Friday, March 10, 2023 8:43:59 AM
NEWS -- Q4 2022 Lineage Cell Therapeutics Inc Earnings Call
Participants
Brian M. Culley; CEO, President & Director; Lineage Cell Therapeutics, Inc.
Gary S. Hogge; SVP of Clinical & Medical Affairs; Lineage Cell Therapeutics, Inc.
Ioana C. Hone; Director of IR; Lineage Cell Therapeutics, Inc.
Jill Ann Howe; CFO & Principal Financial and Accounting Officer; Lineage Cell Therapeutics, Inc.
Jack Kilgannon Allen; Senior Research Analyst; Robert W. Baird & Co. Incorporated, Research Division
Joanne Lee
Joseph Pantginis; Director of Research & MD of Equity Research; H.C. Wainwright & Co, LLC, Research Division
Kristen Brianne Kluska; Analyst; Cantor Fitzgerald & Co., Research Division
William McKinnie Wood; Research Analyst; B. Riley Securities, Inc., Research Division
Presentation
Operator
Welcome to the Lineage Cell Therapeutics Fourth Quarter and Full Year 2022 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 property of Lineage. And recordings, reproductions or transmission 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 to you your host for today's call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.
Ioana C. Hone
Thanks, Mandeep. Good afternoon, and thank you for joining us.
A press release reporting our fourth quarter and full year 2022 financial results was issued earlier today, March 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. 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 M. Culley
Thank you, Ioana, and good afternoon, everyone. Welcome to our full year 2022 call. We appreciate you joining us today.
2022 was another challenging year for biotech companies, but I think it was an exceptional one for Lineage. We worked successfully alongside Roche and Genentech to prepare OpRegen for its next clinical trial, and that trial is now open and enrolling new patients.
With the positive tailwinds from the OpRegen program in place, we made bold but financially responsible moves to expand our pipeline, adding a photoreceptor program, which capitalizes on our experience and success in ophthalmology and by adding an auditory neuron program, which is the first time we've shown that we can not only improve upon existing assets, but also create them from scratch in our R&D labs, vastly reducing any third-party financial obligations from these in-house product candidates.
2022 also marked a year of important and successful clinical and regulatory execution for the Lineage team as we advanced our clinical programs along their respective developmental pathways.
I realize this is a 2022 recap call, but I know a lot of investor attention is presently focused on the dry AMD landscape. So I thought that would be a better way to use my opening remarks.
Last month, FDA approved a complement inhibitor to treat dry AMD. And with this approval, the FDA has set a precedent that anatomical change in the form of photoreceptor preservation is an approvable endpoint in this condition. We believe this is an enormous regulatory decision for us because the data we have collected to date with OpRegen and its ability to improve outer retinal structure and either halt or even reverse the progression of GA is far greater than what has been demonstrated by either of the leading complement inhibitors.
Critics sometimes say that we've only shown these results in a small number of patients, but I will remind them that we are seeing changes which do not occur spontaneously, and we're reporting these via multiple independently verified analyses using objectively captured anatomical images. So on this basis, we believe these early and exceptional results are likely to be repeated in larger studies.
When I look at the error bars surrounding the point estimates on the Phase III trial for the complement inhibitor, which recently gained FDA approval for which only a small reduction in GA growth is provided, I think it's highly likely that all 5 OpRegen patients, which Roche and Genentech reported on at the ARVO Annual Meeting last year have shown greater reductions to the area of GA than all of the more than 1,200 patients treated in the clinical trials, which supported that drug's approval.
Furthermore, we have demonstrated not only anatomical changes but also functional improvements to patients' vision with an average of 7.6 letters gained among all Cohort 4 patients and increasing to 12.8 letters gained among the 5 patients who received extensive coverage of OpRegen cells across their GA and who additionally exhibited outer retinal structure improvements measured 12 months following transplant in our Phase I/IIa study.
Recently, a number of outlets have been reporting that a different complement inhibitor can provide functional benefits to vision. The evidence which that company provided was a post hoc exploratory analysis, which is something my former colleague likes to call drawing the target around the arrows after they're fired. This selective data cuts sought to make the case that patients on treatment were less likely to lose 15 letters at 12 months than patients on placebo.
Despite this data similarly being in a very small number of patients, representing only 5 to 10 patients of all patients treated on that trial, it actually was quite well received by the investment community. And for this reason, I will again draw the comparison that OpRegen data, which was reported at ARVO by Roche and Genentech showed 25% of patients in Cohort 4 gained at least 15 letters. They didn't avoid loss. They gained vision. So we're talking about comparisons, which are as large as a 30-letter delta between these approaches.
Obviously, it's a huge benefit for patients and the medical community to finally have something which may help some patients with their condition, but it appears to us that there is a tremendous amount of clinical benefit, which could still be provided. Benefits which monthly injections of complement inhibitors have not shown. It's very important for our results to continue being presented at major medical meetings and help the medical and investor communities become aware of the efficacy, safety and other attributes of our product candidate profile.
One of the additional potential advantages of the OpRegen product profile is in dosing and administration. OpRegen treatment involves a single 30-minute procedure rather than giving patients an injection every month or 2, year after year with all the compliance issues, which accompany it. For this reason, we often are asked how long our treatment lasts. But we don't yet know because we haven't reached a clear terminus or an indication of the benefit tapering.
I've mentioned on prior calls, that we have patient data going out as long as 5 years in some cases, including our very first patient with structural improvement who after 4 years has lost 30 letters in her untreated eye, which, by the way, was her better performing eye at baseline. But she was still 3 letters higher than her baseline level of visual acuity in her OpRegen-treated eye. Again, that's data coming 4 years post treatment in a disease which is widely viewed as inevitably progressive.
Long-term follow-up from the Phase I/IIa study is still ongoing, which allows us to continue to monitor evidence of the duration of treatment effect. And there may be more to come from deeper imaging analyses as well. Next month, some of that data from our Phase I/IIa trial will be made available at the 2023 ARVO Annual Meeting on April 25. That will be presented by Dr. Eyal Banin on behalf of Roche and Genentech. And as always, data updates are important disclosures, and we look forward to this next one happening in just a few weeks.
Meanwhile, we're excited about the ongoing Phase IIa study, which Roche and Genentech has launched to evaluate the safety and efficacy of OpRegen as well as certain delivery techniques. It is difficult to predict when that trial will have data available because it has an enrollment range of 30 to 60 patients. But regardless, the primary and secondary outcome measures for that study will all occur at 90 days. So the primary observation period is very brief compared to what we usually expect from dry AMD studies.
Genentech has disclosed 2 enrolling clinical sites so far in Cincinnati and Sacramento, both of whom participated in our Phase I/IIa study. Dr. Christopher Riemann, the PI from the Cincinnati Eye Institute is a former Lineage site PI who treated one of the original retinal restoration patients, and we appreciate his and Dr. Telander's continued participation in the OpRegen trial, and we expect more sites will be coming online this year.
Moving next to our spinal cord program. You'll recall that a lot of our work last year focused on activities to support regulatory interactions for OPC1, which we successfully completed as planned. Our response to an RMAT interaction with a comprehensive data package was submitted to FDA to support the use of the new delivery device, along with a clinical protocol synopsis for the small safety study we plan to conduct in sub-acute and chronic patients, and which I've discussed previously on several occasions.
We have been in active dialogue with FDA and have been responding to additional requests for information following our initial RMAT package submission. We anticipate another formal interaction to occur with FDA in the second quarter, a Type B meeting, which we hope will support submission of our planned IND amendment in the second half of this year. Assuming the necessary clearances are received, our plan is to initiate the open-label device safety clinical study known as the DOSED study in 5 to 10 patients with either subacute or chronic injuries as soon as we're able.
We also remain in frequent contact with the California Institute for Regenerative Medicine, and we continue to plan to apply for a grant to support the device safety study. As most of you are aware, CIRM guidelines state that an applicant must provide communication from FDA indicating that it's safe to proceed with a proposed clinical trial protocol. So therefore, the timing of the submission of our grant application will be contingent on and subsequent to receipt of FDA clearance to initiate the dose study.
For VAC2, we submitted our pre-IND meeting package as planned, actually a little bit earlier than we planned and have already received feedback from FDA. Our emphasis in the pre-IND package was to understand the FDA's view of our production process and the analytical methods, which we propose to use to manufacture and characterize our clinical material. Their feedback was generally positive and provided us with a clear and actionable path to an IND submission.
Any future IND filing would naturally be expected to include supporting clinical data from the Phase I study of VAC2 conducted by Cancer Research UK. We currently are still awaiting those data and were recently informed by Cancer Research UK that it's expected to be available during the second quarter of 2023. This data would be an important component of any potential IND so we will be in a better position to update you on our VAC plans at that time. In the meantime, we will continue to monitor the changing landscape of DC vaccine product candidates and their evolving clinical data.
