And while we await a decision on the future of the OpRegen program, I will note that while we have long believed that we may be seeing a potential functional cure for advanced Dry AMD in the OpRegen program. This month’s presentation by our partners Roche and Genentech is the first time that they have used similar language to describe OpRegen as a potentially disease modifying treatment. Obviously even discussing disease modification and geographic atrophy is exceptionally promising because dry AMD is a common condition that is not been shown to self resolve and only leads to worsening vision. So we find it notable that after adding only a single site in 2024, Genentech has now opened 11 new clinical sites starting in late 25, bringing the ongoing study to a total of 17 unique locations.

As I have explained on these calls before, we do not have a time frame to share when or whether a GAlette study data reveal and or a public commitment to a multicenter controlled trial may occur. But we continue to be confident in our partner’s commitment to the program. And we believe that the work that they are doing in the GAlette study to optimize surgical delivery will improve the product’s profile and is intended to increase its probability of regulatory and commercial success. Especially compared to the competition which appeared to us to still be in the early stages and not as advanced as we are in the necessary aspects of manufacturing or delivery. Overall, we believe our powerful quartet of scalable manufacturing, proprietary delivery tools, long term safety and efficacy data and a partnership providing world class commercial capabilities make us bullish on the potential for OpRegen to capture a significant portion of a multi billion dollar and still under-served GA market.

And because all of our programs have certain features in common, we believe we can bring the same kinds of attributes to other cell transplant programs, but even more quickly. Which should explain why we are eager to try and apply these learnings to other cell types. Because development of cell therapies is very different than that of small molecules, we needed first to invest in our manufacturing capabilities to enable development of these other cell types. And that is because in cell therapy, the process is the product. Even seemingly insignificant changes to a process can impact your products characteristics including its efficacy, you want to ensure that you have the right process in place before beginning clinical testing. Making those investments too late could be fatal to a program, analogous perhaps to changing the structure of a molecule.

Some companies may feel pressured to rush into clinical testing without a robust scalable manufacturing process and assume they can figure that part out later. We think that approach can create significant risks We are choosing instead to invest in commercially viable process development before launching clinical trials so that if we do demonstrate compelling clinical activity, we believe we can be much more confident that the product which led to that activity can continue through approval and eventual commercialization. Otherwise, you may be delaying an inevitable and potentially critical short coming. Which could cause you to go back to square 1 with the regulators. Fortunately, while manufacturing may sometimes be an underappreciated or even overlooked area of cell therapy, it is nonetheless an integral factor in a product’s success.

We believe we have made tremendous strides in this area. Our AlloSCOPE manufacturing platform utilizes a 2 tiered banking system in which a master cell bank generates a working cell bank which generates the clinical material. The production capability underlining this approach is easy to understand. A single vial from a master cell bank can generate an entirely new working cell bank and any vial from that working cell bank can generate the product. That means the amount of material you can mathematically generate is being multiplied at each step. So each step has a 100 vials, even just a 100 times a 100 times a 100 is a million vial production capability. And this is not a prophetic claim about large scale production. We have performed these individual steps multiple times.

And the final product from our banks has cleared the FDA requirements and been used in clinical testing. If we were to successfully perform these steps again and again using the full potential of our banks, we would produce many millions of vials of our product. Importantly, this kind of scale also means our cost per dose for a particular program can potentially be in the hundreds of dollars which we believe offers advantages in terms of patient access and affordability. And the potential for low cost scale is 1 of the reasons we are so excited about the allogeneic off the shelf product candidates in our pipeline. I will now turn my focus to how we apply our manufacturing success and lessons we have learned into our pipeline of cell based assets for other medical conditions that arise from the loss of critical cellular function.

OPC 1 is our second clinical stage program designed to increase mobility for people who have suffered from a spinal cord injury by delivering new and functional oligodendrocyte progenitor cells to the site of injury. 30 individuals in 2 Phase 1/2 safety trials and we believe the long term safety and efficacy data collected in those trials is both promising and worthy of further investigation. This is a program that was created before the advent of modern cell therapy technologies and required some improvements to both the production process and product delivery. We have previously reached our goals on the production process side. Generating new cell banks and producing a cleaner, potent and uniform product on a commercially viable platform in our in house GMP facility.

We also overcame a major deficit with accessibility by inventing and introducing a new patented thaw and inject formulation. Which we developed for and then borrowed from the OpRegen program. That material has undergone in vivo comparability testing and we expect to present that supporting data package to FDA later this year. With the intention of introducing those cells, those new cells, into the ongoing DOSED trial. DOSED is also running in parallel to provide a separate analysis, which is to evaluate the safety and performance of a novel and proprietary delivery system for OPC1. Our goal with the new device is to deliver the cells to the area of injury without stopping patient ventilation, something that was required in prior studies. Once the cells and device have been adequately tested, and a study design has been discussed with FDA, we expect we would be in a position to conduct a larger comparative study of OPC1 either alone or with a partner.

Notably, the ongoing study is the first time OPC1 has been administered to patients with chronic injuries, which are injuries that may have occurred as long as 5 years prior to treatment. We have treated 2 such patients to date, And because we will be collecting functional assessment on all patients, we have the opportunity to investigate any signals of efficacy that may arise. This is important because unlike subacute patients, most chronic patients have reached a performance plateau where further spontaneous improvements are considered unlikely and therefore any functional improvements they gain may be easier to detect. And chronic injuries also represent a new and larger potential patient population for this experimental therapy. Importantly, the first chronic SCI participant is coming up on their 1 year follow-up visit.

