Lineage Cell Therapeutics Inc (LCTX) 2018 Q3 法說會逐字稿

Welcome to BioTime, Inc.'s Third Quarter 2018 Conference Call. (Operator Instructions) As a reminder, today's call is being recorded.

I would now like to introduce your host for today's conference, Ioana Hone of BioTime Investor Relations. Ms. Hone, please go ahead.

Thank you, Tiffany. Good morning, and thank you for joining us. My name is Ioana Hone, and I am responsible for Investor Relations at BioTime, and it is a pleasure to be with you today.

A press release reporting our third quarter 2018 financial results was issued earlier today, November 8th, 2018 and can be found on the Investor Section of our website.

Please note that today's conference call and webcast will contain forward-looking statements within the meaning of federal securities laws, including statements regarding our strategy, goals, product candidates, clinical trials, synergies and benefits of the acquisition and financing matters. Such statements are subject to significant risks and uncertainties, including those described in our press release issued on November 8th, 2018 and our recent SEC filings on Form 8-K, Form 10-K, and Form 10-Q. Actual results or performance may differ materially from the expectations indicated by our forward-looking statements due to those risks and uncertainties described in the BioTime and Asterias reports filed with the SEC, including the following factors: whether our respective shareholders will approve the merger; the ability to meet closing conditions to the merger on a timely basis or at all; delay in closing the merger; the ultimate outcome and results of integrating the operations of BioTime and Asterias and the ultimate ability to realize synergies and other benefits; business disruption following the merger; the availability and access in general of funds to fund operations and necessary capital expenditures. We caution you not to place undue reliance on any of the forward-looking statements which speak only as of today.

Joining us today are our newly appointed Chief Executive Officer, Brian Culley; our Chief Financial Officer, Russell Skibsted; and our Senior Vice President of Clinical and Medical Affairs, Gary Hogge. The executives will provide prepared remarks, then take questions from analysts and institutional holders.

With that, I'd like to turn the call over to Brian Culley, who joined BioTime as its new CEO on September 17th.

Thank you, Ioana, and good morning, everyone. We have a lot of important items to update for you today, so thank you for joining the call.

To start off, I'm extremely pleased to have been selected by the BioTime Board of Directors to lead the next phase of our growth. I've joined what I believe is a transformational period for this company. We aim to become the premier cell therapy company, and I believe we have the opportunity to do this by being one of the first cell therapy companies to turn ambitious research ideas into treatment realities.

I want BioTime to lead this mission, and I believe I can help drive the process through my experience building the teams, infrastructure and institutional awareness necessary to advance the pipeline of treatments through clinical development. I also have a successful history of engagement with patients and advocacy groups, which can further increase our visibility and significance with the medical investment communities by ensuring awareness and appreciation of our clinical accomplishments.

Some of you are aware of my background, so I'll just mention briefly that I have more than 25 years of technical and business experience across diverse operational areas, including strategy, finance, product licensing and product development. Early in my career, I worked at the bench, running experiments at both academic and for-profit research laboratories, so I understand the process and the potential of basic research. But I also spent time in the regulatory world and know what it takes to successfully file a new drug application with the FDA. I have a strong business development background and have bought and sold not only individual drug programs, but also several companies.

To give you a sense for my management style, as a former scientist, I believe making decisions based on reliable data rather than gut feel. As a businessman, I believe in intelligent and disciplined allocation of capital. And as a leader, I believe in focusing on aggressive but achievable goals. Day-to-day, I'm most excited by clinical development. And no doubt, as we proceed together, you'll see my passion for clinical development reflected in our priorities and by our accomplishments.

And lastly, I strive to be an advocate for the treatments I work on and for the patients we serve. I like to share my enthusiasm, which is helpful if you're trying to generate awareness and build a positive brand for a company. It's a privilege to be here at BioTime, and I'm ready to get to work for you and with you.

Although we have important corporate development items to review today, most notably the execution of the merger agreement for the acquisition of Asterias, I believe our product candidates are the ultimate drivers of our value. So I'd like to start off with an update on OpRegen and Renevia before moving on to our recent news on Asterias, AgeX and Juvenescence.

