Lineage Cell Therapeutics Inc (LCTX) 2023 Q1 法說會逐字稿

Welcome to the Lineage Cell Therapeutics First Quarter 2023 Conference Call. (Operator Instructions). 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, Abby. Good afternoon, and thank you for joining us. A press release reporting our first quarter 2023 financial results was issued earlier today, May 11th, 2023, and can be found on the Investors section of our website.

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. 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 SEC filings. With us today are Brian Culley, our Chief Executive Officer; Jill Howe, our Chief Financial Officer; and Gary Hogge, our Senior Vice President of Clinical and Medical Affairs.

With that, I'd like to turn the call over to Brian.

Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us today. Our most recent quarterly call was just 2 months ago, but I'm happy to report today on additional and fairly exciting progress, which has occurred since then.

The most significant event of the past 2 months was the ARVO Annual Meeting held in New Orleans, where Dr. Eyal Banin, one of the investigators involved with the initial Phase I/IIa trial of OpRegen presented never before seen analyses, which Genentech performed on data collected in our study. To be clear, these were new, independently generated analyses conducted by Genentech's masked expert grader. And while the data support and reinforce our original findings, as well as the sub-study findings made by the Doheny Image Research Lab, these were novel analyses and results which Lineage had not previously reported.

We have previously reported and presented on unique clinical findings among some of our Cohort 4 patients, including areas of GA being smaller at 12 months than at baseline, and increases in patient visual function at 12 months, which occurred notably among the 5 patients who received extensive coverage of OpRegen across their area of GA. But Genentech took these data analyses even further using proprietary technology and imaging expertise, and they were able to generate new analyses from the raw data and images. These additional results support what Lineage had reported previously, including structural and functional improvement in a disease previously thought to be inevitably progressive. Genentech showed new findings supporting the observation that extensive placement of OpRegen cells across the area of GA appear to result in the best clinical outcomes seen in clinical trials to date, as well as continued evidence that transplant of OpRegen cells may result in a multi-year treatment effect from a single dose.

We believe these findings compare favorably versus the burden of someone, typically elderly and with very poor vision, seeking out a monthly or even every other monthly injections of a complement inhibitor. And importantly, these data were collected using a common surgical technique, which every licensed Vitreoretinal Surgeon is capable of performing, using standard instrumentation. And these outcomes occurred 5 out of 5 times when OpRegen was placed extensively across the area of GA. Additionally, something which I believe has continued to be overlooked is the evidence Genentech presented, which showed a patient who no longer had features of cRORA near the border of their GA following treatment with OpRegen. I'll remind you that cRORA is an area of complete RPE and outer retinal atrophy, which essentially means the complete loss of photoreceptors and the essential supporting RPE.

I'd also like to point out that thousands of patients have completed clinical trials for the 2 leading complement inhibitors. But despite recent reports from extensive subgroup analyses of those data, I'm not aware of even a single case of cRORA resolution among them. Now while Lineage may not yet have as many data points as the competition, but even setting aside the vision gains we reported in patients who should be losing vision, we are reporting much larger anatomical changes than the competition, and we're using objectively collected methods on anatomical features, unaffected by patient effort. So I believe these direct comparisons, and questions about relative value, are completely valid. We welcome these comparisons, especially as the OpRegen program advances through the clinic.

As a reminder, the primary and secondary endpoints for the ongoing study occurr just 90 days post treatment, which means these data are detectable and collected 9 months earlier than the more common 12-month treatment outcomes.

Before moving on, I'd just like to convey my appreciation to our partners, Roche and Genentech, for enthusiastically supporting our desire to have these new data presented at ARVO. Their retinal tissue segmentation algorithm and additional resources which they deployed, give us further conviction in our cell transplant approach and reflect the insights and expertise which we were counting on when entering into the license agreement for the development and commercialization of OpRegen, from which I'll remind you, we're eligible to receive up to $620 million in additional payments as well as double-digit royalties.