So we expect to be able to provide an update on how they are doing on our next earnings call. And while the possibility of a treatment effect in chronic patients is an exciting topic, I do not want us to lose sight of the point that the DOSED study is designed to demonstrate the safety and performance of the novel delivery device and to date that device has performed as expected with no unexpected procedure, product, or device related adverse events or significant design changes required. Dose also has recently been expanded to a second site, the Rancho Research Institute located in Downey, California, in conjunction with the Rancho Los Amigos National Rehab Center. We are honored to have Doctor. Charles Liu the principal investigator and his team involved with the OPC1 program.

Moving next to ReSonance. This is our first internally developed program using the modern technology available from the AlloSCOPE platform. This is an auditory neuronal cell transplant to treat hearing loss. Resonance was built from the beginning on our AlloSCOPE platform, it already has the features I discussed a few minutes ago. And last year, we announced a partnership for this program with William Demant Invest which is expected to fully fund the planned preclinical development plan leading to an IND filing. Resonance is an important example that showed we could conceive of and successfully manufacture a completely new cell based product candidate on our AlloSCOPE platform in a rapid and efficient way. From an initial investment of approximately $1 million, we generated new intellectual property and advanced resonance into preclinical testing in about 1 year.

The speed and success of that project then led to a partnership with Demant, a world leading hearing health care company which brought us access to specialized technology, auditory expertise, a network of hearing health leaders. As shared previously, DeMont also agreed to fund up to $12 million of preclinical activities leading to a first in human regulatory filing, a portion of which has already been spent in support of the project including as reimbursement to Lineage for our contributions. We believe this collaboration demonstrated the speed, efficiency, and value creation that the AlloSCOPE platform can provide as well as highlighting productive deal making. And we hope to repeat this success with some of our other cell transplant programs.

Meanwhile, our collaboration with Demant has been progressing well. I am happy to share for the first time today that we have successfully completed 3 engineering runs and preparations are underway to perform that process in our GMP suite. Successful manufacturing of GMP material will be an important next milestone as it is something we want to complete. Before speaking with the regulators about human testing. We have also established a novel model of deafening which will enable the initiation of functional animal testing using the cells we produced under this important partnership. Moving now into the rest of the pipeline, I want to provide some context regarding the next 2 programs, our islet cell and corneal endothelial cell initiatives.

Human body is comprised of more than 200 discrete cell types. And because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into additional product candidates. After extensively evaluating where we might generate the greatest value from our process development and directed differentiation expertise, we announced 2 new initiatives. 1, focused on addressing the issue of scale in type 1 diabetes, and a second 1 focused on corneal endothelial disease. 1 of the things we like about these 2 initiatives is that clinical evidence demonstrating that a cell transplant can address the respective diseases already exists. Unlike a small molecule program, where you really have no idea about clinical efficacy or the translatability of animal models until you reach those steps, there already is established data showing that functional islet cells can lead to insulin independence and that functional corneal cells can treat Fuchs dystrophy.

In these areas, the clinical risk may be reduced due to these precedents and thus the business opportunity for Lineage resides where we perform best. On the process development and production side. And because islet and corneal cell transplants are currently performed using cadaver cells, we see a huge opportunity to try and develop a consistent and low cost supply of these cells from our AlloSCOPE platform. Starting with COR1, this is a corneal endothelial cell or CENC therapy program. Designed for the treatment of Fuchs and other corneal dystrophies. Fuchs corneal dystrophy is a progressive condition where cells on the inner layer of the cornea die off causing swelling and vision loss. In the advanced setting of this disease, DMEK or Descemet’s membrane endothelial keratoplasty, is a surgical option consisting of replacing the diseased cells with a donor graft often leading to improved vision.

COR1 is an internally developed and wholly owned preclinical cell transplant aimed at providing a consistent and affordable supply of corneal cells to these procedures. I hope it is not missed that COR1 can benefit from our ophthalmology and manufacturing expertise and highlights our approach by focusing on what we do best large scale, high quality cell manufacturing. Millions of people are potential candidates for corneal transplants, but the current supply of CENCs from cadaveric sources is limited by the low availability of organ donors which by their nature have inconsistent yield and quality. Nevertheless, CENC therapy from cadaveric sources has been approved in Japan and is in Phase III testing in The U. S. Providing evidence for the mechanism of action and business opportunity.

But according to JAMA Ophthalmology, cadaver sources can only serve about 1 in 70 patients highlighting the unmet need. Core 1 program aims to solve this limitation. Because existing approved CENC transplant therapy not only relies on cadaveric tissue, which is limited in variable but also requires cells to be transplanted within 30 hours of harvesting creating barriers to patient access. We believe there is a terrific opportunity address the unmet need for reliable, consistent, scalable and cryopreserved CENCs. And again, CENC transplant therapy is already clinically validated. With preclinical models, endpoints, and clinical and regulatory precedents that are well established and ready to be copied by an innovator with a superior cell source.

