David Nakasone - IR Aditya Mohanty - Co-CEO and Director Michael West - Co-CEO, President and Director Russell Skibsted - CFO

Kevin DeGeeter - Ladenburg Thalmann & Co. Reni Benjamin - Raymond James & Associates Keay Nakae - Chardan Capital Markets Patrick Lin - Primarius Capital

Greetings, and welcome to BioTime, Inc. Third Quarter 2017 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. A replay of the conference call will be available for 7 business days beginning about 2 hours after the conclusion of the live call by calling toll free from U.S. or Canada at 1844-512-2921. International callers, 1412-317-6671. User conference ID number or pin 136-71848. Additionally, the archived webcast will be available on the Events and Presentations page of the Investors and Media section on the company's website. It is now my pleasure to turn the conference over to your host, David Nakasone. Thank you. You may begin.

Thank you, operator, and good afternoon, everyone. Thank you for joining us today for BioTime's investor conference call and webcast to review the company's results for the third quarter of 2017 as well as recent corporate developments. There will be a replay of this call, which will be available approximately 2 hours after the call's conclusion and will remain available for 7 days. The operator will provide the replay information at the end of today's call. With us today at corporate headquarters at Alameda, California are: Co-Chief Executive Officer, Adi Mohanty, Co-Chief Executive Officer Dr. Michael West; and Chief Financial Officer, Russell Skibsted. Each executive will make prepared remarks and then we will take questions from our covering analysts and institutional holders. Before we get started, we would like to remind you that during the course of this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company's filings with the SEC, including, without limitation, to the company's Forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, risks inherent in the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital and maintenance of intellectual property rights. And with that, I'd like to turn the call over to Adi Mohanty, Co-Chief Executive Officer of BioTime.

