Ladies and gentlemen, welcome to the Lineage Cell Therapeutics Fourth Quarter and Full Year 2019 Financial Results Earnings Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the Investors section of Lineage website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage. And recordings, reproduction or transmission of this call without the express written consent of Lineage are strictly prohibited.As a reminder, today's call is being recorded. I'd like to introduce your host for today's conference, Ioana Hone, Director of Investor Relations at Lineage. Ms. Hone, please go ahead.

Thank you, Howard. Good afternoon and thank you for joining us. A press release reporting our fourth quarter and full year 2019 financial results was issued earlier today, March 12, 2020 and can be found on the investors section of our website. Please note that today's conference call and webcast will contain forward-looking statements within the meaning of federal securities laws, including statements regarding our strategy, goals, product candidates and clinical trials and financings and cost savings matters. Such statements are subject to significant risks and uncertainties including those described in our press release issued on March 12, 2020 and our recent filed Form 10-K.Actual results or performance may differ materially from the expectations indicated by our forward-looking statements due to those risks and uncertainties. We caution you not to place undue reliance on any of the forward-looking statements which speak only as of today. Joining us today are our Chief Executive Officer, Brian Culley, our Chief Financial Officer, Brandi Roberts, our Chief Medical Officer, Ed Wirth and our Senior Vice President of Clinical and Medical Affairs, Gary Hogge. The executives will provide prepared remarks, and then take questions from analysts and institutional holders. With that, I'd like to turn the call over to Brian Culley, our CEO.

Thank you, Ioana. Good afternoon, everyone. We know there are lots of important things going on right now. So we very much appreciate those of you who are able to join us today for our full year 2019 conference call. I'm first going to review our 2019 activities then describe some of our plans for 2020 followed by a brief update on each of our clinical programs. So I'll start off by saying the 2019 was an incredibly important year for us because we decided early in the year that the best path to success would be by focusing on clinical stage cell therapy opportunities in areas with high unmet need.Following that path meant that we needed to change many of our historic activities, establish to new priorities and focus our resources far more intensely on product development in dry AMD, spinal cord injury and cancer. We knew that by being a more streamlined and focused biotech company, we would be able to offer both our current and future shareholders a compelling opportunity driven by the extraordinary potential of using cell therapy to create a new class of therapeutics. Our overall objective for 2019 was therefore to create a strong foundation from which we ultimately could become a successful cell therapy company. And our path is now firmly set on driving forward this new branch of medicine, which is based on transplanting intact cells into the body to restore activity loss, injury or disease.Our year-long effort to move away from some of our historic initiatives and fully embrace the opportunities associated with the clinical development of cell therapies required us to make significant changes in three areas. First, we expanded and diversified our product development pipeline by acquiring two additional clinical stage assets. This also let us move manufacturing for…

Thanks Brian. I'd like to start by reflecting a bit on my first year at Lineage. It was definitely a busy year. As Brian mentioned, we've worked hard to transform the company into a leader in cell therapy. We are extremely focused on moving our clinical programs forward in the most efficient way possible. An important component of driving efficiency was to implement a culture of responsible spending. We took a hard look at everything we spent money on and identify significant cost reductions throughout the year. We decreased our headcount from a high of 105 at the time of the Asterias merger in March 2019 to 52 currently. When we brought on new employees we look for people who were ready to roll up their sleeves and get work done.We don't have accessible of management in our organization and I'm proud to say that we have a company full of doers. We also worked with many of our large service providers to bring down expenses, specifically in the areas of legal, patent support and accounting. In several cases we switch to providers that have lower hourly billing rates and comparable services. We've also implemented new processes like international travel guidelines things that individually don't represent a big spend, but when added up can become significant. We also brought activities in-house that were historically outsourced. Things like planning for conferences. We have people already on our staff with skill sets that can effectively manage these activities in addition to their day-to-day responsibilities.These types of broad-reaching cost savings initiatives will continue through 2020 while we work to progress our clinical programs. As Brian mentioned, we brought down our budget for 2020 to a net operational spend of about $16 million based on our current plan. This is a significant decrease from…

Great. Thanks Brandi. We're certainly happy with what we have accomplished in 2019 to make 2020 even better. Our focus is going to be to accelerate the pace of all of our clinical programs. That means an emphasis on completing enrollment in the OpRegen study. We also expect that 2020 will feature substantial business development activity because we're making greater efforts than before to identify and obtain development support for all of our assets. And we also be evaluating the option to regain majority ownership and control the back platform for oncology if the data supports that decision. But again, the most important event in the near term will be our next data update for the OpRegen program which we plan to provide in early May.So with that I'd like to thank everyone for joining us today. And let the operator know that the team here is ready for any questions.

[Operator Instructions]First question a comment comes from the line of Joe Pantginis from H.C. Wainwright. Your line is open.

Hey, everyone. Good afternoon. Thanks for taking the question. Brian with your comments on OPC1, I'm just curious with regard to things you might be working on for the new delivery device. So in the past, so obviously when Geron first started the program there were pioneers and then Asterias, they put a lot of work, early work for that matter into the stereotactic surgery and surgical training of the physicians et cetera. So I was just curious what kind of major differences or properties you might be looking at as technology has advanced?

