Lineage Cell Therapeutics (NYSE:LCTX) reported their third quarter 2023 financial results, demonstrating resilience amid a challenging biotech environment. The company's manufacturing subsidiary in Israel remains unaffected by the ongoing conflict, and operations continue as normal. The OpRegen program, a treatment for geographic atrophy, received positive attention at a recent conference, and the company is well-positioned with sufficient capital to support operations into Q1 2025.
Key takeaways from the earnings call include:
- Lineage reported cash, cash equivalents, and marketable securities totaling $41.3 million as of September 30, 2023. This is expected to support their planned operations into the first quarter of 2025.
- Total revenues for the period were $1.2 million, a decrease from the same period in 2022 due to lower collaboration and licensing revenue from the Roche agreement.
- The company's net loss for the period was $7.1 million, with operating expenses standing at $7.8 million.
- Lineage expressed confidence in their partnership with Roche and Genentech for the advancement of their lead asset, OpRegen.
- The company plans to complete the final steps for the OPC1 IND amendment this year.
- Lineage is exploring financing options, including potential support from the California Institute for Regenerative Medicine for their OPC1 spinal cord program.
- The ANP1 program for hearing loss has reached a milestone in preclinical testing and will proceed to functional assessments.
Lineage Cell Therapeutics (NASDAQ:LCTX) also discussed their interest in developing hypoimmune cell lines for neurological indications and the potential of cell therapy in areas beyond oncology, such as ophthalmology. They stated that they are focused on maintaining financial discipline to reach milestones and create value for shareholders.
The company's staged investment strategy, from Phase 2 programs to early-stage cell line development, was also discussed. Lineage expressed interest in the potential for OpRegen in the geographic atrophy space and the favorable competitive landscape due to its clinical benefits. They also discussed the market opportunities for spinal cord injury and the unmet need in the field.
In their agreement with Eterna for gene editing work, predefined milestones could trigger additional payments. Lineage is also working with external groups to utilize well-known models and outcome assessments for their ANP1 functional model. Lastly, they stated that the tech transfer process with Roche is on target.
InvestingPro Insights
Lineage Cell Therapeutics, despite operating in a challenging biotech environment, has demonstrated financial resilience. According to InvestingPro data, the firm holds an adjusted market capitalization of $187.24 million. Over the last twelve months up to Q2 2023, the company has generated $10.52 million in revenue, with an impressive gross profit margin of 94.46%.
However, it's worth noting the company's stock has experienced significant volatility, with a one-month price total return of -20.15% by the end of 2023. This is consistent with the InvestingPro Tip that the stock has fared poorly over the last month.
In terms of financial health, InvestingPro Tips suggest that Lineage Cell Therapeutics holds more cash than debt on its balance sheet, and its liquid assets exceed short term obligations. This aligns with the article's mention of the company's cash and cash equivalents totaling $41.3 million as of September 30, 2023.
Yet, it's important for potential investors to be aware that the company has not been profitable over the last twelve months and does not pay a dividend to shareholders. Furthermore, analysts do not anticipate the company will be profitable this year, and two analysts have revised their earnings upwards for the upcoming period.
For a deeper understanding of Lineage Cell Therapeutics and access to more InvestingPro Tips, consider exploring the InvestingPro platform.
Full transcript - LCTX Q3 2023:
Operator: Welcome to the Lineage Cell Therapeutics Third Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the Investors section of Lineage's website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage and recordings, reproductions or transmissions of this call without the expressed 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.
Ioana Hone: Thank you, Jordan. Good afternoon and thank you for joining us. A press release reporting our third quarter 2023 financial results was issued earlier today, November 9, 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 and its subsequent quarterly reports on Form 10-Q. We caution you not to place undue reliance on any forward-looking statements, which speak only as of today and are qualified by the cautionary statements and risk factors described in our 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.
