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Item 1. Business

2021-03-11 compared with 2020-03-12 · 574 added, 834 removed, 656 unchanged (68% of the section changed)

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combating cancer.

Our programs are based on our proprietary cell-based therapy platform and associated development and manufacturing

capabilities.

From this platform, we develop and manufacture specialized, terminally or partially differentiated human cells from

established and well-characterized pluripotent cell lines.

These differentiated cells are developed either to replace or support

cells that are dysfunctional or absent due to degenerative disease or traumatic injury, or are administered as a means of helping

the body mount an effective immune response to cancer.

Specifically, Lineage is testing therapies to treat dry age-related macular degeneration, spinal cord injuries,

and non-small cell lung cancer.

Our programs are based on our proprietary cell-based therapy platform and associated development

and manufacturing capabilities.

From this platform, we develop and manufacture specialized, terminally or functionally differentiated

human cells from established and well-characterized pluripotent cell lines.

These differentiated cells are transplanted into a

patient either to replace or support cells that are dysfunctional or absent due to degenerative disease or traumatic injury, or

are administered as a means of helping the body mount an effective immune response to cancer.

Candidates & Other Programs

have three allogeneic, or “off-the-shelf,”

cell therapy programs in clinical development:

OpRegen ®

a retinal pigment epithelium (“RPE”) cell replacement therapy currently in a Phase 1/2a multicenter clinical trial

for the treatment of advanced dry age-related macular degeneration (“AMD”) with geographic atrophy (“GA”).

have three allogeneic, or “off-the-shelf,” cell therapy programs in clinical development:

a retinal pigment epithelium (“RPE”) cell replacement therapy currently in a Phase 1/2a multicenter clinical trial

for the treatment of advanced dry age-related macular degeneration (“AMD”) with geographic atrophy (“GA”).

There currently are no therapies approved by the U.S.

Food and Drug Administration (“FDA”) for dry AMD, which

accounts for approximately 85-90% of all AMD cases and is a leading cause of blindness in people over the age of 65.

an oligodendrocyte progenitor cell therapy for acute spinal cord injuries.

We have completed enrollment in a 25-patient Phase

1/2a multicenter clinical trial with OPC1;

this trial was partially funded by the California Institute for Regenerative Medicine

(“CIRM”).

There are currently no therapies approved by the FDA.

a cancer immunotherapy of antigen-presenting dendritic cells currently in a Phase 1 clinical trial in non-small cell lung

cancer (“NSCLC”).

This clinical trial is being funded and conducted by Cancer Research UK, the world’s largest

independent cancer research charity.

in Other Companies

Food and Drug Administration (“FDA”) for dry AMD, which

accounts for approximately 85-90% of all AMD cases and is the leading cause of blindness in people over the age of 60.

an oligodendrocyte progenitor cell therapy currently in the long-term follow-up portion of a Phase 1/2a multicenter clinical

trial for acute spinal cord injuries (“SCI”).

This clinical trial has been partially funded by the California

Institute for Regenerative Medicine.

an allogeneic cancer immunotherapy of antigen-presenting dendritic cells currently in a Phase 1 clinical trial in non-small

cell lung cancer.

This clinical trial is being funded and conducted by Cancer Research UK, the world’s largest independent

cancer research charity.

addition to seeking to create value for shareholders by developing product candidates and other technologies through our clinical

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two companies that later became publicly traded companies:

OncoCyte Corporation (“OncoCyte”) and AgeX Therapeutics,

(“AgeX”).

As of March 5, 2020, we hold approximately 9.7% and 2.3% in OncoCyte and AgeX, respectively.

The combined value of these holdings as of March 5, 2020, was approximately $14.6 million, based on the closing price of their

common stock on such date.

We also hold a convertible promissory note from Juvenescence Limited (“Juvenescence”),

in connection with our sale of AgeX stock to Juvenescence in August 2018.

The value of the Juvenescence note of $23.6 million

at December 31, 2019 is based on the principal amount of $21.6 million plus accrued interest.

See “Risk Factors—Risks

Related to Our Business Operations and Capital Requirements—The value of our investments in public companies fluctuates

based on their respective stock prices and could be negatively affected by poor business performance,”

our principal focus is on advancing our three cell therapy programs in clinical development, we may seek to create additional

value through corporate transactions, as we have in the past.

Our securities holdings also may be a significant source of capital

to fund our operations as an alternative to issuing additional Lineage securities.

OncoCyte Corporation (“OncoCyte”) and AgeX Therapeutics,

the year ended December 31, 2020, we received approximately $12.6 million in gross proceeds in connection with our sale of shares

of OncoCyte and AgeX.

In August 2020, we also received $24.6 million from Juvenescence Limited (“Juvenescence”),

representing principal and accrued interest under a promissory note we received in connection with our sale of AgeX shares to

Juvenescence in August 2018.

no longer hold any common stock in AgeX.

The value of our OncoCyte holdings as of March 5, 2021, was approximately $4.2

million, based on the closing price of its common stock on that date.

In this Report, see Part I, Item 1A, “Risk Factors—Risks

Related to Our Business Operations and Capital Requirements—The value of our investments in public companies fluctuates

based on their respective stock prices and could be negatively affected by poor business performance.”

our principal focus is on advancing our three cell therapy programs currently in clinical development, we may seek to create additional

value through corporate transactions, as we have in the past, or by initiating new programs using our protocols or with new protocols

and cell lines.

is incorporated in the State of California.

Our common shares trade on the NYSE American and the Tel Aviv Stock Exchange under

the symbol “LCTX.”

Our principal executive offices are at 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008, and our

the symbol “LCTX.” Our principal executive offices are at 2173 Salk Avenue, Suite 200, Carlsbad, CA 92008, and our

phone number at that address is (442) 287-8990.

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to the Securities and Exchange Commission.

Transactions Affecting Our Corporate Organization

March 8, 2019, we acquired Asterias Biotherapeutics, Inc.

(“Asterias”) via merger (the “Asterias Merger”).

In the acquisition, each outstanding share of Asterias common stock was converted into 0.71 Lineage common shares.

to May 13, 2016, Asterias was a majority-owned and consolidated subsidiary of Lineage.

On May 13, 2016, Lineage’s percentage

ownership decreased from 57.1% to 48.7% as a result of the sale of shares of common stock by Asterias in a public offering, resulting

in Lineage’s loss of control of Asterias under generally accepted accounting principles in the U.S.

(“GAAP”).

Accordingly, Lineage deconsolidated Asterias effective May 13, 2016.

As of March 8, 2019, Asterias became our wholly owned subsidiary,

Asterias ceased to exist as a public company, and we consolidated Asterias’

operations and results with our operations and

results beginning on that date.

From May 13, 2016 until the consummation of the merger on March 8, 2019, Lineage accounted for

its ownership of Asterias under the equity method of accounting, electing the fair value option, with the investment carried on

the consolidated balance sheet at fair value and all subsequent changes in fair value included in Lineage’s consolidated

statements of operations in other income and expenses, net.

The deconsolidation of Asterias is sometimes referred to as the “Asterias

Deconsolidation”

in this Report.

X Deconsolidation and Distribution

August 30, 2018, we entered into a Stock Purchase Agreement with Juvenescence and AgeX, under which we sold 14,400,000 of our

shares of AgeX common stock to Juvenescence for $3.00 per share.

The transaction resulted in over $43 million in non-dilutive

financing for Lineage.

completion of that transaction, our percentage ownership of AgeX’s outstanding shares of common stock decreased from 80.4%

to 40.2%, and Juvenescence’s percentage ownership increased from 5.6% to 45.8%.

As a result of the transaction, as of August

30, 2018, AgeX was no longer our subsidiary and effective that date, we deconsolidated AgeX’s consolidated financial statements

and consolidated results of operations from Lineage’s under GAAP due to the decrease in our percentage ownership in AgeX

to below 50%.

Prior to that date, AgeX was our majority-owned and consolidated subsidiary.

Beginning on August 30, 2018 through

November 28, 2018 (the date on which AgeX began trading as a public company as discussed below), we accounted for AgeX using the

equity method of accounting, electing the fair value option, recording the retained interest in AgeX at fair value on August 30,

2018 with all subsequent changes in fair value included in our consolidated statements of operations in other income and expenses,

November 28, 2018, AgeX began trading as a public company on the NYSE American (under the symbol “AGE”) and, on that

date, we distributed 12.7 million shares of AgeX common stock we owned to our shareholders, on a pro rata basis, in the ratio

of one share of AgeX common stock for every 10 Lineage common shares they owned.

This distribution was accounted for at fair value

as a taxable, dividend-in-kind transaction in the aggregate amount of $34.4 million.

Immediately following the distribution, we

owned 1.7 million shares of AgeX common stock.

As of December 31, 2019, we own 1.0 million shares of AgeX common stock, which

we hold as marketable equity securities.

of, and for each reporting period after August 30, 2018, the fair value of our ownership interest in AgeX is determined by multiplying

the fair value of a share of AgeX common stock by the number of such shares we own.

consolidated assets and liabilities are not included in our audited consolidated balance sheet at December 31, 2018, due to the

deconsolidation.

The fair value of the AgeX shares we owned is shown on our audited consolidated balance sheet as of December

31, 2019 and 2018.

Our audited consolidated statements of operations for the year ended December 31, 2018 include AgeX’s

consolidated results for the period through August 29, 2018, the day immediately preceding the deconsolidation.

AgeX’s results

are not included in our audited consolidated statements of operations for the year ended December 31, 2019.

deconsolidation of AgeX is sometimes referred to as the “AgeX Deconsolidation”

in this Report.

distribution of AgeX common stock is sometimes referred to as the “AgeX Distribution”

in this Report.

Deconsolidation

February 17, 2017, we deconsolidated the financial statements and results of operations of OncoCyte under GAAP due to the decrease

in our percentage ownership in OncoCyte to below 50% as a result of OncoCyte’s issuance of 625,000 shares of its common

stock upon exercise of warrants.

Prior to that date, OncoCyte was our majority-owned and consolidated subsidiary.

From February

17, 2017 through September 11, 2019, we accounted for our OncoCyte common stock using the equity method of accounting.

2.25 million shares of OncoCyte common stock for net proceeds of $4.2 million in July 2019.

Accordingly, our ownership in OncoCyte

was reduced from 28% to 24%.

Lineage sold an additional 4.0 million shares of OncoCyte common stock for net proceeds of $6.5 million

on September 11, 2019.

Lineage’s ownership in OncoCyte was further reduced to 16% at this time.

Effective September 11,

2019, Lineage began accounting for its shares of OncoCyte common stock as marketable equity securities.

The calculation of fair

value is the same under the equity method and as a marketable equity security.

The fair value of our ownership interest in OncoCyte

has been determined by multiplying the closing price of OncoCyte common stock as quoted on NYSE American by the number of such

shares we owned.

Changes in fair value were included in our consolidated statements of operations in other income and expenses,

fair value of OncoCyte shares we owned is shown on our audited consolidated balance sheet as of December 31, 2019 and 2018.

OncoCyte’s

results are not included in our audited consolidated statements of operations for the years ended December 31, 2019 and 2018.

deconsolidation of OncoCyte is sometimes referred to as the “OncoCyte Deconsolidation”

in this Report.

further discussion see the Notes to Consolidated Financial Statements and Management’s Discussion and Analysis of Financial

Condition and Results of Operations included elsewhere in this Report.

and Early 2020 Highlights

achieved numerous strategic accomplishments during 2019 and early 2020, including advancing clinical trials and product development

in several key programs.

2019, we successfully dosed two patients in our OpRegen

Phase 1/2a clinical trial with a new thaw-and-inject formulation and a new delivery device, the 510(k)-cleared

Subretinal Delivery System (“SDS”) developed by Gyroscope Therapeutics (“Gyroscope”).

The Gyroscope

SDS is designed to precisely and consistently deliver therapeutics to the sub-retinal space via a suprachoroidal route,

(i) the need for a vitrectomy;

(ii) perforation of the retina (retinotomy);

and (iii) loss of cells and adverse

safety events due to efflux.

We have to date reported on two patients dosed with the combination of the new device and

The first patient demonstrated notable improvements in vision, having gained 25 readable letters (or 5 lines)

6 months following administration, as assessed by the Early Treatment Diabetic Retinopathy Scale (“ETDRS”).

represented an improvement in visual acuity from a baseline of 20/250 to 20/100 in the treated eye.

