Lineage Cell Therapeutics, Inc. (AMEX:LCTX) Q1 2024 Earnings Call Transcript

Lineage Cell Therapeutics, Inc. (AMEX:LCTX) Q1 2024 Earnings Call Transcript May 10, 2024

Lineage Cell Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Lineage Cell Therapeutics First Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the Investors section of Lineage website at www.lineage.com. This call is subject to copyright and is the property of Lineage and recordings for productions 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 your host for today’s call, Ioana Hone, Head of Investor Relations of Lineage. Ms. Hone, please go ahead.

Ioana Hone: Thank you, John. Good afternoon and thank you for joining us. A press release reporting our first quarter 2024 financial results was issued earlier today, May 9th, 2024, and can be found on the Investors section of our website. Please note that today’s remarks and responses to your questions reflect management’s views as of today only and will contain forward-looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward-looking statements, which are subject to significant risks and uncertainties. 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 section in today’s press release and in the company’s SEC filings, including its annual report on Form 10-K, for the year ended December 31st, 2023. 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 Howe, our Chief Financial Officer. I’ll now hand the call over to Brian.

Brian Culley: Thank you, Ioana, and good afternoon, everyone. We’ve had an exciting week, and I appreciate you taking the time to join us on this call. We have many positives to cover today, including the news we just shared a few minutes ago, but I want to begin with the recent data update on OpRegen. Data is a major driver of value and that data was notable for several reasons, and I just want to ensure those points are clear for our new and existing shareholders. Last Friday, on behalf of Roche and Genentech, Dr. David Thelander, presented 24-month results from the Phase 1/2a trial of OpRegen for dry AMD. As you know, dry AMD is a degenerative disease that never resolved spontaneously. Dry AMD also currently has no treatment options that can improve vision or even maintain vision in terms of the number of letters read on an eye chart, which is the standard way to assess visual performance in these patients.

In fact, according to a recent publication in the Lancet reporting on a clinical trial of more than 1,200 dry AMD patients, [indiscernible] treated patients with baseline disease characteristics similar, although not identical to those OpRegen patients reported by Dr. Thelander lost an average of seven letters of visual acuity after 24 months. Patients who received the best available treatment with an FDA-approved complement inhibitor still experienced a mean loss of vision of eight or nine letters over the same 24-month time period. In comparison, among the 24 patients treated in the OpRegen Phase 1/2a study, and we focused on the 12 patients, which we call Cohort 4, and these are patients who were not already legally blind at baseline, 10 of those 12 patients had data available at 24 months, which, therefore, somewhat matches those reported in the Lancet publication.

And those Opergen patients actually gained an average of 5.5 letters. I think it’s worth repeating this point. This cohort of OpRegen patients gained back an average of 5.5 letters of visual acuity while comparable patients on anti-complement therapy or no therapy at all lost seven to nine letters. So if you compare these time matched outcomes, our experimental therapy was on average, 14 letters better than the best available therapy. More importantly, these OpRegen patients gained vision while those others lost it. Digging further, if you look only at the five patients who received more thorough coverage of Opregen across their areas of GA, that difference moves even further in our favor with an average gain of 7.4 letters of BCVA at 24 months, coupled with those gains in visual acuity were the anatomical changes, which also were reported by Dr. Telander.

I won’t repeat his entire presentation, which is available on our website, but a summary version of it is that some of these OpRegen treated patients who should all be experiencing degradation of their retinal tissue have shown imaging evidence of retaining or even gaining critical layers of their retina two years after receiving a single transplant of OpRegen RPE cells. While this observation did not occur in a large number of patients, it’s important to keep in mind that this is a phenomenon which never occurs in the natural course of this disease. And additionally, our pharma partner is reporting these observations independently by accessing and evaluating raw data, collected from our study at multiple sites, from multiple surgeons and even using significantly different delivery techniques.

Now we all know that small data sets from early-stage studies are not as conclusive as large studies, but that does not mean that small data sets aren’t valuable. It depends on their context and the consistency of information which they provide. For this reason, I think it’s worthwhile to put two things into perspective. First, the data set I’m comparing us to is not small. The complement data — data I just mentioned includes more than 1,200 patients. So we believe the vision loss experienced by those patients is both relevant and reliable to use as context for our data. Second, while our data reports on a cohort of 10 patients rather than the large number of patients used to determine findings of safety and efficacy for marketing authorization, it’s certainly encouraging to us that these 10 patients with dry AMD treated at six different clinical sites in two countries, by eight different surgeons and using two different routes of delivery as a group and also as a majority showed improvement in an unavoidably degenerative condition.

