LCTX 10-K Fiscal year ended Dec. 31, 2014

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Key Accomplishments in 2014

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Additional Information

Espy ^® , HyStem ^® , Hextend ^® , PureStem ^® , and PentaLyte ^® are registered trademarks of BioTime, Inc., and Renevia ™, ReGlyde ™, Premvia ™, ESpan ™ and ESI BIO ™ are trademarks of BioTime, Inc. ACTCellerate ™ is a trademark licensed to us by Advanced Cell Technology, Inc., now Ocata Therapeutics, Inc., (“Ocata”) . ReCyte ™ is a trademark of ReCyte Therapeutics, Inc. PanC-Dx ™ is a trademark of OncoCyte Corporation. OpRegen ^® is a registered trademark of Cell Cure Neurosciences, Ltd. GeneCards ^® is a registered trademark of Yeda Research and Development Co. Ltd.

BioTime was incorporated in 1990 in the state of California. Our principal executive offices are located at 1301 Harbor Bay Parkway, Alameda, California 94502. Our telephone number is (510) 521‑3390.

Business Strategy

One of our goals is to develop cell-based regenerative therapies for age-related degenerative disease. If we are successful developing our products, achieving FDA approval and commercializing our products, we may be able to increase both length and quality of life for elderly patients suffering from a variety of age-related degenerative diseases. Additionally, the degenerative diseases of aging meet several criteria that make them an attractive business opportunity. First, the elderly comprise a large and growing segment of the U.S. and world population. Second, chronic degenerative diseases account for nearly 75% of health care costs. Third, because many age-related diseases appear to be caused by the inherent limited capacity of aged human cells to regenerate damaged tissues in the body, our cell replacement technologies may eliminate the high costs associated with care for these diseases.

Our effort in regenerative medicine also includes research on more than 200 purified, scalable, and novel human embryonic progenitor cell types produced from hES and iPS cells. This research has included extensive gene expression studies of the unique properties of the cells, as well as conditions that cause the cells to differentiate into many of the cell types in the body. We have filed patent applications on the compositions of these cells, the media in which they can be expanded, and a variety of uses of the cells, including drug discovery and cell replacement therapies. This novel manufacturing technology may provide us with a competitive advantage in producing highly purified, identified, and scalable cell types for potential use in therapy.

We have organized several subsidiaries to undertake our cell replacement therapeutic programs, diagnostic product programs, and our research product programs. We have provided funding, through cash infusions, loan facilities and the issuance of our stock, and will continue to partly or wholly fund these subsidiaries, recruit their management teams, assist them in acquiring technology, and provide general guidance for building the subsidiary companies. We may license patents and technology to the subsidiaries that we do not wholly own under agreements that will entitle us to receive royalty payments from the commercialization of products or technology developed by the subsidiaries.

The joint ownership of subsidiaries with other investors allows us to fund the expensive development costs in a manner that spreads the costs and risk and reduces our need to obtain more equity financing of our own that could be dilutive to our shareholders. This structure also allows investors the flexibility to invest in BioTime, which is a broad portfolio of companies focused on regenerative medicine, or to invest in a particular subsidiary that is targeting a specific field of medicine or product market.

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The following table shows our subsidiaries, their respective principal fields of business, our percentage ownership, directly and through subsidiaries, as at December 31, 2014, and the country where their principal business is located:

(1)

During February 2015, Asterias sold 1,410,255 shares of its Series A Common Stock to investors, which reduced our percentage ownership of Asterias to 67.5%.

(2)

Includes shares owned by BioTime, Asterias, and ESI.

(3)

LifeMap Sciences, Ltd. and LifeMap Solutions, Inc. are wholly-owned subsidiaries of LifeMap Sciences, Inc.

(4)

Includes shares owned by BioTime and Asterias.

Another tenet of our business strategy is the development and sale of advanced human stem cell products and technologies that can be used by researchers at universities and other institutions, at companies in the bioscience and biopharmaceutical industries, and at other companies that provide research products to companies in those industries. By providing products and technologies that will be used by researchers and drug developers at larger institutions and corporations, we believe that we will be able to commercialize products more quickly and inexpensively, and realize greater revenues than would be possible with the development of therapeutic products alone.

We have made the filing and prosecution of patent applications an integral part of our business strategy in order to protect our investment in our products and that we and our subsidiaries have developed or licensed from others.

Renevia ™ and Other HyStem ^® Cell Delivery Medical Devices

Our HyStem ^® hydrogel product line is one of the components in our near-term revenue strategy. HyStem ^® is a patented biomaterial that mimics the extracellular matrix (“ECM”), the network of molecules surrounding cells in organs and tissues that is essential to cellular function. Many tissue engineering and regenerative cell-based therapies will require the delivery of therapeutic cells in a matrix or scaffold for proper function. HyStem ^® is a unique hydrogel that has been shown to support cellular attachment and proliferation in vivo. Current research at leading medical institutions has shown that HyStem ^® is compatible with a wide variety of tissue types including brain, bone, skin, neural, cartilage, and heart tissues.

The patented technology underlying our HyStem ^® hydrogels such as ReGlyde ™ and Premvia ™ was developed at the University of Utah and has been licensed to us for human therapeutic uses. The HyStem ^® technology is based on a unique thiol cross-linking strategy to prepare hyaluronan-based hydrogels from thiol-modified hyaluronan. Since the first published report in 2002, there have been over 120 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.

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The building blocks for HyStem ^® hydrogels are hyaluronan and in some applications, gelatin, each of which has been thiol-modified by carbodiimide mediated hydrazide chemistry. HyStem ^® hydrogels are formed by cross-linking mixtures of these thiolated macromolecules with polyethylene glycol diacrylate (“PEGDA”). This unique cross-linking chemistry works through an elegant chemical reaction between the acrylate groups on the PEGDA and the sulfhydryl groups on the thiolated macromolecules, that does not generate any toxic by-products, pH change or heat. The rate of the cross-linking reaction turning the liquid mixture into a hydrogel (gelation rate) as well as hydrogel stiffness can be controlled by varying the amount of the PEGDA cross-linker. Due to the unique cross-linking chemistry, HyStem ^® hydrogels can be injected or applied as a liquid which allows the hydrogel to conform to the cavity or space, and gelation occurs in situ without harming the recipient tissue. This property of HyStem ^® hydrogels offers several distinct advantages over other hydrogels, including the possibility of mixing bioactive materials with the hydrogel at the point of use and the ability to inject or otherwise apply the material in its liquid state with precision at surgical or wound sites. Building upon this platform, we have developed the HyStem ^® family of unique, biocompatible resorbable hydrogels.

