Welcome to the Lineage Cell Therapeutics fourth quarter and full year 2021 conference call. At this time, all participants are in a listen-only mode. 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 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 call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.
Thank you, Blue. Good afternoon, and thank you for joining us. A press release reporting our fourth quarter and full year 2021 financial results was issued earlier today, March 10, 2022, 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, plans, aims, objectives, thoughts, beliefs, development programs, product candidates, platform and pipeline, and their potential therapeutic applications and commercial potential, the timing of the announcement of additional product candidates, clinical trials, data updates, future payments, transfer of expenditures and activities under the collaboration with Roche and Genentech, anticipated benefits and opportunities from our existing and potential future collaborations, the achievement of milestones, anticipated regulatory meetings and interactions, planned manufacturing improvements, financing, cash management and runway, anticipated growth and commercial opportunities.
Statements made during this discussion that are not statements of historical facts 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 annual report on Form 10-K filed today, March 10, 2022. With us today are Brian Culley, our Chief Executive Officer, and Kevin Cook, our Chief Financial Officer. Brian and Kevin will provide some prepared remarks and then will be available for questions from analysts. With that, I'd like to turn the call over to Brian.
Great. Thanks, Ioana, and good afternoon, everyone. I realize there are a lot of companies reporting today, so we really appreciate you choosing to join us. This is actually the first time that I am speaking directly to you this year, and rather than providing the usual program updates, I've decided to frame our discussion a little bit differently, especially given the overall market conditions we're experiencing. My main objectives today are to provide some broader context around the partnering of our lead program, as well as a top-line view of how we plan to evolve and grow our business going forward.
We've heard from many investors who are surprised or frustrated by the current share price, especially considering the transformative deal which we entered into with Roche last year, a deal which we believe validates what many of us thought for years, that being that in the right settings, cell transplants may be able to deliver clinical outcomes beyond the reach of traditional small molecule approaches. I think this disconnect is being driven primarily by macro factors, which are negatively affecting the overall biotech sector. Without diminishing the importance of share price, I also want to make sure that everyone understands how we believe the Roche collaboration created value for the company in other areas and how it can continue to do so for years to come.
We believe this first worldwide partnership unlocked a whole new set of opportunities for Lineage, and there are many reasons for optimism over the short, medium, and long-term time frames, which I aim to describe for you today. 2021 was a successful year for our company in many respects, obviously capped off by the Roche partnership, which we announced in December. We believe that deal provides tangible and independent evidence of the potential for our approach to address multi-billion-dollar market opportunities. A commitment of this size by a global pharmaceutical company also provides an indication that cell therapy applications outside of oncology are reaching an important inflection point as a new branch of medicine. We believe it also provides a testament to Lineage's specific capabilities in this field.
Our accumulated directed cell differentiation know-how contributed to this collaboration, and we believe that experience and success can be applied to other therapeutic areas which we're working in. We therefore are eager to transfer that know-how to our other programs in the months and years ahead. We also now have the strongest balance sheet in our company's history. This is the result of the combination of the Roche upfront payment, capital which we raised in 2021 when the share price was significantly higher, and our continued approach to careful spending.
We take pride in the efficiency we believe we create in terms of product development progress per dollar spent, and we invite you to compare that metric with other biotech companies of our size and scope. We also made significant progress during 2021 with the development of our other programs, progress that we expect will allow us to move toward additional clinical trials of those products during 2022. Because all of our programs are based on the same core technology and because we have learned a great deal through the development of OpRegen, we are increasingly optimistic about our ability to have similar success with additional products over time. That success could arise in the form of additional partnerships with major pharmaceutical companies.
We may elect to develop one or more of our product candidates ourselves, eventually becoming a company which collects revenues from our own product sales if doing so is in the best interest of our shareholders. Now, I'd like to take just a moment to review the OpRegen partnership. You already know that Roche is one of the largest pharmaceutical companies in the world, and their products include some of the most widely prescribed ophthalmic therapies. Outside of oncology, only a small number of cell therapy companies have successfully attracted a big pharma partnership. To our knowledge, this was the largest license agreement ever signed for a non-oncology cell therapy product candidate.
In addition to the $50 million upfront payment which we received, we're eligible for up to $620 million of additional cash payments for the achievement of various developmental, regulatory, and commercial milestones. We also are eligible for tiered double-digit royalties, which could reach very large amounts in light of our expectation that dry AMD represents a multi-billion-dollar commercial opportunity. In addition to all of these potential payments, Roche and Genentech is now leading all OpRegen programs globally. That includes clinical development, regulatory interactions, and of course, commercialization. That means Lineage also will be offsetting the majority of its future OpRegen clinical and commercialization expenses. Lineage still maintains responsibility for activities related to the ongoing phase I/IIa clinical study, which, you may recall completed enrollment about a year ago, as well as certain manufacturing commitments.
