Yesterday, we released a Quarterly Update on International Stem Cell Corporation (ISCO-OTC). This 12-page report is a follow-up to our 72-page and very in-depth Executive Informational Overview® published in August. Full text of the newly issued Update is available here.
ISCO is focused on the therapeutic applications of human parthenogenetic stem cells (hpSCs) to treat diseases of the brain, liver, and the eye. ISCO’s proprietary technology is based on the creation of stem cells through parthenogenesis, a form of asexual reproduction that involves the stimulation of a human oocyte (egg) to start the cell division process without actual fertilization. Since the eggs are not fertilized, no viable human embryo is created nor destroyed for the generation of ISCO’s hpSC lines. The Company believes that these therapeutic stem cells avoid the safety, economic, and ethical concerns inherent with existing stem cell technologies.
ISCO has focused its therapeutic efforts in three markets where cell therapy has been clinically proven, but where there is a shortage of safe cells or tissue: (1) Parkinson’s disease (PD); (2) inherited metabolic liver diseases; and (3) corneal blindness. ISCO is also developing a stem cell bank, UniStemCell™, and produces and markets specialized cells and growth media for therapeutic research through its subsidiary Lifeline Cell Technology, and stem cell-based skin care products through its subsidiary Lifeline Skin Care.
Key Points about ISCO’s Business:
To date, ISCO has created 15 hpSC lines, including the first clinical-grade hpSC lines believed to meet FDA regulations. The Company has published and patented methods to generate pure, well-characterized populations of both neural cells and hepatocyte-like cells as well as the differentiation of 3D corneal constructs.
Following positive preclinical results demonstrating the therapeutic benefit and safety of ISCO’s stem cell-derived neuronal cells in its PD program, the Company has initiated IND-enabling pharmacology and toxicology non-human primate studies, with preliminary results expected by the end of 2013.
On August 21, 2013, ISCO entered into a master clinical research agreement with Duke University to conduct clinical trials research in PD using the Company’s neural stem cell product.
Financial Results for the Second Quarter 2013 and First Six Months of 2013
ISCO is considered a development-stage entity with no revenue generated from its principal operations in therapeutic research and development. However, the Company does generate revenues from the operations of its subsidiaries, Lifeline Cell Technology and Lifeline Skin Care, which support ISCO’s primary therapeutic research and development efforts.
For the second quarter 2013 (ended June 30, 2013), ISCO reported revenues of $1.46 million, a 38% increase over the same quarter a year ago. Revenues were generated by the Company’s subsidiaries as follows: $708,000 from Lifeline Skin Care and $748,000 from Lifeline Cell Technology. ISCO’s sales for the first six months of 2013 were $2.74 million, up considerably from the $2.13 million in sales generated in the first six months of 2012.
The Company’s net loss in the second quarter 2013 was $2.20 million versus a net loss of $2.48 million during the same period of 2012. For the first six months of 2013, the Company reported a net loss of $3.91 million versus a net loss of $5.15 million during the same period of 2012. The improvement in both periods is mainly due to increased revenues and decreased general and administrative (G&A) expenses.
Financing Activity—July 2013
Subsequent to the end of the second quarter 2013, ISCO raised approximately $2.5 million in net proceeds through a public offering of 20 million units at $0.15 per unit. Each unit consisted of one share of ISCO’s common stock and one Series A warrant to purchase one share of its common stock at a price of $0.15 per share. In addition, ISCO also offered up to 20 million Series B warrants exercisable at a price of $0.15 for one share of ISCO’s common stock and one Series A warrant. Dr. Andrey Semechkin, ISCO’s co-chairman and chief executive officer, purchased 5,998,999 units and 5,998,999 Series B warrants, and Dr. Ruslan Semechkin, ISCO’s vice president of research and development, purchased 667,667 units and 667,667 Series B warrants.