Brian Culley: Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us today. I'm pleased to report that everything remains on track with our most important development plans and we continue to have many reasons to be excited about the future. For example, we recently reached a milestone with the ANP1 program for hearing loss, which I look forward to describing further today. But first, I want to start off by talking about our manufacturing subsidiary because it is located in Israel. And the work performed by that group is very important to us. We have more than 50 employees in Israel and naturally, the safety and well being of that team is our top priority. Fortunately, there has been almost no impact on our operations due to the Israel-Hamas war. Our facility itself is located in a suburban area approximately 30 minutes outside of Jerusalem, and it has not been directly impacted by the ongoing conflict. We have an extremely capable and dedicated team. And while a small number of employees or spouses were called up for reserve duty, the team has continued to maintain their high level of output, in particular by completing the final validation work for OPC1 and continuing manufacturing activities for OpRegen. As additional support for our employees, we have made supplemental employee services available as may be needed. And in the meantime, we will continue to monitor the situation closely. And if needed, we will adjust our operations accordingly. But we expect we will be able to continue to operate our business as normal in both Israel and the U.S. Moving on to OpRegen. We were pleased to present last week at the Eyecelerator conference in San Francisco in a session called Mapping the Future of Geographic Atrophy. There were more than 40 ophthalmology companies showcasing their innovations. But we were one of just four companies selected to share the main stage with Apellis and Iveric Astellas in front of a large audience of retinal specialists, investors and other interested parties. It was wonderful to be recognized among the most promising approaches in the GA space, and I hope the replay from that presentation will be available soon for your review. As an additional part of our ongoing efforts to broaden awareness of the OpRegen program, Roche and Genentech electively reported data last month from our Phase 1/2a clinical study at the 23rd EURETINA Congress. These latest results which were independently generated and reported by our partners focused on the rapid time to onset of retinal structure improvements in OpRegen treated patients, which are vastly faster than anti-complement approaches. You may have noticed that there has been a lot of attention recently drawn to the effects of complement inhibition during its third consecutive year of treatment, or as I prefer to call it after 18 to 36 injections. Meanwhile, our data show that after just a single administration of OpRegen, improvements to retinal structure were detectable in some cases just days later, and always within three months. As a reminder, all five patients who had extensive coverage of the GA lesion with the surgical bleb containing a suspension of OpRegen demonstrated evidence of improvement in outer retinal structure and visual acuity gains at 12 months. Additionally, maintenance or greater improvements in retinal structure were observed over time. These data continue to give us confidence in our lead asset, and we look forward to additional future clinical data updates on the OpRegen program from our partners Roche and Genentech for both the fully enrolled Phase 1/2a study which we conducted, as well as from Roche's Phase 2a study which is currently enrolling. In parallel with these additional data announcements, we have continued inventing and patenting new process development methods to support long periods of exclusivity for our pipeline of cell transplant programs, including OpRegen. In September, the USPTO issued a patent entitled Large Scale Production of Retinal Pigment Epithelial Cells. This patent, which has been exclusively licensed to Lineage has an expected expiration date of July 28, 2036, and we believe further enhances the value of the OpRegen program. For reasons I've shared previously on several occasions, I'm unfortunately not yet able to provide any details about the results from the ongoing Phase 2a trial of OpRegen. But patient enrollment continues, data are being collected and additional sites are expected to come online, which you can follow at clinicaltrials.gov. And while I'm not able to speak to when or where top line data will be available, we understand that investors are eager to learn whether Roche can reproduce the clinical observations, which Lineage reported from our Phase 1/2a study, and we aim to provide that information at our first possible opportunity. Moving next to OPC1, our spinal cord program, we remain on track to submit the IND amendment for the new delivery device before year end. The work we have been conducting recently is necessary to submit the IND amendment, which itself is a requirement to initiate our planned clinical safety study of the new spinal cord delivery device, which we licensed from Neurgain Technologies. Assuming submission of the IND before year end as we've planned, and if no FDA comments are received in the 30 days following that submission, that will permit us to bring OPC1 back into clinical testing by opening our first site and initiating the small safety study in sub-acute and chronic patients with either thoracic or cervical spinal cord injuries presumably in Q1 of next year. In parallel with this work, we continue to be in contact with the California Institute for Regenerative Medicine regarding potential financial support for the OPC1 program, and specifically