Moreover, the visual acuity improvement over untreated eyes, which also had dry AMD, was present as shown in the presentation last week at six months, 12 months and now demonstrated also at 24 months. OpRegen is a treatment designed and intended to accomplish exactly this kind of replace and restore outcome. So while additional data will be needed to determine the future value of our treatment it seems to us at lineage that the stream of incremental evidence of a beneficial and durable clinical effect is continuing, and this gives us great hope for the future. Taking the future of the segue for the next topic, we had a second significant and positive event this week. We announced just a few minutes ago that we have entered into a new services agreement with Genentech, which will provide additional support to the ongoing development of OpRegen.

To be clear, we did not renegotiate our existing license agreement. This is a new additional agreement under which Lineage will be providing certain clinical, technical training and manufacturing services expanding beyond the scope of the existing license agreement that also further supports the ongoing advancement of the OpRegen program. These additional services will be fully funded by Genentech and include activities to support the ongoing Phase 1/2a and the currently enrolling Phase 2a studies as well as additional technical training and materials related to Lineage’s cell therapy technology platform, which can support commercial manufacturing strategies. We believe this additional commitment provides an important signal of our partners support for our approach at a time when they are making difficult decisions about their developmental pipeline.

Specifically, we noted that gross representatives recently stated they are focusing on high impact assets which is supported by recent actions they have taken to prioritize their pipeline toward first-in-class and best-in-class assets. We welcome that as our view is that OpRegen satisfies both of those criteria. For today, I’ll summarize my updated view of the OpRegen program with these three points. First, we announced additional validating data this week, which offers implications for both the clinical benefit and durability of our lead product candidate. Second, we’ve entered into a new services agreement with our partner, which will expand the investigation and understanding of OpRegen and further deepened the valuable relationship we struck on this groundbreaking project.

And third, despite safety concerns with current FDA approved treatment options, the commercial market for a dry AMD therapy continues to grow and is creating a more informed patient population. We believe all of these factors combined to position us well for a promising and potentially revolutionary approach to treating dry AMD. While dry AMD is a compelling opportunity and OpRegen may have applications in additional ocular diseases, we believe our cell transplant approach is not limited to ocular conditions. We believe the fundamental science of cell replacement offers advantages over small molecules and antibodies in certain situation, advantages, which could be applied to many areas of the body. As Genentech’s Vice President and Global Head of Ophthalmology Product Development recently said on a podcast, and I’ll again quote antibodies can’t replace dead cells.

Only cells can replace dead cells. I couldn’t agree with them more. Clearly, cell therapy has already revolutionized oncology treatment, and there are many other indications where it could have a positive impact on chronic degenerative diseases. And I think there’s abundant evidence from the biotech and pharma world to support that statement. We can not only point to large companies like Bayer, Roche, Astellas or Vertex, who have made major investments in this emerging field, but also look to newer entities, which have raised significant capital from high-caliber investors to explore what is possible using cell transplant technology. While we welcome these new entrants for the validation they bring to our approach, we’re also comforted by our experience, which indicates that the learning curve for this form of cell therapy, especially doing affordably scaled and well-controlled manufacturing is extremely steep and long.

For this and other reasons, we believe we can remain a leader in this new branch of medicine by advancing our growing pipeline of opportunities and while pointing to the continued success of OpRegen. Our most advanced example of making investments in our pipeline is, of course, OPC1, our cell transplant program for spinal cord injury. The objective of this program is to replace the cells, which comprise the spinal cord and restore or provide function to people who have been paralyzed by a spinal cord injury. This is an approach of great interest and importance to the SCI field, and there have been a number of attempts to use stem cells in this patient population. However, those efforts all utilized undifferentiated for mesenchymal stem cells.

At Lineage, we don’t use undifferentiated stem cells in any of our clinical programs because those aren’t the cells which are destroyed or lost to disease. Instead, we are manufacturing and transplanting cells which far more closely match the identity of cells found naturally in the body. And specifically, in this case, those found in the spinal compartment, which by the way, is the same fundamental approach, which has yielded positive results in the ocular compartment with our dry AMD program. We manufacture our spinal cord product candidate at a CGMP facility, which we control. And alongside the advantages of having in-house manufacturing, we’re not aware of anyone who has a longer set of safety data in cell therapy for spinal cord injury.