OpRegen is an allogeneic, or off-the-shelf, cell therapy treatment in development for dry form age-related macular degeneration, a leading cause of adult blindness in the developed world. There currently is no FDA treatment for dry-AMD. Our approach with OpRegen is to grow and deliver healthy RPE cells to the back of the eye where they can replace dead, dying or dysfunctional RPE cells. We believe this approach can slow the loss of vision and possibly improve vision in affected patients. OpRegen has been granted fast-track designation by the FDA and currently is the subject of a Phase I/IIa multi-center clinical trial.

This clinical trial is designed first and foremost to evaluate the safety and tolerability of different doses of OpRegen administered to people with dry-AMD, but we also are collecting markers of efficacy in this study, which will help inform our decisions and strategy for the next trial. The current study is expected to enroll a total of 24 subjects, and those subjects are divided into 4 cohorts according to disease severity, and that's reflected by their visual acuity. We currently are dosing patients in the fourth and final cohort.

We announced new data from this study a couple of weeks ago at the American Academy of Ophthalmology annual meeting. The data we shared showed that treatment with OpRegen continues to be well-tolerated, with signs of structural improvement in the retina and decreases in drusen density observed in some patients.

As a reminder, RPE cells have multiple functions, including support of photoreceptor maturation, function and maintenance, so it takes many months following an OpRegen administration for structural anatomical changes to impact functional recovery and reveal the improved visual acuity that we're looking for. But nevertheless, the early data we've collected from patients in Cohort 4 appears to be encouraging. We can identify signs of structural improvement within the retina, evidence of the continued presence of transplanted cells, and there are even early suggestions of improvements in visual acuity.

These data are important to us because Cohort 4 patients have earlier-stage AMD and better vision than Cohorts 1 through 3. So they more closely represent the large patient population we ultimately hope to treat.

At the same time, although we're encouraged by these data, these folks do have some vision remaining, and we have reported on a few serious but not unexpected adverse events. So enrollment is proceeding slowly to ensure we are providing a compelling risk-reward benefit, which ultimately is how the FDA will assess the program. But nonetheless, the trial is expected to complete enrolling early next year, and we expect the data from the study will support faster enrollment in our next clinical trial.

Turning next to Renevia, our medical esthetics program, we have 3 points to make. First, we submitted our CE Mark application this year to BSI, the independent accredited body in the U.K. responsible for reviewing such applications. This review is ongoing, with responses to BSI's questions being promptly provided by BioTime. It is important to note that the regulatory review process does not come with a statutory clock, meaning BSI can take as long as necessary to review our application. But once the review is completed, BSI will notify us of their feedback. Our best estimate at this time for a response is early next year.

Second, we have a similar wait-and-see situation in the U.S. We do not yet fully know how Renevia will be classified by the FDA. If it's viewed as a device, as in Europe, that's favorable outcome and may afford a relatively rapid development path. But if it is considered to be a drug or biologic, or as a combination product under the jurisdiction of CBER, which would presumably be attributable to hyaluronic acid or the use of the patient's own fat or cells, then we would be facing a decision to undertake a far longer and significantly less attractive product development path.

Thirdly, the initial data using large volume administrations have not been as robust or as well-tolerated as those which were reported to us with small volume treatments. There are some significant differences between the two studies, and only a handful of treatments have occurred to date. But because there's a precedent for large volume fillers not to perform as well as their smaller equivalent doses, and because we also have all this regulatory uncertainty, which I just described and which likely won't read out until next year, we plan to reduce our clinical and regulatory activities with Renevia until we have more clarity as to our regulatory and commercial options.

Depending on the outcomes from the three items I just mentioned, which span from product approval down to further development or just seeking a partner for the program, I really don't want to get too far ahead of myself on this call, but putting a business development effort behind Renevia might make a lot of sense in light of our recent acquisition.

That's actually a convenient segueway to the first of several corporate development events we plan to discuss. The first of those is that I'm extremely pleased to share that we have entered into a definitive merger agreement through which BioTime will acquire all of the remaining outstanding common stock of Asterias Biotherapeutics not currently owned by BioTime, which upon closing will become a wholly-owned subsidiary of BioTime if closing conditions are met, which includes approval by our respective shareholders.

The acquisition is expected to provide several important and positive benefits for us. First, we believe the Asterias cell therapy product candidates fit naturally and operationally within BioTime's existing portfolio. Second, we already are the largest shareholders of Asterias, so we only needed to issue enough shares to acquire the approximately two-thirds of the company which we didn't already own. Third, we have unique cell manufacturing expertise at our GMP facility in Israel and a broad patent position, which together we believe can help accelerate the Asterias product development and commercialization timelines. And fourth, we expect to benefit from certain financial synergies and enjoy other advantages from our critical mass, which collectively supported our decision to merge the pipelines and create a dominant cell therapy company.