The second patient showed

a small improvement in visual acuity in the treated eye at just 14 days following treatment.

Both patients had rapid healing

at the surgical site with no unexpected complications or any serious adverse events.

Improvements for patients in the trial

have typically become most evident approximately three to six months after treatment.

Treatment for all patients in the trial

continue to be well tolerated and all five patients in Cohort 4, who have better baseline vision and less advanced disease

than patients in Cohorts 1-3, registered improvement according to the ETDRS eye chart assessment (improvements ranged from

8 to 25 additional letters correctly identified for all patients with at least 6 months of follow-up as of December 31, 2019).

We expect to dose a total of six patients with the Gyroscope SDS under our current agreement with Gyroscope.

March 2019, we acquired Asterias.

We entered into an Agreement and Plan of Merger with Asterias on November 7, 2018 and closed

the acquisition on March 8, 2019.

As a result of this acquisition, we acquired two additional cell therapy product candidates,

OPC1 and VAC2, along with their associated expansion opportunities and other assets.

As we integrated the two companies, we

reduced costs by about 50% by eliminating duplicate costs and rationalizing non-key projects, including a reduction of headcount

from 105 at the time of the merger to our current headcount of 53.

August 2019, we rebranded as Lineage Cell Therapeutics and relocated the corporate headquarters from the San Francisco Bay

area to Carlsbad, California.

During 2019, we also hired experienced biotech professionals to fill critical management positions

including the Chief Financial Officer, General Counsel, and Vice President, Business Development.

November 2019, we reported a positive clinical update from our ongoing Phase 1/2a clinical trial of OPC1 for the treatment

of acute spinal cord injury known as SCiStar.

The overall safety profile of OPC1 has remained excellent with robust

motor recovery in the arms/hands maintained through year 2 follow-ups to date.

Gains in motor function for patients assessed

to date have continued, representing improvements to quality of life and independence.

2019, we entered into agreements with three separate companies, with each agreement relating to different parts of our intellectual

property portfolio.

All three companies have ongoing commercial operations, including with respect to their cell therapy-related

The aggregate up-front cash payment from the three transactions was greater than $1.0 million, with additional cash

and royalties due upon reaching certain development milestones or product sales.

2019, we obtained patents associated with the manufacture

of our unique cell types, adding additional protections to all three of our clinical programs.

We also obtained patent

rights describing the use of induced pluripotent stem cells, an alternate option for generating differentiated cells

for transplant and treatment of diseases, further broadening the potential application of our work.

Through the Asterias Merger,

we also acquired a number of in-licensed and internally owned patents and pending applications.

2019, we were awarded a $2.5 million grant from the Israel Innovation Authority (“IIA”) for our OpRegen program

and a $0.7 million Small Business Innovation Research grant from the National Institutes of Health (“NIH”) for

our Vision Restoration Program.

2019, we were able to fund our operations primarily by selling some of our investments in OncoCyte and AgeX, two companies

that originated at Lineage before becoming independent public companies.

In part due to their success, we have elected to

convert some of our ownership positions into cash for Lineage’s operations which reduces the need to conduct dilutive

equity issuances.

February 2020, we announced that after reviewing promising preliminary data from the ongoing OpRegen Phase 1/2a clinical trial,

our independent data safety monitoring board removed the protocol-mandated treatment stagger.

Accordingly, we are opening

clinical sites to accelerate patient enrollment and broaden surgical experience among dry AMD experts.

goal is to become a leading cell therapy company by developing allogeneic, or “off-the-shelf,”

treatments that are

achieved numerous strategic accomplishments during 2020, including advancing clinical trials and product development in several

key programs.

May 2020, we announced the early exercise of our option with Cancer Research UK to bring the VAC immuno-oncology platform

June 2020, we announced the first known finding of retinal tissue restoration in a patient who received an RPE cell

October 2020, we reported encouraging preliminary Phase 1 clinical study results with VAC2 for the treatment of non-small

cell lung cancer with high levels of antigen-specific immunogenicity observed.

November 2020, we completed enrollment in a 24 patient Phase 1/2a clinical study of OpRegen for the treatment of dry AMD with

GA with encouraging preliminary signs of tolerability and efficacy.

December 2020, we announced that we had been able to make significant manufacturing improvements to our OPC1 acute SCI program,

including better controlled processes, enhanced purity, potency, and scale, and to the development of a “ready-to-inject”

formulation, substantially decreasing logistical burden at the point of care and enabling use at a much larger number of treatment

goal is to become a leading cell therapy company by developing allogeneic, or “off-the-shelf,” treatments that are

comprised of differentiated cells derived from pluripotent cell lines, which have been directed to become specific cell types

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Significant near-term activities that underlie our business strategy include:

enrollment in the Phase 1/2 study of OpRegen for patients with dry AMD with GA and collecting

safety and efficacy data from those patients;

commercially enabling attributes to the OPC1 manufacturing process, such as higher scale

and purity, to enable broader adoption at clinical trial sites in support of a comparative

clinical trial;

clinical data from the VAC2 study of patients with NSCLC to assess the effect of treatment

of VAC2 and evaluate the potential early exercise of our option to acquire the data from

attracting, and assessing alliance and partnering opportunities which can accelerate

the progress of our clinical programs and provide sources of non equity-dilutive capital

to run our business.

new and accumulated OpRegen data from the ongoing Phase 1/2a clinical study on two occasions during the first and second quarters

VAC2 patient enrollment in the ongoing Phase 1 clinical study for the treatment of non-small cell lung cancer by the end of

the first half of 2021;

delivery improvements for our OPC1 program, which combined with our “ready-to-inject” formulation, will enable

access to a greater number of clinical sites, currently ongoing and throughout 2021;

with the FDA to discuss further development of the OPC1 program, including a late-stage clinical study, during the second

half of 2021;

opportunities for new VAC product candidates based on manufacturing improvements and product improvements, including newly

discovered tumor antigens/neoantigens, throughout 2021;

partnership opportunities and expansion of existing external collaborations and identification of new collaborations for OpRegen,

OPC1 and VAC2, currently ongoing and throughout 2021.

Therapy Technology

believe we are a leader in pluripotent cell asset development based on lineage derivation protocols and whole cell manufacturing.

Pluripotent cells, which are widely published as capable of becoming any human cell type, have potential applications in many

areas of medicine with large unmet patient needs, including certain age-related degenerative diseases and degenerative conditions

for which there presently are no cures.

We currently are focused on developing pluripotent cells into three specific cell types:

believe we are a leader in pluripotent, cell-based asset development based on directed lineage derivation protocols and whole

cell manufacturing capabilities.

Pluripotent cells, which are widely published as capable of becoming any human cell type, have

potential applications in many areas of medicine with large unmet patient needs, including certain age-related degenerative diseases

and degenerative conditions for which there presently are no cures.

We currently are focused on developing pluripotent cells into

RPE cells, oligodendrocyte progenitor cells and dendritic cells.

pharmaceuticals that require a narrowly defined molecular target, cellular therapies are often aimed at regenerating or replacing

the entire affected cell or tissue and therefore, may have broader or more suitable applicability than many pharmaceutical products.

Small molecules and biologic therapies that require systemic delivery into the body often have unexpected results, or side effects,

that can limit their usefulness.

When cell replacement is locally administered, systemic side effects are usually not a primary

The risk profile more closely resembles that of transplant medicine, focused more on whether the transplanted cells are

rejected by the body and whether the cells function as expected.

We currently are using our pluripotent stem cells as biological

starting material from which we derive three separate and specific cell types, each of which are product candidates currently

in clinical testing.

the entire affected cell or tissue and therefore, may have broader or more suitable applicability than many traditional pharmaceutical

Small molecules and biologic therapies that require systemic delivery into the body often have unexpected results, or

side effects, that can limit their usefulness.

When cell replacement is locally administered, particularly to anatomical compartments,

systemic side effects are usually not the primary concern.

The risk profile of cell therapy more closely resembles that of transplant

medicine, focused more on whether the transplanted cells are rejected by the body and whether the cells function as expected.

We currently are using our pluripotent stem cells as starting material from which we derive three separate and specific cell types,

each of which are product candidates currently in clinical testing.

maintain an innovative cell therapy manufacturing facility in the Bio Park on the campus of the Hadassah University Hospital in

Jerusalem, Israel.

The facility includes process development laboratories and a state-of-the-art, cGMP manufacturing facility.

It is designed and equipped to enable simultaneous cGMP processes and to produce a range of cell therapy products for human use

in clinical trials as well as developing scale suitable for commercial launch.

All cGMP manufacturing processes, including cell

banks and product manufacturing for our cell therapy product candidates, are conducted in this facility.

Therapy Product Candidates

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Dry AMD may also lead to wet AMD, a condition for which there are several FDA-approved treatments

administered locally to inhibit the growth of new blood vessels, but these treatments have not been approved for the treatment

administered locally to inhibit the growth of new blood vessels, but these treatments are not effective nor approved for the treatment

Physicians often recommend a healthy diet, exercise and/or nutritional supplements for dry AMD, but nutritional supplements

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a representation of the process of drusen formation and the goal of cell replacement therapy.

AMD involves the loss of retina cells, creating an area of geographic atrophy (GA), which causes impaired vision and blindness

believe one of the most promising approaches to treat dry AMD is to replace the layer of damaged RPE cells with new, healthy and

functional RPE cells.

OpRegen is a cell replacement therapy derived from our pluripotent cell technology in which our proprietary

directed-differentiation methods convert pluripotent cells into nearly pure populations of RPE cells.

Using this method, OpRegen

is grown free of any animal products and consists of human RPE cells with high yield and purity that can be transplanted directly

into the patient’s eye, where the patient’s own RPE cells are missing or dysfunctional.

The OpRegen therapeutic approach

is designed to replace damaged or lost RPE cells with the goal of slowing disease progression to preserve and/or restore visual

studies in the Royal College of Surgeons (RCS) rat have shown that following a single subretinal injection, OpRegen as a suspension

of cells rapidly organized into their natural monolayer structure and survived until the end of the study, which we believe is

critical to the potential success of OpRegen in humans.

Additionally, rats receiving OpRegen had objective evidence of improved

optomotor tracking, indicating functional visual improvement compared to control animals.

is intended to be an allogeneic, or “off-the-shelf,”

product provided to retinal surgeons in an “easy-to-use”

functional RPE cells manufactured from a well-characterized cell line.

OpRegen is a cell replacement therapy derived from our

pluripotent cell technology in which our proprietary directed-differentiation methods convert pluripotent stem cells into nearly

pure populations of RPE cells.

Using this method, OpRegen is grown free of any animal products and consists of human RPE cells

with high yield and purity that can be transplanted directly into the patient’s eye, where the patient’s own RPE cells

are missing or dysfunctional.

The OpRegen therapeutic approach is designed to replace damaged or lost RPE cells with the goal

of slowing disease progression to preserve and/or restore visual function.

is an injection of RPE cells delivered to the retina, to replace lost retinal cells and preserve or restore vision

studies in the Royal College of Surgeons (RCS) rat model have shown that following a single subretinal injection, OpRegen

as a suspension of cells rapidly organized into their natural monolayer structure and survived until the end of the study, which

we believe is critical to the potential success of OpRegen in humans.

Additionally, rats receiving OpRegen had objective evidence

of improved optomotor tracking, indicating functional visual improvement compared to control animals.

is intended to be an allogeneic, or “off-the-shelf,” product provided to retinal surgeons in an “easy-to-use”

form for transplantation.

Unlike other investigational treatments for dry AMD that require repeated intravitreal injections, we

believe OpRegen could have a lasting benefit from a single administration, or once every several years.

This approach differs

from the approved agents currently marketed for wet AMD, such as Ranibizumab (Lucentis ®

) and Aflibercept (Eylea ®

that require multiple, frequent intravitreal injections into the eye.

We believe OpRegen could have a lasting benefit from a single administration, or once every several

This approach differs from other investigational drugs for Dry AMD and approved agents currently marketed for wet AMD,

such as Ranibizumab (Lucentis ® ) and Aflibercept (Eylea ® ), that require multiple, frequent intravitreal

injections into the eye.

patients in our ongoing Phase 1/2a clinical trial are 50 years of age or older, whose dry AMD has advanced to the GA stage, with

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The eye in which the disease has progressed the most is treated, while their

other eye serves as an internal control.

