Lineage Cell Therapeutics (LCTX) risk factors, FY2024 10-K

Risks Related to Our Business Operations and Capital Requirements

1. 01We are dependent on our third-party collaboration with Roche to develop and commercialize OpRegen. If Roche is not successful in developing and commercializing OpRegen and/or Roche terminates the collaboration, we will lose a significant source of potential revenue
2. 02the loss or impairment of intellectual property rights related to OpRegen
3. 03it may adversely affect the interest of other third parties in pursuing strategic collaborations relating to our product candidates, including OpRegen, or technology or the terms of any such potential collaboration
4. 04We have incurred operating losses since inception, and we do not know if or when we will attain profitability
5. 05Our investigational allogeneic cell therapies represent a novel approach to the treatment of serious medical conditions, which gives rise to significant challenges. We or our collaborators may not succeed in developing any of our product candidates
6. 06We will continue to spend a substantial amount of our capital on research and development, but we might not succeed in identifying or developing product candidates that are safe and effective for their target indications or commercially viable
7. 07marketing, if any. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our planned operations
8. 08Raising additional capital may cause dilution to our existing shareholders, restrict our operations, or require us to relinquish rights to or dilute our economic interest in our product candidates or technology on terms unfavorable to us
9. 09Our ability to raise capital through equity or convertible debt financings may be limited by applicable rules of the SEC and NYSE American
10. 10We may expend our limited resources to pursue particular product candidates and fail to capitalize on other product candidates that may be more profitable or for which there is a greater likelihood of success
11. 11If we fail to meet our obligations under our in-license agreements, we may lose our rights to key technologies on which our business depends
12. 12Our failure to address these risks or other problems encountered in connection with acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally
13. 13trials, and manufacturing operations, due to natural disasters, public health emergencies, geopolitical conflicts, political and economic instability, acts of terrorism, or hardware, software, telecommunication or electrical failures, which could significantly disrupt or harm our business
14. 14Our international business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States
15. 15regulatory and compliance risks that may fall within the purview of the U.S. Foreign Corrupt Practices Act, UK Bribery Act, anti-boycott laws and other anti-corruption laws
16. 16Our business could be materially and adversely affected in the future by the effects of a public health crisis
17. 17refusal of the FDA to accept data from clinical trials in affected geographies
18. 18Our business could be adversely affected if we lose the services of the key personnel upon whom we depend or if we fail to attract and retain senior management and key scientific personnel
19. 19Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations
20. 20Political uncertainty may have an adverse impact on our operating performance and results of operations
21. 21Our ability to use net operating losses and other tax attributes to offset future taxable income or taxes may be subject to limitations
22. 22Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our overall tax liability
23. 23Because a portion of our expenses are incurred in currencies other than the U.S. Dollar, our results of operations may be harmed by currency fluctuations

Risks Related to Government Regulation

1. 24If we or our strategic collaborators do not receive regulatory approvals, our product candidates may not be marketed or sold
2. 25We or our collaborators will have to conduct expensive and time-consuming clinical trials of new products. The full cost of conducting and completing clinical trials necessary to obtain FDA and foreign regulatory approval of a new product cannot be presently determined but could exceed our current financial resources
3. 26Data obtained from preclinical and clinical studies is susceptible to varying interpretations and regulatory changes that could delay, limit, or prevent regulatory agency approvals
4. 27Government-imposed bans or restrictions and religious, moral, and ethical concerns about the use of hES cells could prevent us from developing and successfully marketing stem cell products
5. 28Some of our product candidates, may be considered combination products by the FDA and other regulatory authorities, which could increase the complexity, cost and timeline for their development and regulatory approval
6. 29If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis
7. 30Legislation and legislative, executive and regulatory proposals intended to contain health care costs may adversely affect our business
8. 31Disruptions at the FDA and other government agencies caused by funding shortages or other events or conditions outside of their control could negatively impact our business
9. 32The ACA and future changes to that law may adversely affect our business
10. 33created a licensure framework for follow on biologic products
11. 34If we fail to comply with the extensive legal and regulatory requirements affecting the healthcare industry, we could face increased costs, penalties and loss of business
12. 35Additionally, conditions and regulations governing the health care industry in the U.S. are subject to greater risk of change and uncertainty as a result of changes in legislative and regulatory priorities and personnel
13. 36Even if we receive approval to market a product candidate, we may be subject to extensive post-approval regulatory obligations that may have a significant adverse effect on our business, results of operations, financial condition and reputation
14. 37The FDA has granted orphan drug designation to OPC1 for the treatment of acute SCIs. However, there is no guarantee we will be able to maintain this designation, receive this designation for any other product candidate, or obtain the benefits associated with such designation, including marketing exclusivity
15. 38Regenerative Medicine Advanced Therapy designation may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that a product candidate will receive marketing approval
16. 39Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. In addition, recent healthcare reform legislation has strengthened these laws