From a manufacturing and formulation perspective, the anticipated therapeutic dose is small. Fewer than 2 million cells per patient. Which we believe is well within the capability of AlloSCOPE to deliver low cost of goods and an efficient production process. The differentiation pathway is well understood and we believe we can utilize 1 of our existing differentiation methods to create a proprietary position as well as potentially accelerating and streamlining product development. As a result, in just a matter of months, our team advanced the COR1 program from little more than an idea to preclinical development and was able to successfully manufacture off the shelf corneal endothelial cells on our AlloSCOPE platform with the identity and morphological and functional characteristics that met our initial internal criteria and support further development.

We plan to advance this program first into translational models and thereafter into initial human testing. And I hope at our next quarterly call that I will be able to provide a timeline for initiation of a clinical trial of COR1. Moving next to type 1 diabetes, we have been getting a lot of interest about our entry into this space. As with CENCs, the clinical data show that islet cell transplants can work. Each year, dozens of patients are reported to be functionally cured using islet cells from cadavers, meaning they can regulate their blood sugar without daily disease management. However, islet supply is a major unsolved problem. Expansion of islets from cadaver sources cannot currently support a commercially viable source of these cells.

Immunosuppression, patient eligibility and hypoimmunity are all additional hurdles that need to be overcome. But we believe the hurdle with the least amount of progress to date is making islets at the scale required for commercial success. And we believe significant value in the islet cell transplant community should accrue to whomever solves the scale problem. 1 reason for the supply gap is that the required dose of islet cells may be as high as 1 billion cells per patient. For reference, the upper limit for an optimized bioreactor process might be 10 billion cells per liter. And that is still commercially inadequate for T1D patients even at 10- or 15-liter scale. And because mature islet cells do not expand readily in culture, these optimal calculations do not even apply.

Our calculations suggest that you might begin to reach commercial viability at thousands of doses per batch implying the production will have to occur on the scale of at least an 80-liter reactor. But carrying out a differentiation process in an 80-liter vessel requires feeding that vessel with many billions of undifferentiated pluripotent cells. You cannot just rely on cells to divide endlessly. They have to attain their full pluripotency, their genetic stability, and do so without losing their homogeneity and synchrony. And that is the fundamental problem. Conventional 3D expansion in aggregates introduces heterogeneity. Leading to lower control, lower synchrony, and higher dissociation requirements resulting in more genetic aberrations and less effective differentiation.

But generating billions of cells from conventional 2D approaches requires impractically large surface areas and high aseptic risk. There is an unavoidable conflict. In islet cell production between reproducible control and sufficient scale. And there is no trade off. You have to combine the best of both worlds in order to produce a commercially viable product. Our proposed solution to this problem is called ILT1, a new manufacturing initiative employing a modification of our AlloSCOPE platform into what we call AlloSCOPE 5– AlloSCOPE 5D has the goal of generating large scale production of pre differentiated cells with reduced manipulation and passaging so that you are capturing both 2D synchronization and control of differentiation with 3D environmental control and scalability.

Hence, 5D. ILT 1 is initially focused on producing a homogenized population of undifferentiated pluripotent cells ready for synchronized differentiation. And which if successful could thereafter serve as the high feed source material for differentiation into islet cells. If we can develop a modality that can support an islet cell production process from expansion through differentiation in a dynamic culturing system we could potentially solve a major hurdle to production and commercialization of an islet cell therapy product candidate. With this initiative, we are inverting the traditional development paradigm by focusing on the scale up of undifferentiated cells first Because as I explained in the beginning of this call, once you have shown that you can actually produce your material, while maintaining its quality at scale, We believe you may be materially reducing the risk profile for the remainder of the development project.

That is because multiple independent groups have already shown that islets can clear preclinical and clinical testing and become an effective intervention for people with T1D. Similarly, editing strategies and differentiation protocols already exist and can provide risk reducing information in those respective areas. But no 1 to our knowledge has shown that they can scale islets to commercially relevant levels. For this reason, we think it is appropriate to focus on the unresolved scale problem rather than performing years of expensive preclinical and clinical studies while deferring the problem of scale-up for later. For some companies advancing into clinical testing without a robust manufacturing process may even become a significant setback.

We think the value is in establishing from the beginning a process that can support downstream development. I previously reported that we met our first internal manufacturing milestone for this initiative by demonstrating what we believe is a highly homogenized scalable and fully suspension based process for generating undifferentiated pluripotent cells using 1 of our proprietary cell lines. After this work was successful at a 0.5-liter scale, we then moved into a larger multi liter format which continues today. If we are successful at the larger scale, we would then seek to demonstrate AlloSCOPE 5D scalability with either an internally or externally sourced hypoimmune cell line, 1 that is suitable to support islet cell differentiation. Or we may proceed with a non hypoimmune line or perhaps both.

We do not need to generate islets yet. We first want to demonstrate the capability of being able to generate enough raw material that can become islets. As 1 final point on AlloSCOPE 5D, I will add that we do not yet know what the upper limit is for our approach, but we have already done it reproducibly at a small scale and that allows us to apply insights, IP, and process improvements to our other programs. Such as by potentially making larger cell banks or driving our production costs even lower We will do our best to keep you informed on ILT1 I can share today that we believe it is already paying off in other areas. Changing gears for just a moment, we recently announced the formation of our scientific advisory board to provide strategic counsel and insights into the development of our pipeline.

