Lineage Cell Therapeutics Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 10, 2023

There are 10 speakers on the call.

Operator

Welcome to the Lineage South Therapeutics Second Quarter 2023 Conference Call. At this time, all participants are in a listen only mode. An audio web this call is subject to copyright and is the property of Lineage and recordings, reproductions or transmission 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.

Operator

Hone, please go ahead.

Speaker 1

Thank you, Mandeep. Good afternoon and thank you for joining us. A press release reporting our Q2 2023 financial results was issued earlier today, August 10, 2023, 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 and webcast are expected to be in a listen only mode.

Speaker 1

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 ten ks and its subsequent quarterly reports on Form 10 Q. We caution you not to place undue reliance on any forward looking statements, which speak only as of today and are qualified by the cautionary statements and risk factors described in our SEC filings. With us today are Brian Culley, our Chief Executive Officer Jill Howe, our Chief Financial Officer and Gary Hogue, are Senior Vice President of Clinical and Medical Affairs. With that, I'd like to turn the call over to Brian.

Speaker 2

Thank you, Joanna, and good afternoon, everyone. We appreciate you taking the time to join us I'm happy to share that I'm feeling very good about how things are going. A lot of the items that I will comment on today reflect a business that continues to be on track with its development plans and has many reasons to be excited about the future. I'm going to kick off as usual with OpRegen and in particular, I want to comment on recent developments in the dry AMD space And how I see those events positively affecting our lead program. As you no doubt are aware, there have been safety issues disclosed recently related to the use of XIFAVI, the 1st FDA approved agent available to treat geographic atrophy secondary to dry AMD.

Speaker 2

I'm not going to speculate on the root cause of these safety issues because the story is still evolving, but I am going to highlight That a rare but serious side effect is exactly the sort of thing that can derail a product when it only offers a small clinical benefit. As we all know, the clinical experience to date with complement inhibitors shows that at best, if you actually receive all of your monthly or And in terms of the patient experience, you are unlikely to feel any differently when taking it and you continue to lose your vision, which is Why there was so much debate about whether the product would have enough clinical benefit to be approved. But it did receive marketing authorization in the early signs where there was going to be a very successful launch due, of course, to the absence of other choices and the high unmet need in this condition. Subscriber or an individual patient, the utility of a given drug stems from its benefits and its risks. When the rewards are small And perhaps require years to observe, even rare side effects can be devastating to a product.

Speaker 2

So while the initial launch of Xyfobri was compelling and highlighted the extraordinary enthusiasm which exists on the demand side, Its Achilles' heel may end up being its limited clinical benefit, which is unable to overcome the risks of catastrophic vision loss. While this risk appears small on an absolute basis, the use case for a product is not limited to its risk, but rather deeply about vision. The hope for preserving even a small bit of vision, even if that takes several years to be achieved, is capable of driving enormous demand, but the risk of losing vision is so unacceptable that the market opportunity may remain unfulfilled Until a product is approved for which the gains are more clearly worth the risks. For investors, that means finding a therapy which is safer, More effective or ideally both. Overall, I think this most recent chapter in the dry AMD story highlights Three things.

Speaker 2

First, it has provided prescriber level evidence of an enormous market opportunity. Before the risk of vision loss due to vasculitis was disclosed, the early sales of SYFOVRI were impressive and helped to validate widely held commercial projections in dry AMD. 2nd, despite the approvals of SYFOVRI and now also Izervae, We've heard from prescribers and thought leaders that there continues to be a need for more effective agents to treat dry AMD. These complement inhibitors appear to be temporary and incomplete solutions. More exciting, effective and infrequently dosed candidates which were achieved by patients in our Phase IIIa trial who received OpRegen cells across substantially all of the area of GA and with a single surgical administration.

