Brian M. Culley, CEO of Lineage Cell Therapeutics

When the first of four patients showed restoration of their retinal tissue following treatment with its lead candidate OpRegen® in June 2020, Lineage Cell Therapeutics reached out to Genentech (among several biopharma giants) seeking to partner further development of its promising dry age-related macular degeneration (AMD) therapy.

A few months later, after Lineage announced retinal tissue restoration for the second patient in its open-label Phase I/IIa trial (NCT02286089), Genentech connected with the company, seeking to learn more about the retinal pigment epithelium (RPE) cell therapy and its clinical results.

“We informed them after case one, but things warmed up after the second case,” Lineage CEO Brian M. Culley told GEN Edge. “When you have one time restoration, it’s like ‘Oh, I don’t know.’ And then we had the second one, now it’s like, ‘Wait a second, what’s going on here?!’”

The companies’ conversations culminated recently when Lineage and its Cell Cure Neurosciences subsidiary entered into an up-to-$670 million-plus development and commercialization agreement with Genentech for Lineage’s OpRegen program in ocular disorders that include its current indication of AMD with geographic atrophy (GA). Genentech agreed to oversee further clinical development and commercialization of OpRegen, while Lineage agreed to complete activities related to the Phase I/IIa trial and carry out manufacturing.

“They will be in the driver’s seat, which is the reason we did this deal,” Culley said. “They can increase the probability of success as they have many more resources to address this global market. And they can move faster than we could, so it was a big reason for us to partner with them in this major area of unmet need.

Genentech agreed to pay Lineage $50 million upfront, and up to $620 million in payments tied to achieving development, approval and sales milestones. Genentech also agreed to pay tiered double-digit royalties on sales of OpRegen.

Culley said Lineage and Genentech sought to finalize their collaboration in 2021, to take advantage of the window presented by Lineage completing enrollment in the Phase I/IIa trial, and planning its next clinical study. How quickly that and other trials get launched will be up to Genentech.

“What this deal does for us is it validates our approach,” Culley said. “It enables us to move from being an asset company to more of a platform company, because there are other cell types, and there are other diseases and applications that we can pursue.”

Time will tell whether Lineage will pursue those other disease and applications alone or with additional biopharma partners: “All of that is on the table as part of our overall business strategy,” he said.

Preparing “lineage 2.0”

Culley says the Genentech partnership is a harbinger of good things to come for Lineage. “We had an anticipation of this deal getting done for a while, so we’ve had an opportunity to prepare for Lineage 2.0,” Culley said.

“I sometimes jokingly call us similar to Amazon because Amazon used to only sell books, and they figured out they were good at that and started selling a lot of other stuff. We have demonstrated that we’re pretty good at manufacturing retinal cells. Maybe we can do a bunch of other things as well and be a much larger and more successful company.”

Lineage was established in 1990 as BioTime, a cell therapy pioneer that over time grew into an unwieldy set of companies. Culley, who became BioTime’s CEO in 2018, refocused the company on developing therapies based on directed differentiation and transplant of specific cell types, through moves that included selling off AgeX Therapeutics and acquiring Asterias Biotherapeutics in a $32.4 million stock deal completed months before BioTime rebranded as Lineage in 2019.

“I saw a compelling business and professional opportunity to bring what I saw as some direction and focus in an area of high value, which was not being fully appreciated nor driven at the time,” Culley said. “I had to make some changes first, and then with those changes in place, I was comfortable changing the identity of the company. I felt confident that we would start to have [positive] events in our future if we stayed aligned to our new narrow and clear mission around delivering differentiated cell types.”

That will entail, in part, Lineage succeeding where many big-name and smaller biopharmas are scrambling—and some have failed—in bringing dry AMD therapies to market.

Dry AMD accounts for 85% to 90% of the roughly 11 million U.S. patients with AMD, yet no dry AMD therapies have won FDA approval—compared with two blockbuster drugs for wet AMD, Genentech’s Lucentis (ranibizumab), marketed outside the U.S. by Roche; and Regeneron Pharmaceuticals/Bayer’s Eylea® (aflibercept).

During the first three quarters of 2021, Eylea generated $9.3 billion in sales, of which Regeneron accounted for $6.904 billion (up 21% from Q1-Q3 2020), while Bayer racked up €2.145 billion (about $2.4 billion; up 19%). Roche reported CHF 1.017 billion (about $1.1 billion) in Q1-Q3 sales for Lucentis, down 5% from a year earlier.