We've also continued to engage in manufacturing and preclinical activities for our 2 new cell transplant programs in hearing loss and vision disorders, both of which were publicly launched last year. Initial preclinical studies from our photoreceptor program are currently ongoing, and we hope to be able to present top line preclinical data once the appropriate patent submissions have been made and as data become available.
Last month, we also announced the initiation of preclinical testing with our auditory neuron program in a collaboration with the University of Michigan with initial preclinical data anticipated to be available later this year. I'd like to remind everyone that Lineage's hearing loss program didn't even exist at the beginning of last year, and yet we've already started in vivo preclinical studies. Notably, we've been able to advance this program to that stage while spending less than $1 million of our R&D budget. We believe that speed and return on our R&D investment dollars are illustrative of the efficiency and versatility of the Lineage platform.
We showed the ability to advance from a little more than a product concept then develop new differentiation methods to generate intellectual property and execute on the manufacture of a specific cell type, then proceed into in vivo testing in less than 12 months and with an investment of less than $1 million. When we compare the money and time we invested to move a new program from concept into in vivo testing against the industry norms for a small molecule making the same journey, we find striking differences in the return on invested capital. And as we continue to improve our capabilities and our homegrown programs advance further, I think it will become increasingly apparent that the Lineage platform has tremendous untapped potential.
Our goal will be to unlock that value in the months and years ahead, both internally and through partnerships while still maintaining a prudent financial balance between the exciting progress occurring with OpRegen and our expansion activities with our pipeline.
This brings me next to a few comments about our most recent business development transaction. As you know from prior calls, I have said that we are emphasizing business development, and that includes in-licensing, out-licensing and joint development projects. Our most recent deal is an option agreement with Eterna Therapeutics, which gives us an affordable way to gain access to several new technologies, which fit within our overall strategic approach. These staged investments in technologies are intended to provide us with certain advantages and help set the foundation for the type of company we aim to become.
Because our confidence in the future success of OpRegen has increased upon the recent regulatory precedent set by FDA in dry AMD, we believe this is the right time to apply our technology in other areas. That is where the Eterna deal fits into our overall strategy. It provides us with an opportunity to gain experience in 3 new areas: gene editing, hypoimmunity and induced pluripotent stem cells or iPSCs. These 3 complement and are expected to bolster our in-house manufacturing and directed differentiation capabilities.
Gene editing offers us an opportunity to modify the behavior and functionality of cells and engineer new features before they are transplanted. This ex vivo editing allows us to fully characterize an edited cell line prior to it being administered to a patient. In some cases, we may look to add genes and thereby add functionality, while in other cases, we may look to delete genes, which may help with the tolerability or the durability of a transplant. Editing also gives us a competitive edge because it makes our products difficult to copy, and it may give them better clinical outcomes.
As we explained in the press release announcing the Eterna agreement, we will be utilizing a B2M deficient cell line, which is a feature associated with lower chances of transplant rejection. We don't see hypoimmunity as relevant to our existing programs because we've never received a reported rejection of our OpRegen or OPC1 cells and that's going out as long as 10 years in patients with spinal cord injury or as long as 5 years in patients with dry AMD. But the eye and spinal cord are known to be tolerant locations for cell transplants. If we want to expand our technology to other areas of the body, we need to consider whether hypoimmunity could be beneficial and ensure that all of our product candidates have an appropriate and suitable commercial product profile. We think hypoimmunity could be an interesting feature for potential new product candidates.
The third new aspect of this deal is the use of an iPSC line. We already have intellectual property for certain platform inventions and uses of iPSC cells, but exercising this option could lead to our first product candidate built from day 1 on an iPSC cell line. We know from experience that the quality and performance of iPSC lines can vary widely, and we'll be keen to see how these cells behave in our hands. Regardless, experience with both iPSC and ES lines is rare and we'll give Lineage yet another point of differentiation compared to the competition.
Overall, we're very excited about this deal because we believe it provides us with access to multiple new technologies but with a relatively modest cost structure. We anticipate providing updates under this collaboration later this year.
Overall, while many cell therapy and gene-editing companies struggled badly last year, reducing headcounts and/or deprioritizing programs, we broadened our pipeline and advanced each of our 5 programs. We made a number of key hires and expanded our research space in both California and Israel, but we did this with very responsible and stepwise investments to help ensure we have capital to reach additional milestones and important events.
I believe the company made exceptional progress in 2022 and our efforts during 2023 will remain focused on the further progression of our allogeneic cell therapy programs, making responsible investments in disease settings where we believe we can have a meaningful impact and the continued prioritization of both new and existing collaborations, all and each in support of our overarching vision of building Lineage into a leading cell therapy company.
With that, I'll now hand the call over to Jill for a discussion of our financials.
Jill Ann Howe
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 December 31, 2022, totaled $57.9 million, which is expected to support our planned operations into Q3 of 2024. Please note, this does not account for any of the Roche Genentech milestones, which we may receive nor for any business development or grant revenues, which we may receive during this same period.
Let me start with an overview of our fourth quarter 2022 operating results. Our revenue is generated primarily from licensing fees, collaboration revenues, royalties and research grants. Total revenues for the fourth quarter were approximately $1.9 million, a net increase of $0.7 million as compared to $1.2 million for the same period in 2021. The increase was driven by the recognition of deferred collaboration revenues in connection with the Roche agreement, which we entered into in 2021.
Operating expenses are comprised of research and development expenses and general and administrative expenses. Total operating expense for the fourth quarter were $8.5 million, a decrease of $20.7 million as compared to $29.2 million for the same period in 2021. The overall decrease was almost entirely driven by a decrease in R&D expense due to the Roche collaboration. R&D expenses for the fourth quarter were $4.1 million, a decrease of $20.7 million as compared to $24.8 million for the same period in 2021. The decrease was substantially driven by the prior year $21 million accrual for financial obligations payable to the IIA and Hadasit in connection with the $50 million upfront payment received in early 2022 under the Roche collaboration. This decrease was partially offset by $0.1 million and $0.2 million in new expenses to support the development of the photoreceptor and auditory neuron cell therapy programs, respectively.
G&A expenses for the fourth quarter were $4.3 million, a decrease of $0.1 million as compared to $4.4 million for the same period in 2021. The decrease was driven by a $0.4 million in legal and litigation expenses. Loss from operations for the fourth quarter were $6.6 million. This is due to a decrease of $21.6 million as compared to $28.2 million for the same period in 2021, principally owing to Roche collaboration-related expense accruals of $21 million, as I had previously mentioned.
Other income for the fourth quarter was $0.3 million compared to other income of $0.2 million for the same period in 2021. This variance was primarily related to the change in the value of marketable equity securities as well as exchange rate fluctuations related to our international subsidiaries for the applicable period. The net loss for the fourth quarter was $6.4 million or $0.03 per share compared to a net loss of $29 million or $0.17 per share for the same period in 2021.
Now let me move on to our full year 2022 operating results. Revenues for the full year were $14.7 million. This represents an increase of $10.4 million compared to $4.3 million for the same period in 2021. Again, the increase is primarily related to revenues recognized from the $50 million upfront payment from the Roche collaboration. Total operating expense for the year was $36.5 million, a decrease of $15.6 million as compared to the $52.1 million for the same period in 2021.
Total R&D expense for the year was $14 million, a decrease of $19.9 million as compared to $33.9 million for the same period in 2021. The decrease was substantially driven by the prior year $21 million accrual for financial obligations payable to the IIA and Hadasit. This decrease was partially offset by $0.7 million and $0.5 million in R&D spending on the new auditory neuron and photoreceptor cell therapy programs, respectively.
Total G&A expenses for the year were $22.5 million. This is an increase of approximately $4.3 million as compared to $18.2 million for the same period in 2021. The increase was primarily attributable to $2.1 million in litigation and legal expenses, $1.3 million in salaries and related benefit fees and $0.9 million in share-based compensation expenses.
Losses from operations for the year were $22.5 million, a decrease of $26.7 million as compared to $49.2 million for the same period in 2021. Other income and expenses for the year netted an expense of $3.3 million compared to other income of $5.9 million for the same period in 2021. The net variance was primarily related to a prior year gain on sale of marketable equity securities as well as exchange rate fluctuations related to our international subsidiaries for the applicable period.
The net loss for the year was $26.3 million or $0.15 per share compared to a net loss of $43 million or $0.26 per share for 2021. Overall, we intend to maintain the same spending discipline that we have adhered to for years and which has served us well in the past. The biotech markets continue to face uncertainty, so we believe that maintaining discipline with our spending will continue to allow us to maintain our plan to reach meaningful milestones and create value for shareholders from our investments in our programs.
