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CARLSBAD, Calif.--(BUSINESS WIRE)--Nov 10, 2022--
Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, today reported financial and operating results for the third quarter of 2022. Lineage management will host a conference call and webcast today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its third quarter 2022 financial and operating results and to provide a business update.
“A single administration of RG6501 (OpRegen ® ), a proprietary retinal pigment epithelial cell transplant, across an area of atrophy in advanced AMD patients has shown the potential to slow, stop, or reverse the progression of GA in our phase 1/2a clinical trial. To our knowledge, this is the first intervention that has reported anatomical changes of this magnitude in the field of GA, so we are pleased with the continued progress on RG6501 and the efforts which have been made to initiate its next clinical trial,” stated Brian M. Culley, Lineage CEO. “Looking ahead, our focus turns increasingly to planned regulatory interactions for OPC1 and VAC2, from which we expect to inform and enable their next phases of clinical development in spinal cord injury and oncology, respectively. In parallel, we are advancing our newly launched cell transplant programs in photoreceptors for vision disorders and auditory neurons for hearing loss, with initial preclinical studies from our photoreceptor program currently ongoing and the start of preclinical testing of our auditory neuron program anticipated prior to year-end. We believe that completing these efforts while maintaining our commitment to disciplined spending will help Lineage create shareholder value in the coming year.”
Recent milestones and activities included:
- Announced appointment of Jill Howe as Chief Financial Officer effective November 14, 2022
- Establishednew U.S. R&D facility and expanded current GMP manufacturing facility in Israel
- Strengthenedintellectual property portfolio
- OPC1
- VAC2
- ANP1 & PNC1
Some of the key upcoming milestones and activities anticipated by Lineage include:
- Planned Regenerative Medicine Advanced Therapy (RMAT) submission to FDA before year-end regarding an OPC1 IND amendment to enable clinical testing of a novel spinal cord delivery system.
- Response to a pre-IND regulatory submission which should provide clarity on a VAC2 CMC, nonclinical, and clinical information package to inform future U.S. clinical development, expected around year-end.
- Completion of an R&D manufacturing process sufficient to support initiation of preclinical testing and the initiation of such testing with ANP1 for the treatment of hearing loss, anticipated prior to year-end.
- An additional OPC1 manuscript from a Phase 1/2a clinical study in subacute cervical spinal cord injury.
- Submission of a grant application to California Institute for Regenerative Medicine (CIRM) for the continued support of the clinical development of OPC1.
- Clinical data update from the ongoing VAC2 Phase 1 non-small cell lung cancer (NSCLC) study, pending release from Cancer Research UK (CRUK).
- Evaluation of new partnership opportunities and/or expansion of existing collaborations.
- Continued participation in investor and partnering meetings and medical and industry conferences to broaden awareness of our mission, programs, and accomplishments.
Balance Sheet Highlights
Cash, cash equivalents, and marketable securities totaled $66.4 million as of September 30, 2022, which is expected to support planned operations into Q3 2024.
Third Quarter Operating Results
Revenues: Lineage’s revenue is generated primarily from licensing fees, royalties, collaboration revenues, and research grants. Total revenues for the three months ended September 30, 2022 were approximately $3.0 million, a net increase of $0.7 million as compared to $2.3 million for the same period in 2021. The increase was driven by collaboration and licensing revenue recognized from deferred revenues from the Roche Agreement, partially offset by less royalty revenues.
Operating Expenses: Operating expenses are comprised of research and development (“R&D”) expenses and general and administrative (“G&A”) expenses. Total operating expenses for the three months ended September 30, 2022 were $8.0 million, a decrease of $0.1 million as compared to $8.1 million for the same period in 2021.
R&D Expenses: R&D expenses for the three months ended September 30, 2022 were $3.6 million, a net increase of $0.8 million as compared to $2.8 million for the same period in 2021. The net increase was primarily driven by higher OpRegen related expenses to support the Roche collaboration.