Speaker 2

As investors begin to look beyond the recent approval of 1st generation agents and into the pipeline of future dry AMD programs, we believe Lineage is ideally positioned with a potential best in class and 1st in class product candidate with a proposed treatment profile, which in such patients doesn't merely slow progression, but can in some cases stop or even reverse GA and do so with an increase in visual acuity starting in weeks and lasting for years. While every product has its benefits and risks, we believe a commercially approved agent with a significantly larger clinical benefit would more easily tolerate a low frequency risk of adverse events. The 3rd highlight is This makes us feel even stronger about our partnership with Roche and Genentech. Roche has extensive clinical experience with complement inhibitors, but The development of those assets were discontinued. Meanwhile, they added a completely new approach to treating GA via the licensing deal we signed for OpRegen.

Speaker 2

When it comes to treating GA, I believe Roche was right to move on from the complement pathway and embrace agents with larger potential clinical benefits. For reasons I've shared previously, I'm not yet able to provide details about the ongoing Phase 2a trial of OpRegen, but Roche continues to enroll patients. As a reminder, the primary endpoint occurs just 90 days following each transplant. Roche has nearly 2 quarters of enrollment experience behind them and additional sites are expected to come online this year, which you can follow at clinicaltrials.gov. I'm not able to guide to when the top line data will be available, but we continue to be hopeful that the data will show that Roche is able to reproduce the clinical benefits, which lineage reported in the Phase IIIa trial and that they also will build upon our early success with additional insights into the safest and easiest way to deliver OpRegen.

Speaker 2

Moving next to OPC1, our spinal cord program. As we expected, we recently received a response from FDA to our Type B meeting submission. This submission was conducted to discuss and clarify We do not need to conduct additional back and forth discussions with the agency on this topic. Our next step will be to submit the IND amendment for this new system and through that amendment, we will be permitted to provide some final content and clarifications that were requested in the FDA's response. The agency also said that the clinical design seems acceptable and tentatively agreed that no additional nonclinical in vivo studies would be needed.

Speaker 2

In light of this feedback on our proposed trial, we remain on track to submit the OPC1 IND amendment in the Q4. Assuming no further comments arrive in the 30 days following that submission, That will permit us to proudly bring OPC1 back into clinical testing by initiating the dose study in subacute and chronic patients. Related to OPC1, I briefly want to provide a follow-up on the 1st Annual Spinal Cord Injury Investor Symposium, Individuals with lived experience, caregivers, advocacy organizations, investors, analysts and members of the public and the media And alongside presentations and panel discussions, we heard from people who have participated in SCI clinical trials and what they would like to webcast, we will be conducting a listen only mode. The response to this event has been far beyond our expectations and we already have begun thinking about how we can improve it next year, Including by inviting representatives from regulatory agencies. Moving next to VAC2.

Speaker 2

We recently received data on the 8 patients with advanced non small cell lung cancer who were enrolled in the U. K.-based Phase 1 trial conducted by Cancer Research UK. The most notable points from those data were that the VAC2 product candidate appeared to be well tolerated in all treated patients and the adverse events we observed were modest and ones which we expect from a therapy designed to generate a robust and durable immune response. 5 of 8 patients demonstrated a best response of immune related stable disease and 3 demonstrated immune related progressive disease. Ellispot assays indicated that 2 patients had durable responses and 2 others had transient responses As a whole, these data provide an important connection between the proposed mechanism and the clinical observations in this trial.

Speaker 2

And while this was a small sample, 3 of the 8 patients, all of whom had refractory disease reached the 2 year survival endpoint. This was an important trial to assess the tolerability and mechanism of VAC2 and the overall safety and efficacy data which was collected, affirms our belief And the potential for allogeneic cell therapy to address certain types of cancer. We appreciate the patients and the team at Cancer Research UK for their efforts to complete this study. In terms of our path forward, because many different antigens could be employed in our allogeneic dendritic cell system, We believe strategic alliances offer us the best way to advance the VAC platform and our BD team continues to be engaged in exploratory session for the development of VAC assets. While there is no assurance that any partnerships we're exploring will come to fruition, We note encouraging clinical results have recently been reported in the neoantigen vaccine space.

