Initiating Coverage of LCTX Lineage Cell Therapeutics is developing cellular-based therapies for use as standardized, “off-the-shelf” products to restore tissue damaged by disease processes. The company has developed a proprietary technology for growing early cells into mature cell lines of differentiated, functional tissue components. These cells are then implanted to restore areas of dead or damaged cells.Lead Product is In Dry AMD The company’s technology directs cells to differentiate along specific cell lines, guiding them to mature into functional tissue components. Its lead product, OpRegen, is in development for dry age-related macular degeneration, or dry AMD. Interim results from a Phase 1/2a trial RPE were updated in July 2021, with the next clinical trial planned in late 2021-early 2022.Spinal Cord Injury The second product in development is for nerve injury. OPC1 is a cell transplant to repair damage after loss of function following spinal cord injury. Following proof-of-concept studies, improvements have been made to the process and administration procedures. The company will be testing these changes, to be followed by a Phase 2b/3 trial in 2022-23.Immune Stimulation The third product is an application for stimulating the immune system. VAC2 is currently in testing to improve immune responses in treating non-small cell lung cancer (NSCLC). The first non-exclusive technology license agreement to another company was made in April 2021.Conclusion: We expect LCTX to be driven by clinical milestones in the OpRegen program for dry AMD. We have excluded them from our valuation due to the uncertain time frames involved. We value the company based on our estimated revenues from OpRegen, discounting our 2028 EPS estimates at 30% per year. We then apply a 15X multiple for a price target of $8 per share. Read More >>