Welcome to the Lineage Cell Therapeutics 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. 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, Angela. Good afternoon. Thank you for joining us. Please note that today's remarks and responses to your questions reflect management's views as of today only and will contain forward-looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward-looking statements, which are subject to significant risks and uncertainties. The company's actual results or performance may differ materially from the expectations indicated by such forward-looking statements. For a discussion of certain factors that could cause the company's results or performance to differ, we refer you to the forward-looking statements section in today's press release and in the company's SEC filings, including its most recent annual report on Form 10-K and in any subsequent quarterly reports on Form 10-Q.
We caution you not to place undue reliance on any forward-looking statements, which speak only as of today and are qualified by the cautionary statements and risk factors described in our press releases and SEC filings. With us today are Brian Culley, our Chief Executive Officer, Jill Howe, our Chief Financial Officer, and Dr. Priyantha Herath, our Senior Vice President and Head of Clinical. I'll now hand the call over to Brian.
Thank you, Ioana. Good afternoon, everyone. Thank you for joining us today as I review this morning's press release and respond to some analyst questions on COR1. COR1 is our new internally developed and wholly owned cell transplant program being developed for the potential treatment of corneal endothelial disease. To begin, you might be wondering why we elected to do a standalone call to discuss a preclinical cell transplant program. The answer to that question is that the manufacture and delivery of cells outside of the setting of cancer is a rapidly emerging branch of regenerative medicine for which a little bit of explanation may be able to help our audience better understand our goals and priorities. I also want to add that we would like to keep the Q&A focused on manufacturing strategy and COR1 today.
Obviously, OpRegen is very important to us. One of our goals today is to help the investment community begin to appreciate how our technology and our experience with OpRegen can be applied to the internally owned assets in our pipeline. This will unavoidably be a somewhat technical call, but my goal will be to keep things clear and comprehensible because we want to provide important information about our pipeline that may not be immediately appreciated from headlines or press releases. I appreciate you taking your time today to join us to better understand what we're building and why we're so excited about it. At Lineage, I'll remind you that all of our programs are what we'll call allogeneic cell transplants.
We manufacture specific types of cells of the human body and deliver them to patients in an effort to replace the cells that are missing and restore function that was lost when those cells which the patient was born with were destroyed or became dysfunctional due to aging or disease. Everything we are doing is off-the-shelf, meaning the therapy is being developed to be suitable for all labeled patients and thus avoiding the extraordinary cost of autologous cell therapy. This, of course, is the primary advantage of an allogeneic approach, making the same material for all applicable patients and doing so without the exorbitant cost of a custom therapy produced for just one person at a time. What we do is also very different from small molecule drug discovery.
Early in my career, I recall screening hundreds of thousands of molecules to try and find one that worked in a particular assay. Small molecules are typically designed to hit just a single pathway or molecular target. Gene therapy is similar. It aims to fix or replace a single element of the genome, and these are highly targeted approaches with advantages in certain settings, but they cannot replace an entire cellular infrastructure the way that a cell transplant can. All of these approaches seek to develop new medicines, but they go about it in completely different ways, and we think it will be productive to highlight some of those key differences because this is a growing area of medicine that is increasingly gaining recognition.
Acquisitions of single-asset cell transplant companies like BlueRock, Neurona, Semma, and Aurion, some of these for around $1 billion each, are strong and growing evidence of the financial and clinical maturation of this field. No matter which disease you're looking at, a fundamental aspect of cell therapy is that it involves complex manufacturing, and once a company or sponsor commits to clinical development, downstream changes to your product cannot be easily introduced without the potential for significant cost and risk. For example, if you generate initial clinical data using a manual two-dimensional process, a process you may know in advance is not suitable for scale-up because it requires impractically large surface areas and high aseptic risks, you might plan to change over to a 3D system for your later-stage trials.
It may be very difficult or even impossible to switch to an automated 3D system with assurance that your final cell product will be the same as the one you tested in phase I. Importantly, the FDA has issued guidance on this topic, which states that a cell therapy product is defined by the process used to make it. Therefore, if a process is changed, the product itself has been changed. While the rush to generate clinical evidence is real, that rush reflects a traditional small molecule path rather than the specific demands of a commercially viable and affordable cell therapy.