Speaker 2

So in addition to the B. Detox, We intend to continue monitoring this landscape to help inform our corporate strategy and determine the best development path for VAC2 or any other VAC platform programs, Lastly, we recently received information which indicates that VAC2 development could be eligible for CIRM funding And have begun to evaluate that avenue as well as the others I just mentioned. For ANP-one, which is our cell transplant program for hearing loss, preclinical testing is ongoing through a collaboration with the University of Michigan. Our initial objectives from this collaboration are to evaluate engraftment of our cells in certain anatomical destinations and assess how long cells can survive after transplantation to those locations. I don't wish to get ahead of myself on this As some of you may have seen, just a few days ago, another hearing loss company was acquired, making that 2 early stage gene therapy hearing loss acquisitions in the past year.

Speaker 2

We believe these recent acquisitions in the hearing loss space serve to validate our decision to expand the Lineage platform into hearing loss and will provide competitive comparators for the ANP-one program. And as I've previously said, I think cell therapy can have advantages over certain kinds of gene therapy because Replacing the entire cell means you don't have to select for patients who carry a specific genetic defect. We think this offers cell therapy larger addressable markets, while matching the advantages of the one and done treatment schedule of gene therapy. So to wrap up this part of the call, I want to mention a few of the ways in which we will be working to create near term value for Lineage shareholders. I believe one of the questions for investors at the moment is whether Roche will independently reproduce our findings of improved retinal structure.

Speaker 2

So we will be doing everything we can to help support their efforts to enroll and conduct that study. In parallel, we will be working closely with Roche and Genentech employees to transfer our production process to them, which will enable them to manufacture OpRegen in house, which continues to be part of the overall plan for OpRegen development. And thirdly, We expect some additional data updates from the Phase IIIa study of OpRegen to be presented at medical meetings this year, which is always helpful for increasing awareness of our program and to demonstrate our partners' commitment to it. With respect to our pipeline programs, the most notable item will be getting the IND amendment for OPC1 submitted before the end of the year. We also expect to have updates from other areas of our business as we always aspire to reach newsworthy milestones from across our portfolio.

Speaker 2

And while we do try to make a lot of progress each quarter and reach those milestones, we also try very hard to keep our spending under control. So with that serving as a transition, I will now hand the call over to Jill for a discussion of our financials.

Speaker 3

Thanks, Brian, and good afternoon, everyone. Beginning with our balance sheet, I'm pleased to report that we have continued to be smart with our spending and are well capitalized to conduct the near term activities, which Brian just outlined. Recorded to support our current planned operations into the Q4 of 2024. Please note, this cash amount does not account for any of the RocheGenentech milestone payments or for any business development or grant revenues, which we may receive during this same period. Next, we will review our 2nd quarter operating results.

Speaker 3

Our revenue is generated primarily from licensing fees, Royalty, collaboration revenues and research grants. Total revenues were $3,200,000 a net decrease of $1,400,000 as compared to approximately $4,600,000 for the same period in 2022. The decrease was primarily driven by lower collaboration And licensing revenue recognized from deferred revenues from the Roche agreement. Operating expenses are comprised of research and development expenses And general and administrative expenses. Total operating expenses were $8,100,000 a decrease of $500,000 as compared to $8,600,000 for the same period in 2022.

Speaker 3

R and D expenses were $3,900,000 a net increase of $600,000 as compared to $3,300,000 for the same period in 2022. And this increase is primarily driven by $400,000 in higher OpRegen program related expenses and $300,000 in non clinical related expenses to support the OPC1 program. G and A expenses were $4,200,000 a net decrease of approximately $1,100,000 compared to the $5,300,000 for Overall reduction in cost incurred for services by 3rd parties, consulting costs and stock based related compensation expenses. Loss from operations was $5,000,000 an increase of $800,000 as compared to $4,200,000 for the same period in 2022. Other income and expenses included other expenses of $200,000 compared to other expenses of $2,500,000 for the same period in 2022.