We’ve collected and published as long as 10 years of safety and efficacy data on our patients and believe the adjustments we’ve made to increase purity and control of our sales and our manufacturing process will further improve the quality profile, which we’ve already demonstrated for this program. And in addition to improving the material we transplant, we’re simultaneously investigating superior ways to deliver ourselves to patients. To that point, the next clinical trial we plan to run in spinal cord injuries for the safety and performance of a novel delivery system, which we will initiate as soon as we receive final clearance from FDA. We have already submitted the requisite IND amendment information and received comments from the FDA. And typically, those comments only take us a few days to respond to, but FDA has explained to us that their heavy workload is causing delays.

And in fact, their review of our submission has continued past their initial expectation of April 26, but we believe we are approaching the end of this portion of the regulatory process. And so in parallel, we are continuing to perform the necessary start-up activities for the clinical study. If FDA clearance does become likely to our target start date this quarter. We will provide that information around that time. But at present, we believe we remain on track to open our first clinical site for this study in June. There are three important aspects of this trial, which I want to note for you today. First, the delivery system we’re testing has been designed to deliver cells without stopping patient ventilation. -Prior trials, including also the two prior trials of OPC1, which have been completed, required the patient’s ventilator to be stopped during cell administration.

We consider keeping the patient connected to the ventilator to offer an obvious safety advantage over therapies, which do not have this feature. This new approach is also compatible with our proprietary thaw-and-inject formulation, which has eliminated costly dose preparation steps and the associated counting and handling of cells in favor of a simple five-minute filing procedure followed by a slow manual push of the cells via an off-the-shelf needle. Thirdly, and probably the most exciting point among the three is that this study will be the first time OPC1 is administered to patients with chronic spinal cord injuries. That will be a significant milestone for this program, because most chronic injury patients have reached a plateau in their recovery.

So if we happen to observe any functional recovery in a patient who has plateaued, it can significantly broaden the addressable patient population for this therapy. So in addition to the safety and performance of the new device, we also will be collecting functional assessments on the patients to investigate whether any signals of efficacy are present among chronic injury patients. As our technology and know-how increases as our lead program adds validation to our approach and as our internally developed programs reach clinical testing, we are positioning ourselves to retain a growing share of the economics of our success. For this reason, we plan to continue investing in our pipeline and partnerships, which are aligned with this strategy. For example, our alliance with Eterna to generate a hypo immune cell-line for future cell transplant programs is making good progress, and that could be something we discuss on the next call.

An additional comment I wanted to make today was to provide an update on the second annual SCI Investor Symposium. We created this conference with input and support from the Christopher and Dana Red Foundation and California Institute for Regenerative Medicine as part of our efforts to expand collaborative partnerships and drive greater awareness to the SCI field. To our knowledge, this investor facing conference is the only one of its kind in spinal cord injury and we’re delighted by the quality of speakers and companies, which have confirmed to present. In addition to molecular interventions such as these self-transplants and small molecules being developed by Lineage and AbbVie, we have added companies from the electrical stimulation and BCI fields.

Most of the thought leaders who presented last year have already committed to return, and we are continuing to add speakers. The event aims to provide a comprehensive view of issues and opportunities in spinal cord injury. You can expect an update from us on this conference in the coming weeks, and I hope that some of you will consider joining us for it in San Diego on June 26th and 27th. Before handing the call over to Jill to review our financials, I wanted to add a few words about the passing of our long-serving Chairman, Mr. Al Kingsley. Al played a pivotal role in this company’s journey. He was incredibly dedicated and creative in his work, and our deepest condolences go out to his family, friends and countless colleagues. Al was a man of great faith and charity in both his personal and professional lives, and we intend to honor his dreams for this company through the inspiration and dedication that his memory provides for us each and every day.

Jill?

Jill Howe: Thanks, Brian, and good afternoon, everyone. Starting with our balance sheet, I am pleased to announce that we remain sufficiently capitalized to carry out the near-term activities in our current operating plan. Our reported cash, cash equivalents and marketable securities of $43.6 million as of March 31, 2024, is expected to support planned operations into Q3 of 2025. Next, I will review our financial operating results — our first quarter operating results. Our revenue is generated primarily from collaboration revenues and royalties. Total revenues were approximately $1.4 million, a net decrease of $1 million as compared to $2.4 million for the same period in 2023. The decrease was primarily driven by lower collaboration and licensing revenue recognized from deferred revenues under the collaboration and license agreement with Roche.