Thanks, David, and thank you everyone for joining our call today. Over the last year, we have focused on 3 main objectives, clinical progress, simplification and unlocking value with the intention of transforming BioTime into a commercial organization with a powerful pipeline and a solid balance sheet. We took many steps toward this transformation in the last quarter, and we're very pleased with our progress. Over the last few months, BioTime secured more than $40 million of funding. This included a raise of nearly $29 million through an equity financing with good - great investors and attractive terms as well as a $10 million equity financing for AgeX and $3.6 million of grants. These recent cash infusions provide us sufficient capital for our currently planned activities into the middle of 2019. Compared to many small biotech companies, we think BioTime has a lower risk profile because of our product and platform diversification. Further, we think that our products and platforms themselves should be viewed as having a lower risk profile because our cell replacement therapies are more similar to transplants rather than systemically-administered molecular drugs. As we have said in the past, transplants have a high success rate of approximately 80% to 90%, whereas approximately 90% of molecular drugs fail or are discarded in development. Often, these drugs fail because they have unintended or unexpected side effects. Our products do not fit that model. Also, we have multiple trials with our fluid potent cell therapy platform and all are showing encouraging results so far. Our cell delivery platform demonstrated strong data and met the primary endpoint in the pivotal trial. We believe that more investors are beginning to recognize these factors, and this was evident by the quality of new investors that participated in our recent financing, along with our existing institutional investors. With a $10 million raise for AgeX, we started it on its path towards independence. This achievement had the added benefit of reducing BioTime spending on these programs by approximately $5 million annually. A further benefit to the BioTime shareholder is the expected distribution of AgeX and subsequent public trading of its shares, which may be completed early second quarter 2018. Let's now turn to clinical program update, starting with Renevia. Earlier this year, we announced that we met the primary endpoints in our EU pivotal trial. We've been working towards filing Renevia for final regulatory approval in Europe. In preparation for CE Mark submission, we identified an opportunity to enhance Renevia's packaging that would make Renevia easier and faster for physicians to use. This will reduce our cost of goods and improve physicians practice economics, which we believe will likely accelerate adoption. As a result of this packaging enhancement, we're delaying our CE Mark submission by a couple of months and now anticipate filing Renevia for approval in early 2018. We've been working closely with the regulatory agencies, and we do not expect this minor delay to impact the overall timing of approval and continue to expect approval and launch in the second half of 2018. In parallel to these activities, we continue to be in active discussions with potential commercial partners in Europe. The strong data from our pivotal trial plus the long-term performance at the 12- and 18-month time points provide strong support for ongoing business development discussions. As we have discussed previously, we see the European Renevia trial as a gateway trial into a broader market opportunity like cosmetic surgery for facial aesthetics. With the strong clinical data and what will be considered a challenging patient population, we feel more confident about the potential product performance in the broader patient population. We've already started executing our on-label expansion plans and recently announced the enrollment of the first patient in an investigator-led trial in the U.S. This facial aesthetics trial is being conducted by Dr. Joel Aronowitz, who is a leading Beverly Hills plastic surgeon. This is a clinical trial for facial volume enhancement in a broad patient population. Dr. Aronowitz has expressed his enthusiasm about the potential of achieving a consistent, long-lasting volume retention while maintaining a natural look. As this trial is an open-label trial, we expect to be able to share data on an ongoing basis. We look forward to sharing these data beginning next year. We believe we can build upon this investigator-led trial in combination with the EU trial data to expand the potential label for Renevia and enter new geographies, including the U.S. We're in the process of building the data package that will be used with the FDA. We plan to submit our package later this year and expect to meet with them in Q1 of 2018. The facial aesthetics market is estimated to be over $5 billion and growing. As we have previously explained, it is substantially a cash market, so we're not going to depend on the payer reimbursement in order to drive widespread acceptance and use. Turning now to our RPE cell transplant program, OpRegen, which is being studied in dry-AMD. Our OpRegen clinical program for dry-AMD continues to advance in an ongoing Phase I/IIa clinical trial. The initial data from this trial remains promising. We have seen, in multiple patients, even past 12 months, that the transplanted cells have shown signs of engraftment. Furthermore, we have seen in some patients even the photoreceptor layer appears to be thickening. We believe this may be a sign of biological response. The product appears to be well-tolerated with no product-related severe adverse events reported to date. The latest available data from this trial will be presented at the upcoming American Academy of Ophthalmology meeting being held in New Orleans. Our podium presentation is scheduled for next Tuesday, November 14. The first 2 cohorts enrolled very late-stage patients where the primary focus was safety. We've already been able to reduce the length of immunosuppression given to patients based on these early cohorts. In cohort 3, we're refining the surgical procedure. In cohort 4, in addition to safety, we hope to see some early signs of functional improvement in one or more outcome measures such as best corrected visual acuity, micro-perimetry, low light and/or reading speed. If the safety profile continues as it has, we plan to treat patients at earlier stages of this disease in cohort 4. By enrolling patients in earlier stages of the disease, we hope to address this terrible disease before it consumes their vision. Our trial sites in California are now fully operational and are screening patients for treatment. We're also in the process of working with additional sites, which we expect to be online in the coming months. As the trial expands into U.S. sites, our DSMB, the committee that monitors the trial, have evolved to include 2 new U.S. thought leaders in the ophthalmology space: Dr. Lin and Dr. Kim [ph]. Dr. Lin is currently a Professor of Ophthalmology at the Byers Eye Institute at Stanford University School of Medicine, and serves as principal investigator on multiple clinical trials. While Dr. Kim is a Professor of Ophthalmology at the Medical College of Wisconsin. OpRegen and dry-AMD represents one of the largest unmet medical need and market opportunities. As you're probably aware, AMD affects more than 30 million people worldwide, and approximately 1.6 million people are nearly diagnosed annually in the U.S. alone. AMD is the leading cause of blindness in people over the age of 60. Approximately 90% of all AMD patients suffer from the dry form, for which there are no approved therapies. Let me briefly touch on our affiliates and subsidiaries. Asterias recently published additional data on an investigational program for its spinal cord injury treatment, AST-OPC1. Following its previously reported 9-month results and DSMB support to continue the study, the company recently reported positive 12-month data. Also, the FDA granted the company's request for AST-OPC1 to be designated a regenerative medicine advanced therapy under the 21st Century Cures Act. The company, also received the necessary approvals to initiate the first in human clinical trial of its lung cancer immunotherapy, AST-VAC2 in the United Kingdom. Asterias will report third quarter results in November 14. Turning now to OncoCyte, which continued its progress with its liquid biopsy test for breast and lung cancers. OncoCyte CLIA lab was approved by the state of California, and they continue preparations towards the commercial launch. OncoCyte will also report third quarter results on November 14. Both of our lead programs, Renevia and OpRegen have major milestones upcoming, including approval and launch of Renevia in Europe, label expansion studies for Renevia, expansion of our Renevia studies in the U.S., multiple data readouts from the OpRegen trial and potential partnerships along the way. Now let me turn the call over to Mike West to discuss AgeX. Mike?

