Welcome to the Lineage Cell Therapeutics third quarter 2021 conference call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the investor section of Lineage website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage. Any recordings, reproductions, or transmissions of this call without the express written consent of Lineage are strictly prohibited. As a reminder, today's call is being recorded. I would now like to introduce your host for today's conference, Ioana Hone, Director of Investor Relations at Lineage. Ms. Hone, please go ahead.
Thank you, Chris. Good afternoon, and thank you for joining us. A press release reporting our Q3 2021 financial results was issued earlier today, November 10, 2021, and can be found on the investors section of our website. Please note that today's discussion will contain forward-looking statements within the meaning of federal securities laws, including statements regarding our strategy, goals, product candidates, clinical trials, data announcements and updates, anticipated regulatory meetings and interactions, planned manufacturing improvements, financing, cash management and runway, anticipated collaboration opportunities and benefits and commercial potential.
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. Actual results or performance may differ materially from the expectations indicated by our forward-looking statements due to known and unknown risks and uncertainties.
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 in our filings with the SEC, including in our quarterly report on Form 10-Q filed today, November 10, and our annual report on Form 10-K for the year ended December 31, 2020.
With us today are Brian Culley, our Chief Executive Officer; Kevin Cook, our Chief Financial Officer; and Gary Hogge, our Senior Vice President of Clinical and Medical Affairs. Brian and Kevin will provide some prepared remarks, and then all of the executives will be available for questions from analysts. With that, I would like to turn the call over to Brian.
Thank you, Ioana. Good afternoon, everyone. We appreciate you joining us on the call today. As you will have seen in today's press release, the Lineage team had another productive quarter. Most notably, we delivered additional positive clinical data from our lead asset, OpRegen, which is intended to treat dry age-related macular degeneration with geographic atrophy.
We also took important strides to advance our OPC1 program to treat spinal cord injury. We continue to grow our executive team with the appointment of Mr. George Samuel as our General Counsel. Lastly, we continue to generate awareness for the company, our data, and our mission through various investor and medical events, presentations, and other engagements. As I say each call, Lineage is pioneering a new branch of medicine.
Our approach for each of our product candidates is to manufacture differentiated cell types with all batches forever produced from a single cell line and transplant those differentiated cells into the body in order to restore or improve function which has been lost due to aging, injury or disease. Simply put, we believe that if a certain type of cell in your body is dying or dysfunctional, you need to replace that specific type of cell.
As a reminder, our approach does not require any gene editing or reprogramming of the cell's original DNA. It's impossible to perfectly control those edits, and there are unanswered questions about how often they will lead to clinical complications. These safety concerns are not theoretical, as you've probably seen recently in reports from companies which employ them.
We aren't involved in the debate over which editing approach or platform is best because we avoid these risks entirely. When we manufacture our cells, we harness the natural developmental programming contained within each of our single source cell lines. This regenerative medicine platform, which we own, is broad and powerful, not only for the value of our three current indications, but also because our cell transplant approach might someday be applicable to a large number of additional cell types and address many different unmet needs.
We view our approach as the path to reaching our long-term goal of becoming the leading cell therapy company. With that, I will turn to a brief review of our recent accomplishments and set some expectations for the remainder of this year and early 2022.
I will as usual begin with OpRegen, our lead product candidate intended to treat dry AMD with GA, a disease with no FDA-approved treatments. Our approach to treating this disease is to transplant healthy new retina cells to replace or support the ones that have died or are dysfunctional. Replacing the entire cell avoids risks and limitations inherent in approaches that target just a single pathway, which may be insufficient to drive a clear clinical benefit, or gene therapy approaches which target a certain mutation which might only be relevant to a small subset of patients.
Importantly, we now have evidence that our approach can not only slow the disease process, which is the objective of the leading companies in this space, but also even halt or reverse an area of atrophy, which obviously would have a far greater impact on disease progression.
We've shown evidence of this reversal of GA in three patients so far, particularly in those who received a fulsome covering of our OpRegen cells across their atrophic area. This phenomenon is something we refer to as retinal restoration and is identifiable by the new appearance of critical layers of retina, and specifically the presence of new areas of RPE monolayer with overlying ellipsoid zone, external limiting membrane, and outer nuclear layer, all of which were not present in previously confirmed atrophic areas at the time of baseline assessment.
