Lineage Cell Therapeutics Stock

Welcome to the Lineage Cell Therapeutics Second Quarter 2026 Conference Call. [Operator Instructions] An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagecell.com. This call is subject to the copyright and is the property of Lineage and recordings, reproductions or transmissions of this call without the expressed written consent of Lineage are strictly prohibited. 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. Hone, please go ahead.

Thank you, Jericho. Good afternoon and thank you for joining us. A press release reporting our second quarter 2026 financial results was issued earlier today, August 6, 2026, 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 most recent annual report on Form 10-K and in the Form 10-Q filed today. 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 Dr. Priyantha Herath, our Senior Vice President and Head of Clinical.

I'll now hand the call over to Brian.

Thank you, Ioana. Good afternoon, everyone. We appreciate you taking the time to join us today. As some of you know, from time to time, I like to use these calls to bring investors behind the scenes to better understand how we are advancing our programs and business. Probably everyone on this call knows how important OpRegen is. But based on progress we've made elsewhere, we think this is an opportune time to explain what we've been focusing on while Roche and Genentech continue to conduct optimization activities on our lead program.

Insights and milestones from the OpRegen program have allowed us to fuel the growth of a new and significantly more internally owned pipeline of cell therapy assets. And I'm not sure that side of our company is as appreciated as it could be. So I plan to discuss that today.

Our history of creating multiple new assets from our platform while maintaining a consistent level of annual investment is due to the success we have enjoyed with the AlloSCOPE manufacturing platform.

From AlloSCOPE, we believe we will be able to generate off-the-shelf products with commercial scale production costs in the hundreds of dollars per dose versus the hundreds of thousands of dollars you might expect from autologous products. Purity, potency and control are all critical parts of a successful cell therapy product, but we believe the highest value proposition for allogeneic programs is found on the supply side and specifically the ability to establish low-cost production of consistent and potent material.

It's quite easy to make prophetic claims about production costs or process control, but it's quite difficult to do these things in practice. For many reasons, cell therapy manufacturing is materially more difficult than it is for small molecules. But unlike some of our peers, Lineage does not need to engage in speculation about our manufacturing capabilities. We have already successfully employed the AlloSCOPE platform to generate a 2-tier GMP banking and GMP production system, which we believe is credibly capable of generating millions of vials of a product candidate. The material from those banks has been cleared by FDA and used in the OpRegen clinical trial.

We think having demonstrated this necessary regulatory manufacturing milestone distinguishes us from those who have not. And moreover, we have successfully made cell banks and GMP clinical material for other cell types and from other cell lines, demonstrating the application of our technology in the service of several different indications. We highlight our manufacturing achievements because we know how difficult these things are and we want to invite comparisons to others working in the cell therapy field.

Our success to date with OpRegen means that we have an amazing opportunity to apply the experience, know-how and intellectual property that we have generated to create new assets. This is a core strategic objective for Lineage, which we internally refer to as Lineage 3.0. And we want to broaden awareness of these assets because we believe they highlight potential additional value residing in our company.

Importantly, these pipeline assets each possess 3 key criteria, which I will outline for you now. First, we have and will continue to choose programs for which we believe the AlloSCOPE platform offers a significant competitive advantage, meaning there is a quality and/or a supply issue that we can seek to address through our consistency and scale solutions.

Second, we identify programs that may be capable of generating meaningful signals in a relatively small single-arm trial. OpRegen is a great example of this. At the completion of a first-in-human trial, we secured a collaboration with a $50 million upfront fee and an additional $620 million in potential milestones, which we believe was driven by the fact that GA patients are not known to spontaneously replenish their retinas or durably retain vision gains, yet we showed this outcome in 5 clinical cases. This evidence was compelling even from a small number of patients because the change deviated from the expected natural course of disease. Similar outcomes can be predicted from diabetes and corneal endothelial cell therapy programs because outcomes such as corneal clarity and insulin independence are not known to occur naturally, making these clinical signals easier to identify, even in relatively small trials.

And then third, we want the assets that make up Lineage 3.0 to provide us with superior overall economics, which doesn't mean we won't still consider partnering an asset early.

It just means that the economics for any deals we strike should reflect the value of us mitigating some of the risks associated with scale-up and for the potential or actual generation of convincing data from a first-in-human trial.

I'm next going to briefly discuss how we believe the 3 components of Lineage 3.0 that I just discussed will generate value for us in each of our pipeline programs. I'll start with COR1, our corneal endothelial cell, or CEnC, therapy program, which is designed for the treatment of Fuchs or other corneal endothelial dystrophies. COR1 is a wholly owned preclinical asset, which benefits from our existing ophthalmology and manufacturing expertise and represents a natural next application of our technology platform because it focuses on what we do best, large-scale, high-quality cell manufacturing.

We began exploring CEnC as a potential new program in the second quarter of 2025 and we started doing wet lab work in the third quarter of 2025. And just 9 months later, we successfully employed our AlloSCOPE 5D technology to this program. That means we achieved seamless bioreactor-based 5D precursor expansion and differentiation to support CEnC production, which we believe, together with our proprietary thaw and inject formulation, supports a potentially best-in-class product profile. This work, unsurprisingly, also met our internal criteria for continued advancement into preclinical testing, which is beginning imminently. And thanks to the development precedent that is available for this indication, we are targeting to have initial in vivo data generated by the end of the year.

We think this will be an important data point because we want to show that the cells which we make can perform at least as well as cadaver cells in the applicable and previously established models of efficacy.

As to how we see ourselves fixing a supply side issue with COR1, millions of people are potential candidates for corneal transplants and yet today there is only 1 donor for every 70 diseased eyes globally. The current supply of CEnCs from cadavers is limited by the low availability of donors as well as by inconsistent yield and quality. But cadaver-sourced transplants have also been demonstrated to be highly effective. Cadaveric sources of CEnCs have been approved in Japan to treat corneal endothelial disease, providing strong evidence for cell replacement as an effective mechanism of action.

And as an added benefit, unlike the OpRegen program, we don't expect to have any need for delivery optimization because the cornea is a relatively accessible site with a simple injection-based delivery method, supporting a long clinical track record of positive outcomes. The COR1 program aims to solve the double deficiencies of supply and shelf life of the current therapy because not only do cadaver-derived cells have variable yield and quality, donor-harvested material is not currently cryopreserved and needs to be used promptly. These deficits highlight the benefits of having a reliable, consistent and scalable source of these cells that can also be frozen, shipped and thawed before use. For these reasons, COR1 fits ideally into our ongoing paradigm for rapid pipeline development and we look forward to providing additional updates on this program as it continues to advance. As I mentioned, we recently elected to advance COR1 into in vivo animal testing and initial internal preclinical data is expected to be generated later this year.

Moving next to type 1 diabetes. This is our second case study for Lineage 3.0. As with CEnCs, the clinical data shows that islet cell transplants can be an effective and powerful treatment option. Each year, dozens of patients become insulin independent, thanks to islet cells sourced from cadavers. However, islet supply is a major unsolved problem. Expansion of islets from cadaver sources cannot currently meet the commercial needs for these cells. Immunosuppression, patient eligibility and hypoimmunity are all additional hurdles that need to be overcome and several companies are making great strides on those problems.

But we believe the hurdle with the least amount of progress to date and also the best fit for our technology is making islets at the scale required to address the large unmet need. And we believe significant value in the islet cell transplant community should accrue to whomever solves the scale problem.

One reason for this supply gap is that the required dose of islet cells may be as high as 1 billion cells per patient. In comparison, the dose of OpRegen is up to 200,000 cells, which is 5,000x smaller. On top of that, the proliferative capacity of RPE cells in our hands is at least 50x greater than the published capacity of islets, meaning there is an approximately 250,000-fold gap between current technology and what we believe will be needed for commercial scale islets. This gap will need to be filled somehow.

Therein lies the fundamental problem. Islet cells do not readily expand during differentiation or in mature form. So the scale problem needs to be solved prior to differentiation into these cells. Our proposed solution to this problem is employing a modification of our AlloSCOPE platform in what we call AlloSCOPE 5D, which has the goal of generating large-scale production of predifferentiated cells with reduced manipulation and passaging so that you're capturing both 2D synchronization and control of differentiation with 3D environmental control and scalability.

We are employing AlloSCOPE 5D to support the ILT1 program because the 5D technology is aimed at not only generating massive numbers of pluripotent cells prior to differentiation, but also ensuring those cells retain their pluripotency and synchronized response to the factors that are needed for efficient differentiation.

Yes, it's true that pluripotent cells can maintain long telomeres and self-replicate, but they can still lose genomic integrity and synchrony with every cell cycle or passage, meaning it is necessary, yet very difficult, to maintain homogeneity and control of differentiation as you expand into large numbers of cells.

ILT1 is our plan for a cell therapy product candidate that is initially focused on producing a homogenous population of undifferentiated pluripotent cells ready for synchronized differentiation and which could serve as the high feed source material to an islet cell differentiation process for large-scale production. If we can develop a modality that supports an islet cell production process from expansion through differentiation in a dynamic culturing system, we can potentially solve a major hurdle to commercial scale production of an islet cell therapy. This manufacturing-first approach underlies our view of the islet transplant competitive landscape.

If we can solve the manufacturing problem, we might have a very successful product with large margins. And even if others are present, we can be nicely positioned against anyone else trying to solve the scale-up problem through less efficient brute force approaches. And with this initiative, we are inverting a traditional development paradigm by focusing on the scale-up of undifferentiated cells first, because as I explained just a moment ago, we believe that once you've shown that you can actually produce your material while maintaining its quality at scale, you may be materially reducing the risk profile for the remainder of the development project.

Multiple independent groups have already shown that islets can clear preclinical and clinical testing and be an effective intervention for people with type 1 diabetes. But no one, to our knowledge, has shown that they can scale islets to levels that meaningfully meet the unmet need. For this reason, we think it's appropriate to focus on the unresolved scale problem before performing expensive preclinical and clinical studies. We believe advancing into clinical testing without a robust manufacturing process may prove to be a significant setback for some of the current companies in this space and that there is value in establishing from the beginning a process that can support downstream development, especially when such development has a credible clinical and regulatory precedent.

I previously reported that we met our first internal manufacturing milestone for this initiative by demonstrating a fully suspension-based process for undifferentiated pluripotent cells from one of our proprietary cell lines at a 0.5 liter scale. We have since then successfully demonstrated this process in a larger multi-tier format.

In parallel, we have applied AlloSCOPE 5D to our COR1 program, showing that we could successfully apply 5D expansion protocols to support the generation of a fully differentiated and specific cell type. Looking ahead, our next goal is to show that cells we expand from the 5D platform can also differentiate into islet precursors, which could demonstrate their ability to be further differentiated into islet cells. I'm hopeful that demonstration will bring more attention to this program and I'm pleased at how quickly this work has progressed. As I said on a prior call, we're happy to take you on this development journey because if it continues to pan out, we believe it could become a very valuable component of our business.

Next, I'll spend a few moments on ReSonance. ReSonance is a preclinical auditory neuronal cell transplant to treat hearing loss and is the first internal program built from the beginning on our AlloSCOPE platform. ReSonance is being developed under a partnership with William Demant Invest, or just Demant, where Demant has agreed to fund up to $12 million toward a preclinical development plan, which is intended to support an IND and/or CTA filing. This 3-year alliance is approaching its 1-year anniversary and we are pleased with the progress made to date by the parties.

ReSonance is an example of 2 important features of our platform. The first is that we showed we could conceive of and successfully manufacture a completely new cell-based product candidate in a rapid and efficient way. We generated new intellectual property and advanced ReSonance into preclinical testing in about 1 year.

The speed and success of that project then led to a partnership with Demant, a world-leading health care -- hearing health care company, which brought us access to specialized technology, auditory expertise and a network of hearing health leaders.

The second key feature of ReSonance is it is aligned with our Lineage 3.0 ideals. We believe that if a signal of a treatment effect in hearing loss patients is observed, it would be an important finding in this population, even if it occurs in a small number of patients. That is because, like in dry AMD, patients who suffer from hearing loss from the destruction of a particular type of cell have not been shown to improve spontaneously. If we do see signs of a treatment effect in even a small number of patients with sensorineural hearing loss, we think that could drive value even long before the results of a randomized trial.

ReSonance continues to advance in preclinical testing and the goal of our partnership, as I said, is to advance it to an IND. So I look forward to keeping you informed of our progress. In the meantime, I can share an update that we have successfully completed 3 engineering runs of ReSonance and we also recently completed our first GMP run, which is now undergoing release testing. We've also been establishing a novel model of deafening, which will enable us to conduct functional animal testing using the cells we produced under this important partnership. ReSonance represents a novel approach to treating a large underserved market. It doesn't include the cadaver-based treatment precedent of cornea or islet cells, but that's partly why we elected to partner it early and share risk.

But at the same time, ReSonance has only one comparable competitor that we can identify and is targeting a very large potential market. So it fits nicely with our Lineage 3.0 strategy. For this reason and more, we're hoping to see ReSonance make it into a clinical trial.

Next, as a hybrid to the first 3 examples I've given today, I'm pleased to share some new ideas we have been evaluating for OPC1 development. Implementing these new ideas would more closely align OPC1 into the Lineage 3.0 paradigm. As you likely know, the early efforts with OPC1 were conducted by a different sponsor and focused solely on a subacute patient population.

We haven't needed to evaluate the merits of this approach because we've been focused on the more immediate and necessary goals of manufacturing the cells on what we believe will be a commercially viable platform and developing a new delivery device. In the past year, we've more fully evaluated our new manufacturing process and collected some encouraging initial data with the new device. As a result, we've gotten increasingly comfortable that both of those aspects will be successful, which means we can now turn more earnestly to the topic of patient selection. We also recently hired a new Head of Clinical, Dr. Herath, who's on the call today and brings the appropriate resources to evaluate the various possible development paths for OPC1. As a result of that work, which remains ongoing, we anticipate we may decide to prioritize a chronic patient population for future OPC1 development. There are many reasons to consider this adjustment, but I'll review 3 of them for you today.

First, and probably the most compelling reason of them all, is that chronic patients have a much more stable neurological baseline compared to subacute patients. The neurological and functional status of chronic patients is typically well established, can be reliably and repeatedly measured and is not likely to change meaningfully without intervention. That means these patients can serve as their own internal treatment control, something that is not possible with a subacute patient population. We think this can help overcome the heterogeneous nature of these injuries and the resulting clinical picture because, as you know, subacute patients experience a great deal of spontaneous improvements during the first 9 months or so.

SCI experts we've consulted with acknowledge that it's extremely difficult to tell whether a change in function in a subacute patient is attributable to treatment or to spontaneous improvement, even if you have a well-matched natural historical cohort as a comparison. This issue is mitigated in chronic patients, which is why they fit better into our translational evidence paradigm. Chronic patients are also significantly easier to enroll than subacute patients because they're approximately 10x more prevalent than the subacute population and because the window of eligibility for chronic is measured in months or years, not in just a few weeks.

But that is not the only reason to consider focusing on chronic injuries. The change in demographics, the published evidence and the standard of care for subacute patients has advanced and we need to advance with it. Over the years, the average age of an SCI injury has risen from people in their 20s into their 40s. Patients are older, more medically complex and bring different challenges regarding consent and stabilization. Thanks to improved care, the acute and subacute rehab phase, which subacute patients experience in the hospital, has shortened to just a few weeks and AIS conversion rates have risen, which is great for patients. But makes clinical trial data collection and database comparisons in the subacute population more difficult than before.

Meanwhile, recent data from various groups have shown that chronic patients, especially those with preserved midsagittal tissue bridges at their injury site, are the ones most likely to show evidence of recovery from cell therapy, especially when the intervention is combined with a rehabilitation protocol. For years, this was not the conventional wisdom.

Animal studies from years ago suggested chronic SCI would be a less responsive population. But those studies were conducted, in some cases, 20 years ago, had some design flaws and were never replicated by us or others. We find the recent and modern bodies of work done by both clinical or industrial groups and preclinical and academic groups to be much more convincing and reliable. We appreciate the dedication of these groups to advancing the field because it allows us to proceed into the chronic population with not only a product candidate with the longest published safety profile in the field, but also preexisting evidence of potential activity for this mechanism.

Overall, we are excited that chronic patients, a direction and population we have long considered attractive, have been increasingly validated by us and others, giving us a more promising clinical path and the opportunity to adapt the OPC1 program into our model of early trials that can potentially generate meaningful evidence.

And so while we continue to enroll the ongoing DOSED study and assess our new way of delivering OPC1 cells to patients, we are simultaneously refining our view of how to best focus on the chronic patient population. Dr. Herath has been collaborating with SCI thought leaders and I expect we will be able to discuss some of our specific plans on a future call.

In the meantime, I'll add that the DOSED study, which is designed to demonstrate the safety and performance of the novel spinal cord cell therapy delivery device, to date, has performed as expected with no unexpected procedural, product or device-related adverse events nor does it require any significant design changes. So we are looking forward to enrolling additional patients on that study this year.

And now saving the first for last, I will provide a few words on our lead program, OpRegen. I think everyone is well versed on where we stand with this program. Data we initially reported from our OpRegen Phase I/IIa clinical study included improved anatomy of the retina, halting or reversal of atrophic progression and improved vision in patients with dry AMD. These are outcomes not known to occur naturally in human beings.

And since we made these initial reports, 3 other companies have reported similar outcomes with their own version of an RPE transplant, providing supporting evidence for this mechanism of action. But importantly, our data indicate that such outcomes are achieved only when the cells are delivered right to the target lesion and there are choices you can make regarding how to conduct delivery to this area. For example, you can access the subretinal space from the front of the eye, transvitreally, or around the back of the eye, suprachoroidally. Like many surgical choices, there are trade-offs. So our partners have undertaken a campaign to evaluate a number of surgical devices and methods, which we believe are intended to improve and simplify clinical outcomes.

We believe that this approach may ultimately support a more valuable asset through 3 prongs, a stronger risk-benefit profile, a dominant position over competitors and presumably translating into more revenues attributable to wider adoption by surgeons. This kind of work takes time, but we're encouraged by the progress, for example, reported by the clinical research team at Duke University, which published recently on a novel single-step subretinal injection device that significantly outperformed the current off-the-shelf device in calibrated volume delivery to the subretinal space in a relevant animal model.

Overall, as we look at how actively Roche has been culling their pipeline in favor of first and best-in-disease assets and alongside the supportive comments they have made about OpRegen and their commitment to ophthalmology, we remain confident that the OpRegen program is receiving abundant care and attention from our partners and we continue to anticipate a positive future for the program. This, by the way, is aligned with what the Genentech speaker at the ARVO Eyecelerator Conference said a couple of months ago. He noted that transformational outcomes in cell therapies should be defined by a metric of visual function and preserving vision and went on to say that Genentech was investing in surgical development because safe and reliable delivery of OpRegen was key to the outcome that they're looking to achieve for their patients.

He also highlighted the 3-year clinical data with OpRegen as evidence of what was possible for the field. We support all of those statements and more. So while we await completion of the ongoing surgical optimization work in the GAlette study, we will continue to closely monitor any relevant activity. As one example, OpRegen was recently registered in the EMA IRIS database, which is something that sponsors need to do before they conduct product-related activities like obtaining scientific advice or running clinical studies in Europe. As a second example, we were very happy to see that Roche expanded the GAlette study from 6 sites to 17 starting last year. And as a third example, Roche dedicated approximately half of its exhibit hall space at the most recent ARVO conference to the OpRegen mechanism of action, which we think is intended to raise awareness of this novel approach to treating dry AMD with an RPE cell transplant.

These kinds of actions, along with their continued efforts to discuss the OpRegen program from the podium at medical and scientific conferences, continues to provide us with encouragement that OpRegen is being well supported within the Roche organization.

To wrap up, I believe it's important to highlight that we have in the past year demonstrated the ability to rapidly generate additional novel assets with what we believe are differentiated and compelling profiles to create a growing pipeline of cell transplants that we can develop internally or seek to partner where we think it makes sense to do so.

Our overall strategy aims to efficiently leverage our AlloSCOPE platform to create, support and manage a broad pipeline of cell-based assets. I'll invite you to keep in mind that our platform assets share certain essential traits so that each dollar we invest in innovation may have impact across multiple programs. We believe this allows us to expand our pipeline without losing the focus required to succeed in each indication and still maintain a manageable and efficient level of capital investment compared to our cell therapy peers.

Most of all, we appreciate that the innovative and successful work that created the OpRegen program is giving us the opportunity to generate a portfolio of similar cell-based transplant therapies for many millions of patients around the world and hopefully build a very successful and important company.

With that, I will turn things over to Jill for a review of our financials.

Thanks, Brian. I'll begin with an update on our cash runway. As of June 30, 2026, we had $50.8 million in cash, cash equivalents and marketable securities, which we expect will fund planned operations into the third quarter of 2028 and that is 1 quarter longer than the runway we reported on our last call. This extension of our runway reflects our use of the ATM on a single day, June 26, commonly known as Russell Reconstitution Day. By taking advantage of the unusually high trading volume associated with Lineage being added to the Russell 3000 Index, we raised approximately $4.6 million at a weighted average price of $1.28 per share. We were pleased that even with these sales, our stock still closed above its opening price on that day.

Beyond our cash currently on hand, we also remain eligible for several other sources of capital. First, we are eligible to receive approximately $32 million from the cash exercise of warrants issued in November 2024, which has a strike price of $0.91. Importantly, those warrants, which have a 3-year maturity date, will accelerate to 90 days if Roche and Genentech publicly disclose their intent to advance OpRegen into a multicenter trial that includes the control or comparator arm. Second, we also remain eligible for up to $615 million in development and commercial milestone payments under the Roche and Genentech collaboration agreement. And third, we continue to evaluate potential partnerships similar to our Roche and Demant collaborations, which we could enter into, into the future.

Before reviewing our second quarter results, I'd like to highlight a change from prior periods. We are reporting net income this quarter rather than a net loss. This result primarily reflects a noncash gain from the quarterly remeasurement of our warrant liabilities at fair value. Because our share price declined compared to the prior quarter, the estimated value of these obligations decreased, which creates an accounting gain. This gain was also partially supported by foreign currency effects associated with our international subsidiaries. But I will note that these adjustments affect our reported earnings and reflected normal accounting policies, but do not represent cash received or used during the quarter.

Now I will review our second quarter results. Our revenue is generated primarily from collaboration revenues, royalties and other revenues. Total revenues were $1.1 million, a net decrease of $1.7 million as compared to $2.8 million for the same period in 2025. Decrease was primarily driven by lower collaboration revenue recognized under the Roche Agreement, reflective of measured progress towards completion of the first performance obligation as well as lower revenues recognized associated with the prior year termination of the VAC Collaboration Agreement which was partially offset by an increase in revenues related to our research collaboration with WDI.

Operating expenses are comprised of research and development expenses and general and administrative expenses. Total operating expenses were $10 million, a decrease of $12.5 million as compared to $22.5 million for the same period in 2025. And the overall decrease was primarily driven by the $14.8 million expense recognized in the prior year for the noncash loss on impairment for an intangible asset related to the VAC platform.

R&D expenses were $4.8 million, an increase of $1.7 million compared to $3.1 million for the same period in 2025. The net increase was primarily driven by our preclinical programs and other undisclosed programs.