We also have a pathway to provide input via multiple joint advisory committees. If it's determined to be beneficial for the program, at some point during the collaboration, Lineage could take on responsibility for later-stage manufacturing, but that would be subject to a separate and additional economic arrangement. We are extremely pleased with the financials of this deal, but I realize that some people may feel frustrated that they no longer will receive the frequent updates which they enjoyed while OpRegen was under development by Lineage. This is a common trade-off for getting this program into the hands of such a capable partner, one with the resources to elevate its probability of success. That being said, future public visibility into this program still will be available through channels that are required to be made public by sponsors or through disclosures made directly by Roche or Genentech.
As one example, at a virtual event following the Angiogenesis 2022 meeting in February, a Roche representative mentioned OpRegen as one of their therapeutics in development for geographic atrophy that has the potential to restore retinal structure and improve vision. OpRegen also is now listed among Roche's product development pipeline as RG6501. Investors who are interested in learning more from this event can access the information directly from the Roche website. We certainly look forward to being able to share information on things like the timing of the next clinical trial when those details become publicly available. We also expect that scientific papers, presentations, and any milestone payments which we receive along the way will become publicly available at various times during the development process.
If you're now wondering how our stock could have gone down after such a transformative deal, a deal that not only underlined the value of our technology, but also greatly strengthened our balance sheet and provided the potential for years of substantial cash flows, well, you're not alone. It's clear that the biotech sector is currently in the grip of a very bad bear market, which by some measures, is among the worst in the 40-year history of the modern biotech industry. In this context, Lineage appears to have suffered alongside the vast majority of other small biotech companies, which nonetheless is frustrating.
However, in my experience, and in the opinion of many experts, biotech companies that are well-financed and which continue to make clinical progress without necessarily needing to raise additional capital tend to be well-positioned when world events settle down and investment returns to such promising biotech companies. I think where we are today puts us in a great position relative to many other companies with respect to our ability to weather the current biotech storm to support my optimism. I'll note that we have been successful in outperforming our peers in both good markets like 2020 and in bad ones like 2021. Whether the world next experiences a rebound or a recession in 2022, I think that it'll be a very exciting time to be involved with Lineage.
In the past, you may have thought of Lineage as just a dry AMD company, and that is understandable since recently we mostly discussed OpRegen and didn't emphasize our other clinical stage products or the broad potential of our technology. Lineage has far more to offer than just OpRegen. We believe we are a leader among the growing number of regenerative medicine companies advancing an entirely new branch of medicine. With our newfound validation and capital, we have the potential to broaden and accelerate our work. OpRegen is our first product candidate to gain prominence, principally due to the restoration data we generated with our whole cell transplant approach. There are dozens of other cell types that we have been evaluating as potential development projects and which have the potential to address huge unmet medical needs, most often related to diseases of aging or a diminished health span.
Importantly, for such big-picture thinking, we have learned a great deal from developing OpRegen, and some of these new opportunities share important parallels with our RPE program. I anticipate that our future product development may be faster, cheaper, and easier than what we've accomplished already. Our team is excitedly applying the knowledge we've gained from the OpRegen program to our work in other products. Significantly, we're working to get two of those products to initiate their next clinical trials by the end of this year. Those products are OPC1 for spinal cord injury and VAC2, our cancer therapy. These product candidates have demonstrated promising safety and efficacy data in their initial clinical trials, but each of them required additional work to be ready for their next stage of development.
The work needed to go from these early trials to later ones, which includes things like production efficiency and precise cell delivery, can be among the less glamorous steps in drug development. They're also among the most important, because these are the fundamental characteristics which are necessary to enable a cell therapy product candidate to move from being an interesting idea to becoming a bona fide competitor with a clear line of sight to a global partnership or independent commercial success. These areas of focus also are anticipated to provide an attractive return on investment because they facilitate the ability of these assets to move on to later stages of development and greater investor visibility.
To that point, the pace of development of our OPC1 and VAC programs is accelerating, and I expect will continue to do so as the transition of OpRegen from Lineage to Roche continues to free up resources for our other assets. As I stated, we're working diligently to try and get both of these product candidates to initiate their next clinical trials this year. For OPC1, our efforts will be focused on initiating a clinical trial involving a new delivery device, as well as multiple interactions with the FDA to discuss cell manufacturing improvements which we've made, and additionally, our proposed design of a late-stage clinical trial in spinal cord injury. For VAC, our current focus is on making improvements and modernizations to the manufacturing process, which we believe will help prepare VAC2 for further clinical trials and provide competitive advantages to the program.
This year, we also look forward soon to the completion of the ongoing phase I clinical trial of VAC2, which is being conducted and funded by Cancer Research UK, as well as conducting internal efforts to support the filing of an IND for further clinical testing, which would occur under Lineage's direction in the U.S. Now, so far, all of the products that I have mentioned today are products that you have heard of before. With what we have learned from the development of OpRegen and the overall development of our technology across all three clinical-stage products, we have been evaluating dozens of other product opportunities that are possible using our technology. These are different cell types that could treat major medical needs that in many cases represent multi-billion-dollar market opportunities.