Now let me hand the call back to Brian.
Brian M. Culley
Great. Thanks, Jill.
Circling back to the beginning of this call, I continue to think that Lineage is doing quite well in an otherwise strained environment for the biotech industry. We have been hitting our milestones and advancing our programs in a responsible and positive way. And I expect Jill and I will continue to apply the same financial discipline to our programs this coming year.
Our approach helped us land a valuable collaboration with Roche, and I believe it will continue to be an important attribute during 2023. And further out, as our programs demonstrate success in the clinic or in preclinical testing and potentially attract additional, nondilutive support, I believe, we'll have opportunities to accelerate our work across a number of parallel paths.
Broadly speaking, a few things we'll be working on this year and which you may want to watch for updates on include additional data from the completed Phase I/IIa trial of OpRegen, which we expect next month; additional regulatory progress with OPC1, which we will conduct during the second quarter of this year and which will support OPC1 returning to clinical testing. And we'll be doing our part to support the manufacturing and Phase IIa study of OpRegen being conducted by Roche and Genentech, the results of which we believe could be a seminal event, not only for Lineage but also for the entire GA field.
In addition, we've planted a few seeds to prepare for the future, including our new preclinical programs and the Eterna option deal which gives us affordable access to new technology, which we can combine with our existing capabilities and the furtherance of our goal of using the transplant of whole cells to change the course of disease in new and exciting ways.
And with that, Mandeep, we are ready to respond to any analyst questions that there may be.
Question and Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Jack Allen from Baird.
Jack Kilgannon Allen
Great. Congratulations to the team on all the progress made over the course of the quarter. Brian, you did a great job laying out some of your thoughts around the recent news in geographic atrophy, but I was wondering if you could dive a little bit more deeply into some of the conversations you have with your partner Roche on the heels of this announcement. Any sense as to how soon we could see data? I know you did make a comment as you said earlier, but I'd love to hear any more feedback from the ground there? And then I have one quick follow-up as well.
Brian M. Culley
Yes. Thanks, Jack, for the question. The shortest possible answer is no, nothing to add. The biggest challenge, I think, is the enrollment range being 30 to 60, makes it really difficult to say when, where and how the public disclosure of data will occur, whether it will come in pieces or major medical meetings and so forth. But I do suspect that as we get closer to that event for those events, that we might be in an opportunity to provide more clarity and expectation around it.
Jack Kilgannon Allen
Great. Great. And then my other question, a little bit out of the box here. I'm not sure if you've seen the news coming from some of the medical suppliers here. But it's been hard to get your hands on nonhuman primates or at least it could become more pressing to get your hands on non-human primates given some of the updates from some of the players in the space. I was wondering if you had any comment as it relates to your preclinical activities and the use of these valuable research assets and how you're factoring that into the timelines there?
Brian M. Culley
It's a great question. Part of the answer is that we do not do any nonhuman primate testing. So we haven't -- we're not susceptible to a supply challenge. But by chance, I was looking early this morning at a similar company's slide deck and noticed that they were reporting a lot of data in NHP. And it occurred to me, I wonder if that is an issue for them. It's not for us. I don't know how others are managing it, but we have, ever since COVID began, we have worked to ensure that our supply chains are in good order, and we benefit by being a multinational company in that way. But specifically to NHPs, we don't have any clinical -- excuse me, any preclinical activity utilizing that particular species.
Jack Kilgannon Allen
Great. I congratulate you again on all the progress made over the course of the quarter.
Operator
Our next question comes from the line of Mayank Mamtani from B. Riley Securities.
William McKinnie Wood
This is William Wood on Mayank Mamtani. Congratulations, Brian, to you and the team, really excited to see all the progress you've been making and looking forward to the upcoming work. A couple of questions here from us. We're excited, obviously, to see that you've got the upcoming OpRegen data at ARVO in April. Would be -- I know you've touched on this already a little bit, but it would be great to hear what we might be able to see as far as new or incremental maybe surrounding or remind us how your OTT anatomical results tend to correlate with visual acuity given pretty long follow-up that you've had now all treatment. And then also to clarify, have you or your partner Roche seen the value of cutting BCVA data in terms of a rate of vision loss by greater than 15 letters or 3 lines?
Brian M. Culley
I appreciate the questions, William. I'm going to hand off to Gary to speak to those. Thank you.
Gary S. Hogge
Yes. So obviously, there's a lot of new and buzz around the BCVA and cutting it -- looking at 3-line loss over time. The good thing is that we examine it closely throughout and in the Cohort 4, which is the optical population that is involved in those studies, we haven't had a 3-line loss in any of our Cohort 4 patients. So that's certainly something to be intrigued about. Smaller numbers we know, but it looks like we've maintained those visual improvements that we've observed over time we reported out.
And the data coming up at ARVO, we'll focus on looking at different analysis of the OCT assessment. And how quickly those changes occur and how they tie into the visual acuity improvements, particularly in those patients that showed signs of outer retinal structural improvement. And so we're very excited to have this data, again, presented by an entirely independent analysis.
William McKinnie Wood
I appreciate that extra color there. And then also just to clarify, do you know the timing of the release of ARVO abstracts and then whether you expect that the abstract presenter may comment on the Phase II enrollment status since there is a meaningful overlap in trial sites there?
Gary S. Hogge
Yes. So as per the ARVO website, it will be available sometime in early March, so perhaps in the next week or 2. With regards to Dr. Banin and his ability to comment on the future or the ongoing study that is conducted by Genentech and Roche, I don't think he'll be able to offer any additional comments at this time.
Brian M. Culley
And William, I'm going to add here. I don't think I'm putting Roche on the spot. But as a general matter, when we were running the Phase I/IIa, these were the first 24 people on the planet to ever receive this experimental therapy. Now that there is a basket of safety and efficacy data available, it makes me think that the conversation between a prospective patient on the clinical trial and their doctor might go a little differently because they could actually show some results that are available in the public domain. So I am hopeful, although I have no specific information because the trial is just underway, but I'm hopeful that enrollment will go faster than it was when we were running it.
William McKinnie Wood
Got it. That's really helpful. And then one last one, switching gears. In regard to your ANP1, there's obviously been a number of players in the hearing space, a lot of them incorporating Intratympanic administration. Just curious what your plans are on delivering the cells into the inner ear. I know you mentioned that it could be a good combo for cochlear implants, but I don't think you're going to be limiting to that. Maybe just walk us through your plans there.
Brian M. Culley
Yes. So I think what the right way for me to describe is that we have a lot of good ideas, but they need to be tested. And so we're not today in a position to say a whole lot more about an intended patient population or exactly what the right clinical application will be. There are many causes of hearing loss. We're going to follow the data that's collected. And right now, we're just at the very earliest stages of that process. So it's difficult, but I think as we reject some hypotheses, reject some options and begin to narrow down what we think is the best approach, that will be something we'll look forward to sharing when we are able to do so and feel confident in that information.
Operator
Our next question comes from the line of Kristen Kluska from Cantor Fitzgerald.
Kristen Brianne Kluska
So we've talked a lot about how a GA approval in general, could help to better educate the market. But perhaps I'll ask you the question from a different direction. How do you think that the emergence of these commercial complement inhibitors can help frame eligible patients by the time OpRegen potentially reaches the market? So I know you've shown that if patients are perhaps too far along towards legal blind status, they may not be eligible. So do you think that patients should they be compliant on these complement inhibitors could become eligible given there's at least some slowing of the progression?
Brian M. Culley
I love it. We have a market leader that is going to condition a market to accept a new therapy in an environment where there are no approved therapies today. And I think there are a couple of places where that could be beneficial. There are technologies out there that are helping people to identify this disease earlier. So I think we're going to see an increase in the prevalence through identification of patients. And I think most companies with these therapies in development are thinking that earlier patients are sort of more suited for therapy. And I also think that the aging population is going to increase the incidence of the condition.
So if you imagine that when my dad was first diagnosed with dry AMD that he would have been told, "We're sorry, there's nothing we can do for you, Mr. Culley." But now, he would be brought in. He would have a specific caregiver. Presumably he would be on therapy. And now he's a little bit of a captured population.
So if you come along with the second, third or fourth treatment in a disease setting, you benefit from the precedent and the awareness of an educated patient population. So I would not feel so positively about it if we had a MeToo therapy. But because our therapy is so wildly different, and I'm hopeful we'll continue to look so different in terms of its product profile, I think that it's actually a big positive for us.