Following injection, the patients are followed for 12 months at specified intervals to

evaluate the safety and tolerability of OpRegen.

other eye serves as a measure of disease progression.

Following injection, the patients are followed for 12 months at specified

intervals to evaluate the safety and tolerability of OpRegen.

the initial 12-month period, patients are evaluated at longer intervals for up to an additional five years following administration.

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in this safety-focused aspect of the trial, no unexpected ocular adverse events have been observed and those events expected to

occur based on the procedures involved in OpRegen administration, such as vitrectomy, have been mild in severity.

of these subjects had pre-existing epiretinal membranes at the time of trial enrollment and in most cases, experienced new or

worsening epiretinal membranes following the surgical procedure, which is believed to be attributable to pars plana vitrectomy.

The majority were mild to moderate in severity.

occur based on the procedures involved in OpRegen administration, such as vitrectomy, have been predominately mild in severity.

The majority of these subjects had pre-existing epiretinal membranes (ERMs) at the time of trial enrollment and in most cases,

experienced new or worsening ERMs following the surgical procedure, which is believed to be partially attributable to the route

of administration via pars plana vitrectomy (PPV) and retinotomy.

The majority were mild to moderate in severity, though two patients

with severe ERM were successfully treated via a routine surgical procedure.

These subjects are being monitored during trial follow-up.

One instance of retinal

detachment occurred in a patient who was legally blind prior to treatment.

The event was not assigned as related to treatment,

procedure or to the combination.

The patient continued in the trial following successful surgical repair.

The independent data

safety monitoring board approved moving to Cohort 4 based on the safety data from the Cohorts 1-3.

Cohort 4 incorporates an additional

variety of objective and subjective assessments to look for signs of potential efficacy as well as potential anatomical changes

indicative of OpRegen cell function following implantation.

of the adverse events observed in subretinal procedures are related to the delivery technique utilized during the surgery.

January 2019, we announced an exclusive partnership with Orbit Biomedical (now Gyroscope Therapeutics) to assess its FDA-cleared

Orbit Subretinal Delivery System (SDS), a single-use vitrectomy-free delivery device designed to deliver products to the subretinal

space for the administration of OpRegen within the ongoing clinical trial.

The device allows for access to the subretinal space

via a sclerotomy and suprachoroidal approach, which means that there are no openings created into the vitreal chamber.

eliminate the possibilities of new or worsening epiretinal membranes or generation of a cataract, both known issues with the older

standard method of delivery.

We believe that the use of this device could significantly decrease the number of adverse events

and improve retention and dose control of OpRegen in our clinical trials.

One instance of retinal detachment occurred in a patient who was legally blind prior to treatment.

The event was not assigned

as related to treatment, procedure or to the combination.

The patient continued for a period of time in the trial following successful

surgical repair but has since withdrawn due to other unrelated health issues.

The independent data safety monitoring board approved

moving to Cohort 4 based on the safety data from the Cohorts 1-3.

Cohort 4 incorporates an additional variety of objective and

subjective assessments to look for signs of potential efficacy as well as potential anatomical changes indicative of OpRegen cell

function following implantation.

described above, many of the adverse events (AEs) observed in subretinal procedures are likely related to the delivery technique

utilized during the surgery.

As previously described, in January 2019, we announced an exclusive partnership with Orbit Biomedical

(now Gyroscope Therapeutics, Ltd.) to assess its FDA-cleared Orbit Subretinal Delivery System (SDS), a single-use vitrectomy-free

delivery device designed to deliver products to the subretinal space for the administration of OpRegen within the ongoing clinical

The device allows for access to the subretinal space via a sclerotomy and suprachoroidal approach, which means that there

are no openings created into the vitreous chamber.

This could eliminate the possibilities of new or worsening epiretinal membranes

and exacerbation or generation of a cataract, both known issues with the older standard method of delivery.

We believe that the

use of this device could significantly decrease the number of adverse events and improve retention and dose control of OpRegen

in our clinical trials.

completed enrollment in Cohorts 1-3 (12 patients) in the middle of 2018 and as previously reported, OpRegen was well tolerated

with no unexpected systemic serious adverse events or ocular adverse events.

with no unexpected systemic serious adverse events (SAEs) or ocular AEs.

Importantly, there were several patients that exhibited

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of the OpRegen cells.

We began enrollment of Cohort 4 shortly thereafter and treated three patients via the traditional route

of administration.

In 2019, we amended our clinical protocol to incorporate the Orbit SDS and our new thaw and inject formulation

into our Phase 1/2a clinical trial and have treated two patients to date.

We intend to dose at least six patients with the Orbit

In February 2020, we announced that after reviewing promising preliminary data from the ongoing OpRegen Phase 1/2a clinical

trial, our independent data safety monitoring board removed the protocol-mandated treatment stagger.

Accordingly, we are opening

two new clinical sites to accelerate patient enrollment and broaden surgical experience among dry AMD experts.

The two new sites,

Cincinnati Eye Institute and Mid Atlantic Retina, which collaborates with Wills Eye Hospital in Philadelphia, join our three other

actively participating sites, Retina-Vitreous Associates in Los Angeles, Retinal Consultants Medical Group in Sacramento and West

Coast Retina Medical Group in San Francisco.

Our other sites in the U.S.

and Israel continue to follow their patients in the long-term

follow-up phase of the clinical trial.

have established an innovative cell therapy manufacturing facility in the Jerusalem Bio Park on the campus of Hadassah University

Hospital in Jerusalem, Israel.

Our facility is equipped with multiple suites and is able to produce cGMP-grade OpRegen and is

expected to become the manufacturing site for a range of other cell therapy products for human use in clinical trials as well

as at a scale suitable for commercial introduction.

we believe OpRegen may provide a benefit for individuals suffering from dry AMD, we plan to administer OpRegen to

additional patients this year and collect data on the safety and efficacy of their treatment, including changes or improvements

to best corrected visual acuity and anatomical changes such as the continued or delayed growth of GA.

In the near-term, we plan

to administer OpRegen via the Orbit SDS device to at least the next four patients.

Longer term, we may elect to treat additional

patients with or without the Orbit SDS and/or present information on OpRegen to FDA for discussion about a subsequent, comparative

clinical trial.

OPC1 is our lead product

candidate for the treatment of acute spinal cord injury (“SCI”).

SCI occurs when the spinal cord is subjected to a

severe crush or contusion injury, such as that caused by a car or motorcycle accident and typically results in severe functional

impairment, including limb paralysis, aberrant pain signaling, and loss of bladder and sexual function.

There are approximately

18,000 new spinal cord injuries annually in the U.S.

(NSCIC SCI Facts and Figures at a Glance (2019)), and there are currently

no FDA-approved drugs specifically for the treatment of SCI, although methylprednisolone, a corticosteroid generally used as an

anti-inflammatory drug, is sometimes prescribed on an off-label basis to reduce acute inflammation in the injured spinal cord

immediately after injury.

We began enrollment of Cohort 4 (targeted for an additional 12 patients) shortly thereafter and treated

three patients via the traditional route of administration.

In 2019, we amended our clinical protocol to incorporate the Orbit

SDS and our new thaw and inject formulation into our Phase 1/2a clinical trial.

In February 2020, we announced that after reviewing

promising preliminary data from the ongoing OpRegen Phase 1/2a clinical trial, our independent data safety monitoring board removed

the protocol-mandated treatment stagger.

The COVID pandemic slowed the rate of patient accrual but study enrollment was completed

on November 10, 2020, with the treatment of the twelfth Cohort 4 patient, seven via the Orbit SDS and five via PPV/retinotomy.

Five different surgeons at four centers successfully delivered OpRegen using the Orbit SDS and there were no unexpected AEs.

structural and clinical changes in these better vision patients, including better visual acuity and increased reading speed, are

being followed and updates will be provided at major medical meetings or as findings merit.

June 2020, we were able to report the first known example of retinal restoration following OpRegen administration in a

Cohort 4 patient who was treated via the PPV/retinotomy route, with the findings confirmed by several independent reviewers.

is hypothesized that photoreceptor cells in the transition areas at the boundary of the GA are dysfunctional and dying, but not

completely lost.

The addition of new RPE cells may restore the microenvironment in surrounding tissue and contribute to the possibility

of restoring function to existing cells that otherwise, if left untreated, would inevitably progress to further expansion of the

atrophic region.

Specifically, in this patient, the area of GA assessed at nine months following OpRegen treatment was

approximately 25% smaller than the patient’s pre-treatment baseline.

As reported in November at the 2020 American Academy

of Ophthalmology (AAO) Annual Meeting, this patient continues to show signs of a smaller area of GA and improved visual acuity.

This unprecedented finding supports the view that dry AMD is not an irreversible, degenerative condition and that some portion

of diseased retinal tissue may be recoverable in atrophic end-stage disease patients.

enrollment complete, patients are being followed for safety and efficacy as per protocol.

We plan to present OpRegen data to the

FDA in the third quarter of 2021 for discussion about a subsequent, comparative clinical trial.

is our lead product candidate for the treatment of acute spinal cord injury (“SCI”).

SCI occurs when the spinal cord

is subjected to a severe crush or contusion injury, such as that caused by a car or motorcycle accident and typically results

in severe functional impairment, including limb paralysis, aberrant pain signaling, and loss of bladder and sexual function.

are approximately 18,000 new spinal cord injuries annually in the U.S.

(NSCIC SCI Facts and Figures at a Glance (2019)), and there

are currently no FDA-approved drugs specifically for the treatment of SCI, although methylprednisolone, a corticosteroid generally

used as an anti-inflammatory drug, is sometimes prescribed on an off-label basis to reduce acute inflammation in the injured spinal

cord immediately after injury.

It is believed that to effect substantial benefit in treating this complex injury, multiple mechanisms

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As the sole source of the insulating protein myelin in the brain and spinal cord,

oligodendrocytes wrap around nerve axons and allow conduction of electrical impulses throughout the central nervous system (“CNS”).

Clinical data to date has been collected on patients with C-4 to C-7 spinal cord injuries.

oligodendrocytes wrap around nerve axons and allow conduction of electrical impulses throughout the central nervous system (“CNS”).

is an oligodendrocyte progenitor cell therapy derived from our pluripotent cell technology under Current Good Manufacturing Practice

(“cGMP”) conditions using a directed differentiation method.

These cells are stored frozen until ready for use and

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a grant for clinical development, the development of OPC1 has been supported by $14.3 million in funds from the California Institute

for Regenerative Medicine (“CIRM”), from 2014 through the date of this Report.

We intend to apply for additional grants

from CIRM for the program’s continued development.

to our acquisition, Asterias tested OPC1 in two clinical trials:

a five patient Phase I safety trial and a 25 patient Phase 1/2a

from CIRM for the program’s continued development.

to its acquisition, Asterias tested OPC1 in two clinical trials:

a five patient Phase 1 safety trial and a 25-patient Phase 1/2a

dose escalation trial, which we call the SCiStar trial.

The SCiStar trial was an open-label, single-arm trial testing three sequential

escalating doses of OPC1 administered at up to 20 million OPC1 cells in 25 patients with subacute, C-4 to C-7, motor complete

(AIS-A or AIS-B) cervical SCI.

These individuals have essentially lost all movement below their injury site and experience severe

paralysis of the upper and lower limbs.

AIS-A patients have lost all motor and sensory function below their injury site, while

AIS-B patients have lost all motor function but may retain some minimal sensory function below their injury site.

OPC1 was administered

21 to 42 days post-injury.

Patients continue to be followed by neurological exams and imaging procedures to assess the safety

and activity of the product.

escalating doses of OPC1 administered at up to 20 million OPC1 cells with subacute, C-4 to C-7, motor complete (AIS-A or AIS-B)

cervical SCI.

These individuals have essentially lost all movement below their injury site and experience severe paralysis of

the upper and lower limbs.

AIS-A patients have lost all motor and sensory function below their injury site, while AIS-B patients

have lost all motor function but may retain some minimal sensory function below their injury site.

OPC1 was administered 21 to

42 days post-injury.