for this anticipated clinical trial. As I've shared before, we intend to apply for financial support for this study after we complete the 30-day waiting period, or address any further requirements for our IND amendment as is consistent with CIRM guidelines. Moving next to ANP1, we committed to providing an update before year end, and I'm happy to provide that update today. As a reminder, ANP1 is our cell transplant program being developed to address hearing loss. And we have been conducting preclinical testing of our ANP1 cells through a collaboration with the University of Michigan. Our initial objectives from this collaboration were to evaluate the delivery of our cells into specific target areas using standard surgical tools to monitor initial engraftment of ourselves into certain anatomical destinations and to assess whether our cells survive after transplantation. We also wanted to see whether the cells migrated and if they were expressing certain markers of neuronal identity. The outcomes from this initial proof of concept work were both positive and encouraging. And we consider the results sufficient to advance this program into its next phase of preclinical development, which is to evaluate our ANP1 cells in a functional model of hearing loss. Two reasons why we're excited about reaching this milestone and proceeding into functional assessments are first, the recent deal activity in the hearing loss space, which includes early stage assets. And second, clinical reports from gene therapy approaches to treat certain kinds of hearing loss. We believe cell therapy may have advantages over certain kinds of gene therapy insofar as replacing the entire cell, means you don't have to select for patients who carry a specific genetic defect. We think this offers cell therapy larger addressable markets, while matching the advantages of the one and done treatment schedule of gene therapy. And if we're able to demonstrate a functional signal in an animal model, that may create opportunities for business development or partnering of ANP1 if we determine that's the preferred path for us to pursue. I am also excited about the ANP1 program because it represents our flagship example of the speed and return on R&D investment, which is possible with the Lineage platform. We advanced from little more than a product concept into preclinical testing in less than 12 months and with an initial investment of less than $1 million. That is possible largely because the pluripotent cell lines which we start with are by definition capable of differentiating into every cell type of the human body. Once we figure out how to make the desired cell and can do so in a reproducible and scalable manner, we have essentially created a new pipeline asset. While clearly this is an environment where capital raising is not cooperating with opportunities for rapid expansion, we will continue to try to find clever and affordable ways to extend our capabilities and unlock value in the months and years ahead. As a second example of our efforts to create significant long-term value without large capital commitments, during this past quarter, we initiated certain development activities under our partnership with Eterna Therapeutics. This collaboration with Eterna is an example of our strategy of capitalizing on our extensive and proprietary process development capabilities by combining them with externally access cell engineering and cell editing technologies, all for the purpose of creating novel and potentially superior product candidates. In this specific case of Eterna, we finalized the selection of edits for the initial iPSC cell lines being developed to reduce the immunogenicity of certain product candidates. And we additionally selected a particular edit intended to confer clinical differentiation and a competitive advantage in its applicable indication. And while we believe it is premature to disclose this program at this time, if we do reach predefined developmental milestones next year, we will look forward to sharing more details on this initiative with you. To wrap up, the biotech environment continues to be extraordinarily challenging. The sector is experiencing historic underperformance and in some cases, even what appears to be positive news isn't being rewarded. But regardless, I believe Lineage continues to be well positioned to advance our business. Our commitment to financial discipline has helped us remain relatively stable for the past two years. And do I wish we could move faster? Of course, but capital comes with a cost and sometimes it's better to reduce your pace of investment, such as when we made the strategic decision to divert the VAC2 program to more of a BD project instead of initiating a clinical study on our own. But the most important thing overall is that we've been able to keep moving forward in these difficult times. And I think our progress is demonstrated in our frequent business updates. And with our lead asset being advanced by Roche and Genentech, we believe Lineage can offer shareholders an opportunity to reset expectations about what is possible in the treatment of geographic atrophy, which continues to represent an unmet need, despite recent marketing authorizations from competing agents. So to summarize the three key points for today; one, the events in Israel have not had a material impact on our business. Two, we continue to be extremely happy with the relationship we have with Roche and Genentech including their commitment to advancing OpRegen. And three, we are eager to complete the final steps for the OPC1 IND amendment this year, so that we can have a second cell transplant program in active clinical development. And with that, I will hand the call to Jill for a discussion of our financials.