The SAB’s founding member is Doctor. Joachim Froebus, a recognized established biopharma executive who brings extensive experience across ophthalmology, neurology, diabetes, other areas of interest to us. Doctor. Freudis helped shape cell therapy development at Novo Nordisk and BlueRock, and has led cross functional global teams responsible for the late stage development and commercialization of multiple approved products. We are excited to have been able to attract a leader of his caliber and look forward to providing updates on further appointments to our SAB throughout the year. In addition, we also welcome doctor Priyantha Harath as our senior vice president and head of clinical. Doctor. Harath is a board certified specialist neurologist with extensive experience spanning early translational development regulatory affairs, clinical development through successful Phase 3 clinical trial execution.

He brings a broad clinical perspective suitable for our diverse pipeline and a deep understanding of disease penetration progression and meaningful outcomes. We are pleased to have attracted support contributions of doctors Froebus and Herath to our growing and maturing company. To wrap up these remarks, our business strategy aims to efficiently leverage our AlloSCOPE platform and create a pipeline of related but discrete cell based assets. Some of which we may advance internally toward commercialization and some of which we may seek to partner during early or late development. If you are wondering how we can manage such a broad pipeline, please keep in mind that our platform generates assets which share certain essential traits in common. Such that each dollar we spend on innovation, can apply across multiple programs And while each product candidate is intended for a different condition and each cell line behaves in a unique manner and their respective development risks vary, The early steps of banking, process development, and achieving control, purity, and scale have somewhat common features in the way we apply them.

Which allows us to broadly expand the scope of our pipeline without losing the focus required to succeed in each indication. And using our capital in an efficient way. I hope that business update has been informative. And with that, I will turn things over to Jill for a review of our financials.

Jill Ann Howe: Thanks, Brian. As of March 31, 2026, our overall cash position was $53.4 million, This capital is expected to support our planned operations into 2028. In addition to our cash on hand, we may also receive approximately $32 million from the exercise of existing warrants maturity date of which will be accelerated if the intent to advance OpRegen into a multicenter trial, which includes a control compare arm, is publicly disclosed. We also continue to remain eligible for a total of $615 million of development and commercial milestone payments under the Roche-Genentech collaboration agreement and we continue to evaluate opportunities for additional partnerships similar to our Roche or DeMont collaborations. Which we could elect to enter into the future.

Now I will review our first quarter results. Our revenue is generated primarily from collaboration revenues, royalties, and other revenues. Total revenues were approximately $1.7 million, a net increase of $200 thousand as compared to $1.5 million for the same period in 2025. The increase was primarily driven by collaboration revenue recognized under our new research collaboration agreement with Demant. Operating expenses are comprised of research and development, expenses and general and administrative expenses. Total operating expenses were $9.3 million, an increase of $1.3 million as compared to $8 million for the same period in 2025. R&D expenses were $4.2 million, an increase of $1.1 million as compared to $3.1 million for same period in 2025.

The net increase was primarily driven by $300 thousand for our OPC1 program, $200 thousand for our ReSonance program, and approximately $700 thousand for our preclinical and other undisclosed programs. G&A expenses were approximately $5.1 million, an increase of $200 thousand as compared to $4.9 million for the same period in 2025. The net increase was primarily driven by personnel costs, partially offset by services provided by third parties. Loss from operations was $7.6 million, an increase of $1.1 million compared to $6.5 million for the same period in 2025. Other income and expenses reflected other income of $2.8 million compared to other income of approximately $2.4 million for the same period in 2025. The net increase was primarily driven by exchange rate fluctuations related to Lineage’s international subsidiaries and no warrant related financing transaction costs incurred as compared to the prior year’s quarters.

Net loss attributable to Lineage was $4.8 million or $0.02 per share basic and $0.03 per share diluted compared to a net loss of $4.1 million or $0.02 per share for both basic and diluted for the same period in 2025. Our financial results continue to reflect our dedication to responsible fiscal management and we remain focused on balancing our cost of capital with the investments we make to grow and strengthen our pipeline. As presented earlier in the call, I will now hand the call back to Brian for concluding remarks.

Brian Culley: Thanks, Jill. I will quickly summarize by repeating some key themes. First, we continue to remain confident in the potential for OpRegen to advance into a multicenter controlled trial. Second, with that confidence, we are making investments in our AlloSCOPE platform and launching new programs. In some cases, these new programs have a strong clinical precedent from cadaver cells. Such as using islet cells to achieve insulin independence or CENCs to improve vision in patients with corneal endothelial disease. In other cases, the utility of replacing a cell is less established, but like OpRegen, might reveal a remarkable new mechanism by which we can modify or even reverse the course of a disease. But in all of these programs, we believe establishing a robust manufacturing process early on with the purity potency and scale capable of supporting a commercially attractive cost of good is the right strategy for both long term internal development and for creating partnership opportunities.

And then fourth, as our pipeline advances, we expect we will provide updates prior to as well as following any potential updates that our partners may make on the OpRegen program. For example, we are looking forward to reporting initial OPC1 data, the outcome from the ReSonance annual go/no-go decision, COR1 development plans, ILT 1 scale up progress, announcing additional SAB members, a patent issuance update, and whatever other news we might be able to generate in the second half of this very productive year. Overall, we appreciate your support. And your belief in our vision. And with that, operator, we are ready to take analyst questions.