This is a remarkable clinical observation, which is achievable with just a one-time administration of RPE cells performed in about 30 minutes under local anesthesia. We believe our approach may have an enormous advantage in terms of compliance, convenience, and benefit over traditional drugs being developed by competitors that require monthly or semi-monthly injections.
We also have seen phase III data from one of the leading complement inhibition companies, and it is unclear whether that data will support approval. If we assume that it does, given that that product's clinical benefit was somewhat modest, it clearly leaves abundant room for improvement and opportunity. Retinal restoration data, which we have previously presented, is something which has never been shown with any complement inhibitors or oxidative stress reducers. In addition to that anatomical observation we have reported, we also have seen functional improvement in the majority of our patients' treated eyes.
In contrast, visual acuity declined in the majority of our patients' untreated eyes. Now, seeing these benefits, even in a small population, is exciting, but visual acuity can be a difficult assessment to rely on in clinical trials because the size and location of atrophy only broadly correlates with vision.
For this reason, we expect our primary efficacy endpoint in a registrational trial will be the change in the rate of growth of atrophy over time, which is similar to what is being pursued by companies like Apellis and Iveric. Overall, the data set we are collecting includes both functional and anatomical evidence, which further reinforces our belief that a suspension of OpRegen RPE cells can generate clinically meaningful outcomes in patients with dry AMD with GA, and particularly in those with earlier stage atrophic disease.
Looking ahead, we will be providing an important clinical update at the 2021 Academy of Ophthalmology annual meeting, which takes place this week and through this coming weekend. Dr. Michael Ip, who is a retinal imaging expert from UCLA's Doheny Eye Institute, will present new imaging data which he and Dr. Goswami have generated from our cohort four patients.
Now, you're already aware that we have reported retinal restoration using high-resolution OCT imaging, which is necessary because of the inability of older FAF technology to detect our healthy RPE cells. We more recently have performed a sub-study analysis of that same data using a separate technology known as 3D OCT. 3D OCT is a validated Part 11 compliant image grading software, which can provide quantitative information on the thickness and area of key layers of the retina.
Using this approach, we can interrogate not just the boundary of GA as defined by the formation of new layers, but now we're able to report on the individual measurements of thickness and volume of atrophic areas such as the outer nuclear layer or the RPE-Bruch's complex. Dr. Ip also will provide a general clinical study update.
What we're most excited about in the coming days is being able to provide a second separate method of measuring retinal restoration, and for that data to again come from an independent and highly respected group of experts. Because this presentation will be made at the largest ophthalmology meeting in the world, we are hopeful that these data will foster greater professional awareness of our program.
In addition, we also are working with our advisors to prepare for multiple engagements with FDA to discuss aspects of OpRegen's designation, our manufacturing plans, and the design of a late-stage clinical trial. We anticipate the first of these events will occur in this quarter and will continue into the first quarter of 2022.
Throughout this year, we have provided a cascade of positive event updates from the use of OpRegen with increasing evidence of benefit, and the durability of those benefits has risen as more and more time has lapsed from the date of treatment. With our minimum 12 months of data on all patients available later this quarter, we are excited to move this program forward and unlock the potential of this approach.
Overall, we believe we are seeing the validation of our cell transplant approach with each passing day, and that the manufacture and delivery of replacement RPE cells eventually will be proven to be the most powerful and effective method for treating this degenerative condition. I next will move to OPC1, our cell transplant for treating spinal cord injury patients.
OPC1 is a one-time administration of oligodendrocyte progenitor cells, which are delivered directly into the area of spinal cord injury. As with dry AMD, there currently are no FDA-approved treatments for spinal cord injury despite many attempts. Our view of this indication is that it is very similar to dry AMD insofar as we may be able to demonstrate that transplanting a whole functional cell into a damaged area can accomplish things which are beyond the reach of traditional small molecules or other biologic approaches.
Those efforts have not yet led to any product approvals, so it's clearly time for some new approaches. Because a clinical effect alone is insufficient for commercial success, we've spent the past two years working on a new manufacturing process for OPC1. Our attention to this area led to tremendous advances in the purity, scale, and reproducibility of our OPC1 batches.
This new process was recently moved into our in-house GMP facility at a batch size which can support a registrational sized clinical trial. We expect to complete GMP production via this new process and with a new thaw and inject formulation in the first quarter of next year, ensuring ample supply of clinical material for the controlled study we wish to conduct in this indication.