G&A Expenses: G&A expenses for the three months ended September 30, 2022 were $4.4 million, a net decrease of approximately $0.9 million as compared to $5.3 million for the same period in 2021. The decrease was primarily driven by $1.1 million in lower litigation and legal expenses and $0.3 million in lower investor relations expense, partially offset by a $0.5 million increase in payroll and related benefits expense.
Loss from Operations: Loss from operations for the three months ended September 30, 2022 was $5.2 million, a decrease of $1.6 million as compared to $6.8 million for the same period in 2021.
Other Expenses, Net: Other expenses, net for the three months ended September 30, 2022 reflected other expense, net of $0.3 million, compared to other expense, net of $2.0 million for the same period in 2021. The net change was primarily driven by a decrease in the value of marketable equity securities and exchange rate fluctuations related to Lineage’s international subsidiaries.
Net Loss Attributable to Lineage: The net loss attributable to Lineage for the three months ended September 30, 2022 was $6.1 million, or $0.04 per share (basic and diluted), compared to a net loss attributable to Lineage of $7.8 million, or $0.05 per share (basic and diluted), for the same period in 2021.
Conference Call and Webcast
Interested parties may access today’s conference call by dialing (800) 715-9871 from the U.S. and Canada and should request the “Lineage Cell Therapeutics Call” or provide conference ID number 5262180. A live webcast of the conference call will be available online in the Investors section of Lineage’s website. A replay of the webcast will be available on Lineage’s website for 30 days and a telephone replay will be available through November 17, 2022, by dialing (800) 770-2030 from the U.S. and Canada and entering conference ID number 5262180.
About Lineage Cell Therapeutics, Inc.
Lineage Cell Therapeutics is a clinical-stage biotechnology company developing novel cell therapies for unmet medical needs. Lineage’s programs are based on its robust proprietary cell-based therapy platform and associated in-house development and manufacturing capabilities. With this platform Lineage develops and manufactures specialized, terminally differentiated human cells from its pluripotent and progenitor cell starting materials. These differentiated cells are developed to either replace or support cells that are dysfunctional or absent due to degenerative disease or traumatic injury or administered as a means of helping the body mount an effective immune response to cancer. Lineage’s clinical and preclinical programs are in markets with billion dollar opportunities and include five allogeneic (“off-the-shelf”) product candidates: (i) OpRegen, a retinal pigment epithelial cell therapy in development for the treatment of geographic atrophy secondary to age-related macular degeneration, is being developed under a worldwide collaboration with Roche and Genentech, a member of the Roche Group; (ii) OPC1, an oligodendrocyte progenitor cell therapy in Phase 1/2a development for the treatment of acute spinal cord injuries; (iii) VAC2, a dendritic cell therapy produced from Lineage’s VAC technology platform for immuno-oncology and infectious disease, currently in Phase 1 clinical development for the treatment of non-small cell lung cancer; (iv) ANP1, an auditory neuronal progenitor cell therapy for the potential treatment of auditory neuropathy; and (v) PNC1, a photoreceptor neural cell therapy for the potential treatment of vision loss due to photoreceptor dysfunction or damage. For more information, please visit www.lineagecell.com or follow the company on Twitter @LineageCell.