Thank you, Adi. AgeX Therapeutics is focused on treating the maladies of aging. We believe that aging is the demographic trend of our time. The 76 million-strong surge of baby boomers in the United States reflects the similar worldwide tsunami of aging patients, entering their doctor's offices with complaints of chronic, degenerative conditions that rob them and their families of the joy of life and generate a long-term drain on their personal as well as governmental financial resources. So, addressing the chronic and degenerative diseases of aging is one of the largest potential markets in coming years. It is estimated that in the coming decade, the potential therapeutic market represented by this age wave will exceed $1 trillion annually. As a result, from a business standpoint, aging has finally come of age. So why do we think we have something special at AgeX Therapeutics in this regard? Why do you see our company as a significant leader in this space? First and foremost, AgeX is focused on the root causes of aging itself, not its downstream symptoms. As an example, we can consider the mortality associated with age-related heart disease, the leading cause of death in the United States today. In the case of heart failure, we could either treat the root cause of the disease by restoring lost heart muscle, and thereby, potentially curing the disease, or we could take drugs that target downstream, secondary complications, such as the buildup of fluid in the lungs or ankles. Managing heart failure by targeting the downstream sequelae benefits patients, no doubt. But because the root cause is not addressed, the disease progressively worsens, it persists and leads to years of increasing disability and more invasive procedures. In other words, high, out-of-control health care expenditures. Ultimately, the most strategic product to develop is a cost-effective therapy that targets the root causes of the disease. This ultimately leads the greatest customer satisfaction, and provided that the therapy is cost-effective, addresses the expense of chronic disability as well. The reason that we are so energized by the AgeX opportunities is that we believe that many tissues in the human body age via common mechanism that can therefore be targeted by a common technology. Our platform is based on cellular immortality and regenerative biology. By cellular immortality, we refer to the fact that cells that express sufficient levels of the telomerase gene are capable of replicating without limit. That is to say, they do not age, or as we say, they're immortal. By regenerative biology, we refer to new technologies that allow, for the first time, the ability to rebuild the tissues of the human body with young cells. Lastly, we have a well-thought-up plan to aggressively advance the commercial development of this science for some of the largest markets in age-related disease. Our product, AGEX-BAT1 are young regenerative cells designed to correct metabolic imbalances in aging that are associated with type 2 diabetes, coronary disease and obesity, indications with significant market potential. Similarly, our product, AGEX-VASC1, is designed to regenerate vascular support for ischemic tissues not getting sufficient blood flow. Examples of such a product would be heart disease, the number one cause of age-related mortality in the United States. And lastly, there is our new technology called induced Tissue Regeneration, or as we say, iTR. iTR is, in our opinion, a revolution in the making in biomedicine. The human body has a very limited capacity to rebuild tissue after injury. For example, after a heart attack or a stroke, the heart or brain cannot regrow. Instead, there's a scarring over the wound. This is seen in many tissues in the adult body, most visible, of course, is the scarring of skin rather than through regeneration after a laceration or a burn. Some nonhuman animals have a profound capacity to regrow injured tissues. We believe that this capacity can be induced in humans, hence the term induced Tissue Regeneration. At AgeX, we are performing foundational research on iTR. We plan to publish much of this research in peer-reviewed scientific publications in the future. ITR is are truly remarkable science that tends to unify the previously diverse observations about aging and even provides important, new insights into cancer, which can be thought of as regeneration out of control. Since the financing of AgeX, we've already performed over 200 experiments designed to translate iTR to a practical pharmaceutical formulation that could be applied to injured tissues in the body like the skin, heart or brain to induce scarless regeneration and reversing certain molecular markers of aging. This research has already lead to promising results and we plan to publish these results in peer-reviewed scientific publications and patent applications. We'll advance this product development using a combination of funds received from our recent AgeX equity financing, corporate partnerships and nondilutive grant support. So, in summary, we believe that the product development at AgeX has the potential to unlock value for our shareholders. The timing of the awakening of the scientific and biotechnology community to the significant commercial opportunities associated with aging couldn't have been better-timed. The technology of AgeX has the potential to lead in this exciting trend with powerful technologies aimed at the root mechanisms of aging itself, and we look forward to telling you of our progress in the coming months. I will now turn the call over to Russell Skibsted to review our financials for the third quarter.