Renevia ™

We are developing Renevia ™, a clinical grade HyStem ^® hydrogel, as an injectable product. Renevia ™ may address an immediate need in cosmetic and reconstructive surgeries and other procedures by improving the process of transplanting adipose derived cells or other adult stem cells. Adult stem cell types such as adipose stem cells obtained from a patient through liposuction can be transplanted back into the same patient at another location in the body, without the risk of rejection associated with the transplant of donor tissues. However, the transplantation of cells without the molecular matrix in which cells normally reside often leads to widespread cell death or the failure of the transplanted cells to remain at the transplant site. The transfer of cells in Renevia ™ may resolve this issue by localizing the transplanted cells at the intended site and by providing a three-dimensional scaffold upon which cells can rebuild normal tissue. Renevia ™ may also support other emerging cell and tissue transplant therapies such as those derived from hES and iPS cells, in addition to its potential application in the treatment of a number of conditions such as osteoarthritis, brain tumors, stroke, bone fracture, and wounds.

Renevia ™ is manufactured in the US in compliance with cGMP requirements and has been tested pursuant to ISO 10993 standards for implantable medical devices and shown to be biocompatible without adverse effects in animal studies. Our plan is to bring Renevia ™ to the medical market first in the European Union (“EU”), where the anticipated cost of the clinical trials would be relatively low. Once the use of Renevia ™ in surgery is established in the EU, we plan to seek approval from the FDA to market Renevia ™ in the larger American market where there are approximately 4 million surgical reconstructive procedures performed per year.

Premvia ™

Premvia ™ , is a HyStem ^® hydrogel formulation of cross-linked thiol-modified hyaluronan and thiol-modified gelatin for the management of wounds including partial and full-thickness wounds, ulcers, tunneled/undermined wounds, surgical wounds, and burns. Due to its high water content, Premvia ™ is able to donate water molecules to the wound surface and to maintain a moist environment at the wound bed, which is critical for wound healing. Additionally, the biodegradable matrix provides a scaffold for the cellular infiltration and proliferation as well as capillary growth needed to promote healing. There is significant competition in the wound healing dressing space, however, one advantage that Premvia ™ appears to have over most other technologies is the ability to flow into the wound thereby providing a moist environment to every part of a wound which a traditional covering cannot.

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We submitted a 510(k) for Premvia ™ and received clearance from the U.S. FDA in August 2014 to market Premvia ™ as a medical device for wound management. Premvia ™ utilizes the same cGMP components used in our clinical trials of Renevia ™ . Plans to move Premvia ™ forward in 2015 are in progress.

Premvia ™ is also intended to serve as a foundation for the further development of bioactive products that could deliver biological factors or cells to accelerate wound healing. Such new products would require clinical testing to demonstrate safety and efficacy of the new products, and additional FDA review and approval.

ReGlyde ™

ReGlyde ™ , a cross-linked thiol-modified hyaluronan hydrogel is being developed for the management and protection of tendon injuries following surgical repair of the digital flexor or extensor tendons of the hand. The product is intended to be applied to the repaired tendon area via a syringe or similar device immediately prior to closing of the surgical area. Separation of the tendon from surrounding tissue has been shown to significantly reduce post-surgical adhesions that can lead to complications such as restricted finger mobility and flexibility. We believe that the flowable and in-situ gelling capability of ReGlyde ™ could provide an advantage over the existing technology that is in the form of a sheet causing difficulty in application in what is often a small compartment after surgery. ISO 10993 biocompatibility studies and pre-clinical studies in animal models to demonstrate safety and efficacy are on-going. ReGlyde ™ is expected to be regulated as a medical device in the United States, and we believe that it is eligible for 510(k) market approval. If these requisite studies do not show biocompatibility and efficacy, we will have to reconsider our development plans. We may be required to provide human clinical data demonstrating safety and efficacy for approval as a medical device if the FDA determines that marketing approval should not be granted on the basis of a 510(k) application.

HyStem ^® Hydrogel in Research

Other HyStem ^® hydrogels are currently being used by researchers at a number of medical schools in pre-clinical studies of stem cell therapies to facilitate wound healing; the treatment of ischemic stroke, brain cancer, vocal fold scarring; and myocardial infarct repair. HyStem ^® hydrogels may have other applications when combined with the diverse and scalable cell types our scientists have derived from hES cells. Our HyStem ^® technology forms the foundation for unique stem cell delivery products in both the adult and embryonic stem cell marketplace, including products manufactured using our PureStem ^® technology. Recent publications have highlighted the combined use of HyStem ^® hydrogels with PureStem ^® progenitors resulting in a combined product that produces cartilage- producing cell masses known as chondrocytes. We call this experimental product HyStem ^® -4D . In collaboration with William Marsh Rice University, we are also using HyStem ^® technology to develop 3D cell culture platforms for improved methods of screening new anti-cancer drug candidates.

We have submitted a Device Master File (called an MAF) to the FDA with the details of the manufacturing, testing, and biocompatibility of the HyStem ^® hydrogels, of which Renevia ™ is one version. The MAF was filed in order to allow the FDA to easily access the manufacturing and biocompatibility information to support any future clinical studies that third party investigators may elect to initiate for their cell or drug products utilizing HyStem ^® hydrogels.

OncoCyte: Novel Cancer Diagnostics and Therapeutics.

Formed in 2009, OncoCyte is developing novel products for the diagnosis and treatment of cancer in order to improve the quality and length of life of cancer patients. OncoCyte is presently focusing its efforts on developing PanC-Dx ™ diagnostic products for use in detecting breast, bladder, and lung cancers.

PanC-Dx ™ for Diagnosis of Cancer

OncoCyte’s lead product is PanC-Dx ™ a class of non-invasive cancer diagnostics based on a proprietary set of cancer markers characterized, in part, by broad gene expression patterns in numerous cancer types. The diagnostic products under development are designed to detect cancer using simple, low cost blood tests or, in the case of bladder cancer, a urine test. The apparent high correlation of certain combinations of biomarkers in breast cancer and bladder cancer has made these indications attractive initial targets. OncoCyte is also evaluating markers that may be used in a PanC-Dx ™ screen for lung cancer. Clinical studies designed to test the performance of PanC-Dx ™ markers in these three cancers were initiated in early 2014. Initial studies in bladder and lung cancer have been completed while the breast cancer study is expected to be completed in early 2015. The performance of the marker panels in determining the presence or the progression of disease in various categories of patients in these clinical studies will determine the specific nature of the tests to be developed and the approval pathway that OncoCyte will pursue.