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. Such statements include, but are not limited to, statements relating to: our ability to support our planned operations into the third quarter of 2024 with our existing cash, cash equivalents and marketable securities; Ms. Howe’s employment with Lineage and the anticipated or implied benefits thereof to Lineage and Lineage’s continued growth and ability to exhibit greater productivity in the future; plans and expectations regarding our products in development and our ability to advance our product candidates into their next phases of clinical or preclinical testing; our ability to create shareholder value in the future; the potential benefits to us and our operations of our new and expanded facilities, including the broadening of our R&D capabilities, advancing our programs and partnerships, and increasing our infrastructure; our ability to support multiple years of progress and achieve important milestones; our collaboration and license agreement with Roche and Genentech and the potential to receive milestone and other consideration thereunder; the potential benefits of treatment with OpRegen; the potential future achievements of our clinical and preclinical programs; the timing of anticipated FDA interactions, preclinical activities, clinical trials, and clinical data updates related to our programs, and the submission of a grant application to the CIRM; plans and expectations regarding publications relating to our programs; plans and expectations regarding potential new partnership opportunities and existing collaborations; and our ability to broaden awareness of our mission and accomplishments. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Lineage’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements in this press release, including, but not limited to, the following risks: that we may need to allocate our cash to unexpected events and expenses causing us to use our cash more quickly than expected; that potential benefits of the new and expanded facilities to the Company and its operations may not be realized as quickly as expected or at all; that potential benefits of newly developed intellectual property to the Company may not be realized as quickly as expected or at all; that positive findings in early clinical and/or nonclinical studies of a product candidate may not be predictive of success in subsequent clinical and/or nonclinical studies of that candidate; that competing alternative therapies may adversely impact the commercial potential of OpRegen; that Roche and Genentech may not successfully advance OpRegen or be successful in completing further clinical trials for OpRegen and/or obtaining regulatory approval for OpRegen in any particular jurisdiction; that we may not establish new partnerships or expand existing collaborations; that we do not successfully broaden awareness of our mission or accomplishments; that we may not be able to manufacture sufficient clinical quantities of its product candidates in accordance with current good manufacturing practice; and those risks and uncertainties inherent in Lineage’s business and other risks discussed in Lineage’s filings with the Securities and Exchange Commission (SEC). Lineage’s forward-looking statements are based upon its current expectations and involve assumptions that may never materialize or may prove to be incorrect. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. Further information regarding these and other risks is included under the heading “Risk Factors” in Lineage’s periodic reports with the SEC, including Lineage’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the SEC and its other reports, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Lineage undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.
LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(IN THOUSANDS) |
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| September 30, 2022 |
| December 31, 2021 | ||||
ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents | $ | 24,752 |
| $ | 55,742 |
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Marketable securities |
| 41,603 |
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| 2,616 |
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Accounts and grants receivable, net |
| 434 |
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| 50,840 |
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Prepaid expenses and other current assets |
| 1,720 |
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| 2,351 |
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Total current assets |
| 68,509 |
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| 111,549 |
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NONCURRENT ASSETS |
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Property and equipment, net |
| 4,652 |
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| 4,872 |
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Deposits and other long-term assets |
| 591 |
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| 630 |
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Goodwill |
| 10,672 |
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| 10,672 |
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Intangible assets, net |
| 46,724 |
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| 46,822 |
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TOTAL ASSETS | $ | 131,148 |
| $ | 174,545 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable and accrued liabilities | $ | 9,807 |
| $ | 27,969 |
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Lease liabilities, current portion |
| 543 |
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| 801 |
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Financing lease, current portion |
| 25 |
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| 30 |
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Deferred revenues |
| 12,364 |
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| 18,119 |
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Liability classified warrants, current portion |
| - |
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| 197 |
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Total current liabilities |
| 22,739 |
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| 47,116 |
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LONG-TERM LIABILITIES |
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Deferred tax liability |
| 2,076 |
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| 2,076 |
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Deferred revenues, net of current portion |
| 26,544 |
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| 32,454 |
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Lease liability, net of current portion |
| 2,216 |
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| 1,941 |