Kristen Brianne Kluska
Okay. And given the data here and of course, the validation from Genentech and Roche, I'm wondering how you're thinking about this pathway with some of your earlier candidates as you start to do some work here? So do you like potentially establishing some proof-of-concept data in-house before potentially seeking partnerships similar to what you saw here? And then can you detail for us some of the preclinical work that you're intending to conduct near term?
Brian M. Culley
So with respect to the strategic component of your question, which has to do with partnering, I think the answer is that it very much depends on the cost of development that you're facing, your probability of success, the macroeconomic business environment you're in, your cost of capital, all of these factors are sort of fun decisions that companies with multiple assets get to make.
So we don't have a priority, a plan to either partner or not partner any of our assets. We look at them as assets that have optionality and flexibility. We just try and make them as valuable as possible so that if we do elect to enter into a partnership that we can find that partnership to be financially rewarding and strategically valuable. And that means partnering with people who have high capabilities and are going to increase the probability of success.
I do think from an approach that the success that we've had so far and we will continue with the OpRegen program does create a certain amount of a halo effect on other assets. Clearly, we are working with different cell types, and so there's not a perfect apples-to-apples comparison. But conceptually, the notion that cells are capable of doing things that are beyond the reach of small molecules is a notion that we think is being borne out in the setting of dry AMD, and we believe will be applicable in other settings.
And I could refer to this morning there was a trial that was unsuccessful in the setting of spinal cord injury utilizing a particular scaffold. There were no biologics involved. It was just pure scaffold. Unfortunately for patients, that was not a study that was successful. But again, to me, that is another reminder in the field that sometimes the standard or expected approaches just aren't quite strong enough when the condition is very severe as in the case of cells that are dying off that goes far beyond a single pathway and getting to the level of the entire cell or the cell has been destroyed through an accident or some sort of trauma such as the case of spinal cord injury.
Kristen Brianne Kluska
Thank you, Brian. Looking forward to seeing the data in a few weeks.
Operator
Our next question comes from the line of Joe Pantginis from H.C. Wainwright.
Joseph Pantginis
So Brian, I wanted to focus on your 2 leading regulatory discussions, and I'll start with VAC2 if you don't mind. So obviously, you talked about the pre-IND discussions right now are surrounding production processes as well as characterization of the cells. So I was curious how do those processes differ, if any, from what CRUK is doing?
Brian M. Culley
Thank you, Joe, for that question. I would say that the similarities in the process, they exist, but one of the reasons that we exercise the option is that we saw an opportunity to improve upon those processes. I want to be really clear for everyone listening that each cell type that we try to manufacture demands and requires its own unique set of steps. So we do not have a one-size-fits-all differentiation secret sauce that we apply to different cell types. It really is a laborious effort to figure out how to get these cells to behave in the way that we want so that we're only manufacturing the cells which we desire to be used in the clinic.
So in the setting of the DCs, which we manufacture, we've made great strides in improving the characterization of those cells and some of that data and information has been provided to FDA so that they can see what we would plan to use going forward.
So there definitely are some differences relative to what we were making -- or excuse me, what was being used by CRUK. But at the end of the day, there are release criteria and properties that are consistent across the material. So it's not like it's a different cell type that would necessarily lead to large differences in clinical behavior. We really have been satisfied with the clinical performance. We're looking more to how we can optimize it, how can we scale and get better production costs and make it more affordable and allogeneic off-the-shelf option for patients and how can we increase the potency, perhaps lower the dose. These are all things that we are working on to see if we can improve a product profile in what is otherwise very much a challenging clinical setting.
Joseph Pantginis
That's really helpful. And then just switching over to OPC1. I was hoping to get even some broad strokes at the minimum, the types of questions that have been going back and forth between you and the FDA and how that's translated into what your wish list looks like going into the Type B meeting?
Brian M. Culley
That's a great question. I would say the vast majority of the content in the materials that we've been sharing with the FDA and the questions they've been coming back with have to do with the new device. This is a device that has not been used before for this purpose. And so they have a lot of questions about how it will be used and how it will perform.
What provides us with some comfort and confidence is that the components that actually go into or touch the patient are the same. The cells that are being used are the same as before. The needle is the same type of needle. Everything that's different with the Neurgain device is actually external to the patient.
So I think from a performance perspective, I feel confident that we will have a good outcome from this study. But nevertheless, the FDA is going to be prudent and want to understand how do all these manipulators work, how do they attach, what happens in a fail situation? What's the worst case scenario? Very standard types of information-seeking questions that we've been getting. And I'll ask Gary if there's anything that he -- that comes to mind that he'd like to add to that question, Joe.
Gary S. Hogge
Yes. Just to add that there's nothing unexpected, but many of these are first time in human use when they assembled together as an entire component. And so they want a demonstration of if you pass the cell through, is it still viable and potent ones that goes through the needle and syringe. Are the components -- what's the pH of the components, what's the software look like? They are all questions that we've got to address. Many of them involve very complex detailed reports and analysis, and that's what the back-and-forth questions have been. Nothing unexpected, but many -- much of it takes time.
Operator
Our final question comes from the line of Jason McCarthy from Maxim Group.
Joanne Lee
This is Joanne Lee on the call for Jason. Just 2 around OpRegen. My first one is regarding the recent approval from Apellis, which we noticed was purely based on disease trajectory with no benefit on visual acuity. Now that we've seen a willingness from the FDA to prove based solely on structural changes in geographic atrophy, does the upcoming data at ARVO take a greater importance for OpRegen? And how does this impact the importance of also demonstrating functional benefit in patients with GA?
Brian M. Culley
Thank you for the question, Joanne. I think that the ARVO data is going to be important because there will be parts of that data that have not been shared before. And we're working with a product candidate that is being discussed as being capable of creating anatomical changes far beyond that of the leading candidate and the more recently approved complement inhibitor. So I think any new data on our approach is definitely meaningful to the field.
With respect to the second part of your question, how does it change the calculus on function? I think it's notable that the data from that recently approved asset essentially proves with statistical significance that they do not affect the visual field. So I think that the opportunity to provide a greater clinical benefit in patients is sitting there for the taking for whichever approach and whichever company can find it because the standard of care clearly has -- unquestionably has no effect on visual function. So I see that as a great opportunity, and I think that we are one of the most important contenders to grab that opportunity.
Joanne Lee
Got it. I appreciate the details. And then just given the differences in mechanism behind complement inhibition and retinal restoration, how would you expect a one-and-done treatment like OpRegen could fit in with complement targeting drugs like Empaveli and others. Would this be something patients could perhaps take and then afterwards on a follow-up receive complement inhibition to further prevent damage? Curious to see how you'd imagine OpRegen could be positioned in the treatment landscape?
Brian M. Culley
I imagine myself as a patient looking at 2 product profiles, one that requires a monthly or every other month injection in the eye. And I'm an elderly individual who has difficulty getting to a clinic 6 to 12 times a year and comparing that with a onetime procedure approximately 30 minutes, and I'm awake for it with multiple years, maybe a lifetime of benefit. So I think the product profile just screams preference, but I'm going to invite Dr. Hogge to add to my thoughts.
Gary S. Hogge
I think there's 2 ways you can look at it and both favor, hopefully, patient outcome. OpRegen potentially be used first and then follow up with a complement inhibitor. So if you take care of rest of GA (inaudible) RPE and keep the photoreceptors healthy. And then given it is an aged eye, then complement inhibition may further set up opportunities to succeed and be established for long-term benefit.
Alternately, if you keep complement inhibition first, decreased inflammatory cascade is ongoing, put in OpRegen cells, and they may be even more likely to succeed. But bottom line, the earlier intervention -- the early identification of a much larger patient pool will help both patients and physicians treating them.
Brian M. Culley
Thank you, Joanne. I'm going to actually combine your question a little bit with the question that we got from Kristen Kluska from Cantor because one of the sort of fun ways I think about the complement inhibitor is that it's sort of like one of those tower defense video games where it's slowing a process. So you can imagine there will be more patients in the hot zone, the addressable zone that could be treated by us. So in terms of the utility of OpRegen if a complement inhibitor becomes established, I think, again, you could see a greater number of patients that exist in that addressable patient population spectrum because some of the very early individuals with dry AMD who get on to complement inhibition, if, in fact, they are on for years and there's 20% or so less progression, they might still be within an addressable profile for our product at some point in the future.
Joanne Lee
Great. Appreciate the additional color. Congratulations on all the progress, and we'll be looking forward to the data at ARVO.
Operator
I would now like to turn the call over to Brian Culley for closing remarks.
Brian M. Culley
Well, thank you, everyone. We absolutely and sincerely appreciate your support of Lineage as we look to position ourselves as a leader in cell therapy and cell transplant medicine. Thank you very much for joining the call today, and have a great rest of your week.