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The PanC-Dx ™ biomarkers were discovered as a result of ongoing research within OncoCyte and BioTime on the gene expression patterns associated with embryonic development. This research has demonstrated that many of the same genes associated with normal growth during development are abnormally reactivated by cancer cells. These genes regulate such diverse processes as cell proliferation, cell migration and blood vessel formation. Many of these genes have not been previously associated with cancer. Moreover, expression of a large subset of these genes is found across numerous cancer types (e.g. cancers of the breast, colon, ovaries, etc.), suggesting these genes may control fundamental processes during cancer growth and progression. In addition to their potential value in developing diagnostic biomarkers, an understanding of the pattern of expression of these genes may also enable the development of powerful new cancer therapeutics that target rapidly proliferating cancer cells.

OncoCyte has initiated clinical development of its bladder cancer diagnostic test in both the United States and China. In the United States, OncoCyte has entered into a Clinical Trial Agreement with a leading medical institution with an international reputation for excellence and discovery, while in China, OncoCyte has entered into a Fee-for-Service Agreement with China Medicine Inc., a contract research organization serving nine major medical institutions. The goal of these clinical studies is the testing of OncoCyte’s proprietary diagnostic technology in the most common type of bladder cancer, urothelial carcinoma (“UC”) (previously designated transitional cell carcinoma). Investigators in the collaborating institutions will collect urine samples from patients at the time of bladder cancer diagnosis as well as from those with a risk for recurrent disease. In certain cases, current standard-of-care diagnostic strategies such as the cellular microscopic analysis of the urine samples will be compared with OncoCyte’s proprietary markers. A statistical analysis of these and other results will be performed to determine the overall relative performance of OncoCyte’s PanC-Dx ™ markers.

The ability of the markers tested in the studies to determine the absence, presence, or progression of UC in patients will determine the specific nature of the bladder cancer test to be developed and the regulatory approval pathway that OncoCyte will pursue. UC constitutes more than 90% of bladder cancers in the Americas, Europe and Asia. Although most patients with bladder cancer can be treated with organ-sparing chemotherapy, UC has a relapse rate of nearly 70% and can progress to invasive, metastatic, and lethal disease. The regular surveillance and treatment of recurrent disease from the time of diagnosis for the remainder of a patient’s life makes UC the most costly malignancy on a per patient basis. The problem is amplified because the standard of care for surveillance – microscopic assessment of urinary cytology specimens – often lacks the sensitivity sufficient to ever declare a patient truly disease free. While cytology has a very high positive predictive value (low false positive rate), it has a low negative predictive value and a high indeterminate rate. Patients who have indeterminate urine cytology results commonly undergo cystoscopy, which is painful, time consuming, costly, and unnecessary in many cases since a neoplasm is often not present. In UC, as in virtually all other cancers, earlier and more accurate diagnosis, including diagnosis of disease recurrence, is generally associated with better outcomes and lower cost.

Overall markets for bladder cancer diagnostics are large and growing. Based on National Cancer Institute statistics released in 2012, it was estimated that in 2013 over 72,000 new cases of bladder cancer would occur in the United States and a total of over 550,000 men and women alive would have a history of bladder cancer and be subject to recurrence surveillance testing using cystoscopy or urine cytology. Based on data released in 2012, the overall incidence of bladder cancer in China is 6.1 cases per 100,000 individuals. That number is expected to increase markedly in the next two decades. It is estimated that the annual number of urine cytological analyses performed in the U.S. is over 1.5 million, with more than 3 million tests performed annually in the developed world.

During October 2013, OncoCyte entered into a Sponsored Research Agreement and a Material Transfer Agreement with The Wistar Institute to collaboratively develop lung cancer diagnostic products. As part of the collaboration, Wistar investigators are conducting a multi-center patient study in which they are assessing gene expression patterns in blood cells of patients with malignant versus non-malignant lung disease. OncoCyte scientists will analyze blood samples obtained from patients in the study to determine levels of tumor-associated proteins using its proprietary PanC-Dx ™ diagnostic tests. The performance of markers tested in the study in determining the presence or the progression of disease in various categories of patients may determine the specific nature of the lung cancer test to be developed and the regulatory approval pathway that OncoCyte will pursue. OncoCyte will have an option to exclusively license any inventions, discoveries or technology developed by Wistar, or by OncoCyte using Wistar technology, in the course of the collaborative research.

Lung cancer remains a primary cause of cancer-related death, in part because there is no effective diagnostic test to screen patients for lung cancer at an early stage. The Wistar-sponsored study was conducted on patients recruited through grant partners at multiple clinical sites. Enrollment in this study was completed in mid-2014. It is expected that the results of this study will be presented at scientific conferences and published in a peer-reviewed journal during the first half of 2015.

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Cancer Therapy

Although OncoCyte is presently devoting its research and development efforts to PanC-Dx ™, OncoCyte has also conducted research to derive vascular endothelial cells engineered to deliver a toxic payload to the developing blood vessels of a tumor, with the aim of removing malignant tumors while not affecting nearby normal tissues in the body.

The progression of human solid tumors almost always requires the development of a support network of blood vessels to provide nutrients to the expanding tumor mass. The developing tumor vasculature affords an attractive target for anti-cancer therapeutics. Drugs targeting the growth of blood vessels have shown some efficacy in specific cancer applications. However, there is clear need for additional therapeutic approaches that can be used to treat advanced, metastatic cancers. OncoCyte intends to develop a new class of cellular therapeutics that would specifically target the development of tumor vasculature in advanced cancers as an entry point for the delivery of regulated tumoricidal activities.

Through the acquisition of Cell Targeting, Inc., OncoCyte has access to technology that uses peptides selected for their ability to adhere to diseased tissues. By coating or "painting" these peptides onto the surface of therapeutic cells using techniques that do not modify the cell physiology, OncoCyte has been able to produce tissue-specific and disease-specific cell modification agents. This technology may be used in conjunction with the development of genetically modified hES-derived vascular progenitors designed to target and destroy malignant tumors.

