The August 9, 2013, investor conference call presented by International Stem Cell provided more than the company's 3-month and 6-month financial results, significant though those results were. Quarterly revenues were up by 38% over the second quarter in 2012, and gross margin jumped to 77%, up 600 basis points. But significant information regarding the company's moves over the past several months was also presented, along with expectations.
Simon Craw, Executive Vice President of Business Development, summarized a number of key points:
•ISCO continued to move forward with their Parkinson's disease program, the company's top priority at this point, and they are still planning for an IND filing in 2014. During the 2nd quarter, they had what Craw called a "pre-pre" IND meeting with the FDA's office of tissues, cellular, and gene therapy. These early meetings are an opportunity to get off-the-record advice regarding pre-clinical research, and help lay the groundwork for a smooth pre-IND meeting, ensuring no surprises. For ISCO's Parkinson's disease program, they got guidance from the FDA regarding specific questions pertaining to the intended manufacturing process for creating the human neural stem cells to be used, along with the design of their associated primate and rodent studies. Subsequent to this pre-pre meeting, ISCO began the large scale manufacturing of the human neural stem cells and associated cell banking. The company anticipates IND filing sometime in the middle of next year.
•In the 2nd quarter, ISCO also gave results of their neuronal cell in vivo safety and efficacy studies, with presentations at the American Society of Gene & Cell Therapy meeting in Salt Lake City, UT, and the International Society of Stem Cell Research in Boston, MA. These studies show that implanting human neuronal cells, created using the ISCO proprietary platform, into the brains of primates and rodents has a good safety profile, and increases the levels of dopamine in the brain, plus may also offer a potential neuroprotective benefit. This work is now being prepared for publication in a peer-reviewed scientific journal.
•Regarding ISCO's metabolic liver disease program, using their hepatocyte like cells, they have been working to scale up the manufacturing process for the cells, along the same model as used to create the neuronal cells used in their Parkinson's disease program.
•With respect to ISCO's cornea program, this is a pre-clinical stage program, developing human corneas from stem cells primarily for eventual use in the developing world where it is especially needed. ISCO is the first company in the world to have successfully created these 3-dimensional corneal tissue constructs from stem cells, and they are now optimizing their physical and optical properties to make them suitable for transplantation.
Dr. Craw emphasized that one of the things making ISCO a special company is their proprietary platform for creating stem cells using parthenogenesis, and that clinical success in any one of the above programs will validate the approach and unlock tremendous therapeutic and partnering opportunities. This clearly differentiates ISCO from other stem cell companies.
He also commented on ISCO's two commercial operations, Lifeline Skin Care and Lifeline Cell Technologies, are responsible for the significant increase in revenue as well as improvement in gross margins. Over the past months, ISCO has invested in growing business in Asia, and much of these improvements are the result of those efforts. The company plans to continue expanding in Asia, but also plans to have more U.S. focused sales people to help grow the domestic market share more quickly. The reduced cash burn rate and improved gross margins is due in part to the company's use of larger batch sizes and more efficient manufacturing processes, but also because of the company's ability to promote their higher margin products.
Replay of the conference call is available through August 16, 2013, by calling 877-344-7529, or 412-317-0888 internationally.
For more information, visit InternationalStemCell.com
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