Our vision is to build BioTime into a pioneering leader in cell therapy. And this acquisition can help make that a reality because it not only diversifies our pipeline with clinical assets addressing high unmet medical needs, but also adds partnerships with notable and relevant institutions, such as the California Institute for Regenerative Medicine and Cancer Research U.K. We believe this merger can be an opportunity for BioTime's stockholders to benefit from the current and future value of a broader pipeline, as well as the opportunity to meaningfully impact disease areas that are in desperate need of innovative therapeutic approaches and which seem like suitable targets for whole-cell approaches rather than small molecule or antibody-based modalities.

As part of our ambition to become the premier cell therapy company, we want to be ahead of the curve. We believe the next big biotech breakthrough will be in cell and gene therapies. For some recent evidence, I would point to strategic moves from companies like Novartis, Astellas and Novo Nordisk, each of which has announced significant commitments to cell and gene therapies in just the past few weeks.

And I won't go into a lot of detail on the Asterias pipeline today, but just to orient you a bit, it features OPC1, an innovative wholesale approach to treating spinal cord injury and which is the subject of a Phase I/II clinical trial which recently completed its enrollment. OPC1 is a cellular therapy which utilizes oligodendrocyte progenitor cells to address the complex pathologies observed in demyelination disorders such as spinal cord injury or neurodegenerative diseases like multiple sclerosis and white matter stroke. The potential reparative functions of OPC1 include the production of neurotrophic factors, the stimulation of vascularization, and the induction of remyelination of denuded axons, all of which are critical for survival, re-growth and conduction of nerve impulses through axons at the injury site.

Patient enrollment and dosing in the cervical spinal cord injury patients is complete in a Phase I/IIa study called SCiSTAR. The current study and other earlier work with OPC1 suggested a favorable safety profile regarding OPC1 itself and the procedure used to administer the cells to patients. The data from the current study also has shown durable engraftment of the OPC1 cells at the injury site in over 95% of patients treated.

Patients in the trial are quadriplegic as a result of their cervical spinal cord injuries, yet many of them are showing promising motor recovery in their fingers, hands, and arms. There have been no serious adverse events observed attributable to the OPC1 cells. There were two serious adverse events, one of which was associated with the injection procedure and the other was related to the immunosuppression regimen. While many of the patients in the SCiSTAR study have shown promising upper extremity motor recovery, the extent of the recovery attributable to OPC1 and not spontaneous recovery will need to be evaluated as part of a randomized controlled trial.

Although the 12-month results from the SCiSTAR study are anticipated in Q1 next year, an independent data review panel for the study met last month and recommended the continued clinical development of OPC1, which we of course intend to do after the close of the acquisition. And in fact, a Type B meeting with the FDA in accordance with the Regenerative Medicine Advanced Therapy, or RMAT designation, which Asterias received, has already been scheduled.

And notably, this program has been partially funded by the California Institute for Regenerative Medicine, or CIRM, and we believe it has the potential to obtain additional non-dilutive funding to partially offset the cost of OPC1's next phase of clinical development.

The second clinical stage asset we will acquire through this deal is called VAC, the cell therapy immuno-oncology platform, which we all know is a hot area for drug development. VAC is a form of immunotherapy which aims to stimulate the body's ability to recognize cancer antigens and mount an immune response to control the spread of disease. Dendritic cells direct the function of the immune system through the presentation of antigens, and they can be harnessed as therapeutic agents. Asterias's dendritic cell-based vaccines target a protein expressed in over 95% of cancers but which is rarely found in normal adult cells.

VAC1 for acute myeloid leukemia, or AML, is an autologous vaccine based on cells sourced from the specific patient, while VAC2 is an allogeneic, or non-patient specific, vaccine manufactured from a pluripotent cell platform and which is being developed to treat non-small cell lung cancer, or NSCLC. Notably, this platform was designed to be synergistic with other therapies currently in development for these indications, including new chemotherapeutic or other immunotherapy approaches, such as immune checkpoint inhibitors.