Operator
Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.
Participants
Brian M. Culley; CEO, President & Director; Lineage Cell Therapeutics, Inc.
Gary S. Hogge; SVP of Clinical & Medical Affairs; Lineage Cell Therapeutics, Inc.
Ioana C. Hone; Director of IR; Lineage Cell Therapeutics, Inc.
Jill Ann Howe; CFO & Principal Financial and Accounting Officer; Lineage Cell Therapeutics, Inc.
Jack Kilgannon Allen; Senior Research Analyst; Robert W. Baird & Co. Incorporated, Research Division
Joanne Lee
Joseph Pantginis; Director of Research & MD of Equity Research; H.C. Wainwright & Co, LLC, Research Division
Kristen Brianne Kluska; Analyst; Cantor Fitzgerald & Co., Research Division
William McKinnie Wood; Research Analyst; B. Riley Securities, Inc., Research Division
Presentation
Operator
Welcome to the Lineage Cell Therapeutics Fourth Quarter and Full Year 2022 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 property of Lineage. And recordings, reproductions or transmission 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 to you your host for today's call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.
Ioana C. Hone
Thanks, Mandeep. Good afternoon, and thank you for joining us.
A press release reporting our fourth quarter and full year 2022 financial results was issued earlier today, March 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. 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 M. Culley
Thank you, Ioana, and good afternoon, everyone. Welcome to our full year 2022 call. We appreciate you joining us today.
2022 was another challenging year for biotech companies, but I think it was an exceptional one for Lineage. We worked successfully alongside Roche and Genentech to prepare OpRegen for its next clinical trial, and that trial is now open and enrolling new patients.
With the positive tailwinds from the OpRegen program in place, we made bold but financially responsible moves to expand our pipeline, adding a photoreceptor program, which capitalizes on our experience and success in ophthalmology and by adding an auditory neuron program, which is the first time we've shown that we can not only improve upon existing assets, but also create them from scratch in our R&D labs, vastly reducing any third-party financial obligations from these in-house product candidates.
2022 also marked a year of important and successful clinical and regulatory execution for the Lineage team as we advanced our clinical programs along their respective developmental pathways.
I realize this is a 2022 recap call, but I know a lot of investor attention is presently focused on the dry AMD landscape. So I thought that would be a better way to use my opening remarks.
Last month, FDA approved a complement inhibitor to treat dry AMD. And with this approval, the FDA has set a precedent that anatomical change in the form of photoreceptor preservation is an approvable endpoint in this condition. We believe this is an enormous regulatory decision for us because the data we have collected to date with OpRegen and its ability to improve outer retinal structure and either halt or even reverse the progression of GA is far greater than what has been demonstrated by either of the leading complement inhibitors.
Critics sometimes say that we've only shown these results in a small number of patients, but I will remind them that we are seeing changes which do not occur spontaneously, and we're reporting these via multiple independently verified analyses using objectively captured anatomical images. So on this basis, we believe these early and exceptional results are likely to be repeated in larger studies.
When I look at the error bars surrounding the point estimates on the Phase III trial for the complement inhibitor, which recently gained FDA approval for which only a small reduction in GA growth is provided, I think it's highly likely that all 5 OpRegen patients, which Roche and Genentech reported on at the ARVO Annual Meeting last year have shown greater reductions to the area of GA than all of the more than 1,200 patients treated in the clinical trials, which supported that drug's approval.
Furthermore, we have demonstrated not only anatomical changes but also functional improvements to patients' vision with an average of 7.6 letters gained among all Cohort 4 patients and increasing to 12.8 letters gained among the 5 patients who received extensive coverage of OpRegen cells across their GA and who additionally exhibited outer retinal structure improvements measured 12 months following transplant in our Phase I/IIa study.
Recently, a number of outlets have been reporting that a different complement inhibitor can provide functional benefits to vision. The evidence which that company provided was a post hoc exploratory analysis, which is something my former colleague likes to call drawing the target around the arrows after they're fired. This selective data cuts sought to make the case that patients on treatment were less likely to lose 15 letters at 12 months than patients on placebo.
Despite this data similarly being in a very small number of patients, representing only 5 to 10 patients of all patients treated on that trial, it actually was quite well received by the investment community. And for this reason, I will again draw the comparison that OpRegen data, which was reported at ARVO by Roche and Genentech showed 25% of patients in Cohort 4 gained at least 15 letters. They didn't avoid loss. They gained vision. So we're talking about comparisons, which are as large as a 30-letter delta between these approaches.
Obviously, it's a huge benefit for patients and the medical community to finally have something which may help some patients with their condition, but it appears to us that there is a tremendous amount of clinical benefit, which could still be provided. Benefits which monthly injections of complement inhibitors have not shown. It's very important for our results to continue being presented at major medical meetings and help the medical and investor communities become aware of the efficacy, safety and other attributes of our product candidate profile.
One of the additional potential advantages of the OpRegen product profile is in dosing and administration. OpRegen treatment involves a single 30-minute procedure rather than giving patients an injection every month or 2, year after year with all the compliance issues, which accompany it. For this reason, we often are asked how long our treatment lasts. But we don't yet know because we haven't reached a clear terminus or an indication of the benefit tapering.
I've mentioned on prior calls, that we have patient data going out as long as 5 years in some cases, including our very first patient with structural improvement who after 4 years has lost 30 letters in her untreated eye, which, by the way, was her better performing eye at baseline. But she was still 3 letters higher than her baseline level of visual acuity in her OpRegen-treated eye. Again, that's data coming 4 years post treatment in a disease which is widely viewed as inevitably progressive.
Long-term follow-up from the Phase I/IIa study is still ongoing, which allows us to continue to monitor evidence of the duration of treatment effect. And there may be more to come from deeper imaging analyses as well. Next month, some of that data from our Phase I/IIa trial will be made available at the 2023 ARVO Annual Meeting on April 25. That will be presented by Dr. Eyal Banin on behalf of Roche and Genentech. And as always, data updates are important disclosures, and we look forward to this next one happening in just a few weeks.
Meanwhile, we're excited about the ongoing Phase IIa study, which Roche and Genentech has launched to evaluate the safety and efficacy of OpRegen as well as certain delivery techniques. It is difficult to predict when that trial will have data available because it has an enrollment range of 30 to 60 patients. But regardless, the primary and secondary outcome measures for that study will all occur at 90 days. So the primary observation period is very brief compared to what we usually expect from dry AMD studies.
Genentech has disclosed 2 enrolling clinical sites so far in Cincinnati and Sacramento, both of whom participated in our Phase I/IIa study. Dr. Christopher Riemann, the PI from the Cincinnati Eye Institute is a former Lineage site PI who treated one of the original retinal restoration patients, and we appreciate his and Dr. Telander's continued participation in the OpRegen trial, and we expect more sites will be coming online this year.
Moving next to our spinal cord program. You'll recall that a lot of our work last year focused on activities to support regulatory interactions for OPC1, which we successfully completed as planned. Our response to an RMAT interaction with a comprehensive data package was submitted to FDA to support the use of the new delivery device, along with a clinical protocol synopsis for the small safety study we plan to conduct in sub-acute and chronic patients, and which I've discussed previously on several occasions.
We have been in active dialogue with FDA and have been responding to additional requests for information following our initial RMAT package submission. We anticipate another formal interaction to occur with FDA in the second quarter, a Type B meeting, which we hope will support submission of our planned IND amendment in the second half of this year. Assuming the necessary clearances are received, our plan is to initiate the open-label device safety clinical study known as the DOSED study in 5 to 10 patients with either subacute or chronic injuries as soon as we're able.
We also remain in frequent contact with the California Institute for Regenerative Medicine, and we continue to plan to apply for a grant to support the device safety study. As most of you are aware, CIRM guidelines state that an applicant must provide communication from FDA indicating that it's safe to proceed with a proposed clinical trial protocol. So therefore, the timing of the submission of our grant application will be contingent on and subsequent to receipt of FDA clearance to initiate the dose study.
For VAC2, we submitted our pre-IND meeting package as planned, actually a little bit earlier than we planned and have already received feedback from FDA. Our emphasis in the pre-IND package was to understand the FDA's view of our production process and the analytical methods, which we propose to use to manufacture and characterize our clinical material. Their feedback was generally positive and provided us with a clear and actionable path to an IND submission.
Any future IND filing would naturally be expected to include supporting clinical data from the Phase I study of VAC2 conducted by Cancer Research UK. We currently are still awaiting those data and were recently informed by Cancer Research UK that it's expected to be available during the second quarter of 2023. This data would be an important component of any potential IND so we will be in a better position to update you on our VAC plans at that time. In the meantime, we will continue to monitor the changing landscape of DC vaccine product candidates and their evolving clinical data.
