SOURCE: International Stem Cell Corporation

International Stem Cell Corporation

August 18, 2015 08:30 ET

International Stem Cell Corporation Announces Record Net Income in Second Quarter 2015

CARLSBAD, CA--(Marketwired - August 18, 2015) - International Stem Cell Corporation (OTCQB: ISCOD) (www.internationalstemcell.com) ("ISCO" or "the Company"), a California-based biotechnology company developing novel stem cell-based therapies and biomedical products, today provided a business update and announced operating results for the three and six months ended June 30, 2015.

"Stable increase in revenues from our biomedical businesses, ability to generate net income as a parent company and progress in demonstrating the safety and efficacy of our stem cells for the treatment of Parkinson's disease and stroke position us as a leader in regenerative medicine field," stated Andrey Semechkin, Ph.D., CEO and Co-Chairman of ISCO. "We look forward to receiving Australian TGA authorization to start clinical trials. We expect to dose the first Parkinson's disease patients in this trial in Q4 2015."

Second Quarter 2015 Business Highlights

  • Demonstrated in animal models that the Company's proprietary human parthenogenetic neural stem cells (hpNSCs) can significantly reduce neurological dysfunction after a stroke.
  • Published the results of two proof of concept studies that demonstrate the safety and efficacy of the Company's stem cell treatment of Parkinson's disease in both non-human primate and rodent animal models in the journal "Cell Transplantation".
  • Presented data on the Parkinson's disease program at the American Academy Of Neurology and International Society for Cellular Therapy annual meetings.
  • Lifeline Skin Care completed development and testing of two new products, both of which have launched in Q3 of 2015.

Subsequent to the quarter end, in July, 2015, the Company completed a nine month safety study of the hpNSCs demonstrating safety elements for regulatory approval of the upcoming Parkinson's disease clinical trial, and submitted the results to the Australian TGA.

Second Quarter 2015 Financial Highlights

  • Total revenue for the second quarter of 2015 was $1.82 million, an increase of $227,000, or 14%, compared to the second quarter in 2014; Lifeline Skin Care sales for the second quarter of 2015 increased 18%, or $138,000, and Lifeline Cell Technology sales increased 11%, or $89,000, compared to the second quarter in 2014.
  • Profit margin for the second quarter of 2015 was $1.3 million, or 72%, compared to profit margin of $1.2 million, or 74%, for the second quarter of 2014.
  • Net income for the second quarter of 2015 was $723,000, compared to net loss of $4.4 million for the second quarter in 2014. We expect our net operating loss to continue declining quarter over quarter through 2015 year-end as our research and development expenses are expected to continue decreasing due to the completion of multiple preclinical studies during the three months ended June 30, 2015.

Year-to-Date Financial Highlights:

  • Total revenue for the six months ended June 30, 2015 was $3.44 million, an increase of $200,000, or 6%, compared to the six months ended June 30, 2014; Lifeline Skin Care sales for the six months ended June 30, 2015 increased 11%, or $176,000, and Lifeline Cell Technology sales increased 1%, or $25,000, compared to the six months ended June 30, 2014.
  • Profit margin for the six months ended June 30, 2015 was $2.5 million, or 73%, compared to profit margin of $2.4 million, or 74%, for the six months ended June 30, 2014.
  • Net loss for the six months ended June 30, 2015 was $564,000 compared to net loss of $5.8 million for the six months ended June 30, 2014. We expect our net operating loss to continue declining quarter over quarter through 2015 year-end as our research and development expenses are expected to continue decreasing due to the completion of multiple preclinical studies during the six months ended June 30, 2015.

Balance Sheet Highlights:

  • The Company ended the second quarter of 2015 with cash balance of $554,000.
  • Stockholders' equity totaled $805,000 as of June 30, 2015.

About International Stem Cell Corporation

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 parthenogenetic, 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 (www.lifelinecelltech.com), and stem cell-based skin care products through its subsidiary Lifeline Skin Care (www.lifelineskincare.com). More information is available at www.internationalstemcell.com.

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Safe harbor statement

Statements pertaining to anticipated developments, expected clinical studies (including timing and results), progress of research and development, 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, 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.