In the meantime, we'll closely monitor the establishment and size of the dry AMD commercial market. While Lineage does not have a commercial product today, we believe the recent approval of Syfovre(R) and reported $5.9 billion acquisition by Astellas of a similar complement inhibitor asset, will not only help create engaged and informed physician and patient populations, but also set the stage for potential next-generation products like OpRegen, by verifying expectations of a multibillion-dollar commercial market which is comprised of patients eager to find effective interventions for their debilitating condition.

Moving next to our OPC1 program, which is intended to help patients recover more fully from a spinal cord injury. Our recent focus has been on completing the requisite regulatory interactions to support the initiation of the DOSED trial, which is a 6 to 10 patient safety study of a new spinal cord cell delivery system. This new system is expected to greatly improve the transplant procedure by allowing the surgeon much more time to administer the cells to the spinal cord and to do so while the patient's respirator is still connected.

As you'll recall, we previously held an RMAT meeting with the FDA to discuss the use of the new delivery device. Along with the device information, we included a protocol synopsis for the clinical safety study we plan to conduct in subacute and chronic SCI patients. That RMAT interaction was followed by a request from Lineage for a Type B meeting to discuss specific items, which would be included in an IND amendment Unexpectedly, the FDA noted in response to our request, that their written responses from that meeting would not be available until the last week of June, which is approximately 8 weeks later than we'd expected for a Type B meeting request. I want to provide some comfort to our knowledge, this later-than-expected meeting date is in no way a reflection on the OPC1 program. The FDA explained that the delay was due to time constraints among certain essential staff members necessary for our topics. So we find this to be unfortunate, but not entirely surprising given the deluge of cell and gene therapy programs currently in development. Nevertheless, after the Type B meeting is held this summer, and provided that the agency's responses support the use of the new delivery system, we expect to be able to submit an IND amendment for OPC1 in Q4 and open the DOSED study clinical sites as soon as possible thereafter.

I do have 3 additional updates on OPC1 today. The first is that we strengthened our intellectual property position through a patent, which was granted for claims covering manufacturing processes, which Lineage developed. That patent has claims which expire no earlier than 2040, providing us with a long period of protection for this program.

Second, I want to provide an update on our announcement regarding the creation of the first annual Spinal Cord Injury Investor Symposium, a conference which Lineage will be presenting this year alongside The Christopher & Dana Reeve Foundation, and which will be held the last week of June at the Sanford Consortium for regenerative medicine in La Jolla, California. We created this event to increase engagement between industry and patients and the patient advocacy community, which in our experience, can help inform and improve the product development process. The Reeve Foundation is a recognized leader in the field of spinal cord injury, and we're proud to have them as a partner as we advocate for those affected by paralysis. We aim to increase disease awareness, elevate the probability of success for product development and promote clinical trial participation by focusing on topics such as patient appropriate endpoints and the benefits of partnerships among and between for-profit and nonprofit organizations.

Most notably, 2 days ago, we announced that we had received an education grant from the California Institute for Regenerative Medicine, or CIRM, recognizing the SCI Investor Symposium as an important scientific conference and supportive of CIRMs overall mission and objectives. We are thankful for this additional financial support from CIRM. And you may recall that OPC1 was one of the first clinical trials ever supported by CIRM, and we're grateful to the agency for its continued commitment to spinal cord injury. As I have shared before, we still expect to approach CIRM about a clinical trial grant to support the DOSED clinical study, but that step is normally performed after the IND amendment has been submitted.

So third and lastly, for OPC1 today, I just want to convey my appreciation to all the members of Team Lineage, both in Carlsbad and Israel, as well as any investors who participated in the Wings For Life World Run last weekend. The World Run is an important and global fundraiser for SCI research and embodies the importance of broad-based collaboration, which, as I just explained, we believe is core to successful product development in this condition.

Moving along, I have just a few more updates to share.