Our Ownership of OncoCyte

We presently own 75.3% of the OncoCyte common stock outstanding. The other shares of OncoCyte common stock are owned by two private investors. OncoCyte has 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 OncoCyte and BioTime. As of December 31, 2014, options to purchase 2,722,500 shares of OncoCyte common stock had been granted.

Asterias: Stem Cell Therapies

During September 2012, we formed Asterias to acquire assets in the stem cell field for use in developing and commercializing products for regenerative medicine. On October 1, 2013, Asterias acquired intellectual property, cell lines and other human embryonic stem cell related assets from Geron Corporation ("Geron") and also acquired a quantity of certain hES cell lines from BioTime, which provides Asterias with the use of cell lines and other biological materials, patents, and technology developed by Geron over 12 years of work focused in the following complementary lines of research:

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The establishment of cell banks of undifferentiated hES cells produced under current good manufacturing procedures "cGMP" and suitable for human therapeutic use;

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The development of scalable differentiation methods which convert, at low cost, undifferentiated hES cells into functional cells suitable for human therapeutic cells that can be stored and distributed in the frozen state for "off ‑ the ‑ shelf" use;

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The development of regulatory paradigms to satisfy both U.S. and European regulatory authority requirements to begin human clinical testing of products made from hES cells; and

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The continuous filing and prosecution of patents covering inventions to protect commercialization rights, as well as consummating in-licenses to enable freedom to operate in a variety of fields.

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Products Under Development

Asterias’ product candidates are summarized in the following table:

(1)

The estimates of the numbers of potential patients shown in the table are based on data for the United States only and do not include potential patients in other countries.

(2)

In vitro means in tissue culture dishes.

Product Candidate Description	Target Market	Estimated Number of Potential Patients (1)	Status
AST-VAC1 – Autologous Monocyte – Derived Dendritic Cells (infused cells derived from the treated patient)	Cancer	Prostate: 240,000 new cases per year in U.S.	Phase I study in metastatic prostate cancer completed ( Journal of Immunology , 2005, 174: 3798-3807).
		Acute myelogenous leukemia: more than 12,000 new cases per year in U.S.	Phase I/II study in acute myelogenous leukemia completed. Manuscript in preparation.

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AST-OPC1 Glial Progenitor Cells

Asterias’ AST-OPC1 (formerly GRNOPC1) product is comprised of glial progenitor cells, which are cells that become glial cells after injection, derived from a cGMP master cell bank of undifferentiated hES cells that has been fully qualified for human use. These cells, which are stored frozen until ready for use, are produced under cGMP conditions and screened for adventitious agents. These glial progenitor cells were the first hES cell-derived cellular therapy to enter human clinical testing when Geron initiated a Phase 1 trial of these cells in spinal cord injury in 2010.

Glial cells are nature’s neuronal insulating cells. Like the insulation covering an electrical wire, glial cells enable the conduction of electrical impulses along nerve fibers throughout the central and peripheral nervous system. They are also known to promote neural growth, as well as induce blood vessel formation around nerve axons. AST-OPC1 cells reproduce all of the natural functions of glial cells in animal models, including: producing myelin that wraps around nerve fibers; producing neurotrophic factors which encourage neuro-regeneration and sprouting of new nerve endings, and inducing new blood vessels which provide nutrients and remove waste matter from neural tissue as it functions in the body.

The pathology of spinal cord injury involves extensive loss of the myelin sheath (insulation) produced by glial cells at the site of injury. Although neurons are lost, the prime pathology of spinal cord injury is loss of glial insulation which prevents transmission of nerve impulses above or below the point of injury.

There are currently no drugs approved by the FDA specifically for the treatment of spinal cord injury, 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 in order to effect substantial benefit in treating this complex injury, multiple mechanisms of action are required, such as re-myelination of the demyelinated axons, generation of new blood vessels to repair the ischemic damage from injury, and the presence of biologics that cause neuro-sprouting or new nerve growth to enable the severed axons to repair. In studies to date, AST-OPC1 cells have been shown to exhibit all three effects, and therefore we believe they have potential to effectively treat acute spinal cord injury.

Geron has performed multiple studies in a validated rat model of spinal cord injury showing that a single injection of AST-OPC1 cells at the site of injury produces durable re-myelination, new blood vessel formation, and new neuronal sprouting, all of which result in sustained and significant improvement in the animal’s locomotion within several months after injection. These data provided the rationale to initiate the world’s first clinical trial using hES cell-derived glial cells (AST-OPC1) to treat acute spinal cord injury in humans. A large body of evidence derived from this research showed the following observations:

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AST-OPC1 survives for at least 12 months in the spinal cord after injection into animal models of spinal cord injury.

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The injected cells result in sustained and significant improvement in locomotor activity in the spinal cord injured animals in models of both thoracic and cervical injuries.

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The growth of the AST-OPC1 cells after injection reduces cavities that normally form after injury in both animal models and human spinal cord injury.

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AST-OPC1 cells migrate up to 5 centimeters in both directions from the site of injection in rodent models of spinal cord injury. No toxicity was seen in the animals after injection – no systemic toxicity, nerve pain, benign growths (known as teratomas), or toxicity of any kind other than rare observations of benign cyst-like structures at the point of injection. Extensive in vitro immune assays demonstrated the absence of direct immune recognition of AST-OPC1 by human immune cells.

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The cyst-like structures that appeared in certain rat model studies were microscopic in size, had very few dividing cells, did not grow, and were found exclusively in the spinal cord injury site where the AST-OPC1 cells were injected. Because of the discovery of the cyst-like structures in early animal models, the FDA placed Geron’s planned clinical trial on hold. The presence of cyst-like structures was investigated in additional animal studies. In four separate animal studies using the clinical grade AST-OPC1 product, cyst-like structures were found in the frequencies shown in the following table:

After discussions that Geron had with the FDA, the clinical trial investigators, and the data monitoring safety board, the unanimous opinion was that these cyst-like structures were of low risk to subjects and the clinical trial was permitted to proceed. Nevertheless a plan was developed to monitor subjects in clinical trials for the development of such cyst-like structures. In the completed Phase I safety study in which 5 patients received AST-OPC1 cells in their injured spinal cords, no cyst-like structures were detected in multiple magnetic resonance imaging exams (“MRIs”) during a one year follow-up, or in annual long term follow-up MRIs out to 3-4 years in all subjects.