Roche is also developing a new eye therapy, faricimab, for which the company in July won FDA acceptance for review of its Biologics License Application (BLA), under Priority Review, for the treatment of neovascular or “wet” age-related macular degeneration (nAMD) and diabetic macular edema (DME). If approved, faricimab would be the first in a new class of eye medicines designed to target two key pathways that drive retinal disorders causing vision loss—angiopoietin-2 (Ang-2) and vascular endothelial growth factor-A (VEGF-A).

‘Multi-Billion-Dollar’ Opportunity

Culley says the potential sales for OpRegen in dry AMD represent a “multi-billion-dollar” opportunity.

Investors initially appeared to find that opportunity appealing: Lineage’s shares jumped 21% on the day of the Genentech announcement, closing at $2.57 from $2.12 on December 17—a 32% discount from the stock’s “fair value” of $3.78, making the stock undervalued according to Morningstar. The share price has since dipped to $2.45 on December 31.

Among the cascade of dry AMD cell therapy candidates, Astellas Pharma in 2021 paused enrollment in ASP7317, citing COVID-19. “The pandemic especially has taken a toll on this program because of the immunosuppression required and the patient population, which is very elderly and therefore, at risk for complications of COVID-19,” Astellas chief medical officer Bernhardt Zeiher, MD, told analysts last April on the company’s conference call following release of fiscal fourth quarter 2021 results.

However, in August 2021, a research team reported positive one-year safety results from its first clinical trial for Regenerative Patch Technologies’ composite subretinal implant CPCB-RPE1, according to a study published in Translational Vision Science & Technology. Though the study was not powered for efficacy, the researchers reported that treated eyes from four patients showed increased BCVA of >5 letters (6–13 letters). A larger proportion of treated eyes experienced a >5-letter gain when compared with the untreated eye (27% vs. 7%), while a larger proportion of nonimplanted eyes showed a >5-letter loss (47% vs. 33%).

In other modes, dry AMD candidates that have failed clinical trials include toxic byproduct reduction candidates, Pfizer’s RNG6, GSK’s GSK933776; anti-inflammatory candidates such as Novartis’ tesidolumab and CLG561, as well as Genentech/Roche’s lampalizumab.

“What’s in common with those failed approaches and most of the approaches that are still in development is that they are small molecules or antibody fragments things like that which are trying to hit a single pathway, or maybe a cluster of pathways. Well, that’s like putting one sandbag out for the flood. These cells are in dire shape, and what we need to do is replace the whole cell,” Culley said. “And in doing so I think that is the explanation why we are able to see a reversal of this condition, rather than just slow its progression further.”

Showing restoration

Lineage’s four patients showing retinal tissue restoration were among 24 patients in a Phase I/II open-label, dose escalation safety and efficacy trial assessing a single injection of human RPE cells derived from an established pluripotent cell line and transplanted subretinally in patients with advanced dry AMD with GA.

The study enrolled 24 patients into four cohorts. The first three cohorts enrolled only legally blind patients with a best corrected visual acuity (BCVA) of 20/200 or worse. The fourth cohort enrolled 12 “better vision” patients, defined as a BCVA from 20/65 to 20/250 with smaller mean areas of GA. Cohort 4 also included patients treated with a new “thaw-and-inject” formulation of OpRegen, which can be shipped directly to sites and used immediately upon thawing, removing the complications and logistics of having to use a dose preparation facility.

All four patients showing restoration were in the “better vision” category. The first patient has shown zero GA growth almost 3 years following treatment with OpRegen—an unprecedented result, Lineage said, due to the progressive nature of the disease. The size of the patient’s atrophic lesion measured via square root transformation (SQRT) was 2.8 mm2, unchanged from baseline.

The second patient showed repair of RPE and external limiting membrane (ELM) discontinuation, and improvement of outer plexiform layer (OPL) subsidence, two months after treatment, with complete resolution of incomplete RPE and Outer Retinal Atrophy (iRORA) lesion. The third patient showed retinal restoration at three months following treatment, based on a reduced ELM-based area of atrophy, from 3.56 mm2 at baseline October 5, 2020, to 2.69 mm2 on January 21, 2021.