Speaker 3

This change was primarily driven by exchange rate fluctuations related to our international subsidiaries, fair market value changes in marketable equity securities and interest income from our marketable debt securities. The net loss was $5,200,000 or $0.03 per share Compared to a net loss of $6,800,000 or $0.04 per share for the same period in 2022. Overall, we continue to maintain our same spending discipline as we have adhered to for years and which has served us well in the past. As the biotech markets continue to face uncertainty, we believe that maintaining discipline with their spending will will continue to allow us to maintain our plan to reach meaningful milestones, make important progress and create value for shareholders from our investments in our programs. Now let me hand the call back to Brian.

Speaker 2

Thanks, Jill. To wrap up, we believe Lineage is pioneering an approach, which cells, the reality may be that the true value from stem cells isn't using them as medicine, but using them as starting material to generate other cell types, can vastly exceed the best available alternatives. Most of the success stories to date in cell therapy can be found in oncology or transplant medicine, but Data reported recently in non cancer indications such as Type 1 diabetes and Parkinson's disease as well as Our own achievements in dry AMD with GA suggest that advancements in the tools, understanding and best application of differentiated cells in a replace and restore approach may be on the cusp of an exciting era. I continue to believe Lineage is making good decisions in a challenging biotech environment. And one of the things we will be particularly excited to work on this year will be continuing to support them in the further clinical development of OpRegen.

Speaker 2

As always, we sincerely appreciate your support of the company as we look to position Lineage to become the leader in cell therapy and cell transplant medicine. And with that, Mandeep, Jill, Gary and I are ready to take analyst questions.

Operator

Our first question comes from the line of Jack Allen from Baird. Please go ahead.

Speaker 4

Great. Thanks for taking the questions and congratulations to the team on all of the progress made over the course of the quarter. Maybe to start, I know, Brian, you talked a lot about the The GA opportunity with OpRegen. Could you maybe speak a little bit more finally about what you can do to help your partner enroll this

Speaker 2

It's limited when I'm able to share specifically, but what I can note is that to date, Genentech has relied on the same clinical centers, which we had used in the Phase IIIa study. So there's certain familiarity, relationships, know how, understanding that could be beneficial. But with respect to the specific activities that we perform, I would characterize those as more contributory are contributional in nature and not as much the frontline decision making. And as you already know, Roche is paying for the clinical development of OpRegen in this study and any future studies, which they conduct. So we

Speaker 4

Great, great. Thanks so much for that color. And it's great to hear you're taking an active or at least as active a role as you can in helping progress that asset forward. And then maybe on OPC1, very quickly, it's great to hear that you've gotten the feedback from the FDA and you're planning to implement the device with the IND amendment here. I guess maybe could you step back and talk a little bit about your longer term aspirations for OPC1?

Speaker 4

Previously, my understanding that you're going to dose a few patients This new device may be moving to a larger study. Can you talk a little bit more about the maybe 3 to 5 year plan here?

Speaker 2

The most important and outstanding question about OPC1, which we want to answer and intend to answer In order to answer that question, we will need to conduct a larger and controlled study. The study design has not been determined. It deploying and demonstrating the utility of the new delivery system. It's a lot smaller, many fewer component parts. It's easier to administer and it has advantages that we think will be beneficial on safety and perhaps even efficacy.

Speaker 2

The second thing that we need to do is to introduce the new cells, which we manufacture here at Lineage. As I believe you and others are aware, I've talked extensively about the achievements of the manufacturing team that they have made on the manufacture of OPC1 in terms of the reproducibility, the scale, the control and the purity, When those two elements are complete, then we would be able to have the back and forth with FDA to design and propose A larger comparative study. And so that's really where we want to go with this. We would need to clear a couple of What I think are relatively straightforward hurdles and then when we get past those, we want to conduct that larger study and answer that critical question, which is, Is this a therapy that can help individuals gain mobility after a spinal cord injury that they would not otherwise experience but for the receipt of these cells to their spinal cord.