Risks Related to Our Clinical Development and Commercial Operations

1. 40Clinical development of new therapeutic products is a lengthy and expensive process with a high level of uncertainty as to timing and ultimate outcome
2. 41greater than anticipated cost of clinical studies of our product candidates
3. 42variability in interpretation and analysis of study data
4. 43Changes in or disruptions to our manufacturing operations could materially and adversely affect our business
5. 44The commercial success of any of our current or future product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors, other healthcare providers and others in the medical community
6. 45the pricing and availability of coverage and adequate reimbursement by third-party payors and government agencies
7. 46If the market opportunities for our product candidates prove to be significantly smaller than we estimate, our business prospects may suffer
8. 47decreased demand for any marketed products
9. 48We currently have no marketing and sales force or distribution capabilities. If we are unable to establish effective internal capabilities or effectively collaborate with third parties to market and sell our product candidates, if approved, our ability to generate product revenue will suffer

Risks Related to our Intellectual Property

1. 49Our intellectual property may be insufficient to protect our products
2. 50we may not be successful in developing additional proprietary technologies that are patentable
3. 51Confidentiality agreements with employees and third parties may not prevent disclosure of trade secrets and other proprietary information
4. 52advantage of any opportunity to protect trade secrets or other confidential information, our competitors could use such information to compete with us, which would significantly harm our business
5. 53If we are unable to obtain and enforce patents and to protect our trade secrets, others could use our technology to compete with us, which could limit opportunities for us to generate revenues by licensing our technology and selling products
6. 54There is no certainty that our pending or future patent applications will result in the issuance of patents
7. 55Intellectual property we may develop using grants received from governmental entities are subject to rights maintained by those governments
8. 56We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business
9. 57There is no certainty that we will be able to obtain licenses to intellectual property rights owned by third parties

Risks Related to our Dependence on Third Parties

1. 58We may become dependent on possible future collaborations to develop and commercialize many of our product candidates and to provide the regulatory compliance, sales, marketing and distribution capabilities required for the success of our business
2. 59We do not have the ability to independently conduct clinical trials required to obtain regulatory approvals for our product candidates and we rely on third parties over whom we have limited control to perform important clinical and preclinical development activities for us
3. 60They or their third-party manufacturers may not perform as agreed, may terminate their agreements, or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute on a commercial scale, if approved
4. 61They or their third-party manufacturers may not obtain or maintain intellectual property rights necessary for the development, manufacture and, if approved, commercialization of the systems or devices
5. 62We may be subject to product liability exposure arising out of use of the systems or devices to administer our product candidates in clinical trials or, if approved, for commercial use, and our insurance may not cover all potential claims
6. 63The market price of our common shares has been and may continue to be volatile, and you could lose all or part of your investment
7. 64other factors described in this Risk Factors section
8. 65Because we do not intend to pay cash dividends, our common shares may not be a suitable investment for anyone who needs to earn dividend income
9. 66Insiders continue to have substantial influence over our company, which could limit your ability to influence the outcome of key transactions, including a change of control
10. 67If we or our subsidiaries issue additional common shares or preferred shares, investors in our common shares may experience dilution of their ownership interests
11. 68The issuance of common shares upon exercise of warrants would cause immediate and substantial dilution to existing shareholders
12. 69Our business could be negatively affected as a result of actions of activist shareholders, and such activism could affect the trading value of our securities
13. 70Securities analysts may not initiate coverage or continue to cover our common shares, and this may have a negative impact on the market price of our common shares
14. 71If we, or our personnel or third parties upon whom rely, fail, or are perceived to have failed, to address or comply with applicable data privacy, security, protection and transfer requirements, we could face significant consequences
15. 72Failure of our internal control over financial reporting could harm our business and financial results
16. 73Our results of operations are affected by prevailing economic and political conditions and other factors beyond our control, such as the rate of inflation, fluctuations in costs, particularly due to changes in labor costs and material costs, levels of business confidence, and wars or armed conflicts
17. 74Adverse litigation judgments or settlements resulting from legal proceedings in which we may be involved could expose us to monetary damages or limit our ability to operate our business
18. 75Our business could be negatively impacted by environmental, social and corporate governance (“ESG”) matters or our reporting of such matters