First Phase I Safety Trial

After FDA authorization, Geron began the world’s first hES cell trial in patients with acute spinal cord injury in October 2010. The trial was an open label design conducted at seven U.S. neuro-trauma sites. Five subjects were treated in the trial, each of whom had a sub-acute functional complete thoracic (chest) spinal cord lesion. Patients enrolled in the study received a single dose of 2 x 10 ⁶ cells at the injury site between 7 and 14 days after injury. All subjects received temporary low dose immune suppression treatment for 60 days. The primary endpoint of the study was safety, with secondary endpoints of neurologic function assessed by five different validated measures of sensory and motor function. Each subject received a screening MRI, and if treated and entered into the treatment protocol, received 8 follow-up MRIs in the first year and multiple physical exams and laboratory testing. The patients then entered a separate protocol after the first year which will follow them intermittently over a period of 15 years.

As of March 2015, all five patients had completed their three year follow-up data set. No surgical complications during or post-surgery have been observed, and there have been no significant adverse events to date in any patient attributable to the AST-OPC1 product, the surgery to deliver the cells, or the immunosuppressive regimen. There have been five minor adverse events possibly related to AST-OPC1 such as transient fever and nerve pain. There have been no unexpected neurological changes to date, nor has there been evidence of adverse changes or cavitation on multiple MRIs. MRI results in four of the five subjects are consistent with prevention of lesion cavity formation. Immune monitoring, conducted in some of the patients, has not detected any evidence of immune responses to AST-OPC1, at time periods of up to one year post-transplant, an important clinical finding that was predicted by extensive in vitro immune testing of AST-OPC1 prior to initiating the trial.

Phase I/IIa Dose Escalation Study: Subjects with Neurologically Complete Cervical Spinal Cord Injuries

Based on the results of the completed Phase I trial of AST-OPC1 in thoracic spinal cord injury (“SCI”), Asterias obtained permission from the FDA in August 2014 to initiate a Phase I/IIa dose escalation trial in patients with complete cervical injuries. Asterias believes that there are both medical and scientific rationales for the transition to subjects with cervical SCI. Individuals with neurologically complete cervical SCI have an enormous unmet medical need due to the loss of function in all four limbs as well as multiple additional impairments such as impaired bowel and bladder function, reduced sensation, spasticity, sudden changes in blood pressure, deep vein thrombosis, sexual dysfunction, increased infections, skin pressure sores, and chronic pain. These individuals frequently require significant assistance for their care and activities of daily living. One recent published study estimated the lifetime costs of care for a person who suffers a cervical SCI at age 25 to be $4.2 million (Y. C. Cao and M. J. DeVivo (2009)).

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Scientifically, the injured cervical spinal cord is a much better location than the upper or middle thoracic spinal cord to test the safety and potential activity of AST-OPC1. This is partly due to the fact that damaged and demyelinated nerve axons in thoracic injuries need to regrow over several spinal segments in order to restore neural function. In contrast, damaged and demyelinated nerve axons in cervical injuries only need to regrow a short distance to restore neural function. Therefore, in cervical injuries, regeneration and/or repair of damaged axons mediated by AST-OPC1 could result in substantial re-innervation of cervical segments and thereby have a significant impact on upper extremity motor and/or sensory function.

The advantages of conducting clinical trials in patients with neurologically complete cervical SCI was recently further demonstrated by published studies done by J. D. Steeves and others together with the Spinal Cord Outcomes Partnership Endeavor (SCOPE). (Steeves et al, Top Spinal Cord Inj Rehabil 2012). These studies analyzed several large SCI databases and found that only 21% and 26% of people living with C4-C7 cervical sensorimotor complete spinal cord injury recovered two or more upper extremity motor levels at 24 and 48 weeks after injury, respectively. If this rate could be increased by 20 percentage points (i.e. to 41-46% of subjects recovering two or more upper extremity motor levels), the authors calculated that a trial could achieve sufficient statistical power with approximately 200 subjects enrolled. Those studies further showed that an improvement of two or more motor levels led to a statistically significant increase in the Spinal Cord Independence Measure (“SCIM”) self-care subscore, suggestive of a measurable association between improvement in neurological function and a clinically meaningful functional outcome.

Near-Term Product Development Strategy for AST-OPC1

Asterias initiated enrollment of the Phase I/IIa dose escalation trial of AST-OPC1 in patients with complete cervical injuries in March 2015. The trial is designed to assess safety and activity of escalating doses of AST-OPC1 in complete cervical SCI, the first targeted indication for AST-OPC1. The trial is an open-label, single-arm study in patients with sub-acute, C-5 to C-7, neurologically complete cervical SCI. These individuals have lost all sensation and movement below their injury site with severe paralysis of the upper and lower limbs. AST-OPC1 will be administered 14 to 30 days post-injury. Patients will be followed by neurological exams and imaging methods to assess the safety and activity of the product. Asterias is implementing an initiative to accelerate the current timelines for the AST-OPC1 clinical program by approximately six months in order to obtain safety and efficacy readouts more rapidly, and plans to seek FDA concurrence to increase the robustness of the proof of concept in the Phase I/IIa clinical trial by expanding enrollment from 13 patients to up to 40 patients. Asterias believes these changes will increase the statistical confidence of the safety and efficacy readouts, and position the product for potential accelerated regulatory approvals. Asterias has received a Strategic Partnerships Award grant from the California Institute for Regenerative Medicine, which provides $14.3 million of non-dilutive funding for the Phase I/IIa clinical trial and other product development activities for AST-OPC1.

In addition to the ongoing Phase I/IIa study, Asterias is conducting additional research and planning for subsequent trials and for other possible indications for the use of AST-OPC1. Ongoing and intended near term activities in the AST-OPC1 program encompass five main categories of activities: Regulatory; Clinical; Product Development; Quality; and Research, briefly summarized below.

Regulatory : These activities include, but are not limited to, preparing regulatory packages for each clinical site for submission to the FDA, preparing a briefing package to discuss ongoing product development activities with FDA staff, and amending the existing IND to enable expansion of the Phase I/IIa study from 13 to up to 40 patients.

Clinical : The activities include, but are not limited to (i) selecting and engaging clinical sites and vendors for the conduct of the clinical trial, (ii) training and qualifying neurosurgeons and clinical sites to identify and enroll subjects, to prepare the AST-OPC1 drug product at the clinical sites, and to conduct the trial according to the IND protocol, (iii) monitoring conduct of the study to ensure it is performed in accordance with the IND protocol, and (iv) consulting with investigators and key opinion leaders to further define clinical development plans for subsequent trials. We must also ensure an adequate supply chain of (1) the investigational drug product (AST-OPC1), (2) syringe positioning devices used to inject the AST-OPC1 cells, and (3) dose preparation kits used to thaw and prepare the AST-OPC1 cells for injection.

