Lineage extends cash runway into Q2 2027 as OpRegen site expansion accelerates and new partnerships advance pipeline

Earnings Call Insights: Lineage Cell Therapeutics (LCTX) Q3 2025

MANAGEMENT VIEW

* CEO Brian Culley opened with an update on OpRegen, highlighting that "Genentech opened 2 new clinical sites last month and 5 new clinical sites were opened during the prior quarter. Overall, 8 clinical sites have been opened in just the past 6 months, bringing us to a total of 15 unique locations." Culley emphasized this rapid expansion compared to the single site opened in 2024, interpreting the momentum as a positive signal for the program.
* Culley reported a series of positive developments, including Genentech's expanded services agreement, RMAT designation for OpRegen, and the evaluation of two next-generation delivery devices, which could "offer a significant competitive advantage over companies that lack both this specialized equipment and the extensive delivery experience of our partner, Roche."
* Culley discussed the new partnership with William Demant Invest A/S (WDI), which is expected to fund up to $12 million in research and collaboration costs for the ReSonance hearing loss program, positioning it as a proof point for the company's external funding model.
* Regarding pipeline strategy, the company is conducting initial lab work on multiple cell types, with disclosure of the next intended indication expected before the next quarterly call. An islet cell production initiative aims to address commercial viability challenges in Type 1 Diabetes through large-scale manufacturing advances.
* CFO Jill Howe stated, "As of September 30, 2025, our overall cash position was $40.5 million. This amount is expected to support our planned operations into Q2 of 2027, which is 1 quarter longer than we guided to on our last call. The biggest contributor to the longer runway we are reporting today is cash we have already received from our new alliance with WDI."

OUTLOOK

* Management expects to know the outcome of the CIRM CLIN2 grant application in December, which could provide up to $7 million in nondilutive funding for the OPC1 spinal cord injury study. Culley indicated, "assuming CIRM maintains its planned timing and we have interpreted their plans correctly, we should know our status toward meeting our fourth goal in about 4 or 5 weeks."
* The company anticipates an initial feasibility decision on the Type 1 Diabetes initiative "with a modest investment and just a few more months of work," aiming to accelerate potential partnership conversations if successful.
* The cash runway extension was attributed mainly to the WDI partnership, and the company continues to pursue additional partnerships and milestone payments from Roche and Genentech.

FINANCIAL RESULTS

* CFO Howe reported, "Total revenues were $3.7 million, a decrease of approximately $0.1 million as compared to $3.8 million for the same period in 2024. The decrease is primarily driven by lower royalty revenue and other service revenues recognized of $0.3 million, partially offset by more collaboration revenues of $0.2 million."
* Operating expenses for the quarter were $7.5 million, down $0.1 million from the prior year period. R&D expenses rose to $3.3 million, while G&A expenses decreased to $4.2 million.
* Loss from operations stood at $3.8 million. Other expenses totaled $26 million, mainly due to noncash warrant liability remeasurement. Net loss was $29.8 million or $0.13 per share, compared to a net loss of $3 million or $0.02 per share in the prior year period.
* The company highlighted $37 million of warrant capital potentially available if OpRegen advances to a clinical trial with a comparator arm.

Q&A

* William Wood, B. Riley Securities: Asked about go/no-go criteria for the islet cell program and partnership strategy. Culley responded that the focus is on maximizing early-stage cell production to reach commercial scale and that decisions to partner or retain assets depend on capital costs and value creation opportunities.
* Wood also inquired about OPC1 dosing and multiple-site administration. Culley confirmed the feasibility, stating, "we have, in prior cases, had patients who received cells in 2 separate locations during the same surgery... Can you deliver multiple doses, multiple locations? The short answer is yes."
* Joseph Pantginis, H.C. Wainwright: Asked about CIRM grant impact and inclusion of milestones in cash runway. Culley explained CIRM funding would enable site expansion and more aggressive recruitment, and Howe confirmed Roche milestones are not included in the current cash runway guidance.
* Charlie (for Jack Allen), Baird: Sought clarification on dose study timing and OpRegen GAlette follow-up requirements. Culley explained patient stagger, safety monitoring, and the rapid nature of primary and secondary assessments in the GAlette study, noting Lineage lacks access to Genentech's data package plans.
* Boris Peaker, Titan Partners: Inquired about future OpRegen data presentations and CIRM grant contingency. Culley stated no knowledge of Genentech's data disclosure plans and said the program would continue even without CIRM funding.
* Sean McCutcheon, Raymond James: Asked about integrating the new OPC1 formulation and FDA engagement. Culley said the company is preparing to introduce the new cells near the end of the dose study and is awaiting FDA feedback.
* Gum-Ming Lowe, Craig-Hallum: Requested more detail on new OpRegen delivery devices. Culley described two next-generation devices and emphasized their potential to improve procedure safety and success.

SENTIMENT ANALYSIS

* Analysts focused on partnership opportunities, CIRM grant prospects, clinical trial progress, and technical details, with a tone of cautious optimism and specific interest in program milestones and risk mitigation.
* Management's prepared remarks were confident, highlighting "a steadily growing list of asymmetrically positive indicators" and "momentum" in the second half of the year. During Q&A, the tone shifted to measured realism, with Culley repeatedly clarifying uncertainties and limitations in data access and partnership timing.
* Compared to the previous quarter, management's confidence was more pronounced in prepared remarks, while analysts maintained a consistent level of interest in operational execution.

QUARTER-OVER-QUARTER COMPARISON

* OpRegen site expansion accelerated, with 8 new sites opened in 6 months versus 1 in all of 2024, and greater emphasis on the clinical momentum of the program.
* The WDI partnership added $12 million in expected funding, extending the cash runway to Q2 2027, up from Q1 2027 last quarter.
* The islet cell initiative moved from background planning to active early-stage development, with a go/no-go decision expected in the next quarter.
* Management maintained a focus on external funding and partnerships, but provided more detail on pipeline expansion and manufacturing innovation.
* Analysts continued to press for clarity on clinical milestones, funding contingencies, and partnership economics, echoing prior quarter themes.
* Management's tone was more bullish regarding OpRegen and overall platform momentum, while remaining pragmatic on uncertainties and timelines.

RISKS AND CONCERNS

* Management noted lack of full visibility into Genentech's GAlette study data or decision-making process, clarifying that advancement decisions are solely at Roche and Genentech's discretion.
* The outcome of the CIRM grant remains pending, with the company highlighting that failure to secure funding would not halt the OPC1 program but would forgo a "very nice nondilutive offset."
* The islet cell initiative faces technical risks related to scaling production, with Culley explaining that success is contingent on overcoming biological and manufacturing barriers early in the process.
* Analysts raised questions about the impact of funding delays, data disclosure uncertainties, and the potential for milestone slippage on financial planning and program momentum.

FINAL TAKEAWAY

Management emphasized growing momentum in OpRegen's clinical development, strategic progress in expanding the pipeline through new partnerships and technology initiatives, and strengthened financial positioning with an extended cash runway. The company remains focused on advancing multiple programs toward key decision points while balancing risk, capital allocation, and potential value creation for shareholders.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/lctx/earnings/transcripts]

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