Thank you, Mike. I'd like to take a moment to discuss the progress, plan and timing of our previously announced plans to make AgeX a public company. As Adi mentioned, AgeX closed private financing that valued AgeX at approximately $68 million. This not only sets AgeX on a path to independence as a publicly traded company, but has the added benefit of saving BioTime approximately $5 million annually on these programs. BioTime owns approximately 85% of the outstanding shares of AgeX with a valuation of $58 million. In September, we announced that our board approved the distribution of some or all of the shares of AgeX owned by BioTime to BioTime shareholders. We plan to have this distribution completed early in the second quarter of 2018. We are working with investment banks and other financial institutions to finalize and implement the strategy and activities for taking AgeX public, which may include a tax-free distribution of BioTime's AgeX shares to the BioTime shareholders. For the time being, BioTime will continue to consolidate AgeX financial results with BioTime's, as is required by GAAP. We plan to also continue to provide the non-GAAP table at the end of our earnings releases to help investors better understand ours and AgeX's financials. Once BioTime's ownership of AgeX drops below 50%, we will then deconsolidate the AgeX financials just as we've previously deconsolidated the Asterias and OncoCyte financials once our ownership of those companies was below 50%. I'd now like to review some financial highlights from the quarter. BioTime's consolidated cash and cash equivalents totaled approximately $17 million as of September 30th, which compared to approximately $15 million as of June 30th. Just after the completion of the quarter, we closed a public offering of BioTime's stock with net proceeds of about $27 million. This would've brought our total cash position to approximately $44 million had we completed the raise just a couple weeks earlier. In addition, we had marketable securities with our ownership positions in Asterias and OncoCyte, which represent an aggregate of market value of about $140 million based on yesterday's closing stock price. We were also awarded, as Adi mentioned, 2 grants during the quarter that totaled about $3.6 million. I'd like to take a minute to discuss our recent public offering. In general, the last couple of years has been a difficult time in Wall Street for small biotech companies and lately, even for some large biotech companies. This is another reason why we are so pleased with the success of our recent financing and the quality of the investors included in this round. Good, fundamental biotech investors understand that companies like ours are making long-term investments in products that could have tremendous impact on people's lives. In return, there's a potential for enormous benefit for investors compared to other types of investment. We are pleased to say that these were the types of investors that joined us last month. As a reminder, GAAP requires us to consolidate the financial entities where we own over 50% of the stock, even when those entities are standalone, self-funded companies. To help address this, we have included at the end of our earnings press release, a non-GAAP table that breaks out noncash expenses and operating expenses by entity. We believe this will help investors better understand BioTime's actual operating expenses and cash burn. Please keep in mind, when reviewing the table though, that you have to take into consideration the grants awarded, which are not included in operating expenses in order to get a closer estimate of our cash burn. During the third quarter, BioTime's non-GAAP operating expenses were approximately $6.5 million, subtracting the $3.6 million in grants, which if annualized, suggests an operating burn of about $5.5 million a quarter. Based on our Q3 burn and current planned activities, we expect the decline in the quarterly operating burn over the next several quarters. Now I'll turn the call back to Adi.

