CEO Letter

July 31, 2019

Dear Shareholders,

Welcome to Lineage Cell Therapeutics. As we previously announced, BioTime will adopt our new name on August 12th. We appreciate your support of this change. I wanted to take this opportunity to share with you our reasons for launching a new corporate brand and to summarize some of our upcoming plans.

When I was hired last September, I outlined for the Board of Directors a strategic, multi-step approach to derive value from certain assets contained within BioTime and its affiliate companies at the time, AgeX Therapeutics, Asterias Biotherapeutics, and OncoCyte Corporation. BioTime was fortunate to have many exciting projects, but this abundance of opportunities led to the simultaneous pursuit of too many competing ideas, which made it difficult for some investors to discern priorities and ownership among these four interrelated entities. Meanwhile, the basic idea and compelling promise of manufacturing specific cell types and transplanting them into humans to restore or preserve lost function was maturing, not only at BioTime, but also in premier academic and for-profit research labs around the world.

Consequently, we set in place a plan to rapidly and intelligently simplify our business structure and re-position ourselves as one of the most promising and focused cell therapy companies, initially constructed on completing three basic transactions:

  • First, divesting AgeX into an independent public company, separating earlier-stage research programs from BioTime’s more mature clinical stage assets,
  • Second, acquiring Asterias Biotherapeutics, to combine three clinical-stage assets into one entity, providing diversification for investors and permitting us to leverage cell manufacturing expertise developed from the OpRegen® program, and
  • Third, selectively leveraging our external equity investments, demonstrating a willingness to convert our strategic assets into cash and avoid issuing additional BioTime shares, which preserves shareholder value.

Additional initiatives which were nearly as important included building out a new management team and aggressively cutting spending on non-critical activities and personnel. While research feeds our industry and personal experience is valuable, in order to remain a leader in a competitive field, it is vital to periodically review the company’s direction to understand how it fits into the evolving industry landscape. Taking a fresh and critical look at our business helps ensure we remain focused only on those programs which are both medically interesting and more likely to reward shareholders in a reasonable timeframe.

Specific steps we took to supplement our core plan included:

  • Hiring a new CEO (Sep 2018), CFO (Jan 2019), CMO (Mar 2019), General Counsel (May 2019) and VP Business Development (Aug 2019),
  • Signing a Research and Option Agreement with Orbit Biomedical, providing us with a competitive advantage in the sub-retinal delivery of cells for dry-AMD,
  • Integrating Asterias’s assets and exiting their facility while adding nominal additional headcount (1 full-time hire + 2 consultants retained), and
  • Streamlining BioTime’s headcount from more than 100 at its peak to approximately 65 at the end of this quarter, while simultaneously reducing shared services with our former affiliate companies.

Collectively, these steps have redefined the company and we believe we now are positioned to become the leader in clinical development of cell transplant therapies. For this reason, and to highlight our commitment to our clinical programs, we are changing our name to LINEAGE CELL THERAPEUTICS. Our new name reflects what we do: we control the lineage of pluripotent cells and transplant those fully-differentiated cells for use as therapeutics.

Importantly, we do not administer any stem cells to patients. Stem cells are simply the starting material for the retina cells or spinal cord cells which we administer to patients, just as flour is the starting material for both a cracker or a wedding cake. Our technology, supported by hundreds of patents, is based on our ability to control the growth and development of non-specific, pluripotent cells and directing them into becoming substantially pure populations of specific, differentiated cell types. Those cells are then used to replace or support the cells which have been lost to injury or disease. These interventions are intended to slow or reverse the natural course of a disease or condition.

We also are relocating our corporate headquarters from Alameda to Carlsbad, California. Clinical, regulatory, and business functions will be led out of California, while cell manufacturing will continue to be performed by our 30+ employees at our multi-suite GMP facility in Jerusalem. This move provides us with convenient access to San Diego’s expansive biotech community with its many cell therapy companies, an innovative research community, and a deep bench of entrepreneurial, technical, and administrative talent.

It has been less than one year since I joined the company and I’m excited that we have largely completed the key objectives of simplifying the business and re-defining our brand by committing to clinical-based priorities, lower spending, and meeting timelines. We have additional plans, which we believe will significantly improve our visibility in the investor community. However, no amount of business simplification or cost-savings can compare with the value created from generating compelling clinical evidence that a new treatment can provide a meaningful benefit to patients. Each of our decisions is part of the larger commitment we are making to bring the long-held promise of turning cell therapy into treatment reality. The maturation of our OpRegen® data in dry-AMD, manufacturing OPC1 cells in a controlled and scalable manner, and determining whether VAC2 amplifies an immune response in cancer patients are all key advancements which we believe will help the company gain visibility with important stakeholders the second half of this year and early next year.

I believe we now have the right people, priorities, and plans to become the leading cell therapy company and pioneer the use of rationally-manufactured cells from pluripotent cell lines into differentiated and FDA-approved medicines. Control your lineage; don’t leave it up to fate.

We thank you for joining us on the next step of this exciting journey.


Brian M. Culley, CEO

Forward-Looking Statements

The company cautions you that all statements, other than statements of historical facts, contained in this letter are forward-looking statements. Forward-looking statements, in some cases, can be identified by terms such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “contemplate,” “project,” “target,” “tend to,” or the negative version of these words and similar expressions. Such statements include, but are not limited to, statements relating to the timing of the company’s rebranding and relocation activities, potential industry position, and the status of the company’s clinical studies. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements in this press release, including risks and uncertainties inherent in the company’s business and other risks described in the company’s filings with the Securities and Exchange Commission (SEC). The company’s forward-looking statements are based upon its current expectations and involve assumptions that may never materialize or may prove to be incorrect. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. Further information regarding these and other risks is included under the heading “Risk Factors” in the company’s periodic reports filed with the SEC, including the company’s Annual Report on Form 10-K filed with the SEC on March 14, 2019 and its other reports, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. The company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.