G&A expenses were $5.2 million, an increase of $0.7 million as compared to approximately $4.5 million for the same period in 2025. The net increase was primarily driven by personnel costs and stock-based compensation expenses. Loss from operations were $8.9 million, a decrease of $10.9 million as compared to $19.8 million for the same period in 2025. The decrease was primarily driven by the prior year noncash impairment expense related to the VAC platform of $14.8 million, which is a nonrecurring transaction. Other income and expenses reflected other income of $10.5 million compared to other expense of $10.6 million for the same period in 2025.

The net change was primarily attributable to the quarterly fair value noncash remeasurement of the warrant liabilities, driven by a decrease in our share price as compared to an increased share price in the prior year's quarter, which is partially offset by exchange rate fluctuations related to our international subsidiaries.

The net income and loss attributable to Lineage was $1.5 million or $0.01 per share for basic and $0.03 loss per diluted compared to a net loss of $30.5 million or $0.13 per share for both basic and diluted for the same period in 2025. The change was primarily driven by the prior year noncash loss on impairment expense related to the 2019 acquisition for the quarterly fair value remeasurement of the warrant liabilities.

Overall, our second quarter results reflected our continued focus on disciplined fiscal management and prudent capital allocation. We remain committed to managing expenses carefully while directing resources towards strategic investments that strengthen and advance our pipeline. We believe this balanced approach supports our near-term operating priorities and our long-term growth objectives.

With that, I'll turn the call back to Brian for closing remarks.

Thanks, Jill. This will continue to be an exciting year for Lineage. I'll just repeat some key points. First, we continue to remain confident in the potential for OpRegen to advance into a multicenter controlled trial. Second, with that confidence, we have made investments in our AlloSCOPE platform, demonstrating the ability to rapidly and strategically generate additional novel cell transplant assets, all based on our platform technology and utilizing our AlloSCOPE capabilities. And then looking ahead, our approach to product development will seek to take advantage of the power of cell transplantation to swiftly, effectively and strategically develop assets with the potential to generate signals from early clinical trials.

We're very proud of our progress to date and also believe there's much more to look forward to from our platform in the months ahead. We appreciate your support and belief in our vision.

With that, operator, we are ready for any analyst questions.

[Operator Instructions] Your first question comes from Mayank Mamtani with B. Riley Securities.

Appreciate a lot of detail here. So maybe just first on the islet cell program. If you could comment a little bit on what the multiliter scale you are at right now with working volumes? And if you could maybe talk about your process and protocol, how that contrasts with peers, including, I think, a couple that are in clinical stage and have mentioned recently their excitement about having more patients be exposed to this modality.

And then my second question was on the chronic DOSED study where you've had, I believe, a couple of SCI patients on study. And I was just wondering if there's been any update, including a 1-year update, I think you had mentioned before. And maybe just comment on what sort of things to look out for as you advance your regulatory dialogue here, including some clinical data we can get from here.

Thanks, Mayank. So as to your first question, there are many component parts that go into AlloSCOPE 5D. There are biological inputs, physical inputs, engineering inputs. There's know-how. And while one might think that something as simple as the vessel size you're using for any particular stage might not be in and of itself revealing and think that is true, there are a finite number of providers in the space. And so even something as simple as saying what scale we're at will probably not be shared by us anytime in the future because we want to maintain protection across every aspect of what we're doing. It is that important to us.

So we're being intentionally unclear about exactly what vessel size, because if there were only one company in the world that makes a 4.4-liter vessel, you would know one of the many component parts and we're just not going to do that. So for now, you're going to have to be satisfied with multiliter. But perhaps Dr. Herath can give you a more satisfying answer to your other question about where we are in the DOSED study.

Mayank, good to meet you here. So as you know, the DOSED study was not designed to assess functional changes in our patients. And therefore, we shouldn't be actually looking for clinical improvements or any such thing in this particular study. What we can tell you, however, is that the patients, both of them -- one of them completed a year, the other one, 90 days. They have both remained adverse events free and completely stable as expected, given they are chronic patients.

What we can also tell you is that there has been some anecdotal information that has come through from the family members, which we can't really assess formally, but we can tell you that the patient has reported some improvement, improved breathing and core strength, et cetera. But again, as I said, we are not going to comment on formal neurological changes in these patients until we advance to a proper efficacy study.

Your next question comes from Jack Allen with Baird.

I apologize, I wasn't able to listen to all the prepared remarks. So I'm not sure if some of these have been covered. But I wanted to start off with the COR1 program, which it's great to see is moving forward. I guess I wanted to ask about what your time is as it relates to potentially getting this asset into the clinic and how you think about the partnership opportunity with COR1.

I believe some of these indications are fairly high in the number of patients that you could potentially treat. Would you look to bring a partner on ahead of moving into the clinic? Or would you like to provide clinical proof of concept and really derisk the program and then partner the program? And I have a quick follow-up as well.

Thank you for the question, Jack. Always, these are options for us. So there are scenarios that are driven by capabilities where sometimes partnering makes sense. But COR1 probably doesn't rate high on that particular criteria because we can execute a plan. What's really beneficial about COR1 is that others have already established the appropriate animal models, human study designs have been done, leading ultimately to an approved product, in this case, only in Japan to date. So there's a lot of imitation or copycat that we don't have to innovate a whole lot, which I think will allow us to go faster.

Ironically, we did a call dedicated solely to COR1, where my main message was that value for a program like this perhaps should be rewarded or granted even as early as just developing the right product profile. Because we know that the way that this works today is that many thousands of individuals provide donor material. We are just another source of donor material.

So I think that the risk profile for our corneal endothelial cells is probably very different than if you are pursuing an entirely different approach. A small molecule hitting a target that's not validated is very different than if 40,000 people have already had this procedure and you show up with the [ forty thousand and first ] source of cells. I think that's a very different product profile.

So we will be, I think, benefiting in terms of getting into the clinic from the fact that there's a precedent. It probably allows us to do a number of things in parallel. And I think the risk profile would allow us to go confidently down some of those paths in parallel.

What we said today is that one of our goals is to generate initial animal model data. If we are in a position to share it before the end of the year, that's even better. That would certainly be a goal for us. But I do want to remind, for everyone who's listening to that question, this program scarcely existed a year ago. And now here I am talking about how quickly we might be able to get into clinical trials. And so that more than anything else, ought to be a good indication because if you tried to do the same thing with a small molecule approach, you could be spending 4 or 5 years screening compounds and working your way through SAR, doing hit-to-lead activities.

So the power of this platform is exactly that, that we can generate programs with differentiated risk profiles and differentiated products and features very rapidly without breaking the bank along the way.

Yes, I know. It's been great to see the rapid progress there. And then if I may, just one brief follow-up. You mentioned a regulatory filing around OpRegen in Ireland. I was hoping you could just elaborate a little bit more on what that filing was and what it could mean as it relates to Roche's appetite to starting studies in that geography.

Yes. Thank you for the question. Not Ireland. I did go there for the first time last year, a lovely place, but I was referring to the IRIS database. So the EMA maintains the IRIS database. And so you need to register any material before you talk with the regulatory bodies in Europe about that material.

So it's nothing more than an administrative step, but it's an administrative step that's been done 2, 2.5 years, 3 years after licensing the program. So it is nothing more than another tea leaf. But I invite the listeners to consider how many tea leaves start to make you feel that there's some asymmetry in a possible positive outcome here.

So it doesn't commit -- to my knowledge, it doesn't commit Roche or Genentech to doing anything in Europe, but it does invite the question why they bother doing that. And I think that's what a lot of the questions are that we have regarding the OpRegen program and all the different activities that seem to point to us that things are going well.

Thanks for the correction on IRIS versus Irish. That's great progress to hear.

Your next question comes from John Newman with Canaccord Genuity.

Congrats on the continued progress. So I'm just wondering, Brian, if you could just remind us on the OpRegen program, what are the commercial -- or sorry, what are the milestones that you're eligible for in that program? And do you maintain commercial rights or maybe some sort of right to opt in? Or is it more of a royalty on the commercialization side?

Yes. Thanks for the question, John. So we remain eligible for $615 million of developmental and commercial milestones. Those are not broken out publicly. There was one milestone that we already met that was in connection with a manufacturing and clinical achievement that we met.

So that was obviously another positive indicator that we're doing some good things for our partner. And then it's not a co-promote agreement. It is a plain vanilla royalty agreement. It's a double-digit royalty that has tiers that increase the rate as certain thresholds are met. As with any license, there are also certain conditions where those royalty rates can be going in the opposite direction. But the base case is that is pretty attractive to us, a double-digit base case for that license agreement with Roche and Genentech on a worldwide basis.

And I will note that while it is for any eye disorder, it is limited to the RPE cells. So any other cell type that we're working on represents more opportunities for potential partnerships, but the Roche/Genentech one could be deployed into any number of different ophthalmological disorders. They do have the right to do that if they so elect.

One additional question on a different program. Should we expect additional updates this year from your work in diabetes?

I hope so. It's more likely than not. I do tend to provide a lot of in-depth information about what we're doing. And I can frankly tell you that I've been surprised at the rate of progress by the team. So I think the answer is yes, but I'll reserve the right to be wrong in my prediction there. But I have provided an update, I think, 3 consecutive quarters. So I would certainly hope that I would have something interesting to say before year-end.

Your next question comes from Joe Pantginis with H.C. Wainwright.

Two questions, please. So Brian, you started the call by saying you're going to provide some background information behind the scenes and what have you. So I'm really happy that you provided all of the manufacturing types of details. But I want to go even deeper there and that is to get to the final cell that gets into the vial and that's based on all of your expertise and the proprietary nature of what I guess I would call the recipe for these cells where once it makes the vial, like I guess you could provide a little more detail here. It's like you just can't go back into the recipe and say, okay, I'm going to add another tablespoon of sugar. So I was hoping you could just sort of talk about the proprietary nature there that could impact the competitive profile in the future. That's number one.

Number two, I'm going to ask, I guess, the 47th version of a proxy question regarding OpRegen. And that is based on your services agreement can you point to anything in your agreement with them with regards to increasing of services, sending them more products or anything of that nature?

Thank you, Joe. I'll answer the second question first. It's shorter. No. There's internal information that we have that is nonpublic. And so of course, we have greater insights and beliefs relative to our investor audience. But all of the service agreement information is, and continues to be confidential.

Regarding the recipe, so making a specific cell type, and I should be really clear again here, not just making it, because there's a lot of labs that can make a cell that you choose, but being able to make it reproducibly, have the right control, the purity, the quality, being able to do it on a scalable platform, right, these are all the table stakes to play for a commercial pot. And as soon as you layer in those criteria, it becomes more difficult.

So a lot of our intellectual property is in the methods that we utilize in order to make these specific cells with all of these additional criteria. But more than that, and the reason why I continue to figuratively pound the table on how difficult this is and why it's important to do it correct from the beginning, is the regulatory component. If you are making cells, and let's say it takes you randomly 45 days to run a batch of a certain kind of cell and that's good enough to do a Phase I clinical trial, but you know that it's not a commercially viable process and you just say to yourself, well, I'm going to put some steroids in here. I'm going to throw some sugar in here and I'm going to make the process, spit out more cells, I'm going to, i.e., scale it, you are changing your product in the view of the FDA.

In a worst-case scenario, your product is different enough that you must start over. So we believe that it is a flawed approach, an unnecessarily risky approach to develop a program that doesn't already, at the beginning, demonstrate the ability to have a high probability of scalability with your process. Build a process that scales on day 1 because none of us want to get into a situation where we celebrate Phase I clinical data and then have to go out to the world and explain and apologize why we can't actually make enough of this product that we're touting as being successful. That sounds like a terrible strategy.

So we take more time. We probably invest more money, but we retain in-house the technology so that we feel a very different sense of our ability to scale these products so that if we do show evidence in a clinical trial, we don't have to go back and change anything. We may have some comparability across batches, but we're not changing anything in our methods. And it is a fundamental principle among those who exist within cell therapy manufacturing, not even the cognoscenti, like just general people who are really wise in cell manufacturing, are going to appreciate how important it is to not make any changes to your process.

But I think that, that is so different from how we look at small molecules where we just say, look, throw more raw materials in, do some quality control, run your analytics and you're going to have the same stuff. That's true for small molecules. It is violently untrue for cell therapy manufacturing.

So we continue to perhaps look and feel a little bit differently. A reason to run a call like the one we're doing today, which is sort of a behind the scenes, get to know us, understand our strategy, is in part specifically because there are principles of cell therapy manufacturing that are not applied to small molecules and not applied to antibodies, but are critical to understand in order to understand how Lineage is building itself to be a successful company in the future.

So I thank you for that question because it gives me an opportunity to stand on a soapbox and shout it again.

Your next question comes from Sean McCutcheon with Raymond James.

Brian, just one from us. On OPC1, can you speak to the requisite safety waiting period and challenges identifying and getting patients into the DOSED study? What are your expectations for cadence of new patients enrolled and being treated moving forward now that the second patient has been dosed, that they were dosed about 90 days ago. And should we anticipate only chronic patients being enrolled into the DOSED study moving forward?

Yes. And I'll let Dr. Herath in just a minute answer that. We didn't expect to -- we didn't expect the need to be urgent around chronic because we figured chronic would come in before subacute because subacute, of course, requires an accident or an event. And so we thought that the subacute patients, of which 3 to 5 are planned, would be the lagging population.

But now we're starting to have some different thoughts. And so yes, we do retain the optionality of potentially changing the protocol. And maybe instead of those subacute patients, perhaps we'll use those patients as bridging to our new cells.

But let me invite Dr. Herath to provide his views on that.

Sean, good to meet you again. So the first 4 patients in the protocol, each will have a 1-month DSMB break before the next patient can be enrolled. So there's that. So until we are done with the fourth patient, we cannot rapidly expand the recruitment. And so that's where things are for the time being.

Third patient is currently being assessed. We have several candidates. What I can tell you is that they are all chronic patients right now, just for the reason that Brian mentioned. So then the fourth patient will come. Beyond that, further expansion and how rapidly we can go depends on a number of factors such as finding the patients, initiating more sites and so on and so forth. But I think the anticipation is to try to get the remaining patients relatively quickly, hopefully, within the next 12 months or so overall.

There are no further questions at this time. I will now turn the call back to Brian Culley for closing remarks.

Excellent. Thanks, everyone. Our focus on replacing cells that have become dysfunctional or destroyed might reshape many treatment paradigms in the future and we really thank you for joining us on this mission. Have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.

Welcome to the Lineage Cell Therapeutics Conference Call. [Operator Instructions]. An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage and recordings, reproductions or transmission of this call without the express written consent of Lineage are strictly prohibited.

[Operator Instructions]. 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. Hone, please go ahead.

Thank you, Angela. Good afternoon, and thank you for joining us. 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 most recent annual report on Form 10-K and in any 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 press releases and SEC filings.

With us today are Brian Culley, our Chief Executive Officer; Jill Howe, our Chief Financial Officer; and Dr. Priyantha Herath, our Senior Vice President and Head of Clinical. I'll now hand the call over to Brian.

Thank you, Ioana. Good afternoon, everyone, and thank you for joining us today. As I review this morning's press release and respond to some analyst questions on COR1. COR1 is our new internally developed and wholly owned cell transplant program, being developed for the potential treatment of corneal endothelial disease.

To begin, you might be wondering why we elected to do a stand-alone call to discuss a preclinical cell transplant program. The answer to that question is that the manufacture and delivery of cells outside of the setting of cancer is a rapidly emerging branch of regenerative medicine for which a little bit of explanation may be able to help our audience better understand our goals and priorities.

I also want to add that we would like to keep the Q&A focused on manufacturing strategy and COR1 today. Obviously, OpRegen is very important to us. But one of our goals today is to help the investment community begin to appreciate how our technology and our experience with OpRegen can be applied to the internally owned assets in our pipeline.

This will unavoidably be a somewhat technical call, but my goal will be to keep things clear and comprehensive because we want to provide important information about our pipeline that may not be immediately appreciated from headlines or press releases, and I appreciate you taking your time today to join us to better understand what we're building and why we're so excited about it.

At Lineage, I'll remind you that all of our programs are what we'll call allogeneic cell transplants. We manufacture specific types of cells of the human body and deliver them to patients in an effort to replace the cells that are missing and restore function that was lost when those cells, which the patient was born with, were destroyed or became dysfunctional due to aging or disease.

Everything we are doing is off the shelf, meaning the therapy is being developed to be suitable for all labeled patients, and thus avoiding the extraordinary cost of autologous cell therapy. This, of course, is the primary advantage of an allogeneic approach, making the same material for all applicable patients and doing so without the exorbitant cost of a custom therapy produced for just one person at a time.

What we do is also very different from small molecule drug discovery. Early in my career, I recall screening hundreds of thousands of molecules to try and find one that worked in a particular assay, but small molecules are typically designed to hit just a single pathway or molecular target. Gene therapy is similar. It aims to fix or replace a single element of the genome and these are highly targeted approaches with advantages in certain settings, but they cannot replace an entire cellular infrastructure the way that a cell transplant can.

All of these approaches seek to develop new medicines, but they go about it in completely different ways, and we think it will be productive to highlight some of those key differences because this is a growing area of medicine that is increasingly gaining recognition.

Acquisitions of single asset cell transplant companies like BlueRock, Neurona, Semma and Aurion, some of these for around $1 billion each are strong and growing evidence of the financial and clinical maturation of this field. No matter which disease you're looking at, a fundamental aspect of cell therapy is that it involves complex manufacturing. And once the company or sponsor commits to clinical development, downstream changes to your product cannot be easily introduced without the potential for significant cost and risk.

For example, if you generate initial clinical data using a manual 2-dimensional process, a process you may know in advance is not suitable for scale-up because it requires impractically large surface areas and high aseptic risks. You might plan to change over to a 3D system for your later-stage trials. But it may be very difficult or even impossible to switch to an automated 3D system with assurance that your final cell product will be the same as the one you tested in Phase I.

And importantly, the FDA has issued guidance on this topic, which states that a cell therapy product is defined by the process used to make it. Therefore, if a process has changed, the product itself has been changed. So while the rush to generate clinical evidence is real, that rush reflects a traditional small molecule path rather than the specific demands of a commercially viable and affordable cell therapy. In fact, generating clinical data with an immature or incomplete manufacturing process is what we at Lineage refer to as "bridge to nowhere."

If you have Phase I data, but you haven't locked or finalized a robust production and manufacturing process, one which can support Phase II or Phase III clinical studies, then we believe you are at a significant disadvantage. You may eventually be required to change your process, and there can be a huge amount of risk and cost in making these types of changes.

These are not small risks for a program. We take them very seriously. It's why we embrace what we call "better from the beginning," that's our approach to product development. In our experience, trying to engineer in changes to an already clinical stage process introduces unacceptably high levels of risk to comparability and scale. So we aim to lock these attributes before proceeding to the clinic because that gives us confidence that if our clinical data are positive, we can continue forward with a process that FDA has already seen and cleared for use. And I want to remind everyone today that we have firsthand experience and considerable success in this matter because we have successfully shown evidence for a commercially viable production modality using a product candidate that has been successfully presented to FDA and delivered to patients in a clinical trial.

So given the impacts of early manufacturing success, investors may want to ask whether a company is already making their product candidate on a scalable platform? Is the cell line known to be compatible with scale up? Is the company using proprietary and patented methods? Is even the container closure system compatible with the product being developed? Or will that require a change later?

Cell therapy manufacturing can be so sensitive that even a change to a raw material that is so insignificant that it does not have to be disclosed by the supplier can mean the difference between success and failure of a batch. These are all hidden risks lurking in cell therapy programs being developed around the world, but awareness and experience can help reduce risk which is one of the advantages of Lineage having significant experience in scalable cell manufacturing.

What this means to companies working in this field is that defining your product candidate early is not only necessary, but should also be valuable, especially if you already know a certain type of cell is capable of treating the condition.

Now that I've hopefully explained the importance of having a mature and reliable process driving your product profile and having those criteria established before even beginning preclinical efficacy studies, I will walk through 4 critical criteria that we at Lineage have established for COR1 and which gives us the confidence to continue to advance COR1 into preclinical testing. Those 4 key attributes are scale, storage, quality and consistency. We'll begin with scale.

Around the world, there is only 1 donor cornea available for every 70 patients who need treatment, which means there is a massive unmet need for a reliable supply of corneal endothelial cells or CEnCs. We are making CEnCs in our labs from a self-renewing pluripotent cell line or PSC. PSCs can be expanded to massive numbers and can also be converted into CEnCs. So that is one way to solve the problem of insufficient donor cornea availability. COR1 is produced from a proprietary cell line that is genetically stable and which has passed a robust analysis of whole genome sequencing at multiple qualified vendors and is what we internally call "well-behaved." We started generating CEnCs from a qualified non-GMP working cell bank of that line. And based on our progress, which I will review for you today, we are planning to produce the GMP banks for that line this year and use those cells for continued development.

We have modeled our approach to COR1 scale up on a 2-tiered banking system, something I have spoken about many times for our OpRegen program and which offers us the ability to scale exponentially rather than just linearly. But we are going beyond what we have already accomplished to date by also applying our recently disclosed AlloSCOPE 5D system to COR1 production.

As an aside, I'll briefly explain that AlloSCOPE 5D describes a segment of our AlloSCOPE manufacturing platform, which has the goal of higher scale production with reduced manipulation. AlloSCOPE 5D focuses on the production of high-quality, low passage, undifferentiated cells that are able to synchronously respond to differentiation cues in a seamless fashion. This approach is designed to offer greater control of differentiation than is normally available from regular culturing and bioreactors or even some 2D modalities. In short, it means creating 2D culturing conditions while in a 3D suspension.

Because the goal of the 5D version of AlloSCOPE is to facilitate massive scale up, it is more naturally associated with our islet cell research initiative where the presumed dose is nearly 1 billion cells per patient, but we chose to apply 5D to the COR1 program as part of our proof-of-concept work. And we found that we could utilize the 5D expansion process to support high-quality CEnC production with the same robust differentiation, but with much greater scale than a 2D modality.

We are, therefore, confident that we're on a path to being able to generate millions of doses of the COR1 product candidate from the current banking system, similar to what we've accomplished with OpRegen. That scale would mean we would not only be able to supply a product to a growing patient population, but also do so with the cost of goods that we expect to be far below the expense of the manual harvesting, manipulation and dose preparation required for the current cadaver-derived procedure. And please note, I'm discussing our early current and unoptimized calculations. We expect we would be able to improve upon these estimated levels of output from our cell banks with additional time and investment.

Moving next to storage and handling. I am particularly excited that we have developed and deployed a proprietary cryopreservation protocol for our CEnC cells and generated what we believe to be clinically and commercially attractive levels for both viability and recovery from all steps in the manufacturing process, the banks, the intermediates and the final product candidate.

We believe a COR1 product profile, featuring a ready-to-use Thaw and Inject format gives the program a significant competitive advantage. And additionally, adding cryopreserved banks and intermediates provides us with operational flexibility, efficiency and process consistency. The advantage to us is because the current standard of care for a CEnC transplant, including the approved product in Japan and an ongoing clinical program in the U.S. requires the use of harvested cadaver cells within just a few days. If we can offer not only a scalable product, but also a product that can be stored frozen and used on-demand. We think this will be a far more user-friendly and accessible option for patients and providers.