Patients continue to be followed by neurological exams and imaging procedures to assess the safety and activity

of the product.

Enrollment was completed in December 2017 and consisted of five cohorts:

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One patient from Cohort 3 and one patient from Cohort 5 were administered 10 million cells.

January 2019, Asterias provided top-line 12-month data from the SCiStar trial, which included the following key findings:

January 2019, top-line 12-month data from the SCiStar trial were announced by Asterias, which included the following key findings:

Safety Profile .

Magnetic resonance imaging (“MRI”) scans at 12 months post-injection of OPC1 showed no evidence

of adverse changes in any of the 25 patients.

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At 12 months, 21 of the 22 patients who were administered either 10 million or 20 million cells of OPC1

(Cohorts 2-5) recovered at least one motor level on at least one side, and 7 of the 22 patients recovered two or more motor

levels on at least one side.

Motor level recovery was based on the upper extremity motor score (“UEMS”), as measured

by the International Standards for Neurological Classification of Spinal Cord Injury (“ISNCSCI”).

None of these

patients saw decreased motor function following administration of OPC1, and patients consistently retained the motor function

recovery seen through six months or saw further motor function recovery from six to 12 months.

(Cohorts 2-5) recovered at least one motor level on at least one side, and seven of the 22 patients recovered two or

more motor levels on at least one side.

Motor level recovery was based on the upper extremity motor score (“UEMS”),

as measured by the International Standards for Neurological Classification of Spinal Cord Injury (“ISNCSCI”).

None of these patients saw decreased motor function following administration of OPC1, and patients consistently retained the

motor function recovery seen through six months or saw further motor function recovery from six to 12 months.

November 2019, we provided an update on the SCiStar trial that highlighted, among other things:

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All 3 Cohort 1 patients continued to be stable 2-4 years out post treatment.

At 24 months, 5 of the 6

Cohort 2 patients recovered at least two motor levels on at least one side, and 1 Cohort 2 patient recovered three motor levels,

which has been maintained through that patient’s 36-month follow-up visit.

Motor level recovery was based on the UEMS

as measured by the ISNCSCI.

FDA designated OPC1 as a Regenerative Medicine Advanced Therapy (“RMAT”), for the treatment of acute SCI and granted

At 24 months, five

of the six Cohort 2 patients recovered at least two motor levels on at least one side, and one Cohort 2 patient

recovered three motor levels, which has been maintained through that patient’s 36-month follow-up visit.

recovery was based on the UEMS as measured by the ISNCSCI.

November 2020, the formal Clinical Study Report for the SCiStar study with the above supporting data was submitted to the FDA.

FDA designated OPC1 as a Regenerative Medicine Advanced Therapy (“RMAT”), for the treatment of acute SCI and granted

it Orphan Drug Designation, which includes the ability for increased interfacing with the FDA during clinical development, and

a pathway to possible market exclusivity.

2019, we transferred all cGMP manufacturing processes, including the establishment of H1 cell banks and the OPC1 process development

and manufacturing for clinical studies, to our cell therapy manufacturing facility in Jerusalem, Israel where OpRegen process

development and production are currently ongoing.

had a Type B meeting with the FDA to discuss the next clinical

trial of OPC1.

We are now analyzing the data from the SCiStar trial to inform us as to how to proceed with further discussions

with the FDA.

Additionally, we are leveraging our manufacturing capabilities and process development expertise learned from OpRegen

to support OPC1’s development.

OPC1 has been shown to promote CNS repair through multiple reparative mechanisms, we believe its therapeutic benefit extends beyond

SCI to other types of neurological injury and disease, particularly those that involve demyelination.

Through collaborations with

academic researchers, OPC1 is currently in preclinical development as a potential treatment for ischemic stroke and multiple sclerosis,

two additional neurological conditions with demyelination as a key component of their pathology.

In both cases, the preclinical

data generated thus far has provided initial proof of concept efficacy of OPC1, which we may use to seek funding for further preclinical

improvements to the manufacturing process are planned during 2020 and include enhancements to the production process to ensure

robust, controlled and commercially viable scale, purity, and reproducibility of OPC1.

We intend to develop a thaw and inject

formulation of OPC1 as well.

A meeting with the FDA is planned around the middle of 2020 to discuss our manufacturing improvements

and the further development of OPC1 in SCI to best set the program up for success moving forward.

Concurrently, we will work to

expand our partnerships with SCI advocacy and support organizations to support their mission to accelerate stem cell treatments

to patients with unmet medical needs and fast-track the development of the most promising stem cell technologies.

2019, we transferred all cGMP manufacturing processes, including the establishment of cell banks and the OPC1 process development

and manufacturing for clinical studies, to our cell therapy manufacturing facility in Jerusalem, Israel.

Improvements to the manufacturing

process were completed in 2020 and include enhancements to the production process to ensure robust, controlled reproducible and

commercially viable scale, and purity of OPC1.

We also developed a thaw and inject formulation of OPC1 to facilitate logistics

and handling at the point of care with the elimination of the dose preparation at the clinical site.

An information amendment

describing the new process, an improved analytical plan, and a proposed comparability plan has been filed with FDA.

with the FDA is planned during the second half of 2021 to discuss our manufacturing improvements and the further development

of OPC1 in SCI to best set the program up for success moving forward.

Concurrently, we have announced a new partnership for the

introduction of a novel delivery device for OPC1.

Preliminary assessment of prototypes revealed promising compatibility with OPC1

product while simplifying the surgical procedure by providing surgeons with an instrument that is small, simple to use and would

not require stopping the patient’s ventilator to perform the injection, allowing far more flexibility for accurate delivery

to the injury site.

We intend to complete development activities in the first half of 2021, then discuss with FDA the introduction

of the new delivery device in our IND if supported by the collected data.

We continue work to expand our partnerships with SCI

advocacy and support organizations to support their mission to accelerate stem cell treatments to patients with unmet medical

needs and fast-track the development of the most promising stem cell technologies.

is our lead product candidate for the treatment of cancer.

Cancer afflicts millions worldwide and is one the largest unmet clinical

needs with current treatment options providing limited efficacy and a wide range of debilitating side effects.

To provide a more

effective and targeted treatment, we are developing VAC2 as an allogeneic, or non-patient specific, cancer vaccine candidate designed

to stimulate patient immune responses to an antigen which is commonly expressed in cancerous cells but not in normal adult cells.

VAC2, which is produced from our pluripotent cell technology using a directed differentiation method, is comprised of a population

of mature dendritic cells.

As the most potent type of antigen presenting cell in the body, dendritic cells instruct our body’s

immune system to attack and eliminate harmful pathogens and unwanted cells.

To target cancerous cells, VAC2 is engineered to express

the tumor-selective antigen telomerase, which is found in over 85% of all cancers.

Because the tumor antigen is loaded exogenously

into the dendritic cells prior to administration, VAC2 is a platform technology that can be modified to carry any antigen, including

patient-specific tumor neo-antigens.

Using pluripotent cells as the starting material for VAC2 production adds several additional

advantages to this candidate therapeutic.

Compared to technologies that rely on the use of a patient’s own blood, our pluripotent

cell technology provides a scalable system for production of a large number of vaccine doses in a single lot, lower manufacturing

costs, greater product consistency, and more notably, off-the-shelf availability to provide broader and immediate access to patients.

In addition, we believe that as an allogeneic therapy, VAC2 has the potential to stimulate a more robust immune response through

an adjuvant effect resulting from the partial immune mismatch between the VAC2 cells and patients receiving the therapy.

September 2014, Asterias initiated clinical development of VAC2 by entering into a Clinical Trial and Option Agreement (the “CRUK

Agreement”) with Cancer Research UK (“CRUK”) and Cancer Research Technology Limited, a wholly owned subsidiary

of CRUK, under which CRUK agreed to fund Phase 1 clinical development of VAC2 in non-small cell lung cancer.

CRUK is responsible,

at its own cost, for manufacturing clinical grade VAC2 and for carrying out the Phase 1 clinical trial of VAC2.

Patient enrollment

began in June 2018 and four patients have completed dosing in the initial aspect of the trial.

completion of the Phase 1 clinical trial, we will have an exclusive option to acquire the data generated in the trial and conduct

further development of VAC2.

The reacquisition fee is approximately $1.6 million with additional milestone fees based upon initiation

of a Phase 3 clinical trial and the filing for regulatory approval, as well as mid-single-digit royalty payments on sales

of commercial products.

If we decline this option, CRUK will then have an option to obtain a license to Lineage’s intellectual

property to continue the development and commercialization of VAC2 and related products in exchange to Lineage for a revenue share

of development and partnering proceeds.

In connection with the CRUK Agreement, we sublicensed to CRUK for use in the clinical

trials and product manufacturing process certain patents we licensed or sublicensed to third parties.

We will also be obligated

to pay to those licensors and sublicensors upon the achievement of various milestones and to pay royalties on sales of products

if VAC2 is successfully developed and commercialized.

The allogeneic VAC2 program

was preceded by the autologous VAC1 program which isolated dendritic cells from a patient’s own blood, modified those cells

to stimulate immune responses to telomerase and then administered those cells back to the patient as a therapeutic modality.

was studied for the treatment of acute myeloid leukemia, the most common form of acute leukemia in adults.

A Phase 2 clinical

trial of VAC1 demonstrated that it successfully manufactured and released in 24 out of the 33 patients enrolled in the trial.

Cancer afflicts millions worldwide and is one of the largest unmet

clinical needs with current treatment options providing limited efficacy and a wide range of debilitating side effects.

a more effective and targeted treatment, we are developing VAC2 as an allogeneic, or non-patient specific, cancer vaccine candidate

designed to stimulate patient immune responses to an antigen hTERT, which is commonly expressed in cancerous cells but not in

normal adult cells.

VAC2, is produced by our pluripotent cell technology using a directed differentiation method, and is comprised

of a population of mature dendritic cells to which the hTERT antigen was introduced.

As the most potent type of antigen presenting

cell in the body, dendritic cells instruct our body’s immune system to attack and eliminate harmful pathogens and unwanted

To target cancerous cells, VAC2 is engineered to express the tumor-selective antigen telomerase, which is found in over

85% of all cancers.

The tumor antigen is loaded exogenously into the dendritic cells.

The VAC1 autologous program,

which preceded VAC2, serves as an effective and encouraging proof of concept behind our approach to dendritic cell vaccines

targeting telomerase, which is the backbone of the VAC2 program.

pluripotent cells as the starting material for VAC2 production adds several additional advantages to this therapeutic candidate.

Compared to technologies that rely on the use of a patient’s own blood, our pluripotent cell technology provides a scalable

system for production of a large number of vaccine doses in a single lot, lower manufacturing costs, greater product consistency,

and more notably, off-the-shelf availability to provide broader and immediate access to patients.

In addition, we believe that

as an allogeneic therapy, VAC2 has the potential to stimulate a more robust immune response through an adjuvant effect resulting

from the partial immune mismatch between the VAC2 cells and patients receiving the therapy.

We believe that VAC2 can be used as

a platform technology that can be modified to carry any antigen, including patient-specific tumor neo-antigens.

September 2014, Asterias initiated clinical development of VAC2 by entering into a Clinical Trial and Option Agreement (the “CRUK

Agreement”) with Cancer Research UK (“CRUK”) and Cancer Research Technology Limited (“CRT”), a wholly

owned subsidiary of CRUK, under which CRUK agreed to fund Phase 1 clinical development of VAC2 in non-small cell lung cancer.

CRUK is responsible, at its own cost, for manufacturing clinical grade VAC2 and for carrying out the Phase 1 clinical trial of

Patient enrollment began in June 2018 and six patients have now completed dosing in the initial aspect of the trial.

May 2020, Lineage and its wholly owned subsidiary Asterias entered into a Second Amendment to Clinical Trial and Option Agreement

(the “CTOA Amendment”) with CRUK and CRT, which amends the Clinical Trial and Option Agreement entered into between

Asterias, CRUK and CRT dated September 8, 2014, as amended September 8, 2014.

Pursuant to the CTOA Amendment, Lineage assumed

all obligations of Asterias and exercised early its option to acquire data generated in the Phase 1 clinical trial of VAC2 in

non-small cell lung cancer being conducted by CRUK.

