Full Year Financials In Line With Expectations. Lineage Cell reported a 4Q21 loss of $28.2 million or $(0.17) per share, and a loss of $43.0 million or $(0.26) per share for FY21. The larger than expected loss in 4Q21 was due to the accrual of $20.6 million for future obligations payable to its licensors under the December 2021 Genentech/Roche Agreement. The company ended the year with $55.7 million in cash, excluding proceeds from the Genentech agreement.Genentech/Roche Agreement Transformed The Company. In December 2021, Lineage Cell made a collaboration and licensing agreement covering OpRegen, its retinal pigmented epithelial cell transplant for ophthalmologic indications. Genentech/Roche will take over the clinical development and commercialization, in exchange for $50 million in upfront fees, $620 million in potential milestone payments, then double-digit royalties upon sales.Accruals For Payments to Licensees Increased The 4Q and Annual Loss. During 4Q21, Lineage accrued $21 million for payments required by the OpRegen technology license agreements with the Israel Innovation Authority (IIA) and Hadasit Medical Research Services. In January 2022, it received the $50 million payment from Genentech/Roche, ending January 2022 with an estimated $83 million in cash.Product Pipeline Announcement Expected Later This Month Lineage plans to continue developing OPC-1, its cellular transplant system for spinal cord injury (SCI). This includes manufacturing and delivery refinements, with amendments to the regulatory filings for trials using the modifications. It is also planning to file an new IND for a clinical trial with VAC-2, its cell technology for presenting antigens to stimulate an immune response against cancers. Conclusion. The results from 4Q21 and FY21 were close to our expectations, excluding the accruals for the contractual payments obligations. Lineage plans to announce additional pipeline updates later this month, with additional indications possible. We continue to rate the stock Outperform with an $8 target price. Read More >>