Q&A Session

Operator: Thank you. As a reminder, to ask a question, you will need to press star then the number 1 on your telephone keypad. And to withdraw your question, press star-1 again. We will pause for just a moment to compile the Q and A roster. Your first question comes from the line of Mayank Mamtani with B. Riley Securities. Your line is open.

Analyst (Mayank Mamtani): Yes. Good afternoon, team. Thanks for taking our questions. And congrats on a lot of progress here. So on your understanding of that being characterized as disease modifying relates to what data that was presented at the recent conference. The Foundation Fighting Blindness summit. And how do you think of the photoreceptor recovery and some of the stratifying by bleb coverage? Data that you have integrated as part of the GAlette trial, of these learnings that you are having longer term? And then I have a follow-up.

Brian Culley: Thank you for the question, Mayank. With regard to disease modification, my comments there, because we do not have access to the data in the ongoing GAlette study, We just like our investors, look to other indicators of how things are going. A very clear indicator we had for example, is the opening of 11 sites after initially only having 6 sites. We think that is consistent with planning for a larger campaign. My comments around disease modification are more nuanced. I am speaking to the conclusion slide from the CTS data which was very similar to the FFB data that came out nearly a year later. But the conclusion side at CTS, call it 9 months ago, did not include any language about potentially modifying disease.

That language has been presented for the first time in the recent FAB presentation. So it is small, but I highlight it because it is a change that I assume is intentional and purposeful. And I believe that is positive to see that kind of language being used by a partner that is running an open label study with a clinical benefit that never happens naturally And even though we do not have access to those data, I think that there is some utility in paying attention to how the partners describe the data they have. And perhaps that also partly answers your second question. The insights that we have regarding bleb coverage and photoreceptor recovery comes entirely from our own phase 1, 2 a, as well as data that is been presented by other companies it does not include any specific insights that we have on the data from the ongoing GALET study.

So we form our opinions, we share those opinions, and we try to help direct investors to things that are out there available in the public, and then they can interpret them as they wish. But we are not able to provide any specific insights from the ongoing GALET study because we do not have that information. And even if we did, would not be able to share it with you at this time.

Analyst (Mayank Mamtani): Thank you, Brian. that is that is helpful. And then on the other eye programs that you have preclinical, the corneal endothelial cell, I think you also disclosed the new PNC1, which is it looks like also for the photoreceptor cell targeted Maybe just on the corneal program, what is the internal criteria you may have met here? And what sort of the work underway preclinically and sort of what things we should be watching for as you kind of do your next steps on manufacturing and also, you know, time to IND filing if you maybe just clarify that. And then just on resonance, if you may, you know, just remind us what are any partner related milestones now that, you know, you have run the you had the 3 manufacturing runs completed? And where does that you know, 12 million over a sort of 3 year period number, you kind of get started start getting recognized as we get closer to IND.

Brian Culley: Yes. Thank you so much. So I guess first on I will go in reverse order here. So for ReSonance, I think 2 things are important to us. Completing the engineering runs is a gateway to doing GMP runs. Which itself is a gateway to having conversations with the FDA. And I know that is something that people are going to be really interested in knowing. You know, when would we have our first FDA interaction for this program and what might be a timeline to clinical development. A second thing for resonance is there is baked into that alliance a go/no-go decision that occurs with the advancement of the program. So if the parties are not happy with how things are going, we can elect to conclude either party has certain rights under those decisions.

We have coming up an annual go/no-go, or we call it a continuation decision. I think in certain areas, we are running ahead of schedule, and I think we are really happy. So I am not particularly concerned but, you know, I am only speaking for 1 half of the alliance. So we, you know, we need to, we want to, and we frankly expect that we will go past an affirmative go/no-go decision. Based on the work that is been conducted to date. The $12 million, which is over an approximate 3 year term of the agreement, is roughly 2-thirds reimbursement to lineage and maybe 1-third to Demant entities. So these will be third party organizations that are providing various services. Turning back to your question, Yeah. Hard to ignore that we have 3 ophthalmology programs, OpRegen for GA, the new 1, COR1, and then photoreceptor program.

COR 1, I think I covered fairly well in the script. In the photoreceptor program, we are keeping a close eye on the, photoreceptor program. That is under development at Bayer. We are really interested in seeing what they do. And we also unencumbered some of the economics of the photoreceptor program, from a third party. We did not wish to rely on that third party’s intellectual property anymore. So we abandoned that work. Terminated that agreement in order to unfetter that program from those unattractive economics. I will be you know, appropriate here to say that also means we cannot utilize the intellectual property that we were relying on. So it caused us to move the photoreceptor program a little bit back in time, little bit earlier stage than where it was, But I think long term having superior economics makes a lot of sense to us.

Overall, and I think in part also addressing 1 of your questions, We perhaps look at value creation with these programs and cell therapy more broadly a little bit differently than many others. Especially with programs like CORE 1 where you know that there is a precedent We think the value is in what we have been doing recently, which is getting a very high quality manufacturing process that is reproducible, that is not going to need to be changed during development, And when we have that accomplished, we feel like the risk profile from there forward is very different. Because we believe that a lot of companies have demonstrated that you can get exciting early clinical data, but then if you cannot manufacture your product or you need to change your process, the FDA may tell you that it is not the same product anymore.