Speaker 4

Great. Thank you so much for taking the questions and all the color. Congratulations again on the progress.

Speaker 2

Thank you, Jack.

Operator

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

Speaker 5

Hey, everybody. Good afternoon. Thanks for taking the questions. So Brian, my first question, I promise there is no pun intended, But do you envision or any potential complementarity between OpRegen and IsoVE or cifovri?

Speaker 2

I've heard a lot of vision jokes in my 5 years here and that is certainly one of them. I'm going to refer the question to Gary, to talk about the compatibility and how our

Speaker 6

Yes. So Joe, I think obviously based on the initial launch of Clearly, there's a huge unmet need. So, it's a big playing space and there's no reason that OpRegen can't be used in In conjunction with the complement inhibitor, either the 2 approved agents or allow a complement inhibitor to be used first and then follow-up with OpRegen or vice versa. We think that there's a potential synergistic effect of the 2 products, 3 products technically, and that in the effect that they both might benefit from So obviously, we'll need to conduct those coadministration studies at some point, but we don't think it will impact If anything, it will benefit both approaches to treating dry AMD.

Speaker 5

No, that's helpful. Thank you. And then, wanted to switch over to the VAC platform. I guess, how should we view or what are you doing to percolate sort of the platform concept behind the scenes other than sort of having inbounds and marketing it as a platform, are you doing any particular Scientific work, to be able to help market it, do you have the potential to be able to and sales out on an NDA situation where a third party can sort of do their own experiments. So how is the platform being percolated?

Speaker 2

The answer is that it is being viewed through a number of different prongs. Of antigens which could be presented on the surface of the dendritic cells. And you could imagine that that idea can range from work that has been done at academic centers for more of The pan cancer antigen like a TERT or you could imagine harnessing some of the discoveries that are coming out of The AI field and machine learning to rationally select the antigen that you might use either Individual patient basis or again more collectively for antigens that could serve this purpose more broadly. We have other prongs that we are considering, which include manufacturing. We think that there is still a lot of room to improve The production and drive down the costs of the dendritic cell system.

Speaker 2

And we think that from a clinical perspective, there's a prong that can be viewed with the dendritic cell as a tool because it essentially goes beyond the first step of the immune system, which is we are are concerned that your antigen is not tickling the immune system quite in the right way, utilizing nature's Previously designed system for presenting those antigens could be beneficial. It is extremely difficult to tackle all of those prongs simultaneously with all of their exploratory conversations, these are the kinds of prongs that they are thinking about and talking about with various parties, each of which in isolation could be beneficial of the VAC program and help elevate the visibility and importance of that program, And which altogether could provide us with some de risking by having multiple approaches, Partly supported by partnership and then perhaps partly supported by Lineage.

Speaker 5

Appreciate the color, Brian. Thanks a lot.

Speaker 2

Thank you, Joe, and thank you also for participating as a moderator at that spinal cord First Annual Spinal Cord Conference. We appreciate you and Jack and others.

Operator

Our next question comes from the line of Christian Klaskow from Cantor Fitzgerald. Please go ahead.

Speaker 7

Hi, good afternoon. This is Jason Bouvier on for Kristen. Thanks for taking our questions. I have two questions. Just going back to the Phase 2a trial being managed by Genentech.

Speaker 7

Do you have any information on the number of patients Or subjects that have been enrolled, sort of the rate of enrollment and how many are left? And then the second question is, how are you thinking Prioritizing earlier stage programs and any potential projects that are not yet out in the pipeline? Thanks.