At the same time that we are completing steps to introduce our newly manufactured lots into clinical development, we also plan to initiate an interim clinical safety study of a new delivery device through our collaboration with Neurgain Technologies. This new device was developed to help avoid complications and risks which could occur with an earlier delivery system. Obviously, delivering material to the spinal cord is a delicate procedure, and anything we can do to reduce patient risk is important to us.
We also have learned from the OpRegen program that careful placement of cells can be correlated with better outcomes, so it made sense for us to invest in superior delivery options. Two of the notable advantages of this new device are easier manipulation of the XYZ axes and the ability to deliver cells much more slowly because the patient can continue to be connected to a respirator during delivery.
This is a huge advancement over the prior method, and we are excited to be pioneering this approach. Over the past quarter, we completed the manufacture of clinical device prototypes and continued the required verification and validation work based on FDA input, which we received.
We expect to complete that evaluation this quarter, and immediately thereafter, we intend to initiate human clinical performance and safety testing with the new delivery device and plan to submit an amendment to our open IND in the first quarter of 2022. We also are preparing for an FDA interaction to discuss our cell manufacturing improvements, which we similarly anticipate to occur in the first quarter of 2022.
Interestingly, because this performance trial is focused on safety and delivery, we are able to expand the eligible patient criteria beyond the subacute population treated to date. We have feedback from FDA indicating their openness to us including patients with chronic injuries on this trial.
This is notable not only because it's generally easier to identify and enroll patients who have a chronic injury, but also because any hint of improvement in patients who have functionally plateaued for years would be an incredible finding. Now, to be clear, showing an improvement in mobility in chronic injury patients is not the intent of the study. It's just something we want to keep aware of. We didn't expect to see retinal restoration in the OpRegen program.
It's important to collect the data across a large number of parameters, and sometimes you find unexpected surprises. Overall, I'm pleased with the progress we've made to get all of these pieces to fall into place in a coordinated manner. We have the GMP clinical material, the new delivery device testing, and some new ideas on regulatory strategy all converging next year to support further testing of OPC1.
I'll conclude the OPC1 section by adding that the work that we have done on this program reflects our commitment to advancing nascent cell therapy technologies into commercially viable product candidates. I have said many times that cell therapy is on the cusp of a breakout, but that breakout will require a maturation from early or academic programs through manufacturing and delivery enhancements, and ultimately to the generation of controlled clinical data. The Lineage model is to serve as that bridge and facilitate the adoption of this new branch of medicine.
Now thirdly, I'll move to VAC2, our investigational off-the-shelf dendritic cell cancer vaccine. VAC2, as many of you will recall, is comprised of mature dendritic cells, which we manufacture from proprietary established cell banks, which are then loaded with a tumor-specific target or antigen to instruct and deploy the body's immune system to attack and eliminate cancer cells.
Our partner, Cancer Research UK, continues to be responsible for this study, but enrollment has been impacted by COVID restrictions across the U.K. CRUK is still working on enrolling the final patient into the study, and following completion of enrollment, we anticipate additional clinical data will become available and recorded.
Because the trial operationally is out of our hands, we're unable to accurately predict when that final patient will be treated. I will share that I am increasingly frustrated by the pace of enrollment in this trial. We have initiated steps to address this situation so that the VAC2 program can advance in a more predictable fashion under our direction and control.
Meanwhile, our focus is on making improvements and modernizations to the VAC manufacturing process, which will help prepare VAC2 for future trials and provide competitive advantages for any future VAC programs we may design in advance.
This manufacturing-focused investment is similar to what we did successfully for both OpRegen and OPC1 and is core to Lineage's competitive advantage in cell and gene therapy. As part of the manufacturing enhancement process, we aim to enhance the flexibility of the VAC platform because one could theoretically insert any antigen into our dendritic cells, and we believe the VAC platform is therefore capable of producing a tremendous number of product candidates, with each one being distinguished by the specific antigen which our dendritic cells are presenting to the patient's immune system.
This opens up a large number of potential corporate partnerships by allowing us to use our dendritic cells as carriers for other companies' antigens while simultaneously retaining the option to advance our own programs. These partnerships can diversify our oncology pipeline across more programs and provide new opportunities for success without the financial burden of independent development.
As you're aware, we already have the first instance of this with our glioblastoma program, which we have partnered. Overall, I believe we have continued to execute on our plans and generate valuable progress by advancing all three of our clinical programs and further strengthening the company's capabilities. With that, I'm happy to turn the financial update over to Kevin.