The VAC1 results from the Phase II multi-center open label clinical trial in AML, which met the primary safety endpoint, serves primarily as an encouraging proof of concept for the VAC2 program. The main initiative, VAC2, is a Phase II program which enjoys a valuable partnership with Cancer Research U.K., the world's largest independent cancer research charity. Cancer Research U.K. provides substantially all of the funding for the current clinical trial, so this study is not anticipated to add a significant amount of expense to the combined companies' budget.

In July of this year, the Safety Review Committee for the Phase II study reviewed the available safety and tolerability data and recommended continuation of the study and moving to parallel enrollment of additional patients in the advanced cancer cohort per the study protocol.

Speaking next about the structure of the proposed merger; following the closing, the holders of Asterias' outstanding capital stock will receive 0.71 common shares of BioTime for every share of common stock of Asterias they hold. On a pro forma and fully diluted basis, Asterias shareholders are expected to own approximately 16% of the merged company, and BioTime shareholders are expected to own approximately 84% of the merged company.

The proposed merger has been approved by the Boards of Directors of each company acting upon a recommendation of a special committee of the Board of each company and is expected to close during the first quarter of 2019 subject to approval of the transaction by the shareholders of both companies and other customary closing conditions.

From a general management perspective, we anticipate a smooth transition and integration process. According to the merger agreement, two members of the current Asterias Board of Directors will be represented on the BioTime Board of Directors, one of whom, Don Bailey, will be a new addition as of the effective time of the merger, and the other of whom, Michael Mulroy, already serves on the BioTime Board. Dr. Ed Wirth, who many of you know Asterias's Chief Medical Officer, will continue to lead the OPC1 program.

From my perspective, I'm excited to manage a larger and more important portfolio of related assets. I've previously led the acquisition of three companies, and I'm grateful that the close relationship we've had with Asterias means this business combination does not appear to pose any unusual challenges for us. After closing the acquisition, I look forward to collaborating closely with Mike Mulroy, the Asterias CEO, on the integration process to ensure it is rapid, disciplined, and productive for our shareholders.

Next, I'd like to discuss AgeX Therapeutics. Keeping in mind that BioTime owns an extensive portfolio of patents and related technologies, it is impossible for us to develop everything we own into a commercial product or technology. For this reason, AgeX was created as a basket of early-stage non-core assets and research programs to be separately funded and developed. We then convert them into non-equity dilutive cash for our core operations. In this particular, and I believe highly successful example, these assets are focused on the biology of aging and age-related diseases, which is an area of increasing interest evidenced by the emergence of companies such as Calico and Juvenescence.

Selling half of our interest in AgeX to Juvenescence and distributing most of the remainder to our shareholders is a great example of our ability to unlock value from our broad platform and provide capital and focus on our core assets. And as you will have seen a few days ago, we just received the second installment of $10.8 million from that sale. We also recently announced a record date of November 16th and a distribution date of November 28th for the distribution of AgeX shares, at which point AgeX will become a separately-traded public biotech company.

Although we will separate BioTime's research and development operations from AgeX, we certainly will retain a positive and active relationship with the company; including, of course, with BioTime's former CEO, Dr. Mike West, who has been very helpful to my on-boarding process. We also will enjoy a 4.9 ownership in AgeX, which we can elect to sell in the open market for cash or retain longer-term as a potential upside from the success of AgeX and Juvenescence.

Speaking of Juvenescence, I mentioned a moment ago that we received earlier this week a cash payment $10.8 million, representing the second installment from the sale of approximately 50% of our interest in AgeX to Juvenescence. We now have received 50% of the total purchase price, and we expect to receive the remainder of the $43 million purchase, that being approximately [$21 million] additional dollars upon the maturity of the convertible note we provided to Juvenescence at closing. And as has been stated on a prior call, that note can be converted into shares of Juvenescence; so depending upon how their planned IPO performs, it's possible we could receive significantly more than just $21 million in principal. So for many reasons, strategic and economic, we're hopeful they will have a highly successful IPO sometime next year.

So that seems like plenty of information on our clinical programs and corporate development efforts, so I'll now turn the call over to Russell to review our financials for the third quarter.

Thanks, Brian. BioTime's consolidated cash, cash equivalents and marketable securities totaled approximately $21.4 million as of September 30th, which compared to approximately $29 million at the end of the second quarter, at which time we consolidated AgeX's financials.