Speaker 2

We're not permitted to disclose or share that level of granularity with respect to enrollment. You and everyone, unfortunately, will need to just kind of make their own estimates and projections. With respect to What I will call the balance between our lead program and other programs, we are trying to strike a balance within that balance, which is to say that we are certainly planning for success. If one isn't planning for success, one presumably is planning for failure. So that is It's pretty straightforward that we are looking to build a company here that in part will be elevated by the success, The future success of OpRegen and dry AMD.

Speaker 2

However, it's also abundantly clear that this environment is not one of the best that has ever been for the biotech industry, so we can't be irresponsible in how we invest in our pipeline program. So we have today multiple assets, they are staged with respect to where they are clinically or preclinically, I. E, how far they are along in development. And that staging can be intentionally adjusted to reflect an appropriate level of financial commitment. So there are some areas that we think that the return on our investment and the value to our business is quite high.

Speaker 2

And the best example I would point to there some exciting early stage acquisitions that were done for what I believe were essentially single asset hearing loss programs. So We use that sort of discipline and that critical ROI evaluation as a way to manage our spending Across the platform and we're always asking ourselves if it's something that we should look at grant funding, is it something we should be thinking for what we hope will be exciting future data from the OpRegen program.

Speaker 7

Great. Thanks a lot for that answer.

Speaker 2

Thank you, Jason.

Operator

Our next question comes from the line of Mayank Mamtani from B. Riley Securities. Please go ahead.

Speaker 8

Hey, guys. This is Madison on for Mayank. Thanks for taking the call and congrats on the progress. Just a quick question. Once you submit your IND amendment in 4Q and 30 days past, How long will it be before you actually move into the clinic there?

Speaker 8

And then Secondly, it sounds like you guys will no longer be responsible for production as you're transferring capacity to your partners Regarding OpRegen, I'm just wondering how long that transfer process

Speaker 2

To OPC1, we always look to minimize the amount of time between when we are clear to open a site and getting through the contracting process And actually opening a site, a lot of the time is, regrettably on the site The legal and the contracting side, I think generally speaking, sponsors are good about turning around their documentation, but Each site is its own animal and poses its own challenges. So we do as much as we can to start these trials quickly. I have no reason to think that we would benefit in any way by having a delay. So while we know that this will be a study at Small number of sites, we are going to do everything we can to be able to start very quickly After the 30 day clearing period has occurred, but there are some centers out there that won't engage fully Until you have an IND open and that's very frustrating, but many others allow you to parabola path with an expectation of when you'll be ready. So it's a blend.

Speaker 2

When you have a multicenter trial, you're going to find different hurdles. But for us, The best answer is for us to pre plan and be ready to hit the ground running to the extent possible with redundancy and parallel path work Being done in advance of that 30 day period. With respect to the second question, I have no idea how long it takes to transfer a cell therapy production process to a big pharma partner because We've never done it before. However, we have abundant faith in our manufacturing production team And their ability to train and teach skilled collaborators to achieve the work. As Probably everyone on the call knows manufacturing cells consistently and reproducibly and controlling the process is very difficult and there have been many failures over the years in laboratories around the world, but we have seen many examples of extraordinary success by our in house manufacturing team.

Speaker 2

One of those examples I spoke to with ANP-one being able to create a differentiation protocol very quickly. Another example would be the enormous scale of production, which they achieved with OPC1. A third example would be how well they were able to improve the purity and the scale of the OPC1 program excuse me, I misspoke, I meant OpRegen previously, I meant OPC1 in that case. So those are three examples from 3 different programs, which illustrate the capabilities of the manufacturing team. And I have no reason to think that RocheGenentech has a paucity of resources or capabilities, quite the opposite.

Speaker 2

I expect that they have abundant capabilities in this regard. So while it's Not a straightforward and simple task. You can't mail it into somebody. You don't just send them a document. You really need to be sitting next to them Going through repeating it several times, I really am unable to tell you when I think that process would be completed, but we will Pay great attention to it and work very closely with our partner to give them the best possible chance of success.