Moving to the third attribute, quality. We employ modern and expected analytical tools like single-cell RNA-Seq and bioinformatics. And of course, we investigate the identity of ourselves, and we'll only release a batch if it meets our high standards for these criteria. We also minimize the production of off-target cell types. In practice, we have seen some beautiful honeycomb morphologies with high levels of purity and 0 residual hESC cells. We do not disclose our identity markers, but I can share with you today that they meet our criteria for a go/no-go decision.

Our approach also uses a proprietary differentiation path on which we recently submitted patent applications. And as I said before, we found that incorporating a 5D expansion protocol, also led to improved quality of our product candidate. Overall, we believe a consistent and high-quality stem cell-based product generated from a single pluripotent line would be preferable to the highly variable cells that are harvested from deceased individuals with variable age and unknown medical histories.

My fourth and final point today is consistency. I will again highlight that the current standard of care comes from donated cadavers with variable age and medical conditions. So you, unavoidably, will have variability in the quality of your starting material and then how it is going to behave. And it is well established that donor harvested cells require complex processing.

To date, we have observed batch-to-batch consistency with our COR1 program, and we are working on optimizing the conditions for the final expansion steps. Separately, because CEnCs provide a barrier function to the cornea, we have established a transepithelial resistance test as a potency assay to ensure each batch is comparable to the batch prior. This, of course, is also an FDA requirement for use in the clinic, so it's important to have generated that data from our process.

So why are we investing so much time into this program? The answer is twofold. First, as I explained at the beginning, cell therapy is not like small molecule product development. We believe we are doing excellent and innovative work, but much of our audience has a small molecule experience. So there is an education and awareness component to this call for both COR1 and other programs in our pipeline. And the primary message we're trying to get across is that we believe it is an advantage to establish from the beginning, superior characteristics in an asset before conducting your clinical trials because the cost and risk and regulatory hurdles of trying to engineer in fixes into a deficient process is unacceptably high.

The other reason is that there is a huge under-addressed commercial opportunity available in corneal endothelial disease, and we think we are increasingly well positioned to compete for it. We are advancing a product candidate which we believe will offer a product profile superior to cadaver-derived CEnCs, which I've explained several times now, have been shown to be an expensive variable and unwieldy source. We believe that an immediate use, cost-effective and consistent supply of CEnCs, such as we are developing with COR1 would be preferable to both patients and providers.

To conclude, I just want to provide some specific dates which highlight the power and efficiency of our pluripotent cell-based therapeutic platform. We began exploring CEnCs as a potential new pipeline program in the second quarter of 2025 and didn't start internal wet lab work until the third quarter of 2025. This program wasn't even publicly mentioned until March of this year.

And just 9 months after initiating lab work, we're hosting a call today to highlight that we are developing what I believe will be an exciting and disruptive asset in corneal disease and we've done it while maintaining a stable and disciplined pace of capital investment. I believe it's a remarkable amount of progress by the team that I would be happy to compare among our cell therapy peer group.

Lineage is best known today for OpRegen and our RPE transplant program to treat dry AMD and OpRegen is clearly an exciting asset. But while we wait for additional updates on that program from our partner, I think it is important to keep in mind that we have also demonstrated the ability to rapidly generate additional novel assets also with differentiated profiles. And because we skip the cost and time of doing target discovery and validation and screening and optimization associated with small molecules. We have been able to affordably develop an entire pipeline of cell transplants that we own internally or can strategically partner with collaborators where we think it makes sense to do so. Very proud of our progress to date, and we also think there is much more to come from our platform in the years ahead.

I want to thank you all for your attention. And I would be happy to take a few questions.

[Operator Instructions] Your first question comes from the line of Mayank Mamtani with B. Riley Securities.

Appreciate, Brian, the technical detail on what superior product profile could look like for CEnCs and the development time lines are impressive. On the math, you shared about millions of doses with that kind of ceiling or potential to be reached. Could you just walk us through what you've achieved to date so far with the batch scale-up and how you're kind of thinking maybe in the context of OpRegen also how you kind of did that development, maybe what's different now in this situation with the 5D, and if you are able to give us some color also on the COGS that you're targeting once this is in the clinic and then separately once it's commercial scale? And then I have a follow-up.

Thank you, Mayank, for that question. I'm going to be more exemplary rather than precise, partly for competitive reasons, and partly because some aspects of what we do are subject to our license agreement with Roche and Genentech. But conceptually, for both the OpRegen program and for the COR1 program or not conceptually, but how we approach this is we use a 2-tiered banking system.

So a master cell bank might have 100 vials. And you could randomly choose any one of those vials from which to generate a working cell bank. That's your second set of banks. And that might also be, let's say, 100 vials or a little bit larger than that. And then from that working cell bank from that intermediate, you can then make your product. If you were to make, let's say, 3,000 doses of your product, that may be 3,000 doses from one run, but the banking system, which generated it has the exponential factor of 100 times 100. So you can do 100 times 100 times 3,000, so that would be 30 million doses of a product.

We haven't disclosed the specific scale, and in fact, it can vary because manual filling is just naturally going to generate fewer vials than automated filling. So there are sort of min/max capabilities, which is why I intentionally used the somewhat sweeping language of millions of vials being capable from this kind of system.

The 5D aspect of your question is a component of the platform, a component of AlloSCOPE that is specifically aimed at pre-differentiation and that is because one of the perhaps not well understood aspects of cell-based manufacturing is that while it is true that pluripotent cells are self-renewing, and can divide. If you want them to be differentiated into well -- and controlled differentiation into one specific cell type they tend not to behave as well with each passage. You could have manual manipulation, which can affect the cells and cause spontaneous differentiation or you could have enzymatic passaging that can lead to that.

So 5D, without revealing exactly how we do this, employs certain biological and physical/engineering attributes in order to generate very large numbers of pre-differentiated cells that are still capable in a synchronous manner of responding to the factors that will convert them into any other cell type, whether that's a corneal endothelial cell or an islet cell or an RPE cell. You can choose the desired cell type. So in some cases, using a 5D step in your overall manufacturing modality can be beneficial because it can help you when differentiation protocols are not efficient.

So we know that, for example, islet cells don't like to -- they don't like to continue to divide once they've been generated, whereas auditory neurons are quite happy to continue dividing. So those are -- the latter are a lot easier to manufacture. So it just gets into some of the nuance and complexity of manufacturing. But as a general matter, using a multiple tier banking system gives you exponential expansion rather than linear expansion.

You can also employ 5D technology. And if you are employing 5D technology, you're talking about manufacturing your product in bioreactors rather than in flat plastic 2D plates because those planar substrates really just don't scale as well or as efficiently if you can achieve the same product or an even better product in a 3D environment.

Anything on the COGS? And while you answered that also was curious on the in vivo animal work that you are going to -- you've undertaken already and you'll have data what that would entail on species or what sort of assays you're testing for, and then lastly, on the islet cells, like, time lines? Are they -- a lot of investor interest there, are very comparable to the time lines for COR1, just as you think about when you announced the program first, should we expect islet cell to move along the same time lines?

I appreciate that. I'll just kind of invert them. So islet program continues to advance in our labs. I don't have an update that we intend to share today, but our quarterly call will come around. And if we have something to say, at that time, you would expect that we would do that.

Going back to COR1 for the other 2 questions around COGS and in vivo animal testing and in particular, I'm sure you'd be interested in functional animal models. One of the wonderful aspects that I really didn't bring up on -- in the main body of the call, is that there is a lot of precedent work. We do know quite clearly that cadaver-sourced cells are an effective therapy. They have been utilized in Japan in a product called Vyznova, which the package insert is available, and the development has been conducted by companies like Aurion and Alcon in the U.S. And so there is a precedent where we don't have to go and choose and hope to choose wisely what sort of animal models we have and can obtain reference material as a positive control for our studies. So that one of the great considerations regarding risk is if you already know that cadaver cornea cells can treat the disease effectively and you know the regulatory path that they've gone through that establishes a nice precedent where you could do some things in parallel.

So with respect to timing, we are already talking to the vendors about the in vivo animal testing. We expect initial data will be generated this year. And even beyond that, we are thinking about jurisdictions where we might be able to generate initial human evidence for this approach more rapidly than we would in the U.S. And frankly, despite everything that I said on this call, which is all about the importance of getting your product profile squared away early and not rushing too hastily into clinical trials.

The fact of the matter is that there will be great attention on this program if and when our generated, our manufactured cells can successfully treat the condition in a handful of patients. I think the risk profile could change at that time. I don't want to neglect COGS. Again, there's a competitive aspect of COGS that I don't want to get into. I do think that I have said on other calls or previous public settings, that when you are manufacturing a capability, simply repeating a process over and over, and having the ability to generate millions of vials by repeating that process, it would be normal and expected that you'd be talking about below 4 figures for a dose, but we don't go into it specifically. And we haven't optimized it anyway for any of our programs. I think there are aspects of manufacturing that could be improved.

But when you compare that with autologous cell therapy or you compare that with the unavoidable manipulation, dose prep, handling, and brief process time and utilization window of cadaver-sourced cells, you're really getting down into some incredibly attractive margins for a program like this attributable to our efforts to realize the very dream of allogeneic cell therapy, which, of course, is high scale, low-cost production of consistent material.

Your next question comes from the line of Yang Chen from Raymond James.

This is Yang from Raymond James. Congrats on the progress. We have 1 or 2 quick questions, especially for the cell therapy, is there an immunosuppression regimen or protocol in place? And secondly, for this therapy for your consideration in human trials, will you require multiple injections or one single injection?

Thank you, Yang. Maybe what I will do is include in Dr. Herath, who can speak briefly about the current state of the procedure of this therapy and how we compare to that. And -- but the short answer regarding immunosuppression is that it would not be expected to be lifetime immunosuppression or gene-edited therapy, the sort of which you might see with some of the other programs that are out there in other indications.

Thank you, Brian. So thanks for the question. I'll take the immunosuppression question first. As you know, many of our programs -- patients do receive short-term tacrolimus. And I would expect that, that might be the case. So this also remains to be seen, but most likely. And then to answer the other question as far as procedure itself. The surgical approach really follows the anatomy. And for COR1's target, this happens to sit in a far more accessible place right in front of the eye.

So for example, if you think about the OpRegen program, the RPE cells we are replacing, they live under the retina, right? And so we have to go sub-retinal which requires a vitrectomy and a control injection under the retina by a very well-trained, vitreoretinal surgeon. It is a very sophisticated surgical procedure as happens in our Genentech collaboration with OpRegen trial for dry AMD. Delivery precision has been one of the real variables in that program.

For the COR1 program, this is far more straightforward. Corneal endothelium lines the back of the cornea facing directly into the anterior chamber, as you know. So the delivery is an injection into that fluid-filled space in front of the iris. This is a simpler, minimally invasive outpatient done by a cornea specialist in which our cells are injected into the anterior chamber, then we would expect that the patient will rely on gravity-assisted positioning, plus or minus Rho-kinase inhibition to sustain and maintain the cells rather than surgically replacing the tissue. So the entire thing is far less invasive than corneal transplants like DMEK or DSAEK with no donor tissue and certainly no vitreoretinal surgery like the OpRegen study.

Now essentially, therefore, the thing to remember is that this approach really points to lower procedural risk, broader adoption. Think about it. There are about 6 million patients with corneal endothelial disease, which is about 7x as many as Parkinson's patients or about just as many Alzheimer's patients in the United States right now. That's a lot of patients. And so more accessibility is a huge thing and therefore more treatment sites at lower cost. And so these are some of the things I think that Brian was trying to ask me to explain. And I hope I answered your question.

Thank you, Yang. Operator, I just -- check to see if we have any additional questions.

There are no further questions at this time. I would now like to hand the call back over to Mr. Culley for closing remarks.

Great. Well, thank you very much, again. I appreciate everyone's time. Thank you for being interested in this program and overall, our approach where we're really trying to do the most difficult things first and then moving forward -- moving these programs forward. So you can expect to see a lot more from the company as we go forward. And please enjoy the rest of your day. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Welcome to the Lineage Cell Therapeutics First Quarter 2026 Conference Call. [Operator Instructions] An audio webcast of this call is available on the Investors section of Lineage website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage, and recordings, reproductions or transmissions of this call without the expressed written consent of Lineage are strictly prohibited. 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. Hone, please go ahead.

Thank you, Demi. Good afternoon, and thank you for joining us. A press release reporting our first quarter 2026 financial results was issued earlier today, May 12, 2026, 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 most recent annual report on Form 10-K and in the Form 10-Q filed today. 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 will now hand the call over to Brian.

Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us today. We have a lot of great things to cover. I'm going to try and keep it short so that we can have plenty of time for analyst questions. I do definitely want to highlight the successful expansion of AlloSCOPE, our proprietary cell manufacturing platform, most notably because it led to the launch of COR1, our new wholly-owned corneal endothelial cell transplant program. We also successfully met our first internal milestone with our ILT1 manufacturing initiative. and established a new Scientific Advisory Board and attracting and recognized and established cell therapy executive as its founding member.

But before I share those and other updates, I'll begin with the status of our lead clinical program, OpRegen. Data we reported several years ago from the OpRegen Phase I/IIa clinical study included improved anatomy of the retina, halting or reversal of atrophic progression and improved vision in patients with dry AMD. These are compelling data because they're not known to occur naturally in human beings. And since we made these initial reports, 2 additional and very important advancements have occurred in the field.

The first of these is that 3 other companies have reported similar results with their own version of an RPE transplant, independently providing further evidence in support of the mechanism and its treatment effects.

And the second is that Roche and Genentech's long-term analysis of our data showed that vision gains persisted for at least 3 years following a single administration of cells among patients who received those cells to the target location.

Taken together, these data appear to us to be consistent with continued forward progress of the OpRegen program. And while we await a decision on the future of the OpRegen program, I'll note that while we've long believed that we may be seeing a potential functional cure for advanced dry AMD in the OpRegen program. This month's presentation by our partners, Roche and Genentech is the first time that they have used similar language to describe OpRegen as a potentially disease-modifying treatment.

Obviously, even discussing disease modification and geographic atrophy is exceptionally promising because dry AMD is a common condition that has not been shown to self-resolve and only leads to worsening vision. So we find it notable that after adding only a single site in 2024, Genentech has now opened 11 new clinical sites starting in late 2025, bringing the ongoing study to a total of 17 unique locations.

As I've explained on these calls before, we do not have a time frame to share when or whether a GAlette study data reveal and/or a public commitment to a multicenter controlled trial may occur. But we continue to be confident in our partners' commitment to the program. And we believe that the work that they are doing in the GAlette study to optimize surgical delivery will improve the product's profile and is intended to increase its probability of regulatory and commercial success, especially compared to the competition, which appeared to us to still be in the early stages and not as advanced as we are in the necessary aspects of manufacturing or delivery.

Overall, we believe our powerful quartet of scalable manufacturing, proprietary delivery tools, long-term safety and efficacy data and a partnership providing world-class commercial capabilities make us bullish on the potential for OpRegen to capture a significant portion of a multibillion-dollar and still underserved GA market. And because all of our programs have certain features in common, we believe we can bring the same kinds of attributes to other cell transplant programs, but even more quickly, which should explain why we are eager to try and apply these learnings to other cell types.

Now because development of cell therapies is very different than that of small molecules, we needed first to invest in our manufacturing capabilities to enable development of these other cell types. And that is because in cell therapy, the process is the product. Even seemingly insignificant changes to a process can impact your product's characteristics, including its efficacy. So you want to ensure that you have the right process in place before beginning clinical testing. Making those investments too late could be fatal to a program, analogous perhaps to changing the structure of a molecule.

Some companies may feel pressured to rush into clinical testing without a robust, scalable manufacturing process and assume they can figure that part out later. We think that approach can create significant risks. We are choosing instead to invest in commercially viable process development before launching clinical trials so that if we do demonstrate compelling clinical activity, we believe we can be much more confident that the product which led to that activity can continue through approval and eventual commercialization. Otherwise, you may be delaying an inevitable and potentially critical shortcoming, which could cause you to go back to square one with the regulators.

Fortunately, while manufacturing may sometimes be an underappreciated or even overlooked area of cell therapy, it is nonetheless an integral factor in a product's success. And we believe we've made tremendous strides in this area. Our AlloSCOPE manufacturing platform utilizes a 2-tiered banking system in which a master cell bank generates a working cell bank, which generates the clinical material. The production capability underlining this approach is easy to understand. A single vial from a master cell bank can generate an entirely new working cell bank and any vial from that working cell bank can generate the product. That means the amount of material you can mathematically generate is being multiplied at each step.

So if each step has 100 vials, even just 100 times 100 times 100 is a 1 million vial production capability. And this is not a prophetic claim about large-scale production. We have performed these individual steps multiple times. And the final product from our banks has cleared the FDA requirements and been used in clinical testing. If we were to successfully perform these steps again and again using the full potential of our banks, we would produce many millions of vials of our product.

Importantly, this kind of scale also means our cost per dose for particular program can potentially be in the hundreds of dollars, which we believe offers advantages in terms of patient access and affordability. And the potential for low-cost scale is one of the reasons we're so excited about the allogeneic off-the-shelf product candidates in our pipeline.

I'll now turn my focus to how we apply our manufacturing success and lessons we've learned into our pipeline of cell-based assets for other medical conditions that arise from the loss of critical cellular function.

OPC1 is our second clinical stage program designed to increase mobility for people who suffered from a spinal cord injury by delivering new and functional oligodendrocyte progenitor cells to the site of injury. OPC1 has been administered to 30 individuals in 2 Phase I/II safety trials, and we believe the long-term safety and efficacy data collected in those trials is both promising and worthy of further investigation. This is a program that was created before the advent of modern cell therapy technologies and required some improvements to both the production process and product delivery.

We've previously reached our goals on the production process side, generating new cell banks and producing a cleaner, potent and uniform product on a commercially viable platform in our in-house GMP facility. We also overcame a major deficit with accessibility by inventing and introducing a new patented "thaw-and-inject" formulations, which we've developed for and then borrowed from the OpRegen program. That material has undergone in vivo comparability testing, and we expect to present that supporting data package to FDA later this year with the intention of introducing those cells, those new cells into the ongoing DOSED trial.

DOSED is running in parallel to provide a separate analysis, which is to evaluate the safety and performance of a novel and proprietary delivery system for OPC1. Our goal with the new device is to deliver the cells to the area of injury without stopping patient ventilation, something that was required in prior studies. Once the cells and device have been adequately tested and a study design has been discussed with FDA, we expect we would be in a position to conduct a larger comparative study of OPC1 either alone or with a partner.

Notably, the ongoing study is the first time OPC1 has been administered to patients with chronic injuries, which are injuries that may have occurred as long as 5 years prior to treatment. We have treated 2 such patients to date. And because we will be collecting functional assessments on all patients, we have the opportunity to investigate any signals of efficacy that may arise. This is important, because unlike subacute patients, most chronic patients have reached a performance plateau where further spontaneous improvements are considered unlikely, and therefore, any functional improvements they gain may be easier to detect. And chronic injuries also represent a new and larger potential patient population for this experimental therapy.

Importantly, the first chronic SCI participant is coming up on their 1-year follow-up visit, so we expect to be able to provide an update on how they're doing on our next earnings call. And while the possibility of a treatment effect in chronic patients is an exciting topic, I don't want us to lose sight of the point that the DOSED study is designed to demonstrate the safety and performance of the novel delivery device. And to date, that device has performed as expected with no unexpected procedure, product or device-related adverse events or significant design changes required.

DOSED also has recently been expanded to a second site, the Rancho Research Institute located in Downey, California in conjunction with the Rancho Los Amigos National Rehab Center. We are honored to have Dr. Charles Liu, the principal investigator and his team involved with the OPC1 program.

Moving next to ReSonance. This is our first internally developed program using the modern technology available from the AlloSCOPE platform. This is an auditory neuronal cell transplant to treat hearing loss. ReSonance was built from the beginning on our AlloSCOPE platform. So it already has the features I discussed a few minutes ago. And last year, we announced a partnership for this program with William Demant Invest, which is expected to fully fund the planned preclinical development plan, leading to an IND filing.

ReSonance is an important example that showed we could conceive of and successfully manufacture a completely new cell-based product candidate on our AlloSCOPE platform in a rapid and efficient way. From an initial investment of approximately $1 million, we generated new intellectual property and advanced ReSonance into preclinical testing in about 1 year. The speed and success of that project then led to a partnership with Demant, a world-leading hearing health care company, which brought us access to specialized technology, auditory expertise and a network of hearing health leaders.

And as shared previously, Demant also agreed to fund up to $12 million of preclinical activities, leading to a first-in-human regulatory filing, a portion of which has already been spent in support of the project, including as reimbursement to Lineage for our contributions. We believe this collaboration demonstrated the speed, efficiency and value creation that the AlloSCOPE platform can provide as well as highlighting productive dealmaking, and we hope to repeat this success with some of our other cell transplant programs.

Meanwhile, our collaboration with Demant has been progressing well. I'm happy to share for the first time today that we have successfully completed 3 engineering runs and preparations are underway to perform that process in our GMP suite. Successful manufacturing of GMP material will be an important next milestone as it's something we want to complete before speaking with the regulators about human testing. We've also established a novel model of deafening, which will enable the initiation of functional animal testing using the cells we produced under this important partnership.

Moving now into the rest of the pipeline. I want to provide some context regarding the next 2 programs, our islet cell and corneal endothelial cell initiatives. Human body is comprised of more than 200 discrete cell types. And because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into additional product candidates. After extensively evaluating where we might generate the greatest value from our process development and directed differentiation expertise, we announced 2 new initiatives: one, focused on addressing the issue of scale in type 1 diabetes; and a second one, focused on corneal endothelial disease.

One of the things we like about these 2 initiatives is that clinical evidence demonstrating that a cell transplant can address the respective diseases already exists. So unlike a small molecule program where you really have no idea about clinical efficacy or the translatability of animal models until you reach those steps, there already is established data showing that functional islet cells can lead to insulin independence and that functional corneal cells can treat Fuchs dystrophy.

In these areas, the clinical risk may be reduced due to these precedents and thus, the business opportunity for Lineage resides where we perform best, on the process development and production side. And because islet and corneal cell transplants are currently performed using cadaver cells, we see a huge opportunity to try and develop a consistent and low-cost supply of these cells from our AlloSCOPE platform.

Starting with COR1. This is a corneal endothelial cell or CEnC therapy program designed for the treatment of Fuchs and other corneal dystrophies. Fuchs corneal dystrophy is a progressive condition where cells on the inner layer of the cornea die off, causing swelling and vision loss. In the advanced setting of this disease, DMEK or Descemet membrane endothelial keratoplasty is a surgical option, consisting of replacing the diseased cells with a donor graft, often leading to improved vision.

COR1 is an internally developed and wholly-owned preclinical cell transplant aimed at providing a consistent and affordable supply of corneal cells to these procedures. And I hope it isn't missed that COR1 can benefit from our ophthalmology and manufacturing expertise and highlights our approach by focusing on what we do best, large-scale, high-quality cell manufacturing.

Millions of people are potential candidates for corneal transplants, but the current supply of CEnCs from cadaveric sources is limited by the low availability of organ donors, which, by their nature, have inconsistent yield and quality. Nevertheless, CEnC therapy from cadaveric sources has been approved in Japan and is in Phase III testing in the U.S., providing evidence for the mechanism of action and business opportunity.