Jill Howe: Thanks, Brian, and good afternoon, everyone. Beginning with our balance sheet, I'm pleased to report that we continue to be well capitalized to conduct the near-term activities, which Brian just outlined. Our reported cash, cash equivalents and marketable securities as of September 30, 2023 totaled 41.3 million, which is expected to support our current planned operations into the first quarter of 2025. This is one quarter further than some of you may have expected and it's due to efficiencies and opportunities to extend our runway which we have identified during the quarter in which we will continue to look forward going forward. Next, we will review our third quarter operating results. Our revenue is generated primarily from licensing fees, royalties, collaboration revenues and research grants. Total revenues were 1.2 million, a net decrease of 1.8 million, as compared to approximately 3 million for the same period in 2022. The decrease is primarily driven by lower collaboration and licensing revenue recognized from deferred revenues from the Roche agreement. Operating expenses are comprised of research and development expenses and general and administrative expenses. Total operating expenses were 7.8 million, a decrease of 0.2 million as compared to 8 million for the same period in 2022. R&D expenses were 3.7 million, a net increase of 0.1 million as compared to 3.6 million for the same period in 2022. The net increase is primarily driven by 0.2 million in higher OPC1 program-related expenses and 0.5 million in expenses to support preclinical and other research and development programs. These increases were primarily offset by a 0.5 million decrease on our VAC program, primarily related to reduce manufacturing activities. G&A expenses were 4 million, a net decrease of approximately 0.4 million as compared to 4.4 million for the same period in 2022. The decrease is primarily due to an overall reduction in costs incurred for services by third parties, consulting costs, and recruiting-related expenses. Loss from operations were 6.7 million, an increase of 1.5 million as compared to 5.2 million for the same period in 2022. As a reminder, this loss was driven by a non-cash expense primarily due to revenue recognition associated with the Roche agreement. Other income and expenses included other expenses of 0.4 million compared to other expenses of 0.3 million for the same period in 2022. The change was primarily driven by exchange rate fluctuations related to our international subsidiaries, fair market value changes in marketable equity securities and interest income from our marketable debt securities. The net loss was 7.1 million or $0.04 per share compared to a net loss of 6.1 million or $0.04 per share for the same period in 2022. Overall, we have maintained our same spending discipline, which continues to serve us well. As the uncertainty impacting the biotech markets continues, 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.
Brian Culley: Great. Thanks, Jill. As I said at the Eyecelerator conference last week, cell therapy has revolutionized the oncology world. Cell therapy stands alongside chemotherapy and surgery as one of the pillars of cancer therapy. And we believe that cell therapy and the cell therapy revolution will extend beyond oncology into other areas, including ophthalmology, and we'll continue to strive to apply differentiated cells in a replace and restore approach to help achieve that end. A key piece of that journey and presumably one of the biggest questions for potential Lineage investors is whether Roche will be able to independently reproduce our findings of improved retinal structure and function with OpRegen. So we'll be doing everything we can to support their efforts to conduct the ongoing study, while also working closely with them to transfer our production process to their manufacturing facility in the U.S., which will help support any further development and commercialization activities, which are pursued. I appreciate your attention today. With that, operator, we are ready to take analysts' questions.
Operator: Thank you. Your first question comes from the line of Joseph Pantginis from H.C. Wainwright. Your line is live.
Joseph Pantginis: Hi, everybody. Good afternoon. Thanks for taking the question. So, Brian, I'm going to ask about the OpRegen Phase 2a anyway, but I'm going to ask it this way. Based on the totality of the data and especially the recent imaging data, do you have any sort of anecdotal comments how this may have impacted positively the conduct of the study and being able to say bring on principal investigator -- I'm sorry, investigators or additional sites quicker?