 
International Stem Cell Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data)
       
   June 30,   December 31,  
   2015   2014  
Assets  (Unaudited)      
 Cash and cash equivalents  $554   $1,111  
 Accounts receivable, net of allowance for doubtful accounts of $18 and $19 at June 30, 2015 and December 31, 2014, respectively   361    453  
 Inventory, net   1,759    1,517  
 Prepaid expenses and other current assets   574    485  
 Restricted cash   50    50  
  Total current assets   3,298    3,616  
 Property and equipment, net   546    714  
 Intangible assets, net   2,980    2,795  
 Deposits and other assets   61    54  
  Total assets  $6,885   $7,179  
Liabilities and Stockholders' Equity           
 Accounts payable  $580   $670  
 Accrued liabilities   1,311    1,711  
 Related party payable   2,285    11  
 Advances   250    250  
 Fair value of warrant liability   1,654    4,216  
  Total current liabilities   6,080    6,858  
Commitments and contingencies           
Stockholders' Equity           
Series B Convertible Preferred stock, $0.001 par value, 5,000,000 shares authorized, 300,000 issued and outstanding, with liquidation preferences of $430 and $421 at June 30, 2015 and December 31, 2014, respectively   -    -  
Series D Convertible Preferred stock, $0.001 par value, 50 shares authorized, 43 issued and outstanding, with liquidation preference of $4,320   -    -  
Series G Convertible Preferred stock, $0.001 par value, 5,000,000 shares authorized, issued and outstanding, with liquidation preference of $5,000   5    5  
Series H-1 Convertible Preferred stock, $0.001 par value, 2,000 shares authorized, 377 and 1,482 issued and outstanding at June 30, 2015 and December 31, 2014, respectively   -    -  
Series H-2 Convertible Preferred stock, $0.001 par value, 500 shares authorized, issued and Outstanding   -    -  
Common stock, $0.001 par value, 720,000,000 shares authorized, 1,828,162 and 1,596,195 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively (1)   2    2  
Additional paid-in capital   96,111    95,063  
Accumulated deficit   (95,313 )  (94,749 )
 Total stockholders' equity   805    321  
 Total liabilities and stockholders' equity  $6,885   $7,179  
            
(1) All common shares reported have been adjusted for the 150-for-1 reverse stock split effected on July 29, 2015           
         
 
International Stem Cell Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
       
   Three Months Ended   Six Months Ended  
   June 30,   June 30,  
   2015   2014   2015   2014  
Revenues                 
 Product sales  $1,815   $1,588   $3,437   $3,237  
  Total revenue   1,815    1,588    3,437    3,237  
Expenses                     
 Cost of sales   516    409    934    848  
 Research and development   567    1,411    1,685    2,369  
 Selling and marketing   602    679    1,256    1,348  
 General and administrative   1,067    1,332    2,465    2,980  
  Total expenses   2,752    3,831    6,340    7,545  
Loss from operating activities   (937 )  (2,243 )  (2,903 )  (4,308 )
Other income (expense)                     
 Change in fair value of warrant liability   1,702    1,271    2,381    1,894  
 Warrant exchange inducement expense   -    (3,445 )  -    (3,445 )
 Interest expense   (2 )  (1 )  (3 )  (2 )
 Warrant modification expense   (40 )  -    (40 )  -  
 Sublease income   -    8    1    16  
  Total other income (expense), net   1,660    (2,167 )  2,339    (1,537 )
Income (loss) before income taxes   723    (4,410 )  (564 )  (5,845 )
Provision for income taxes   -    -    -    -  
  Net income (loss)  $723   $(4,410 ) $(564 ) $(5,845 )
Net income (loss) applicable to common stockholders  $723   $(4,410 ) $(564 ) $(5,845 )
Net income (loss) per common share-basic (1)  $0.40   $(3.88 ) $(0.33 ) $(5.41 )
Net income (loss) per common share-diluted (1)  $(0.52 ) $(3.88 ) $(1.61 ) $(5.41 )
Weighted average shares-basic (1)   1,800    1,138    1,719    1,081  
Weighted average shares-diluted (1)   1,881    1,138    1,829    1,081  
                      
(1) All common shares and per share amounts reported have been adjusted for the 150-for-1 reverse stock split effected on July 29, 2015                     

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