As Brian noted a moment ago, we received the second installment of the $10.8 million from the Juvenescence transaction. In addition, we own publicly traded common stock in Asterias and OncoCyte, which represent an aggregate market value of approximately $53 million as of yesterday. Once the planned distribution of AgeX is completed later this month, we will own over 1.7 million shares. In upcoming financials, the value of these shares will be included on our balance sheet as marketable securities.

We also have a $21.6 million convertible note from the Juvenescence transaction, which we received during the third quarter. If the note is converted to Juvenescence common stock prior to its maturity date due to a Juvenescence IPO, the value of the common stock may be categorized as a marketable security that BioTime may use to supplement its liquidity. If the Juvenescence note is not converted, it is payable in cash plus accrued interest at 7% per year at maturity.

As a reminder, as a result of the sale of 50% of our interest in AgeX to Juvenescence, we deconsolidated AgeX's financials from ours on August 30th, 2018. So going forward, our operating results will no longer include AgeX's operating results.

In the meantime, to provide additional clarity as to BioTime and AgeX's financials, we've included a non-GAAP table at the end of our earnings release, the details operating expenses by entity, adjusted for non-cash expenses. We believe this will help investors better understand both BioTime's and AgeX's financials, which we believe will make our story more straightforward for investors. Please keep in mind when reviewing this table that the table is not a cash flow by entity, because grants and other revenues are not included in the operating expenses.

During the quarter, BioTime's consolidated non-GAAP operating expenses after eliminating non-cash items were $8.8 million, which is comprised of about $7.4 million for BioTime and about $1.4 million for AgeX. The $7.4 million for BioTime includes about $1.5 million of non-recurring expenses. Grant revenue of about $718,000 was recognized by BioTime during the quarter. BioTime's actual cash burn for the quarter is in line with our prior guidance.

Moving now to details of the distribution of AgeX shares. We plan to distribute approximately 12.7 million shares to BioTime shareholders of record as of the record date on November 28th. If you own shares of BioTime as of the close of trading on November 16th, which is the record date, you will receive one share of AgeX for every 10 shares of BioTime you own.

To be clear, this is not an exchange of one company's stock for another. Think of it more like a stock dividend, but a dividend in the form of a newly-created public company, somewhat like an IPO. Please note that BioTime shareholders will not be required to take any action in order to receive the AgeX distribution, meaning they will not have to surrender or exchange BioTime common shares in order to receive their new AgeX shares. The distribution of shares will ensure that AgeX has a large shareholder base on its first day of trading.

To reiterate, the record date is the date which the list of BioTime shareholders eligible for the distribution is set, is scheduled for November 16th, 2018. The distribution of AgeX shares themselves is planned for November 28th, 2018. After the record date, BioTime shares will trade with due bills attached, which means that if you sell your BioTime share after the record date, you are also selling your right to receive the distribution of AgeX shares. Likewise, if you buy shares of BioTime after the record date, you will also be buying the seller's right to receive the distribution.

For details around the mechanics for receiving shares in the distribution as a BioTime shareholder, please refer to the registration statement on Form 10 that AgeX has filed with the SEC, accessible on the SEC's website at www.sec.gov. It is important to bear in mind that, under current expected timetables, Asterias' shareholders are not expected to participate in the AgeX distribution as the Asterias merger is expected to close after the distribution is already completed.

And with that, I will turn the call back over to Brian.

All right. Thanks, Russell. So, clearly, the overall biotech markets have been volatile recently. We believe a focus on the fundamentals, and in particular the steps we've taken to provide a positive future for BioTime, has provided us with the ability today to report on an exciting and transformative quarter.

We have supplemented and strengthened our pipeline with two additional and synergistic assets, which will help us become a premier cell therapy company. We have strategically converted earlier stage non-core research programs into cash and equity, which can be utilized to fund our more clinically advanced value drivers without diluting our shareholders' equity. And we have advanced the clinical development of our lead program, which continues to generate encouraging results in a disease with no currently approved therapies and comparatively modest competition.

This quarter was packed with news, but we have no plans to slow our pace of progress. We plan to complete the Asterias transaction early next year and will integrate the companies in a thoughtful and productive manner. We will remain focused on advancing our clinical programs throughout 2019, and we will update investors often on our new timelines and regulatory plans.

As a final topic for today, I'm confident in our future because I previously transformed companies not only through strategic transactions like those we've discussed today, but also by building institutional and retail relationships through productive and continuous engagement. I have longstanding relationships with the buy side sell side from my prior CEO roles, and I intend to bring a similar approach to BioTime in order to increase awareness and visibility of the company in our programs.