Brian Culley: Thank you for the question, Joe. My response won't have any specific anecdotal references. What I will reference is a previous statement I made on a call like this, where I said that I felt that the first, I don't know, let's say dozen or so people who underwent this therapy were incredibly courageous and brave. They were the first in the world. Now that we have been able to show the kinds of clinical outcomes which are possible, my presumption is that the conversation between the investigative site and the patient could be easier because they can point to some of the same data, which Roche and Genentech has been presenting through their channels, or which Lineage previously presented through its own channels. But I do want to emphasize that that is no specific statement over the conduct of the ongoing Phase 2, that's entirely under the control of Roche and Genentech. I just think that the fear factor could be mitigated in part by some of the wonderful outcomes that we have described previously.
Joseph Pantginis: That's totally fair. I appreciate that. And then if we just go down a little earlier into the pipeline, you made some ANP1 comments today, whether it's that asset or others, when do you think we might be able to see, say, preclinical data in a poster or some other fashion? And separately as part of the earlier stage assets, how would you describe the current interest with regard to the VAC platform? Thanks a lot.
Brian Culley: Yes. Thank you also for that question. My mind turns to what I described a moment ago, which is a functional preclinical model with ANP1. I don't think that I would want to wait for some sort of research conference if we generated encouraging data in that setting. Because while the initial proof of concept work that we did around delivery, migration, expression of identity factors, that's important and even necessary, I think the true inflection point, the early stage inflection point for a program like ANP1 is some sort of indication of functional effect in an animal model, because that has been largely elusive to different approaches to date. So we -- as I described, we are designing that next phase of preclinical development right now. We intend to conduct that through the alliance we already established with the University of Michigan, but these studies do take a month to conduct and quality check and so forth. So certainly a 2024 event, not a 2023 event. But I think that would be the one that I think would be quite exciting, in part because of the considerable addressable market for hearing loss as well as some of what I referenced earlier, which are the BD activity in hearing loss has been quite substantial, even for early stage assets.
Joseph Pantginis: And VAC platform interest?
Brian Culley: VAC is continuing to be a project for the business development team rather than an internal clinical development program, again, in part due to some, let's say, partial rationalization of the biotech environment, and then also because of the nature of the VAC program, i.e. the different antigens could be presented through the dendritic cell, and it's impossible to think that we could exhaust all of the different product profiles that one could contemplate using that. So we very much see that more as a mini platform, which is more well suited to try to develop through partnership activity rather than with our own current capital on hand.
Joseph Pantginis: Thank you.
Brian Culley: Thank you, Joe.
Operator: Your next question comes from the line of Jack Allen from RW Baird. Your line is live.
Abigail Gray: Hi. This is Abby on for Jack. On the updates as it relates to the Eterna partnership and development of hypoimmune cells for neurological indications, we're hoping you might be able to provide some additional color surrounding what sorts of indications you might be going at in neurology and what drove you to this?
Brian Culley: Thank you, Abby, for that question. I think it is comfortable to say that a hypoimmune cell line offers some potential advantages in indications where rejection is of greater concern than in the eye or in the spinal cord. That is not to say that a hypoimmune line couldn't still be utilized in places that are immuno-privileged, but that is not necessarily what we have in mind in trying to generate that line. I don't think at this point, we're at a position to say anything more than there are indications that might be good opportunities for a cell transplant approach for which having a hypoimmune line makes a lot of sense. I can obviously point to what people have seen in type 1 diabetes. And I think some of the NHP data, non-human primate data, coming out of a similar company down the road from us, I think is quite evocative. So this is part of a larger strategy of utilizing and relying on our process development expertise, and thinking about where this technology will go. Because I find it difficult to imagine that the only place we can get these extraordinary clinical outcomes is in the setting of the eye and even specifically utilizing RPE. I think that this field will reveal itself to have and harbor other opportunities. But they might be more easily addressed using a hypoimmune line than a line where you have risks of rejection. And I should probably note that we have approximately 100 person years of exposure of our non-hypoimmune lines with OpRegen, and we've never had a single case of rejection. That's not to say that it is a non-zero possibility. This is biology and it's complex. But our approach here is to have staged investment from the later stage, such as the Phase 2 program with OpRegen, all the way back to very early stage cell line development, which is what we're doing via the alliance with Eterna, which by the way also includes more of a strategic gene edit that has a very specific purpose in an as yet undisclosed indication.