For VAC2, as you know from our previous discussions regarding the pre-IND written feedback we received, we have a fairly clear path to support the CMC side of an IND submission, but it would be expected for us to also include any ex- U.S. clinical data, which has been collected. That means providing data from the U.K.-based Phase I trial performed by Cancer Research UK in 8 patients with non-small cell lung cancer. We've been waiting for that data to arrive, and I'm happy to share today that we received some key updates and now expect the complete data package to arrive next quarter.

I have stated previously that we believe strategic alliances offer us the best mix of risk and reward for the VAC platform and our BD team has several exploratory discussions ongoing for VAC2 and the VAC platform more generally. While there can be no assurance that any development partnerships we're exploring will come to fruition, our preference for the VAC program is to de-risk it through one or more alliances rather than proceeding independently, and the BD team will continue to work on this initiative. There also have been some encouraging clinical results reported in the neoantigen vaccine space lately. So we intend to continue to monitor this landscape closely because doing so will better inform our corporate strategy and help us determine the best development path for VAC2 or any other VAC platform programs which we may pursue through academic or corporate partnerships.

For ANP1 which is our transplant program for hearing loss, the preclinical testing is ongoing through a collaboration with the University of Michigan. Our initial objectives from this collaboration are to determine the preferred location for the cell transplants and to determine how long the cells can survive after transplantation. Last week, I was provided with the first-ever images generated from that preclinical work. And in fact, I'll see if we can post one of those images to our Twitter account after this call. I think it's kind of a cool thing to see. I was excited to see the early data because as you will recall, our hearing loss program didn't even exist at the beginning of last year, and yet, we already have our first preclinical data emerging. This is such a great example of the speed and return on investment from our R&D dollars.

We developed a differentiation method, filed intellectual property and proceeded into in vivo testing in less than 12 months and with a commitment of less than $1 million R&D dollars. And frankly, I think one of the key advantages for Lineage in what continues to be a difficult environment for small biotech companies, is that our core technology offers us the ability to make tremendous progress without also having to make tremendous expenditures. Our disciplined spending and efficient use of R&D dollars is a foundation, which Jill and I believe is appropriate for our stage of development and which can help us bridge to important events and opportunities which lie ahead, such as completing enrollment and reporting data from the ongoing Phase II trial of OpRegen, the initiation and conduct of clinical trials for OPC1 and progress in partnerships, which we pursue across other areas of our business.

As a final, but actually quite important note, I'm also happy to report that based on preliminary estimates of market cap cutoff, we anticipate Lineage will be added into the Russell 3000 and the Russell Microcap indices this summer, an inclusion, which may help to expand investor awareness, increase institutional ownership and provide additional liquidity in our stock. With that, I will now hand the call over to Jill for a discussion of our financials.

Thanks, Brian, and good afternoon, everyone. Beginning with our balance sheet, I believe we continue to be efficient with our spending and are well capitalized to conduct the near-term activities, which Brian just outlined. Our reported cash, cash equivalents and marketable securities as of March 31, 2023, totaled $46.8 million, which is expected to support our current planned operations into Q3 of 2024. Please note this does not account for any of the Roche Genentech milestone payments nor for any business development or grant revenues, which we may receive during the same period.

Now let me review our first quarter operating results. Our revenue is generated primarily from licensing fees, royalties, collaboration revenues and research grants. Total revenues for the first quarter were approximately $2.4 million, a decrease of $2.8 million as compared to $5.2 million for the same period in 2022. This decrease was driven by lower collaboration and licensing revenues in conjunction with the Roche agreement.

Our operating expenses are comprised of research and development and general and administrative expenses. Total operating expenses for the first quarter were $8.9 million, a decrease of $2.5 million as compared to $11.4 million for the same period in 2022.