Thank you, Russel. So, these past few months have been very productive for BioTime. We secured over $40 million through public offerings and grants, which will take us through many significant milestones through the middle of 2019. Our 2 lead programs are progressing through the clinic. We're closer to becoming a commercial company with the anticipated CE Mark approval of Renevia in Europe next year. In addition to being well-funded and the clinical progress we've made to date, I want to leave you with this: BioTime is a unique biotech company. We're not dependent on any single program or product, but have many shops on goal. One of these programs, Renevia, has the potential to be commercialized in less than 12 months. We have a diversified company with products that span many geographies rather than being dependent on a single country or region. We have both cash paid and reimbursed products in our pipelines, so reimbursement concerns are less critical to the outlook of our business. Our products are more like transplants for specific parts of the body and are locally administered, which compared to many systemic drugs and therapies, reduces the potential likelihood of side effects and increases the potential for success. Many drugs and therapies fail because of their side effect profile. We have successfully unlocked value for our shareholders through the creation and distribution of companies like OncoCyte and plan to unlock further value with the pending distribution of AgeX. Over the last year, BioTime has done a very good job of executing on its stated objectives, and I believe is poised to become better recognized by the investment community. Now operator, we're ready for questions.

[Operator Instructions]. Our first question is from Kevin DeGeeter with Ladenburg.

A few questions on Renevia. Can you better characterize your comment on the changes to the packaging that you referred to that may have an opportunity to lower COGS in Europe? Generally speaking, what are the nature of the changes?

Kevin, yes, sure. I think it's a pretty simple packaging change. We currently have 4 vials that we put in a package, and that takes a little extra time for prep when the physician receives it. And we had a 3-vial version that was also being used, and we weren't sure we could include the 3-vial version in the filing. But the interaction with the agency went pretty well, and they said, "We think it'd be better if you include this 3-vial version," which, well, for us is better, too. So, it's easier for the physician, cheaper for cost of goods and, apparently, even likely easier for the regulatory agencies. So, we thought it made perfect sense to go ahead and make that a part of the filing now, especially given that it might actually make the approval process easier and the expected approval timing remains the same to be able to have approval and launch in the second half of next year.

Got it. So, in terms of preparation for launch timing, any revisions to your thoughts for when it makes sense to seek to either move more aggressively towards establishing relationships with the distributor or make any new investments in kind of more direct medical education if you deem that to be appropriate?

So, we have definitely started to do a fair amount of that work now. We are still on the same timeline we had before, which is second half of next year to have commercial launch and have sales of Renevia before the end of next year. So that second half is pretty important. We have been talking to potential partners, and we think that sometime in the next 3 to 4 months is about a good time to get some type of an arrangement within - with a potential partner. But in the meantime, we have started to switch our thinking towards that commercial thinking that you're just talking about. So, there's several upcoming conferences or opportunities for us to start sharing data with the target population of physicians. I can talk about 4 in specific, right? There's IFATS, the federation of adipose society - international federation of adipose society. That meeting is coming up November 30th, where it will be a very data-driven Renevia-02 pivotal data presentation. But then it quickly follows up with a January, February - I think February 1, January 30-February 1, very large conference in Paris that has about 8,000 aesthetics physicians that - where we intend to start talking about the commercial viability opportunity and move from the data towards that commercial orientation. And so that next - that first half of next year will definitely be more focused on aggressively thinking and talking about commercial adoption and those other types of commercial activities for Renevia.

Again, one more quick one for me then I'll get back in queue. With regard upcoming discussions with FDA with regard to U.S. halfway for Renevia. Any differences with regard to - obviously, patient population are just more generally, when one thinks about those and CMC between the potential patho in the U.S. and the regulatory filing that's now clarified for European markets.

So, if I take that question - it's a pretty big, long, all-encompassing question. So, let me try to answer some of it, and hopefully, we'll cover...

Maybe we'll narrow it down to more - I'm thinking more kind of CMC packaging dose.

Okay. Perfect. Thank you. So, on the CMC side, absolutely, we don't see a difference between what we would be giving to the FDA versus the now enhanced version that we're filing to the Europeans. So that CMC package, the manufacturing process, the stability data, all the different pieces that go into CMC for the U.S., we expect that to be huge amount of leverage from the Europeans that we can use with the FDA. And that kind of how it also extends, the safety data that we have generated and a lot of the other analytical data that we have generated will be, we believe, we can leverage that with the FDA. So yes, there's a lot of common overlap.