Out of those dozens, we have narrowed our focus to a small number, which appear to be the most attractive to us in terms of features like the total addressable market, the competitive landscape, the commercial production viability, and other many important features. I'm excited to announce that later this month, we are planning to reveal the first of these new indications, an entirely new product opportunity based on our in-house efforts. Although I'm not planning to discuss the specific application today, I can share with you that we very recently put appropriate intellectual property protections in place for this new initiative. Notably, we didn't have to spend $1 to acquire any third-party rights or buy someone else's asset. This is a homegrown program, the first of its kind for Lineage.
In just a couple of weeks, I plan to share the details of this new program, why we're excited about it, and how we were able to generate a new pipeline program so quickly and efficiently. Overall, I believe that the combination of a valuable big pharma deal, continuing to advance our current clinical programs, and then later this month, providing a first example of how our platform can rapidly and economically generate new internally owned assets will significantly elevate awareness and drive shareholder value for years to come. To conclude this overview, our objective is to be a leader in the field of cell therapy by continuing to provide evidence that off-the-shelf cells like ours can generate compelling safety and efficacy data in large commercial opportunities, and in some cases, deliver outcomes beyond the reach of traditional approaches like small molecules or antibodies.
During 2022, we will be singularly focused on the continued advancement of our current pipeline, as well as strategic expansion of our novel approach in settings where we believe we can make a significant impact on the human condition by capitalizing on what we accomplished with OpRegen and working to demonstrate additional examples of our replace and restore therapies. With that, I'm happy now to turn the call over to Kevin for a financial update.
Thank you, Brian, and good afternoon, everyone. I'll briefly review our recent financial results, but just a quick preamble before I dive into specifics. The accounting for the Roche collaboration strictly adheres to current GAAP standards, but it isn't necessarily intuitive, nor is it a perfect match to the timing of our actual cash flows. What's important to note from a practical standpoint is that we completed the transaction in December, and in January, we received the $50 million upfront payment from Genentech, from which we then paid out approximately $21 million to satisfy our downstream obligations related to the licensing, meaning we added $29 million to our balance sheet in Q1. For GAAP accounting purposes, we accrued all of the downstream expenses immediately upon signing of the deal in December, and we booked those under R&D expenses as dictated by accounting guidelines.
The $50 million upfront payment, however, was logged as deferred revenue and will be amortized over a longer period as we fulfill our obligations to Genentech. Because of this GAAP treatment, our financial statements and our earnings release reflect a big operating loss and net loss as a result of this timing mismatch of booking all of the expenses, but only a small portion of the revenue in the current period. The important takeaway is twofold. Number one, our operating cash flow for 2021 was negative $23 and a half million, which is right in line with the guidance we provided. That is a testament to our diligent focus on disciplined use of capital, as Brian mentioned earlier. This is one of our core operating principles.
That 23 and a half million of actual spend in 2021 is very different from our $49 million loss from operations that, again, is a result of the revenue expense mismatch via GAAP. The second important takeaway is that our cash balance as of January is $83 million, which reflects receipt of the $50 million upfront payment and payment of the downstream obligations. Okay, so that's my preamble. Now let's spend a couple of minutes on the reported results. Total revenues for the fourth quarter were approximately $1.2 million, a $0.8 million increase from the same period in 2020. The increase was due primarily to increased royalties and licensing fees in connection with collaboration agreements.
Total operating expenses for the fourth quarter were approximately $29.2 million, an increase of approximately $23.1 million as compared to the same period in 2020. Again, this was substantially driven by the $21 million in accruals for the downstream obligations related to the Roche deal. As a result, our loss from operations for the fourth quarter was approximately $28.2 million, an increase of $22.3 million as compared to the same period in 2020. Again, a result of the mismatch of deferring the majority of the revenues but taking all the expenses in the current period. The net loss attributable to Lineage for the fourth quarter of 2021 was $29 million or $0.17 per share as compared to a $2 million net loss or $0.01 per share for the same period in 2020.
Turning to the full year results, total revenues for 2021 were approximately $4.3 million, an increase of $2.5 million as compared to 2020. The increase was due primarily to increased royalties and licensing fees. Total operating expenses for 2021 were approximately $52.1 million, an increase of approximately $24.2 million as compared to 2020. Again, driven by the $21 million in accruals for the downstream obligations related to the Roche deal. As a result, our 2021 loss from operations was approximately $49.2 million, an increase of $22.8 million as compared to the same period in 2020. Once again, broken record, sorry, a result of a mismatch of deferring the majority of the revenues but taking all of the expenses in the current period.
The net loss to Lineage for 2021 was $43 million or $0.26 per share as compared to a $20.6 million net loss or $0.14 per share for 2020. Turning to the balance sheet, we reported cash and equivalents of $55.7 million as of year-end 2021. The cash and cash equivalent number as of the end of January 2022 was approximately $83 million because it incorporates receipt of our share of the $50 million upfront payment from Genentech. Accordingly, we continue to feel that our financial position provides us with sufficient capital to reach multiple value-creating milestones in 2022 and beyond. As we work towards these milestones, we intend to continue our efficient and disciplined spending.
