International Stem Cell Corporation (OTCQB: ISCO) has its
fingers in many pies. It develops and markets products in three different
lines, and two of those businesses turn a profit. Its biomedical division is
the most profitable. For the nine months ending September 30, 2015, the net
operating profit on biomedics was $920,000 on sales of $2,925,000, a healthy
return on sales (ROS) of 31%. ROS measures a company’s operational efficiency,
and ISCO’s ROS shows it’s getting better at what it does. Its ROS for 2015 was
a vast improvement on the comparable period in 2014, when ROS for the biomedics
division was 23%. For the nine months to September 30, 2014, ISCO’s biomedics
division had net income of $616,000 on revenues of $2,681,000. ISCO’s biomedics
business tells a happy story all around. Sales in 2015 improved by 9% over 2014
sales while operating costs fell by 3%, and net operating profit for 2015 in
biomedics rose an astonishing 49% over the comparable period in 2014.
The cheerful news extends to ISCO’s cosmetics division.
Sales in cosmetics for 2015 were $2,648,000, five percent over 2014 sales of
$2,519,000. Net operating profit, or ROS, on cosmetics almost tripled, going
from 4% in 2014 to 11% in 2015. Once again, ISCO has managed to cut costs and
increase revenues. Costs in 2015 for cosmetics fell by 2%. The cosmetics
division generated a net income of $287,000, which represents a whopping 163%
increase in net income over the similar period in 2014.
Together, these two profitable enterprises have increased
ISCO’s 2015 bottom line by $482,000, a nice 66% increase over 2014. Using a
very conservative price to sales ratio of 10 would value ISCO’s biomedics and
cosmetics divisions together at about $56 million.
However, ISCO is not resting on its laurels. The company is
plowing ahead with its innovative line of therapeutics based on a potent new
stem cell technology that employs parthenogenesis. Parthenogenesis is a type of
reproduction that takes place in the absence of fertilization. The company’s
new stem cell technology holds the promise of advancing significantly the field
of regenerative medicine by addressing the problem of immune-rejection. Stem
cells are able to divide in a process of self-renewal in which one cell gives
birth to two or more. They are also able to differentiate into cells of a
different type so that a stem cell originating from one part of the body may
differentiate into a type that is similar to the cells in another part of the
body.
At the top of ISCO’s list is Parkinson’s disease.
Parkinson’s is characterized by noticeable tremors of the hands. The
Parkinson’s Disease Foundation estimates that approximately 60,000 Americans
are diagnosed with Parkinson’s disease each year, a number that may not reflect
the thousands of cases that go undetected. About one million Americans live
with the disease, and an estimated seven to ten million people worldwide are
living with Parkinson’s disease. ISCO’s UniStemCell for Parkinson’s has
completed the Food & Drug Administration (FDA)’s Investigational New Drug
(IND) phase, which means it will soon begin clinical trials. Clinical trials
occur when the effects of new treatments on humans are studied.
International Stem Cell Corporation is a company with a
bright future. It has two money-making divisions that continue to show
increasing profitability. There’s little doubt that its foray into therapeutics
will be equally successful.
For more information, visit www.internationalstemcell.com
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