Our operating expenses are primarily comprised of research and development expenses and general and administrative expenses. Total operating expenses were $8.1 million, a decrease of $0.9 million as compared to $9 million for the same period in 2023. R&D expenses were $3 million, a net decrease of $1.2 million as compared to $4.2 million for the same period in 2023. The net decrease was primarily driven by $0.4 million for our OPC1 program, $0.3 million for our preclinical programs and $0.2 million for our OpRegen program. Another $0.3 million of the decrease is attributable to other research and development expenses, primarily related to reduced manufacturing activities. G&A expenses were $5 million, a net increase of $0.3 million as compared to approximately $4.7 million for the same period in 2023.

The increase was primarily driven by $0.2 million in stock-based compensation expenses and an overall increase in costs incurred for consulting services. Our loss from operations were $6.7 million, an increase of $0.1 million as compared to $6.6 million for the same period in 2023. Other income and expenses were comprised of other income of $0.1 million compared to other income of $0.4 million for the same period in 2023. The net decrease was primarily driven by the employee retention credit recognized in the prior year, partially offset by exchange rate fluctuations related to our international subsidiaries. Our net loss was $6.5 million or $0.04 per share compared to a net loss of $4.4 million or $0.03 per share for the same period in 2023.

Moving ahead, our aim is to uphold our commitment to fiscal discipline. We are confident that this continued approach will support our plans towards achieving pivotal milestones and generating shareholder value through ongoing investments in our programs. Now, I’ll hand the call back to Brian.

Brian Culley: Thanks, Jill. To summarize three key points for today. One, we continue to be extremely happy with our now recently expanded alliance with Roche and Genentech, not only for their commitment to advancing OpRegen through the clinic, but also for enhancing awareness of the program at medical and scientific meetings. Two, we’re excited to be putting a second cell transplant program into active enrollment this year in a disease with an enormous unmet need and limited competition. And three, we will continue to look for ways to build value from our early-stage pipeline through thoughtful investments in experimental studies and methods as well as from strategic collaborations, which can help advance our programs and validate our approach. I appreciate your attention and time today. And with that, operator, we are ready to take analysts’ questions.

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Q&A Session

Operator: Thank you. Ladies and gentlemen, we will now begin our question-and-answer session. [Operator Instructions] The first question comes from the line of Jack Allen from Baird. Please go ahead.

Jack Allen: All right. Thanks so much for taking the questions and congratulations to the team on all the progress made throughout the quarter. I guess my first question is on the new Roche agreement. Seems like a very interesting investment from a company that’s already partnered with you on Opergen. To what extent can you provide some more color on the scope of the agreement and any financial terms also tied to that agreement as well? And then I have a quick follow-up as well.

Brian Culley: Thank you, Jack. I think in an environment where many biotech companies have been struggling, we are delighted to see this agreement, I would say, showcase an increased commitment to the partnership and expand the scope of work and investigation into the Opergen program. There are some areas of activity that are covered by this agreement. They would include things like extending the follow-up period of the ongoing Phase 1, 2A trial. That can provide further information about the potential of activity of Opergen beyond five years. Genentech is planning to expand to one or more sites in Israel. We are uniquely positioned to provide support with that expansion insofar as we have feed on the street in Israel. And I think more generally, you know, Genentech is looking to continue to evaluate the operational needs of the study.

So we don’t have a lot of detail. We are not disclosing the financial information at this time where we’ve shared the information we can, but those are examples of some of the scope of work that will be funded by Genentech and will, in their respective ways, contribute back to the ongoing investigation value of the program.

Jack Allen: Got it. Great. And then for more of a scientific side, I know we spoke quite a bit about the clinical data that was announced, but there was also some preclinical data that your collaborators at Genentech looked at in a pig model, looking at different methods of administration. I’d love to hear, I guess, any thoughts you have as it relates to how high a percentage of patients you expect could be optimized to gain complete coverage of the GA lesion as we’ve seen that provides better clinical results. And then one other quick clinical question I had as well was we saw 24-month data last Friday. When might we be able to see 36-month data? I mean, it seems like this is durable, but as the data continue to evolve to show great durability, it’d be great to see that data as well.