We are proud to have made considerable progress in the past few years while maintaining a net spend level below $25 million per year, a level which we believe is meaningful, meaningfully lower than that of most companies with similar stage pipelines as Lineage. Looking ahead to this year, we likely will see an increase in our net spending because our plan is to create value by advancing two programs toward their next clinical trials. We still have certain obligations under the Roche agreement. Nevertheless, we expect to have capital resources well into 2024 and potentially further, subject to payments we may receive for future development milestones available under our Roche and/or ITI agreements. Further, depending on variables like grant money we might receive from entities like CIRM, opportunistic financings or additional business development arrangements we might enter into in the future.
That wraps up the financial section. I thank you for your time, and we'll now turn the call back over to Brian.
Great. Thanks, Kevin. I next will wrap up with a summary of the events and milestones anticipated by Lineage in 2022, and then, we'll go to questions. Later this month, as I explained, we will announce the first area of internal expansion of our regenerative medicine cell therapy pipeline. We aim to complete GMP production of OPC1 by an improved and larger scale manufacturing process and with a new thaw and inject formulation, which we have developed. We will continue to provide updates from the ongoing VAC2 phase I non-small cell lung cancer study. We intend to meet with the FDA to discuss recent manufacturing improvements we've made to OPC1. We are collecting data to support an IND amendment, which we expect will permit us to initiate a clinical study of a new delivery device for OPC1.
We're moving ahead on plans for an IND submission for a VAC2 clinical study to be conducted in the U.S. We'll continue the development of a VAC-based therapeutic for glioblastoma with our strategic partner, Immunomic Therapeutics. We will evaluate business development opportunities as both a licensor and licensee throughout 2022. As always, we'll seek to broaden the awareness of our work through participation in a large number of investor and partnering meetings, medical and industry conferences, and other communication channels. Our core principles are to advance an emerging technology ever closer to patients and physicians by providing the product attributes and rigorous clinical testing necessary to achieve commercially successful cell therapy products. To that end, we've made significant investments in areas like production, scale, purity, and delivery of our cells.
Our objective from these steps is to create best-in-class products for end users and strong competitive advantages to protect our products over the long term. There's a lot to anticipate from Lineage in the coming weeks, months, and year. We sincerely appreciate your support as we position Lineage to become a leader in cell therapy and cell transplant medicine. With that operator, we are ready to respond and take any analyst questions that may have come in.
Thank you. At this time, to ask a question, you will press star one. Again, to ask a question, you will need to press star one on your telephone. To withdraw a question, just press the pound key. Please stand by while we compile the Q&A roster. Your first question comes to the line of Kristen Kluska from Cantor Fitzgerald. Your line is now open.
Hi, everyone. Good afternoon. Thanks for taking my questions and looking forward to the update later this month. Wanted to ask a question on OPC1. I know that some of the changes made were based on longer term strategies in mind, including manufacturing and physician ease. As you look to start your next trial this year, how are you going to specifically think about measuring the level of success that comes with these updates?
Thank you, Kristen. That's a good question. The next trial for OPC1 is really about validating the new delivery device. That is something we obtained through a license agreement, an option agreement with a company called Neurgain Technologies. The advantages of that device include more precise delivery control, and it's more suitable for our thaw and inject formulation because it has an engineering design that allows the dose to be administered to the patient while the patient's respirator is still connected. There are safety and convenience components involved with that. This next trial is really just a safety study.
We are going to collect some of the conventional efficacy metrics, but it actually has a very short observation period for its primary objective, which is to show that this new SPD, is what we call it, can deliver our cells to the right location in a safe manner. That's a little bit different than demonstrating efficacy in a larger study, as you well understand. We have not yet made a final determination as to which datasets we will collect in a larger comparative study of OPC1.
That actually is a very important initiative for us this year because we have a view that spinal cord injury being an area which has not had anything approved and which frankly has not had nearly the same number of clinical investigations as some of the other more unfortunately frequent or common conditions, that there probably are opportunities to improve and enhance the assessments which are collected. That may also include the primary efficacy assessments that are used for registrational data and to seek approval from the agency. That is something that is very important to us and will be an important initiative for us this year because that speaks directly to one's probability of success in that setting.
Okay, thanks. I have a two-part big picture question without trying to ask about specific indications here. The first is just big picture when you think about new opportunities or indications. Do you think that the cells that are transplanted and the outcomes could differ based on whether the effect was due to cells lost from aging, injury or disease? The second part of that question is with OpRegen and OPC1 experience, one finding you learned was about best time of intervention and best chance of success. Do you think that those strategies are going to follow on no matter which indication you choose, though perhaps at a certain time it may be too late to intervene?
Yeah, those are very good questions. I think the answer to both is yes. We know that different cell lines behave differently. That's within the manufacturing the same type of cells. I think it is very safe to assume that different indications are each one will be unique. They'll have their own sort of tolerance with respect to how variable the cells that one manufactures will be. I do think that from a big picture perspective, although there is much that you can learn, this kind of pipeline expansion is not carbon copy. The way to approach this is to take the lessons in various categories and think about how each of those might be applicable to a new setting.
