Press Releases
Lineage Cell Therapeutics Issues Letter to Stockholders
Dear Fellow Shareholders,
We hope you had a restful holiday season and wish you a happy new year. As we look at our plans for the new year, we want to update you on our recent progress and explain why we believe 2025 will be an exciting year for our company.
As many of you know, Lineage is an emerging cell therapy company, but we more accurately should be referred to as a cell transplant company. The term cell transplant is more accurate because we do not administer “stem” cells to patients. Instead, we deliver mature, differentiated cells, which are guided along a specific lineage to become functionally identical to the cells which an individual has lost due to disease or trauma. Those cells are then transplanted in a one-time procedure to treat conditions caused by the loss or dysfunction of a specific cell type. We summarize this approach as “replace and restore”. In the setting of dry-age related macular generation (dry-AMD), our manufacturing team creates new retinal pigment epithelial (RPE) cells to replace the RPE cells that have been lost by an individual after decades of use. This allogeneic cell therapy program, OpRegen®, led to a global development and commercialization partnership with Roche and
Often, the most important things we do occur behind the scenes. Actions which increase our programs’ probabilities of success do not always become press releases. And discoveries that we make may be more valuable to our shareholders as trade secrets than as patents. Last year was a great example of these circumstances; we made significant progress in many areas, advancing our programs, expanding collaborations, and strengthening our balance sheet to help reach important milestones in 2025 and beyond. However, these advances were masked by significant uncertainty in the biotech sector, which has continued for years, making value-creation in biotech increasingly difficult and, unsurprisingly, frustrating many investors.
This communication is intended to provide clarity and transparency into certain areas of our business and is an opportunity to provide relevant context and expectations for our audience which aren’t normally covered in a press release. Those areas are: financing strategy, manufacturing capabilities, and our plans for long-term success. I aim to address each of those topics for both existing and future potential shareholders.
Financing – A
For the past 6 years, Lineage has been funded by diverse sources of capital, including business development deals, sales of non-core assets, and an ATM facility. At their respective times, we believe each of these offered a better cost of capital than traditional investment bank-led financings. But traditional financings sometimes have advantages, and in particular, the “milestone-warrant” structure employed in our November financing was an ideal fit for our unique situation. However, the structure of that deal is complex and invites some clarity.
As many shareholders know, the company’s future is tightly linked to whether our partners, Roche and
In November, we closed on an initial
In the short-term, we expected the dilutive impact of this raise, because it was conducted in highly unfavorable market conditions, but it is important to run the business from a position of optionality and strength. Notably, based on our historic spending rates, we have capitalized the company potentially into mid-2028, subject to receiving the
Manufacturing – Achieving the Unprecedented
One of the challenges of working in cell therapy is that many people restrict their scope of cell therapy to cancer, but the CAR-T field is unsustainably crowded with many poorly differentiated assets. We believe the more compelling growth opportunity in cell therapy resides in diseases and conditions outside of cancer, or what we like to call “noncology”. There are only a few companies that have reached clinical testing with a “noncology” asset, including Bluerock (acquired by Bayer) for Parkinson’s Disease, and Semma (acquired by Vertex) for Type 1 Diabetes. In fact, to our knowledge, Lineage is currently the only publicly traded company in which one can invest exclusively and directly in this exciting and increasingly validated branch of medicine.
A second challenge is that a focus on clinical outcomes often overlooks the difficulty, or in some cases the feasibility, of manufacturing a product using a commercially-viable and scalable process. Autologous products are expensive because each dose is made for just one person, which precludes affordability in all but the most serious conditions (i.e. cancer). Allogeneic therapies, for which the cells are sourced from one donor but delivered to many patients, offer a theoretical solution to the problem of scale, but in our view, a truly affordable allogeneic process has not yet been reduced to practice by any company. Our view is that making 10, 100, or even 1,000 doses from a single donor fails to deliver on the intent or power of an allogeneic therapy. In fact, we call those approaches “shallow-geneic” because they lack the depth of a scalable process. They may be allogeneic by definition, but they are not sufficiently more scalable than autologous cell therapies, and therefore, do not genuinely address the issue of cost.
We believe the full vision of an off-the-shelf allogeneic therapy comes from scaling production by ten million, or even a hundred million-fold. To our knowledge, no company has yet demonstrated they can manufacture thousands of doses of their product from a stable
Strategy and Future Goals – Planning for Success
The third message is how our development and financing decisions are linked to a longer-term vision of success for Lineage. We understand there are significant expectations on the ongoing OpRegen trial. While we believe our phase 1/2a results are compelling, validation and affirmation of our findings in a larger trial conducted by an international pharmaceutical company can reasonably be expected to add substantial credibility to our initial findings and future expectations. If OpRegen continues to perform as it has to date, we believe it will reflect positively on our team’s capabilities, our technology platform, and the value of the company.
Lineage is primarily known for OpRegen, but we are capable of much more than making RPE cells. A clearly articulated product portfolio, especially one that is generated from an internally-owned platform, can offer a compelling foundation for value creation. For this reason, we are establishing a pipeline of closely-related neurological cell transplant product candidates, which each employ our core technology, including: OPC1 (oligodendrocyte progenitors), to improve mobility following a severe spinal cord injury, ReSonance™ (auditory neuronal progenitors) to improve hearing in people suffering from sensorineural hearing loss, and a third, as yet undisclosed program. If OpRegen advances into a later-stage trial and our manufacturing objectives are reached, we believe our cost of capital will improve and allow us to move faster and farther with these programs. Once the power of our platform is further demonstrated and validated, we believe that the pipeline of internally-owned assets that we are advancing will make us a desirable partner for pharma and an attractive opportunity for investors.
Looking ahead, we will continue to support our partners in the development of OpRegen. In parallel, our internal focus will be on conducting the DOSED clinical study of OPC1, advancing ReSonance for the treatment of hearing loss, and other carefully chosen initiatives.
We remain committed to acting in the best interests of our shareholders and will continue to implement a thoughtful and staged approach to product development. We believe that long-term value and appreciation can be created through the advancement of our clinical and preclinical pipelines, where we intend to apply our technology and expertise to validate our unique cell transplant approach.
We appreciate your support and belief in our vision. We invite you to stay engaged with our progress through regular updates, earnings calls, and announcements.
Replace and Restore,
About
Forward-Looking Statements
Lineage cautions you that all statements, other than statements of historical facts, contained in this press release, are forward-looking statements. Forward-looking statements, in some cases, can be identified by terms such as “believe,” “aim,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “can,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “contemplate,” “project,” “target,” “tend to,” or the negative version of these words and similar expressions. Lineage’s forward-looking statements are based upon its current expectations and beliefs and involve assumptions that may never materialize or may prove to be incorrect. Such statements include, but are not limited to, statements relating to: the potential therapeutic benefits of OpRegen in patients with GA secondary to AMD, as well as the clinical advancement of OpRegen and its impacts on us; our ability to successfully manufacture OpRegen at scale; statements relating to the terms of the financing described herein, which do not purport to be complete and are qualified in their entirety by the full text of the financing documents, copies of which are attached as exhibits to our Current Report filed on Form 8-K on
View source version on businesswire.com: https://www.businesswire.com/news/home/20250106031795/en/
(ir@lineagecell.com)
(442) 287-8963
(Nic.johnson@russopartnersllc.com)
(David.schull@russopartnersllc.com)
(212) 845-4242
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