The fourth patient, announced in November 2021, showed no progression of GA 13.5 months following treatment, with an area of atrophy dipping 2% from 1.28 mm2 to 1.25 mm2.

“Those four patients that exhibited restoration had something in common, which is they had very fulsome coverage of our cells right across the area of atrophy, right across the wound,” Culley said. “In the patients that received their cells, a little bit farther away from the area of atrophy or patients that didn’t get good coverage, none of them exhibited restoration. Now maybe they still will given enough time, or maybe if someone had 30% coverage, maybe that area is going to look good and the other part of it won’t.”

“Greatest competitive advantage”

Culley said Lineage’s key edge is its ability to carry out cGMP manufacturing of its own cells in-house, at a cGMP cell therapy manufacturing facility opened in 2017 by BioTime and Cell Cure within the Jerusalem Bio Park at the Hadassah University Hospital campus. Cell Cure initially developed OpRegen, based on technology developed by Benjamin Reubinoff, MD, PhD, of Hadassah Medical Center, who founded the Israeli company in 2006.

“You have literally billions of different factors that go into the production of these cell types, so we control that manufacturing ourselves,” Culley said. “We have a large manufacturing team, we have multiple GMP suites at our manufacturing facility in Israel, and that is really our greatest competitive advantage: We have these differentiation protocols, and know-how and intellectual property around the differentiation of cells.

“It’s not just being able to make cell type X. You have to be able to make cell type X in a way that is still amenable to commercial scale, that still has the control and reproducibility, and is not introducing the sort of gene editing risks that we seem to see almost every day now in the news,” Culley added. “Core to the mission of Lineage is to move this regenerative science into regenerative medicine, and that means you need to have control over things like scale and production and reproducibility.”

Lineage and Cell Cure oversee process development and manufacturing in Israel: “We’ve retained that because that’s really hard to replicate, and we’ve got a lot of know-how in that team.”

That leaves Lineage, based in Carlsbad, CA, with managing quality control, regulatory, and clinical operations. Between its U.S. and Israeli operations, Lineage employs about 55 people divided between the two sites. Lineage’s pipeline also includes programs aimed at treating spinal cord injury and non-small cell lung cancer (NSCLC). The programs were acquired when BioTime bought Asterias.

Spinal cord injury is the focus of OPC1, an oligodendrocyte progenitor cell therapy studied in the 25-participant Phase I/IIa SCiStar dose escalation study (NCT02302157) completed in July, and showing 96% durable engraftment and 95% of patients exhibiting motor recovery in the upper extremities at 12 months. SCiStar was funded through a $14.3 million award from the California Institute for Regenerative Medicine.

Lineage has begun planning to advance OPC1 into a randomized, potential registrational trial whose timing has not been decided. Culley says it will launch after a smaller study designed to demonstrate a new Parenchymal Spinal Delivery system for OPC1. The company previously developed a ready-to-inject formulation that eliminated dose preparation steps.

NSCLC is targeted by VAC2, an allogeneic, or non-patient specific, cancer vaccine candidate designed to stimulate patient immune responses to telomerase which is commonly expressed in cancerous cells but not in normal adult cells. VAC2’s clinical development was partnered with Cancer Research UK, which funded costs of manufacturing and a Phase I trial (NCT03371485) that generated positive preliminary results last year.

In April, Lineage inked an up-to-$69 million global license and development agreement with Immunomic Therapeutics to generate a novel product candidate from Lineage’s VAC platform and target a Tumor Associated Antigen (TAA) construct provided by Immunomic to treat glioblastoma multiforme.

How will Lineage determine whether to pursue these or other pipeline opportunities?

“It’s not as simple as considering the total addressable market,” Culley said. “It starts to get more subtle: How competitive is the landscape? How clear are the endpoints? How difficult is it to manufacture the cell type? Do you have the analytical methods to be able to characterize the material you’re making? There are dozens of considerations that go into an analysis.”

“There are certain lineages—hence the name—that we know better than others,” Culley added. “In theory, you could manufacturer all 200 cell types of the human body from our pluripotent starting material. In reality, there are much smaller number of opportunities that make commercial in business sense. So, we read and rank and explore those in order to come up with some areas that we would put meaningful resources behind, starting in 2022.”

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