Thank you, Brian, and good afternoon, everyone. Let's briefly review our recent financial results. Total revenues for the third quarter were approximately $2.3 million, a $1.7 million increase from the same period in 2020. This increase was due primarily to increased royalty revenue from a certain partner based on an updated communication to us regarding the royalties owed.
Total operating expenses for the third quarter of 2021 were approximately $8.1 million, an increase of approximately $900,000 as compared to the same period in 2020. That increase was primarily related to increased litigation expenses related to the Asterias deal, as well as share-based compensation expense.
As a result of these items, our loss from operations for the third quarter was approximately $6.8 million, an increase of $100,000 as compared to the same period in 2020. The net loss attributable to Lineage for the third quarter of 2021 was $7.8 million or $0.05 per share, as compared to a $7.8 million net loss last year, or $0.05 per share for the same period.
Turning to the balance sheet, the company ended the quarter with approximately $65 million in cash equivalents, and marketable securities. That wraps up the financial section. I thank you for your time, and we'll now turn the call back over to Brian.
All right. Thanks, Kevin. I want to spend the last minute or two here just being really clear about some of the events and milestones that we anticipate. First, just three days from now, additional interim data from the OpRegen clinical study will be featured at the 2021 American Academy of Ophthalmology annual meeting in that presentation I described by Dr. Michael Ip.
Before year-end, we plan to provide an additional data update which will be able to include a minimum of 12 months on all treated patients in the OpRegen study. As a reminder, that is the primary endpoint for that study, a 12-month observation period. We also have multiple interactions with the FDA planned, where we will discuss OpRegen product designation, our manufacturing plans, and later-stage clinical development.
Those steps are anticipated to begin this quarter and continue into the first quarter of next year. For the OPC1 program, we aim to complete the evaluation of the Neurgain Parenchymal Spinal Delivery system, or the PSD system, in non-clinical testing, and that is anticipated in this quarter. We also expect to complete GMP production of OPC1 via our improved and larger-scale manufacturing process using also our new thaw and inject formulation.
That is anticipated to occur in the first quarter of next year. We have an FDA interaction planned to discuss recent manufacturing improvements we made to OPC1. That's anticipated in the first quarter of next year. We're looking forward to initiating clinical performance and safety testing of the new delivery device with an IND amendment, and that submission is planned for the first quarter of next year.
With respect to the VAC programs, completion of enrollment by Cancer Research UK in the ongoing VAC2 phase I in non-small cell lung cancer is something we hope will occur in the first quarter of 2022. The continued development of the new VAC-based therapeutic with our strategic partner will be ongoing throughout next year. Thirdly, we'll be evaluating opportunities for new VAC product candidates based on internally identified or partnered tumor antigens, which also will be ongoing throughout next year.
At Lineage, we believe the field of cell therapy is poised for explosive growth and that scalable allogeneic off-the-shelf approaches, which are prepared in formulations that are optimal for clinical settings, have the ability to provide significant commercial advantages over autologous or patient-derived sources and methods. Our objective is to usher in the new branch of medicine using our proprietary differentiation protocols.
I believe the data we have been generating is supportive of that goal. With that, I would like to thank you very much for joining us this afternoon, and operator, we are ready to respond to any analyst questions that we may have.
Ladies and gentlemen, if you have a question at this time, please press the star and then the one key on your touch-tone telephone. Once again, you will need to press star and then the one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question comes from the line of Mayank Mamtani from B. Riley. Your line is open.
Hi. This is actually William on for Mayank. I really appreciate you taking our questions today and great overview of your third quarter. Really a lot of good events that went on. Was just curious in regards to your upcoming FDA interaction for your OpRegen. I was curious if you'd be discussing the, and I might have this wrong, the 3D OCT that you said that you'll be highlighting at AAO coming up this weekend, and then the possibility about incorporating this into later studies and also just kind of at a high level, in your discussions with the FDA, will you be communicating these conversations broadly to the public and what we might expect overall?
Let's get Gary Hogge involved in that question. Gary, are you on track for that?
Sure. Thanks for the question, William. Yes, certainly the Doheny data would be incorporated in any discussions we have with the agency because they have provided supporting evidence of retinal restoration and treatment effect. Again, it's done in an independent fashion. They use OCT images, which have already been obtained as part of the study, and they review those independently.
Basically what that system does is it looks for thickness and volume on a layer by layer basis, and they compile that over time, and then they produce these heat maps, and you show the improvement from baseline to the one-year primary endpoint.