CRUK will continue conducting the VAC2 study.

and CRT effectuated the option by simultaneously entering into a license agreement (the “License Agreement”) pursuant

to which Lineage agreed to pay the previously agreed signature fee of £1,250,000 (approximately $1.6 million).

In consideration

of Lineage’s agreement to exercise the option prior to completion of the study, the parties agreed to defer the signature

fee as follows:

£500,000 in September 2020, £500,000 in January 2021 and £250,000 in April 2021.

For the primary

licensed product for the first indication, the License Agreement provides for milestone fees of up to £8,000,000 based upon

initiation of a Phase 3 clinical trial and the filing for regulatory approval and up to £22,500,000 in sales-based milestones

Additional milestone fees and sales-based milestone payments would be payable for other products or indications, and

mid-single-digit royalty payments are payable on sales of commercial products.

completed the transfer of all cGMP manufacturing processes, including the establishment of cell banks and the VAC2 process development

and manufacturing for clinical studies, to our cell therapy manufacturing facility in Jerusalem, Israel.

In 2021, we will focus

on updating and optimizing the manufacturing process for VAC to ensure reliable supply for future clinical studies and possible

commercial development.

An improved VAC manufacturing process will be the subject of a key interaction with FDA in the future

to introduce VAC in an IND.

allogeneic VAC2 program was preceded by the autologous VAC1 program which isolated dendritic cells from a patient’s own

blood, modified those cells to stimulate immune responses to telomerase and then administered those cells back to the patient

as a therapeutic modality.

VAC1 was studied for the treatment of acute myeloid leukemia, the most common form of acute leukemia

A Phase 2 clinical trial of VAC1 demonstrated that it successfully manufactured and released in 24 out of the 33 patients

enrolled in the trial.

Twenty-one patients received VAC1 in the trial, including 19 in clinical remission and two in early relapse.

VAC1 was found to

have a favorable safety and tolerability profile.

Asterias performed follow-up data collection on the 19 patients treated while

in complete remission to determine the long-term effects of the VAC1 administration on remission duration and disease-free survival.

VAC1 was found to have a favorable safety and tolerability profile.

Asterias performed follow-up data collection on the 19 patients

treated while in complete remission to determine the long-term effects of the VAC1 administration on remission duration and disease-free

utilized an autologous approach where the cellular vaccine needs to be created specifically for each patient.

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in advanced cancer patients given the rapidity of disease progression.

The VAC1 program serves as an effective and encouraging

proof of concept behind our approach to dendritic cell vaccines targeting telomerase, which is the backbone of the VAC2 program.

Delivery Technology –

is a patented biomaterial that mimics naturally occurring extracellular matrix, the structural network of molecules surrounding

cells in organs and tissues essential to cellular function and tissue structure.

HyStem may be useful as a scaffold for cell replacement

and retention.

patented technology underlying HyStem was developed at the University of Utah and has been exclusively licensed to us for human

therapeutic uses.

The HyStem technology is based on a unique thiol cross-linking chemistry to prepare hyaluronan-based hydrogels.

Since the first published report in 2002, there have been over 200 academic scientific publications supporting the biocompatibility

of thiol cross-linked hyaluronan-based hydrogels and their applications as medical devices and in cell culture, tissue engineering,

and animal models of cell-based therapies.

Renevia ®

our facial aesthetics product, was developed as a potential treatment for facial lipoatrophy.

Lipoatrophy is the loss of fat tissue

and may be caused by several factors, including drug side effects, such as those that can occur from certain drugs used to treat

patients with human immunodeficiency virus (“HIV”).

Renevia consists of our HyStem hydrogel combined with the patient’s

own fat or adipose progenitor cells.

As a potential alternative to traditional fat transfer procedures, Renevia is designed to

mimic the naturally occurring extracellular matrix in the body and to provide a 3-D scaffold that supports effective cell transplant,

retention, engraftment and metabolic support.

Renevia was developed with the goal of providing a natural looking and feeling,

long-lasting option for facial volume restoration.

2017, Renevia met the primary endpoint of implanted volume retention in a clinical trial in Europe designed to assess its safety

and effectiveness in restoring facial volume in patients whose subcutaneous fat, or adipose tissue, has been lost due to a side

effect of certain drugs used to treat patients with HIV.

In this clinical trial, Renevia treated patients retained approximately

100% of transplanted volume at six months (p<0.001), based on 3-D volume measurement of the implanted area, and achieved the

primary endpoint of the trial.

Based on these clinical trial results, in March 2018 we filed for marketing authorization in the

European Union (“EU”) for certain forms of facial lipoatrophy.

In September 2019, we were granted a Conformité

Européenne (“CE”) Mark.

Renevia received a Class III classification with an intended use in adults as a

resorbable matrix for the delivery of autologous adipose tissue preparations to restore and/or augment facial volume after subcutaneous

fat volume loss for the treatment of facial lipoatrophy.

The CE Mark provides us, or our authorized agent, with the authority

to market and distribute Renevia throughout the EU and in other countries that recognize the CE Mark.

We have engaged a life sciences

advisory firm to identify an external partner for commercialization of Renevia in Europe.

The VAC1 autologous program which preceded VAC2 serves

as an effective and encouraging proof of concept behind our approach to dendritic cell vaccines targeting telomerase, which is

the backbone of the VAC2 program.

2017, we expanded our ophthalmology portfolio by acquiring exclusive global rights to technology that allows the generation of

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The technology is being developed to potentially treat or prevent a variety of retinal degenerative diseases and injuries.

2017, the National Institutes of Health (“NIH”) awarded us a grant of up to $1.6 million to further develop this innovative,

next generation vision restoration program for retinal diseases and injuries, which severely impact the quality of life for millions

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In 2019, we received an additional grant of $0.7 million to continue work on this

We completed work under this grant in 2020 and submitted final reports to the NIH.

2020, the Israeli Innovation Authority approved a budgeted grant of approximately $0.6 million for us to manufacture novel

retinal implants aimed to treat patients with severe retinal impairment such as retinitis pigmentosa.

We are eligible for 60%

reimbursement of our costs under this grant.

This program allows us to combine our knowledge in manufacturing RPE cells and

photoreceptors with 3D printing technology.

Demyelination

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a treatment for demyelination.

Recent research efforts focused on the development of OPC1 as a candidate treatment for ischemic

stroke and multiple sclerosis (“MS”), two severely debilitating conditions for which demyelination is a central component

to their pathology.

Past research efforts investigated the potential development of OPC1 as a candidate treatment for

certain forms of ischemic stroke and multiple sclerosis (“MS”), two severely debilitating conditions for which demyelination

is a central component to their pathology.

develop OPC1 as a treatment for MS, initial proof-of-concept efficacy data has been demonstrated in collaboration with Yale University

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Results of this study showed OPC1 engraftment that was associated with substantial remyelination

of the lesioned primate spinal cord up to 5 months post-treatment.

These data are in preparation for submission to an appropriate

scientific journal.

Subsequently, we initiated a collaboration with University of California Irvine to assess OPC1 efficacy in

additional mouse models of MS that better recapitulate the autoimmune components of the disease.

Preliminary results indicate

that in addition to OPC1’s capacity to remyelinate the lesioned spinal cord, the cells may also help stimulate proliferation

of a distinct class of immune cells known as regulatory T cells that can help reduce or eliminate autoimmunity.

Data obtained

from the collaboration may be used to seek additional non-dilutive funding for further development of OPC1 as a treatment for

of the lesioned primate spinal cord up to five months post-treatment.

Subsequently, we initiated a collaboration with University

of California Irvine to assess OPC1 efficacy in additional mouse models of MS that better recapitulate the autoimmune components

of the disease.

Preliminary results indicated that in addition to OPC1’s capacity to remyelinate the lesioned spinal cord,

the cells may also help stimulate proliferation of a distinct class of immune cells known as regulatory T cells that can help

reduce or eliminate autoimmunity.

ischemic stroke, initial proof-of-concept efficacy data for OPC1 has been demonstrated in a collaborative study with the University

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in improved functional recovery.

We have since initiated a second preclinical study in collaboration with the University of South

Florida to test two different doses of OPC1 in a rat model of ischemic subcortical and white matter stroke.

This study was completed

in the second quarter of 2019.

Results from this study demonstrated the ability of OPC1 to impact the restoration of motor function

in a rat model of white matter stroke.

Further, histological assessments showed a treatment-associated reduction in stroke lesion

size, including in the white matter, as well as reduced inflammation and sustained OPC1 engraftment in the injured brain.

data are in preparation for submission to an appropriate scientific journal.

We may use the results of these studies to seek additional

funding and guide further preclinical development of OPC1 as a treatment for ischemic stroke.

A second preclinical study was completed in collaboration with the University of South Florida

to test two different doses of OPC1 in a rat model of ischemic subcortical and white matter stroke.

Results from this study demonstrated

the ability of OPC1 to impact the restoration of motor function in a rat model of white matter stroke.

Further, histological assessments

showed a treatment-associated reduction in stroke lesion size, including in the white matter, as well as reduced inflammation

and sustained OPC1 engraftment in the injured brain.

we are not actively pursuing OPC1 for MS and ischemic stroke at this time, we may use the results of these studies to seek additional

funding and guide further preclinical development of OPC1 for these or other conditions of demyelination.

for Other Indications

also have rights to intellectual property applicable to other indications such as for producing cardiomyocytes, pancreatic islet

cells, hepatocytes, chondrocytes, osteoblasts and other cell types.

cells, hepatocytes, chondrocytes, osteoblasts and other cell types for which development of new therapies represent significant

commercial opportunities.

We may elect to pursue these or other programs at any time.

also have rights to HyStem, a patented biomaterial that mimics naturally occurring extracellular matrix, the structural network

of molecules surrounding cells in organs and tissues essential to cellular function and tissue structure.

HyStem may be useful

as a scaffold for cell replacement and retention.

We sold HyStem-related assets and licensed the applicable technology in late

2019, but retained the rights for other uses, including for Renevia, our facial aesthetics product, which received a Conformité

Européenne (CE) Mark in September 2019.

and subsidiaries:

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our percentage ownership as of March 5, 2021, and the country where their principal business is located:

Corporation (1)

Therapeutics, Inc.

PureStem ®

progenitor cell lines, brown adipose fat, induced tissue regeneration (“iTR”) technology

Bio-Holdings Ltd.

a portfolio of R&D based companies

Field of Business

OncoCyte Corporation (1)

Cancer diagnostics

Hadasit Bio-Holdings

Owns a portfolio of R&D based companies

subsidiaries:

Cure Neurosciences Ltd.

and manufacturing of Lineage’s cell replacement platform technology

Field of Business

Lineage Ownership

Cell Cure Neurosciences Ltd.

Development and manufacturing of Lineage’s cell replacement platform technology

Biotherapeutics, Inc.

based therapeutics to treat neurological conditions

Cell International Pte.

and clinical grade cell lines

Corporation (4)(5)

in orthopedic diseases and injuries

These are publicly traded companies.

See Notes to Consolidated

Financial Statements:

Equity Method of Accounting for Common Stock of OncoCyte, at Fair Value and Note 6.

Deconsolidation

and Distribution of AgeX, included elsewhere in this Report for additional information.

Beginning August 30, 2018, Lineage

deconsolidated AgeX and AgeX is no longer a subsidiary of Lineage as of that date but remains a marketable security for Lineage

for the ownership interest retained.

See “Recent Transactions Affecting Our Corporate Organization,”

Includes shares owned by Lineage and ES Cell International

(“ESI”).

During June and July of 2017, we increased our ownership of Cell Cure Neurosciences Ltd.

Cure”), by acquiring all of the Cell Cure ordinary shares and Cell Cure convertible promissory notes held by its second

largest shareholder, Hadasit Bio-Holdings Ltd., and all of the Cell Cure ordinary shares held by its third largest shareholder,

Teva Pharmaceutical Industries, Ltd.

As a result of this acquisition, we now own, directly and through a wholly owned subsidiary,

approximately 99% of the outstanding Cell Cure ordinary shares.

In July 2018, we terminated the Cell Cure stock option plan

and all Cell Cure issued and outstanding stock options were canceled in exchange for 775,000 Lineage stock options issued

to the Cell Cure employees.