Awareness is vital to our growth. To highlight that point, we recently restructured our Investor Relations function by engaging the Hone Group and Solebury Trout, a global investor relations firm specifically serving the life sciences industry. We will work with these professionals to increase our exposure to the capital markets and accelerate interest in BioTime from the institutional investment community.

Our goal is to build awareness and support for a reinvigorated and repositioned BioTime and have BTX on every investor's radar screen next year. We will achieve this through numerous specific initiatives, including a targeted investor outreach to build that institutional following, investor and sell-side KOL events to educate people about our promising science, conferences and [non-deal] roadshows in major cities, and an aggressive rollout of our recent progress and future plans at JP Morgan, the largest Healthcare Conference of the year.

Most importantly, I believe that stating and then delivering on our milestones across a spectrum of corporate and clinical development activities ultimately will drive the company forward on both a fundamental and equity basis, and that will be this management team's priority and focus.

With that, Operator, we are ready for questions.

(Operator Instructions) And our first question comes from Reni Benjamin with Raymond James.

Congratulations, Brian, on the new role, and it seems like you're already beginning to transform the company, so good luck with that.

Have a couple of questions, maybe starting off with OpRegen. You did have some updated data. You mentioned during the prepared remarks that enrollment is progressing, you hope to complete enrollment by next year. But just kind of looking out into 2019, can you talk a little bit more about your vision in terms of advancing the OpRegen asset into more pivotal studies? Or do you think that longer-term follow-ups from the current cohorts are what are more likely in that only after discussion with the FDA and possibly in 2020 or so is when the next sort of pivotal studies will be conducted?

Thank you very much for the warm welcome. And with respect to OpRegen, I'll have Gary follow up, but what I would say is that the more data that you bring to the agency, obviously the more helpful that is and the more informative it is. I do not believe it is the case that we need to wait 12 months after the last patient dosed to have the clarity and develop our plans and so forth. But let me give Gary an opportunity to provide some more detail around that.

So, basically, as we presented recently at AAO, we enrolled the first 12 patients in cohorts 1, 2, 3, and the first 3 patients in the fourth, better seeing, better vision cohort. There's a total target of 12 for that cohort. So, [as the data represented at] AAO, we are certainly encouraged by the early data showing potential signs of efficacy and certainly well-tolerated at this point. And so, as we progress with that better seeing, better vision, earlier disease cohort, we'll be able to better assess how to move forward after that.

And then, just switching gears to Renevia, can you provide some color, or a little bit of context regarding the kind of questions that you're getting? If you believe that this is likely going to result in approval by the first quarter of 2019, I've seen that there's nothing all that onerous or complicated, but any sort of color regarding that process?

So the questions that we've received to date have been unremarkable, standard (inaudible) around CMC that we've been able to easily address. What we've been waiting for are questions around the clinical aspect. And BSI has new process that they have instituted, which has delayed their questions to us. So as soon as those are received, we'll be able to have a better idea of when we might be able to move that forward, but I think that is a good estimate, essentially, of Q1 of next year.

And just regarding the ongoing activities, I think, Brian, you mentioned that there will be a reduction of the ongoing activities. I assume you mean here in the U.S. in the IS, the investigator-sponsored studies. Am I correct in that, or is there something else?

No, that's correct. The work is substantially complete, European study, and as just was discussed, the regulatory work with respect to the CE Mark is ongoing. So yes, the wait-and-see approach, the slowdown of activity, that's really looking exclusively at the U.S.

And then, just finally for me, it seems like just my back-of- the-envelope calculation for the acquisition of the remaining shares of BioTime, I guess total is about $82 million or so, is what the company is being valued at. Is that correct, or did I miss something?

With respect to the valuation of the company, I mean, you're right, and of course that's going to change daily as we trade because we have a fixed conversion ratio. But yes, that makes -- they have about 55, little over 55 million shares outstanding. Remember, we own about 30%, or about close to 40% of those, so if you look at it on a net basis, it ends up being roughly 16% that the shareholders will own of BioTime once all of this gets completed. But I think, yes, your back-of-the-envelope calculations today are correct.

And our next question comes from Keay Nakae with Chardan.