But according to JAMA Ophthalmology, cadaver sources can only serve about 1 in 70 patients, highlighting the unmet need. The COR1 program aims to solve this limitation because existing approved CEnC transplant therapy not only relies on cadaveric tissue, which is limited and variable, but also requires cells to be transplanted within 30 hours of harvesting, creating barriers to patient access. We believe there is a terrific opportunity to address the unmet need for reliable, consistent, scalable and cryopreserved CEnCs. And again, CEnC transplant therapy is already clinically validated with preclinical models, endpoints and clinical and regulatory precedents that are well established and ready to be copied by an innovator with a superior cell source.

From a manufacturing and formulation perspective, the anticipated therapeutic dose is small, fewer than 2 million cells per patient, which we believe is well within the capability of AlloSCOPE to deliver low cost of goods and an efficient production process. The differentiation pathway is well understood, and we believe we can utilize one of our existing differentiation methods to create a proprietary position as well as potentially accelerating and streamlining product development.

As a result, in just a matter of months, our team advanced the COR1 program from a little more than an idea into preclinical development and was able to successfully manufacture off-the-shelf corneal endothelial cells on our AlloSCOPE platform with the identity and morphological and functional characteristics that met our initial internal criteria and support further development. We plan to advance this program first into translational models and thereafter into initial human testing. And I hope at our next quarterly call that I'll be able to provide a timeline for initiation of a clinical trial of COR1.

Moving next to type 1 diabetes. We've been getting a lot of interest about our entry into this space. As with CEnCs, the clinical data show that islet cell transplants can work. Each year, dozens of patients are reported to be functionally cured using islet cells from cadavers, meaning they can regulate their blood sugar without daily disease management. However, islet supply is a major unsolved problem. Expansion of islets from cadaver sources cannot currently support a commercially viable source of these cells.

Immunosuppression, patient eligibility and hypoimmunity are all additional hurdles that need to be overcome, but we believe the hurdle with the least amount of progress to date is making islets at the scale required for commercial success. And we believe significant value in the islet cell transplant community should accrue to whomever solves the scale problem.

One reason for the supply gap is that the required dose of islet cells may be as high as 1 billion cells per patient. For reference, the upper limit for an optimized bioreactor process might be 10 billion cells per liter. And that is still commercially inadequate for T1D patients even at 10- or 15-liter scale. And because mature islet cells do not expand readily in culture, these optimal calculations don't even apply.

Our calculations suggest that you might begin to reach commercial viability at thousands of doses per batch, implying that production will have to occur on the scale of at least an 80-liter reactor. But carrying out a differentiation process in an 80-liter vessel requires feeding that vessel with many billions of undifferentiated pluripotent cells. You can't just rely on cells to divide endlessly. They have to retain their full pluripotency, their genetic stability and do so without losing their homogeneity and synchrony. And that is the fundamental problem.

Conventional 3D expansion in aggregates introduces heterogeneity, leading to lower control, lower synchrony and higher dissociation requirements, resulting in more genetic aberrations and less effective differentiation. But generating billions of cells from conventional 2D approaches requires impractically large surface areas and high aseptic risk. There is an unavoidable conflict in islet cell production between reproducible control and sufficient scale, and there is no trade-off. You have to combine the best of both worlds in order to produce a commercially viable product.

Our proposed solution to this problem is called ILT1, a new manufacturing initiative employing a modification of our AlloSCOPE platform into what we call AlloSCOPE 5D. AlloSCOPE 5D has the goal of generating large-scale production of predifferentiated cells with reduced manipulation and passaging so that you're capturing both 2D synchronization and control of differentiation with 3D environmental control and scalability, hence, 5D.

ILT1 is initially focused on producing a homogenized population of undifferentiated pluripotent cells ready for synchronized differentiation and which, if successful, could thereafter serve as the high feed source material for differentiation into islet cells. If we can develop a modality that can support an islet cell production process from expansion through differentiation in a dynamic culturing system, we could potentially solve a major hurdle to production and commercialization of an islet cell therapy product candidate.

With this initiative, we are inverting the traditional development paradigm by focusing on the scale-up of undifferentiated cells first because as I explained in the beginning of this call, once you've shown that you can actually produce your material while maintaining its quality at scale, we believe you may be materially reducing the risk profile for the remainder of the development project. That is because multiple independent groups have already shown that islets can clear preclinical and clinical testing and become an effective intervention for people with T1D.

Similarly, editing strategies and differentiation protocols already exist and can provide risk-reducing information in those respective areas, but no one to our knowledge has shown that they can scale islets to commercially relevant levels. For this reason, we think it's appropriate to focus on the unresolved scale problem rather than performing years of expensive preclinical and clinical studies while deferring the problem scale up for later.

For some companies, advancing into clinical testing without a robust manufacturing process may even become a significant setback. We think the value is in establishing from the beginning, a process that can support downstream development. I previously reported that we met our first internal manufacturing milestone for this initiative by demonstrating what we believe is a highly homogenized, scalable and fully suspension-based process for generating undifferentiated pluripotent cells using one of our own proprietary cell lines.

After this work was successful at a 0.5 liter scale, we then moved into a larger multiliter format, which continues today. If we are successful at the larger scale, we would then seek to demonstrate AlloSCOPE 5D scalability with either an internally or externally sourced hypoimmune cell line, one that is suitable to support islet cell differentiation or we may proceed with a non-hypoimmune line or perhaps both. We don't need to generate islets yet. We first want to demonstrate the capability of being able to generate enough raw material that can become islets.

As one final point on AlloSCOPE 5D, I will add that we don't yet know what the upper limit is for our approach, but we've already done it reproducibly at a small scale, and that allows us to apply insights, IP and process improvements to our other programs, such as by potentially making larger cell banks or driving our production costs even lower. We'll do our best to keep you informed on ILT1, but I can share today that we believe it's already paying off in other areas.

Changing gears for just a moment, we recently announced the formation of our Scientific Advisory Board to provide strategic counsel and insights into the development of our pipeline.

The SAB's founding member is Dr. Joachim Fruebis, a recognized and established biopharma executive who brings extensive experience across ophthalmology, neurology, diabetes and other areas of interest to us. Dr. Fruebis helped shape cell therapy development at Novo Nordisk and BlueRock and has led cross-functional global teams responsible for the late-stage development and commercialization of multiple approved products. We're excited to have been able to attract a leader of his caliber and look forward to providing updates on further appointments to our SAB throughout the year.

In addition, we also welcomed Dr. Priyantha Herath as our Senior Vice President and Head of Clinical. Dr. Herath is a Board-certified specialist neurologist with extensive experience spanning early translational development, regulatory affairs and clinical development through successful Phase III clinical trial execution. He brings a broad clinical perspective suitable for our diverse pipeline and a deep understanding of disease penetration, progression and meaningful outcomes. We are pleased to have attracted the support and contributions of Dr. Fruebis and Herath to our growing and maturing company.

To wrap up these remarks, our business strategy aims to efficiently leverage our AlloSCOPE platform and create a pipeline of related but discrete cell-based assets, some of which we may advance internally toward commercialization and some of which we may seek to partner during early or late development.

If you're wondering how we can manage such a broad pipeline, please keep in mind that our platform generates assets which share certain essential traits in common, such as each dollar we spend on innovation can apply across multiple programs. And while each product candidate is intended for a different condition and each cell line behaves in a unique manner and their respective development risks vary, the early steps of banking, process development and achieving controlled purity and scale have somewhat common features in the way we apply them, which allows us to broadly expand the scope of our pipeline without losing the focus required to succeed in each indication and using our capital in an efficient way.

I hope that business update has been informative. And with that, I'll turn things over to Jill for a review of our financials.

Thanks, Brian. As of March 31, 2026, our overall cash position was $53.4 million. This capital is expected to support our planned operations into Q2 of 2028. In addition to our cash on hand, we may also receive approximately $32 million from the exercise of existing warrants, maturity date of which will be accelerated if the intent to advance OpRegen into a multicenter trial, which includes the control/comparator arm is publicly disclosed.

We also continue to remain eligible for a total of $615 million of developmental and commercial milestone payments under the Roche and Genentech collaboration agreement, and we continue to evaluate opportunities for additional partnerships similar to our Roche or Demant collaborations, which we could elect to enter into the future.

Now I will review our first quarter results. Our revenue is generated primarily from collaboration revenues, royalties and other revenues. Total revenues were approximately $1.7 million, a net increase of $0.2 million as compared to $1.5 million for the same period in 2025. The increase was primarily driven by collaboration revenue recognized under our new research collaboration agreement with Demant.

Operating expenses are comprised of research and development expenses and general and administrative expenses. Total operating expenses were $9.3 million, an increase of $1.3 million as compared to $8 million for the same period in 2025. R&D expenses were $4.2 million, an increase of $1.1 million as compared to $3.1 million for the same period in 2025. The net increase was primarily driven by $0.3 million for our OPC1 program, $0.2 million for our ReSonance program and approximately $0.7 million for our preclinical and other undisclosed programs.

G&A expenses were approximately $5.1 million, an increase of $0.2 million as compared to $4.9 million for the same period in 2025. The net increase is primarily driven by personnel costs, partially offset by services provided by third parties. Loss from operations was $7.6 million, an increase of $1.1 million compared to $6.5 million for the same period in 2025.

Other income and expenses reflected other income of $2.8 million compared to other income of approximately $2.4 million for the same period in 2025. The net increase is primarily driven by exchange rate fluctuations related to Lineage's international subsidiaries and no warrant-related financing transaction costs incurred as compared to the prior year's quarters. Net loss attributable to Lineage of $4.8 million or $0.02 per share basic and $0.03 per share diluted compared to a net loss of $4.1 million or $0.02 per share for both basic and diluted for the same period in 2025.

Our financial results continue to reflect our dedication to responsible fiscal management, and we remain focused on balancing our cost of capital with the investments we make to grow and strengthen our pipeline, as presented earlier in the call.

I'll now hand the call back to Brian for concluding remarks.

Thanks, Jill. I'll quickly summarize by repeating some key themes:

First, we continue to remain confident in the potential for OpRegen to advance into a multicenter controlled trial.

Second, with that confidence, we're making investments in our AlloSCOPE platform and launching new programs. In some cases, these new programs have a strong clinical precedent from cadaver cells such as using islet cells to achieve insulin independence or CECs (sic) [ CEnC ] to improve vision in patients with corneal endothelial disease.

In other cases, the utility of replacing a cell is less established, but like OpRegen, it might reveal a remarkable new mechanism by which we can modify or even reverse the course of the disease. But in all of these programs, we believe establishing a robust manufacturing process early on with the purity, potency and scale capable of supporting a commercially attractive cost of goods is the right strategy for both long-term internal development and for creating partnership opportunities.

And then fourth, as our pipeline advances, we expect we will provide updates prior to as well as following any potential updates our partners may make on the OpRegen program. For example, we're looking forward to reporting initial OPC1 data, the outcome from the ReSonance annual go/no-go decision, COR1 development plans, ILT1 scale-up progress, announcing additional SAB members, a patent issuance update and whatever other news we might be able to generate in the second half of this very productive year.

Overall, we appreciate your support and your belief in our vision. And with that, operator, we are ready to take analyst questions.

[Operator Instructions] Your first question comes from the line of Mayank Mamtani with B. Riley Securities.

Congrats on a lot of progress there. So on OpRegen, your understanding of that being characterized as disease-modifying relates to what data that was presented at the recent conference, the Foundation Fighting Blindness Summit. And how do you think of the photoreceptor recovery and some of the stratifying bleb coverage data that you have integrated as part of the GAlette trial, some of these learnings that you're having longer term? And then I have a follow-up.

Thank you for the question, Mayank. With regard to disease modification, my comments there, because we do not have access to the data in the ongoing GAlette study, we, just like our investors, look to other indicators of how things are going. A very clear indicator we had, for example, is the opening of 11 sites after initially only having 6 sites. We think that, that is consistent with planning for a larger campaign.

My comments around disease modification are more nuanced. I'm speaking to the conclusion slide from the CTS data, which was very similar to the FFB data that came out nearly a year later. But the conclusion [ side ] at CTS, call it, 9 months ago, did not include any language about potentially modifying disease. That language has been presented for the first time in the recent FFB presentation.

So it's small, but I highlight it because it is a change that I assume is intentional and purposeful, and I believe that it is positive to see that kind of language being used by a partner that is running an open-label study with a clinical benefit that never happens naturally. And even though we do not have access to those data, I think that there is some utility in paying attention to how the partners describe the data they have.

And perhaps that also partly answers your second question. The insights that we have regarding bleb coverage and photoreceptor recovery comes entirely from our own Phase I/IIa as well as data that's been presented by other companies -- it does not include any specific insights that we have on the data from the ongoing GAlette study. So we form our opinions and we share those opinions, and we try to help direct investors to things that are out there available in the public, and then they can interpret them as they wish. But we're not able to provide any specific insights from the ongoing GAlette study because we do not have that information. And even if we did, we would not be able to share it with you at this time.

That's helpful. And then on the other eye programs that you have preclinical, the corneal endothelial cell, and I think you also disclosed the new PNC1, which is -- it looks like also photoreceptor cell targeted allogeneic. Maybe just on the corneal program, what's the internal criteria you may have met here? And what's sort of the work underway preclinically and sort of what things we should be watching for as you kind of do your next steps on manufacturing and also time to IND filing? If you could maybe just clarify that.

And then just on ReSonance, if you may just remind us what are any partner-related milestones now that you've run the -- you had the 3 manufacturing runs completed? And where does that $12 million over sort of 3-year period number kind of get -- start getting recognized as you get closer to IND?

Yes. Thank you so much. So I guess first on -- I'll go in reverse order here. So for ReSonance, I think 2 things are important to us. Completing the engineering runs is a gateway to doing GMP runs, which itself is a gateway to having conversation with FDA. And I know that, that is something that people are going to be really interested in knowing when would we have our first FDA interaction for this program and what might be a timeline to clinical development.

A second thing for ReSonance is, there is baked into that alliance a go/no-go decisions that occurs with the advancement of the program. So if the parties are not happy with how things are going, we can elect to conclude. either party has certain rights under those decisions. So we have coming up an annual go/no-go or call it, a continuation decision. I think in certain areas, we're running ahead of schedule, and I think we're really happy. So I'm not particularly concerned, but I'm only speaking for 1/2 of the alliance. So we need to -- and we want to, and we frankly expect that we will go past an affirmative go/no-go decision based on the work that's been conducted to date.

The $12 million, which is over an approximate 3-year term of the agreement is roughly 2/3 reimbursement to Lineage and maybe 1/3 to Demant entities. So these will be third-party organizations that are providing various services.

Turning back to your question. Yes, hard to ignore that we have 3 ophthalmology programs, OpRegen for GA, the new one, COR1 and then the photoreceptor program. COR1, I think I covered fairly well in the script. In the photoreceptor program, we're keeping a close eye on the photoreceptor program that is under development at Bayer. We're really interested in seeing what they do. And we also unencumbered some of the economics of the photoreceptor program from a third party. We did not wish to rely on that third party's intellectual property anymore. So we abandoned that work, terminated that agreement in order to unfetter that program from those unattractive economics.

I will be appropriate here to say that, that also means we cannot utilize the intellectual property that we were relying on. So it caused us to move the photoreceptor program a little bit back in time, a little bit earlier stage than where it was. But I think long term, having superior economics makes a lot of sense to us. Overall, and I think in part also addressing one of your questions, we perhaps look at value creation with these programs and cell therapy more broadly, a little bit differently than many others, especially with programs like COR1, where you know that there's a precedent.

We think the value is in what we've been doing recently, which is getting a very high-quality manufacturing process that is reproducible, that is not going to need to be changed during development. And when we have that accomplished, we feel like the risk profile from there forward is very different because we believe that a lot of companies have demonstrated that you can get exciting early clinical data. But then if you can't manufacture your product or you need to change your process, the FDA may tell you that it is not the same product anymore.

For example, if you change a growth factor, you change a vessel, you may be altering the output of your product because it's so sensitive to the process. It's literally defined by the process that you employ. So we think that there is a lot of value in being able to manufacture a cell that has the identity markers, the morphology, the performance attributes that define your product. And if you can make that early, especially in indications where there's already a cadaver-sourced precedent for efficacy, we think these are programs that we are launching that offer a much more attractive overall probabilities of success than the conventional development where maybe you race into the clinic and you get a headline and then everyone figures out much later that you're not able to actually manufacture your product.

We do not want to get into one of those situations. And so ,the criteria that we invite people to look at as we share these data are how reproducible is your material, how scalable? Do you have narrow specifications? What is your potency assay? And I feel that these are questions that are often not asked of some of the companies that work in this space, yet they are integral to a product's survival. So I hope that is helpful for how Lineage is perhaps a little different in thinking about our business strategy, our development strategy and how we can be able to be successful against what is an increase in companies working in cell therapy, which we otherwise welcome as I think this is a really important part of medicine going forward and is going to continue to grow and attract capital.

Next question comes from the line of Jack Allen with Baird.

Congrats on all the progress. I guess, I'll start with the RPE cell space and the geographic atrophy space. I just wanted to ask Brian and the team for their thoughts on some of the competitive data. I think that Astellas and iStem presented updated data from the RPE cells. And then I also saw at ARVO, there was an update from the complement inhibitor class, IZERVAY from Astellas had some data looking at continuation of driver eligibility at 24 months versus Sham. And I just wanted to kind of hear your thoughts on the broader space there. And then I have a follow-up question as well.

I would start with Astellas. I consider their data update to be an important clearing event for Lineage. What I mean by that is that we haven't heard and we haven't known very much about what they have done. And I think it's normal that if you don't have information about a competitor, it's really easy to fill it in with scary thoughts.

But then we saw the presentation, and I find myself comforted because I didn't see any information about manufacturing. I didn't see any information about delivery. I saw limited information about safety, and I saw information on 1 patient out of, I believe, 14 on anatomy. And I didn't find the information in the aggregate to be particularly worrisome or threatening. This is a program that they acquired in 2016, and it is now 2026, and the data in its totality is somewhat limited.

So I feel comforted that we are and will continue to be in a leading position, and I am thankful for the investments that our partners are making in optimizing this program because the more we know about what's going on with the competition, the more opportunities we have to develop a superior product profile. And when you're talking about a surgical procedure in the eye, I would assume that even relatively modest differences in safety profiles could turn into very significant decisions as to which product someone might choose if multiple products were approved.

So I think that the 4 items that I outlined in the call earlier are working together. And I hope that ultimately, those will lead to the best possible product profile and increase the probability of success of a product ultimately reaching these patients in this market.

With respect to complement inhibitors, I view all of them largely the same. I think there is a treatment effect, but I think it is a very small treatment effect. And if I were in charge of a complement inhibitor, whether approved or in development, I would be working very hard to try to generate evidence that it has an effect on visual function because the data to date has suggested or been quite clear perhaps that these interventions do not have an effect on visual function.

And I don't think that post-hoc analyses are going to really convince people. I'd love to see an a priori designed study with a functional endpoint that's statistically demonstrated, but I'm not sure that we're going to see that.

I have not seen the 24-month driving data. I think driving is really important. And if you're increasing someone's vision, such as with an RPE transplant, you may be able to get them a driver's license back. But if you do not increase someone's vision and they've lost their license, they will never get it back. So I don't know exactly what the various complement inhibitor strategies are, but I do feel comfortable that 4 companies now have shown that an RPE transplant can increase patients' vision. So if you want to measure impact on something like driving ability, I think RPE transplants are going to get more licenses into people's hands, whereas I don't think complement inhibitors can do anything but slow the number of licenses being taken away.

Awesome. That's very helpful comment. And then just to round it out on the RPE space. I did see from someone, a picture of the Roche boost at ARVO, I believe it was. And it seems like they are flagging the OpRegen program. I wasn't sure if you had any comments there.

And then my other kind of follow-up question was on the DOSED study of OPC1 and if there were any updates surrounding the CIRM grant application there as well?

Thanks, Jack, for the question. Yes, Genentech did have space at ARVO, which is one of the major ophthalmology medical meetings of the year. That floor space on the exhibit hall, to my recollection, there were 2 areas. There was an area on one side that had a mention of a number of different product candidates, and that's where OpRegen lived.

There was another area that was dedicated to the science of RPE transplants. I don't think it was dedicated to OpRegen per se, but I'm not aware of any other RPE transplants in the program -- in their pipeline. So everyone can decide for themselves what it means that Genentech elected to utilize half of their booth space at ARVO in their ophthalmology section to communicating information about RPE transplants. My view of that is they're running an open-label study. We've got multiple independent examples that we can really have some positive effects in patients and that that's important to communicate to future users of this kind of technology. So I take it as an incredible positive.

But others -- I don't know, I take it as a positive. Moving to DOSED and CIRM, we applied for a CIRM grant, reapplied rather for a CIRM grant. We did not receive one in the first cycle. We do not know if we will receive one in the second cycle, but we applied or reapplied rather in January. And later this summer, I believe CIRM will be getting together and having a decision.

If we get the CIRM grant, that is a wonderful pickup. But as I shared after we did not receive the grant the first time, it does not have a material impact on this program. So I'm hopeful that we get it. If we do not, the program will continue, and we are looking forward to moving the DOSED study ahead and introducing our internally made cells into the ongoing DOSED trial.

Next question comes from the line of Joe Pantginis with H.C. Wainwright.

So Brian, I wanted to start with the ILT1 program. And I know the answer is probably going to be, we just need to do the experiment. But you mentioned how you really need to scale up and be confident around your scale up around the baseline pluripotent cells. Now when you look to then take those cells and differentiate them into the ILT cells, what are the risks that, if any, I mean, a, you have to go through your differentiation process and any of those processes providing any risk with regard to, say, impacting scale up once you hit the ILT portion?

Joe, it's an excellent question. And if it were easy to differentiate these cells into islets, we wouldn't -- we, the field, wouldn't have a problem with scale-up. Islet cells are unlike RPE, -- they are unlike auditory neurons. They do not like to expand in culture. So we can do a lot of expansion of our RPE after they've become RPE. They can continue to divide. Islet cells don't like to divide once they become islets. So you lose the ability to expand into greater numbers during differentiation, and again, post differentiation. So you have to focus on pre-differentiation. But there is absolutely risk at every step of the way.

Everything that you might imagine as having an impact on your production is a valid risk, because cell production is so sensitive to the process. So it would be inaccurate of me to suggest that just because we could make a huge number of undifferentiated cells that I can pledge that those will easily and fully be converted into islet cells. Differentiation of pluripotent cells into specific cell types is very difficult.

But -- having said all of that, we've had a lot of success, more success than most. And I said a little bit about this about talking about AlloSCOPE and what we've done in a GMP environment, getting into the clinic. So we've gotten past FDA. These are things that I think a lot of companies talk about but haven't yet successfully done. So there's a lot of talk in the field. And I think we've been able to demonstrate some very credible success. We've reduced to practice, some very difficult things.

So I think that we've got confidence in the team's ability to be successful, but it simply doesn't matter. If you cannot generate enough starting material, you will never have a commercially viable product. So Step 1, I've been really clear about this once we launched the program. Step 1 is just showing that we can do a proof of concept at very small scale. Step 2 is moving up to a more moderate scale. That would be multiple leaders. That work is ongoing. And then Step 3 would be to start to work with specific lines that we already know are capable of becoming islet cells.