Cell based therapeutics to treat neurological conditions

ES Cell International

Research and clinical grade cell lines

OrthoCyte Corporation (4)(5)

Research in orthopedic diseases and injuries

are publicly traded companies.

See Notes to Consolidated Financial Statements:

Stock Based Awards.

Asterias was acquired by Lineage in March 2019.

to Consolidated Financial Statements:

Equity Method of Accounting for Common

Stock of OncoCyte, at Fair Value.

shares owned by Lineage and ES Cell International Pte.

was acquired by Lineage in March 2019.

See Notes to Consolidated Financial Statements:

Asterias Merger.

The operating activities and fields of business listed under these subsidiaries are conducted primarily by Lineage as the parent company.

OrthoCyte Corporation (“OrthoCyte”) adopted a stock option plan under which it may issue up to 4,000,000 shares of its common stock to officers, directors, employees, and consultants of OrthoCyte and Lineage employees, including officers.

As of December 31, 2019, options to purchase 999,000 shares of OrthoCyte common stock were outstanding.

operating activities and fields of business listed under these subsidiaries are conducted primarily by Lineage as the parent

Corporation (“OrthoCyte”) adopted a stock option plan under which it may issue up to 4,000,000 shares of its common

stock to officers, directors, employees, and consultants of OrthoCyte and Lineage employees, including officers.

As of December

31, 2020, no options to purchase OrthoCyte common stock were outstanding.

and Trade Secrets

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that are commercially important to the development of our business.

We also rely on contractual obligations with employees and third parties to protect our proprietary rights.

example, in addition to protecting our proprietary rights with patents, we rely on unpatented trade secrets, improvements, know-how

and innovation, and we take steps necessary to protect these rights, including through confidentiality agreements with our corporate

partners, employees, consultants and vendors.

We have sought, and intend to continue to seek, appropriate patent protection for

important and strategic components of our proprietary technologies by filing patent applications in the U.S.

We also rely on contractual obligations with employees and

third parties to protect our proprietary rights.

For example, in addition to protecting our proprietary rights with patents, we

rely on unpatented trade secrets, improvements, know-how and innovation, and we take steps necessary to protect these rights,

including through confidentiality agreements with our corporate partners, employees, consultants and vendors.

We have sought,

and intend to continue to seek, appropriate patent protection for important and strategic components of our proprietary technologies

by filing patent applications in the U.S.

and internationally.

We may also file additional patent applications, when appropriate, to cover improvements on our clinical products, clinical product

candidates, and related technologies.

There are no assurances that any of our intellectual property rights will guarantee complete

or adequate protection or market exclusivity for our products and product candidates.

We also enter into collaborative and other

similar arrangements with third parties, such as license agreements, to in-license and/or out-license intellectual property rights.

Our financial success will be dependent, in part, on our ability to obtain rights to commercially valuable patents, to protect

and enforce our intellectual property rights and to operate without infringing any intellectual property rights of others.

time to time, we assess our patents and pending applications covering our products and product candidates.

If we determine that

any patents or patent applications no longer provide adequate or necessary protection, we may transfer or abandon such patents

and patent applications to avoid incurring unnecessary costs.

own or license, directly through or through our subsidiaries, several patent families that include hundreds of U.S.

We may also file additional patent applications, when appropriate,

to cover improvements on our clinical products, clinical product candidates, and related technologies.

There are no assurances

that any of our intellectual property rights will guarantee complete or adequate protection or market exclusivity for our products

and product candidates.

We also enter into collaborative and other similar arrangements with third parties, such as license agreements,

to in-license and/or out-license intellectual property rights.

Our financial success will be dependent, in part, on our ability

to obtain rights to commercially valuable patents, to protect and enforce our intellectual property rights and to operate without

infringing any intellectual property rights of others.

From time to time, we assess our patents and pending applications covering

our products and product candidates.

If we determine that any patents or patent applications no longer provide adequate or necessary

protection, we may transfer or abandon such patents and patent applications to avoid incurring unnecessary costs.

own or license, directly or through our subsidiaries, several patent families that include hundreds of U.S.

and international

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that pending applications will result in issued patents.

We and our subsidiary,

Cell Cure, have rights to issued U.S.

and our subsidiary, Cell Cure, have rights to issued U.S.

and international patents and pending patent applications covering OpRegen.

The issued patents

have expiration dates ranging from 2028 to 2033.

The pending applications if issued, will have estimated expiration dates

ranging from 2028 to 2038.

The issued patents have expiration dates ranging from 2028 to 2036.

The pending applications if issued, will have estimated expiration

dates ranging from 2028 to 2041.

and international issued patents and pending applications also include those in-licensed

from Hadasit Medical Research Services and Development Ltd.

(“Hadasit”), the commercial arm and a wholly owned subsidiary

of Hadassah Medical Organization.

We also solely own pending U.S.

and Patent Cooperation Treaty (“PCT”) patent

applications relating to cryopreserving the cell population and then shipping it to the clinical trial so the cells can be immediately

and Patent Cooperation Treaty (“PCT”) patent applications

relating to cryopreserving the cell population and then shipping it to the clinical trial site so the cells can be immediately

thawed and delivered to the patient without further processing.

patent applications, and any filed international

patent applications based on the PCT applications, if issued, will have estimated expiration dates in 2038.

Cure was a party to two pending opposition proceedings in the European Patent Office (“EPO”) involving EP Patent Numbers

2147094 (issued 08-Oct-2014) and 2554661 (issued 19-Nov-2014), both entitled, “Stem Cell-Derived Retinal Pigment Epithelial

Cells”.

patent applications, and any filed international patent

applications based on the PCT applications, if issued, will have estimated expiration dates in 2038.

Cure was a party to two pending opposition proceedings in the European Patent Office (“EPO”) involving EP Patent Numbers

2147094 (issued 08-Oct-2014) and 2554661 (issued 19-Nov-2014), both entitled, “Stem Cell-Derived Retinal Pigment Epithelial

The oral proceedings took place on March 16, 2017 and March 17, 2017, respectively.

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Both patents cover OpRegen until 2028.

We have rights to U.S.

and international issued patents and pending patent applications covering Renevia.

The issued patents include those in-licensed

from the University of Utah Research Foundation (“UURF”) having expiration dates ranging from 2023 to 2027, and a

pending patent application in Europe having an estimated expiration date of 2024.

We also solely own pending U.S.

patent applications filed in 2018 that, if issued, will have estimated expiration dates in 2038.

We have numerous U.S.

and international issued patents and pending patent applications that are relevant to neural cells, such as oligodendrocyte progenitor

cells, including patent families acquired from Geron Corporation (“Geron”) that are directed to the differentiation

of pluripotent stem cells, including human embryonic stem (“hES”) cells, into various neural cell types, as well as

various culture and purification methods.

and international issued patents and pending patent applications also include

those in-licensed from the Regents of the University of California.

Additionally, there are four patent families with pending

patent applications owned by us directed to improved methods of producing oligodendrocyte progenitor cells, oligodendrocyte progenitor

cell compositions and methods of treatment of spinal cord injury using oligodendrocyte progenitor cells.

There is also a patent

family directed to improved methods of producing oligodendrocyte progenitor cells, oligodendrocyte progenitor cell compositions

and methods for the treatment of stroke using oligodendrocyte progenitor cells which is jointly owned with the Regents of the

University of California.

The expiration dates of the patents and pending patent applications acquired from Geron and in-licensed

from the Regents of the University of California range from 2023 to 2036.

The estimated expiration dates of the four patent

families with pending applications owned by us range from 2036 to 2038.

The commercial success of OPC1 depends, in part,

upon our ability to exclude competition for this product with the existing patent portfolio, regulatory exclusivity, undisclosed

have numerous U.S.

and international issued patents and pending patent applications that are relevant to neural cells, such as

oligodendrocyte progenitor cells, including patent families acquired from Geron Corporation (“Geron”) that are directed

to the differentiation of pluripotent stem cells, including human embryonic stem (“hES”) cells, into various neural

cell types, as well as various culture and purification methods.

and international issued patents and pending patent

applications also include those in-licensed from the Regents of the University of California.

Additionally, there are four patent

families with pending patent applications owned by us directed to improved methods of producing oligodendrocyte progenitor cells,

oligodendrocyte progenitor cell compositions and methods of treatment of spinal cord injury using oligodendrocyte progenitor cells.

There is also a patent family directed to improved methods of producing oligodendrocyte progenitor cells, oligodendrocyte progenitor

cell compositions and methods for the treatment of stroke using oligodendrocyte progenitor cells which is jointly owned with the

Regents of the University of California.

The expiration dates of the patents and pending patent applications acquired from Geron

and in-licensed from the Regents of the University of California range from 2023 to 2036.

The estimated expiration dates of the

four patent families with pending applications owned by us range from 2036 to 2040.

The commercial success of OPC1 depends, in

part, upon our ability to exclude competition for this product with the existing patent portfolio, regulatory exclusivity, undisclosed

know-how and/or trade secrets, or a combination of these barriers to entry.

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cells and methods of eliciting an anti-telomerase immune response in a subject by administering to the subject such compositions.

The expiration dates of the patents, and the estimated expiration dates of the pending applications, acquired from Geron or

in-licensed to us range from 2020 to 2029.

The commercial success of VAC1 and VAC2 products depends, in part, upon our ability

to exclude competition in these products with this patent portfolio, regulatory exclusivity, undisclosed know-how and/or trade

secrets, or a combination of these barriers to entry.

The expiration dates of the patents, and the estimated expiration dates of the pending applications, acquired from Geron or in-licensed

to us range from 2022 to 2041.

The commercial success of VAC1 and VAC2 products depends, in part, upon our ability to exclude

competition in these products with this patent portfolio, regulatory exclusivity, undisclosed know-how and/or trade secrets, or

a combination of these barriers to entry.

Patents and Patent Applications

We also have U.S.

international issued patents and pending patent applications related to producing cardiomyocytes, pancreatic islet cells,

hepatocytes, chondrocytes and osteoblasts.

and international issued patents and pending patent applications related to producing cardiomyocytes, pancreatic islet

cells, hepatocytes, chondrocytes and osteoblasts.

The expiration dates of these patents and pending patent applications range

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and pending patent applications range from 2021 to 2026.

also have U.S.

and international issued patents and pending applications covering Renevia, include those in-licensed from the

University of Utah Research Foundation (“UURF”) having expiration dates ranging from 2023 to 2027, and a pending patent

application in Europe having an estimated expiration date of 2024.

We also solely own pending U.S.

and European patent applications

filed in 2018 that, if issued, will have estimated expiration dates in 2038.

Risks Related to Obtaining and Enforcing Patent Protection

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of December 31, 2020, we had 55 employees, of which 20 were Lineage employees and 35 were employees of Cell Cure in Israel and

of which 50 are employed on a full-time basis and five are employed on a part-time basis.

Twelve full time employees hold Ph.D.

of which 49 were employed on a full-time basis and six were employed on a part-time basis.

Ten employees hold Ph.D.

degrees in one or more fields of science.

None of our employees are covered by a collective bargaining agreement.

In connection

with our updated corporate objectives with a greater focus on clinical development, we reduced our worldwide headcount from the

time of the Asterias Merger (March 8, 2019) by 50 employees through employee terminations and the closing of vacant positions

during the year ended December 31, 2019.

Manufacturing

established an innovative cell therapy manufacturing facility in the Bio Park on the campus of the Hadassah University Hospital

in Jerusalem, Israel.

maintain an innovative cell therapy manufacturing facility in the Bio Park on the campus of the Hadassah University Hospital in

Jerusalem, Israel.

The facility includes process development laboratories and a state-of-the-art, cGMP manufacturing facility.

It is designed and equipped to enable simultaneous cGMP processes and to produce OpRegen and a range of cell therapy products

for human use in clinical trials as well as at a scale suitable for commercial launch.

We transferred all cGMP manufacturing processes,

including the establishment of H1 cell banks and the OPC1 process development and manufacturing for clinical studies, to this

facility in 2019.

Hydrogel Products

hold a California Device Manufacturing License in support of our 510(k)-cleared product, Premvia.

We have ISO 13485:2003 certification

for the design, development, manufacture, and distribution of hydrogels for therapeutic delivery applications.

Although we hold

these certifications, licenses, and registrations, all our HyStem ®

Hydrogel product manufacturing occurs at contract

facilities located in Pennsylvania and California.