R&D expenses for the first quarter were $4.2 million, an increase of $1.2 million as compared to $3 million for the same period in 2022. The increase is primarily driven by a $0.5 million of nonclinical related expenses to support the OPC1 program and $0.2 million in OpRegen program expenses to support the Roche collaboration. Another $0.4 million and $0.2 million of the increase was related to R&D spending on the auditory neuron and photoreceptor programs, respectively. G&A expenses for the first quarter were $4.7 million, a decrease of $3.7 million as compared to $8.4 million for the same period in 2022. The decrease was primarily driven by the $3.5 million in lower litigation and legal expenses related to the Asterias litigation settlement that was accrued in the prior year and $0.2 million in lower expenses for accounting and tax services.

Loss from operations for the first quarter was $6.6 million, an increase of $0.2 million as compared to $6.4 million for the same period in 2022. Other income for the first quarter was $0.4 million compared to other expenses of $0.7 million for the same period in 2022. The income was primarily driven by the change in the fair market value of our marketable equity securities, interest from our marketable debt securities and a receivable for the employee retention credit program partially offset by exchange rate fluctuations related to our international subsidiaries. The net loss for the first quarter was $4.4 million or $0.03 per share compared to a net loss of $7.1 million or $0.04 per share for the same period in 2022.

Overall, we continue to maintain our same spending discipline as we have adhered to for years and which has served us well in the past. As the biotech markets continue to face uncertainty, we believe that maintaining discipline in our spending will continue to allow us to maintain our plan to reach meaningful milestones, make important progress and create value for shareholders from our investments in our programs. Now let me hand the call back to Brian.

Thanks, Jill. I continue to believe Lineage is making good decisions in a challenging biotech environment. We've been conservative and disciplined with our spending, and we're advancing our programs in a responsible way. Our collaboration with Genentech and Roche is progressing extremely well. And one of the many things we'll be excited to work on this year will be continuing to support Genentech and Roche in the further clinical development of OpRegen for the treatment of dry-AMD with geographic atrophy. As always, we sincerely appreciate your support of the company as we look to position Lineage to become a leader in cell therapy and cell transplant medicine. And with that, operator, we are ready to respond to any analyst questions.

This time, I would like to begin our question-and-answer session. (Operator Instructions). We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jack Allen from BAIRD.

Awesome. Congratulations to the team on the progress made throughout the quarter. I'll kick things off with a question on the OpRegen program. I realize that the clinical study right now is being run by Roche. But I was wondering if you had any comments as it relates to getting data readout from that Phase IIa study. You do reference the rather rapid time point here with the 90-day post-treatment follow-up. And then I have a follow-up to that, I was hoping you could provide some more color as it relates to the milestones that we could expect from the Roche Genentech deal and any of those that could be coming in the near term as well...Thank you so much.

Thank you, Jack. No doubt the top 2 questions that I would expect to receive today, and you got both of them. Dosing is underway in the study, which is confirmable by the fact that at Roche's quarterly update, we have been moved to a Phase II program. They only do that after first patient has been initiated. So we've got 3 sites open right now. More sites are expected. But there are 2 variables that are very hard for us to provide a firm answer on when data could be expected. One is that the study could enroll anywhere from 30 to 60 patients.

This is a surgical optimization study. So you can imagine that if there is a variable which is tested and it looks interesting, they may continue to investigate that variable to see if they can squeeze out some more benefit or ease of use. So we don't know how many patients will be defining the end of enrollment. The other part of the question is whether what we're looking for is full data such as what might be publicized or presented at a major medical meeting, versus top line data. My view is that while subject matter experts surely would like to see B scans and OCT images, the main question, I believe, that is out there, is whether Roche will be able to observe and report the same kind of data as Lineage has. And will you find that to be satisfying in 30 patients, in 10 patients, in 5 patients, or in just 1 patient?

So it's very difficult for us to say exactly when the data will arrive. But we do have this one advantage that's quite meaningful, which is we're going to be getting our data approximately 9 months sooner than you might expect, because they are both anatomical primary and secondary endpoints.

With respect to milestones, the milestones are redacted for competitive reasons by our partner. Big Pharma often doesn't want to disclose exactly how much they're paying and when, because that can, of course, be used against them by future partners that they negotiate with. So it's not unusual for us to have redacted milestones.