For example, there are certainly some parallels between RPE cells for dry AMD and oligodendrocyte progenitors for spinal cord injury, but they obviously have, you know, significant differences as well. I think that it is certainly correct that there will be an indication-specific set of subtleties that will need to be worked through not only for Lineage, but for any company pursuing this sort of transplant approach. I think it goes further and into the second question that, yes, I do expect that there is much to learn from timing, just as we learned a lot about the timing and placement of cells in the setting of dry AMD. I think those same kinds of lessons can be applicable to other conditions. Spinal cord injury is another nice parallel.
The data that was generated from animal studies indicated that a window of three to four weeks post-injury was the optimal window. It's possible that that might get refined further as more human data is collected. One could run an analysis on patient outcomes and perhaps learn that earlier is better, and perhaps that window would get more narrow or the opposite, maybe later is better. Just like small molecules have many considerations around dose and clearance and teratogenicity, there is a whole host of cell therapy or whole cell applications that share many of those same challenges. I think what's important for any sponsor is to keep your eyes open. Don't presume that you know exactly how the cells are going to behave in the body.
That sort of egocentric behavior can lead to destruction. It's really important to let the data speak and to interpret it in an objective manner. In doing so, you may find some wonderful surprises, as we did with the delivery of RPE cells across the whole area of atrophy in dry AMD, leading to much better outcomes than when those cells were delivered sort of farther away from the area of atrophy. Is that helpful to answer the question?
Yes, very helpful. Thanks. I'll squeeze one last question, if I may. Just, you know, you mentioned a lot about evaluating partnerships for the short, medium, long-term focus of the company. Do you think for opportunities that you're going to potentially look to out-license, should we expect something similar along the lines of OpRegen, where you would look to have some proof of concept in-house first in order to get more favorable economics or a deal size related to the one you had with Roche/Genentech, for example? Or, you know, do you anticipate these might be some earlier, or is it gonna be a mix?
Well, in terms of the economics, setting aside a partner's capabilities and credibility and all of that, just focusing on the economics, more is always better. It is always sort of a fun exercise to think about what is the right time in a product's life cycle to seek and hopefully enter into a corporate partnership. One has to consider your risk tolerance. You know, do you want to offset risk or are you comfortable with that level of risk? I think one of the things that the partnership that we entered into for OpRegen provides for us is an ability to advance our programs farther so that we can enjoy better economics, provided that the products continue to advance and generate compelling data.
It's entirely possible that we could retain any product that could be commercialized by a smaller company is one that we could retain even farther. There's an ongoing, I won't say daily, but there's a constant sort of question where a company or a sponsor can ask itself, you know, is this the right time to partner? What's our strategy? What's our plan? I think that how we approach the answer to that question is to maintain contact with the natural, most obvious potential partners so that they're aware of what we're doing without committing necessarily to an outcome a priori, and just making sure that if we ever get to the point where we say, "You know what? This would be a great time for us to collaborate.
Maybe we'll do a joint development, or maybe it'll be more like the Roche deal where they are controlling development and paying for it." I really think that all things are on the table. What I would add to it, however, is that as much as I really like the deal that we entered into with ITI, that is very much a back-loaded deal. That is, you know, fractional ownership of an asset with some later-stage payments that are largely success weighted. That kind of transaction is not big enough upfront to really sustain a company like Lineage over the long term, whereas a deal like what we entered into for OpRegen, you know, the capital that we retain from the upfront exceeds what we spent on an annual basis for several years.
We always would be interested, as I say, coming back to more being better. We try to develop products that have the attributes that can lead us to having the option to enter into those large kinds of deals. You know, pick spinal cord injury as an example. That's a rare disease. That's an orphan condition. Being able to hold onto an asset like that for longer because I presume it would not require a 2,000-patient registrational study, those are things that we can hold onto for longer, create more value internally, and then if we do enter into a partnership, presumably it could, you know, be on the scale of something that we did with OpRegen just off of phase I data.
Thanks, Brian.
Thank you, Kristen.
Your next question comes from the line of Mayank Mamtani from B. Riley Securities. Your line's now open.
Hi, this is actually William Wood on for Mayank Mamtani. Thank you for taking our question today. Really great to get the update from y'all today. Just one question I had when looking at your past earnings and this earnings. It looks like that both your OPC1 program, your meetings with the FDA, as well as your VAC program, has been pushed back at least 1-2 quarters. I'm just curious if there's any, what the justification or what the reasoning behind those pushbacks were and if that's now been alleviated.
Yeah, that's a good question. Thank you for including some of the buy-side presence on our call today. There are several reasons. I think the biggest one would be the attention that we put into completing the Roche agreement. Then also there are a lot of activities that are required in order to launch that initiative. The commitment and the resources available that we've put into that work has had an impact on our ability to maintain the same pace with other programs. Are there other factors like, you know, COVID and things like that? Sure. Overall, what's important to us is doing things correctly and doing things well.