We definitely incorporate that into discussions with the agency about potential designation changes, or incorporation into a subsequent clinical study to show again that there's treatment effect, not only on the area of geographic atrophy but throughout the layers of the retinal structure that's of interest.
Then, I guess just high level or then, with those, because there are, I believe you said there would be multiple FDA, will you be communicating those findings in an ongoing process? Then-
Yeah. Sure, William. Sorry, William, I should have jumped in for part two. For competitive reasons, we obviously won't be previewing our regulatory strategy or discussions. After we hold the FDA meetings and we have the specific feedback to the plan that we will pursue, that is something that we absolutely would be sharing.
You know, typically for how Lineage does things, we would share that in abundant detail. You know, I have said several times that there are many designs which might fit well for our particular situation, including various adaptive or continuous phase II/III designs. The work is currently ongoing to determine the clinical plan that we will present to the FDA as our first and best choice.
As a reminder, we only completed enrollment on November 10th of last year, literally one year ago. Those patients have now just finally reached, literally today, the primary endpoint of one year post-treatment. I think we're on track and moving quickly, and any discussions on the next study design are going to need to include those data. They're being collected and analyzed, and that's why we'll expect that interaction in particular around study design would be something that would occur in Q1 of next year rather than Q4 of this year.
Right. Makes sense. Then one about OPC1. You mentioned that you have a new thaw and inject formulation. I was wondering if you could give any information on how that might be improved over your current formulation, sorry, maybe a higher level. Also curious maybe like cell viability or just any extra benefits that the patients might expect.
Yeah. The key advantages here, what we're really trying to accomplish, was a formulation that was ready to use. One of the headaches of most cell therapy approaches is the dose preparation. In particular for the OPC1, the prior study required the preparation of the cells. They had to wash out the medium and plate them and count them, and this work had to begin the day before. You had tissue culture activities and then eventually you could get that material into the patient the next day. That's a big headache. We have the technology and the experience, the success of doing that with OpRegen.
We deployed some of the same approaches in order to have a thaw-and-inject formulation, which will go from a frozen state right into the delivery needle and be administered to the patient without that long delay. We are putting those kinds of commercial planning and utility anticipation into practice while we are going through and working on things like scale or, you know, in all of our programs, whether we're following up on clinical data, et cetera. Those are some of the key advantages. I have an estimate of about a 90% reduction in the handling and manipulation costs and complexity. By the way, it also will help vastly reduce the possibility of a dosing error, which did occur in the hands of a prior sponsor at one of the sites.
There are a lot of advantages to having a thaw-and-inject formulation. As you did hear me say on the call, in the body of the call, that one of the things that we're really excited about is that we'll be able to administer our cells more slowly by using this formulation compatibly with the new device, because we will not have to take the patient off the respirator during the administration of the cells. Just as an FYI, I was watching some pre-clinical animal work very recently, and the administration of the cells is, you know, essentially automated. You know, everyone's pencil's down for five minutes while the cells are being administered.
It used to be a manual process where you were, you know, pushing it in quickly, and you had to hurry 'cause there was a clock running because the respirator was not functioning at that time. We think this is a huge and, you know, really underappreciated benefit to utilizing this new formulation with this new manufacturing process and this new device. We think it'll facilitate the clinical activity and even open up additional sites that maybe didn't have the capabilities to handle these cells, but they certainly have the ability to just thaw them at the bedside in the surgical suite and administer them.
Excellent. I really appreciate that extra color, and thank you for answering our questions today and look forward to everything at AAO. Thanks. Bye.
Appreciate that, William. Thank you.
Your next question comes from the line of Joe Pantginis from HCW. Your line is open.
Hey, everybody. Good afternoon. Thanks for taking the question. Brian, I wanna ask a specific question, and then I'm gonna get a little more macro. During your prepared comments, you gave us a little bit of a tease with regard to OPC1, saying that you're toying with new ideas with regard to regulatory strategy. I'm just wondering if you could provide a little more color on that comment.
Oh, boy, you're really putting me on the spot. That's good. Not yet. Here's what I can say, or here's what I'm comfortable saying, is that there are clinical settings, there are disease settings where the endpoints are difficult. I mean, dry AMD is one of them. You know, we all love to think that visual acuity is easy to rely on, but it's challenging, which is why the world shifted to more of an anatomical endpoint and GA growth. A similar situation exists in the setting of spinal cord injury. It's very difficult to demonstrate improvements in mobility because the tools and assessments that are generally collected are fairly crude, you know, three-point scales and so forth.