In fact, generating clinical data with an immature or incomplete manufacturing process is what we at Lineage refer to as a, quote, bridge to nowhere. If you have phase I data, but you haven't locked or finalized a robust production and manufacturing process, one which can support phase II or phase III clinical studies, then we believe you are at a significant disadvantage. You may eventually be required to change your process, there can be a huge amount of risk and cost in making these types of changes. These are not small risks for a program. We take them very seriously. It's why we embrace what we call, quote, better from the beginning. That's our approach to product development. In our experience, trying to engineer in changes to an already clinical stage process introduces unacceptably high levels of risk to comparability and scale.
We aim to lock these attributes before proceeding to the clinic because that gives us confidence that if our clinical data are positive, we can continue forward with a process that FDA has already seen and cleared for use. I want to remind everyone today that we have firsthand experience and considerable success in this matter because we have successfully shown evidence for a commercially viable production modality using a product candidate that has been successfully presented to FDA and delivered to patients in a clinical trial. Given the impacts of early manufacturing success, investors may want to ask whether a company is already making their product candidate on a scalable platform. Is the cell line known to be compatible with scale-up? Is the company using proprietary and patented methods?
Is even the container closure system compatible with the product being developed, or will that require a change later? Cell therapy manufacturing can be so sensitive that even a change to a raw material that is so insignificant that it does not have to be disclosed by the supplier can mean the difference between success and failure of a batch. These are all hidden risks lurking in cell therapy programs being developed around the world. Awareness and experience can help reduce risk, which is one of the advantages of Lineage having significant experience in scalable cell manufacturing. What this means to companies working in this field is that defining your product candidate early is not only necessary but should also be valuable, especially if you already know a certain type of cell is capable of treating the condition.
Now that I've hopefully explained the importance of having a mature and reliable process driving your product profile and having those criteria established before even beginning preclinical efficacy studies, I will walk through four critical criteria that we at Lineage have established for COR1 and which give us the confidence to continue to advance COR1 into preclinical testing. Those four key attributes are scale, storage, quality, and consistency. We'll begin with scale. Around the world, there is only one donor cornea available for every 70 patients who need treatment, which means there is a massive unmet need for a reliable supply of corneal endothelial cells or CEnCs. We are making CEnCs in our labs from a self-renewing pluripotent cell line or PSC. PSCs can be expanded to massive numbers and can also be converted into CEnCs. That is one way to solve the problem of insufficient donor cornea availability.
COR1 is produced from a proprietary cell line that is genetically stable and which has passed robust analysis of whole genome sequencing at multiple qualified vendors, and is what we internally call, quote, well-behaved. We started generating CEnCs from a qualified non-GMP working cell bank of that line, and based on our progress, which I will review for you today, we are planning to produce the GMP banks for that line this year and use those cells for continued development. We have modeled our approach to COR1 scale-up on a two-tiered banking system, something I have spoken about many times for our OpRegen program, and which offers us the ability to scale exponentially rather than just linearly. We are going beyond what we have already accomplished to date by also applying our recently disclosed AlloSCOPE 5D system to COR1 production.
As an aside, I'll briefly explain that AlloSCOPE 5D describes a segment of our AlloSCOPE manufacturing platform, which has the goal of higher scale production with reduced manipulation. AlloSCOPE 5D focuses on the production of high-quality, low-passage, undifferentiated cells that are able to synchronously respond to differentiation cues in a seamless fashion. This approach is designed to offer greater control of differentiation than is normally available from regular culturing in bioreactors or even some 2D modalities. In short, it means creating 2D culturing conditions while in a 3D suspension. Because the goal of the 5D version of AlloSCOPE is to facilitate massive scale-up, it is more naturally associated with our islet cell research initiative, where the presumed dose is nearly a billion cells per patient. We chose to apply 5D to the COR1 program as part of our proof of concept work.
We found that we could utilize the 5D expansion process to support high-quality CEnC production with the same robust differentiation, but with much greater scale than a 2D modality. We are therefore confident that we're on a path to being able to generate millions of doses of the COR1 product candidate from the current banking system, similar to what we've accomplished with OpRegen. That scale would mean we would not only be able to supply a product to a growing patient population, but also do so with a cost of goods that we expect to be far below the expense of the manual harvesting, manipulation, and dose preparation required for the current cadaver-derived procedure. Please note, I'm discussing our early, current, and unoptimized calculations. We expect we would be able to improve upon these estimated levels of output from our cell banks with additional time and investment.