You know, I could sort of joke that if we had spent the money to maintain those timelines without any slowdown, I'd be on this call, you know, with questions about how much our cash is available and how much our spending went up. I'm happy to not have to do that. I wish that those timelines had not been delayed, but they largely were delayed because we allocated resource to getting the Roche agreement for OpRegen in place and making sure that it is launched in a good way with their organization. If that meant I had to pull people off of VAC and OPC1, that was a reasonable thing to do at that time.
As I shared earlier in the call, I believe that those programs and their development will now accelerate as resources shift back from OpRegen onto those two clinical programs.
Right. Makes sense. Appreciate the clarity there. One last question on your OPC1 program. I believe in the past, your past clinical trials have targeted the upper mid cervical region. I was curious if this has the potential to target all regions of spinal cord injuries, including thoracic and lumbar.
Yeah. I think the answer is yes. To be fair, you said potential, so it's easy for me to say yes. The reason that we focused on cervical level 4-7 is that that's typically where you're wiring out to your upper extremities. Keeping in mind that we cannot address an enormous area of trauma, the injuries need to be smaller. They're not complete destruction of a spinal cord, you know, over a large area. In doing so, by focusing on those smaller areas of injury in the area where they wire to the upper extremities, what we're trying to do is help individuals, you know, control their phones, control their wheelchairs, you know, clothe and feed themselves.
In terms of quality of life and impact for the patient. That is an area of great focus. Now everybody, of course, loves to think about and talk about the potential for people who are in wheelchairs to leave those wheelchairs behind. I hope and expect that this field will get to that point, but that this field currently has no therapeutics approved. We think that just trying to achieve meaningful quality of life improvements for individuals in the area where most of us spend most of our time, and what I mean by that is that most of us spend time on phones and computers, or hobbies like, you know, painting. There are very few professional marathoners among us. There's a reason why we have focused there.
I do believe that it would be normal and expected that a product that had an effect in that area could be applied to other areas as part of an overall life cycle development, and that mechanistically it would make sense. I do think it would require some careful thinking about what it is you're measuring and how you collect it in order to be able to link the therapeutic that you put in place with the outcome that has some functional benefit for the patient.
Makes sense. That's it for me. Thanks again, Brian, and really congratulations to your team.
I appreciate that. Thank you very much.
Your next question comes to the line of Joe Pantginis from H.C. Wainwright. Your line's now open.
Hey, everybody. Good afternoon. Thanks for taking the question. Brian, I got two questions. The first one, it's a serious question, but I'm gonna ask it somewhat facetiously. I mean, you guys are in a very supply intensive environment right now on the manufacturing front. Obviously, it's a decent part of your burn. I guess when you consider, you know, in this day and age and all the problems with supply chains, I mean, are you getting everything you need in a timely basis? I guess the facetious aspect is, you know, are any of your supplies laying on train tracks strewn across in Los Angeles?
I know I can always count on you for good questions like that. Aside from a personal delay for a door, I'm not aware of any Lineage-related supply issues. Now you already are aware that our manufacturing facility is located in Israel, and so we have global acquisition capabilities. Meaning if we need a particular reagent, it's possible for us to obtain that through U.S. channels and ship it to Israel or obtain it directly in Israel. That gives us an extra point of flexibility. We also spent a considerable amount of money pre-purchasing certain critical reagents in anticipation of continued delays and problems associated with COVID and associated with supply chains. We certainly did not anticipate what's happening in Eastern Europe.
Nevertheless, I am not aware of any supply interruptions or slowdown of work at our manufacturing facility thus far. Of course, that is something that we will need to continue to monitor as it is a big concern. I will add, and this is not Lineage specific, although it does affect us, that one of the things that has been interesting is that it's become more difficult to get your contract slots for animal studies. That has been frustrating, I think, for a lot of companies. You can't quite move as quickly as you would like. It just means you have to plan a little bit earlier and anticipate these things.
That's actually very helpful and good to hear on the planning side of things. I guess I just wanna switch gears to talk, I guess, to the totality of the VAC program. Obviously, you know, you have a platform there, hopefully looking for some nice expansion over the coming years. I guess how should we look at it right now with regard to, you know, you're bringing VAC2 in-house, but more specifically, do you envision that you might do some internal VAC programs even outside of oncology potentially, versus, you know, the ratio of having more BD at the moment potential?
Well, I might be saying too much, but let me tell you where I would love to see VAC go from a big picture perspective. That is to refer you to some of these mega deals that get done based on platform technologies. From earlier in my career, gosh, it's now a long time ago, but I remember when target discovery and target validation was really hot, and you would see some of the large oncology companies would do 10, 20 or even 50 asset deals. These were really big deals around a whole cluster of potential targets that were coming from platform technologies.
One of the reasons that I talk about us introducing manufacturing enhancements and improvements and modernizations into the VAC program is I would like VAC, i.e., specifically the DC delivery platform of antigen presenting cells that are allogeneic. I would like that platform to become so robust and flexible that it will open the door for us to be able to secure one of these mega deals where a company comes in and says, "Hey, I have more antigens than I know what to do with. I have intelligently refined them down to my favorite ten. Lineage, how would you like to do a deal for ten antigens?