Our next question is from Ren Benjamin with Raymond James.

I guess just to follow-up a little bit on Kevin's questions. Can you talk maybe a little bit more - and starting off with Renevia, talk a little bit more about the commercial strategy? I understand you want to get partners, but are these partners for each geographical area in each specific country? Are these partners going to be marketing? Or will you be and they're just distributors? And what's the ideal sort of deal, if you will, that you would like to see?

Well, I could say the ideal deal is one that has enough zeros. But I'll tell you, so absolutely, we've done a lot of thinking around this. And I think I've mentioned some before, but let me help. Our focus initially is the European commercial launch of Renevia, which is coming up. And in that specific market, at this time, we think that having a geographic-specific, sort of European-specific partner is the best option for us. That gives us the opportunity to then find the right person in Asia. We've been having some conversations there. And the idea here is also that, we think, given all our knowledge at how we have been working towards the expansion of the label, beyond HIV to cosmetic use or general facial volume loss use, we think that we can take this product a little further if we control that development just for a little bit longer. And that little bit longer has already become shorter time, because that little bit longer included things like the U.S. trial that we've started in California that is generating data on just facial volume enhancement. So, getting a little bit more data on facial volume enhancement, getting clarity at the U.S. development path, allows us then to also look at maybe a complete Renevia partnership across the globe. That's an opportunity we want to be able to have the option to do. So, in Europe, where we will start with looking at very specifically European partner, we do have the 2 choices: out-license or distribution partnership. I think my bias would be maybe that a distribution partnership is better. It allows us control. It allows us flexibility. We can get out of it and then we can choose either to do a larger licensing globally or more licensing regionally. It leaves a lot of flexibility. However, we still have the option of licensing just for Europe. So, these should evolve very quickly over the next few months, and hopefully then, we can be much more specific and give you that answer more clearly.

And how should we be thinking about - if everything goes according to plan and you launch in the second half of 2018, how should we be thinking about the commercial opportunity? Should we just be focused on sort of the lipoatrophy market? Is there potential for expanded or further use in aesthetics? How are you guys thinking about it from a European perspective?

Yes, it's a good question. We're trying to be careful. We have done some market surveys and we've done some commercial analysis in Europe. We also don't want to get too far ahead of the analysis without the appropriate partner having theirs and being able to combine the expertise of a potential partner in Europe. But clearly, even very early on, we can see that there is a pathway to expanding the label in Europe in very short order. There are a couple of pathways: One, a device in Europe can often be approved for performance and not necessarily for indication. So, there is an option; that's possible, and we'll pursue that beyond just the specific indication, but just for performance, that allows its use in a broader space. The data we're generating in California can also be used to supplement and file with agencies to try and do expansion of label. Just like we can leverage the data in Europe and the U.S., we can leverage the data in U.S. and Europe. So, we think that the label expansion is going to be in very short order, could but happen much faster than I think what people are expecting to do repeat trials in a very long, lengthy label expansion. We - I want to be careful about how specific I get right now. As some of this data comes off in the next few months, I think we can give you a much clearer path. But we think it's in very short order.

Got it. And then just can you give us an update as to the IST trial. What - how is the progress there? Do you expect enrollment to be kind of slow? Or is this something that you expect to ramp pretty quickly? And I guess just related to that, can you just help us think about Premvia versus Renevia? And just why we might not be able to take this IST data and just start marketing Premvia?