Moving next to storage and handling, I am particularly excited that we have developed and deployed a proprietary cryopreservation protocol for our CEnC cells and generated what we believe to be clinically and commercially attractive levels for both viability and recovery from all steps in the manufacturing process, the banks, the intermediates, and the final product candidate. We believe a COR1 product profile featuring a ready-to-use Thaw and Inject format gives the program a significant competitive advantage. Additionally, having cryopreserved banks and intermediates provides us with operational flexibility, efficiency, and process consistency. The advantage to us is because the current standard of care for a CEnC transplant, including the approved product in Japan and an ongoing clinical program in the U.S., requires the use of harvested cadaver cells within just a few days.
If we can offer not only a scalable product, but also a product that can be stored frozen and used on demand, we think this will be a far more user-friendly and accessible option for patients and providers. Moving to the third attribute, quality, we employ modern and expected analytical tools like single-cell RNA-seq and bioinformatics, and of course, we investigate the identity of our cells and will only release a batch if it meets our high standards for these criteria. We also minimize the production of off-target cell types. In practice, we have seen some beautiful honeycomb morphologies with high levels of purity and zero residual HESC cells. We do not disclose our identity markers, but I can share with you today that they meet our criteria for a go, no-go decision. Our approach also uses a proprietary differentiation path on which we recently submitted patent applications.
As I said before, we found that incorporating a 5D expansion protocol also led to improved quality of our product candidate. Overall, we believe a consistent and high-quality stem cell-based product generated from a single pluripotent line would be preferable to the highly variable cells that are harvested from deceased individuals with variable age and unknown medical histories. My fourth and final point today is consistency. I will again highlight that the current standard of care comes from donated cadavers with variable age and medical conditions, so you unavoidably will have variability in the quality of your starting material and in how it is going to behave. It is well established that donor-harvested cells require complex processing. To date, we have observed batch-to-batch consistency with our COR1 program, and we are working on optimizing the conditions for the final expansion steps.
Separately, because CEnCs provide a barrier function to the cornea, we have established a transepithelial resistance test as a potency assay to ensure each batch is comparable to the batch prior. This, of course, is also an FDA requirement for use in the clinic, so it's important to have generated that data from our process. Why are we investing so much time into this program? The answer is twofold. First, as I explained at the beginning, cell therapy is not like small molecule product development. We believe we are doing excellent and innovative work, but much of our audience has small molecule experience, so there is an education and awareness component to this call for both COR1 and other programs in our pipeline.
The primary message we're trying to get across is that we believe it is an advantage to establish, from the beginning, superior characteristics in an asset before conducting your clinical trials, because the cost and risk and regulatory hurdles of trying to engineer in fixes into a deficient process is unacceptably high. The other reason is that there is a huge under-addressed commercial opportunity available in corneal endothelial disease, and we think we are increasingly well-positioned to compete for it. We are advancing a product candidate which we believe will offer a product profile superior to cadaver-derived CEnCs, which I've explained several times now have been shown to be an expensive, variable, and unwieldy source. We believe that an immediate-use, cost-effective, and consistent supply of CEnCs, such as we are developing with COR1, would be preferable to both patients and providers.
To conclude, I just want to provide some specific dates which highlight the power and efficiency of our pluripotent cell-based therapeutic platform. We began exploring CEnCs as a potential new pipeline program in the second quarter of 2025 and didn't start internal wet lab work until the third quarter of 2025. This program wasn't even publicly mentioned until March of this year. Just nine months after initiating lab work, we're hosting a call today to highlight that we are developing what I believe will be an exciting and disruptive asset in corneal disease, and we've done it while maintaining a stable and disciplined pace of capital investment. I believe it's a remarkable amount of progress by the team that I would be happy to compare among our cell therapy peer group.
Lineage is best known today for OpRegen and our RPE transplant program to treat dry AMD, and OpRegen is clearly an exciting asset. While we wait for additional updates on that program from our partner, I think it is important to keep in mind that we have also demonstrated the ability to rapidly generate additional novel assets, also with differentiated profiles. Because we skip the cost and time of doing target discovery and validation and screening and optimization associated with small molecules, we have been able to affordably develop an entire pipeline of cell transplants that we own internally or can strategically partner with collaborators where we think it makes sense to do so. Very proud of our progress to date, and we also think there's much more to come from our platform in the years ahead.
I want to thank you all for your attention, I would be happy to take a few questions.
Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. We will pause for just a moment to compile the Q&A roster. Thank you. Your first question comes from the line of Mayank Mamtani with B. Riley Securities. Your line is now open.
Yes, good afternoon. Thanks for taking our questions and appreciate, Brian, the technical detail on what superior product profile could look like for CEnCs, and the development timelines are impressive. On the math you shared about millions of doses, would that kind of ceiling or potential to be reached, could you just walk us through what you would achieve to date so far with the batch scale-up and how you're thinking, maybe in the context of OpRegen also, how you did that development, maybe what's different now in this situation with the 5D? If you are able to give us some color also on the COGS that you're targeting once this is in the clinic, and then separately once it's commercial scale. I have a follow-up.
Thank you, Mayank, for that question. I'm going to be more exemplary rather than precise, partly for competitive reasons and partly because some aspects of what we do are subject to our license agreement with Roche and Genentech. Conceptually, for both the OpRegen program and for the COR1 program, or not conceptually, but how we approach this is we use a two-tiered banking system. So a master cell bank might have 100 vials, and you could randomly choose any one of those vials from which to generate a working cell bank. That's your second set of banks. That might also be, let's say, 100 vials or a little bit larger than that. From that working cell bank, from that intermediate, you can then make your product.
If you were to make, let's say, 3,000 doses of your product, that may be 3,000 doses from one run, but the banking system which generated it has the exponential factor of 100 times 100. You can do 100 times 100 times 3,000, that would be 30 million doses of a product. We haven't disclosed the specific scale, and in fact, it can vary because manual filling is just naturally going to generate fewer vials than automated filling. There are sort of min-max capabilities, which is why I intentionally used the somewhat sweeping language of millions of vials being capable from this kind of system. The 5D aspect of your question is a component of the platform, a component of AlloSCOPE that is specifically aimed at pre-differentiation.
That is because one of the perhaps not well-understood aspects of cell-based manufacturing is that while it is true that pluripotent cells are self-renewing and can divide, if you want them to be differentiated into a well and controlled differentiation into one specific cell type, they tend not to behave as well with each passage. You could have manual manipulation, which can affect the cells and cause spontaneous differentiation, or you could have enzymatic passaging that can lead to that. 5D, without revealing exactly how we do this, employs certain biological and physical/engineering attributes in order to generate very large numbers of pre-differentiated cells that are still capable in a synchronous manner of responding to the factors that will convert them into any other cell type, whether that's a corneal endothelial cell or an islet cell or an RPE cell. You can choose the desired cell type.
In some cases, using a 5D step in your overall manufacturing modality can be beneficial because it can help you when differentiation protocols are not efficient. We know that, for example, islet cells don't like to continue to divide once they've been generated, whereas auditory neurons are quite happy to continue dividing. The latter are a lot easier to manufacture. It just gets into some of the nuance and complexity of manufacturing. As a general matter, using a multiple-tier banking system gives you exponential expansion rather than linear expansion. You can also employ 5D technology, and if you are employing 5D technology, you're talking about manufacturing your product in bioreactors rather than in flat plastic 2D plates because those planar substrates really just don't scale as well or as efficiently if you can achieve the same product or an even better product in a 3D environment.
Anything on the COGS? While you answer that, also was curious on the in vivo animal work that you've undertaken already, and you'll have data, what that would entail, what species or what sort of assay you are testing for. Then lastly on the islet cell timelines, a lot of investor interest there. Are they comparable to the timelines for COR1? Just as you think about when you announce the program first, should we expect islet cell to move along the same timelines? Thanks for the question.
I appreciate that. I'll just kind of invert them. The islet program continues to advance in our labs. I don't have an update that we intend to share today, but our quarterly call will come around, and if we have something to say at that time, you would expect that we would do that. Going back to COR1 for the other two questions around COGS and in vivo animal testing, and in particular, I'm sure you'd be interested in functional animal models. One of the wonderful aspects that I really didn't bring up in the main body of the call is that there is a lot of precedent work. We do know quite clearly that cadaver-sourced cells are an effective therapy.
They have been utilized in Japan in a product called Vyznova, which the package insert is available, and the development has been conducted by companies like Aurion and Alcon in the U.S. There is a precedent where we don't have to go and hope to choose wisely what sort of animal models. We have and can obtain reference material as a positive control for our studies. That one of the great considerations regarding risk is if you already know that cadaver cornea cells can treat the disease effectively and you know the regulatory path that they've gone through, that establishes a nice precedent where you could do some things in parallel. With respect to timing, we are already talking to the vendors about the in vivo animal testing. We expect initial data will be generated this year.