I'm gonna use your VAC platform for every single one of them." That is really what I would consider to be a wonderful success, because you can imagine that the economics from that kind of a deal could certainly fund an internally owned program, whether for an antigen that we currently have or an antigen that we maybe have an interest in or an antigen that we haven't even discovered yet.
The company's efforts today are to continue to generate data and validate that the VAC platform can be powerful and can deliver these very significant large T-cell responses, and doing that with the current antigen, TERT, but also making sure that the platform as a whole, from the RNA portion, the electroporation, the manufacturing efficiency and yield, that all of that is nice and robust so that we might have an opportunity to enter into these deals that can help fund our own internal development.
Fantastic. I appreciate the color, and I'm glad you did say more.
Thank you, Joe. I appreciate it.
Your next question comes to the line of [David Wang] from SMBC. Your line's now open.
Hey, Brian and team. Thanks for the update and taking my questions. I had two, one on the pipeline and then a financial question. Let me, you know, let me start with the pipeline one. In terms of OPC1 and spinal cord injury, you know, recognizing it's still early days, I'm just trying to think down the line a little bit. In terms of, you know, adoption and uptake, do you have any sense of how many centers, you know, you would like to see this product administered and be available at in terms of, you know, achieving commercial success? Is that, you know, given you have a device and then the need to administer cells, and then is that something that you think internally, you know, Lineage, would be able to commercialize yourself without a partner?
Let me go through it backwards. I think the short answer is yes. I think spinal cord injury, 18,000 per year, is a size and scope that a Lineage, not Lineage in current form obviously today, but a company like a Lineage, could handle the commercialization of a product like that. In anticipating that, whether it's ours or whether it's partnered, one of the things that we have done is that we have created a thaw and inject formulation which eliminates the dose prep steps. That is really important because that allows you to open a larger number of centers and conduct a larger clinical trial. We also are working on this new device, and the device essentially sits directly on the patient. You'd say, "Well, you know, is that really novel, Brian? Is that a big deal?" Yeah.
Do you have any idea how many different sized beds there are at trauma centers? You can't really make this. You can't use this giant contraption, all the scaffolding that was used in the past, because it's not turnkey. You have to almost make it bespoke for every facility, and that really fights against the commercial utility. When I was talking in my prepared remarks about how we invest in some of the less glamorous attributes of product development, these are exactly the kinds of things, and I highlighted that they provide a good return on investment because if a partner or an investor or, you know, our own interest in raising capital and launching products like this, it's going to be driven by the product profile and how easily or difficult it is to deploy that product into the field.
I think it's really exciting that it is a smaller, not smaller in terms of dollar. I think the dollar opportunity is very high because there's a huge unmet need from a patient perspective, but I think it's exciting that the number of patients and the frequency are such that this is the kind of asset that can really help company become tremendously successful. I should add that we have much better third-party economics associated with OPC1 than we had on OpRegen. There's even more reasons why we might wanna hold on to it for longer.
Thanks a lot for that. That's really helpful. Just my second question. You know, I did see you mention you did have some downstream commitments with you know, with the upfront payment from Roche on OpRegen. I'm just wondering, you know, does that split extend to the future milestones, development, regulatory, and then, you know, royalties? Should we kind of expect similar split in terms of the commitment, in terms of how much you book and you know, another third party would receive?
Yeah.
Yeah, Kevin.
Yeah, go ahead, Kevin. Thanks.
Yeah. This is Kevin. I can jump in here. The answer, the short answer is yes. The long answer is there are a few, you know, changes that might happen from milestone to milestone, but it's basically in the same zip code. Once we get to royalties, there's a different formula, and I think that's spelled out in the contract. Between now and, you know, and sort of the lifetime of our milestones, it's roughly in line with what you're seeing here.
Okay. Got it. That's really helpful. Thanks for taking the questions.
Thanks, David. We appreciate you joining today.
Your next question comes to the line of Michael Okunewitch from Maxim Group. Your line's now open.
Hey, Brian. Thanks for taking the questions.
Hi, Michael.
I'd like to start off with a big picture question. With the Roche deal coming out, what seems like, you know, a really opportune time where you have OPC1 at essentially the same place where OpRegen really gained steam, and now you have VAC advancing, how should we look at Lineage going forward? Should we think of OPC1 and VAC as the new main focuses? Or given the strength of your balance sheet and the new candidate to be announced, should we expect a more broad approach to cell therapy for Lineage going forward?
Thanks for your question, Michael. The thing that makes me very happy about the deal that we did for OpRegen is it allows me to share with you that the answer is both. We can more rapidly advance our VAC and OPC1 programs, and we can expand the scope of what we do. One of the nice things about new programs is that initiating them is very inexpensive. There are huge economies which we enjoy in our manufacturing because if you were to ask me what the most amount of time in manufacturing is spent waiting for cells to grow, right? We expand the cells in number, and we differentiate them in type. Well, it takes many weeks.