Our contractors have the necessary registrations and certifications to perform

this manufacturing.

as described below, we believe the raw materials and supplies that we require to manufacture our products, as well as the raw

materials that we require for our research and development operations relating to our product candidates and products, are widely

available from numerous suppliers and are generally considered to be generic materials and supplies.

Except as described below,

we do not rely on a single supplier for the current production of any product in development or for our research and development

operations relating to our products.

of the materials required in the research and development of our product candidates are off-the-shelf pharmaceutical products

available from third-party suppliers;

special production or special requirements are not required to order these materials.

typically submit purchase orders to our suppliers from time to time and as required.

We do rely on single-source, third-party

suppliers for a few key components of our product candidates.

If these single-source, third-party suppliers are unable to continue

providing a key component, the initiation or progress of any clinical studies of its product candidates may be impeded.

of the ingredients in the HyStem products are readily obtainable from multiple sources.

Two critical ingredients, gelatin and

sodium hyaluronate, are readily available from multiple sources but would require significant testing in order to qualify new

vendors as sources of those ingredients for our products.

are no longer producing research-grade HyStem.

We sold HyStem-related assets and licensed the applicable technology to Advanced

BioMatrix in late 2019.

We retain the rights to develop human-grade HyStem and other orthopedic applications.

It is designed and equipped to enable simultaneous cGMP processes and to produce a range of cell therapy products for human use

in clinical trials as well as at a scale suitable for commercial launch.

All cGMP manufacturing processes, including cell banks

and product manufacturing for our cell therapy product candidates are conducted in this facility.

obtain key components required for the manufacture of our cell therapy product candidates from third-party manufacturers and suppliers,

which include, in some instances, sole source manufacturers and suppliers.

We do not currently have long-term commitments or supply

agreements in place to obtain certain key components used in the manufacture of our cell therapy product candidates.

Technology and Product Development Agreements

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be useful to other companies that are engaged in the research and development of products for human therapeutic and diagnostic

Hydrogel Technology

February 2006, we acquired an exclusive worldwide license from UURF under certain U.S.

and international issued patents and pending

applications for the production and sale of hydrogel products, including our HyStem products, excluding certain veterinary and

animal health uses.

Our licensed field of use includes all human pharmaceutical and medical device applications, all tissue engineering

and regenerative medicine uses, and all research applications.

The patents have expiration dates ranging from 2023 to 2027.

is one pending patent application in Europe having an estimated expiration date of 2024.

the license agreement, we will pay a 3% royalty on sales of products and services performed that utilize the licensed patents.

We are obligated to pay:

(i) minimum royalties to the extent that actual annual royalties on products sales and services utilizing

the patents are less than $30,000;

(ii) 30% of any sublicense fees or royalties received under any sublicense of the licensed

and (iii) a $225,000 milestone fee within six months after the first sale of a “tissue engineered product”

that utilizes a licensed patent.

agreed to pay an additional license fee for the additional rights licensed to us during August 2012, and the costs of filing,

prosecuting, enforcing and maintaining the patents exclusively licensed to us, and a portion of those costs for patents that have

been licensed to a third party for a different field of use.

may, under certain circumstances, be obligated to sublicense to one or more third parties, on commercially reasonable terms to

be negotiated between us and each prospective sublicensee, or re-grant to the UURF, rights to use the licensed patents for products

and services outside the general industry in which we or any of our affiliates or sublicensees is then developing or commercializing,

or has plans to develop or commercialize, a product using the licensed technology.

Amendment to Clinical Trial and Option Agreement and License Agreement with Cancer Research UK

May 6, 2020, Lineage and its wholly owned subsidiary Asterias entered into a Second Amendment to Clinical Trial and Option Agreement

(the “CTOA Amendment”) with Cancer Research UK (“CRUK”) and Cancer Research Technology Limited (“CRT”),

which amends the Clinical Trial and Option Agreement entered into between Asterias, CRUK and CRT dated September 8, 2014, as amended

September 8, 2014.

Pursuant to the CTOA Amendment, Lineage assumed all obligations of Asterias and exercised early its option

to acquire data generated in the Phase 1 clinical trial of VAC2 in non-small cell lung cancer being conducted by CRUK.

continuing to conduct the VAC2 study.

and CRT effectuated the option by simultaneously entering into a license agreement (the “CRT License Agreement”) pursuant

to which Lineage agreed to pay the previously agreed signature fee of £1,250,000 (approximately $1.6 million).

In consideration

of Lineage’s agreement to exercise the option prior to completion of the study, the parties agreed to defer the signature

fee as follows:

£500,000 in September 2020, £500,000 in January 2021 and £250,000 in April 2021.

For the primary

licensed product for the first indication, the CRT License Agreement provides for milestone fees of up to £8,000,000 based

upon initiation of a Phase 3 clinical trial and the filing for regulatory approval and up to £22,500,000 in sales-based

milestones payments.

Additional milestone fees and sales-based milestone payments would be payable for other products or indications,

and mid-single-digit royalty payments are payable on sales of commercial products.

party may terminate the CRT License Agreement for the uncured material breach of the other party.

CRT may terminate the CRT License

Agreement in the case of Lineage’s insolvency or if Lineage ceases all development and commercialization of all products

under the CRT License Agreement.

Research and License Agreement

June 2017, Cell Cure entered into a Second Amended and Restated License Agreement with Hadasit (the “Hadasit License Agreement”).

Pursuant to the Hadasit License Agreement, Hadasit granted Cell Cure an exclusive, worldwide, royalty-bearing license (with the

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by a research laboratory.

Cure agreed to pay Hadasit non-refundable milestone payments upon the recruitment of the first patient for the first Phase IIB

Cure agreed to pay Hadasit non-refundable milestone payments upon the recruitment of the first patient for the first Phase 2b

clinical trial, upon the enrollment of the first patient in the first Phase 3 clinical trials, upon delivery of the report for

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As of December 31, 2020, Cell Cure had not accrued any of these milestone payments.

Hadasit License Agreement terminates upon the expiration of Cell Cure’s obligation to pay royalties for all licensed products,

unless earlier terminated.

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or upon an order being granted against the other party for the appointment of a receiver or a liquidator in respect of a substantial

portion of such other party’s assets.

The Hadasit License Agreement also contains customary indemnification obligations

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Agreement with University of California

are party to an exclusive license agreement with The Regents of the University of California dated February 20, 2003 (the “UC

License Agreement”) for U.S.

are party to an exclusive license agreement with The Regents of the University of California dated February 20, 2003 (the “UC

License Agreement”) for U.S.

and international issued patents and pending patent applications covering a method for directing

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that we receive from sublicensees.

UC License Agreement terminates on the expiration of the last-to-expire of the university’s issued licensed patents.

no further patents covered by the UC License Agreement are issued, it will terminate in 2024.

The university may terminate the

UC License Agreement if we breach it, and we can terminate with 60 days’

UC License Agreement if we breach it, and we can terminate with 60 days’ notice.

have rights to certain U.S and international issued patents, pending patent applications and stem cell lines with the Wisconsin

Alumni Research Foundation (“WARF”) under a Commercial License and Option Agreement entered into between Lineage and

WARF in January 2008 and a Non-Exclusive License Agreement entered into between Asterias and WARF in October 2013 (collectively,

the “WARF Agreements”).

the WARF Agreements, we have a worldwide non-exclusive license under certain WARF patents and WARF-owned primate (including human)

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Agreement with Geron

connection with Asterias’s acquisition of Geron’s stem cell assets, in October 2013, we entered into a royalty agreement

with Geron (the “Royalty Agreement”) pursuant to which we agreed to pay Geron a 4% royalty on net sales (as defined

connection with Asterias’s acquisition of Geron’s stem cell assets, in October 2013, we entered into a royalty agreement

with Geron (the “Royalty Agreement”) pursuant to which we agreed to pay Geron a 4% royalty on net sales (as defined

in the Royalty Agreement) by us or any of our affiliates or sales agents of any products that we develop and commercialize that

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We estimate that the latest patent expiration date will be in 2032.

License Agreement

with our contribution of assets to AgeX in August 2017, we and AgeX entered into a license agreement pursuant to which we licensed

to AgeX, with rights to sublicense, certain intellectual property, including patents and patent applications and know-how for

use in the development, manufacture and commercialization of products or services for the prevention, treatment, amelioration,

diagnosis or monitoring of all human and non-human animal diseases and conditions except for the field of medical products, devices

and services for the reserved Lineage fields of orthopedic, ophthalmic and medical aesthetic uses.

In addition, we retained an

option right to license, on terms to be negotiated, certain patents in research, development, manufacturing and commercialization

of treatments in the reserved Lineage fields.

The licensed patents and know-how relate generally to:

(i) our PureStem human embryonic

progenitor cell lines;

and (ii) telomere length and DNA quality control analysis in pluripotent stem cells.

Lineage patent rights licensed to AgeX are exclusive and worldwide except for existing third-party licenses, and for medical products,

devices, and services related to tendon.

AgeX also received an option to license certain Lineage retained patent rights outside

of orthopedic indications unless a license grant would compete with a Lineage program or products in the retained Lineage field.

also agreed to license or sublicense to AgeX certain additional patents and patent rights and know-how relating to Lineage HyStem

hydrogel technology, human embryonic progenitor cell technology, and human pluripotent stem cell lines and technology for use

outside the fields reserved to Lineage or in the case of certain sublicense rights in fields previously licensed to third parties.

authorities at the federal, state and local level, and in other countries, extensively regulate among other things, the development,

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Authorities also heavily regulate many of these activities

for human cells, tissues, and cellular and tissue-based products (“HCT/Ps”).

and Foreign Regulation of Therapeutic Products

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such factors as the use to which the product will be put, the chemical composition, and the interaction of the product with the

In the United States, the FDA regulates drugs and biologics under the Federal Food, Drug and Cosmetic Act (“FDCA”),

the Public Health Service Act (“PHSA”), and implementing regulations.

In the United States, the FDA regulates drugs and biologics under the Federal Food, Drug and Cosmetic Act (“FDCA”),

the Public Health Service Act (“PHSA”), and implementing regulations.

In addition, establishments that manufacture

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After testing in animals

to evaluate the potential efficacy and safety of the product candidate, an investigational new drug (“IND”) submission

must be made to the FDA to obtain authorization for human testing.

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Each clinical trial

is conducted under the auspices of an independent Institutional Review Board (“IRB”).

The IRB will consider, among

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clinical trial.

Phase 3 clinical trials are large-scale, multi-center, comparative trials and are conducted with

patients afflicted with the target disease or condition in order to provide enough data to demonstrate the efficacy and safety

required by the FDA.

The FDA closely monitors the progress of each of the three phases of clinical testing and may, at its discretion,

re-evaluate, alter, suspend or terminate the clinical trial based upon the data which have been accumulated to that point and

its assessment of the risk/benefit ratio to the intended patient population.

Phase 3 clinical trials are large-scale, multi-center, comparative trials and are conducted with patients afflicted

with the target disease or condition in order to provide enough data to demonstrate the efficacy and safety required by the FDA.

The FDA closely monitors the progress of each of the three phases of clinical testing and may, at its discretion, re-evaluate,

alter, suspend or terminate the clinical trial based upon the data which have been accumulated to that point and its assessment

of the risk/benefit ratio to the intended patient population.

All adverse events must be reported to the FDA.

of all aspects of the trial to minimize risks is a continuing process.

Monitoring of all

aspects of the trial to minimize risks is a continuing process.

action can be taken to market any therapeutic product in the U.S.

until an appropriate New Drug Application (“NDA”)

or Biologics License Application (“BLA”) has been approved by the FDA.

until an appropriate New Drug Application (“NDA”)

or Biologics License Application (“BLA”) has been approved by the FDA.

Submission of the application is not a guarantee

that the FDA will find it complete and accept it for filing.

If an application is accepted for filing, following the FDA’s

review, the FDA may grant marketing approval, request additional information or deny the application by way of a Complete Response

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and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required

specifications including gene therapy products (“GTPs”) to the extent applicable.

These are FDA regulations and guidance

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to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Medical Devices

is regulated in the EU as a medical device by way of a certification.

The CE mark shows that the device has a Certificat de Conformité.