We've also continued to engage in manufacturing and preclinical activities for our 2 new cell transplant programs in hearing loss and vision disorders, both of which were publicly launched last year. Initial preclinical studies from our photoreceptor program are currently ongoing, and we hope to be able to present top line preclinical data once the appropriate patent submissions have been made and as data become available.
Last month, we also announced the initiation of preclinical testing with our auditory neuron program in a collaboration with the University of Michigan with initial preclinical data anticipated to be available later this year. I'd like to remind everyone that Lineage's hearing loss program didn't even exist at the beginning of last year, and yet we've already started in vivo preclinical studies. Notably, we've been able to advance this program to that stage while spending less than $1 million of our R&D budget. We believe that speed and return on our R&D investment dollars are illustrative of the efficiency and versatility of the Lineage platform.
We showed the ability to advance from a little more than a product concept then develop new differentiation methods to generate intellectual property and execute on the manufacture of a specific cell type, then proceed into in vivo testing in less than 12 months and with an investment of less than $1 million. When we compare the money and time we invested to move a new program from concept into in vivo testing against the industry norms for a small molecule making the same journey, we find striking differences in the return on invested capital. And as we continue to improve our capabilities and our homegrown programs advance further, I think it will become increasingly apparent that the Lineage platform has tremendous untapped potential.
Our goal will be to unlock that value in the months and years ahead, both internally and through partnerships while still maintaining a prudent financial balance between the exciting progress occurring with OpRegen and our expansion activities with our pipeline.
This brings me next to a few comments about our most recent business development transaction. As you know from prior calls, I have said that we are emphasizing business development, and that includes in-licensing, out-licensing and joint development projects. Our most recent deal is an option agreement with Eterna Therapeutics, which gives us an affordable way to gain access to several new technologies, which fit within our overall strategic approach. These staged investments in technologies are intended to provide us with certain advantages and help set the foundation for the type of company we aim to become.
Because our confidence in the future success of OpRegen has increased upon the recent regulatory precedent set by FDA in dry AMD, we believe this is the right time to apply our technology in other areas. That is where the Eterna deal fits into our overall strategy. It provides us with an opportunity to gain experience in 3 new areas: gene editing, hypoimmunity and induced pluripotent stem cells or iPSCs. These 3 complement and are expected to bolster our in-house manufacturing and directed differentiation capabilities.
Gene editing offers us an opportunity to modify the behavior and functionality of cells and engineer new features before they are transplanted. This ex vivo editing allows us to fully characterize an edited cell line prior to it being administered to a patient. In some cases, we may look to add genes and thereby add functionality, while in other cases, we may look to delete genes, which may help with the tolerability or the durability of a transplant. Editing also gives us a competitive edge because it makes our products difficult to copy, and it may give them better clinical outcomes.
As we explained in the press release announcing the Eterna agreement, we will be utilizing a B2M deficient cell line, which is a feature associated with lower chances of transplant rejection. We don't see hypoimmunity as relevant to our existing programs because we've never received a reported rejection of our OpRegen or OPC1 cells and that's going out as long as 10 years in patients with spinal cord injury or as long as 5 years in patients with dry AMD. But the eye and spinal cord are known to be tolerant locations for cell transplants. If we want to expand our technology to other areas of the body, we need to consider whether hypoimmunity could be beneficial and ensure that all of our product candidates have an appropriate and suitable commercial product profile. We think hypoimmunity could be an interesting feature for potential new product candidates.
The third new aspect of this deal is the use of an iPSC line. We already have intellectual property for certain platform inventions and uses of iPSC cells, but exercising this option could lead to our first product candidate built from day 1 on an iPSC cell line. We know from experience that the quality and performance of iPSC lines can vary widely, and we'll be keen to see how these cells behave in our hands. Regardless, experience with both iPSC and ES lines is rare and we'll give Lineage yet another point of differentiation compared to the competition.
Overall, we're very excited about this deal because we believe it provides us with access to multiple new technologies but with a relatively modest cost structure. We anticipate providing updates under this collaboration later this year.
Overall, while many cell therapy and gene-editing companies struggled badly last year, reducing headcounts and/or deprioritizing programs, we broadened our pipeline and advanced each of our 5 programs. We made a number of key hires and expanded our research space in both California and Israel, but we did this with very responsible and stepwise investments to help ensure we have capital to reach additional milestones and important events.
I believe the company made exceptional progress in 2022 and our efforts during 2023 will remain focused on the further progression of our allogeneic cell therapy programs, making responsible investments in disease settings where we believe we can have a meaningful impact and the continued prioritization of both new and existing collaborations, all and each in support of our overarching vision of building Lineage into a leading cell therapy company.
With that, I'll now hand the call over to Jill for a discussion of our financials.
Jill Ann Howe
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 December 31, 2022, totaled $57.9 million, which is expected to support our planned operations into Q3 of 2024. Please note, this does not account for any of the Roche Genentech milestones, which we may receive nor for any business development or grant revenues, which we may receive during this same period.
Let me start with an overview of our fourth quarter 2022 operating results. Our revenue is generated primarily from licensing fees, collaboration revenues, royalties and research grants. Total revenues for the fourth quarter were approximately $1.9 million, a net increase of $0.7 million as compared to $1.2 million for the same period in 2021. The increase was driven by the recognition of deferred collaboration revenues in connection with the Roche agreement, which we entered into in 2021.
Operating expenses are comprised of research and development expenses and general and administrative expenses. Total operating expense for the fourth quarter were $8.5 million, a decrease of $20.7 million as compared to $29.2 million for the same period in 2021. The overall decrease was almost entirely driven by a decrease in R&D expense due to the Roche collaboration. R&D expenses for the fourth quarter were $4.1 million, a decrease of $20.7 million as compared to $24.8 million for the same period in 2021. The decrease was substantially driven by the prior year $21 million accrual for financial obligations payable to the IIA and Hadasit in connection with the $50 million upfront payment received in early 2022 under the Roche collaboration. This decrease was partially offset by $0.1 million and $0.2 million in new expenses to support the development of the photoreceptor and auditory neuron cell therapy programs, respectively.
G&A expenses for the fourth quarter were $4.3 million, a decrease of $0.1 million as compared to $4.4 million for the same period in 2021. The decrease was driven by a $0.4 million in legal and litigation expenses. Loss from operations for the fourth quarter were $6.6 million. This is due to a decrease of $21.6 million as compared to $28.2 million for the same period in 2021, principally owing to Roche collaboration-related expense accruals of $21 million, as I had previously mentioned.
Other income for the fourth quarter was $0.3 million compared to other income of $0.2 million for the same period in 2021. This variance was primarily related to the change in the value of marketable equity securities as well as exchange rate fluctuations related to our international subsidiaries for the applicable period. The net loss for the fourth quarter was $6.4 million or $0.03 per share compared to a net loss of $29 million or $0.17 per share for the same period in 2021.
Now let me move on to our full year 2022 operating results. Revenues for the full year were $14.7 million. This represents an increase of $10.4 million compared to $4.3 million for the same period in 2021. Again, the increase is primarily related to revenues recognized from the $50 million upfront payment from the Roche collaboration. Total operating expense for the year was $36.5 million, a decrease of $15.6 million as compared to the $52.1 million for the same period in 2021.
Total R&D expense for the year was $14 million, a decrease of $19.9 million as compared to $33.9 million for the same period in 2021. The decrease was substantially driven by the prior year $21 million accrual for financial obligations payable to the IIA and Hadasit. This decrease was partially offset by $0.7 million and $0.5 million in R&D spending on the new auditory neuron and photoreceptor cell therapy programs, respectively.
Total G&A expenses for the year were $22.5 million. This is an increase of approximately $4.3 million as compared to $18.2 million for the same period in 2021. The increase was primarily attributable to $2.1 million in litigation and legal expenses, $1.3 million in salaries and related benefit fees and $0.9 million in share-based compensation expenses.
Losses from operations for the year were $22.5 million, a decrease of $26.7 million as compared to $49.2 million for the same period in 2021. Other income and expenses for the year netted an expense of $3.3 million compared to other income of $5.9 million for the same period in 2021. The net variance was primarily related to a prior year gain on sale of marketable equity securities as well as exchange rate fluctuations related to our international subsidiaries for the applicable period.
The net loss for the year was $26.3 million or $0.15 per share compared to a net loss of $43 million or $0.26 per share for 2021. Overall, we intend to maintain the same spending discipline that we have adhered to for years and which has served us well in the past. The biotech markets continue to face uncertainty, so we believe that maintaining discipline with our spending will continue to allow us to maintain our plan to reach meaningful milestones and create value for shareholders from our investments in our programs.