Operator

Our next question comes from the line of Michael Okunovich from Maxim Group. Please go ahead.

Speaker 9

I think to start off, I'd just like to ask a little bit about the VAC2 program and to see if you could kind of prime us for the full data from that study with the additional analyses ongoing at your U. K. Partner, which of those particular analyses do you consider to be the most important

Speaker 2

Thank you, Michael, for the question. I will refer to Doctor. Hogue to respond to you. So

Speaker 6

There are ongoing investigations. They're looking at biopsies from the tumors to look for tumor inventory in lymphocytes. We're keenly interested in those data. Looking at the skin biopsies at the site of administration to see what type of cell influx occurred post first administration all the way up to 6 administrations, so that would be of interest if that profile changes over time. Additionally, we're looking at different ELISA panels, look to see if we have a Th1 or Th2 cytokine profile shift, that wasn't their baseline.

Speaker 6

And all this would be indicative and may show that there was at least some anti tumor effect as well that we Certainly interested in looking at. So those data are being analyzed and we await the reports from Cancer Research UK.

Speaker 4

All right. Yes, thank you for that. And then I would just like

Speaker 9

to ask about the, specifically in the Do you see having additional one and done therapies out there paving the way as making it more attractive for development for ANP-one? And then do you have any additional color on specific indications you might look to go into once this gets towards the clinic?

Speaker 2

Thanks, Michael. I have a 2 part answer. The Refinement of the indication and the intended patient population will be driven by the data which we collect initially, Preclinically and then evolving into the clinic. It's difficult for us with such a New approach to be credibly definitive about Some of them chemical, some of them physical, some of them more reflecting aging and degenerative processes, the notable aspect of Other approaches and let's call it success that we're seeing in approaches for hearing loss, I think is very beneficial to our earlier program because it's beginning to establish the existence and refine some of those questions about What are the right clinical endpoints to use? What are the economics of a program look like?

Speaker 2

Because ultimately, If we're going to get credit for what today is a preclinical program, that's going to come through some sort of evaluation exercise, which is going to need to have some sort of an addressable market, which is going to need to have some refined patient population. So While it's exciting to go into a new area with an incredible paucity or dearth of other competitive threats, The trade off for that is we don't have a mature and established commercial market that we can point to with certainty and say we know exactly what patients we're going after. So In light of the options of a mature and crowded space compared to this new area, I'm delighted to be going into this new area because we can partly define it for ourselves rather than be forced into following others, but I think there's a lot to learn in the hearing loss space from some of the early forays that we are seeing in particular in gene therapy and as I described earlier, even if a gene therapy is able to wonderfully address one specific deficiency in the genome Through some sort of repair or replacement of that genetic information, that is going to leave many other kinds of hearing loss available to an approach that is replacing the entire genome through the transplant of a cell.

Speaker 9

Thank you. I appreciate your insight.

Speaker 2

Thank you for the question.

Operator

Our next question comes from the line of Jack Allen from Baird. Please go ahead.

Speaker 4

Great. Thanks again for taking the questions and the follow-up here. You just jogged the thought as one of my peers is asking a question about Roche's execution of enrollment of the OpRegen Phase 2a study. I know you mentioned in response to my question that you have a lot of experience with the sites that are being utilized by your collaborator. I guess any historical context you could speak to as it relates to the ability of those sites to enroll patients in your Phase II or III study?

Speaker 2

One of the things that I like to highlight sometime ago was that the early forays into this study enrolled very slowly, By the end of the study, this team at Lineage had taken control Of enrollment, we had opened additional sites and we were able to enroll, I think the last four patients were all within a very crowded period of maybe 6 or 8 weeks. So that is reflecting tremendous variability of pace of enrollment, which occurs not just at the study level, but also So I think there are some factors that go in our favor. In particular, I think the Conversation between a prospective patient and the center and the surgeon is different today because you're talking about a program that has pharma credibility and 24 well or highly accessible sets of data to be able to refer to rather than being the first of its kind, but at the same time, this is an optimization study. And I believe that Roche would like to minimize the number of variables to the extent it's possible so that they can gain as much information as possible from this study. And in doing so, it's not surprising to us that they have elected to start out with just the sites that we had used previously.

