Lineage Cell Therapeutics, Inc. (LCTX)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 revenue was $1.44M, down $1.00M year over year on lower deferred collaboration and licensing revenue recognition under the Roche agreement; net loss was $6.54M with EPS of ($0.04) versus ($0.03) in Q1 2023 .
• Cash, cash equivalents, and marketable securities were $43.6M as of March 31, 2024; management reiterated runway into Q3 2025 .
• OpRegen program momentum: 24‑month Phase 1/2a data showed mean BCVA gain of 5.5 letters in Cohort 4 (7.4 letters in patients with extensive lesion coverage), with anatomical improvements; Lineage entered a new, fully funded services agreement with Genentech to support clinical, technical, and manufacturing needs .
• OPC1 device study start-up progressing; management targeted opening the first site in June and highlighted first chronic SCI patient dosing in the upcoming study as a potential scope‑expansion catalyst .

What Went Well and What Went Wrong

What Went Well

• New services agreement with Genentech fully funds Lineage’s added clinical, technical, training, and manufacturing support activities, signaling partner commitment to OpRegen: “These additional services will be fully funded by Genentech...” .
• Durable OpRegen efficacy: “Those OpRegen patients actually gained an average of 5.5 letters... our experimental therapy was, on average, 14 letters better than the best available therapy” (vs anticomplement or sham outcomes cited) .
• Strategic manufacturing/execution leadership: “Antibodies can't replace dead cells. Only cells can replace dead cells,” underscoring Lineage’s differentiated cell transplant thesis and partnership validation .

What Went Wrong

• Revenue declined $1.0M YoY to $1.44M on lower collaboration/licensing revenue recognition; EPS widened to ($0.04) from ($0.03) YoY .
• Other income decreased to $0.10M vs $0.44M in Q1 2023, primarily due to the prior-year employee retention credit and FX impacts on international subsidiaries .
• Continued losses: loss from operations was $6.66M; R&D fell YoY, but G&A rose on stock-based comp and consulting, highlighting ongoing spend to support programs despite revenue variability .

Financial Results

Consolidated P&L – Trend and Comparison

Revenue Breakdown (Q1 2024)

Cash and Balance Sheet KPIs

Estimates vs Actuals

Note: Wall Street consensus from S&P Global was unavailable due to request limits. We attempted retrieval but could not access estimates at this time.

Additional Disclosures

• YoY revenue change: decreased by $1.0M vs Q1 2023 .
• Non-GAAP: Company did not present non-GAAP EPS or adjusted metrics in Q1 2024 materials .

Guidance Changes

No formal revenue, margin, OpEx, OI&E, tax rate, or dividend guidance was issued for Q1 2024 .

Earnings Call Themes & Trends

Management Commentary

• “These additional services will be fully funded by Genentech and include activities to support the ongoing Phase I/IIa and the currently enrolling Phase IIa studies as well as additional technical training and materials related to Lineage's cell therapy technology platform...” .
• “Those OpRegen patients actually gained an average of 5.5 letters... our experimental therapy was, on average, 14 letters better than the best available therapy.” .
• “Antibodies can't replace dead cells. Only cells can replace dead cells.” (quoting Genentech’s Global Head of Ophthalmology PD) .
• “We are approaching the end of this portion of the regulatory process... we remain on track to open our first clinical site for this study in June.” (OPC1 device study) .
• CFO: “Cash, cash equivalents and marketable securities of $43.6 million as of March 31, 2024 is expected to support planned operations into Q3 of 2025.” .

Q&A Highlights

• Genentech services agreement scope: Lineage to extend follow‑up of Phase 1/2a beyond 5 years, support Israel site expansion, and operational needs; financial terms undisclosed but fully funded by Genentech .
• Delivery optimization: Genentech’s mini‑pig preclinical work aims to improve lesion coverage, correlating with better BCVA outcomes; discussion of multiple dosing/earlier dosing opportunities left to partner’s design .
• Comparative context: Cohort 4 treated eyes had foveal involvement; contralateral eyes typically had better baseline vision; direct anti‑complement comparisons seen as favorable to OpRegen over 12–24 months .
• OPC1 enrollment: Plan for 6–10 patients across subacute and chronic; device designed to avoid ventilator stoppage; first-time chronic administration could broaden addressable population if signals observed .
• Market appetite: Syfovre injection volumes highlight strong demand despite safety concerns, supporting the commercial opportunity for a onetime therapy .

Estimates Context

• We attempted to pull S&P Global/Capital IQ consensus for revenue and EPS for Q1 2024 (and prior quarters) but were unable to access due to request limits; consensus was unavailable at the time of analysis. As such, we cannot characterize beats/misses versus Wall Street estimates for this quarter.
• Given limited analyst coverage typical of microcap biotech and the program-dependent revenue profile, near‑term estimate revisions are more likely to be driven by OpRegen clinical/partner updates than by collaboration revenue variability [GetEstimates attempt; consensus unavailable].

Key Takeaways for Investors

• The new, fully funded Genentech services agreement strengthens OpRegen execution and signals partner conviction; expect continued independent data releases and delivery optimization efforts as potential catalysts .
• 24‑month OpRegen data showing BCVA gains and anatomical improvements vs degenerative baseline provide durable‑benefit validation; positive comparisons vs anti‑complement outcomes may support valuation re‑rating on partner updates .
• Near‑term OPC1 milestones (June first site, inclusion of chronic patients, ventilator‑sparing device) add optionality; any early functional signals in chronic SCI could expand market scope and partnering appeal .
• Financially disciplined with $43.6M cash and runway into Q3 2025; collaboration revenue variability persists, but operating spend remains controlled; watch for deferred revenue recognition dynamics .
• The GA market’s demonstrated demand despite safety concerns for anti‑complement agents underscores appetite for differentiated, onetime cell therapy—commercial narrative could be a stock catalyst upon successful Phase 2a outcomes .
• No formal financial guidance; focus on operational milestones (OpRegen data cadence, OPC1 device study progress, CIRM grant outcomes) as stock‑moving events .
• Risk monitors: partner trial data timing/quality, manufacturing continuity in Israel, and regulatory feedback; management tone remains confident and execution-focused .

Citations: Q1 2024 8-K press release and financial tables ; Q1 2024 earnings call transcript ; Q4 2023 press release and call ; Q3 2023 press release and call .