There are other assessments that have been in development in other companies or in academic centers for many years that are maturing and are probably more useful. The way that I would try to put a finer point on this is that I talked to a patient who was on this study, who received OPC1 cells, and he told me, "You know, I didn't score as high on one of the scales because the particular mobility, the particular movement which I had gained didn't register." He said, "But it was useful for me. I could sort of curl a finger and hold on to a mug or a cup." It was useful for him for independence and his ability to keep himself hydrated.
It never showed up as a benefit clinically because there was a disconnect between his gain of function and the score or the scale that was being used. Without going into specific details, there are other tools that are available, and I'm very interested in how we might reapproach some of that in order to increase our probability of success by narrowing the gap between what the cells and the therapy can provide and what is being measured. I have some experience with this previously in my career, and I think that there are, you know, I'm looking forward to hopefully getting some more information and being able to share more.
Conceptually, that's what I'm talking about, trying to make sure that what we're measuring is not just clinically important, but is also more closely tied to the benefits that we believe this therapy can provide.
No, that's really helpful. Thanks. I look forward to FDA visibility on their feedback. You know, going to the more macro front, as I alluded to, you have a lot of logistical things going on at the company, you know, manufacturing of your cells, you know, first and foremost, as well as, you know, your device initiatives with OPC1.
I guess I'll ask the question this way, you know, based on all those logistics that you have to deal with and are dealing with, do you have any impacts or have you had to, you know, change your plans with regard to all of the global supply chain issues that everyone's experiencing right now?
That is a very clever question. I'm proud that the manufacturing folks in particular were concerned about supply chain issues and brought it to our attention. We have done a lot of pre-purchasing of critical materials, and we have had the benefit of being an international company, right? We have approximately half of our staff located in Israel and half of our staff located in the United States.
There have been times where we have acquired or purchased equipment or materials in one country and shipped it to the other. By the way, sometimes you can find cost savings, but it's more important for us to have availability of those materials. I have heard stories about, you know, lack of availability of, you know, things as simple as pipette tips and plastic.
I'm a little bit more concerned with reagents, you know, key reagents, because if you are running a two-month long manufacturing campaign and you get to day 40 and you're supposed to add, you know, secret ingredient number seven and it's not available, you're done. The manufacturing team, which is the same team working on all three programs, right?
That's one of our efficiencies, intentional efficiencies about how we run the business, has been very good about advanced purchasing and basically stockpiling in particular things, materials or reagents that don't have expiration dates and so forth. Yeah, I hope that every company is able to avoid those challenges, but one easy way to solve them is to just, you know, order from multiple suppliers and know that you'll eventually be using that stuff.
That's really helpful. Thanks for that. It's obviously an ongoing issue, and it's nice to hear that you planned ahead and are dealing with it. I guess my last question is also somewhat macro focused, but on the VAC program. You know, beyond the non-small cell VAC2 and the lung cancer program, I guess, how would you characterize your ongoing BD discussions for additional antigens that people might be interested in?
How would I characterize those discussions?
The scope of discussions and how advanced or immature they might be.
You know, almost as a rule, Joe, it's a very good question. It's a very fair question. Almost as a rule, I try not to comment on business development activity or try to put any sort of potential or anticipation behind it because I have experienced, you know, huge global partnerships that fell apart, you know, 24 hours before they were signed for, you know, almost unrelated reasons.
What I would say is we maintain a high level of interest in engaging with different entities, actually a very broad array of entities, of form and type of those entities with respect to partnering. I'm far more comfortable letting something get signed and announced than to say, for example, I wanna have, you know, three of these this year or one big one this year, or any kind of guidance at all on partnering. I think we'll just let the surprises happen when they happen during the year on any of our programs.
Yeah. You know what, Brian? That's a very fair answer. You know, I had to ask it anyway because of the, you know, the potential around, you know, beyond lung cancer, you know, of the, platform potential of the, VAC. Thank you for all the color. Thanks a lot.
Great stuff, Joe. Thank you.
Your next question is from the line of Kristen Kluska from Cantor Fitzgerald. Your line is open.
Good afternoon. This is Rick on for Kristen. Thank you for taking our questions. To follow up on an earlier question on the multiple guided FDA interactions in upcoming quarters around OpRegen, how are you thinking about priorities and the potential cadence of regulatory discussions as you're thinking about moving the program forward?