We have been asked whether there was a milestone in connection with the current study, and we haven't reported one. And what you can take from that is that there was not a milestone, and that is because that surgical optimization study, which is running right now, was not originally contemplated when we entered into the deal. So we're very happy that the optimization study is being done. It gives us additional confirmatory data. It gives us potentially even a greater benefit and it is a study that Lineage very likely would not have been able to conduct on its own. So we're very glad that this study is happening, but it really was conceived and decided to proceed with this study after the deal was already determined, i.e., the milestones were already placed where they belong. So hopefully, that is as much of an answer as I can provide on data and milestones and hopefully, that can provide at least some insight as to the information that we've been able to provide to date.

Great. Great. And then maybe just one very brief follow-up. I know you had very strong efficacy in the Cohort 4 data once you had realized that you had to fully cover the lesion -- the question would be, do you get the sense from Roche as to whether they're looking to optimize efficacy here? Or could it be that they're also looking to optimize safety? How do you think about the relative, I guess, objectives with this study?

Yes, Jack, we think the answer is both. Obviously, cover as much of the area of GA as possible because that's where the efficacy and effect were observed and how best to safely do that. And certainly, the group at Roche and many of their vision experts are some of the foremost in the world. And as Brian alluded to, they may have some ideas on how better to approach both the front of the eye via PPV and retinotomy as well as other delivery routes. So we await those data, and that may be involved and whether it's 30 or up to 60 patients, we don't know, but we leave it to them to optimize that.

Got it. Thank you for the questions -- congratulations again on the progress.

Your next question comes from the line of Joe Pantginis from H.C. Wainwright.

So 2 questions, please. So obviously, with the ARVO data, pictures speak volumes. So I'm just curious, seeing these new imaging analyses and being able to see better coverage, et cetera, do you think that will impact any of the plans moving forward with regard to still assessing various delivery techniques through Genentech studies? And number two, would you be able to just remind us as you're awaiting the FDA meeting for OPC1, what your wish list is?

Sure, Joe. With respect to question one, of course, one of the reasons to partner with the #1 ophthalmology company in the world is to rely on their judgment on those decisions. So this is a new technology. We have 5 of potentially the best ever clinical outcomes that you can get in this disease setting, but it's still 5. So is there room for improvement through different approaches, methods, safety, ease of use, all of these things will really be data-driven decisions, but data-driven decisions that are inextricably linked to Roche's ophthalmology experience.

With respect to OPC1 and the wish list, the device that we are proposing to use has advantages that feel very obvious to us in terms of the ease of use and potentially the safety, maybe even spilling over into efficacy.

So we'd like to get a green light to be able to deploy that device. It does look like a device that could be used at many more centers than the original method of delivering cells, which required a lot of scaffolding and equipment and the handling and construction of that equipment. So in terms of ease of use and deployability, we'd really like to get a green light there. We have not yet taken the new process by which we manufacture the cells and presented that comparability data to FDA because we're doing these things sequentially.

That may help us just to be able to continue on under the current IND, for example. But the agency is aware that we have developed a new process. And they know that when we have completed our comparability testing and we are in a position to do so, we will bring all of that data to them. So step one is a clean bill of health to be able to initiate the DOSED study. And then step 2 will be to get the cell data in front of the agency. And then longer term, we have some really interesting ideas around assessment tools and endpoints, but that would be for a future conversation.

Your next question comes from the line of Kristen Kluska from Cantor.

Congrats on these recent data. I had a couple of quick questions for you. The first is, Brian, since I've known you, you've been a huge advocate for OCT and not just you but others in the field, including companies, thought leaders, et cetera. So I just wanted to ask if you would say that, broadly speaking, the field is really moving towards appreciating and recognizing the advantages related to looking at OCT specifically for GA?