Speaker 2

I expect that that will expand over time. I don't have specific information about that. But I think it's a general sentiment that I'm encouraged that There is more horsepower and there is more experience available for this trial being run by Roche and Genentech than what was done in the hands of Lineage, although obviously we were quite delighted with the findings and success that we had in our Phase 1.

Speaker 4

Great. That's great color. Thank you again for taking the follow-up.

Speaker 2

I appreciate that, Jack. Thank you.

Operator

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

Speaker 5

Hey, guys. Thanks for taking the follow-up as well. So, when you're looking at the AMP-one program, I wanted to dive in a little bit here. Can you describe sort of a little more of the models you're looking at right now and what's planned? And I sort of want to correlate that with the takeouts that you referred to of Akuos and Desibel.

Speaker 5

Now they are using gene therapy as you alluded They were very focused on targeting of their AAVs and in very specific mutations, which you don't necessarily need

Speaker 2

Thank you, Joe. It's a great question. I understand the question. We do plan to provide an update on ANP-one later this year and probably the question is even more suitable at that time, Because at this point, our focus is and our emphasis is primarily on the delivery of our cells And the durability of our cells, as everyone knows, if your cells aren't present, they're not going to be functional and that's where we need to go. So we're not at the level where we are designing our own functional tests or making comparisons Which means ensuring that we can get the cells where we want them to go and ensuring that they are still present after a clinically relevant amount of Time and using the models that are quite conventional in this space, which are various forms of rodent models.

Speaker 2

But I think when we do a more fulsome update, it'll be easier to be able to begin to draw parallels Across what we're doing and what some of the other folks are doing. But I do think that to the extent you're specific defect so that gene therapy companies can show that they can fix that DNA and then have a clinical outcome from that, our approach would be that we do not need to have such difficulty that we can use what I would characterize as cruder forms of deafness because we aren't Trapped by or forced into the narrow segment of a single gene being responsible for the absence of effective hearing.

Speaker 5

That makes great sense. I appreciate that. And I'm just going to just focus on one of your D words and that's the delivery. You need the experiments to look at durability. So AAV is much smaller than cells and you're dealing with a very limited volume environment, are you looking at what's essentially been relatively standardized surgical techniques now?

Speaker 5

I This is pretty forward looking or is there something more unique to sales that we'd have to consider or is it too early to really even go down that alley.

Speaker 2

You're asking an excellent question because of course cells are much larger than viral vectors. And one place where we think that that's extremely interesting is in the setting of the eye. We know that viral vectors can travel across the optic chiasm and appear on the other contralateral untreated eye. So that makes control arms in that space a bit challenging. With respect to delivery to the ear, It is extraordinary to learn what is capable with teeny tiny needles and a steady hand.

Speaker 2

So we do have some challenges in the delivery as we do have challenges with delivery to the spinal cord or to the eye or to everywhere because as you correctly note, if the stuff doesn't get where it needs to be, it's not going to work. So I think what we will do is we'll share some of our findings and some of our methods in particular at that update later this year. But I think that generally speaking, we have not I can say that we have not needed to invent anything new in order to perform these preclinical studies, if that answer is at least helpful in the interim.

Speaker 5

No, it certainly does, Brian. Thanks a lot. I can't wait to hear about it.

Operator

That concludes today's analyst call. I would now like to turn the call over to Brian Culley for closing remarks.

Speaker 2

I would just like to say thank you everyone. It's exciting to have such great interest in all the things that we're doing and we will continue to work hard

Operator

Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now

Powered by Quartr
Earnings Conference Call
Lineage Cell Therapeutics Q2 2023
00:00 / 00:00