Brian Culley: I’m smiling because I’m just thinking about like the Roman Colosseum, and no matter what you give them, they want more. So, let me go in reverse. So, 36-month data, you know, to be determined. People know when the study began and when it ended, so I guess I would say probably it would not take another year from now to come up with 36-month data, but it has not been determined by us and together with our partner when that would occur. The pig study that you mentioned, and I didn’t put it in the script not because it’s not important, but it reflects another example of Genentech’s commitment to the program that they are conducting not just the ongoing clinical trial, but also evaluating how OpRegen RPE performs in various animal models.

The pig study, the mini pig study and delivery is, I imagine, intended in part to help improve the delivery by testing various techniques. There are a number of models or forums where such studies can be done, of course, in the context of a clinical trial. One can also deliver cells into a cadaveric eye for pig eye. So there are a lot of different ways that you can test out different methods or techniques to ultimately try to drive a wedge between the clinical effect of the therapy and the safety and tolerability of a therapy, and that’s what all of us in this field want to do because that is the threshold for obtaining marketing authorization and then having a financially successful product is the evaluation of the risk reward. So I think about this much in the same way that I think about LASIK surgery, which when I was a young person, sounded very scary and dangerous, but as more and more people received it and there was more and more experience with it, it became almost routine, perhaps it is routine at this point.

And so I’m comforted by the fact that surgical/procedural and methods seem to be more likely to be able to yield to investment and offer success than trying to come up with, for example, a small molecule to have activity in a very complex disease. So I like very much that an area of great attention is how to get very good delivery of these cells because, of course, that’s one of the big findings from the Lineage Phase 1 is that if you get the cells to the right place, they really seem to drive exceptionally strong clinical outcomes. So I don’t know, if there’s a threshold for what the ceiling could be for a successful therapy, I think that we’ve seen some exciting results even in patients who didn’t receive what we might think of as ideal transplant of the cells across the area of atrophy that invites questions around multiple dosing or dosing patients earlier.

There’s a lot of really interesting things. And that is a big reason why we’ve partnered with the best of the best in ophthalmology is that we would not be able to adequately investigate all of those important parameters in a way that would really contribute to the probability of success here. So we’re thankful that we have a partner that identified and agreed that we were on to something exciting and is conducting those studies for the benefit of the program and thereof also for Lineage just benefit.

Jack Allen: Awesome. Great. Thank you very much for taking the questions, and congratulations again on all the progress.

Brian Culley: Thank you very much, Jack.

Operator: The next question comes from the line of Mayank Mamtani from B. Riley. Please go ahead.

William Wood: Thank you very much. This is actually William Wood on for Mayank. I would appreciate you taking our questions and correct on the very next quarter. I want to step back and just play a bit of a devil’s advocate here. When looking at the agreement that you have, the new agreement with Roche, should this be looked at potentially negative where Roche is needing to rely on your services, your experience, your techniques more to get it done because they’re having trouble? Or is this really — that’s the wrong way to look at it, and this really is a positive and they’re just trying to get to the best outcome.

Brian Culley: I feel comfortable saying that I see this solely as a positive. The additional activities are to Lineage’s perspective, beneficial to the program. In some cases, there may be some convenience such as the work in Israel, but we have sort of an additional component, maybe this is really what you’re referring to which is that this is not a normal license agreement. I think if big pharma does a deal with a company that has a small molecule or a company like Genentech does a deal with an antibody company, there’s probably very little that the small company can contribute because the capabilities and the expertise of the big pharma company are so extensive that they don’t really need any input. It’s not going to probably contribute to the further end of the program.

But we’re doing something very novel. And although you’re seeing more examples of it every day, and I spoke about this in the body of my prepared remarks, the reality is that even our work is built upon about 2 decades of experience — so if you ask the question in this way, can Roche and Genentech or any other big pharma benefit by maintaining an ongoing relationship and dialogue and learning additionally from us as the innovator, I think the answer is yes, and we see that as a great positive because it suggests that there are competitive barriers that others will have difficulty surpassing that we get to remain more closely involved in the program, perhaps in genders. I cannot speak for Roche’s strategic plan, but perhaps it in genders a sense of interest in additional work or additional campaigns, there are many things about this expanded agreement that go beyond my over comments that companies are being rigorous about what they invest in and looking for high-impact, high-value programs.

