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Lineage Cell Therapeutics, Inc. (LCTX)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 revenue was $3.78M, up 203% year over year and +169% quarter over quarter, driven by higher collaboration revenue recognized from deferred revenue under the Roche agreement; net loss narrowed to $3.03M ($0.02 per share) from $7.11M ($0.04) in Q3’23 .
  • Cash, cash equivalents and marketable securities were $32.7M; management extended cash runway guidance into Q1 2026, reflecting fiscal discipline and timing on OPC1 DOSED startup activities with FDA feedback, a positive surprise versus Q2’s Q4 2025 guide .
  • OpRegen (dry AMD) received RMAT designation from FDA via Roche/Genentech; management highlighted multiple partner actions consistent with continued investment (e.g., added sites, a services agreement, long-term follow-up), supporting the program’s strategic value .
  • OPC1 (spinal cord injury): management reported recent alignment with FDA on remaining user tests for the device and expects IND amendment review completion in Q1 2025, planning to commence enrollment shortly thereafter, a near-term clinical catalyst .

What Went Well and What Went Wrong

What Went Well

  • RMAT designation for OpRegen under Roche/Genentech, reinforcing regulatory momentum and partner commitment .
  • Revenue inflected on higher collaboration revenue recognized from deferred revenue under Roche; operating loss and net loss improved y/y, highlighting disciplined spend .
  • Clearer regulatory path for OPC1 DOSED: “we believe we reached alignment on the final user tests… FDA… do not expect to send us additional requests… anticipate… review… in Q1 2025,” enabling enrollment soon after submission .
  • Manufacturing scalability focus: CEO emphasized Lineage is “working right now… on… ensuring purity, potency and yield necessary to support commercial scale manufacturing,” targeting milestone next year .

What Went Wrong

  • Limited visibility on OpRegen Phase IIa interim data; Lineage does not control disclosure timing and acknowledges it lacks interim efficacy data access .
  • Margins remain deeply negative given the company’s R&D profile; operating margin still below breakeven despite improvement (Q3 operating loss $3.84M on $3.78M revenue) .
  • DOSED timeline previously slipped due to inter-center FDA review (CBER/CDRH), drawing analyst scrutiny; while clarity improved this quarter, execution risk remains until site activation and first patient dosing .

Financial Results

Income Statement vs prior year and prior quarter

MetricQ3 2023Q2 2024Q3 2024
Total Revenues ($USD Millions)$1.246 $1.408 $3.779
Collaboration Revenues ($USD Millions)$0.957 $1.098 $3.386
Royalties, License & Other ($USD Millions)$0.289 $0.310 $0.393
Loss from Operations ($USD Millions)$(6.705) $(5.867) $(3.840)
Net Loss ($USD Millions)$(7.110) $(5.760) $(3.034)
Diluted EPS ($USD)$(0.04) $(0.03) $(0.02)
Revenue less Cost of Sales ($USD Millions) (calc.)$1.077 $1.364 $3.741
Gross Margin % (calc.)86.5% 96.9% 99.0%
Operating Margin % (calc.)(538.1%) (416.7%) (101.6%)
Net Income Margin % (calc.)(570.6%) (408.9%) (80.3%)

Notes: “Revenue less Cost of Sales” and margins are calculated from reported line items in the press release tables .

Revenue Breakdown

MetricQ3 2023Q2 2024Q3 2024
Collaboration Revenues ($USD Millions)$0.957 $1.098 $3.386
Royalties, License & Other Revenues ($USD Millions)$0.289 $0.310 $0.393
Total Revenues ($USD Millions)$1.246 $1.408 $3.779

Q3 2024 Actual vs Consensus

MetricQ3 2024 ActualQ3 2024 Consensus (S&P Global)
Revenue ($USD Millions)$3.779 N/A
EPS ($USD)$(0.02) N/A

Wall Street consensus via S&P Global was unavailable at time of query; results cannot be benchmarked to estimates.

Operating Expense and Other Items (trend)

Metric ($USD Millions unless noted)Q1 2024Q2 2024Q3 2024
Total Operating Expenses$8.105 $7.275 $7.619
R&D Expense$3.010 $2.868 $3.171
G&A Expense$4.997 $4.363 $4.410
Other Income (Expenses)$0.103 $0.094 $0.839
Weighted Avg Shares (Millions)182.909 188.813 188.835

Liquidity and Deferred Revenue

MetricQ1 2024Q2 2024Q3 2024
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$43.6 $38.5 $32.7
Deferred Revenues (Current) ($USD Millions)$10.106 $9.142 $8.250
Cash Runway GuidanceInto Q3 2025 Into Q4 2025 Into Q1 2026