Even beyond that, we are thinking about jurisdictions where we might be able to generate initial human evidence for this approach more rapidly than we would in the U.S. Frankly, despite everything that I said on this call, which is all about the importance of getting your product profile squared away early and not rushing too hastily into clinical trials, the fact of the matter is that there will be great attention on this program if and when our manufactured cells can successfully treat the condition in a handful of patients. I think the risk profile could change at that time. I don't want to neglect COGS. Again, there's a competitive aspect of COGS that I don't want to get into.
I do think that I have said on other calls or previous public settings that when your manufacturing capability, simply repeating a process over and over and having the ability to generate millions of vials by repeating that process, it would be normal and expected that you'd be talking about below four figures for a dose. We don't go into it specifically, and we haven't optimized it anyway for any of our programs. I think there are aspects of manufacturing that could be improved. When you compare that with autologous cell therapy, or you compare that with the unavoidable manipulation, dose prep, handling, and brief process time, and utilization window of cadaver-sourced cells, you're really getting down into some incredibly attractive margins for a program like this. Attributable to our efforts to realize the very dream of allogeneic cell therapy, which, of course, is high-scale, low-cost production of consistent material.
Super helpful, Brian. I'll hop back in the queue. Thank you.
Great. Thank you, Mayank.
Your next question comes from the line of [Yang Teng] from Raymond James. Your line is now open.
Hi, good afternoon. This is [Yang] from Raymond James. Congrats on the progress. We have one or two quick questions. Especially for the cell therapy, is there an immunosuppression regimen or protocol in place? Secondly, for this therapy, for your consideration in human trials, will you require multiple injections or one single injection? Thank you.
Thank you, [Yang]. Maybe what I will do is include in Dr. Herath, who can speak briefly about the current state of procedure of this therapy and how we compare to that. The short answer regarding immunosuppression is that it would not be expected to be a lifetime immunosuppression or gene-edited therapy, the sort of which you might see with some of the other programs that are out there in other indications.
Thank you, Brian. Thanks for the question. I'll take the immunosuppression question first. As you know, many of our programs, patients do receive short-term tacrolimus, and I would expect that that might be the case for this also. Remains to be seen, but most likely. Then to answer the other question, as far as procedure itself, the surgical approach really follows the anatomy. For COR1's target, this happens to sit in a far more accessible place right in front of the eye. For example, if you think about the OpRegen program, the RPE cells we are replacing, they live under the retina. So we have to go subretinal, which requires a vitrectomy and a controlled injection under the retina by a very well-trained vitreoretinal surgeon. It is a very sophisticated surgical procedure, as happens in our Genentech collaboration with OpRegen trial for dry AMD.
Delivery precision has been one of the real variables in that program. For the COR1 program, this is far more straightforward. Corneal endothelium lines the back of the cornea, facing directly into the anterior chamber, as you know. The delivery is an injection into that fluid-filled space in front of the iris. This is a simpler, minimally invasive outpatient procedure done by a cornea specialist in which our cells are injected into the anterior chamber. We would expect that the patient will rely on gravity-assisted positioning, plus or minus rho kinase inhibition to sustain and maintain the cells rather than surgically replacing the tissue. The entire thing is far less invasive than corneal transplants like DMEK or DSAEK, with no donor tissue and certainly no vitreoretinal surgery like in the OpRegen study.
Now, essentially, therefore, the thing to remember is that this approach really points to lower procedural risk, broader adoption. Think about it. There are about 6 million patients with corneal endothelial disease, which is about seven times as many as Parkinson's disease patients, or about just as many Alzheimer's disease patients in the United States right now. That's a lot of patients. More accessibility is a huge thing, and therefore, more treatment sites at lower cost. These are some of the things I think that Brian was trying to ask me to explain, and I hope I answered your question.
Thank you.
Thank you, [Yang]. Operator, just check to see if we have any additional questions.
There are no further questions at this time. I will now like to hand the call back over to Mr. Culley for closing remarks.
Great. Well, thank you very much. Again, appreciate everyone's time. Thank you for being interested in this program and overall our approach, where we're really trying to do the most difficult things first and then go moving these programs forward. You can expect to see a lot more from the company as we go forward, and please enjoy the rest of your day. Thank you.
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.