Yeah. I'm gonna invite Gary to respond to that and provide a little bit more detail than we have in the past. Sure.
Sure. Rick, as we've announced previously, we've already got Fast Track designation, which affords us certain interactions with the agency, and some ability to have them help us guide the program. There are other designations that we can seek that we think we could fulfill the obligations to. One of them is RMAT, so that's a Regenerative Medicine Advanced Therapy designation.
You know, as the FDA reviews data, they can also suggest if they think that your data meet their expectations, you can also consider submitting for Breakthrough Therapy. In addition to our Fast Track, we're considering those two options as well. Taken together with our data, which again, we're one year post last patient being treated, those data are being analyzed and collected right now.
The study reports are being written, and we will review an end of study meeting with the agency to discuss the profile, endpoints, size, and scope of the next study. That would occur following the designation meeting.
Thank you for that answer. One more perhaps. For OPC1, you guided that you could move from non-clinical testing with the PSD system in Q4 this year to potential clinical and safety testing with OPC1 with potential IND amendment in first quarter of next year. Could you please discuss how rapidly you believe you could move from the IND amendment stage into clinical testing? Thanks.
Gary, do you have some thoughts on the gap between—I mean, I know there's a 30-day waiting period, but any further color on that readiness there?
Yeah. The agency will review a number of our supporting documents behind that. We'll work on the protocol. As Brian speaks to, there's the 30-day period of no comment. But the hope would be to, you know, obviously, to get first patient in as quickly as possible. You know, we haven't yet set a date on that yet, but as quickly as the agency would allow us, basically.
Okay, thank you very much.
Your next question comes from the line of Jason McCarthy from Maxim Group. Your line is open.
Hey, Brian, this is Michael Okunewitch on the line for Jason. Thanks for taking my question.
Hi, Michael.
Could you talk a bit about the importance of now having achieved statistical significance after the nine-month data in OpRegen study? If this gives you a clear idea of the expected effect size and what kind of trial size you need for later-stage studies, and are there any comparable trials we could look at to get an idea?
I think it's probably worth being clear that the statistical difference exists, which is wonderful, but we're talking about a difference of treated and untreated eyes, right? A population of data points over time. The size of the study, you know, details around the endpoint, all the things that everyone, including us, would like to know more about really are part of the output from our FDA engagement.
I think I can add that there are some precedents out there that are informative, right? If you keep in mind that the size of a study is a function of the N required for a statistical plan to give you evidence based upon some benefit or some delta, that there's sort of a zone of reasonableness.
If you, for example, ask on one end, where do you start getting sort of ridiculous as far as your benefit? What I mean by that is, if the bar that exists out there is slowing growth of GA, and we're reversing it, obviously, we have a whopping effect that can be observed in a very small number of patients. However, when you're doing registrational studies, there's also sort of a, you know, a realistic floor as to how many patient exposures the FDA is going to want to see in order to feel comfortable with granting a marketing authorization, right?
We have a scenario where there's sort of, you know, we can't become overly optimistic or overly aggressive because we run into the reality of needing to have enough exposures that we're satisfying the agency. That's one side. The other side is that if you make a study so large that you start to detect with statistical significance, even a small effect, right?
That becomes very silly, and that's where, you know, a 1,000-patient study or something like that's where you're showing statistical significance of some tiny little benefit, and that's not our objective. In fact, we've benefited tremendously from the Apellis data, which showed, across different studies, 12%-29%, 27%, I don't remember, percent range, right? That's kind of the floor, right? That's the comparison.
Setting aside frequency of treatment, safety profile, just saying clinical benefit, that's sort of the comparable floor that we're working with. I think that that's well supported by the future, you know, user community of saying, "We'd like to see, you know, 20%-25% reduction in the growth of GA."
All of that is to say that there are some reasonable boundary conditions, but I could shorten it to be like, you know, look, I think it's gonna be fewer than 300. I don't know. We haven't gone in. If you're looking for, you know, give me an order of magnitude reality check, the precedents which are out there and the size of the clinical benefit and the reference points from complement inhibition and the need to have enough exposures, you start closing down the range of what's possible.
You know, somewhere between 200 and 300 patients seems most likely to me, but we won't have the final number, and we won't, you know, make any further clarity on that until we actually have the output from that meeting with FDA.