So it's a step-wise sequential risk-reducing approach that also is maintaining our investment in the program in an appropriate way. So these all represent go/no-go decision points that we could make. So if we run into a problem and we can't get somewhere, we can elect to stop the program, and we wouldn't be stuck with all this fixed investment and all of this infrastructure. So I think we're doing it in a really smart way. We've been very committed to trying to keep our spending in the neighborhood of $30 million a year, which we've done for multiple years now.

And I think that's appropriate, because we are still waiting for an update that perhaps could change our share price. And until that occurs, we want to be really prudent and thoughtful about how we deploy our capital into these new initiatives. But again, as I said, we're able to manage multiple programs in part because they do have some similarity across them. The equipment that we do this in, the facility that we do this in, the team that we rely on, there are a lot of similarities here, and that's how we're able to manage 5, 6, 7, 8 programs simultaneously.

No, that's very helpful. And you took the words out of my mouth with regard to leveraging the successes that you've had. So I appreciate the answers.

And then with the ReSonance, and this is going into the scientific weeds again. ReSonance program, you did mention that you now have a novel model of deafening. So just curious any more details you could provide with this model? Are these genetically genetic-based deafness? Or is it chemically or environmentally induced deafness and why it might be relevant to the cells that you're going to be injecting?

Yes. Thank you. We wouldn't be putting cells into humans that have got fully intact cellular capability. So we need to model disease condition, which means we need to destroy or cause the existing cells to be dysfunctional. There are multiple ways of doing that.

Chemical induction is pretty standard. So there are different compounds and different concentrations and different times that people can use to essentially destroy a population of auditory neurons. And then you would take that model. And of course, you would then add your test article, you would deliver the cells and see if they are able to bring some of the hearing from your original baseline down to reduced capability, see if you can bring some of that capability back. These approaches, [ then ] the literature have largely been unsuccessful, but largely been performed using various mesenchymal stem cell preparations. So I don't know if those can work even under the best conditions.

But we've needed to develop our own model, because this is very innovative work, and you can't go to one of the vendors and say, I'm going to send you my cells, please use them in your very well-established and regulatory familiar animal model of deafening. Even as to your selection of species, you've got different cochlea that are different sizes and anatomical changes. And it's actually difficult to develop a model that you feel is going to give you reliable information when you introduce the test article to that model.

But we think we have one now, and this has always been part of the plan. You establish a model and then you utilize your cells in the model. So we've, I guess, achieved an important, albeit relatively quiet milestone of creating a model of deafening that we can now use with our test article and see what occurs in response. And I think if we are successful in being able to affect hearing or at least minimally brain signaling from the ear in these models, I think that's an important finding and bodes well for future development and moving into human testing.

Great. Thank you, Brian.

I think, Joe, it's just a follow-up that you didn't ask for. Many years ago, I remember working at this company where we had rat data using our RPE cells. And I'm quite sure at that time, I did not think that I was going to see the kinds of treatment effects that we've seen more recently. So it sounds preliminary to be talking about animal models and having to create your own models, but time goes by and then you find yourself with a nearly $700 million partnership with big pharma. And so I'm hopeful that some of the things that we are doing in hearing loss, while they don't have a precedent per se, there was no precedent for RPE cells either.

Next question comes from the line of Sean McCutcheon with Raymond James.

A couple from us. On OPC1, can you speak to the requisite safety waiting period and challenges identifying and getting patients into the DOSED study? Maybe what are your expectations for cadence of new patients to get enrolled and treated moving forward now that the second patient has been treated?

And then just secondarily on COR1, can you speak to the currently available interventions for FECD in the U.S. and the unmet need there, perhaps a sense for the low-hanging fruit for a cell therapy and key differences or limitations for the cell therapy approach relative to procedures like DMEK?

Thank you, Sean. Good questions. With respect to OPC1, we've got 2 groups of patients that are part of this device study: chronic injuries, which are from 1 to 5 years; and subacute injuries, which are from 21 to 42 days. These patient journeys are very different from not just the anatomical or procedural changes, but emotional changes and where these individuals are in their lives. And you can imagine that they also represent an incredible spectrum of perspectives as to their interest in participating in clinical trials.

So for example, there are some individuals who have had chronic injuries, and for years, they have had no changes. And when they are presented with an opportunity to participate in a study like this, it sounds very exciting. There are other people who, when they find out that it involves a surgical intervention are not interested, because there is no amount of risk that they are willing to tolerate, which could change their function. And that is applicable also for a subacute patient. It's just that they are in a different situation because the injury is so new, it's just weeks old and the evaluation consideration is, I would say, even scarier because you're still sort of trying to reconcile.

Between those 2 groups, I would say that chronic is generally easier to enroll because these are individuals who are in the community and they can be reached more easily, whereas a subacute injury unfortunately requires a tragic incident to occur, and that incident has to happen near one of our sites, and then they have to qualify as well. So it's always been very difficult to find subacute patients. And I assume that we will find our chronic patients before we find our subacute patients.

It is helpful that we've opened a second site. And I think as we go forward and learn more, there can be additional sites that we can bring on and have a wider net. But it does not surprise me at all that the first 2 patients were chronic for the reasons that I shared.

To try to address your second question around COR1, DMEK is utilizing cadaver sources of cells. So there are sort of multiple ways that you might envision the competitive landscape. One is we look at cadaver-sourced cells as being variable. You don't know who was in that car accident or whatever happened and they have an eyeball available. And so you've got a variability concern, and you also have a temporal concern. You have to move quickly to acquire that donor material, prepare it, deliver it to a site. And so we don't -- and there's not enough supply. So we think that cadaver sources are not particularly useful.

But there are some very interesting companies in the space, Aurion, Emmecell, Cellusion, these are 3 of them that we remain mindful of. Aurion is actually not even Aurion anymore. It's Alcon. Alcon acquired Aurion and they have an ongoing Phase III using cadaver cells. They just harvest the cadaver cells and then they passage them a number of times in order to increase the amount of supply. And while I don't know if the number was made public, our understanding is that it was quite an interesting acquisition for that company. So that's only a partial solution.

I think if we are able to generate in the best case, an off-the-shelf low cost of production, cryopreserved formulation, we could essentially stockpile identical material that could be used for these procedures by schedule rather than being beholden to the unfortunate donor supply.

So it's quite exciting as a product profile. It is early. We are just now making these cells. But again, I really can't emphasize enough that perhaps value should be ascribed to companies when they are manufacturing the cells because we already know that these cells have been shown in others' hands to be successful, not just through preclinical testing, clinical testing, but even in commercial setting. And there's an approved product in Japan using cadaver-sourced cells. So it's very exciting to know, and I put know in quotation marks for all the risks that obviously are inherent in product development.

But we don't have mechanistic questions about whether CEnCs can improve vision in corneal endothelial diseases. That question has already been answered. And that is such a completely different risk profile than many years ago when I worked at a company like Neurocrine Biosciences, and we'd have an early-stage small molecule that hit a target really nicely, but you have absolutely no idea if it's going to be successful in preclinical testing, let alone clinical testing.

So it's one of the reasons that I love this area of medicine so much is that you have the opportunity to create so many changes and use precedent from other sources, but still provide an important and valuable solution by having an off-the-shelf alternative to donor cell material that is used in indications like endothelial diseases or type 1 diabetes.

There are no further questions at this time. I will now turn the call back over to Brian Culley for any closing comments.

Yes. Thanks, everyone. Our focus on replacing cells that have become dysfunctional might someday reshape many treatment paradigms, and we really thank you for joining us on this mission. Have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.

Welcome to the Lineage Cell Therapeutics Third Quarter 2025 Conference Call. [Operator Instructions] An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage. And recordings, reproductions or transmission 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 your host for today's call, Ioana Hone, Head of Investor Relations at Lenis. Ms. Hone, please go ahead.

Thank you, Jamie. Good afternoon, and thank you for joining us. A press release reporting our fourth quarter and full year 2025 financial results was issued earlier today, March 5, 2026 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 most recent annual report on Form 10-K filed today. 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.

Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us on the call today. We have a great call planned highlighted by recent warrant exercises that further extend our runway and a positive result for our initial go/no-go development milestone in our [indiscernible] research initiative.

I want to start by reminding everyone that we have a significant number of employees who live and work in Israel. And while our manufacturing facility is not located near a metropolitan center, some of our staff do commute from larger cities. Their safety is our top priority, and we are, of course, monitoring the situation. To date and as expected, a few employees and employee spouses have been called into military service, which is similar to what we've experienced and successfully navigated in 2023. We cannot know what the future holds, but thanks to the incredible dedication of the team we've hired, our operations are continuing, and we expect things will continue to progress. Thank you also for the many messages of concern and support I've received from our colleagues and shareholders alike.

Moving ahead, as many of you know, cell therapy has revolutionized oncology saving lives and creating tremendous shareholder value. But the use of cell therapy in oncology is maturing, while the application of cell therapy the fields outside of cancer remains in the early stages. For this reason, we are focused on delivering the next wave of innovation and value creation in this emerging branch of medicine.

We'll begin with the exciting results seen from our lead program in geographic atrophy as a testimonial to what cell therapy is capable of. And as that program matures, we have begun turning our focus to how we can apply our manufacturing success and the lessons we have learned from the OpRegen program to evaluate other medical conditions that also arise from the loss of critical cellular function.

Our focus on replacing cells that have become dysfunctional or destroyed may fundamentally reshape many treatment and recovery paradigms. And based on our conviction that the OpRegen program has the potential to drive future value. We believe we are uniquely positioned to capitalize on opportunities to develop other kinds of mature differentiated cells for patients, which, in our view, could lead to clinical outcomes currently beyond the reach of conventional approaches.

Our work was productive last year, highlighted by us achieving the first milestone under our Roche Genentech alliance, entering into a funded research collaboration for preclinical development of ReSonance, which is our first internally developed product candidate, and more recently, the launch of our new ILT cell research initiative, something which I will provide an update on later in the call.

But first, I want to discuss 2 developments in particular from last year that reinforce our confidence in the company's long-term outlook and which helped shape our plans for 2026. First, after relying on just 7 clinical sites for more than 2 years, Roche and Genentech have somewhat suddenly opened 10 new clinical sites in the GAlette study in the past 9 months, including one announced earlier this week at Duke Eye Center. While we don't have any guidance to share on the timing of any additional trials or data disclosures, we view this surge of site openings as a favorable sign because this activity could support preparations for later-stage trials. And as I've shared on prior calls, there are other actions and readouts that have occurred in the past year that similarly suggest positive forward progress of OpRegen could be underway.

The second item we enjoyed last year were the enhancements and milestones we hit with our manufacturing platform, AlloSCOPE. AlloSCOPE purposefully stands for Allogeneic, Scalable, Consistent, Off-the-shelf, Pluripotent Cell Engineering. This acronym highlights the key elements of our core technology. Many of you are familiar with the challenges of autologous cell therapy, such as its high manufacturing cost and donor variability. But with AlloSCOPE, we address those challenges by using the same source cell line for all patients built on a platform we believe is capable of scaling into millions of doses and trillions of cells. This is something that has long been aspired to or sometimes even promised by the field of allogeneic cell therapy.

But to our knowledge, very few companies possibly none have actually shown that they can perform a large-scale pluripotent cell production process in a GMP setting and use that resulting material in an FDA-cleared clinical trial. But here at Lineage, we successfully established a GMP master cell bank from which we established a GMP working cell bank and generated product that has been used in the clinic. And because the hundreds of vials, which comprise those banks are identical, we are confident that we can successfully repeat the process as many times as needed.

We believe this achievement provides credible evidence that the AlloSCOPE cell banking system we built is capable of generating millions of vials of our product candidate. This is no small achievement because it's easy to say you plan to rely on the self-renewing capability of pluripotent cells to generate Phase I trial material. But with complex biologics like cell therapies, the process is the product. So if your early clinical process isn't capable of satisfying commercial scale, then you're developing product candidate that won't be able to supply the market. This is an essential but often overlooked aspect of cell therapy product development and requires certain investments and commitments to occur in the early stages.

As a company with many years of experience in this field, we have had the time to make these investments. This also explains why we embrace the mantra of better from the beginning. We strive to only initiate programs that have a clear line of sight to commercial scale and other critical product features. And from these 2 significant developments, specifically, the evidence supporting OpRegen's potential advancement by Genentech, along with the successful demonstration of commercially viable pluripotent cell production, we have developed the conviction to apply our platform to the furtherance of developing other cell-based products with the potential to treat various diseases and conditions.

I will say a few things about our recent and planned pipeline development later in the call. But first, I want to briefly review the status of our lead programs, OpRegen for dry AMD with geographic atrophy, OPC1 for spinal cord injury and ReSonance for hearing loss. OpRegen is the most advanced program in our pipeline and serves as a critical case study for our approach to cell transplantation. Dry-AMD with GA is an increasingly established indication but suffers from underwhelming treatment options. Initial reports from our Phase I/IIa clinical study included improved anatomy, halting of atrophic progression and improved vision in patients with dry AMD and were unprecedented at the time.

And from Roche and Genentech's additional analysis of our Phase I/IIa data, it has been observed in a single dose of OpRegen cells can provide visual improvement lasting for at least 3 years among patients who received the cells at the target location. This is an exceptionally promising finding because dry AMD is a condition that has not been shown to self resolve and only leads to worsening vision.

Equally importantly, 3 independent groups pursuing RPE transplants have recently reported short-term outcomes similar to ours, providing further evidence in support of this novel mechanism. Although data remains forthcoming from GAlette, Roche and Genentech's ongoing Phase IIa study, it is encouraging to see that our partners have continued to expand the retinal communities exposure and experience with OpRegen.

As a reminder, GAlette is a surgical optimization study designed for approximately 60 patients. This study has been running for 3 years and is an open-label study for which all primary and secondary outcome measures are captured in 90 days. So we infer that Roche has collected and reviewed long-term data from patients treated in that trial, which we expect has informed their recent site expansion decisions. Specifically, after adding only a single site in 2024, Genentech suddenly increased its pace and opened 9 new clinical sites in 2025, bringing this study to a total of 17 unique locations, including the new site just added last week. In addition, Genentech previously acquired novel and proprietary surgical delivery devices from a competitor and sought and received RMAT designation for OpRegen.

We believe these are all positive indicators that support our expectation of Roche and Genentech's continued advancement of the OpRegen program. And in December, Lineage received its first $5 million payment from the achievement of a development milestone, highlighting our contribution to this process. When you aggregate these and other publicly available actions, we believe they point to a positive future. And while OpRegen reflects a new technology, we believe we have a set of attributes including scalable manufacturing, proprietary delivery tools, long-term safety and efficacy data and a world-class partnership that adds abundant clinical insights and commercial capabilities.

For these reasons and others, I hope you'll appreciate why we are so bullish on the potential for OpRegen to capture the multibillion and still largely unaddressed GA market. And also, while we are taking steps to try to recreate this promise with other cell types.

Moving to our next cell type, oligodendrocyte progenitors. We are developing OPC1 an off-the-shelf cell transplant designed to increase mobility for people who suffered from a spinal cord injury. OPC1 has been administered in 2 Phase I/IIa -- excuse me, [indiscernible] safety trials in sub-acute patients and the long-term safety and efficacy data we have collected so far is both promising and worthy of further investigation.

We currently are enrolling patients in the DOSED study, the third clinical study of OPC1 which is evaluating the safety of a novel and proprietary system to deliver ourselves to the area of injury without stopping patient ventilation. In addition to testing the safety and performance of the new device, we also will be collecting functional assessments on all patients, giving us the opportunity to investigate any signals of efficacy that may arise. This is important because last year, we treated our first ever chronic SCI patient. That was an important milestone because chronic injuries represent an additional and larger potential addressable population for this experimental therapy. And unlike subacute patients many chronic patients have reached a functional plateau, making any physical improvement easier to detect and rely upon.

DOSED is an open-label study and that first participant, I mentioned recently had their 6-month safety follow-up visit with no significant safety events reported following treatment. Equally important, the device performed as planned, which provides significant derisking of the device that we plan to employ in a larger trial. Last month, we expanded DOSED to the Greater Los Angeles area by opening our second clinical site at the Rancho Research Institute in conjunction with Rancho Los Amigos National Rehab Center. Jill and I have the pleasure of hosting Dr. Charles Liu, the principal investigator and his team for dinner a few weeks ago, and we are extremely excited to have their group involved with the OPC1 program.

Moving next to ReSonance. This is an auditory neuronal cell transplant being developed to treat hearing loss and also marks our first internally developed program. One of our goals during 2025 was to strike deals which partly are completely funded existing product candidates. We accomplished this goal through the partnership we announced with William Demant Invest, which is expected to fund all planned preclinical development for the AMP 1 program up to the IND stage.

ReSonance was an important test for our business model because it demonstrated that we could conceive of and successfully manufacture a completely new cell-based product candidate on our AlloSCOPE platform in a rapid and efficient way. With a modest investment, we were able to generate new intellectual property and advanced ReSonance into preclinical testing within one year. This early data was sufficient to establish a partnership with a world-leading hearing health care company, which also brought us access to specialized technology, auditory experience and a network of hearing health leaders. We believe this collaboration was an important demonstration of the speed, efficiency and return on investment that the AlloSCOPE platform can provide and evidence of our ability to replicate our OpRegen collaboration success with another cell transplant program.

I next will spend just a moment on AlloSCOPE to provide context to my upcoming remarks about our new ILT cell initiative. AlloSCOPE describes a platform on which we can bank and scale pluripotent cells to great numbers before differentiating those cells into discrete types of cells of the human body. It delivers what we consider to be the table stakes necessary to create a commercially successful allogeneic cell therapy, and it is being applied by us across multiple programs and cell lines.

AlloSCOPE is a proprietary differentiation and production platform on which our cell-based products are derived from a single initial cell line, conferring consistent, cost-effective and scalable production. These features should enable us to support the production of millions of doses of a consistent and cost-effective cell-based product. Using AlloSCOPE, we have successfully completed a cGMP production run from our 2-tiered cell banking system for 2 of our product candidates, one of which has been utilized in the clinic.

This achievement is notable because it demonstrates our ability to scale a process with the purity, potency and regulatory quality required to support clinical use, a standard, which we believe sits beyond the reach of many companies and which can become a valuable differentiator for Lineage.

With that background provided, I'll remind you that the human body is comprised of about 200 discrete cell types. And because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into the development of additional potential product candidates. When thinking about where we might generate the greatest value from our process development and directed differentiation expertise, we recently announced a new research initiative in Type 1 diabetes and specifically, an opportunity we saw to address a major obstacle to a successful Type 1 diabetes cell transplant treatment.

We've been getting a lot of questions about our entry into this space. So I'm going to take your time today to walk you through our plans in some detail. The headline is that we met our initial internal go/no-go development milestone, which means we will continue to our next phase of internal development. Now I need to explain why that's important.

We already know that ILT cell transplants can work. Dozens of patients are functionally cured each year using ILT cells from cadavers, meaning they can regulate -- patients can regulate their blood sugar without proactive and daily disease management. However, a major unsolved problem is supply. Cadavers cannot support a commercially viable source of ILT cells. Immunosuppression, patient eligibility and hypoimmunity are all additional hurdles that need to be overcome, but we believe the elephant in the room is that we know of no company that can make ILTs at the scale required for a commercial product. And we believe the greatest value in the ILT cell transplant space will accrue to whoever solves that scale problem.

The explanation for this gap is that the required dose of ILT cells may be as high as 1 billion cells per patient, but mature ILTs do not expand readily in culture. Meanwhile, our calculations indicate that commercial viability begins in the range of thousands of doses per batch, implying that commercially relevant processes will have to be done on the scale of at least an 80-liter bioreactor. But carrying out a differentiation process in an 80-liter vessel requires feeding that vessel with billions of undifferentiated stem cells, which retain their full flurry potency capability and their genetic stability. And that is the problem.

Conventional 3D expansion introduces excessive passaging risking loss of control and genetic aberrations but generating billions of cells required from conventional 2D approaches demands in practical surface areas and high aseptic risk. There is unavoidable conflict and trade-off between having reproducible control and scale. Our strategy has 2 aspects. The first is to use the AlloSCOPE platform to combine the control advantages of 2D culture with the volumetric efficiency of 3D systems or what we refer to as 5D engineering. And I'm proud to report today for the first time that we have actually achieved this milestone and reduced it to practice multiple times at 0.5 liter scale, successfully reaching our first go/no-go decision point with this initiative.

We're now evaluating whether we can translate this capability to the next step up into a multi leader vessel. Demonstrating reproducible performance at an even larger scale is the next step on the path to feeding 80-liter bioreactors of scale, which should be capable of producing thousands of therapeutic doses of ILT cells per run. Importantly, this work is all being done pre differentiation, which means this stage of development is not dependent on finalizing our immune suppression strategies.

The second important aspect of our strategy is that we are looking to tackle the bioreactor feeding problem first. We are inverting the traditional development paradigm by focusing on the scale-up of undifferentiated cells, first, because once you've shown that you can actually produce your material at scale, we believe the risk profile for the rest of the ILT cells project changes materially. That's because we already know that ILTs can be an effective intervention and have been shown by multiple groups to be successful in preclinical and clinical settings.

Similarly, editing strategies and differentiation protocols already exist and provide risk-reducing information in those areas. And we may be able to leverage that information if our scale initiative is successful. But no one yet has shown that they can scale ILTs. We think it's far more prudent to focus first on the unresolved scale problem rather than performing years of expensive studies and deferring the issue of scale for later.

Our strategy doesn't fit easily onto a bumper sticker. But if we wanted to print one, it might say better from the beginning. That is how I describe our development philosophy. We enter fields only when we can see the entire path from cell banking through commercial delivery. We look to identify clear go, no-go decision points along the way and we strive to include improvements or solutions to existing methods, processes, delivery or to the cells themselves in order to have the best overall product profile.

I'll conclude by saying that our platform generates assets which share certain essential traits in common, so that each dollar we spend on innovation may apply across multiple programs. While each product candidate is, of course, intended for a different condition and each cell line behaves in a unique manner, the early steps of banking, process development, control purity and scale have somewhat common features in the way we apply them, which allows us to expand the scope of our pipeline without losing the focus required to succeed in each indication, and uses our capital in an efficient way. I hope that it helps explain our exciting business update.

And with that, I'll turn things over to Jill for a review of our financials.

Thanks, Brian. Before presenting our financial results, I want to address some points that may have caught your attention. The reported net loss for the full year is approximately $45 million higher than in 2024, this increase is mainly due to noncash charges linked to our rising stock price over the year, which resulted in higher warrant liability. Additionally, we incurred a noncash charge relating to an asset we acquired in 2019, which we elected to no longer develop. You may have also noticed that the reported cost for option costs are higher this year. This is due to a standard accounting treatment applied when recording the expense associated with our downstream obligations after we received the first milestone from Roche Genentech. If you look at the expenses without this cost, the OpRegen developmental expenses were lower year-over-year.

As of December 31, 2025, our overall cash position was $55.8 million, which, together with the approximate $5.4 million in proceeds from warrants exercised this March is expected to support our planned operations into Q2 of 2028. This is a significantly higher runway than we guided to during our last call, with the biggest contributors being the $21 million in gross proceeds received from an ATM block trade in November, the warrant exercise of $5.4 million this week along with the achievement of the first $5 million milestone under our Roche collaboration. This revised guidance also does not take into account any other potential sources of funding, including additional milestone payments we are eligible for under our Roche collaboration, or any additional partnerships, which we may elect to enter into in the future.