Product Development : Activities in this category will include work to improve the scale and efficiency of the manufacturing process for AST-OPC1 in preparation for larger future trials if the Phase I/IIa trial is successful.

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Quality : Asterias will be required to test the purity, stability and potency of the AST-OPC1 drug product used in the proposed trial and also to improve the assays currently used to define the product attributes as clinical trials of AST-OPC1 progress to later stage clinical studies .

Research : Asterias plans to try to develop novel methods to measure purity and potency of the AST-OPC1 drug product. Asterias plans to investigate possible improvements to the current methods used to manufacture AST-OPC1 and also to test AST-OPC1 in animal models of other neurodegenerative diseases to identify other potential clinical applications for the product, such as sub-cortical stroke.

AST-OPC1 CIRM Grant

Asterias will need to raise additional capital in order conduct the Phase I/IIa clinical trial and subsequent clinical trial and product development work. Asterias intends to apply for a supplementary CIRM grant to provide funding for the clinical trial expansion from 13 to up to 40 subjects, and may sell some of its BioTime common shares or additional shares of its own capital stock to finance the clinical trials, including later Phase trials.

AST-OPC1 for the treatment of multiple sclerosis and other diseases

In addition or as an alternative to spinal cord injury, Asterias may test the AST-OPC1 cells in other alternative indications, including multiple sclerosis (“MS”) and stroke. AST-OPC1 may be useful in the treatment of MS focal lesions, especially those in the spinal cord. Because of its functional properties, AST-OPC1 is a candidate for the repair of central nervous system lesions found in subjects with MS. In these lesions, axons are “demyelinated,” meaning that they have lost the sheaths that provide insulation for nerve conduction. In many cases, lesions located in the spinal cord of patients with MS are responsible for progressive clinical deterioration and a loss of ambulatory function. AST-OPC1 may have the potential to repair such spinal cord lesions and to reverse clinical deterioration associated with the lesions. Preclinical studies were conducted by Dr. Jeffrey Kocsis at Yale University. In these studies, Dr. Kocsis’ group created lesions resembling those seen in MS. AST-OPC1 was implanted seven days after induction of the lesion. Progressive remyelination of the lesion was observed which was durable for at least one year and was not observed in control animals that did not receive AST-OPC1. Asterias believes that research provides support for potential clinical testing of local delivery of AST-OPC1 in the spinal cord of patients with progressive MS, and we are exploring potential development paths to assess the safety and utility of AST-OPC1 in treating MS spinal cord lesions.

Additionally , a growing body of evidence supports the use of AST-OPC1 as a treatment for white matter stroke. Based upon the three documented mechanisms of action of AST-OPC1 – re-myelination, vascularization, and neurotrophin release – Asterias is collaborating with Dr. Thomas Carmichael at the University of California Los Angeles (UCLA) to study AST-OPC1 in animal models of white matter stroke in an attempt to generate proof of concept data for the application of AST-OPC1 in this large, unmet medical need.

AST-VAC2 and AST-VAC1, Technology for Potential New Cancer Vaccines

Asterias acquired from Geron two experimental therapeutic cancer vaccines designed to target cancer cells by targeting the cancer cell’s expression of telomerase. Telomerase is a ubiquitous cancer target, expressed at high levels in all human cancers but at very low levels or not at all, in normal human cells. The premise underlying these vaccines is to “teach” the patient’s own immune system to attack cancer cells while sparing other cells. This may be possible by repeatedly exposing the immune system to a substance (an antigen) that is either specifically expressed or over-expressed by cancer cells in a way that subsequently induces an immune response to any cells that express that antigen on their surface. Asterias believes that the characteristics of telomerase make it an ideal antigen for cancer vaccines.

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AST-VAC2: hES Cell-Derived Dendritic Cells

Dendritic cells can be likened to the quarterback of the immune system. They are antigen processing and presenting cells which are potent initiators of a cellular and humoral (antibody) immune response. Immature dendritic cells initiate an antigen specific suppressive response, such as would be required to terminate an abnormal autoimmune reaction as occurs in diseases like rheumatoid arthritis, and systemic lupus erythematosis. Mature dendritic cells, on the other hand, initiate active cellular and humoral immunity such as is required for immune targeting cancer and infectious disease. AST-VAC2 is a mature dendritic cell population that is produced from hES cells that can be modified with any antigen. There is a significant amount of global clinical literature that describes the use of mature dendritic cells isolated from peripheral blood samples and used to stimulate immune responses to a target antigen in various vaccination schemes, especially in various cancers (see our discussion of AST-VAC1, below). Although effective in generating an antigen specific immune response, and in several cases showing a significant clinical impact, the drawbacks of autologous peripheral blood-derived dendritic cell vaccination schemes such as AST-VAC1 are the limited supply of cells, the high cost of production, the long production time, and high patient to patient variability. As a second generation dendritic cell technology, AST-VAC2 is designed to specifically obviate theses drawbacks. AST-VAC2 can be produced in large quantities, similar to the other hES cell-based therapeutic cells. Additionally, because AST-VAC2 is an allogeneic cell, it is believed to be potentially more potent than an autologous dendritic cell, by means of partial antigen mismatch in the HLA system (Human Leukocyte Antigen  - markers of immune system types, akin to blood types) which may have a broad immunostimulatory effect similar to the adjuvants used in many vaccines.

Quality control can be standardized and the product can be shown to have uniform potency. Cost of goods is dramatically lower than autologous approaches, and the multi-dose batch production and cryo-preservation enables “on-demand” availability. It is generally agreed that partial HLA matching between dendritic cell and patient will be required to optimize efficacy and reduce side effects. The H1 hES cell line, qualified for human use by Geron, can provide a single HLA match on HLA-A2 (a specific HLA type) for approximately 47% of North American Caucasians. Addition of dendritic cells manufactured from one additional hES cell line will capture approximately 70% of North American Caucasians. The feasibility of AST-VAC2 differentiation from multiple hES cell lines has been demonstrated.