If you hire someone whose job it is to manufacture RPE cells, and I don't want to make it sound like I'm diminishing the art and the talent of these individuals, but they really do spend a lot of time watching cells grow. That's a fixed cost for that individual. If you can have that person in parallel working on other programs, you get this wonderful economy in your manufacturing side of your business. For us to be able to launch new programs, I don't have to go and validate a target. I don't have to screen 10 million small molecules. I don't have to do, you know, a year of structure-activity relationship work. We know what the valid target is. It's a cell type. It's indisputable.
For us to be able to inexpensively plant some seeds with some early-stage programs that over time, over years, will get more and more maturation behind them and they'll themselves get into phase I clinical trials, that's a great thing for us to be doing now because it's very efficient and economical to do so. In the meantime, we will continue to advance our other two related programs of OPC1 and VAC, because, you know, OpRegen, when I joined, it also had problems. It was not enrolling quickly. There were open issues with respect to how to develop it, but we were able to get past those and obviously we found a great home for it. Some of that same kind of work is currently ongoing with OPC1 and VAC.
I think at the other side of that bridge, we're gonna find that we've got some very attractive assets.
All right. Thank you, Brian. Just one more. I'd like to see if you could provide a bit more color on some of the areas you're looking at regarding aging and aging-related diseases without revealing anything you can't. Obviously, this is an interesting space where you're seeing a lot of Silicon Valley money pouring in with Altos and Calico. We've also seen cell therapy on the signaling side targeting inflammaging-related diseases. Could you talk about what aspects of aging the Lineage platform may be equipped to address? Would this be largely looking at cell replacement for age-damaged tissues? Can you just give your thoughts on that?
That's a really interesting question. I don't know where the distinction lies between what we're doing, which I'll characterize as cell replacement, and something like what, let's say, Altos Labs is doing. They have a lot of visibility. Where does manufacturing a replacement cell tissue organ, where does that cross over to becoming to address aging? I'm not sure that there's a clear distinction. I think it's a continuum because the aging folks, if they'll permit me to speak for them, have appropriately focused their efforts on improving health span. Not so much that you wanna live to 200, but that if you do live longer than people live typically, that you will live well.
In many regards, I feel like we're farther along and a lot closer to the goal because if I'm going to live to 120 years old, I want to have replacement RPE cells. There are some other applications that you and I could go through parts of the body and say, "Well, would it be good?" You know, what's likely to break down? Let's just say liver 'cause it's a big area.
I think that there's not so much a clear distinction because really all of the companies outside of pure live longer companies, I think all of us are trying to make people live better, whether that's tied to your overall survival or not. I'm not sure it matters. I you know frankly don't know if this view would be shared by anyone, but I feel like we're a more advanced aging company than many of these aging companies that have been launched.
All right. Thank you very much, Brian. I appreciate the answers and looking forward to the updates later this month.
Thank you, Michael.
Your last question comes from the line of Robert LeBoyer from Noble Capital. Your line is now open.
Good afternoon, and first let me say that I'm planning to live to 120, and I'm gonna be relying on you for my replacement RPE cells. But my question has to do with the FDA and some of the timelines that you laid out for the FDA and the manufacturing, filing an IND. As best as anyone can at this point, could you give some expected timeframes for those milestones?
Also, given the situation with the FDA and all of the changes in the last year or two, could you give some background as to how the agency has changed in terms of time frames, level of scrutiny, and whether the agency is better, worse or, you know, on the same kind of schedule as it was before?
Yeah. Thanks, Rob. Appreciate you participating today. The answer that I can give is that we are working to initiate the next clinical trial of OPC1 and of VAC this year. I would like to be able to narrow that, but the harsh reality is that the interactions that you have with FDA really define how long your timelines are going to be. For example, if the agency says they want to see three batches of certain material instead of two batches or one batch, your timeline gets longer. I don't like to provide guidance that I can't meet, but I also know that I can't say nothing. What I'm comfortable saying is that we are trying to have those two next trials initiated this year.
With respect to the agency, because I just explained that they are the critical determinant of timing, I think the agency is getting much better in the area of cell and gene therapy. I don't know that they were deficient. I just think that there is a massive surge of new, well, all INDs, you know, obviously are new because the I stands for initial. There is a massive number of new clinical programs that are being started in cell and gene therapy, and the agency has been working very hard to try to keep up with respect to that flow and the guidance and expectations. I sat on a seminar just yesterday, it was a patient-focused seminar specifically around cell and gene therapy.
I think that the old sort of guideline of ask the agency, you know, what it is you need to do and then go do it stands higher than, let's say, the occasional trends toward being more flexible or less flexible depending on who the commissioner is and things like that. Our view of regulatory activity is, you know, ask the right questions, and then when you're told, you know, go do those activities and then share that with your audience, i.e. you and others, so that everybody knows what the steps are and the expectations are.
We will try to commit to being open with respect to what we hear from those interactions and provide as accurate guidance as we can, especially as we get further into this year.
Okay, great. Thank you very much.
I appreciate it, Rob. We'll work on your healthy lifespan as well.
Oh, I'm counting on you, so please stay on target.
Excellent.
There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.