Separately, a large additional source of potential capital is the approximately $32 million remaining of underlying warrants priced at $0.91 per share which is below our current trading price and which gets accelerated if Roche or Genentech publicly disclosed their intent to advance OpRegen into a clinical trial with the comparator arm.

Now I will review our fourth quarter and full year results. Total revenues for the fourth quarter were approximately $6.6 million, a net increase of $3.7 million as compared to the same period in 2024. The increase was primarily driven by higher collaboration revenue recognized under our collaboration and license agreement with Roche, following the achievement of the first milestone, along with the new research collaboration agreement with WDI.

Total operating expenses for the fourth quarter were $13.2 million, an increase of $5.2 million as compared to the same period in 2024. R&D expenses for the fourth quarter were $8.2 million, an increase of $4.8 million as compared to the same period in 2024. The net increase was primarily driven by $2.1 million for our OpRegen program expenses and $2.7 million for our preclinical and other undisclosed programs. G&A expenses for the fourth quarter were approximately $4.8 million, an increase of $0.4 million as compared to the same period in 2024. The net increase was primarily driven by personnel costs.

Loss from operations for the fourth quarter was $6.5 million, an increase of $1.4 million as compared to the same period in 2024. Other income expenses for the fourth quarter reflected other income of $2.2 million compared to other income of approximately $1.9 million for the same period in 2024. The net increase is primarily driven by exchange rate fluctuations related to Lineage's international subsidiaries. No warrant-related financing transaction costs incurred as compared to the prior year's quarter, and this was partially offset by the noncash quarterly fair value remeasurement expenses of the warrant liabilities. The net income loss attributable to Lineage for the 3 months ended December 31 with a net income of $0.9 million or $0.04 per share compared to a net loss of $3.3 million or $0.02 per share for the same period in 2024.

Next, I'll spend a few minutes reviewing the full year operating results. Total revenues for the year were $14.6 million, an increase of $5.1 million as compared to the same period in 2024. This increase was primarily driven by higher collaboration revenue recognized under the Roche agreement following the achievement of the first milestone along with new research collaboration agreement with WDI. Total operating expenses for the full year were $51.2 million, an increase of $20.2 million as compared to the same period in 2024. This increase is primarily driven by $14.8 million of expenses recognized during the year for the loss on impairment of the intangible asset related to the [indiscernible] platform. R&D expenses for the full year were $17.7 million, an increase of approximately $5.2 million as compared to the same period in 2024. The increase is primarily driven by $1.6 million for our OpRegen program, $0.7 million increase for our [indiscernible] program and $0.2 million for our OPC1 program and $2.8 million for our preclinical programs and other undisclosed programs.

G&A expenses for the full year were $18.5 million, an increase of approximately $0.3 million as compared to the same period in 2024. The net increase was primarily driven by $0.2 million in personnel costs and $0.1 million for services provided by third parties. Loss from operations for the full year was $36.6 million, an increase of $15.1 million as compared to the same period in 2024. Other income expenses for the full year reflected other expenses of $32 million compared to other income of $2.9 million for the same period in 2024. The net change of $34.9 million was largely attributable to the noncash fair value measurement expense of the warrant liabilities of $37.9 million, primarily due to an increase in our share price as compared to the prior year period. This increase in expense was partially offset by exchange rate fluctuations related to Lineage's international subsidiaries and lower warrant-related transaction costs incurred as compared to the prior year in connection with the November 2024 financing.

The net loss attributable to Lineage for the year ended December 31, 2025, was $63.5 million or $0.28 per share compared to a net loss of $18.6 million or $0.09 per share for 2024. The difference was primarily driven by the noncash fair value remeasurement of the warrant liabilities and the loss on impairment expense related to a 2019 acquisition. Our financial results continue to reflect our ongoing dedication to responsible fiscal management, and we remain focused on balancing our cost of capital with the investments we make to grow and strengthen our pipeline.

Let me hand the call back to Brian for concluding remarks.

Thanks, Jill. I'll quickly summarize by repeating 2 key themes. First, we continue to remain confident in the potential for OpRegen to drive positive clinical outcomes in dry AMD and we're encouraged by our partner signs of commitment to the program. We also believe the independent evidence generated by others RPE cell transplant trials supports and elevates our replace and restore philosophy. Second, we're preparing for a successful future by making new investments in our cell transplant platform and using our recent manufacturing innovations as a foundation from which additional pipeline programs can be advanced either by a funded partnerships or independently.

We believe our approach offers powerful optionality, which we consider essential for a company at our stage of growth and development. We appreciate your support and belief in our vision.

With that operator, we are prepared to take analyst questions.

[Operator Instructions] Your first question comes from the line of Joe Pantginis with H.C. Wainwright.

Actually, Brian, I have 3 questions, a strategic one, a technical one and probably a question you can't answer. So first, on the strategic question, I mean, you have many ongoing programs now with specific cell types, and you also have this broader AlloSCOPE program with pluripotent cells ready to go. How do you look to potentially translate, say, over the longer term with regard to business development strategy around all your various options?

Thank you, Joe, for the first of those 3 questions. Again, excellent business development team. Clearly, I can point to the Roche Genentech transaction. I can point to the Demant deal. And of course, these are just things that you've seen, it is normal and common for us to have other interactions, maybe deals that could come together but don't for various reasons. So they're a reliable and productive group. What we can do, what we have the opportunity to do is to take the AlloSCOPE platform and apply it in different ways to generate a basket of assets. And then we can make some decisions that are good for the company in terms of partnering or retaining. We don't have a particular objective to launch any of the products we manufacture, although that's certainly not off the table either.

We are really being mindful of our cost of capital, the spending, the risk and our own capability to make decisions about what and whether to partner and what time, assuming that there is an appropriate economic arrangement to be struck at all. So I think the way to maximize the value of the platform that we have developed is in part to generate new assets that can be partnered fairly early and to use some of that capital to offset our needs to rely on traditional capital markets and through that mix of creating assets that are funded by others as well as adding programs and taking them a little bit further. I think we may be solving to optimize for the best return on invested capital that we can with the technology that we have developed here at Lineage.

That's extremely helpful. And then I guess my technical question is without giving away the secret sauce here. For the ILT cell component that you're working on here, what would you consider to be the rate-limiting step or steps with regard to moving beyond the 0.5 liter scale?

That's an excellent question and the very nature of the exploratory work is that we do not know. So we cannot predict the linearity of going from half liter to multi liter to ultimately up in the neighborhood of 80-liter or 300 liters. There are incredible new technologies that are available that help companies with this work, but it's very difficult to say. I would say this, though, I do think going from 0 to a 0.5 liter was a much larger achievement than what I expect going from a 0.5 liter to 2, 3, 4 liters will be. And the reason for that is that it hadn't been done before and as I explained earlier on the call, it's very hard to get the control that you want from a 2D process and apply it into the scale of a 3D process.

So to be clear about one thing here, AlloSCOPE describes our basic platform, our banking or manufacturing. AlloSCOPE 5.0 is the application where we're essentially tricking cells to think that they're being grown in a 2D environment while actually putting them in a 3D environment. So quite simply 2 plus 3 equalys 5, perhaps the additional dimensions our scale and cost in that situation.

But I think what's really exciting about the next step is that if you do have control in the lower mid-leader scale, you really could begin to have discussions about pooling that output and feeding maybe an 80-liter reactor or it could give you some insights and confidence about the linearity as you scale. Not every cell line is going to be amenable and can adapt to these larger scales and perhaps some of the technologies don't fit well depending on the cell type that you plan to differentiate. So it's very much unexplored territory, which is why I wanted to spend a lot of time talking about it today.

Very helpful. And then I think we're essentially done because I think the next one is unanswerable, as I said. But with regard to the GAlette study, I'm sure you get questions on this all the time. But is there any visibility or anecdotes you could provide with regard to the types of deliveries that Roche might be testing or methods?

There have been some presentations at conferences where images of different devices have been provided. I don't know in every case, whether those presentations have been made available to the public online or are they exclusive to the registrants of these conferences. But what I would say as a general matter is that the 2 big chunky approaches are to deliver [indiscernible] through the front of the eye or via a [indiscernible] approach, which is going around the eye and accessing the subretinal space from below. They have trade-offs. I won't go through all of the trade-offs right now, but that is just one basic way of looking at delivery to the subretinal space.

Within that, there, of course, are more refined approaches regarding the kinds of needles or the methods that one uses. But if you were to pull up or request from us the 2025 CTS desk -- slide deck, I think some examples of some of the technologies that Genentech acquired are available. But this is an important reminder. This is not -- the study that they're doing is a surgical optimization study. So they're going to be looking at different cohorts of patients and evaluating what works well. So they may try some things that don't go well and abandon those, and that's appropriate. They may find some things that seem to go well and want to push the envelope, and that's also appropriate. In fact, desirable.

But this is not a responder analysis. So there -- it's not some number out of 60 is a success threshold. We know that you get the best results if the cells go to the subretinal space. So of course, it is obvious and appropriate to try and simplify that as much as you can before moving into and committing to larger trials. So we're hopeful that everything that has happened is an indication that, that work is going well. I think if that work we're going clearly poorly, they've had abundant time to abandon this initiative, but we also remain confident that our partners know best how to find the right level of risk and reward, moving as quickly as they can while not jeopardizing their leadership position in the space.

Our next question comes from the line of Jack Allen with Baird.

And congrats to the team on all the progress made over the course of 2025. Looking forward to a productive 2026. Just 2 quick questions from my end. The first one is on the OPC1 program. I was hoping if you could provide some more color on the timing of the functional measures? And anything you can also add as it relates to the baseline characteristics of that first participant in the study there being a chronic participant. I'm curious as it relates to their baseline functionality.

And then secondly, on OpRegen, I know you guys have presented 3-year data in the spring of 2025. I'm curious if 4-year data could be on the docket as it's been great to see the continued durability response as it relates to OpRegen?

Thank you, Jack. I will ask your second question of our partner. I do not know their plans for 4-year data. But obviously, we are excited by the fact that the benefits that we're seeing in year one did continue into year 2 and year 3, which mechanistically makes sense for a transplant that is not rejected. We think that's a great sign, especially because the untreated eye in the same patient continues to lose letters of vision. So the delta, the clinical benefit and the confidence in that benefit only seems to get better with each passing year.

With respect to OPC1, we do -- I do want to remind everyone that the OPC1 study is a safety and performance study of a device. So it is not an efficacy design. So we have a more limited set of function measurements that we are collecting. But we are collecting things like an [indiscernible] exam and quality of life measures, [indiscernible] is one of the tools that we've -- one of the assessment tools that we've employed in this trial. So we collect baseline data or screening data prior to the cells being administered and then we have some early functional assessments probably too early to see anything. So these are functional assessments that occur in the first 90 days. They provide some reinforcement or reliability about your baseline measures and ensure that the patient isn't experiencing any decline.

And then we wait until a year in most cases because we aren't looking every 30, 60, 90 days at these patients because, again, that's not what the study was designed to do. But when we collect the 1-year functional assessments, if we do see some changes, those are things that perhaps would be more meaningful if they're occurring at 12 months versus occurring at 3 months or even 6 months.

There is, quite interestingly, there has been some information. We view this information as coming from a reliable source, but there was some information about the chronic patient having some improvement in certain measures. This is anecdotal. This is not part of our conveyance of clinical data to the public, but people are free to talk about their own experiences on clinical trials. So you may find some evocative information out there. We don't confirm or refute it. We will only be communicating actual data from our trial when it becomes available.

But I would add only to your specific question that the patient fits within our specific criteria as being [indiscernible] Impairment A. And I guess I could add to that, that we had some difficulty finding the next patient in the stagger. And we recently went through an expansion of the protocol to allow a second impairment level of A for the second patient enrolled in this study. So to the extent that we hadn't enrolled a second patient yet, I can tell you that it was because it was really hard to find the stagger that had been agreed to with FDA. So we went through the steps to amend that protocol stagger to broaden it to allow for another A to be treated, and we have someone who has been identified and may get treated here in the coming weeks this month. So I think we're going to be back on track with this trial, but very good and appropriate questions, Jack. Thank you for them.

Awesome. Maybe if I can just follow up one more on AlloSCOPE. But before I do, it's great to hear about the anecdotal progress of the OPC1 program, while it's not necessarily well-vetted clinical data. There's a high unmet need in spinal cord injury. So that's great to hear that there's some enthusiasm there.

On AlloSCOPE, I just wanted to ask very briefly how you think about ramping expense of that program as you move up from the half liter bioreactor, I know if you get more expensive as you [indiscernible] larger reactors, how are you planning to contain [indiscernible]?

Yes. It's not too difficult. The cells are eating the media that we feed them, and we have done a lot of batches and the multi-liter batch size, I've spoken frequently about OpRegen already being manufactured at a 3-liter scale. So we have abundant experience at that scale. I think where it starts getting really exciting is when you go up one level beyond. I don't want to get ahead of myself at this point. There still are risks and uncertainties associated with this. But one of the really powerful attributes of our approach of inverting our development plan and focusing on manufacturing is that we are able to put a relatively modest amount of capital to work to get answers as to the scalability of these lines.

If we were doing it the other way, if we were doing expensive animal studies or very expensive human studies, and we were deferring the important questions around scale, we would be spending a tremendous amount of money running studies that others have already shown can be successful and not necessarily proving anything about our viable product candidate in terms of its ability to meet the commercial demand. But if instead, you follow the Lineage approach and you say, well, I'm going to answer the question of scale first, then you are looking at the risk profile of your subsequent preclinical and preclinical studies with a little bit of a different view because you already know you can make a lot of your material.

So I really like the overall approach. I think it's prudent. I think it's investor friendly. And from our perspective, we have experienced a lot of experience already at a single leader or multi leader scale production. So we have a well-trained team that can fill and finish vials out of that scale in a GMP environment. So we'll have to see. But as Jill said, we're very committed to high returns on our invested research dollars and trying hard to maintain something close to our historic investment of capital on an annual basis.

Next question comes from the line of Mayank Mamtani with B. Riley Securities.

Thanks also to your company employees and their families in [indiscernible]. So Brian, just to piggyback on the last kind of framing you had on this inverted risk framework you have on the scale-up of the manufacturing first for this ILT cell research initiative. Could you maybe just double-click on what have been the learnings to date from the OpRegen work since inception and also as part of specifically the Roche partnership? And maybe also if you could recap what milestones should we be watching for potential candidate being identified here? Or is this being used by a strategic partner since obviously, this would draw a lot of interest? And then I have a follow-up.

Thank you, Mayank, for that multipart question. Yes, the inverted risk, I think, as I say, attractive because we're putting what I believe is the least expensive and most challenging step first. And so we're trying to invert the risk profile of islet cell transplant product initiative or campaign. The specific learnings and lessons from the OpRegen program are coupled with independent learnings and lessons we have because, of course, we have other programs that we've had to solve different problems for whether that's our hearing loss program or our spinal cord program.

Altogether, a lot of these have taught us some clever and sometimes patentable material and insights. Overall, I would say that also is comprised of 3 components. There are physical or engineering-type components. So these are the physical properties of how we do the manufacturing. There are biological aspects to it, i.e., exactly what we expose the cells to and when. And then you have an engineering component, which is a little bit more of like the know-how. So it is not that there's a magical molecule that makes AlloSCOPE work or a special coding of plastic or type of plastic that makes everything click. It is the combination through years, in fact, decades of experience coming together finally being able to show that this capability can legitimately make millions of vials as I said, trillions of cells and then applying it in a very unique way to solve a specific problem in the setting of ILT cells.

I don't envision that being a fee-for-service business of our company. I'll never say never because our job here is to create value, it's not necessarily to make medicine. So if we see an opportunity and it makes sense, we may pursue it. But what we would envision with AlloSCOPE in partnerships is always enjoying significant ownership of any program that's going forward. We are bringing tremendous value to partnerships. We're a healthy company that can carry its own weight in development. And so we want to make sure that we're never viewed as a CDMO, not that there's anything wrong with that business, it's just very hard to price that kind of product when the probability of success is unknown as you go into those alliances.

And we also have limited GMP space, a very highly trained team. This is not up the shelf skill set that we just grabbed from some recent college grads. So it is something that we have to be very selective where we apply our technology. But you also asked a very important question in there, which is additional programs, and it occurs to me now in this moment that I have previously said that we had some additional cell types that we are going to talk about and it didn't even make it into my prepared remarks, which gives you a sense of how much exciting stuff is happening here.

But we do have plans to reveal another new cell type, that could be as early as in the next 3 to 6 weeks. It's coming together. It's maturing. I'm very excited about it. but it is as yet undisclosed. But hopefully, that is something that we could have out into -- out for public consumption prior to our next quarterly call.

Yes. No, that's -- new cells that would be great to learn about them. Thank you for that level of detail. And then on the OpRegen program, if that was to theoretically start a Phase III tomorrow -- like what's your capacity for the amount of doses you can provide because these could be like very large trials, at least historically that have been done? And do you have any visibility of regulatory interaction that has occurred beyond the RMAT designation that was secured last year or 2 years ago?

Thank you for that additional question. Unfortunately, again, that's a question that really can only be answered by Roche and Genentech. I am not a party to regulatory strategy discussions or regulatory interactions that they have regarding OpRegen. So I cannot say because I do not know. .

Okay. And one last for Jill. In your cash runway, how much of the additional warrants are factored in? If you could just clarify.

Yes. So of the existing runway that we talked through today, it only includes the $5.4 million in warrants that we collected this week on an exercise of the 32 remaining is not factored into our future runway at this point.

Mayank, I neglected to answer the remainder of your question. And I'm happy to say that perhaps one of the least of my concerns at this company is being able to manufacture sufficient material. It really speaks to the power of our technology. We literally are manufacturing more OpRegen than we can reasonably fill and finish in a day's work. So I do not think that supply of clinical material will be gating because the 2-part banking system and then the production vessel scale that we're at, really does generate a very large number of cells on each run that we perform.

Next question comes from the line of Albert Lowe with Craig-Hallum.

I was wondering how you'll be applying the hypoimmune cell line that you recently received from the partnership with [indiscernible]? And I believe this is an [ iPSC ] line. Can you please also speak on some advantages of using on [indiscernible] stem cell line?

Albert, thank you for that question. The hypoimmune line that we obtained through our [ Factor ] alliance is a line that we designed for a neurological indication. That indication is as yet undisclosed. I may or may not -- I think I'll probably just say that I cannot confirm that it is even the same indication that I suggested could be coming out in the next 3 to 6 weeks. But you're correct that it is an iPSC line. I don't know if there are advantages of IPS over ES or vice versa.

Our view is that it is appropriate to follow the data and the behavior of these lines. I do think that there is an important discussion that occurs about various attributes that may make one or the other more attractive but there simply have not been enough approved agents to be able to definitively say one is superior. Typically, what one finds is it when you work with one form of a line, that is the line type or source that you defend for us, we are indifferent. We have both types of -- excuse me, we have both types of pluripotent lines. But in this case, the experience that Factor had with gene editing, with IPS, with hypoimmunity and we also engineered in an additional functional, hopefully, relevant edit into that line.

That is about us accessing capabilities that we think are valuable, but that we didn't want to build in-house. And because ourselves are always fully characterized before they go into a patient, we can be confident that there are a number of different editing technologies that could be applied because we can always confirm [indiscernible] it was designed to be before we utilize it and before we invest in the scale-up of that material.

And looking forward to hearing about this new cell type that's coming soon.

Next question comes from the line of Sean McCutcheon with Raymond James.

This is Yang for Sean. We have one quick question. Could you speak to the process of getting a new OPC1 formulation into the DOSED study? And how much do you think that may shorten the time line versus bridging study? And are you in dialogue with FDA on that front?

Thank you, Yang, very appropriate question. We elected to separate the new device that we are testing from the new cells that we have manufactured. So we have completed the manufacturer, the new process by which we manufacture those cells. We have completed the comparability testing including in-life comparability testing and all the other features that go into a meeting package with FDA, but we have not yet presented or delivered that information to FDA to request us to bridge in those studies. We thought it would be prudent to get a little bit of experience with the new device so that then the focus could shift away from the new device and into the new cells.

So what we are hopeful for is that the new device will perform as it was designed to be performing in the first 4, 5, 6 patients and then proposed to FDA that we would switch over to the lineage new process in the last handful of patients in the DOSED study. If successful with that endeavor, that would save a lot of time. It would prevent us from having to establish and conduct a separate safety cohort with our new cells. So you can imagine that the bioinformatics data, the animal data, all of the analytical work that we have done to propose that switch has been exhaustive in order to give us the best probability of success in accelerating that process because it is correct that in order to run a larger study, our view is that we need to have this superior device deployed and we need to use our higher quality, higher purity, higher scale and better control OPC1 cells. And so that is our plan. And when that is complete, then I believe we would be in a position to run a larger study, either ourselves or in a partnership but a larger study of spinal cord injury patients.

There are no further questions at this time. I will turn the call back over to Brian Culley, CEO, for closing remarks.

Thanks, everyone. I know it was long and complicated, but it's very important, and I think also very exciting. So stay tuned. Clearly, we have some exciting stuff coming up not too far away. Thank you for your interest and support of the company, and we'll talk again soon.

That concludes today's call. Thank you all for joining, and you may now disconnect.

Welcome to the Lineage Cell Therapeutics Third Quarter 2025 Conference Call. [Operator Instructions] An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage and the recordings, reproductions or transmissions of this call without the expressed written consent of Lineage are strictly prohibited. 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. Hone, please go ahead.

Thank you, Angela. Good afternoon, and thank you for joining us. A press release reporting our third quarter 2025 financial results was issued earlier today, November 6, 2025, 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 most recent annual report on Form 10-K and in subsequent SEC filings. 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.

Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us on the call today.

I'll begin with an update on our lead program, OpRegen, then review our progress against the 5 strategic goals, which I outlined for you last quarter. In addition, I'll provide some insights on our pipeline strategy before concluding with some information on our islet cell project. Then I'll hand the call to Jill for a review of our financials before taking questions from our analysts.

I want to begin with an update on OpRegen because there have been some very exciting advancements in the ongoing Phase IIa GAlette study. We're pleased to update you that Genentech is continuing to expand the retinal community's exposure and experience with OpRegen. In particular, 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.

In comparison, Genentech opened only 1 new site in all of 2024. So we take this site expansion to be a positive sign. As a reminder, we don't have full visibility into the GAlette study enrollment or its findings, but the study has been running for more than 2 years, and it is an open-label trial for which all primary and secondary outcome measures are captured at 90 days. Given that there has been abundant time for Genentech to collect outcomes data in year 1, and they more than doubled the number of sites in year 2, we interpret this acceleration of their clinical efforts to be a positive signal for the future of this program.

The rising number of clinical sites is, of course, just one element contributing to our belief that things are going well for OpRegen. There is a growing body of additional publicly available information, which in the aggregate, provides further evidence that OpRegen could be advanced into a controlled clinical trial, possibly in parallel with continued efforts at surgical optimization of this new technology.

For example, since the GAlette study began, Genentech reported its own 24 and -- excuse me, 36-month analyses from the Lineage Phase I/IIa trial. That data showed that as a group, patients who received a onetime dose of OpRegen RPE cells across large areas of their GA enjoyed improvements in retinal structure, consistent and durable increases in visual acuity and an acceptable safety profile. These are remarkable clinical findings because patients with GA don't self-heal.