And some companies are laying people off or killing their programs. And here, we see a very clear sign of additional commitment. That’s all positive. But when you wrap it up into a much larger picture, we will never be able to go 50% with the resources that Genentech can put into this program or a Roche can put into this program. So, we still are a minority in terms of the resources that we put into the program compared to them. But we do have some things that we can offer and we can offer those things not just to the OpRegen program, but to many other programs. And that really speaks to the value of this company in this business where today known well for what we have entered into for the dry AMD program with Roche and Genentech. But in the future, I think the learnings and lessons and advantages that we have from this platform will be applied to additional programs as they mature or as they find their way into partnerships.

And now you’re talking about the kind of growth that could be incredibly exciting from an investor perspective.

William Wood: Awesome. I appreciate that answer. That was very nice. Very helpful. Within — when we’re thinking — looking at the 24-month data, obviously, we always like to compare to a control arm. How should we be looking at the patients in your trials with the other eye, the contralateral eye, do these eyes also have GA maybe so kind of infers in control? How should we — is that a direct comparison to other trials that we’ve seen maybe in complement? And then sticking on the complement, if I can squeeze in one extra question. Is there a point maybe late-stage development where you actually start using your — the control eye is now injected with, say, a low-dose complement or something of that sort of a standard of care type. Yes, any color there would be appreciated.

Brian Culley: And that’s a fantastic question. I have to begin by saying that there are always going to be some differences among data sets. And they sometimes reside in your inclusion, exclusion criteria and they might even more simply just reside within the number of patients that you’re looking at and thus the variability. So there is no perfect comparison, but I appreciate what you are asking because it’s a normal and appropriate question. And I do think that there are some insights, despite the fact that this is a relatively small patient population, one can still identify a handful of insights. The most powerful one, of course, is that the images and the effects that we have discussed and our partner have presented, do not happen in the natural course of the disease.

So we have a very convincing link between the therapy and those changes that we have observed, and we view that those changes are positive changes. Going beyond that, one does have the ability to start asking questions. So for the contralateral eye or the untreated eye in our patient population, I would explain for everyone’s sake that, that is always the eye that has a — on average, that is a smaller area of atrophy. So the patient’s other eye does have dry AMD as a requirement for this study, but it’s always the better eye — and the difference in visual acuity between the treated eye and the untreated eye is very large. I think if I recall correctly that on average, our patients were somewhere around 2060 or 2080 for the untreated eye. So that’s a lot better than the treated eye, which could be running upwards of 2,100 or 2,200.

So there is a built-in bias that the treated eye is always starting off in a worse place. Third point that I would make is that the patients on our study, all of the treated eyes had foveal involvement. And so in making comparisons to complement inhibitors, not all of the patients on either of the well-tested complement inhibitors had foveal involvement. And as a general matter, not having foveal involvement would suggest that you have better baseline BCVA or other visual acuity metrics that you might rely on. So there are imbalances. We do look at those imbalances because if you see partially informative sets of data or partially informative analyses, but they all point in the same direction or they reinforce each other, taken as a collective, it can be very exciting because it increases your confidence, of course, is falling short of a 200-patient study, but there’s a lot here that we think is directionally correct, directionally consistent and gives us a lot of encouragement about the difference.

The last part of your question is around treatment of a — excuse me, a Control eye, perhaps getting a complement inhibitor as a direct comparison with OpRegen. And I don’t think it’s too bold to say that while that decision would be made by our partner, that design — that clinical study design decision would be made by our partner, my personal opinion is, I don’t care. Because the clinical changes and the anatomical differences between what we’ve seen with OpRegen versus an untreated eye or what we’ve seen with OpRegen versus an anti-complement treated eye are so large and obvious, literally going in opposite directions that I’m not particularly concerned about our probability of success, whether it’s compared to Anticomplement therapy or compared to an untreated eye entirely, especially over a relatively short period of observation, which could be 24 months, 18 months, 12 months in anatomical case, you’d still also want to loop in six months.

So, one of the great challenges to wrap-up this answer a little bit shorter, is that, while Visual Acuity and anatomical changes are inextricably linked and travel in the same direction, they don’t travel at the same time or the same pace. So it becomes a very difficult to make direct comparisons, especially as you start to look at subsets. And so we take the opposite approach. We start to rise above the subsets and trying to ask more general questions about directionality of effect over long periods of time and whether those are likely to be due to chance or attributable to our therapy.