All right. Thank you. Could you just provide a bit more granularity on when you're expecting to hear the output from those upcoming meetings, both the one for OpRegen as well as for OPC1?
Yeah. There's a whole series of events, you know, I covered them in the call. The most notable one around design of an OpRegen clinical study. That's a meeting that we'd expect to have in Q1 next year. OpRegen has several engagements. We've got completion of certain activities and then at least two engagements with FDA in Q1. There's actually a very heavy amount of FDA engagement that we anticipate in Q1. I will be clear that those engagements can vary. You know, you don't always have an in-person sit-down meeting. Sometimes big questions can be addressed through written correspondence. Sometimes it's a call. You know, we don't have everything determined.
You know, we leave it to the agency to direct us as to what they are looking for in terms of the form of meeting, et cetera. You know, Q1 is going to be somewhat of an incredible quarter for us because the number and substance of those regulatory interactions is so high, and that's going to inform so much around how long it'll take to run these studies, what do these studies, probability of success that people ascribe to these studies when they can initiate enrollment, et cetera, et cetera. It's a really important start to the year for us.
All right. Thank you very much. One more, if you don't mind. I'd just like to touch on you. You were talking earlier about the ability to do 3D measurement of the geographic atrophy. Is there a possibility that you could detect additional signs of retinal restoration beyond those original three patients where you've already determined it because you just didn't previously have the tools to measure it?
Yeah. I mean, I'm going to say yes, because I didn't expect to see retinal restoration to begin with. You know, is it possible? Absolutely. Perhaps, Gary, you could add something to how that technology works and what we might be able to learn from it.
Sure. Yeah. The good thing about it is this is being done independently in a blinded fashion. I think everyone knows they were treated, but the group that's doing the analysis don't know in advance who is or is not a retinal restoration patient. Independently, they've identified these areas of iRORA or incomplete retinal atrophy as well as cRORA repair.
Yes, there's a good possibility there may be additional patients that they will identify that are retinal restoration. We look to them to validate, and which they've done so already, the three that we've identified, potentially identify additional patients that show a clear benefit.
All right. Thank you very much.
You're welcome.
Your next question comes from the line of Dane Leone from Raymond James. Your line is open.
Hi. Thanks for taking the questions. Just one for me. When you meet with FDA, what is the primary endpoint that you would hope to establish, for running a pivotal study with OpRegen? Thank you.
Yeah, Dane, we're gonna embrace what all the leading companies are doing, which is the same form of change in GA area over time with three separate assessments. I think there's been some misconception in the past in some places. Not your place, but I think there's been some misconception because we've had this visual acuity data, which is so compelling that that would be what we would elect to pursue. I think that we view that as subordinate to being able to reverse the size of the GA. We would be monitoring the change of GA over time. We presume we would be proposing that just like the leading companies in this space.
The key difference is that we'd like to rely on OCT as the assessment tool because FAF is incapable of seeing our cells. So the deck is rather stacked against us with FAF because our cells are invisible using FAF. So it would be kind of ridiculous. It would be, you know, inappropriate. It's not a matter of futility. It's why would you use the wrong tool to try to assess it? So I don't think there's a particular level of risk. I don't think that the FDA is going to say, "No, FAF is the only imaging tool we would ever accept." That seems kind of ridiculous when the field, the experts in the field, I think are very well aligned that OCT is a more powerful and informative imaging tool.
I think people are going to be delighted that we would be embracing a better camera, a better imaging technology to measure essentially the same sort of anatomical changes over time. Gary, is there anything I left out there that I should add about that?
No, I think you've captured it. Again, everyone acknowledges that OCT is a superior way. Taken together, you know, with microperimetry and visual acuity and the other functional data, in addition to the structural data that the agency has already considered as an approvable endpoint, we think makes a compelling story for OpRegen to utilize that endpoint and show a true benefit to the patients.
Got it. Thanks.
Sure.
Great.
I am showing no further questions at this time. I would now like to turn the conference back to Mr. Brian Culley for his concluding remarks.
Well, thank you, everyone. As always, we appreciate your support as we position Lineage to become a leader in cell therapy and cell transplant medicine. We obviously still have more we expect to accomplish this year, but I think 2022 and even 2023 are gonna be even better as we continue to deliver and as awareness of our accomplishments continues to grow. Thank you very much and have a great afternoon or evening.
This concludes today's conference call. Thank you for your participation and have a wonderful day. You may now disconnect.