CARLSBAD, California – November 15, 2011 - International Stem Cell Corporation (ISCO) (OTCBB:ISCO) today announced financial results for the three-month and nine-month periods ended September 30, 2011. ISCO is a development-stage biotechnology company that created, patented and is commercializing a powerful new stem cell technology called parthenogenesis which promises to advance significantly the field of regenerative medicine.
ISCO reported revenue of $0.84 million for the quarter ended September 30, 2011, a 141% increase from the same period of the prior year. For the nine months ended September 30, 2011, the Company reported revenue of $3.47 million, a year-over-year increase of 227%. The increases in revenue was driven by strong sales from the initial launch of ISCO’s wholly-owned subsidiary Lifeline Skin Care (LSC), which commenced operations in the fourth quarter of 2010. In addition, steady growth in sales from ISCO’s other wholly-owned subsidiary, Lifeline Cell Technology (LCT), contributed to the increases in revenues for both periods.
The Company continued to invest in the development of new technologies, products and channels of distribution. For the three months ended September 30, 2011, development expenses, excluding cost of sales, were $3.60 million, an increase of 15% compared to the third quarter of 2010, reflecting increased R&D activities on therapeutic programs and new product development for both subsidiaries. Sales and marketing expenses related to our skin care products, partially offset by a reduction in general and administration expenses, also contributed to the increase in development expenses.
For the nine months ended September 30, 2011, development expenses, excluding cost of sales, were $10.77 million, an increase of 30% when compared with the prior year period. The increase is attributed primarily to increased research activities on therapeutic products and product development programs for LSC and LCT, increased stock-based compensation expense, increased headcount and higher general corporate expenses coupled with increased sales and marketing expenses related to our skin care products.
Dr. Andrey Semechkin, co-Chairman and CEO, commented “We are pleased with the rapid growth in sales of our two subsidiaries, LSC and LCT. Together, these business units are providing much-needed capital to help support our growth as well as the research leading to the development of new stem cell technologies and products.” Kurt May, President and COO, noted “Our focus continues to be on maximizing the performance of our operating subsidiaries, advancing the development and commercialization of our therapeutic products and strengthening our organization and operating systems to accommodate our anticipated rapid and significant growth.”
Third Quarter 2011 Highlights:
Important developments and milestones for International Stem Cell in the third quarter included:
-- Continuing to solidify its leadership team with the addition of Linh Nguyen as ISCO’s new Chief Financial Officer. Further, the Board of Directors elevated Kurt May to President and Chief Operating Officer and Dr. Semechkin to co-Chairman of the Board and Chief Executive Officer.
-- Renewing the marketing agreement with John Mauldin to promote its Lifeline Skin Care products and commenced a new sales channel to resorts and destination spas.
-- Lifeline Cell Technology began selling products through new distribution channels in Japan, Korea, Singapore, Malaysia and Indonesia, expanding its business throughout Asia.
-- ISCO scientists successfully completed the first series of preclinical studies designed to support the application of neuronal cells derived from hpSCs. These experiments were designed to demonstrate that the derived neuronal cells were able to survive in mouse brains without giving rise to tumors.
International Stem Cell Corporation is focused on the therapeutic applications of human parthenogenetic stem cells (hpSCs) and the development and commercialization of cell-based research and cosmetic products. ISCO's core technology, parthenogenesis, results in the creation of pluripotent human stem cells from unfertilized oocytes (eggs). hpSCs avoid ethical issues associated with the use or destruction of viable human embryos. ISCO scientists have created the first parthenogenic, homozygous stem cell line that can be a source of therapeutic cells for hundreds of millions of individuals of differing genders, ages and racial background with minimal immune rejection after transplantation. hpSCs offer the potential to create the first true stem cell bank, UniStemCell™. ISCO also produces and markets specialized cells and growth media for therapeutic research worldwide through its subsidiary Lifeline Cell Technology, and cell-based skin care products through its subsidiary Lifeline Skin Care. More information is available at www.internationalstemcell.com.
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Forward-looking Statements
Statements pertaining to anticipated developments, anticipated sales growth and other opportunities for the company and its subsidiaries, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as "will," "believes," "plans," "anticipates," "expects," "estimates,") should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of potential products and the management of collaborations, regulatory approvals, need and ability to obtain future capital, application of capital resources among competing uses, and maintenance of intellectual property rights. Actual results may differ materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the many uncertainties that affect the company's business, particularly those mentioned in the cautionary statements found in the company's Securities and Exchange Commission filings. The company disclaims any intent or obligation to update forward-looking statements.
Contacts:
International Stem Cell Corporation
Andrey Semechkin, CEO & Co-Chairman
760-940-6383
International Stem Cell Corporation
Kurt May, President & COO
760-710-3294
International Stem Cell Corporation
Linh Nguyen, CFO
760-940-6383
Lippert/Heilshorn & Associates
Don Markley
310-691-7100
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1) The Company restated its financial statements for the year ended December 31, 2010 and the quarter ended March 31, 2011. See explanatory note after cover page of this 10-Q and Note 1 to the unaudited condensed consolidated financial statements. See accompanying notes to the unaudited condensed consolidated financial statements