For example, if you change a growth factor, you change a vessel, you may be altering the output of your product because it is so sensitive to the process. it is literally defined by the process that you employ. So we think that there is a lot of value in being able to manufacture a cell that has the identity markers, the morphology, the performance attributes, that define your product. And if you can make that early, especially in indications where there is already a cadaver source precedent for efficacy we think these are programs that we are launching that offer much more attractive overall probabilities of success than the conventional development where maybe you race into the clinic and you get a headline and then everyone figures out much later you are not able to actually manufacture your product.

We do not want to get into 1 of those situations. And so the criteria that we invite people to look at as we share these data are how reproducible is your material, how scalable do you have narrow specifications What is your potency assay? And I feel that these are questions that are often not asked of some of the companies that work in this space, yet they are integral to a product’s survival. So I hope that is helpful for how lineage is a little different in thinking about our business strategy, our development strategy, and how we can be able to be successful against what is an increase in companies working in cell therapy, which we otherwise welcome as I think this is a really important part of medicine going forward and is going to continue to grow and attract capital.

Very helpful, Brian. Thanks for that framework.

Operator: Thank you, Next question comes from the line of Jack Allen with Baird. Your line is open.

Analyst (Jack Allen): Great. Thank you so much for the updates, and congrats on all the progress. I guess I will start with the RPE cell space and the geographic atrophy space. I just wanted to ask, Brian and the team, for their thoughts on some of the competitive data, I think, that Astellas and iStem presented. Updated data from their RPE cells, and then I also saw at ARVO, there was an update from the complement inhibitor class. Eiservay from Astellas had some data looking at you know, continuation of driving eligibility at 24 months versus sham. And I just wanted to kinda hear your thoughts on the broader space there, and then I have a follow-up question as well.

Brian Culley: I would start with Astellas. I consider their data update to be an important clearing event for lineage. What I mean by that is that we have not heard– we have not known very much about what they have done. And I think it is normal that if you do not have information about a competitor, it is really easy to fill it in with scary thoughts But then we saw the presentation. And I find myself comforted because I did not see any information about manufacturing. I did not see any information about delivery. I saw limited information about safety, and I saw information on 1 patient out of, I believe, 14 on anatomy and I did not find the information in the aggregate to be particularly worrisome or threatening This is a program that they acquired in 2016.

And it is now 2026. And the data in its totality is somewhat limited. So I feel comforted that we are and will continue to be in a leading position And I am thankful for the investments that our partners are making in optimizing this program because the more we know about what is going on with the competition, the more opportunities we have to develop a superior product profile and you are talking about a surgical procedure in the eye, I would assume that even relatively modest differences in safety profiles could turn into very significant decisions as to which product someone might choose, if multiple products were approved. So I think the 4 items that I outlined in the call earlier are working together and I hope that ultimately those will lead to the best possible product profile and increase the probability of success of a product ultimately reaching these patients and this market.

With respect to complement inhibitors, I view all of them largely the same. I think there is a treatment effect. But I think it is a very small treatment effect. And if I were in charge of a complement inhibitor, whether approved or in development, I would be working very hard to try to generate evidence that it has an effect on visual function, because the data to date has suggested or been quite clear perhaps that these interventions do not have an effect on visual function. And I do not think that post hoc analyses are going to really convince people. I would love to see an a priori design study with a functional endpoint that is statistically demonstrated, but I am not sure that we are going to see that. I have not seen the 24 month driving data.

I think driving is really important. And if you are increasing someone’s vision, such as with an RPE transplant, you may be able to get them a driver’s license back. But if you do not increase someone’s vision and they have lost their license, they will never get it back. So I do not know exactly what you know, the various complement inhibitor strategies are but I do feel comfortable that 4 companies now have shown that an RPE transplant can increase patients’ vision. If you wanna measure impact on something like driving ability, I think RPE transplants are going to get more licenses into people’s hands, whereas I do not think complement inhibitors can do anything but slow the number of licenses being taken away.

Analyst (Jack Allen): Awesome. it is very helpful comment. And then just to round it out on the RPE space, I did see from someone a picture of the Roche booth at Arvo, I believe it was, And it seems like they are flagging the OpRegen program. I was not sure if you had any comments there. And then my other kind of follow-up question was on the DOSED study of OPC1. And if there were any updates surrounding the CIRM grant application there as well.

Brian Culley: Thanks. Jack, for the question. Yeah, Genentech did have space at ARVO, which is 1 of the major ophthalmology medical meetings of the year. That floor space on the exhibit hall to my recollection, there were 2 areas There was an area on 1 side that had a mention of a number of different product candidates, and that is where OpRegen lived. There was another area that was dedicated to the science of RPE transplants. I do not think it was dedicated to OpRegen per se, but I am not aware of any other RPE transplants in the program, in their pipeline. So everyone can decide for themselves what it means that Genentech elected to utilize half of their booth space at ARVO in their ophthalmology section. To communicating information about RPE transplants.

My view of that is they are running an open label study We have got multiple independent examples that we can really have some positive effects in patients and that is important to communicate to future users of this kind of technology. So I take it as an incredible positive. Others I do not know. I take it as I take it as a positive. Moving to dosed and CIRM, we applied for a CIRM grant– reapplied rather for a CIRM grant. We did not receive 1 in the first cycle. We do not know if we will receive 1 in the second cycle, but we applied or reapplied rather in January. And, later this summer. I believe CIRM will be getting together and having a decision If we get the CIRM grant, that is a wonderful pickup. But as I shared after we did not receive the grant the first time, it does not have a material impact on this program.