Abigail Gray: Wonderful. Thank you. And then as a follow up, you had mentioned type 1 diabetes. I was wondering if you could kind of comment on your thoughts about the initial proof of concept as it relates to their/BlueRock's program in Parkinson's.
Brian Culley: I love it. I think that it helps to validate a replace and restore strategy. I'm encouraged by what I've seen. I must acknowledge I'm not an expert in type 1 diabetes. Our company, as you know, is much more neurologically oriented. But I do think that the mechanistic principles, which underlie their work and our work, share a lot of common features. And that is exactly why we are looking for affordable ways to expand the scope of our platform and how it gets deployed.
Abigail Gray: Wonderful. Thank you so much.
Brian Culley: Thank you, Abby.
Operator: Your next question comes from the line of Kristen Kluska from Cantor Fitzgerald. Your line is live.
Kristen Kluska: Hi. Good afternoon, everybody. Thanks for taking my question. I wanted to ask if you're aware or seeing any new trends as it relates to enrollment in general, not specifically asking you to comment on OpRegen, in light of some of the advances we've seen over the last few months. So on one hand, these therapies are available now. But then on the other hand, perhaps those that were excited to try these may be looking for other options given some of the safety issues that have come up.
Brian Culley: Kristen, if I could ask you to expand a little on that. My mind is thinking about when COVID first came along and people on ophthalmology clinical trials began skipping appointments for example wet AMD (NASDAQ:AMD) therapies, but is that what you have in mind or something more specific to OpRegen?
Kristen Kluska: Just like the geographic atrophy space in general, meaning that there are therapies approved now. So on one hand, patients may not be as interested in a clinical trial. But then to play devil's advocate here, maybe those patients that were interested in getting on an approved therapy might be having second thoughts in light of the safety issues that have arrived.
Brian Culley: Thank you. My personal experience, because I'm not collecting data to one can rely on, but I sit there and I see the commercials for the approved agents just like all of us. And because of my association with GA, I also monitor some of the issues and concerns around vasculitis or other AEs. I believe what that all points to is the unavoidable relationship between the clinical benefit and the safety profile of any asset. And I think that the reason that safety has become the focus of the anti-complement field of late is attributable to the fact that there are some real questions not about the rate of AE and the risk to the patient, but whether the benefits are worth taking that risk. So to put a finer point on it, you just don't get very much clinical benefit to justify the risks of even rare adverse events. I think that is contrasted with the current product profile of OpRegen or the desired product profile of OpRegen insofar as we are going to great lengths to point to visual gains, not slower losses, and the improvement in retinal architecture, rather than slowing the progression of the disease. So we are talking about clinical outcomes that are wildly beyond the reach of anti-complement. And that would naturally invite a different level of tolerability on adverse events. These ultimately all feed down to individual choice. There are people who are willing to go to great lengths and take great risks, because vision is so critical to their daily living. There are others that feel quite differently. So I don't think that there's a unanimous perspective with respect to patient population. But I do think that the patient population is getting increasingly educated thanks to the approval of the anti-complement therapies, because whereas in the past, they were told, I can't do anything for you, stop smoking and eat your leafy green vegetables. Now they are becoming experts on their condition and they are understanding these tradeoffs and these risks. I think the overall competitive landscape and the commercial opportunity is very favorable for OpRegen, because I think that the clinical benefits are compelling. I think a single procedure is very compelling with respect to compliance and follow up. And I'm hopeful that ultimately, the safety profile of OpRegen will also provide a better ratio compared to what we are seeing on almost a daily basis with anti-complement. I hope that is helpful to provide my view of that question.
Kristen Kluska: No, it is. Thanks so much. And then can you remind us or share what your latest thoughts are around the market opportunities specific for spinal cord injury? I know -- you've done a lot of work with your peers in this space in particular to really put your heads together and think about a number of these questions. Thanks so much.