And earlier this year, these outcomes were independently validated by similar reports coming from 3 other groups, each using their own version of an RPE suspension. One of those competing entities is a multinational pharmaceutical company, which we believe further supports the commercial potential of our cell transplant approach.

As a further reminder, about 1 year ago, Roche was streamlining its pipeline and eliminated a set of development programs to focus on those with best-in-class potential. Some investors had asked about how these pipeline cuts could affect the OpRegen program, but OpRegen was not affected. And a few months later, we actually entered into an additional and expanded services agreement with Genentech to further support OpRegen development.

Around the same time, Roche elected to seek and successfully received RMAT designation for OpRegen. And more recently, Genentech shared that they would be evaluating 2 next-generation delivery devices acquired specifically for the OpRegen program and which have the potential to not only improve the safety and success of the cell transplant procedure, but may also offer a significant competitive advantage over companies that lack both this specialized equipment and the extensive delivery experience of our partner, Roche.

When you aggregate all of these publicly available actions, and I did not list all of them today, but I hope you will appreciate why we are bullish on the future of OpRegen to treat GA patients and why we are taking steps to try to repeat the success with other cell types.

So given what appears to be a steadily growing list of asymmetrically positive indicators for the successful advancement of OpRegen into a controlled clinical trial and while still noting the ultimate decision to advance the program is solely with our partners, Roche and Genentech, we have increasingly been thinking about how we can create value from the clinical, technical and financial success that we're anticipating from OpRegen.

With that in mind, I will turn next to some statements I made on our prior quarterly call to get a scorecard on how we've been doing. Last quarter, I outlined 5 areas of focus through the end of this year, and I'm pleased to report that we have already successfully delivered on several of those strategic initiatives, and we still have nearly 2 months to go.

Our first goal was to enter into deals which partly or completely fund existing product candidates. We accomplished this goal through the partnership we announced with William Demant Invest A/S, WDI, which is expected to fund up to $12 million in research and collaboration costs for all planned preclinical development of ReSonance, our first internally developed cell transplant program for the treatment of hearing loss. ReSonance was an important test for our business model because it showed that we could conceive of and successfully manufacture a new cell-based product candidate, generate new intellectual property and advance it into initial preclinical testing in approximately 1 year and with a modest initial investment.

And soon thereafter, we signed a collaboration agreement with WDI, which is a world-leading hearing health care company, securing external funding, leading to an IND or CTA if the data supports it, and also provides access to technology expertise in a network of hearing health leaders. We and WDI also have preserved the right to enter into a future clinical and/or commercial deal with a pharma partner, if such an opportunity does arise. I believe this collaboration was an important demonstration of the speed, efficiency and return on investment that the Lineage platform can provide and provides evidence to support our strategy of replicating our OpRegen success with other cell transplant programs.

In addition to funding existing assets, our second goal was creating new assets, which could attract external funding or collaborations. And while we have not yet said anything publicly about what we're doing in this category, I can share this year we conducted initial wet lab work on multiple target cell types. And if that work continues to go well, our expectation is that we would then disclose our next intended indication before our next quarterly call.

Our third goal was to capitalize on our unique manufacturing capability, which we believe could solve issues which impede others' programs from success. Our new initiative in islet cell production is an example of how we're trying to meet this goal. Specifically, we're looking to tackle the major limitations in production scale, which must be solved in order to have a commercially viable cell therapy product for Type 1 Diabetes.

If we are successful with this initiative, our innovations could be applicable to other programs, potentially opening the door to conditions previously thought to be too big and too expensive to address with cell therapy. At scale affordability is, in fact, the entire point of allogeneic off the shelf product development. So achieving this goal would mark a crucial moment for the field.

Our fourth goal was to obtain a CIRM CLIN2 grant, which we applied for earlier this year. CIRM has employed a new review process, and our understanding of that process is that only 7 applications were advanced out of an initial larger pool of candidates. We were among those 7 finalists. Since that selection to the final 7, we have answered a series of questions from the grants working group, but we have not received a grant score or an indication of whether we ultimately will receive a grant or not.

However, we believe the finalists will be voted on at the next CIRM ICOC meeting on December 11. Therefore, 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. And by the way, if we do receive CIRM funding, it would provide a very nice nondilutive offset of up to approximately $7 million from the ongoing dose study of OPC1 for spinal cord injury.

The last of the 5 goals I outlined for the quarter was to complete activities leading to milestone revenues from our partnership with Roche and Genentech. As you already know, I cannot speak to our milestones or their amounts until such time as they are met, but it remains an important activity. It is a top priority, and I am pleased with our progress related to this effort.

As a final point, most of the goals we have focused on are tied in some way to an expansion of our business. For example, expanding the scope of the OPC1 study via CIRM grant or expanding the output of new assets from our in-house manufacturing platform.

These are intentional moves by us because they reflect the convergence of 3 key factors: one, the reduction to practice of our high-scale GMP banking system, which we announced a few months ago; two, the emergence of a more favorable biotech market, which has improved the cost of capital from which we can fund judicious and stepwise expansion; and three, the belief that the OpRegen program will continue to advance under our Roche/Genentech alliance and provide us with the credibility, confidence and capital to take our platform further than where it is today.

We have been eagerly awaiting a time when this accumulation of factors would align and permit us to elevate Lineage's growth trajectory. We believe this momentum began in the second half of this year and expect it to continue during 2026.

I should add at this point that while we aim in time to create a basket of cell therapy assets, some of which we might choose to develop internally and some of which we might partner, I have been asked on occasion how we, as a small company, which has long demonstrated such fiscal discipline, how would we manage a larger portfolio? The answer is clear. Our core technology, our platform generates assets which share essential traits in common. Those traits occur early enough in a project that they're not dependent on us having a huge body of disease-specific expertise.

Our technology is based foremost on the directed differentiation of pluripotent cells into discrete and scalable cell types of the human body. And while each product candidate is, of course, intended for a different condition and each cell line behaves in a unique manner, the early and necessary steps of process development, control, scale and purity are largely common features in the way we apply them, which allows us to expand the scope of our pipeline without losing the focus necessary to succeed or without requiring an excessive amount of capital investment. And by adapting or initiating each program on the same process development modality, we are generating more shots on goal per dollar invested.

So with the platform expansion as a convenient transition point, I'll turn lastly to an explanation of our recently revealed islet cell initiative. The human body is comprised of about 200 discrete cell types. And because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into new product candidates. When we were nearly 100% focused on OpRegen, this selection process was largely running in the background.

Our initial pilot effort from this strategy was our program in auditory neurons because we knew auditory neurons represented a high-quality opportunity. And based on our recent collaboration with WDI, that has proven to be true. But there are many other cell types we could tackle. And as OpRegen's future brightened, we have increasingly emphasized and acted on our plans to repeat our OpRegen success.

To that end, we hired a former venture capitalist who built for us a proprietary opportunity tracker. The basic idea for that tracker is that you matrix each of your product opportunities against dozens of product characteristics such as the addressable market, the quality of translational models and many other aspects, including, of course, our proprietary manufacturing insights. And from the thousands of data points which are generated, we can identify our best potential returns on investments.

One of the top outputs from this proprietary process was the opportunity for us to enter the Type 1 Diabetes space. Our work identified 3 main obstacles preventing cell transplantation from providing a commercially feasible functional cure for Type 1 Diabetes patients. The first of these was the mechanism, but multiple companies have since shown that indeed an islet cell transplant can achieve insulin independence for patients.

The second obstacle is the need for lifetime immunosuppression, which is not a commercially feasible solution for the vast majority of patients. Several attempts to eliminate the need for immunosuppression have been explored such as capsules or droplets, but we find the recent evidence from genetically edited hypoimmune cells to be the most attractive approach, one which has created a line of sight on breaching that second obstacle.

That leaves only the third major hurdle, which is production scale. Cadavers are not a sustainable or stable source of islet cells, but pluripotent cells are self-renewing, so they can solve those deficiencies. However, while a single pluripotent cell can give rise to thousands of RPE cells in our system, you can only get a dozen or so islet cells from each pluripotent cell that you start with. And because the anticipated dose levels are as high as 1 billion cells per patient, you're not really a commercially viable product until and unless you can overcome the biological ceiling imposed by the generally accepted differentiation processes that exist today.

I obviously cannot go into detail for competitive reasons, but the gist of the matter is that we have conducted some early work that suggests we may be able to increase our already large-scale production process by many thousand fold. If we are successful, this could increase our relevance in the race to develop a functional cure for Type 1 Diabetes.

Our initial goal for this program is to demonstrate our capability with one of our proprietary and best behaving cell lines. This initial work is ongoing and intended to lead to a go/no-go decision on further development, which we will expect to occur next quarter. If the initial work with an internal cell line is successful, we believe it could accelerate partnership conversations for this program.

And in parallel with any such talks, we would also seek to demonstrate system compatibility with a hypoimmune cell line, either internally or externally sourced, which would be a more suitable line from which to support a clinical campaign. And depending, of course, on the results and feedback we collect along the way, we may elect to do this work for a partner or retain the product internally for a longer period.

So to summarize, we believe we can reach an initial feasibility decision on this T1D initiative with a modest investment and just a few more months of work. And even if our overall goal isn't met, we might still discover some things which we can apply to improve the efficiency of our existing programs.

So with that, I'll turn things over to Jill for a review of our financials.

Thanks, Brian, and good afternoon, everyone.

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.

We also continue to pursue other sources of funding like the CIRM grant, to support the dose study and milestone payments we are eligible for under the Roche-Genentech collaboration agreement as well as any additional partnerships, which we may elect to enter into in the future. Separately, a large additional source of potential cash is the approximately $37 million of warrant capital we may receive if Roche and Genentech publicly disclose their intent to advance OpRegen into a clinical trial with a comparator arm and our investors exercise their warrants in cash.

Now let me review our third quarter results. Our revenue is generated primarily from collaboration revenue, royalties and other revenues. 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. Our operating expenses are primarily comprised of R&D and G&A expenses.

Total operating expenses for the third quarter were $7.5 million, a decrease of $0.1 million as compared to $7.6 million for the same period in 2024. Our R&D expenses were $3.3 million, an increase of $0.1 million as compared to $3.2 million for the same period in 2024. The net increase was primarily driven by $0.2 million for our OPC1 program, $0.4 million for our preclinical programs and other undisclosed programs, partially offset by $0.5 million for our OpRegen program.

Our G&A expenses were $4.2 million, a decrease of $0.2 million as compared to $4.4 million for the same period in 2024. This decrease is primarily attributable to stock-based compensation expenses and services provided by third parties.

Loss from operations was $3.8 million, which was in line with the comparative prior period loss. Other income expenses reflected other expenses of $26 million compared to other income of $0.8 million for the same period in 2024. The change was largely attributable to the noncash quarterly fair value remeasurement of the warrant liabilities of $26.6 million compared -- primarily due to change in our share prices as compared to the prior year and $0.2 million for exchange rate fluctuations related to Lineage's international subsidiaries.

The net loss was $29.8 million or $0.13 per share compared to a net loss of $3 million or $0.02 per share for the same period in 2024. The change was primarily driven by the aforementioned warrant liability. Our financial results continue to reflect our ongoing dedication to responsible fiscal management, and we remain focused on balancing our cost of capital with the investments we make to grow and strengthen our pipeline.

So with that, I'll hand the call back to Brian.

Thanks, Jill. So I will quickly summarize by repeating 2 key themes. First, we remain confident in the potential for OpRegen to drive positive clinical outcomes in dry AMD, and we are encouraged by our partner signs of commitment to the program. We also believe the independent evidence generated by others RPE cell transplant trials, supports and elevates our replace and restore philosophy.

Second, we're preparing for a successful future by making new investments in our cell transplant platform and using our recent manufacturing innovations as a foundation from which additional pipeline programs can be advanced either via funded partnerships or independently. We believe our approach offers powerful optionality, which we consider essential for a company at our stage of growth and development.

We appreciate your support and belief in our vision. And with that, operator, we are ready to take analyst questions.

[Operator Instructions] And your first question comes from the line of Mayank Mamtani with B. Riley Securities.

This is William on for Mayank. Congratulations on a very nice quarter. A couple from us, if we may. Just kind of curious in terms of your -- the considerations for your islet cell program. You mentioned that there was sort of a go/no-go decision in the works. And I was curious what the internal considerations are incorporated into that for -- on how to move forward?

And then I'm just also kind of curious in terms of partnerships. You obviously mentioned the William Demant collaboration. How should we be thinking about additional partnerships? Are you still looking to extend additional collaborations? Or sort of what's the ballpark or the goalpost, internal goal that you're looking for to complete and whether it's based on sort of capital or capacity-wise?

Thank you, William. Great question. So with respect to the islet cell program, due to the biological ceiling, which exists in differentiation protocols today, the opportunity to really step function change the process by which you differentiate is probably fairly limited and probably not a solution that would lead to the kind of scale that we're talking about. But if you can start with a much larger number of cells, that biological ceiling becomes less relevant.

So, our efforts are aimed at some of the earliest steps so that by the time you get to the later steps, which are, let's say, capped, you're already on track for the kinds of output that you need to get. So at the end of the day, it's a mathematical formula where you start with, let's say, 100 trillion cells per year, and you need to work backwards through various size of vessels, how long does it take to turn around a batch of product and ultimately, all the way back to the earliest steps. And if you do not maximize the earliest steps sufficiently, you will never reach the kind of output that is required to have a commercially viable product. You would perhaps create an interesting niche product, but that's not really our objective here.

So, we have a lot of experience with this part of the process development activity. And so, we are working on some fairly straightforward efforts. And if we can knock down the barriers in the earliest steps, we think that, that provides a credible line of sight to conduct the same activities with some other cell lines that potential partners could have or be able to do it with our own cell line and be able to just continue on the process.

Obviously, we are not saying that we can or need to in the initial days, show someone that we can make 100 trillion cells. But rather, we want to show the modality, the platform has that capability. And then, of course, there's risk inherent in actually reducing that fully to practice. But that is partnered all the time in this industry. People partner preclinical programs or Phase I programs, not knowing if they will ever generate revenues. So it's analogous to that. It just happens to have an emphasis in the early-stage scale.

The second question you asked was regarding partnerships. So, I'm very proud of the team for identifying Demant as a bit of an atypical partner for us. However, they're ideal for us because of their hearing expertise. We don't have an [ up ] priority objective to find atypical partnerships, nor do we oppose them. They must be fit for purpose. Because we lack hearing loss expertise, William Demant invest is a terrific choice for us. And we reserve the right with them if we want to partner with some traditional pharma later, we can still do that.

But you asked about our vision for partnerships and future partnerships. Ultimately, because our platform is capable of generating multiple assets, multiple product candidates, we envision having a basket of assets, some of which are partnered and some of which are retained for longer. The specific question as to whether an asset gets partnered or not has many inputs. One of those inputs certainly is what is the cost and what is the risk and when would it be appreciated by the investment community versus being appreciated by a partner.

That's not a question that we can really answer because it depends in large part on our cost of capital. So if we have an unattractive share price, it makes sense to rely on partners to advance programs. If we have a more reasonable share price, we have the lovely opportunity to hold on to things a little bit longer, create more value. So it really comes back ultimately to the business of value creation and value creation per share.

So there are other factors. I won't go into them, but ultimately, all of the factors come together, and we then make an assessment of whether now is the right time to do a partnership and with whom.

Got it. That's very helpful. One more, if I may, just briefly on OPC1. Congratulations on your first [ SBI ] patient being dosed. I was just curious based on sort of -- if the patient is affected, say, in this case, from T1 to T10, I believe originally, at least preclinically, OPC1 or OPCs in general could migrate approximately about 5 centimeters. And so, just thinking about the span of injury there, even if it's originally at a single site, is there a potential here for OPC1 to be administered or dosed at multiple sites to achieve greater coverage along the spinal cord?

Yes. The question -- your question is correct. The first patient was a thoracic injury patient. We have, in prior cases, had patients who received cells in 2 separate locations during the same surgery. So I would describe it as saying approximately half the dose was administered on one side of the lesion and the other -- the remainder of the dose was delivered on the other side of the lesion.

So you're asking a very interesting question. Can you deliver multiple doses, multiple locations? The short answer is yes. Is there a benefit from redosing down the road? We don't know the answer to that yet. But we have what we consider to be a very strong safety profile for OPC1. So it would be something that we would like to investigate, and we know of no reason why one could not receive multiple doses of the product, even at the full dose of 20 million cells.

Your next question comes from the line of Joe Pantginis with H.C. Wainwright.

So Brian, first, I want to go to your comments around the potential for the CIRM grant, whether it's $7 million or what have you. I wanted to simply ask based on your commentary, how you feel the additional funding might expand or accelerate the program?

Thanks, Joe. So yes, we don't know if we will get -- we don't know a final amount because the way that the funding works is there's a bit of a bring-down exercise where they check on your budget to make sure it aligns with your original application, nothing significant has changed. But in the ideal case for us, we would be somewhere, maybe just a little north of $7 million.

This would accomplish multiple things for us. The first is that we would feel emboldened to expand the number of sites and be more aggressive about recruiting patients because we have both acute and chronic injury patients that will be enrolled. Acute injury patients are harder to find because you have a window where they are eligible for your trial. So it's good to cast a wide net. But we also have had the first utilization of the new device. And so that has had some level of derisking.

So, just as we are now more comfortable having more patients come on the study, we've learned what we needed to learn. We also are meeting hopefully with a successful outcome from the CIRM grant that will help fund that. And that's the second part of the answer is the funding, is that we have in our budget, in our plans for our business, a meaningful number of millions of dollars that will fund this trial. If, in fact, we are offsetting approximately 50% of this study, that frees up cash that we would otherwise plan to spend on this trial. So it's a very nice pickup.

But just to be clear, if anyone who is listening is not certain about this, CIRM does not hand you a check for the full amount. It is essentially a reimbursement. So there's a delay and a stagger, but you are -- if you conduct all the activities and the program continues, you are likely to collect the full amount of the grant over the multiyear period.

That's very helpful. Next question, a bit of housekeeping, probably a little rhetorical for Jill. With regard to your cash runway, are any of the Roche milestones or beyond included in that runway? Or it's basically you'll update when they happen?

Yes, that's right, Joe. So it's not included, and we do plan to update when we are able to achieve those milestones and they get added into our forward runway.

Perfect. And then, Brian, my last question is really about your longer term business model. You obviously have a foundational platform with all of the different cell directions you can take here. So looking deep into the future, and I know this is difficult, can you tell us how or why or why not Lineage could become a tool or cell services company as part of its approach?

I hope we never do is my answer. The problem is that I think it remains difficult to do the work that we do. We have the lovely advantage of having been around and involved in this technology for over 20 years. So I think we've gotten quite good at it. But nevertheless, it's difficult to price the development of the recipe by which you develop a cell because you don't know how long it's going to take. So it's not a widget that you can easily price.

The other factor with respect to sort of behaving like a CDMO is that those margins tend to be unattractive to me. I want through our partnerships to have significant ownership in the upside. We're not particularly interested in doing fee-for-service work. We do have an exquisitely well-trained team, but we also have a small facility. So we don't really have the capacity to do that.

There are some scenarios that I think are worth considering, which are whether we have some intellectual property or some other technology that perhaps an alliance with one of those CDMOs would make sense, especially in areas that we have deemed not to be of interest to us. because there are plenty of people who are working on cell therapy programs that we wouldn't touch. But the fact that they have raised capital and perhaps some of that capital could find its way to flow back to Lineage would be fantastic.

So do we have formulation technology or storage technology or process technology? And could that be utilized by others in sort of a multi-handed deal? I think that's a really interesting idea, but it is not our ambition to become a 2-sided business where we're developing products for ourselves on one side, and we're doing fee-for-service. To the extent that fee-for-service does bring in capital that you can use for innovation, I would rather do that by separating -- by getting a big return on investment, i.e., separating the amount of money required to launch a new program from the amount of money we get from a partnership.

And I think that both the Roche agreement and the WDI agreements are really good examples of that. Our upfront or our reimbursed amount is greater than the amount that we put in to invent these things. So I think if we can continue to find those opportunities, we will be less reliant on the capital markets than perhaps we would if we could not conduct those strategies.

Your next question comes from the line of Jack Allen from Baird.

This is Charlie on for Jack. So just to start with the dose study, could you remind us of any interpatient stagger requirements there? How quickly you could dose patients? And what sort of data set you envision collecting before announcing initial data as well as with this first chronic patient, could you let us know when they were dosed and how we should think about the stability of their motor function prior to dosing? And then I have a follow-up afterward?

Thank you. A lot to unpack there. So the dose study does have a stagger. The first patient was a thoracic AA and the next patient will be a thoracic AB. And then the third patient will be thoracic A or B, and then we can do our first cervical patient. And those steps that I outlined can be either chronic or subacute. At that point, we then go into open enrollment for an additional 2 to 6 patients.

The data set -- we have already provided initial data. We have shared that the new device had performed and delivered the cells in its intended way. And that is the primary objective of the study was to assess the safety and performance. However, I recognize that the investment community is more intrigued by the possibility of seeing some functional improvement in patients, especially chronic patients. And I think that's the right thing to be excited about.

The status of the patient, the stability of the patient is not known to me. But in any case, the patient was dosed on July 30th, so approximately 2 months ago. So we would assume that, that would be too soon to report on any sort of functional changes that they might be experiencing, if they are experiencing any at all. And that is because there can be some variability even among chronic injury patients, and we would not want to get ahead of the story.

And I would point no further than the OpRegen program. When we first identified retinal restoration, we didn't go public for 9 months because it was such an extraordinary claim. Frankly, we needed to make sure we had a lot of independent and blinded reviews of that data before we went out to speak about it. And by doing so, we were able to speak quite credibly about it.

We would imagine the same approach with respect to the dose study. So we will continue to watch this patient. There is a stagger. The patients go approximately a month, and they have to pull together your DSMB and then they go through the review before you get cleared. So what I really can only say about the patient at this point is that there have been no significant safety events, and that's through the first 60 days following the treatment. So that's great, and the device seemed to work the way it was intended. So that's great. And we will continue. And I think it's really more of a 2026 story for this trial.

Wonderful. Thank you for the color there and helping to unpack that multifaceted question. For the follow-up, just curious on the OpRegen program, have you -- has Roche given you a sense for the degree of follow-up they'd like to see from patients treated in the GAlette study prior to moving into a pivotal trial? And is there any kind of description of a data package they're working toward that we should keep in mind? And that will be it for us.

Thanks, Charlie. The degree of follow-up is known. The primary and secondary assessments are through 90 days. So the 2 primaries and the secondary assessment occur within 90 days. So -- now that is not inclusive of longer term functional data. So those data, of course, do get collected. Those patients are on study for years. But the initial questions that should be framing decisions occur very rapidly.

So that's in part why we're so encouraged by seeing the expansion and the continuation of this program is that if it were a disaster, presumably that would be quite easy to know. But we do not know what the plans are for the data package. And it's probably worth reminding everyone that this is not a conventional Phase II study. There is no prespecified endpoint. It is not a responders analysis the way that we often see Phase II responders analysis. This is surgical optimization.

A large number of patients could have very bad outcomes. But if enough of them using one particular set of criteria are encouraging, then presumably Roche would follow that set of criteria as they consider moving into a subsequent trial. But the truth of the matter is that we do not have that information. We are not part of that discussion, and we do not know what that plan will be or when it will occur. We just know that it's an endpoint that is difficult to miss. it occurs very rapidly. And there seem to be a lot of activities, which I outlined on the call today, that would suggest that things are going well. So we're hopeful that we're correct in interpreting these events and that at some point in the future, we will all learn the very specific answer to your question.