Yes. Thanks Joe. I think a pioneering is the correct term, if memory serves the Geron spinal cord IND was the first cell therapy IND of its kind. What's really notable is from the time that that IND was filed to today, some of the tools and techniques that we have available at our disposal to control and maintain production and cell type and then think about other aspects like understanding delivery, imaging techniques. We're in just such a much more advanced and it's a promising place than we were in the past. In particular for us, one of the things that we would like to do is that we know that having a thaw-and-inject formulation will not only open up additional centers to us and allow us to be able to enroll studies faster.But that creates a thaw-and-inject formulation that obviates the need for all of that dose preparation. But like many things in the world it involves some trade-offs and one of those trade-offs is that there is an upper limit on how concentrated your cells can be in the thaw-and-inject formulation. And when you have a less concentrated formulation, it requires more time to administer it. So what we're really trying to solve for the most important thing we're trying to solve for as an ability to deliver the cells while maintaining the patient on the respirator.So when the original SciStar study was done the cells were administered I think in fewer than two minutes. So you could actually disconnect a respirator. You had an immobilized patient, you could administer the cells. You would be doing this with lot of stress because you're trying not to push the cells in too quickly, but you could get the cells in less than two minutes and you're not putting the patient at significant risk. In contrast, if we need what we expect will be more like four or five minutes to administer the cells, we're going to need the patient to be connected to the respirator. So we're going to get rid of respirator risk, but it means we need more of a floating cannula-type approach. If you can imagine the needle needs to be able to move up and down with the chest cavity of the patient.So that's one of the real major differences in what we're planning on doing and what was done in the SciStar study.

That's actually really, really helpful. Thanks for that Brian. And then more towards your, I guess, your strong financial position especially with Juvenescence coming in. How could -- what, you have your hands full with regard to your clinical programs and what-have-you. But I guess behind the scenes what are you doing to further boost your non-dilutive funding potential especially through organizations like CIRM?

So we're going to look everywhere. We've enjoyed tremendous value and frankly validation from groups like CIRM from groups like CR UK. And the Israel Innovation Fund. These are terrific partners for us and it brings a lot of non dilutive capital. There are also our discussions that we're having in areas that are more traditional, right traditional business development type activities and then we have historically been successful with things like grants from the NIH. The aggregate of all of these opportunities are things that we are always interested in because anytime we have the opportunity to avoid having to issues Lineage common stock and instead fund through other avenues.As we have for a long time and we hope to continue to do. We feel like that puts the company in a very strong position. If you think about CIRM in particular, they had exhausted the original funding but they are going back to the voters of California to seek out additional funding and my understanding is that of the $5 billion that's being requested approximately $1.5 billion is earmarked for neurological indications. Spinal cord injury would fit into that bucket. So that's one area that if money becomes available. I imagine we would want to apply for some of it. And we probably apply for more money than we receive, but we really like that way of trying to maintain our business.

Our next question comes from the line of Keay Nakae from Chardan Capital. Your line is open.

Yes. Thank you. Brian with respect to the OpRegen patients treated with the Gyroscope device, the first two, anything you can tell us about the baseline characteristics of the two patients that may have been different.

What I'll do, Keay, is I'll hand that question of Gary who manages the program and --

Yes. Thanks for the question, Keay. So all of our cohort four patients have less severe disease than the previous first three cohorts. So smaller areas of GA, better vision and a less history of disease. So in particularly the two Orbit patients though they had to be worse than 21/100 as two person humans the Orbit 2.0 version and our operation thaw-and-inject, so our safety committee wanted the initial first two patients be worse than 2100. So the first was 20/225 and the second was 21/100. So now given that both those went well we can look forward to the full pre protocol 20/64 to 20/250. So basically the younger and a little bit healthier.

Okay. And having had the constraint of the staggered enrollment removed, how soon can you get more sites up and when should we expect the next patients to be treated.

Right. So our first, we had two sites that we've added on. One is the Cincinnati Eye Institute and the other will be Wills. Cincinnati Eye Institute is already screened their first subject, the screen window is eight weeks. So that patient right now is having their images reviewed and their blood work and we'll see how they go, but hopefully they'll remain eligible to be the next patient treated. And we hope Wills will start up shortly as well.

Okay. And then just to, back to I know, Brian, you talked about things that picked up a little bit, but in terms of perhaps a timeframe for you to exercise your option. Can you narrow that down a little bit for us? Is that second half 2020 or is that something that doesn't occur until sometime at 2021?

So again with respect to what I'm allowed to say, I think we've said that we expect that decision to occur this year. I don't think I could narrow it but what I would say in terms of process like how we approach it, there are trade-offs. You could go sooner with less information you could go later with more information, but for us our view of it is at some point there may be a threshold. And if we meet that threshold meaning we see enough that we feel good about and we can arrange to exercise an option that's fantastic. We'd like to do that. So I think what we expect is based on recent acceleration in that program that that's an assessment or a judgment that we would make this year. It's possible; it could be in a subsequent year. But I think we're quite comfortable saying that that's a 2020 event.

Okay. And then just finally maybe for, Brandi, with respect to the Juvenescence note. What -- under what circumstances would you not be able to capture those funds in Q3 initiative?

Yes. So as I mentioned, we do have the right to review their financial statements. So I get to analyze their cash position, few things like make sure that they have our note on their balance sheet. So those things can be done but I will note that that their note is convertible. And so if an IPO is done by Juvenescence with proceeds of at least $50 million that note would convert into those Juvenescence securities. So that's kind of what we look at as being one of the things where we might not get cash, we might get securities instead.

Would and again maybe you can't predict this but if they did an IPO would be a lock-up period on those shares?

Yes. I mean I think it's fairly typical that there would be a lock-up. I think that are pretty normal thing to have but obviously we're in good discussions with Juvenescence. We talked to them on a regular basis and so if they were going to go public we would have those discussions with them in advance.End of Q&A

Thank you. I am showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

All right. Thanks everyone. I really appreciate you joining us this afternoon. We're obviously very excited about our plans. We have a lot to look forward to. We certainly appreciate our shareholder and other folks support as we position Lineage to become a leader in cell therapy and cell transplant medicine and we are looking forward to demonstrating what OpRegen can do for people with dry AMD.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a wonderful day.