Well, thank you, Kristen, and I appreciate that question. I'm not a doctor, so I use really simple ideas. I feel like it's sort of like the difference between an x-ray and an MRI. OCT gives you almost histological levels of observation. And I think there's been a trend toward that as a very informative tool. I, in fact, had a physician say to me that he doesn't need to see his patient, he can just see the OCT images and knows what to do next. But Gary, do you have anything to add, and you might have some additional insights on kind of the state-of-the-art with the imaging technologies.

Yes. I think the statement from AAO, that they consider [OCT to be] (added by company after the call) the gold standard for evaluating the posterior section of the eye, it kind of speaks for itself. And other companies that are obviously in this space are also looking at not only FAF but OCT to better assess how they're potentially slowing the progression of GA as opposed to hopefully arresting or reversing. So I think in conjunction with these other corporations and academic efforts, the FDA will also come around as well.

And then specifically to this analysis that was reported at ARVO, can you maybe give us a little bit of color on understanding why these analyses were conducted to begin with? It seems that before you reported this data, there was a clear correlation with the placement of cells related to the best patient outcomes, and these data definitely support that case, but perhaps give us a little bit more confidence in definitively saying that in light of the data. So I guess that would be the first part is just understanding why they did [Roche conduct] (added by company after the call) these studies. And then the second part is, if they've communicated, if anything based off of these studies has changed how they've thought about looking at this ongoing IIa study.

Kristen, I'll preface for Gary and just state that while I wish this weren't the case, the reality is that the data which are reported from Lineage are going to be viewed differently than data, which are reported from Roche. So the reason why I've gone to great length to emphasize that these were new analyses, that they haven't been seen before, they reinforced our finding, is because I'm quite aware that hearing it from Roche, can easily mean a lot more to one's evaluation of the data than just hearing it from Lineage's team. But Gary, perhaps you could speak a little more specifically to Kristen's question.

Yes. I think Roche looked at the sub-study conducted by Doheny, some of the additional analyses by Brandon Lujan and Jordi Mones and others. And they certainly believed it because that's why they did the deal. But the thought is, is there a way that a much larger pivotal registrational study, on a global basis, that you can look at a standardized way to assess the progression or regression of the area of atrophy. And there are certain methodologies that they would appear to be exploring to automate this process and make it reproducible across multiple central reading sites.

And then just the last question I have for you is based off of all the feedback you're hearing now that the first drug has been officially launched, do you think that having an approved treatment is going to change physicians' and patient appetite to getting diagnosed earlier and doing more routine testing in this landscape. I mean, we often hear from KOLs that even if patients are aware that they could be at risk or there's an indication, they just don't frankly want to know a whole lot about it if there's nothing that a doctor can offer them. And now that narrative has changed.

Thank you for that question. I do believe very strongly that in a market which has no approved therapies, the first approved agent to come along does wonders for everyone who follows. And that's because the first company will invest in educating the patient population, helping them become aware that there are therapies, you end up now with a captured audience. I mean, literally, databases are created of patients. And so you end up with a much more mature and established market landscape than if you're going in there and trying to say to someone who 5 years ago, was told there's nothing I can do for you, and now all of a sudden, there is an effective therapy. If they don't happen to see your commercial on TV, they're never going to go see their doctor because they don't think there's anything they can do. So I absolutely feel very strongly that it is better for this space, better for these patients to become smarter about their disease and the education that will occur with the conversations that they have with their physicians. And I can tell you anecdotally through a conversation I had with one surgeon, that he has patients coming in off the street with print outs of press releases about the recently approved agent, and they want it.

So I think we've always known that vision is important. And now we may have a convergence of that desire for an intervention with the presence of an intervention, which, as Roger Bannister said many years ago famously, Après moi, le déluge, I think the further -- the follow-on assets which arise on the market are going to benefit from the precedent which is set, regardless of whether it has a big clinical impact or not, regardless of whether it's got a convenient administration or not, it is going to automatically create an educated patient population.

Abby, I think Kristen took the answer offline. So if we have any others, please let me know.