The differentiation process for AST-VAC2 has been optimized, the protocol is patent protected and clinically compliant (suitable for use in humans), and no serum or animal feeder cells are used. The production protocol is robust, achieving fully matured dendritic cells within 34 days. Four growth factors are used to drive hES cell differentiation to dendritic cells, and they are serially removed during the process: VEGF, SCF, BMP-4 and GMCSF. The hES cell-derived dendritic cells can be irradiated, which may shorten the animal studies required for IND submission, because irradiation prevents cell division of the injected AST-VAC2 dendritic cells, potentially eliminating concerns of growth of non-dendritic cells in the product. Lastly, cryo-preservation in low concentration of DMSO (Dimethyl Sulfoxide – a chemical used to stabilize cells during freezing) is feasible, thereby potentially enabling direct thaw and injection in the clinic.

AST-VAC2 cells have been extensively characterized in vitro and have high migratory and antigen presenting functionality with limited phagocytic activity (ability to engulf other cells – not a characteristic of dendritic cells), as would be expected for mature dendritic cells. They express high levels of all the appropriate surface markers defining them as mature human dendritic cells. AST-VAC2 cells are phenotypically similar to dendritic cells derived from peripheral blood mononuclear cells, further enabling them to be potentially used in lieu of peripheral blood derived dendritic cell vaccination protocols. AST-VAC2 and peripheral blood monocyte derived dendritic cells produce similar cytokine profiles (patterns of biologically active proteins) before and after antigen stimulation. AST-VAC2 has been shown to demonstrate functionality in chemotactic responses (cells are specifically attracted by certain molecules) and T-cell stimulation. AST-VAC2 in-vitro stimulates a TH-1 type cytokine production (T-helper 1 – a subtype of T cells) from lymphocytes in a mixed lymphocyte reaction in vitro (a test in which lymphocytes from two different individuals are mixed together to determine whether one individual "recognizes" the other's lymphocyte type) resulting in highly activated antigen restricted T-cell populations (lymphocytes that recognizes only one specific substance). In vitro studies have demonstrated that a single HLA match between AST-VAC2 cells and responding lymphocytes is required to stimulate antigen specific T-cell responses. AST-VAC2 has been shown to retain antigen presentation functionally (ability to "present" antigen on its surface to induce an immune response in another cell) after cryo-preservation. Irradiation of AST-VAC2 after introduction of antigen eliminates the proliferative capacity of the dendritic cells and removes any safety concerns due to the presence of any residual undifferentiated embryonic stem cells in the preparation. Irradiated and cryo-preserved AST-VAC2 cells are fully capable of presenting antigen to T-cells, resulting in antigen specific T-cell activation.

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A clinical protocol for the potential first-in-man safety study of AST-VAC2 has been outlined for non-small cell lung cancer (NSCLC) in collaboration with Cancer Research UK, which has agreed to conduct a Phase I/IIa clinical trial. Telomerase, a ubiquitous tumor antigen, would be the first antigen to be used with AST-VAC2. The intended first-in-man trial design includes treatment of both early stage (resected) and advanced stage NSCLC patients. Patients would initially be restricted to HLA-A 2.1. Three cohorts of patients would receive 6 vaccinations each; patients with resected disease would be treated at two different doses (1 x 10 ⁶ and 1 x 10 ⁷ cells per vaccination), advanced disease patients would be tested at the 1 x 10 ⁷ cells per vaccination dose.

The route of the administration would be intradermal. The primary endpoint would be to investigate the safety and toxicity of AST-VAC2, with secondary endpoints of immune response to the telomerase antigen introduced into AST-VAC2. The clinical and immunological monitoring would be achieved with a standard immune test such as ELISPOT and tetramer analysis (a biochemical assay to measure a specific antigen). Clinical responses would be monitored by rates of relapse in the resected disease setting, and by progression-free survival, and overall survival in the advanced disease patients.

In summary, AST-VAC2, a second generation dendritic cell technology, has been demonstrated to exhibit a mature dendritic cell phenotype of reproducibly characterized cellular composition. The cells activate allogenic T-cells and migrate in response to chemokine stimulation. AST-VAC2 stimulates a TH-1 type cytokine production and can present antigen delivered to the cells in either mRNA, or protein form. AST-VAC2 can stimulate Class 1 and Class 2 antigen specific T-cells (two types of antigens - type 1 is within a cell, type 2 is outside the cell) and has been shown to prime and stimulate naive antigen restricted T-cells even with only a single HLA-antigen match. Lastly, the feasibility of cryo-presentation and irradiation without alteration of AST-VAC2 function has been demonstrated. These attributes will potentially allow for a greater margin of safety in clinical studies utilizing AST-VAC2 and reduce the number of additional preclinical studies required for an IND submission. Specifically, long-term cell survival and engraftment studies may not be required for an AST-VAC2 IND submission. The first clinical trials of AST-VAC2 using telomerase as the antigen are planned and if the outcomes of those trials demonstrate safety and activity, Asterias may examine the potential of AST-VAC2 with telomerase in other cancer indications, or the use of AST-VAC2 to deliver other antigens.

Near-term Product Development Strategy for AST-VAC2

During September 2014, Asterias entered 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, pursuant to which CRUK has agreed to fund Phase I/IIa clinical development of Asterias’ AST-VAC2 product candidate. Asterias will, at its own cost, complete process development and manufacturing scale-up of the AST-VAC2 manufacturing process and will transfer the resulting cGMP-compatible process to CRUK. CRUK will, at its own cost, manufacture the clinical grade AST-VAC2 and will carry out the Phase I/IIa clinical trial of AST-VAC2 in cancer patients both resected early-stage and advanced forms of lung cancer. Asterias will have an exclusive first option to obtain a license to use the data from the clinical trial. If Asterias exercises that option it will be obligated to make payments upon the execution of the License Agreement, upon the achievement of various milestones, and then royalties on sales of products, and if Asterias sublicenses product development or commercialization rights to a third party, Asterias would pay CRT a share of any sublicense revenues that Asterias receives from the third party, with CRT’s share varying from a high of 40% in the case of a sublicense entered into prior to commencement of a Phase II clinical trial, to substantially lower rates in the case of a sublicense entered into at various later stages of clinical development but prior to completion of a Phase III clinical trial, and as low as 7.5% in the case of a sublicense entered into after completion of a Phase III clinical trial. In connection with the CRUK Agreement, Asterias sublicensed to CRUK for use in the clinical trials and product manufacturing process certain patents that have been licensed or sublicensed to Asterias by third parties. Asterias would also be obligated to make payments to those licensors and sublicensors upon the achievement of various milestones, and then royalties on sales of products if AST-VAC2 is successfully developed and commercialized.