Brian Culley: Thank you for that question, Kristen. Because the company neither prices its product candidate at this point nor have we got a definitive idea as to what would be an on label patient population, it would be difficult to say what we think a peak sales, for example, of that asset would be. What we can point to are some reference information. Globally, the overall spinal cord therapy market I believe is referenced upwards of 7 billion, 8 billion, 9 billion, 10 billion. I think that Neuralink, which is the Elon Musk company, recently provided some very specific projections about what they think their pricing could be and how many patients they think they could be treating I believe in year five, I think they kind of came out somewhere around $800 million. So there are some data points out there. For us, we haven't refined it beyond our internal analyses, simply because it still is early. And it will be driven, of course, by value-based pricing. So we don't know what it's worth, so to speak, because we don't have a real strong metric to use. But that is actually part of the clinical study design is to ensure that we are tracking and measuring things that are important to patients so that we can justify a high value in connection with the pricing of any future therapeutic, which gets approved. So there's a tremendous unmet need. There are a lot of different approaches out there. Certainly, we feel comfortable that it is worth the investment in the space. There is a paucity of competing programs. And our approach could work quite comfortably with a lot of other approaches, such as electrical stimulation, or some of the more physical, external mechanistic approaches that are being developed, including potentially some of the brain interface work that is starting to emerge as really interesting as well. So I'm sorry, I can't keep it short and just give you a number. But we feel comfortable that it merits continued investment, because it does represent an exciting area that again can cooperate with other approaches that are in development.
Kristen Kluska: Thanks a lot, Brian.
Brian Culley: Thank you, Kristen.
Operator: Your final question comes from the line of Mayank Mamtani from B. Riley Securities. Your line is live.
Unidentified Analyst: Hi, guys. Madison [ph] here for Mayank. A couple of questions for me. One, you mentioned you guys were looking at clever financing. And then I believe you said that in regards to Eterna, there are some predefined milestones next year. So just wondering if I heard that correctly? And if so, if you could mention what kind of the trigger is, what is the kind of threshold there that you really need to hit? And then secondly, the ANP1 functional model, I'm wondering if that's a model that you guys have created or are creating, or if it's a widely used model in the literature? And then lastly, if you could tell us the transfer of activities at Roche from manufacturing, kind of the status of that, I know it's still ongoing. But if you can kind of mention the progress made say versus last quarter. Thanks, guys.
Brian Culley: Yes. Thank you, Madison. Hopefully, I tracked those questions correctly. With respect to clinical financing, we're fortunate that we believe that our programs, and in particular the OPC1 spinal cord program, are a good match for the California Institute for Regenerative Medicine, and we would hope to be eligible for and receive financial support. I would suggest to you that I'm not sure that there is a better cost of capital than that fantastic program that is available here in the great state of California. So I really like CIRM and I'm hopeful we'll be able to get support as that program has received support in the past, and I know of no reason we wouldn't be eligible in the future. With respect to Eterna and triggers, the agreement that we have is one in which there are certain performance metrics, which Eterna is looking to accomplish in generating the line. So we are funding a certain amount of work and they are going to produce a deliverable, and that deliverable has to meet certain criteria. If it does, that would trigger some elective payments, if we want to continue. And we want to continue. That would be success. But if they fail, we are not compelled to have to continue. But we elected previously that we would be making some investment in their work and supporting some of that work, almost like an outsourced model, because we are not gene editing experts and do not have those capabilities here. Your third question around ANP1 and the model, actually let me finally bring in Dr. Hogge and he can talk about whether we're looking for a precedent. And then Gary may as well continue on tech transfer although there's little we’re allowed to say there.
Gary Hogge: Hi, Madison. So we've worked with a group in Michigan and a number of other groups. There are a number of well known models and outcome assessments. And so the intention is not to develop something de novo, but to utilize that as far as precedent. And so we're working with those groups to figure out the best models for that. But we're not reinventing the wheel here. And as Brian alluded to, the tech transfer is on target at this point. That's about all we can say.
Unidentified Analyst: Got it. I appreciate it, guys.
Operator: There are no further questions at this time. That concludes our meeting for today. You may now disconnect from the conference.
Brian Culley: Thank you, Jordan. Goodbye, everyone.
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