William Wood: Got it. Appreciate the thorough answer there. And then, thank for taking our questions, I’ll hop back in the queue.

Brian Culley: Thank you, William.

Operator: The next question comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead.

Joe Pantginis: Hi everybody. Good afternoon. Thanks for taking my question. Brian, I just want to start with a housekeeping question first on the services agreement. Are you disclosing what the duration is or when it could be renewed?

Brian Culley: No. We have shared what information we are able to share at this time.

Joe Pantginis: Okay. Now with regard to OpRegen, I think the key point that you’ve been making here is that Roche is now doing everything independently presenting the 24-month data independently, doing their own pig study independently. So I guess, I would ask the question this way, and I know, I’m asking you to speak for Roche. So I apologize for that. Since they’re basically seeing all of these data and doing these experiments live, do you feel that any of these can impact their own internal program by pressing the brakes, or pressing the accelerator on any particular aspects as they’ve been looking to optimize the program on their own.

Brian Culley: Well, you do know that I cannot speak for Roche or Genentech. What I can say is that, it was always contemplated from the beginning that there would be a long-term handoff of this program. Partly, that is because the manufacturing process is complex, and you don’t just learn that overnight. So we’ve always anticipated that there would be a transition of both clinical activity, manufacturing activity and ultimately on to commercial activity. But when they entered into the agreement and committed to the upfront payment and the other economics that we are eligible for, they also were able to acquire the discretion to make those choices. Now of course, most license agreements have provisions around things like terminations and clawbacks and commitments to continue to make commercially reasonable efforts and so forth.

And most of that is typically redacted in the filed copies. But what I can say is that even those of us at Lineage, to a certain extent, look at external indications for signs of whether we think our partner is accelerating their interest, decelerating their interest or maintaining their interest. And we continue to be very happy and appreciate that Roche and Genentech do go to link to talk about this program and share data. And I’m not sure that every company does that with every program, and it does not necessarily mean anything. But we presume that, that reflects some enthusiasm. So I think it may be tea-leaf reading or in this case, perhaps the leaves are palm from, which are much larger. But ultimately, where the program fits into their pipeline and their strategic value, their urgency or their decisions on budget year-to-year, those are things that they will decide through their own contemplation of their corporate objectives, but there’s a reason we wanted to go with this organization and it’s because they understand ophthalmology.

They have been exceptionally successful in ophthalmology, and we think that they are as committed to getting this product out and changing lives as we are.

Joe Pantginis: No, that’s very helpful. I appreciate that. And then on OPC1, I was wondering if you could walk us through the steps for site activation, specifically, when are the physicians trained, have they already had some broad training across the sites already, general device availability? Are they essentially stockpiled, ready to be set to the sites? So that’s the top end of the question. And then financially speaking, can you just remind us where — because you gave an update at your year-end call where things stand with regard to the CIRM application cycle? Thanks.

Brian Culley : Yes. Thank you, Joe. I’ll just say for CIRM, there really has not been any update that we’ve received yet. So we continue to wait for the next Board meeting. That Board meeting, I believe, is scheduled for the end of June. And so we would expect that in the end of June, we would have more information that we would be able to share. With respect to onboarding sites, there’s a very long list of activities. Of course, the contracting around the schedule of fees not only with the site, but also with the many vendors that are involved with the clinical trial. Product has been manufactured and is ready to be shipped to sites. Site initiation visits, device training, all of these are steps that are required prior to a patient being treated surgical manual what’s fortunate for us is that the site that we today think will be the first site to open is a site that had been part of this study several years ago and some of the very same people are involved.

And in fact, I would frankly say that, that is something that we found as we were going out and evaluating different sites, is that people who are involved with this program before, we’re very enthusiastic about wanting to be involved again. So I think that’s a good indicator. But I don’t think there’s anything particularly with this clinical trial in terms of the operational execution, I would just add for everyone’s sake that some of the steps such as actually soliciting patients can often do not occur until the full clearance has been obtained with FDA or your risk of having a clinical hold has been diminished down to a very small level. So there are certain steps that are ceding to others. But generally speaking, there’s a lot that you can do to get ready that you can do in parallel, which makes it economically efficient.