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Financing lease, net of current portion |
| 16 |
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| 30 |
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Liability classified warrants and other long-term liabilities |
| 4 |
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| 30 |
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TOTAL LIABILITIES |
| 53,595 |
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| 83,647 |
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SHAREHOLDERS’ EQUITY |
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Preferred shares, no par value, authorized 2,000 shares; none issued and outstanding as of September 30, 2022 and December 31, 2021 |
| - |
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| - |
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Common shares, no par value, 250,000 shares authorized; 169,886 and 169,477 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively |
| 439,148 |
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| 434,529 |
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Accumulated other comprehensive loss |
| (3,184 | ) |
| (5,211 | ) | ||
Accumulated deficit |
| (357,016 | ) |
| (337,097 | ) | ||
Lineage Cell Therapeutics, Inc. shareholders’ equity |
| 78,948 |
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| 92,221 |
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Noncontrolling (deficit) |
| (1,395 | ) |
| (1,323 | ) | ||
Total shareholders’ equity |
| 77,553 |
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| 90,898 |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 131,148 |
| $ | 174,545 |
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LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
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| Three Months Ended |
| Nine Months Ended | ||||||||||||
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| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||||
REVENUES: |
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Collaboration revenues | $ | 2,592 |
| $ | 293 |
| $ | 11,605 |
| $ | 506 |
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Royalties |
| 406 |
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| 1,909 |
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| 1,183 |
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| 2,430 |
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Grant revenues |
| - |
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| 68 |
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| - |
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| 237 |
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Total revenues |
| 2,998 |
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| 2,270 |
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| 12,788 |
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| 3,173 |
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Cost of sales |
| (235 | ) |
| (985 | ) |
| (626 | ) |
| (1,222 | ) | ||||
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Gross profit |
| 2,763 |
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| 1,285 |
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| 12,162 |
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| 1,951 |
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OPERATING EXPENSES: |
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Research and development |
| 3,592 |
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| 2,811 |
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| 9,883 |
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| 9,136 |
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General and administrative |
| 4,422 |
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| 5,317 |
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| 18,160 |
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| 13,788 |
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Total operating expenses |
| 8,014 |
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| 8,128 |
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| 28,043 |
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| 22,924 |
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Loss from operations |
| (5,251 | ) |
| (6,843 | ) |
| (15,881 | ) |
| (20,973 | ) | ||||
OTHER INCOME/(EXPENSES): |
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Interest income (expense), net |
| 384 |
| 1 |
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| 435 |
| (1 | ) | ||||||
Gain on sale of marketable securities |
| - |
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| - |
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| - |
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| 6,024 |
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Unrealized loss on marketable equity securities |
| (233 | ) |
| (2,450 | ) |
| (1,677 | ) |
| (621 | ) | ||||
Gain on extinguishment of debt |
| - |
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| - |
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| - |
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| 523 |
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Gain on revaluation of warrant liability |
| - |
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| 53 |
| 223 |
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| 105 |
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Other income (expense), net |
| (475 | ) |
| 393 |
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| (2,550 | ) |
| (318 | ) | ||||
Total other income/(expense), net |
| (324 | ) |
| (2,003 | ) |
| (3,569 | ) |
| 5,712 | |||||
LOSS BEFORE INCOME TAXES |
| (5,575 | ) |
| (8,846 | ) |
| (19,450 | ) |
| (15,261 | ) | ||||
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Income tax (expense)/benefit |
| (541 | ) |
| 1,012 |
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| (541 | ) |
| 1,181 |
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NET LOSS |
| (6,116 | ) |
| (7,834 | ) |
| (19,991 | ) |
| (14,080 | ) | ||||
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Net loss attributable to noncontrolling interest |
| 47 |
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| 11 |
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| 72 |
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| 51 |
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NET LOSS ATTRIBUTABLE TO LINEAGE CELL THERAPEUTICS, INC. | $ | (6,069 | ) | $ | (7,823 | ) | $ | (19,919 | ) | $ | (14,029 | ) | ||||
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NET LOSS PER COMMON SHARE: |
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BASIC | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.09 | ) | ||||
DILUTED | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.09 | ) | ||||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