Ren, that was a good one. You're talking about Renevia and Premvia, right? So, for everybody else, Premvia is currently 510(k) cleared, which it is approved in the U.S., but is approved for wound management. We had, at a previous time, decided not to launch in the wound management market given the kind of data we had and the kind of effort it would take to fight in that wound care market not as lucrative as a facial aesthetics or a cosmetics market. Renevia is - you should think of Renevia as kind of like the brand name that we're using in Europe, and Premvia being the brand name being used in the U.S. They are essentially the same product. So Renevia is currently approved in the U.S. for wound management; could be used for wound management. As a company, it would be very difficult for me to say why people couldn't use it today, so I want to be very careful about what the possibilities are of Premvia being used in the U.S. today, but it is approved for wound management, available. The IST trial being done in California is using this 510(k)-cleared Premvia with patients for facial cosmetic use. So, Dr. Aronowitz in Beverly Hills is using Premvia. He's already treated a few patients, and I think it'll go pretty fast, right? I mean Beverly Hills, what is this, about an $8,000, $10,000 procedure normally being offered for free. We don't think it will take very long to get it recruited. He's already treated a few patients. He is one site, and this is a clinical trial, so it can't go as fast as I think. I was thinking it could get done very quickly, but we do have to make sure we follow the protocol to collect all the data. So that's what's slowing it down a little bit. But it will be pretty fast. We'll get the data. It's open-label. Will be able to start seeing some of that data. Our expectation is that the February 1 or end of January meeting that I mentioned in Paris, that we should start already sharing some of the data from the first few patients in the first few months with Dr. Aronowitz's trial. And this is relevant because there are plenty of fat-grafting papers to publish out there. I mean, I don't want to go through citing papers. But there are several papers that have been published. And in the published papers, fat grafting shows that fat grafts dropped to almost 50% in the first 3 months. And so, for us to be able to show 3-month data could be meaningful.

Got it. And just one final one for me. The OpRegen results that we are expecting at ARVO - sorry, the academy of ophthalmology.

AAO.

So, can you just talk a little bit about, is it just longer follow-up on the cohorts that we've seen where we see new data and just kind of helps set expectations in terms of safety and efficacy.

Yes. So, it will be longer timing data. It will be a little more than the first of cohorts because we've already treated patients in cohort 3. It's early data but we'll include that, too. But at this point, I believe it will be mostly around safety, maybe a little bit around biological activity. But those first 3 cohorts are really I think we've mentioned, this before, patients who have 2,400 - I mean, really blind patients. And what we would like to see is continued safety profile, engraftment, survival of cells and the ability for us to say, yes, we're allowed to move in cohort 4 to earlier patients, like 20/80, 20/100, those types of patients is what we'd like to be treating because that's where the target population is, and that's where we will likely see functional benefit, that's where would like to treat patients. And so as - if this data next week shows, yes, we still have safety, we have long-term engraftment, we have cell survival, we have - I don't know if it's 7 or 8 patients, but whatever number of patients from cohort 1, 2 and 3. And heads towards getting this cohort completed, cohort 3 completed this year like we said, and starting cohort 4 the beginning of next year, that, to me, is going to be great.

Our next question is from Keay Nakae with Chardan Capital Markets.

Two questions. First before we - maybe if I missed this, I apologize, but where is Dr. Llull at with his investigator-led study over in Spain?

Good question. So, you're right, we have - Dr. Llull is also starting a new trial. So, Dr. Llull was our principal investigator for our pivotal trial in Europe. That pivotal trial is winding down. We're still following those patients long-term, and so he is continuing to track those patients. But he has got now - gone through the regulatory approval process to start his investigator-initiated trial. And he has not yet treated a patient, but we're getting ready to treat patients in his trial very soon. So, things are progressing well in - with his filing and approval, and he should be getting ready to treat patients very soon in his trial in Europe.

And again, he's looking to use higher volumes in the new clinical study?

Well, so actually, Keay, what Dr. Aronowitz is doing - so let me help - in our 8 EU pivotal trial for Renevia, we used 5 ccs per cheek. We were pretty consistent and careful trying to make sure we were being very safe. In the trial in California, there really is not a volume limit. And in fact, I don't know, because it's open-label, maybe I'll say it. I know the first patient was something in the range of 50 ccs. So, we're already doing very large volumes in the U.S. And so, Dr. Llull is also going to do larger volume, but he will be looking at different aspects of this - of the patient response. With California, Dr. Aronowitz is looking at the volume retention, the performance of the engraft - of the engrafted material over the - whatever, 6-month period that we're planning to track.

Okay. And then just a question on the recognized grant revenue in Q3. What part of that was - if not all of it, was from the IIA? And then of the $2 million award that you announced back in August, what part of that is yet to be received?