Your next question comes from the line of Mayank Mamtani from B. Riley.

This is Yuan Zhi on for Mayank, great to see the data update at ARVO. First, could you maybe discuss if Roche is or has plans to incorporate the ARVO findings of relying more on OCT during the analysis for their Phase II OpRegen trial.

I'll let Gary, as a protocol specific question, go ahead and address it.

Yes. [The Phase II trial is] Publicly available on clinicaltrials.gov, and it's primarily a safety and delivery study and the [additional] (added by company after the call) secondary and tertiary endpoints have not been made publicly at this point. We do expect that OCT would be incorporated as part of that.

Got it. Got it. And our second question is, can you provide any extra color on the MRI findings in your upcoming publication and how these were incorporated into your learnings for your novel delivery system.

Yes, the MRI findings, which you're referring to is a forthcoming publication from the Phase I/II study in spinal cord injury using the oligodendrocyte cell transplant, which we call OPC1. What's notable there is that a large number of patients who suffer from a spinal cord injury will experience a cavity or a vacancy in the area of injury and that can lead to complication. And of course, you cannot conduct an electrical impulse across a gap. So the MRI is a wonderful tool for observing the presence or absence of a cavity and in particular, the presence or absence of a cavity following administration of our OPC1 cells.

So, much in the same way that the eye gives us a convenient way of seeing what's going on through the direct imaging we can use an MRI to image the spinal cord and see if our cells have migrated, if they're present, if the patient has a cavity or not. And we want to report these data because the rate of cavitation, i.e., the frequency of an open area or a gap in the spinal cord was vastly reduced following administration of OPC1. So that is an important and notable finding, which speaks to durability of the cells and also provides some very good information for long-term follow-up of the durability of our cells, which, again, we see quite easily in the setting of the eye because we have such good access, and we're able to replicate that work in the spinal cord through the use of an MRI.

Your final question comes from the line of Michael Okunewitch from Maxim Group.

Congrats on the progress. So I guess to start off, you touched on how activity in the space or on geographic atrophy highlights the value of the OpRegen program, in particular, the $5.9 billion acquisition of Iveric. But I'd like to just get a better understanding of how the programs stack up. Is there any difference in treatment setting between where OpRegen fits versus the complement inhibitors?

The 3 areas that I always look at when comparing OpRegen to the complement inhibitors are the magnitude of effect on the anatomical side, which is vastly greater. You can see from the complement inhibition, what you can imagine is the best possible effect. And it's not a smaller area of GA. These areas of GA always get larger.

So on the anatomical side, number one, we've got wonderful data that suggests that we are far beyond the complement inhibitors. Number two, we have an effect on visual acuity. And I referred the extensive data analysis, the post-hoc analyses that are being done, which I feel in many cases, are highly selective and are an attempt to find evidence of functional improvements, which in this case would be less loss of vision. That's not what we have seen. We have seen gains of vision. Now I recognize that vision is assessed with a more variable tool compared to the anatomical changes. But nevertheless, the differences between catastrophic vision, i.e., losing 15 letters or let's say, extraordinary gain of 15, 20, 25 letters, that is such a large difference that I feel it is notable and worthy of some great consideration.

And then thirdly is the administration. Again, we are talking about elderly people who are being asked -- despite their extremely poor vision, to get to a clinic to get an injection. If they want the best effect, they need to have that injection every month. If they want to forfeit a little bit of the already small benefit, then they go every other month. So I really feel like compared to a onetime therapy, where we have the triple benefit of a large anatomical effect, a large functional benefit and a single administration.

And I really think that, that is just a much better product profile because when you get down to it, products are driven through sales through the sales rep and the physician excitement and interest, and it all has to be detailed off of a package insert, which means it all has to be backed up by your data. And I think that I feel great comfort that there will be a day in the future where we'll have a data package, which is very compelling compared to anything else that's in development or that can only hit on a single pathway or a handful of pathways compared to a complete replacement of the cell that has dysfunctioned or been eliminated.