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BASIC |
| 169,786 |
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| 167,624 |
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| 169,722 |
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| 163,120 |
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DILUTED |
| 169,786 |
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| 167,624 |
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| 169,722 |
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| 163,120 |
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LINEAGE CELL THERAPEUTICS, INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(IN THOUSANDS) | |||||||
(UNAUDITED) | |||||||
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| Nine Months Ended | |||||
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| 2022 | 2021 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss attributable to Lineage Cell Therapeutics, Inc. |
| $ | (19,919 | ) | $ | (14,029 | ) |
Net loss allocable to noncontrolling interest |
|
| (72 | ) |
| (51 | ) |
Adjustments to reconcile net loss attributable to Lineage Cell Therapeutics, Inc. to net cash provided by (used in) operating activities: |
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Gain on sale of marketable securities |
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| - |
| (6,024 | ) | |
Unrealized loss gain on marketable equity securities |
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| 1,677 |
| 621 |
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Gain on extinguishment of debt |
|
| - |
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| (523 | ) |
Depreciation expense, including amortization of leasehold improvements |
|
| 441 |
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| 504 |
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Change in right-of-use assets and liabilities |
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| (24 | ) |
| 19 |
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Amortization of intangible assets |
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| 113 |
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| 178 |
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Accretion of income on marketable debt securities |
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| (186 | ) |
| - |
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Stock-based compensation |
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| 3,328 |
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| 2,601 |
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Common stock issued for services |
|
| - |
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| 202 |
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Gain on revaluation of warrant liability |
|
| (223 | ) |
| (105 | ) |
Deferred tax benefit |
|
| - |
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| (1,181 | ) |
Foreign currency remeasurement and other gain |
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| 2,668 |
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| 295 |
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Changes in operating assets and liabilities: |
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Accounts and grants receivable |
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| 50,206 |
| (104 | ) | |
Prepaid expenses and other current assets |
|
| 517 |
| (1,229 | ) | |
Accounts payable and accrued liabilities |
|
| (17,573 | ) |
| 354 | |
Deferred revenue and other liabilities |
|
| (11,591 | ) |
| 784 |
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Net cash provided by (used in) operating activities |
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| 9,362 |
| (17,688 | ) | |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of marketable debt securities |
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| (40,628 | ) |
| - |
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Proceeds from the sale of OncoCyte common shares |
|
| - |
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| 10,064 |
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Proceeds from the sale of HBL common shares |
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| - |
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| 21 |
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Purchase of equipment |
|
| (429 | ) |
| (194 | ) |
Net cash (used in) provided by investing activities |
|
| (41,057 | ) |
| 9,891 |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from employee options exercised |
|
| 506 |
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| 6,269 |
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Common shares received and retired for employee taxes paid |
|
| (17 | ) |
| (41 | ) |
Proceeds from exercise of subsidiary warrants, net |
|
| 991 |
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| - | |
Proceeds from sale of common shares |
|
| 148 |
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| 30,741 |
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Payments for offering costs |
|
| (95 | ) |
| (980 | ) |
Repayment of lease liability |
|
| (23 | ) |
| (13 | ) |
Net cash provided by financing activities |
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| 1,510 |
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| 35,976 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
| (795 | ) |
| (34 | ) |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
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| (30,980 | ) |
| 28,145 |
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH: |
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At beginning of the period |
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| 56,277 |
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| 33,183 |
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At end of the period |
| $ | 25,297 |
| $ | 61,328 |
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SUPPLEMENTAL DISCLOSURES |
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Cash paid for interest | $ | 13 |
| $ | 12 |
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View source version on businesswire.com:https://www.businesswire.com/news/home/20221110005260/en/
CONTACT: Lineage Cell Therapeutics, Inc. IR
Ioana C. Hone
(ir@lineagecell.com)
(442) 287-8963
LifeSci Advisors
Daniel Ferry
(daniel@lifesciadvisors.com)
(617) 430-7576
Russo Partners – Media Relations
Nic Johnson or David Schull
(Nic.johnson@russopartnersllc.com)
(David.schull@russopartnersllc.com)
(212) 845-4242
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: STEM CELLS BIOTECHNOLOGY PHARMACEUTICAL OPTICAL ONCOLOGY HEALTH GENETICS CLINICAL TRIALS
SOURCE: Lineage Cell Therapeutics, Inc.
Copyright Business Wire 2022.
PUB: 11/10/2022 04:05 PM/DISC: 11/10/2022 04:07 PM
http://www.businesswire.com/news/home/20221110005260/en