Now let me hand the call back to Brian.
Brian M. Culley
Great. Thanks, Jill.
Circling back to the beginning of this call, I continue to think that Lineage is doing quite well in an otherwise strained environment for the biotech industry. We have been hitting our milestones and advancing our programs in a responsible and positive way. And I expect Jill and I will continue to apply the same financial discipline to our programs this coming year.
Our approach helped us land a valuable collaboration with Roche, and I believe it will continue to be an important attribute during 2023. And further out, as our programs demonstrate success in the clinic or in preclinical testing and potentially attract additional, nondilutive support, I believe, we'll have opportunities to accelerate our work across a number of parallel paths.
Broadly speaking, a few things we'll be working on this year and which you may want to watch for updates on include additional data from the completed Phase I/IIa trial of OpRegen, which we expect next month; additional regulatory progress with OPC1, which we will conduct during the second quarter of this year and which will support OPC1 returning to clinical testing. And we'll be doing our part to support the manufacturing and Phase IIa study of OpRegen being conducted by Roche and Genentech, the results of which we believe could be a seminal event, not only for Lineage but also for the entire GA field.
In addition, we've planted a few seeds to prepare for the future, including our new preclinical programs and the Eterna option deal which gives us affordable access to new technology, which we can combine with our existing capabilities and the furtherance of our goal of using the transplant of whole cells to change the course of disease in new and exciting ways.
And with that, Mandeep, we are ready to respond to any analyst questions that there may be.
Question and Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Jack Allen from Baird.
Jack Kilgannon Allen
Great. Congratulations to the team on all the progress made over the course of the quarter. Brian, you did a great job laying out some of your thoughts around the recent news in geographic atrophy, but I was wondering if you could dive a little bit more deeply into some of the conversations you have with your partner Roche on the heels of this announcement. Any sense as to how soon we could see data? I know you did make a comment as you said earlier, but I'd love to hear any more feedback from the ground there? And then I have one quick follow-up as well.
Brian M. Culley
Yes. Thanks, Jack, for the question. The shortest possible answer is no, nothing to add. The biggest challenge, I think, is the enrollment range being 30 to 60, makes it really difficult to say when, where and how the public disclosure of data will occur, whether it will come in pieces or major medical meetings and so forth. But I do suspect that as we get closer to that event for those events, that we might be in an opportunity to provide more clarity and expectation around it.
Jack Kilgannon Allen
Great. Great. And then my other question, a little bit out of the box here. I'm not sure if you've seen the news coming from some of the medical suppliers here. But it's been hard to get your hands on nonhuman primates or at least it could become more pressing to get your hands on non-human primates given some of the updates from some of the players in the space. I was wondering if you had any comment as it relates to your preclinical activities and the use of these valuable research assets and how you're factoring that into the timelines there?
Brian M. Culley
It's a great question. Part of the answer is that we do not do any nonhuman primate testing. So we haven't -- we're not susceptible to a supply challenge. But by chance, I was looking early this morning at a similar company's slide deck and noticed that they were reporting a lot of data in NHP. And it occurred to me, I wonder if that is an issue for them. It's not for us. I don't know how others are managing it, but we have, ever since COVID began, we have worked to ensure that our supply chains are in good order, and we benefit by being a multinational company in that way. But specifically to NHPs, we don't have any clinical -- excuse me, any preclinical activity utilizing that particular species.
Jack Kilgannon Allen
Great. I congratulate you again on all the progress made over the course of the quarter.
Operator
Our next question comes from the line of Mayank Mamtani from B. Riley Securities.
William McKinnie Wood
This is William Wood on Mayank Mamtani. Congratulations, Brian, to you and the team, really excited to see all the progress you've been making and looking forward to the upcoming work. A couple of questions here from us. We're excited, obviously, to see that you've got the upcoming OpRegen data at ARVO in April. Would be -- I know you've touched on this already a little bit, but it would be great to hear what we might be able to see as far as new or incremental maybe surrounding or remind us how your OTT anatomical results tend to correlate with visual acuity given pretty long follow-up that you've had now all treatment. And then also to clarify, have you or your partner Roche seen the value of cutting BCVA data in terms of a rate of vision loss by greater than 15 letters or 3 lines?
Brian M. Culley
I appreciate the questions, William. I'm going to hand off to Gary to speak to those. Thank you.
Gary S. Hogge
Yes. So obviously, there's a lot of new and buzz around the BCVA and cutting it -- looking at 3-line loss over time. The good thing is that we examine it closely throughout and in the Cohort 4, which is the optical population that is involved in those studies, we haven't had a 3-line loss in any of our Cohort 4 patients. So that's certainly something to be intrigued about. Smaller numbers we know, but it looks like we've maintained those visual improvements that we've observed over time we reported out.
And the data coming up at ARVO, we'll focus on looking at different analysis of the OCT assessment. And how quickly those changes occur and how they tie into the visual acuity improvements, particularly in those patients that showed signs of outer retinal structural improvement. And so we're very excited to have this data, again, presented by an entirely independent analysis.
William McKinnie Wood
I appreciate that extra color there. And then also just to clarify, do you know the timing of the release of ARVO abstracts and then whether you expect that the abstract presenter may comment on the Phase II enrollment status since there is a meaningful overlap in trial sites there?
Gary S. Hogge
Yes. So as per the ARVO website, it will be available sometime in early March, so perhaps in the next week or 2. With regards to Dr. Banin and his ability to comment on the future or the ongoing study that is conducted by Genentech and Roche, I don't think he'll be able to offer any additional comments at this time.
Brian M. Culley
And William, I'm going to add here. I don't think I'm putting Roche on the spot. But as a general matter, when we were running the Phase I/IIa, these were the first 24 people on the planet to ever receive this experimental therapy. Now that there is a basket of safety and efficacy data available, it makes me think that the conversation between a prospective patient on the clinical trial and their doctor might go a little differently because they could actually show some results that are available in the public domain. So I am hopeful, although I have no specific information because the trial is just underway, but I'm hopeful that enrollment will go faster than it was when we were running it.
William McKinnie Wood
Got it. That's really helpful. And then one last one, switching gears. In regard to your ANP1, there's obviously been a number of players in the hearing space, a lot of them incorporating Intratympanic administration. Just curious what your plans are on delivering the cells into the inner ear. I know you mentioned that it could be a good combo for cochlear implants, but I don't think you're going to be limiting to that. Maybe just walk us through your plans there.
Brian M. Culley
Yes. So I think what the right way for me to describe is that we have a lot of good ideas, but they need to be tested. And so we're not today in a position to say a whole lot more about an intended patient population or exactly what the right clinical application will be. There are many causes of hearing loss. We're going to follow the data that's collected. And right now, we're just at the very earliest stages of that process. So it's difficult, but I think as we reject some hypotheses, reject some options and begin to narrow down what we think is the best approach, that will be something we'll look forward to sharing when we are able to do so and feel confident in that information.
Operator
Our next question comes from the line of Kristen Kluska from Cantor Fitzgerald.
Kristen Brianne Kluska
So we've talked a lot about how a GA approval in general, could help to better educate the market. But perhaps I'll ask you the question from a different direction. How do you think that the emergence of these commercial complement inhibitors can help frame eligible patients by the time OpRegen potentially reaches the market? So I know you've shown that if patients are perhaps too far along towards legal blind status, they may not be eligible. So do you think that patients should they be compliant on these complement inhibitors could become eligible given there's at least some slowing of the progression?
Brian M. Culley
I love it. We have a market leader that is going to condition a market to accept a new therapy in an environment where there are no approved therapies today. And I think there are a couple of places where that could be beneficial. There are technologies out there that are helping people to identify this disease earlier. So I think we're going to see an increase in the prevalence through identification of patients. And I think most companies with these therapies in development are thinking that earlier patients are sort of more suited for therapy. And I also think that the aging population is going to increase the incidence of the condition.
So if you imagine that when my dad was first diagnosed with dry AMD that he would have been told, "We're sorry, there's nothing we can do for you, Mr. Culley." But now, he would be brought in. He would have a specific caregiver. Presumably he would be on therapy. And now he's a little bit of a captured population.
So if you come along with the second, third or fourth treatment in a disease setting, you benefit from the precedent and the awareness of an educated patient population. So I would not feel so positively about it if we had a MeToo therapy. But because our therapy is so wildly different, and I'm hopeful we'll continue to look so different in terms of its product profile, I think that it's actually a big positive for us.