All right. And then just to follow up on that point, I'd like to see if you could -- how you envision if the data holds up with what we've seen so far, OpRegen and the complement inhibitors fitting into the treatment flow? Would you expect this to be something where both therapies could be used in tandem, either complement to slow down the progression and then you get OpRegen to reverse and restore -- or do you believe that based on the current data, at least, it's efficient enough that this is something that would potentially be a replacement or a competitive offering?

Thank you for the clarification. I believe if our data holds up, it would be an easy decision, whether you're on a complement inhibitor or not, to switch to a one-time surgical intervention which holds the promise of halting the expansion of your GA and providing you with a benefit and vision in the near term. But I also don't think that it has to be exclusive. Gary, I know you've had some conversations with docs about this, and perhaps you can add for Michael, your thoughts on how these products could be used together or in different sequences.

Yes. We've had hypotheses from our scientific steering committee and others that are suggesting that it could be used either way. You could try to tamp down the inflammation with the complement inhibitor and then come on with OpRegen. Or alternatively, you can put in fresh healthy RPE cells with OpRegen and then follow that up with a complement inhibitor to help address the patient's own RPE that are still sick and aged. So we can see either scenario coming through. Ultimately, the controlled randomized studies of OpRegen will dictate ultimately how it is used.

And Michael, I'll add a curious point for you, because I have a kid of video game playing age, that I like to think about the complement inhibitor similar to a tower defense video game where you are using an agent that is going to slow down the disease process -- to my mind, that will create a pooling, a clogging, a greater number of patients in an addressable zone for treatment for OpRegen, because if you're slowing the progression of GA as more and more people demographically are getting into a treatment, the beginning, the early phase of treatment, but they stay there longer because they've got, let's say, 20% slower growth, you will mathematically end up with more people in a treatment paradigm opportunity for OpRegen.

I really appreciate that analogy. One last one for me and then and then I'll hop back in the Queue. I just like to ask on the -- one of your preclinical programs. Can you talk about the role of the B2M deficiency in your collaboration with Eterna for CNS disorders?

Absolutely. I'm glad you asked. We don't always have time to put everything into these calls or press releases. But the Eterna collaboration is an option agreement, which is part of a seed planting process. So a company that believes it's going to be successful with its lead asset, i.e., OpRegen, obviously, it can be prudent to prepare for the future. And where we believe the future of cell therapy is headed is that editing can provide a number of advantages such as safety of your cells, tolerability of your cells or perhaps some additional properties of your cells. So this is the convergence of engineering and biology. Eterna has a very suitable ex vivo editing technology. We do not need to get involved in the assessment of the in vivo editors because we're able to develop lines and then test the material before it goes into patients. So we can rely on any number of alternate editing technologies. B2M and specifically dealing with the MHC Class 1 proteins is, of course, around rejection.

Now we've never had a report of rejection of our cells across any of our programs, but we have interest in a number of other areas and applications of our technology and gaining experience with edited cells and how they behave, gaining experience with iPSCs and how they behave are things that are important to us. We're not yet going to discuss exactly the kinds of edits that we may be contemplating because there are a number of them that are relevant, HLA-G HLA-E, CD47, there are a bunch of things that different companies are doing, and we actually benefit from watching and reading their data, to see what seems to be encouraging or seems to be less encouraging. So we don't have anything to say other than generally we are interested in having hypoimmune lines.

Generally, we are interested in iPSC programs and if things go very well, and we continue to execute on our plans, then we would be able to disclose some of our more specific ideas down the road when we're in a position to do so. And that would, of course, include specific applications of future cell types.

Thank you. There are no further questions at this time. Mr. Brian Culley, I turn the call back over to you.

Thank you, Anna. Thank you, everyone, for joining today, and we will look forward to our next update. And feel free to get in touch in the meantime. Thank you.

This concludes today's conference call. You may now disconnect.