Friday, November 9, 2012

International Stem Cell Corp. (ISCO) Reports Greater Revenues, Lower Expenses, Stronger Cash Position

Today before the opening bell, International Stem Cell Corp., a California-based biotechnology company focused on therapeutic and research products, announced its financial results for the three months ended September 30, 2012.

Revenues for the three-month period were $1.19 million, up significantly from the $0.84 million reported for the same period in 2011. Sales for Lifeline Skin Care (LSC) and Lifeline Cell Technology (LCT) increased by 46% and 37%, respectively. According to the press release, LSC and LCT accounted for 44% and 56% of total revenue in the three months ended September 30, 2012, compared to 43% and 57%, respectively, for the same period a year earlier.

Research and development (R&D) expenses totaled $0.90 million for the three months ended September 30, 2012, down from $1.13 million for the same period in 2011. The decrease was primarily attributed to lower stock-based compensation expense, lower personnel-related spending, and lower consulting expenses, partially offset by higher stem cell line research and testing expenses and higher laboratory expenses associated with the Parkinson’s disease program.

The company continues to invest in its sales and marketing infrastructure, spending $0.48 million in the third quarter. Higher than last year, marketing expenses were increased to further promote and build awareness of the Lifeline Skin Care brand and branded products. Notably, general and administrative expenses were down 26% compared to Q3 2011, as a result of higher operational efficiency.

Cash and cash equivalents totaled $2.38 million at September 30, 2012 compared to $1.34 million as of December 31, 2011, due primarily to two financing transactions totaling approximately $7.03 million completed in the first three months of 2012.

“We have made excellent progress in our therapeutic development programs, being able to start our non-human primate study in our Parkinson’s disease program earlier than anticipated, and we remain on track to publish the results in the first half of next year,” stated Dr. Andrey Semechkin, ISCO’s CEO and Co-Chairman. “In addition, our results for the third quarter reflect good progress by LSC and LCT both in terms of growing sales and implementing their strategies. Particularly pleasing is LSC’s continued revenue growth as they aim to diversify their sales channels, and LCT’s strong quarter on quarter performance. General and administrative expenses continued to decrease reflecting our increased focus on cost containment. Looking ahead to next year, we anticipate our R&D expenses to increase further as we expand our pharmacology and safety studies and our Parkinson’s program moves closer to IND filing in early 2014.”

Q3 2012 Highlights:

• The company was granted an important patent for the liver disease program. The patent represents a new method of creating pure populations of definitive endoderm, precursor cells to liver and pancreas cells, from human pluripotent stem cells in an efficient, cost effective and scalable manner.
• Commenced rodent studies to measure the efficacy of candidate neuronal cells for the treatment of Parkinson’s disease.
• Announced the addition of two new regenerative medicine experts to our list of scientific advisors. Dr. Evan Snyder, the director of Sanford-Burnham’s stem cell program and research center, and one of the pioneers of using stem cells to treat Parkinson’s disease (PD), and Dr. Rosario Sánchez-Pernaute, a Harvard trained scientist, who has shown how parthenogenetic stem cells can be used in treating the symptoms of PD.
• Lifeline Cell Technology began selling its primary human cell and optimized media products through Fisher Scientific’s online catalog as an Encompass Preferred Supplier. Fisher Scientific is the world’s largest supplier to the life science industry with sales of approximately $12 billion, $424 million of which came from e-catalog sales in 2011.
• Lifeline Skin Care signed an agreement with Sinopharm Group to distribute LSC’s anti-aging skin care products in China and made the first shipment. Sales of cosmetic products in mainland China is estimated to be approximately $8 billion and growing by over 10% per annum.

In less than two hours, International Stem Cell Corp. will be hosting a conference call. Those wishing to participate should dial 877-317-6776 shortly before 11:00am ET. International callers should dial 412-317-6776. Once connected, participants should provide the conference ID 10020806. To access the call via webcast, visit http://webcast.mzvaluemonitor.com/Home/Login/630.

A replay of the conference call will be available through end date: November 26, 2012 at 9:00 am ET. If anyone is unable to join at 11:00am ET this morning, they should dial 877-344-7529 and enter the conference ID 10020806 when they have time. International callers should dial 412-317-0088, and then use the same conference ID number.

For more information, visit www.internationalstemcell.com

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