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayCorporateInto Q4 2025 Into Q1 2026 Raised (extended)
OPC1 DOSED IND Amendment ReviewRegulatory timelineDelayed; inter-center (CBER/CDRH); no timeline FDA alignment achieved on user tests; no further info requests expected; review completion anticipated Q1 2025 Clarified path
OPC1 DOSED EnrollmentClinical start“As soon as feasible” post-FDA feedback “Commence enrolling… as soon as feasible” after submitting updates (post-review) Maintained with clearer timing
CIRM CLIN2 GrantFundingRolling process; timing dependent on FDA clearance Portal expected to reopen in spring; targeting ~60% support for DOSED Timing specified
OpRegen Regulatory StatusProgram milestoneN/ARMAT designation received via Roche/Genentech New milestone

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2024)Trend
OpRegen clinical/partner signals24-month Phase I/IIa data; new services agreement; site expansion; Roche pipeline prioritization RMAT designation; added sites; “GAlette” study name; management sees continued commitment Strengthening
OPC1 DOSED regulatory statusExpecting IND amendment review; target start in June; device advantages FDA alignment; Q1 2025 review completion anticipated; enrollment to commence thereafter Improving
Manufacturing scalabilityIn-house GMP; improved purity/scale; upcoming data Working on commercial-scale purity/potency/yield; aiming milestone next year Accelerating
ReSonance (ANP1)Functional model underway; planned presentation Preclinical data presented; thaw-and-inject engraftment; collaboration with UMich Advancing
Liquidity disciplineRunway into Q3 2025 (Q1), Q4 2025 (Q2) Runway extended into Q1 2026; fiscal discipline + FDA timing Extending
Macro/sectorBiotech bear market; cautious spend Continued mindfulness of macro/sector factors Cautious

Management Commentary

  • “We now expect to support our planned operations into Q1 of 2026,” reflecting fiscal discipline and timing of DOSED startup activities .
  • On FDA for OPC1: “We believe we reached alignment on the final user tests… FDA… do not expect to send us additional requests… anticipate… review… in Q1 of 2025… plan to commence enrolling… as soon as feasible” .
  • On OpRegen/partner signals: Roche pipeline prioritization kept OpRegen; RMAT designation obtained; added sites; management views these as supportive indicators .
  • On manufacturing: Lineage is focused on “ensuring purity, potency and yield… at commercial scale,” aiming to reduce to practice next year, a key differentiator in allogeneic cell therapy .

Q&A Highlights

  • OPC1 timeline clarity: Management expects FDA review completion in Q1 2025 and outlined overlapping site activation and training to minimize time to first dosing post-clearance .
  • RMAT utilization: While specific plans rest with Roche/Genentech, RMAT can facilitate additional regulatory interactions and endpoint discussions; Lineage leveraged RMAT for an informal FDA discussion on OPC1 .
  • Milestones: Lineage remains eligible for up to $620M in milestones under Roche/Genentech; amounts/triggers undisclosed and not included in runway guidance .
  • CIRM grant: Portal expected to reopen in spring; targeting ~60% financial support for DOSED; spend will be staged to optimize reimbursement potential .
  • OPC1 comparability: Company has prepared a robust comparability package for newly manufactured cells; will sequence regulatory discussions to avoid overloading FDA during DOSED device review .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q3 2024 revenue and EPS was unavailable at time of query; as such, we cannot assess beats/misses versus consensus. Coverage for micro-cap development-stage biotechs can be limited, and Lineage does not provide formal revenue/EPS guidance [GetEstimates error; no data].

Key Takeaways for Investors

  • Cash runway extended into Q1 2026, reducing near-term financing overhang; extension stems from disciplined spend and FDA timing on DOSED startup activities .
  • RMAT designation for OpRegen and continued partner actions (sites, services agreement, long-term follow-up) reinforce strategic commitment; monitoring Roche disclosures remains key .
  • Near-term clinical catalyst: OPC1 DOSED—FDA review expected Q1 2025; enrollment to commence thereafter; potential early safety readouts from an open-label study could be stock-moving .
  • Manufacturing scalability is a core differentiator; management aims to “reduce to practice” commercial-scale consistency—a barrier to entry and potential value inflection if achieved .
  • Revenue trajectory improving with collaboration revenue recognition; however, margins remain negative—expect continued P&L volatility typical of platform R&D companies .
  • Potential upside from Roche/Genentech milestones (not guided) and CIRM grant support (~60% targeted) could augment cash resources; value not in runway until received .
  • Trading setup: Watch for DOSED regulatory resolution (Q1 2025), initial patient enrollment, any OpRegen data disclosures by Roche/Genentech (conference/publications), and manufacturing progress updates—each can re-rate expectations and sentiment .