Kristen Brianne Kluska
Okay. And given the data here and of course, the validation from Genentech and Roche, I'm wondering how you're thinking about this pathway with some of your earlier candidates as you start to do some work here? So do you like potentially establishing some proof-of-concept data in-house before potentially seeking partnerships similar to what you saw here? And then can you detail for us some of the preclinical work that you're intending to conduct near term?
Brian M. Culley
So with respect to the strategic component of your question, which has to do with partnering, I think the answer is that it very much depends on the cost of development that you're facing, your probability of success, the macroeconomic business environment you're in, your cost of capital, all of these factors are sort of fun decisions that companies with multiple assets get to make.
So we don't have a priority, a plan to either partner or not partner any of our assets. We look at them as assets that have optionality and flexibility. We just try and make them as valuable as possible so that if we do elect to enter into a partnership that we can find that partnership to be financially rewarding and strategically valuable. And that means partnering with people who have high capabilities and are going to increase the probability of success.
I do think from an approach that the success that we've had so far and we will continue with the OpRegen program does create a certain amount of a halo effect on other assets. Clearly, we are working with different cell types, and so there's not a perfect apples-to-apples comparison. But conceptually, the notion that cells are capable of doing things that are beyond the reach of small molecules is a notion that we think is being borne out in the setting of dry AMD, and we believe will be applicable in other settings.
And I could refer to this morning there was a trial that was unsuccessful in the setting of spinal cord injury utilizing a particular scaffold. There were no biologics involved. It was just pure scaffold. Unfortunately for patients, that was not a study that was successful. But again, to me, that is another reminder in the field that sometimes the standard or expected approaches just aren't quite strong enough when the condition is very severe as in the case of cells that are dying off that goes far beyond a single pathway and getting to the level of the entire cell or the cell has been destroyed through an accident or some sort of trauma such as the case of spinal cord injury.
Kristen Brianne Kluska
Thank you, Brian. Looking forward to seeing the data in a few weeks.
Operator
Our next question comes from the line of Joe Pantginis from H.C. Wainwright.
Joseph Pantginis
So Brian, I wanted to focus on your 2 leading regulatory discussions, and I'll start with VAC2 if you don't mind. So obviously, you talked about the pre-IND discussions right now are surrounding production processes as well as characterization of the cells. So I was curious how do those processes differ, if any, from what CRUK is doing?
Brian M. Culley
Thank you, Joe, for that question. I would say that the similarities in the process, they exist, but one of the reasons that we exercise the option is that we saw an opportunity to improve upon those processes. I want to be really clear for everyone listening that each cell type that we try to manufacture demands and requires its own unique set of steps. So we do not have a one-size-fits-all differentiation secret sauce that we apply to different cell types. It really is a laborious effort to figure out how to get these cells to behave in the way that we want so that we're only manufacturing the cells which we desire to be used in the clinic.
So in the setting of the DCs, which we manufacture, we've made great strides in improving the characterization of those cells and some of that data and information has been provided to FDA so that they can see what we would plan to use going forward.
So there definitely are some differences relative to what we were making -- or excuse me, what was being used by CRUK. But at the end of the day, there are release criteria and properties that are consistent across the material. So it's not like it's a different cell type that would necessarily lead to large differences in clinical behavior. We really have been satisfied with the clinical performance. We're looking more to how we can optimize it, how can we scale and get better production costs and make it more affordable and allogeneic off-the-shelf option for patients and how can we increase the potency, perhaps lower the dose. These are all things that we are working on to see if we can improve a product profile in what is otherwise very much a challenging clinical setting.
Joseph Pantginis
That's really helpful. And then just switching over to OPC1. I was hoping to get even some broad strokes at the minimum, the types of questions that have been going back and forth between you and the FDA and how that's translated into what your wish list looks like going into the Type B meeting?
Brian M. Culley
That's a great question. I would say the vast majority of the content in the materials that we've been sharing with the FDA and the questions they've been coming back with have to do with the new device. This is a device that has not been used before for this purpose. And so they have a lot of questions about how it will be used and how it will perform.
What provides us with some comfort and confidence is that the components that actually go into or touch the patient are the same. The cells that are being used are the same as before. The needle is the same type of needle. Everything that's different with the Neurgain device is actually external to the patient.
So I think from a performance perspective, I feel confident that we will have a good outcome from this study. But nevertheless, the FDA is going to be prudent and want to understand how do all these manipulators work, how do they attach, what happens in a fail situation? What's the worst case scenario? Very standard types of information-seeking questions that we've been getting. And I'll ask Gary if there's anything that he -- that comes to mind that he'd like to add to that question, Joe.
Gary S. Hogge
Yes. Just to add that there's nothing unexpected, but many of these are first time in human use when they assembled together as an entire component. And so they want a demonstration of if you pass the cell through, is it still viable and potent ones that goes through the needle and syringe. Are the components -- what's the pH of the components, what's the software look like? They are all questions that we've got to address. Many of them involve very complex detailed reports and analysis, and that's what the back-and-forth questions have been. Nothing unexpected, but many -- much of it takes time.
Operator
Our final question comes from the line of Jason McCarthy from Maxim Group.
Joanne Lee
This is Joanne Lee on the call for Jason. Just 2 around OpRegen. My first one is regarding the recent approval from Apellis, which we noticed was purely based on disease trajectory with no benefit on visual acuity. Now that we've seen a willingness from the FDA to prove based solely on structural changes in geographic atrophy, does the upcoming data at ARVO take a greater importance for OpRegen? And how does this impact the importance of also demonstrating functional benefit in patients with GA?
Brian M. Culley
Thank you for the question, Joanne. I think that the ARVO data is going to be important because there will be parts of that data that have not been shared before. And we're working with a product candidate that is being discussed as being capable of creating anatomical changes far beyond that of the leading candidate and the more recently approved complement inhibitor. So I think any new data on our approach is definitely meaningful to the field.
With respect to the second part of your question, how does it change the calculus on function? I think it's notable that the data from that recently approved asset essentially proves with statistical significance that they do not affect the visual field. So I think that the opportunity to provide a greater clinical benefit in patients is sitting there for the taking for whichever approach and whichever company can find it because the standard of care clearly has -- unquestionably has no effect on visual function. So I see that as a great opportunity, and I think that we are one of the most important contenders to grab that opportunity.
Joanne Lee
Got it. I appreciate the details. And then just given the differences in mechanism behind complement inhibition and retinal restoration, how would you expect a one-and-done treatment like OpRegen could fit in with complement targeting drugs like Empaveli and others. Would this be something patients could perhaps take and then afterwards on a follow-up receive complement inhibition to further prevent damage? Curious to see how you'd imagine OpRegen could be positioned in the treatment landscape?
Brian M. Culley
I imagine myself as a patient looking at 2 product profiles, one that requires a monthly or every other month injection in the eye. And I'm an elderly individual who has difficulty getting to a clinic 6 to 12 times a year and comparing that with a onetime procedure approximately 30 minutes, and I'm awake for it with multiple years, maybe a lifetime of benefit. So I think the product profile just screams preference, but I'm going to invite Dr. Hogge to add to my thoughts.
Gary S. Hogge
I think there's 2 ways you can look at it and both favor, hopefully, patient outcome. OpRegen potentially be used first and then follow up with a complement inhibitor. So if you take care of rest of GA (inaudible) RPE and keep the photoreceptors healthy. And then given it is an aged eye, then complement inhibition may further set up opportunities to succeed and be established for long-term benefit.
Alternately, if you keep complement inhibition first, decreased inflammatory cascade is ongoing, put in OpRegen cells, and they may be even more likely to succeed. But bottom line, the earlier intervention -- the early identification of a much larger patient pool will help both patients and physicians treating them.
Brian M. Culley
Thank you, Joanne. I'm going to actually combine your question a little bit with the question that we got from Kristen Kluska from Cantor because one of the sort of fun ways I think about the complement inhibitor is that it's sort of like one of those tower defense video games where it's slowing a process. So you can imagine there will be more patients in the hot zone, the addressable zone that could be treated by us. So in terms of the utility of OpRegen if a complement inhibitor becomes established, I think, again, you could see a greater number of patients that exist in that addressable patient population spectrum because some of the very early individuals with dry AMD who get on to complement inhibition, if, in fact, they are on for years and there's 20% or so less progression, they might still be within an addressable profile for our product at some point in the future.
Joanne Lee
Great. Appreciate the additional color. Congratulations on all the progress, and we'll be looking forward to the data at ARVO.
Operator
I would now like to turn the call over to Brian Culley for closing remarks.
Brian M. Culley
Well, thank you, everyone. We absolutely and sincerely appreciate your support of Lineage as we look to position ourselves as a leader in cell therapy and cell transplant medicine. Thank you very much for joining the call today, and have a great rest of your week.
Operator
Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.
Bullish
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