So I am hopeful that we get it. If we do not, the program will continue. And we are looking forward to moving the DOSED study ahead and introducing our internally made cells into the ongoing DOSED trial.

Analyst (Jack Allen): Awesome. Thanks so much for the color here, congrats again on the progress. Thank you, Jack.

Operator: Next question comes from the line of Joe Pantginis with H. C. Wainwright. Your line is open.

Analyst (Joseph Pantginis): Hey, everybody. Good afternoon. Thanks for taking the questions. So Brian, I wanted to start with the ILT1 program. And I know the answer is probably going to be we just need to do the experiment. But you mentioned how you really need to scale up and be confident around your scale up around the baseline cells. Now when you look to then take those cells and differentiate them into the ILT cells, what are the risks that, if any, I mean, you know, A, you have to go through your differentiation process and any of those processes providing any risk with regard to, say, impacting scale up once you hit the ILT portion?

Brian Culley: Joe, it is an excellent question. And if it was easy to differentiate these cells into islets, we would not we, the field, would not have a problem with scale up. Islet cells are unlike RPE. They are unlike auditory neurons. They do not like to expand in culture. So we can do a lot of expansion of our RPE after they have become RPE. They can continue to divide. Islet cells do not like to divide once they become islet so you lose the ability to expand into greater numbers during differentiation and again post differentiation. So you have to focus on pre differentiation. But there is absolutely risk at every step of the way. Everything that you might imagine as having an impact on your production is a valid risk.

Because cell production is so sensitive to the process. So it would be inaccurate of me to suggest that just because we could make a huge number of undifferentiated cells that I can pledge that those will, you know, easily and fully be converted into islet cells. Differentiation of pluripotent cells into specific cell types is very difficult. But having said all that, we have had a lot of success. More success than most. And I said a little bit about this about talking about AlloSCOPE and what we have done in a GMP environment, getting into clinic. So we have gotten past FDA. These are things that I think a lot of companies talk about but have not yet successfully done. So there is a lot of talk in the field, and I think we have been able to demonstrate some very credible success.

We have reduced practice some very difficult things. So I think that we have got confidence in the team’s ability to be successful. But it simply does not matter if you cannot generate enough starting material, you will never have a commercially viable product. So step 1, I have been really clear about this once we launched the program. Step 1 is just showing that we can do a proof of concept at very small scale. Step 2 is moving up to a more moderate scale. That would be multiple leaders. That work is ongoing. And then step 3 would be to start to work with specific lines that we already know are capable of becoming islet cells. So it is a stepwise sequential risk reducing approach that also is maintaining our investment in the program in an appropriate way.

So these all represent go, no go decision points that we could make. So if we run into a problem and we cannot get somewhere, we can elect to stop the program and we would not be stuck with all this fixed investment and all of this infrastructure. I think we are doing it in a really smart way been very committed to trying to keep our spending in the neighborhood of $30 million a year, which we have done for multiple years now. And I think that is appropriate because we are still waiting for an update that perhaps could change our share price. And until that occurs, we want to be really prudent and thoughtful about how we deploy our capital into these new initiatives. But again, as I said, we are able to manage multiple programs in part because they do have some similarity across them.

You know, the equipment that we do this in, facility that we do this in, the team that we rely on, there are a lot of similarities here, and that is how we are able to manage, you know, 5, 6, 7, 8 programs simultaneously.

Analyst (Joseph Pantginis): No. that is very helpful. And, you took the words, out of my mouth with regard to leveraging the successes that you have had, so I appreciate the answers. And then, with the ReSonance, and this is going into the scientific weeds again. Resonance program, you did mention that you now have a novel model of deafening. So just curious, you know, any more details you could provide with this model. Are these genetically, genetic-based deafness, or is it chemically or environmentally induced deafness, and why it might be relevant to the cells that you are going to be injecting?

Brian Culley: Yes. Thank you. We would not be putting cells into humans that have got fully intact cellular capabilities. So we need to model a disease condition, which means we need to destroy or cause the existing cells to be dysfunctional. There are multiple ways of doing that. Chemical induction is pretty standard. So there are different, different compounds and different concentrations and different times. That people can use to essentially destroy a population of auditory neurons. And then you would take that model and of course you would then add your test article. You would deliver the cells and see if they are able to bring some of the hearing from your original baseline down to your reduced capability, see if you can bring some of that capability back.

These approaches in the literature have largely been unsuccessful but largely been performed using various mesenchymal stem cell preparations. So I do not know if those can work even under the best conditions. But we have needed to develop our own model because this is very innovative work and you cannot go to 1 of the vendors and say, I am going to send you my cells Please use them in your very well-established and regulatory-familiar animal model of deafening. Even as to your selection of species, you have got different cochlea that are different sizes and anatomical changes and it is actually difficult to develop a model that you feel is going to give you reliable information when you introduce the test article to that model. But we think we have 1 now.