Asterias is completing scale up and technology transfer of the manufacturing process for the AST-VAC2 drug product to CRUK. Following completion of the technology transfer, CRUK will initiate cGMP production to support the first-in-man clinical study of AST-VAC2 cancer immunotherapy in NSCLC. Asterias is also developing and transferring to CRUK the quality, purity and potency assays needed for release testing of clinical grade AST-VAC2, and the immunological monitoring assays that will be used to measure patient immune responses in the clinical trial. CRUK will bear primary responsibility for performing the cGMP manufacturing of clinical grade AST-VAC2, filing the regulatory dossier, and for conducting the Phase I/IIa study of AST-VAC2 in NSCLC. Asterias will continue to serve in a collaborative and advisory role with CRUK throughout this process. Upon completion of the Phase I/IIa study, Asterias will have an exclusive first option to acquire the data generated in the trial.

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Telomerase Therapeutic Vaccine (AST-VAC1)

Asterias acquired from Geron rights to its immunological cancer therapy product AST-VAC1, including the IND for clinical trials conducted by Geron and the related drug master files. AST-VAC1 is an autologous product (using cells that come from the treated patient) consisting of mature antigen-presenting dendritic cells pulsed with RNA for the protein component of human telomerase (“hTERT”) and a portion of a lysosomal targeting signal ("LAMP"). LAMP directs the telomerase RNA to the lysosome, the subcellular organelle that directs the RNA to a particular part of the cell membrane. AST-VAC1 is injected into the patient’s skin; and from there the dendritic cells travel to the lymph nodes and instruct cytotoxic T-cells (T-cells that "kill" other cells) to kill tumor cells that express telomerase on their surface.

A Geron-sponsored Phase I/II clinical trial of AST-VAC1 was conducted at six U.S. medical centers in patients with acute myelogenous leukemia (“AML”) in complete clinical remission. The trial examined the safety and feasibility of a prime-boost vaccination regimen (an initial injection ("prime") followed by multiple additional injections ("boost")) to generate and extend the duration of telomerase immunity. Geron evaluated the immune response to AST-VAC1 and explored the effects of vaccination on minimal residual disease and relapse rates. This trial completed patient enrollment in December 2009.

In the Phase I/II clinical trial, patients with AML entered the study in their first or second complete remission. Prior to or shortly after completing consolidation chemotherapy, patients underwent leukapheresis (collection of white blood cells) to harvest normal peripheral blood mononuclear (white blood) cells for vaccine manufacture. AST-VAC1 was produced at a centralized manufacturing facility from the patient-specific leukapheresis harvests. Patient mononuclear cells were differentiated in culture to immature dendritic cells, which were transfected with messenger RNA encoding hTERT and LAMP. Transfected dendritic cells were matured, aliquoted and cryopreserved. AST-VAC1 was released for patient dosing contingent on several product specifications that included identity of mature dendritic cells, confirmation of positive transfection with hTERT, number of viable cells per dose after thawing, and product sterility.

AST-VAC1 was successfully manufactured and released in 24 out of the 33 patients enrolled in the study. These results reflect the variability of patient derived starting material that is often associated with an autologous, patient-specific product.

Three patients progressed prior to vaccination, therefore only 21 of the 24 patients for whom AST-VAC1 was successfully manufactured and released received vaccine. The 21 patients were vaccinated weekly for six weeks with AST-VAC1 administered intra-dermally, followed by a non-treatment period of four weeks, and then subsequent boost injections every other week for 12 weeks. Monthly extended boost injections were then administered until the vaccine product supply was depleted or the patient relapsed.

Twenty-one patients received AST-VAC1 in the study, including 19 in clinical remission and two in early relapse. Of the 19 patients in clinical remission, eight were considered at intermediate risk for relapse and eleven were at high risk for relapse as predicted by their cytogenetics (gene expression pattern in the AML cells), FAB type (French-American-British classification of AML into 8 subtypes), or because they were in second clinical remission. Thirteen out of 21 patients in the trial remained in clinical remission at a median duration of follow-up from first vaccination of 13.2 months. At 12 months after vaccination with AST-VAC1, estimated disease-free survival was 81% for patients at high-risk of relapse (95% CI: 42-95%). The confidence interval (CI) of 95% means that the true value is between 42 and 95 with a probability of 95%. Previously published data on this patient population suggests that approximately 45% of patients would normally remain free from relapse at this stage. AST-VAC1 was found to have a favorable safety and tolerability profile in this study over multiple vaccinations, with up to 32 serial vaccinations administered (median = 17). Idiopathic thrombocytopenic purpura (bleeding into the skin caused by low platelets in blood) (grade 3-4) was reported in one patient. Other toxicities (grade 1-2) included rash or headache. These data from the Phase I/II trial were presented at the December 2010 American Society of Hematology annual meeting.

Expression of WT-1, a marker of minimal residual disease, was sequentially analyzed by qPCR (quantitative polymerase chain reaction – a method to identify DNA modules) in 21 patients. The 13 patients who remain in clinical remission remain negative for WT-1, while six of seven with clinical relapse were WT-1 positive. One patient was positive for WT-1 prior to vaccination with AST-VAC1 and became WT-1 negative during the course of vaccination. This patient relapsed after 30 months.

Patient immune response to telomerase after vaccination with AST-VAC1 was evaluated using a test called the enzyme-linked immunosorbent spot (ELISPOT) assay to measure the presence of activated T-cells specific to hTERT. Positive immune responses were detected in 55% of patients.

Asterias has performed follow-up data collection on the 21 patients treated in the study at the six participating U.S. medical centers to determine the long term effects, if any, of the AST-VAC1 administration on remission duration and disease-free survival. Asterias is in the process of preparing a manuscript describing its findings, and intends to submit an abstract for presentation at the American Society of Clinical Oncology meeting in June.

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		% of Total Revenues for the Year Ending December 31,
Licensee		2014				2013				2012
Hospira			10	%			11	%			30	%
CJ Health			3	%			3	%			8	%
Stemcell Technologies			9	%			-	%			-	%
Summit			-	%			35	%			10	%

		Revenues for Year Ending December 31,
Geographic Area		2014					2013					2012
Domestic		$	1,519,387				$	1,606,945				$	1,183,638
Asia			51,224					978,004					258,041
Total Revenues		$	1,570,611				$	2,584,949				$	1,441,679