Good question, Keay. $1.2 million of that was from the IIA grant, and none of it was received in the third quarter, but we have received some of it in the fourth quarter. And none of it was from the SBIR grant that we mentioned.

Okay. So just so to be clear, Russell, of what you reported, can - you received it in Q4?

Yes.

Our next question is from Patrick Lin with Primarius Capital.

Great update so far. And my question is to get a little bit more clarity here on the value of your marketable securities and your programs. Specifically, when you factor in the ownership BioTime has in Asterias, OncoCyte and then you have the cash in the balance sheet. It doesn't seem like the programs are really given much value that BioTime is looking at. And that's not even factoring in the value of AgeX in terms of what it might be on the spinout. So, I'm just curious, why do you think the stock price has not factored in how these other programs are undervalued as far as the internal?

Thank you, Patrick. That is something we think about every day, and I wonder, like, look I know the investors and analysts are much better equipped to do this calculation and explain how this works. But my golly, sometimes, I think it's crazy that people still don't quite understand. I think Russell walk through our assets, right? It's something like $140 million of AgeX - I mean, sorry, Asterias and OncoCyte, $58 million of AgeX, and that $200 million range. So how are people then valuing the rest of the pipeline? And even if you forget everything other than OpRegen, Renevia, right? Renevia, getting ready to be commercial, is a multibillion-dollar market that we probably will change the paradigm of fat grafting. OpRegen, which is probably addressing one of the largest pharmaceutical opportunities ever, might be with 20 million, 30 million people. In the clinic, progressing well, one getting ready to be commercialized and approved. I don't know, maybe Russell, if you have any specific numbers, we can help. But really, we would love to get these - the experts out there to do some of this analysis. What we can do is work on the fundamentals and keep getting the story out there so people truly recognize everything that is in our company. And I think that's been some of it, right? More and more people learning and understanding what's in the company, hopefully, is going to help, but education in different ways.

Yes, Patrick. I mean, you bring up a really interesting point, as Adi mentioned. And the value of the holdings just in the public companies ourselves, $140 million, is about $1.11 in our stock price. And then when you add AgeX, that's another $0.46. So suddenly, you're looking at over $1.50 per share in value of these entities. I think other than the challenging market for small biotech - small cap biotechs that I mentioned earlier, I still - I think Adi and I still think that people, just the market as a whole, still doesn't quite understand BioTime. One of the things, when Adi and I were out meeting investors, especially for those that are new to the story, the thing that they mentioned the most frequently that they're surprised about is the value of the public company stock ownership we have. Like, I had no idea about that, And the only thing I can think of as the reason for that is because for so many years, Asterias and OncoCyte, these are companies that we created and then got them public because we owned such a large percentage of them, we were consolidating them. And one of the challenges when we consolidate something is that we treat the financials as if they're our own, which means we can't show that we actually own the stock. And so, if you look at our balance sheet, all you would see is - our financial statements. You just see the cash burn, but you wouldn't actually see the value of the stock that we could theoretically go out and sell. So now, we have recently deconsolidated both OncoCyte and Asterias. So, if you look at the balance sheet now, you do see it listed under equity method investment, and it shows the value on our balance sheet. But this is relatively recent. And so, I think it just takes time for that type of - it's not buried, it's public. But it's the kind of information that's not just standing out there saying hey with a big bright yellow highlighter on it. It's something that it takes a lot of communication, it takes people time to look at. But I think we've gone a long way over the last 1.5 years to actually make these financials more clear. And hopefully, with the non-GAAP table that we've been putting at the end of the press release, the earnings press release, that'll also go a long way to helping make our financials a little more understandable to investors. I hope that answers your question.

Right. So, you're saying after the deconsolidation and the balance sheet and the cash flow, it will be easier for investors to kind of analyze what the net value is for your core program, right?

Yes, and it would be great for the analysts to look at that.

Ladies and gentlemen, we've reached the end of the question-and-answer session. At this time, I'd like to turn the call back to management for closing comments.

Yes, this is Adi. Thank you all for joining us, and we look forward to sharing - it's a pretty exciting time for us, so we're really looking forward to coming back and giving you an update again. Thank you.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.