Wondering if you can comment on the upcoming meeting with the FDA. And number one, do you have some firm objectives that you're looking to come out of the meeting having gained clarity on and just maybe a more general statement since you've had -- received the RMAT designation? Do you believe that that's been helpful in your interactions with the agency?

So for the U.S., what we're interested in finding out, because it has a very significant impact on our future plans, is how the agency will categorize or view the product. So, because of the use of cells, because of some of the components of Renevia, it may be deemed to be more drug-like than device-like. And as I know, Keay, you?re well aware -- sorry.

Brian, I was referring to OPC1. I'm sorry.

Pardon me, Keay. Well, here, let me -- I'll just send it right to Gary.

Well, with regards to OPC, so the agency doesn't have to give us a response to our questions more than 24 hours since [leading in] advance of the meeting, so we don't know what the responses are to our inquiries at this time. So, once we receive them, we'll have a better idea of whether or not our initial beliefs based on the data are consistent with what the FDA -- how the FDA views it.

And have you been finding the interaction easier since you've gotten the RMAT designation?

That's really a question for Asterias. We're in that period between signing and closing, so it really is something that we can't answer. But obviously, we would direct you to them until the deal closes, and then we can provide abundant information.

And then, just moving on to the acquisition, I know you've stated a number of reasons for doing it, but would you say there's a primary one? Obviously you have the current equity ownership you'd like to protect. You talked about the synergies in the operation. The assets themselves have their own compelling values. But is there a primary driver, especially when we consider that they are earlier-stage and would require an investor, as we have with the Asterias investors, to have that longer-term investment horizon for those assets?

Yes, that's a good question. We didn't apportion a, let's say, percent contribution of each of the factors that we considered. It's really a constellation of things. But that constellation together is intended to help create a premier cell therapy company. So we think that all the items -- I won't repeat them because you've already heard them from me, but all of them have a purpose, and the purpose is to establish BioTime as that preeminent company. I think we've all been waiting a very long time for the promises of cell therapy to become realities. And so having the critical mass to having multiple shots on target, going after programs that I believe are more suitable with respect to wholesale approaches, all of these things together are intended to achieve that objective, and each of them contribute in an important way.

And our next question comes from Jason McCarthy with Maxim Group.

I'll also say congratulations, Brian, on your new role. Question around manufacturing. You did mention that you have that GMP facility in Israel, and I was wondering what's the capacity of that facility? Manufacturing has become a bit of a hot topic around things like CAR-T and gene therapy. And now that you have the Asterias assets coming under the BioTime umbrella, will you look to transfer that manufacturing in-house to your own facility?

Yes, that's an excellent point. I think people occasionally lose sight of the fact that cell therapy manufacturing is a little bit different and very difficult, and reproducibility and control have tripped up some companies. I've only been on the job 7 weeks, I'm actually headed to go see -- I'm going to go over to Israel and see our facility, leaving on Sunday. So I'm going to get a sense for that.

We haven't made any final decisions about where any assets are going to be manufactured. We have ideas and plans. Certainly we will update you on a fulsome way after closing. But with respect to sort of the facts and figures around that facility, I'd invite Gary, if he has anything to add to it. We have been able to manufacture certainly plenty of OpRegen, more than is necessary for our next study. So I think we're in good shape there, but with respect to additional capacity in the potential to move other assets there.

Yes, I would echo Brian's comments. So certainly, we are comfortable with production for OpRegen, and remains to be seen what we do with the other assets.

And in terms of OPC1, you'd mentioned some features of the SCiSTAR study. Can you tell us when the next update from that program is going to be? Because I would assume that, with spinal cord injury, that this is going to need or require long-term looks at efficacy even without having a randomized trial, this initial, just to see if those effects are maintained.

I wish I could. Again, I can only refer you to the comments I made already on the call. We're not allowed to provide guidance with respect to the proposed merger. So I'm going to have to defer that, redirect you to Asterias themselves until at such time that a deal has closed.

Thank you. And at this time, I'm showing no questions in queue. I'd like to turn the call back over to Brian Culley for further remarks.

All right. So in just the past 2 weeks, we've announced the acquisition of one public company and the distribution date for another. We've announced the receipt of $10 million of non-dilutive capital and encouraging clinical data in a disease with no treatment options. So I'm feeling pretty good about my first conference call at BioTime. I appreciate everyone joining this morning. I'm excited about our plans. And I hope we'll be able to keep this positive momentum going for a long time. Thanks very much.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.