I would add to that, that this is a new technology. Optimization -- surgical optimization presumably could continue for many, many years. That would not be unusual to me in any way. But at some point, saying that you feel comfortable enough to continue development because there's a clock ticking. Of course, there are some competitors, and there are hope for revenues out there.

So I think that there is tension between optimizing to perfection, which is an unrealistic goal in the short-term and moving forward into aggressive development. And I trust that our partners who have been so profoundly successful in ophthalmology product development know exactly what they are doing. And I have no problem saying they surely know better about how to do this than we do.

So we believe the asset is in the very best and most capable hands possible. And if through their work, they are ultimately increasing the future peak sales of this product, if they are increasing the probability of success of this product, then we are quite comfortable waiting for their time lines to hit so that we can all enjoy success.

Your next question comes from the line of Boris Peaker with Titan Partners.

Just quickly on OpRegen. Are there any conferences where you think the next data update could be presented? Or have you spoken to Genentech, Roche on their intention of presenting more data?

We speak with them very frequently, perhaps surprisingly frequently. And from time to time, we do have discussions about upcoming presentations, and we share content at some point before. But with respect to what I believe you're really aiming at, which is the -- which is a disclosure of fulsome GAlette data or at least some form of GAlette data, we do not know their plans. And so we, just like you, look at the calendar, and we just imagine different events and forum where that could occur, but we don't know. It could be something that spontaneously comes out ad hoc, a pharma day, an ophthalmology day, a random day, Monday, like we just don't know.

Got it. And maybe on the CIRM grant, I guess what happens if you don't get CIRM funding? How does that impact your program?

It's a few tears shed in the beer for the hard work of the team to go through the effort to put together a really fantastic application. It's probably a phone call to really try to understand why because we feel like the fit for this program is right in the center of the bull's eye for CIRM's mission. But ultimately, it changes very little. The program will continue. We will continue to find and identify patients.

We need to demonstrate that this new device is adequate and sufficient to support a larger trial. We need to bridge in the new cells that we have prepared and tested. And all of that work will continue. We would just regret that we were not successful in securing some external and very good cost of capital support for the program in the way that we've envisioned it for so long.

The runway, by the way, that we described does not include any CIRM dollars. So potentially, there would be a pickup depending on how close to the edges we are on a quarter there.

Your next question comes from the line of Sean McCutcheon with Raymond James.

Brian, I think you helped bridge into my first one. Can you speak to the process of potentially getting the new OPC formulation into the dose study? How much that could truncate the time line versus a separate bridging study and whether or not you're in dialogue with FDA on that front?

And then maybe a second question, could you provide a sight line to getting more patients treated in the dose study? Maybe remind us of the safety waiting period and progress you're making in terms of identifying patients to be treated?

Thanks, Sean. Yes, the idea that we have was that we could accelerate things by not having the new cells be a separate study. So our strategy is to have the cells introduced more or less at the end of the dose study. Does that mean that the dose study gets larger? Not necessarily. It depends on the next part of your question, which is the FDA dialogue.

So we have been preparing the package to take all of that information to FDA so that we could find out what exactly the path will need to be. So potentially, the agency would say you can introduce these cells into the dose study in the last 4, 5 patients, the last 1 or 2 patients, maybe they'll ask us to add 4 or 5 patients at the end. But we're trying to accelerate and compress time lines by not doing it as a separate campaign.

With respect to the gating of patients and the waiting period, I think I mentioned before, it's about a month, but then you've got this sort of practical reality of assembling -- collecting your data, preparing your data, assembling it for your data safety monitoring board, getting them to discuss and say everything is okay and then going back to your sites and saying it's okay to go.

I mean on a -- it's hard for me to estimate because we don't have a lot of experience running spinal cord trials. The prior data was collected by others. But I would estimate that the turnaround time would be quarterly because you've got the explicit stagger and then you've got the implied stagger. But it also will be a function of additional sites.

So one of the convenient nuances of what we've done here is we wanted to start slowly because we wanted to make sure that the new device was going well. And we also had to start slowly because we had a stagger. But conveniently, we've been waiting for a CIRM output. So CIRM is not funding any of this currently. So just at the time that we would hope to be getting out of a stagger and opening more sites, we may be having partial reimbursement from CIRM. So it all sort of is coming together in the most economically feasible way. And I think that makes sense for where we are as a business, and as I said before, around our cost of capital.

So you can expect to see more activity with the study. You can expect us to see having that FDA engagement, and you can expect to hear more detail from us on timing as we secure that timing and information from FDA.

Your next question comes from the line of Albert Lowe.

I noticed that Roche highlighted the OpRegen program in an investor event they held in September and discussed these new devices that they acquired for the procedure. Can you just give us some more color around the capability of these devices?

Thanks, Albert. I'd be happy to. There are 2 basic ways to access the subretinal space. And everyone should be reminded that you must deliver the OpRegen cells to the subretinal space. These cells are not working at big distances. They are a transplant. So they have to go where the RPE cells belong. And you can go through the front of the eye, which is transvitreal or there's a newer technology or newer method, which is suprachoroidal, which goes around and accesses the subretinal space from the back of the eye, so front door or back door.

Each of those devices that Roche described on their recent Pharma Day or Ophthalmology Day, I don't recall which, each of those is a next-generation version. So the transvitreal is an improved version of what is off the shelf. And the suprachoroidal is also an improved version of the technology that we first demonstrated in these patients in our Phase I study that we acquired a license to Gyroscope that was then acquired by Novartis.

So they have trade-offs. The front of the eye and the back of the eye are just different. We do not know, and I don't know if Roche and Genentech have decided, but we do not know as Lineage, which of the 2 is superior. One is very straightforward. You can see everything you're doing. It's very off the shelf. The other requires some specialized training and some specialized tools, but it may have some advantages. Ultimately, we're going to have to wait and see what kind of information from these devices comes from it.

And I do want to caution everyone that there's no guarantee that our partners are going to tell us all what they found. When I look at some of the competitor data, I feel that they are advantaged in a way because we, at Lineage showed them where to put the cells. So if you go around telling everyone every piece of data that you discover in a way, you can be enabling your competitors.

So it's very important because the warrants -- the $37 million of warrant capital that Jill described, was intentionally designed with milestone language that did not -- that was uncoupled from specific devices or data presentations. It simply and solely required our partners to disclose their intent to run a controlled or comparative arm study.

So it's somewhat of a lower bar, but it was intentionally written that way to capture the possibility that they might say that they're going forward and not tell everyone why. But that's okay. We still would stand to interpret that as a very big positive. But of course, we're hopeful that they will be comfortable sharing everything that they'd like.

And I think given that, at one of those conferences, the global franchise had said that they wanted to pioneer innovation in vision restoration in the context of words talking about going beyond compliment. I think that they're going to find some interesting things. I think they're going to be proud. I think they're going to want to show off. And I think that will be great for us and our shareholders.

There are no further questions. I will now turn the call back over to Mr. Brian Culley for closing remarks.

Well, thank you so much. Everybody, I've been reading the headlines. I think it's a bit of misfortune that there's a lot of discouraging news around cell and gene therapy. We've all seen the news from Takeda and Galapagos and Novo. I think it's important to keep in mind that Lineage is not doing autologous CAR-T. What we are doing is quite different. And the criticisms that may be levied against certain kinds of cell therapy may not be entirely applicable to what we're doing. So I invite everyone to go deeper and really consider how we are distinguishing ourselves through manufacturing and our basic approach of developing allogeneic off-the-shelf cell transplants.

And then please contact us if you have any questions. We're really happy about how things are going. Thanks for your attention.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

And welcome to our next session. I'm the moderator, Sara Nik, an Equity Research VP at H.C. Wainwright. And it's my pleasure to introduce our next presenter, Brian Culley, CEO of Lineage Cell Therapeutics, a clinical stage biotechnology company developing novel cell therapies for neurological and ophthalmic conditions. Brian, the floor is yours.

Thank you so much, and good morning, everybody. It's a pleasure to be here. All right. Next slide. So as we're a publicly traded company and I may make some forward-looking statements, please refer to our safe harbor information filed at clinical trials -- excuse me, that was ironic -- sec.gov. You can also visit clinicaltrials.gov.

All right. So Lineage Cell Therapeutics. I'm going to go very quickly today because I want to squeeze in a couple of new things that you haven't heard presented from the company before. We had some announcements. But as a general matter, Lineage Cell Therapeutics is dedicated to the manufacture and delivery of specific cell types. And we are doing this in order to address conditions and indications where the loss of a certain cell type gives rise to the disease. The highest and best use case for this to date for us has been in the setting of dry age-related macular degeneration. This disease, the hallmark is the loss of RPE cells. We manufacture RPE cells in the laboratory and deliver them to patients in order to restore the function that's lost in that condition.

The pipeline, this is part of the news that we have, the pipeline is a little bit larger. This morning, we announced that we have a new initiative called ILT1. This is our initiative into type 1 diabetes. Specifically, we are looking to address a manufacturing deficiency. So diabetes patients will require a very large number of islet cells in order to provide what appears to be the potential for a functional cure. But to our knowledge, no one has been able to unlock the kind of manufacturing scale required to provide a commercially viable solution. And as we have had success in other programs and we learned some really interesting things on the manufacturing side, this has become an initiative that we've become really keen to lay our hand towards.

We also recently -- more in the middle of the slide here, we also announced that our hearing loss program, where we manufacture auditory neurons to treat the loss of that particular cell type, has been partnered with the William Demant Invest Company, which has been -- which will provide multiple years of development for that program.

So a lot of things going really well. It's not an accident that we have really been looking to find partnerships to be able to advance this because our platform really provides an opportunity to be very productive. You, me, we have 200 different cell types. That's about 200 cell types of the human body. So there's a lot of opportunities to manufacture replacement parts and deliver those to patients and really outperform what small molecules and antibodies are incapable of delivering in the right setting. You have to choose the right setting.

All right. So how do we do this? First thing we do is we expand the cells. We start with the pluripotent cell line, we expand those cells to a great number. And then part two, we then convert those cells into the specific cell. That's where a lot of our IP is coming from is our ability to manipulate and control the lineage, i.e., the name of these different cell types in order to make the cell type of interest, so very pure populations of cells. Gene editing is not required. It is optional. If you want to impart certain properties into your cells, you can do that. For the most part, we haven't done that. We're looking to replace exactly the cell that your body already relies on.

We have done some very special things in the setting of manufacturing. We have been able to develop a multibank system. This is in a GMP environment where our master cell bank, any of those vials can give rise to a working cell bank and any of those vials can give rise to our product. The multiplicative advantage of that is that you can get into millions of vials. Now we don't have millions of vials of our product candidates sitting in freezers, but having reduced this to practice, showing that we can pull a vial and make whatever comes next means that we do have the chain. We have reduced practice to chain that can give rise to millions of vials at the point at which we need those millions of vials.

And that's a very significant point that I wanted to make today because there's so much attention in cell therapy, including in especially non-oncology cell therapy around the clinical data. But I think that there's a missing part of this that's still being caught up that you don't have a commercially viable product unless you can affordably produce it. And so we use this independent banking system, this 2-stage system in order to actually do that. And again, we have reduced this to practice in the lab in the GMP environment.

All right. Manufacturing is really important to us. This is what we call table stakes. What I mean by that is you're not playing for the pot unless you actually bring this to the table. So you cannot ignore this. These are the properties that we have brought into our lead program, OpRegen, for dry age-related macular degeneration, where we have been able to show that we can durably improve both the anatomy and the function of patients who are suffering from dry-AMD with geographic atrophy. This is partnering with Roche and Genentech. This was a $670 million biobucks deal that we signed a few years ago. Roche and Genentech are running a Phase II clinical trial for this program right now.

This is one of the leading causes of blindness in this country, dry age-related macular degeneration. There are a couple of approved therapies to treat this, but we believe that they are woefully inadequate and are leaving a lot of opportunities still on the table because they don't actually improve vision, they just slow the progression of the disease by about 20%. We have cases of patients that may appear to be what I think can be considered reversing the condition or at least halting its advancement. We do this quite simply by manufacturing the cells that are lost in this disease. We manufacture the retinal pigment epithelial cells, and we transplant that, a onetime injection to the back of the patient's eye.

We saw something, it was sort of a happy accident. We saw this really interesting phenomenon when we put the cells right on the area of atrophy rather than sort of in the neighborhood, we got these extraordinary clinical effects. This frame on the left here, that yellow outline, that shows you where the cells were delivered. Those represent extensive coverage, i.e., we covered the area of atrophy. We covered the wound. On the right, when we were initially doing this, we tried to stay away from the wound. We wanted to be careful as a Phase I clinical trial. And that shows you what limited coverage looks like. The cells were delivered away from the area of atrophy, which is somewhat defined by the shinier, brighter central area.

So we've taken our patients and broken them into two different groups. What we saw among those patients who got the cells right in the area of atrophy was anatomical improvement that never happens naturally. Human beings cannot regrow their retinal tissue, but we saw these anatomical changes that were consistent with the replenishing or a restoration of the tissue.

Now I know a few of you go home and look at like, high-resolution OCT images, so we sort of cartooned them in so you can kind of understand what you're looking at. And you can obviously see for the patient at baseline did not have continuous layers, critical layers necessary for your vision. After treatment with OpRegen, there was a normalization of that structure. And this happened every time we delivered the cells right on to the area of atrophy, we saw this phenomenon.

This phenomenon can be quantified, and you can map this and graph this, which our partners, Genentech, have done and presented at a number of major medical meetings. And what they have seen is that when we do cover the area of atrophy, we can see an increase, that's your upper blue line above baseline, increases in key levels of layers of the retina relative to what is normally expected in this disease condition, which is the loss of retinal integrity. Importantly, very importantly, this was associated with improvements in function, i.e., people saw better. So it's not just anatomic improvement, but you have a clinically meaningful increase in vision which has lasted for years from a single administration.

That blue line, you will not find that in the natural history of the disease. People get worse with this condition. So what you're seeing there is people had a very rapid increase in just a couple of months, upwards of 5, 6, 7 letters, and it's persisted for several years. In contrast, the contralateral, i.e., untreated eye, you can see the patients are losing.

By the way, those are contralateralized in this patient set. If you were to look at a patient population and just track them, that lower line looks much worse. You're losing about 4 letters a year very predictably out to -- you'd be minus 11, minus 12 letters. By the way, also on the leading therapies, you'd be minus 11, 12 letters at 3 years. Instead of being plus 6, you're talking about 15, almost 20 letters difference after a single administration. Not 36 pokes in the eye, a single administration of RPE cells.

It breaks out, it looks even more compelling when you look at extensive coverage of the area of atrophy versus limited coverage. So this is all hanging together, the anatomy and function. The ongoing study right now does not have a data report yet, but we're really excited. We're hoping for an update at some point from our partners. But it is an open-label study. So presumably, they're seeing the same kinds of effects that we saw, but we don't know. But we certainly look forward to the partners providing an update on this program because we may be rewriting what the medical techs say about this disease and whether it is truly progressive and degenerative and irreversible. Maybe it isn't.

A key takeaway from this is that when you believe that your lead program is successful and it's based on certain principles and hallmarks, you want to repeat that success. So we are looking at ways that we can apply this restorative approach using other cell types in patients. Coming back to this. The things that we learned in these table stakes that I said at the beginning of the presentation remain intact, and they are important tenets or principles for us in how we develop our programs. You need to have your manufacturing, it's not just about clinical data.

We are doing this technology also in spinal cord injury patients. You can imagine car crashes, diving boards, everything that you think of, robbing the lives of young people typically from their future because of the loss of mobility. About 30 patients have been treated with this therapy so far. The hallmark, of course, is the loss of mobility, right? If I turn my hand like that, that doesn't look like very much, right? But that's an ability to manipulate a wheelchair, right? I can now get around. So even small gains in my upper extremities as a patient with a debilitating injury can have huge impacts in terms of the quality of life.

So we manufacture a different cell type. Obviously, we're not putting retina cells into the spinal cord, we're replacing the cells of the spinal cord. These are oligodendrocyte progenitor cells. They're responsible for the myelin. They are the electrical sheath for your nervous system. These wires here, they wouldn't do a very good job of carrying currents if they weren't wrapped in the insulation that's housing them, so it's the same principle here. We're using the cell type that is lost in a replaced and restore strategy.

This also is allogeneic, which means this is an off-the-shelf therapy that would be appropriate for everyone. We don't take cells from the patient, manipulate them and put them back. That's profoundly expensive because it's a custom therapy. This is a therapy that would be fit for all.

There are a number of mechanisms of action that we believe could be applicable here, preventing the cavitation, which is the gap, right, spackling the hole. Myelinating the axon is necessary for coordinated mobility. Neurotrophic factors are probably supportive in this setting. What we've seen is that patients who receive these cells -- this is not a control of the comparative study, but against historical control -- seem to be doing better, right? This was evocative Phase I data that people with very severe injuries seem to be having increases in mobility. So this is something that we want to get ready to advance into a comparative study to figure out what is the magnitude of benefit that these patients are enjoying from this intervention.

If you can move someone a couple of levels from a cervical level 4 or cervical level 6, huge changes in the cost of their therapy and the quality of their lives. Quite importantly, this clinical study was remarkably safe from an AE perspective. 534 AEs, but remember, we're talking about car crashes -- cervical injuries. We're talking about car crashes and things like that. So there's a lot of problems with these individuals, they have problems regulating the entirety of their body. Only 1 of those 534 AEs was potentially related to OPC1. It was a grade 2 dysesthesia. It's [ auto-resolved ]. So we think that we've got an opportunity here because we have a very nice safety profile, which might encourage us that even a relatively small increase in mobility could be sufficient to support approval for this kind of intervention.

We saw that the cells have been resident. They're not being rejected. One of the nice things about working in the eye, working on the spinal cord is you have some immunoprotection. So patients are on very short-term immunosuppression, 60 to 90 days for those 2 indications. That's probably more than needs to be. It probably could be even shorter. We didn't push the limits of it. But we've never had a case of rejection of our cells reported from those programs.

This has all been fairly recently published just a few years ago, all the publication comes out. I don't know that anyone has longer follow-up data in cell therapy. This is one of the earliest approaches of its kind. So you're talking 7, 8, 9, up to 13 years of follow-up data. No one's growing tumors. There's no cysts in these patients. Like -- the industry has figured out how to control those problems. So some of the archaic fears of cell transplantation probably need to be revisited because they just have not appeared, certainly at least not in our hands.

What has happened in our hands is we've gotten much better at controlling how we make the cells. The clinical data that I just showed you, this is an impurity profile from those cells, the gray bars, upwards of 20% of other stuff that you're not actually trying to make. The stuff that we make now is represented in orange, you can see how much better. We're getting nice, pure populations. And of course, nowadays, you can bring bioinformatics into that.

So look at the top left of the box, I marked off here, epithelial cells. Why would you want epithelial cells in your spinal cord? You don't. But that's actually what led to that evocative clinical data. But now we make a lot cleaner stuff. So -- and I don't think it's just Lineage, I think we're world class at this. But as a general matter, non-oncology cell transplantation has really matured as a field. And I think you're seeing it in the hands of a number of companies. We are among the leaders, but you're seeing a lot of really exciting data because people figured out how to make the right stuff, control it, scale it. Some have figured out how to scale it.

It's a really exciting and I think emerging branch of medicine relative to CAR-T. CAR-T is amazing, right? Revolutionized oncology. It's a pillar in there with chemo and surgery. But non-oncology, I think that's the future. I think that's the untapped potential, and we're trying to be ready to be there.

I'm going to skip past just very quickly. We've got this really cool device for spinal cord is it allows you to deliver the cells while the patient is breathing. You don't have to disconnect the patient from the respirator or you have to get the cells in. You can push the cells in over 4 or 5 minutes. This is an ongoing study, but for the sake of time, I just want to move past it a little bit faster.

And I want to get to the end, I want to talk about looking ahead. Part of our strategy is as we have increased our confidence in our lead program going forward. As we imagine that we might have a better cost of capital in the future, we want to repeat this success. We want to take this program, and we want to apply it into other areas that we see opportunity. We want to go from being defensive to offensive if we want to pick the areas of interest to us.

And that's where we've done things like our hearing loss program, which -- when we launched this -- because we didn't have to do -- we don't have to screen small molecules. I don't have to create an assay, I don't do structure activity relationship. We just know that the auditory neuron works. We got to figure out how to make an auditory neuron.

So we were able to decide that we wanted to do this program, right? No wet lab work, just sitting around with papers saying, "You want to do this?" Within a year, we have started preclinical testing, right? That speed is incredible. We put less than $1 million in that year into this program in order to birth it.

Just recently, we announced this partnership with William Demant Invest. They're going to put in up to -- assuming the program continues, they're going to put in the next $12 million in preclinical investment. So we put in $1 million, and then we've been able to attract a partnership that's going to fund some of the early high-risk program. In an environment where you've got kind of a bad biotech tape and cost of capital is really high, finding partnerships for early-stage programs is a great way of advancing your business, right? We could imagine that we could have a whole basket of opportunities like this. So really happy with what we're doing here by having, as I say, a number of different opportunities for partnerships with groups like Roche, groups like William Demant.

All right. What else is happening at the company. We have a photoreceptor program. We, not too long ago, uncoupled this from some earlier IPs to get us unencumbered from some third-party rights that we have, which I think increases the value of that program. RND1 is an undisclosed indication that we have. We're not a gene editing company, but I think the future of this technology will incorporate gene editing and gene engineering. So we have brought in some of that technology through an alliance with Factor.

Remember, I understand there's excitement around in vivo editing, plus a little scariness around in vivo editing. We're not doing that. Everything is ex vivo. So we can check what we have before we put it into a patient to assure that we have the stuff that is exhibiting all the right properties and characteristics through our analytical processes.

And then this morning's announcement around ILT1, type 1 diabetes. I said this at the beginning, but I think it's a point worth repeating. A challenge with diabetes is you're talking about needing, let's say, on the order of 10 to the 14th cells, right, like 100 trillion cells because the dose for a diabetes patient is probably in the neighborhood of 1 billion cells per person. In the retina with macular degeneration, it's probably in the order of 100,000, right? So you have a massive change in what you're trying to do. So you have to be able to scale that.

And if you have -- there's not enough T75 flasks in the world to support the entirety of the diabetes population. So you have to have different approaches. You have to have banking modalities and you have to have differentiation modalities that can actually generate affordably, the number of cells that are required to treat a meaningful patient population. Otherwise, you're just doing a science experiment.

So I don't know if we're going to figure it out, but we have a reason to want to try it because we have actually learned some really interesting things. I'm very excited about this new program. Whether this ends up being a future partnership opportunity, whether we enter the diabetes program, diabetes field ourselves, to be determined. I don't know, we'll see what happens. But we know that there's a big problem in this area of the field, and we want to see if we can solve it.

So with that, I think it's a fascinating company. It's a lot of attention. People always ask what's going to happen with your lead program, when is data coming. We don't know. But it's a really great program. It's shown 3 years of exciting clinical effects, and we'll wait and see. But in the meantime, we're encouraged by the advancement of that program and are investing in a much longer and greater future for the company. So thanks very much for your attention, and I'd be happy to take some questions out there in the back.

Great. Thank you so much.