International Stem Cell Corp. (ISCO-OTCQB), a biotechnology company developing novel stem cell-based therapies and biomedical products, provided a business update and announced financial results for the three and nine months ended September 30, 2013.
Third Quarter 2013 Operation Highlights
During the quarter ended September 30, 2013, the Company achieved significant milestones. ISCO announced a clinical research agreement with Duke University for the evaluation of ISCO's stem cell-derived neural stem cells for the treatment of Parkinson's disease (PD), providing the Company with complementary skills, resources, and expertise to advance its PD program. In addition, ISCO presented the results of the first PD primate study, examining the benefits of implanting neural stem cells into primates with chemically induced PD symptoms, at the American Neurological Association 2013 Annual Meeting.
The Company also convened a key opinion leader meeting, including leading experts in the field of cell therapy and movement disorders, to obtain feedback and guidance for the planned 2014 submission of an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for its PD program.
Financial Results for the Third Quarter 2013 and First Nine Months of 2013
Revenue for the three months ended September 30, 2013, was a record $1.67 million, a 41% increase compared to $1.19 million for the corresponding period in 2012, with gross margin remaining stable at 73%. Sales for Lifeline Skin Care (LSC) and Lifeline Cell Technology (LCT) during this period increased by 54% and 30%, respectively. Revenue for the nine months ended September 30, 2013, was $4.41 million, approximately 33% higher than the corresponding period in 2012, and almost equal to those reported for the entire year of 2012.
The Company's focus on using its commercial business revenues to support its core therapeutic activities was highlighted by revenue growth as well as cost reduction and improved efficiency efforts. Lower personnel-related expenses, stock-based compensation expenses, and corporate support expenses, coupled with improvements in efficiency in manufacturing and supply chain management, resulted in a decline in general and administrative expenses for the three months ended September 30, 2013, of 13% versus same period a year ago, as well as a reduction of net cash used in operating cash flows (which exclude capital expenditures and patent costs), to approximately $0.47 million per month, compared to $0.57 million per month the corresponding period of 2012.
As of September 30, 2013, ISCO had cash and cash equivalents of $1.79 million following receiving net proceeds of approximately $2.64 million through a July 2013 public offering, and an additional $242,000 derived from partial exercise of the Series B Warrants issued as part of the 2013 Registered Offering. For further details of these transactions, please refer to the Company’s 10-Q filed on November 13, 2013.
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.
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