The means for achieving the requirements for the CE mark vary according to the nature of the device.

Devices are classified in

accordance with their perceived risks, similar to the U.S.

The class of a product determines the conformity assessment

required before the CE mark can be placed on a product.

Each member state can appoint Notified Bodies within its jurisdiction.

If a Notified Body of one member state has issued a Certificat de Conformité, the device can be sold throughout the EU

without further conformance tests being required in other member states.

The CE mark is contingent upon continued compliance with

the applicable regulations and the quality system requirements of the ISO standards.

is subject to controls on product manufacturing and production methods, analytical controls to assure that the product meets its

release specification, data from analytical assay and process validations, and ISO 10993 biocompatibility testing.

we develop any products that are used with medical devices, they may be considered combination products, which are defined by

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that they be produced in compliance with cGMP.

See “Manufacturing.”

The FDA regulates and inspects equipment, facilities,

See “Manufacturing.” The FDA regulates and inspects equipment, facilities,

laboratories and processes used in the manufacturing and testing of products prior to providing approval to market products.

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concerning the safety and efficacy of a product, or any advantages of a product over another product, must be supported by clinical

data filed as part of an NDA, a BLA, or a pre-market notification or pre-market approval application for a medical device (“PMA”),

or an amendment to an NDA, a BLA or a pre-market notification or PMA, and must be consistent with the FDA-approved labeling and

dosage information for that product.

data filed as part of an NDA, a BLA, or an amendment to an NDA or a BLA, and must be

consistent with the FDA-approved labeling and dosage information for that product.

Pharmaceutical

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The FDA does not regulate the behavior of physicians in their

choice of treatments but the FDA does restrict manufacturer’s communications on the subject of off-label use of their products.

of pharmaceutical products outside the U.S.

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Funding and State Regulations

July 7, 2009, the National Institutes of Health (“NIH”) adopted guidelines on the use of hES cells in federally funded

The central focus of the guidelines is to assure that hES cells used in federally funded research are derived from human

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state of California has adopted legislation and regulations that require institutions that conduct stem cell research to notify,

and in certain cases obtain approval from, a Stem Cell Research Oversight Committee (“SCRO Committee”) before conducting

the research.

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Insurance Portability and Accountability Act and Other Health Information Privacy and Security Laws

Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology

for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations impose obligations

on “covered entities,”

including certain healthcare providers, health plans, and healthcare clearinghouses, as well

as their respective “business associates”

that create, receive, maintain or transmit individually identifiable health

information for or on behalf of a covered entity, with respect to protecting the privacy, security, and transmission of protected

health information.

HIPAA also regulates standardization of data content, codes and formats used in health care transactions and

standardization of identifiers for covered health plans and providers.

Penalties for violations of HIPAA regulations include civil

and criminal penalties.

Additionally, HITECH created four new tiers of civil monetary penalties, amended HIPAA to make civil and

criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions

for damages or injunctions in U.S.

federal courts to enforce HIPAA and seek attorneys’

fees and costs associated with pursuing

federal civil actions.

In addition, certain state and foreign laws also govern the privacy and security of health information

in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating

compliance efforts.

Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology for

Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations impose obligations on “covered

entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective

“business associates” that create, receive, maintain or transmit individually identifiable health information for

or on behalf of a covered entity, and their subcontractors that use, disclose, access, or otherwise process individually identifiable

protected health information, with respect to protecting the privacy, security, and transmission of protected health information.

HIPAA also regulates standardization of data content, codes and formats used in health care transactions and standardization of

identifiers for covered health plans and providers.

Penalties for violations of HIPAA regulations include civil and criminal penalties.

Additionally, HITECH created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly

applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions

federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.

In addition, certain state and foreign laws also govern the privacy and security of health information in some circumstances,

many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

and State Fraud and Abuse Laws

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These laws are interpreted broadly and enforced aggressively by various

state and federal agencies, including the Centers for Medicare & Medicaid Services (“CMS”), the Department

of Justice, the Office of Inspector General for HHS, and various state agencies.

state and federal agencies, including the Centers for Medicare & Medicaid Services (“CMS”), the Department of

Justice, the Office of Inspector General for HHS, and various state agencies.

In addition, the Medicare and Medicaid programs

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under a federal health care program.

The definition of “remuneration”

has been broadly interpreted to include anything

The definition of “remuneration” has been broadly interpreted to include anything

of value, including gifts, discounts, credit arrangements, payments of cash, ownership interests and providing anything at less

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within the health care industry, the Office of Inspector General for HHS has issued a series of statutory exceptions and regulatory

“safe harbors.”

However, these exceptions and safe harbors are drawn narrowly and require strict compliance in order

“safe harbors.” However, these exceptions and safe harbors are drawn narrowly and require strict compliance in order

to offer protection from prosecution under the federal Anti-Kickback Statute.

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Additionally, the Patient Protection and Affordable Care Act, as

amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”)) codified case law that a claim

amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”) codified case law that a claim

including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent

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As a result of a modification made by the

Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand”

for money or property presented

Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented

In addition, manufacturers can be held liable under the federal False Claims Act even when they do not

submit claims directly to government payors if they are deemed to “cause”

the submission of false or fraudulent claims.

submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.

also created new federal crimes, including health care fraud and false statements relating to health care matters.

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federal Physician Payments Sunshine Act which require certain manufacturers of drugs, devices, biologics and medical supplies

for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions)

to report annually to CMS information related to payments or other transfers of value made to physicians, a defined by such law,

and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions)

to report annually to CMS information related to payments or other transfers of value made to physicians (defined to include doctors,

dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals, as well as ownership and investment interests

held by physicians and their immediate family members.

Beginning in 2022, applicable manufacturers will also be required to report

information regarding payments and other transfers of value provided during the previous year to physician assistants, nurse practitioners,

clinical nurse specialists, certified nurse anesthetists and anesthesiologist assistants, and certified nurse-midwives.

states have laws similar to the federal laws described above and the state laws may be broader in scope and may apply regardless

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healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless

of payor, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance

guidelines and the relevant compliance guidance promulgated by the federal government, state and local laws that require drug

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Additionally,

Foreign Corrupt Practices Act (“FCPA”) prohibits U.S.

corporations and their representatives from offering,

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are calculated for drugs that are inhaled, infused, instilled, implanted or injected, and annual fees based on pharmaceutical

companies’

share of sales to federal health care programs.

companies’ share of sales to federal health care programs.

Since its enactment, there have been judicial, Congressional,

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to the ACA in the future.

For example, the 2020 federal spending package permanently eliminates, effective January 1, 2020, the

ACA-mandated “Cadillac”

tax on high-cost employer-sponsored health coverage and medical device tax and, effective

January 1, 2021, also eliminates the health insurer tax.

In addition, the 2017 Tax Act was enacted, which, among other things,

removes penalties for not complying with ACA’s individual mandate to carry health insurance.

Since the enactment of the

2017 Tax Act, there have been additional amendments to certain provisions of the ACA.

For example, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the

ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective

January 1, 2021, also eliminated the health insurer tax.

In addition, legislation enacted in 2017, informally known as the Tax

Cuts and Jobs Act (the “2017 Tax Act”), among other things, removes penalties for not complying with ACA’s

individual mandate to carry health insurance.

Since the enactment of the 2017 Tax Act, there have been additional amendments to

certain provisions of the ACA.

On December 14, 2018, a U.S.

District Court

Judge in the Northern District of Texas, ruled that the individual mandate is a critical and inseverable feature of the ACA, and

therefore, because it was repealed as part of the 2017 Tax Act, the remaining provisions of the ACA are invalid as well.

Additionally,

on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate

was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA

are invalid as well.

It is unclear how this decision, future decisions, subsequent appeals, if any, and other efforts to repeal

and replace the ACA will impact the ACA.

District Court Judge in the Northern District of Texas, ruled that

the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the

2017 Tax Act, the remaining provisions of the ACA are invalid as well.

Additionally, on December 18, 2019, the U.S.

Court of Appeals

for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back

to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

Supreme Court is

currently reviewing the case, although it is unknown when or how the Supreme Court will rule.

Accordingly, it is unclear how this

decision, future decisions, subsequent appeals, if any, and other efforts to repeal and replace the ACA will impact the ACA.

there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed

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programs, and reform government program reimbursement methodologies for drug products.

At the federal level, the Trump administration’s

budget proposal for fiscal year 2020 contains further drug price control measures that could be enacted during the budget process

or in other future legislation such as measures to permit Medicare Part D plans to negotiate the price of certain drugs under

Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs

for low-income patients.

Further, the Trump administration released a “Blueprint”, or plan, to lower drug prices and

reduce out of pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the

negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products,

and reduce the out of pocket costs of drug products paid by consumers.

While some of measures may require additional authorization

to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or

administrative measures to control drug costs At the state level, legislatures have increasingly passed legislation and implemented

regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts,

restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to

encourage importation from other countries and bulk purchasing.

At the federal level, the Trump administration’s

budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug

prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and

biosimilar drugs.

Further, the Trump administration released a “Blueprint”, or plan, to lower drug prices and reduce

out of pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating

power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce

the out of pocket costs of drug products paid by consumers.

The likelihood of implementation of any of these, or the other Trump

administration reform initiatives is uncertain, particularly in light of the new presidential administration.

At the state level,

legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing,

including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure

and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

Customers and Sources of Revenues

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ended December 31, 2020 and 2019:

Ended December 31,

Year Ended December 31,

Sources of Revenues

NIH grant income

IIA grant income (Cell Cure Neurosciences

Royalties, licenses,

subscriptions, advertising and other (1)

IIA grant income (Cell Cure Neurosciences Ltd, Israel)

Royalties from product sales and licenses fees

Sale of research products

Subscription and advertising revenues were generated

by LifeMap Sciences, which is a subsidiary of AgeX.

The 2018 revenues shown are for the period January 1, 2018 through August

As a result of the AgeX Deconsolidation on August 30, 2018, Lineage does not expect to recognize subscription and advertisement

revenues during subsequent accounting periods.

Ended December 31,

Year Ended December 31,

United States

Total revenues

Foreign revenues are primarily generated from grants in Israel.

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on favorable terms to justify our investment in our products or achieve sufficient revenues to support our operations.

face substantial competition in all of fields of business in which we engage.

face substantial competition in all fields of business in which we engage.

That competition is likely to intensify as new products

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antibodies, and cell therapies.

Some of these efforts have reached clinical development and at least one effort to reduce inflammation,

complement inhibition, is currently in a Phase 3 clinical trial.

We believe that replacing the entire cell rather

than attempts to fix one aberrant pathway or signal confer a greater probability of success for individuals suffering with dry

Some of these efforts have reached clinical development and at least one approach, complement

inhibition, is currently in a Phase 3 clinical trial.

We believe that replacing the entire cell rather than attempts to fix one

aberrant pathway or signal confer a greater probability of success for individuals suffering with dry AMD.

for Regenerative Medicine

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In addition, certain smaller biotech companies have formed strategic collaborations, partnerships, and other types of joint ventures

with larger, well-established industry competitors that afford the smaller companies’

potential research and development

with larger, well-established industry competitors that afford the smaller companies’ potential research and development

as well as commercialization advantages.

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are also conducting and financing research activities, which may produce products directly competitive to those we are developing.

believe that some of our competitors are trying to develop pluripotent cells and human embryonic progenitor cell based technologies and products that may compete with our stem cell products based on efficacy, safety, cost, and intellectual

property positions.

believe that some of our competitors are trying to develop pluripotent cells and human embryonic progenitor cell-based technologies

and products that may compete with our stem cell products based on efficacy, safety, cost, and intellectual property positions.

Ocata Therapeutics, Inc.

(“Ocata”), which was acquired by a subsidiary of Astellas Pharma Inc.

for approximately $379 million in 2016, and Retinal Patch Technologies Inc.

have conducted clinical trials of a hES cell products

designed to treat dry AMD.

(“Ocata”), which was acquired by a subsidiary of Astellas Pharma Inc.

for approximately $379

million in 2016, and Retinal Patch Technologies Inc.

have conducted clinical trials of hES cell products designed to treat dry

If their products are proven to be safe and effective, they may reach the market ahead of OpRegen.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business