And this has always been part of the plan. You establish a model, and then you utilize your cells in the model. So we have, I guess, achieved an important, albeit relatively you know, quiet milestone of creating a model of deafening that we can now use with our test article and see what, occurs in, in response. And I think if we are successful in being able to affect hearing or at least minimally brain signaling from the ear in these models. I think that is an important finding and bodes well for future development and moving into human testing. Right. Thank you, Brian. I think, Joe, just a follow-up that you did not ask for. Many years ago, remember working at this company where we had rat data using our RPE cells. And I am quite sure at that time, did not think that I was going to see the kinds of treatment effects that we have seen more recently.

So it sounds preliminary to be talking about animal models and having to create your own models, but time goes by and then, you find yourself with a nearly $700 million partnership with big pharma and so I am hopeful that some of the things that we are doing in hearing loss while they do not have a precedent per se, there was no precedent for RPE cells either.

Operator: Next question comes from the line of Sean McCutcheon with Raymond James. Your line is open. Hey, guys. Thanks for the questions. A couple from us.

Analyst (Sean McCutcheon): On OPC1, can you speak to the requisite safety waiting period and challenges identifying and getting patients into the DOSED study. Maybe what are your expectations for cadence of new patients to get enrolled and treated moving forward now that second patient has been treated? And then just secondarily on, COR1, can you speak to the currently available intervention for CECD in The U. S? And the unmet need there, perhaps a sense for the low end– low hanging fruit for a cell therapy and key differences and limitations. For the cell therapy approach relative to procedures like DMEK? Thanks.

Brian Culley: Thank you, Sean. Good questions. With respect to OPC1, we have got 2 groups of patients that are part of this device study. Chronic injuries, which are from 1 to 5 years, and subacute injuries, which are from 21 to 42 days. These patient journeys are very different. From not just the anatomical or procedural changes, but emotional changes and where these individuals are in their lives. And you can imagine that they also represent an incredible spectrum of perspectives as to their interest in participating in clinical trials. So for example, there are some individuals who have had chronic injuries and for years they have had no changes. And when they are presented with an opportunity to participate in a study like this, it sounds very exciting.

There are other people who, when they find out that it involves a surgical intervention, are not interested because there is no amount of risk that they are willing to tolerate which could change their function. And that is applicable also for a subacute patient. it is just that they are in a different situation because the injury is so new, it is just weeks old, and the evaluation consideration is, I would say, even scarier because you are still sorting trying to reconcile. Between those 2 groups, would say that chronic is generally easier to enroll because these are individuals who are in the community and they can be reached more easily, Whereas a subacute injury unfortunately requires a tragic incident to occur and that incident has to happen near 1 of our sites and then they have to qualify as well.

So it is always been very difficult to find subacute patients, and I assume that we will find our chronic patients before we find our subacute patients. It is helpful that we have opened a second site And I think as we go forward and learn more, there can be additional sites that we can bring on and have a wider net But it does not surprise me at all that the first 2 patients were chronic, for the reasons that I shared. To try to address your second question around COR1, DMEK is utilizing cadaver sources of cells. So there are sort of multiple ways that you might envision the competitive landscape. 1 is we look at cadaver source cells as being variable You do not know who was in that car accident or whatever happened and they have an eyeball available And so you have got a variability concern and you also have a temporal concern.

You have to move quickly to acquire that donor material prepare it deliver it to a site, And so we do not and there is not enough supply. So we think that cadaver sources are not particularly useful. But there are some very interesting companies in the space. K-Cell, Cell-Solution– these are 3 of them that we remain mindful of. Aurion is actually not even Aurion anymore. it is Alcon. Alcon, acquired Aurion, and they have an ongoing phase 3 using cadaver cells they just harvest the cadaver cells and then they passage them a number of times in order to increase the amount of supply. And while I do not know if the number was made public, our understanding is that it was quite an interesting acquisition for that company. So you know, that is only a partial solution.

I think if we are able to generate in the best case an off the shelf low cost of production, cryo preserved formulation. We could essentially stockpile identical material that could be used for these procedures by scheduling rather than being beholden to the unfortunate donor supply So it is quite exciting as a product profile. It is early. We are just now making these cells. But again I really cannot emphasize enough that perhaps value should be ascribed to companies when they are manufacturing the cells because we already know that these cells have been shown in others’ hands to be successful, just through preclinical testing, but even in commercial setting. And there is an approved product in Japan using cadaver source cells. So it is very exciting to know and I put ‘know’ in quotation marks for all the risks that obviously are inherent in product development, But we do not have mechanistic questions about whether CENCs can improve vision in corneal endothelial diseases.

That question has already been answered and that is such a completely different risk profile than many years ago when I worked at a company like Neurocrine Biosciences and we would have you know, an early stage small molecule that hit a target really nicely but you have absolutely no idea if it is going to be successful in preclinical testing, let alone clinical testing. So it is 1 of the reasons that I love this area of medicine so much is that you have the opportunity to create so many changes and use precedent from other sources, but still provide an important and valuable solution by having an off-the-shelf alternative to donor cell material that is used in indications like endothelial diseases or type 1 diabetes.

Analyst (Sean McCutcheon): Understood. Thanks, Brian. Thank you very much, Sean.

Operator: There are no further questions at this time. I will now turn the call back over to Brian Culley for any closing comments.

Brian Culley: Yeah. Thanks, everyone. Our focus on replacing cells that have become dysfunctional might someday reshape many treatment paradigms and we really thank you for joining us on this mission. Have a great day.

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