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International Stem Cell Corporation Announces 2016 Fourth Quarter and Year-End Results

CARLSBAD, Calif., April 05, 2017 (GLOBE NEWSWIRE) -- International Stem Cell Corporation (OTCQB:ISCO) (www.internationalstemcell.com) ("ISCO" or "the Company"), a California-based clinical stage biotechnology company developing novel stem cell-based therapies and biomedical products, today provided a business update and announced fourth quarter and year-end financial results for the period ended December 31, 2016.

“In 2016 we made a significant progress in the field of neurology. We transplanted human parthenogenetic stem cells-derived neural stem cells into patients with Parkinson’s disease and we also were able to demonstrate a significant therapeutic potential of our cells in traumatic brain injury animal model,” stated Andrey Semechkin, Ph.D., CEO and Co-Chairman of ISCO. “In the area of ISCO commercial subsidiaries, substantial attention was dedicated to logistics and manufacturing processes optimization. Additionally, we have significantly expanded Lifeline Skin Care and Lifeline Cell Technology product lines. I believe that based on our recent achievements, we are well positioned for ISCO’s future growth.”

FY 2016 Financial highlights:

  • $7.2 million in revenue for the year ended December 31, 2016, a decrease of 5% compared to 2015.
  • Combined operating income for the year ended December 31, 2016 from our two wholly owned revenue generating subsidiaries, Lifeline Cell Technology and Lifeline Skin Care, was $1.3 million;
  • Gross margin remained unchanged at 73% year-over-year;
  • Average net cash used in operating activities was $350,000 per month for the year ended December 31, 2016;

Q4 Corporate Highlights

  • The second patient in the clinical trial for Parkinson's Disease was successfully transplanted with 30,000,000 ISC-hpNSC® cells;
  • Demonstrated that ISC-hpNSC® can improve cognitive performance and motor coordination in rodents with traumatic brain injury;
  • Ten pending patent applications covering internally-generated and in-licensed technologies were issued as patents;
  • Lifeline Skin Care expanded its two core technology product lines by launching four new skincare products targeting retail and professional markets. In 2016 a new patent covering small molecule technology in skin care was issued to the Company in the United States.

2017 Anticipated Events

  • Complete dosing patients in Phase I Parkinson’s disease clinical trial in Australia;
  • Report preliminary safety and efficacy results Phase I Parkinson’s disease clinical trial in Australia;
  • Report on dose escalating animal study results for the treatment of traumatic brain injury;
  • Start phase II clinical study of ISC-hpNSC® for the treatment of traumatic brain injury.

Presentations & Publications

In 2016, the company presented comprehensive findings of its preclinical and clinical studies in Parkinson’s disease at:

  • The American Society for Neural Therapy and Repair Annual Meeting;
  • The Society for Neuroscience Annual Meeting at Neuroscience 2016.

The Company published results of pre-clinical studies demonstrating the safety and efficacy of the company’s treatment of Parkinson's disease in two peer-reviewed journals, Cell Transplantation and Scientific Reports by Nature Publishing Group.

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 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
Consolidated Balance Sheets
(in thousands, except share data)
December 31, December 31,
2016 2015
Assets
Cash and cash equivalents $110 $532
Accounts receivable, net of allowance for doubtful accounts of $12 and $20 at December 31, 2016 and December 31, 2015, respectively 574 539
Inventory, net 1,390 1,348
Prepaid expenses and other current assets 418 572
Total current assets 2,492 2,991
Property and equipment, net 396 375
Intangible assets, net 3,484 3,223
Non-current inventory 615 489
Deposits and other assets 58 60
Total assets $7,045 $7,138
Liabilities and Stockholders' Equity
Accounts payable $841 $1,092
Accrued liabilities 465 834
Related party payable 3,129
Advances 250 250
Fair value of warrant liability 2,045 239
Total current liabilities 3,601 5,544
Commitments and contingencies
Stockholders' Equity
Series B Convertible Preferred stock, $0.001 par value, 5,000,000 shares authorized, 250,000 issued and outstanding, with liquidation preferences of $381 and $366 at December 31, 2016 and December 31, 2015, respectively
Series D Convertible Preferred stock, $0.001 par value, 50 shares authorized, 43 shares 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 I-1 Convertible Preferred stock, $0.001 par value, 2,000 and 0 shares authorized at December 31, 2016 and December 31, 2015, respectively, 1,680 and 0 issued and outstanding at December 31, 2016 and December 31, 2015, respectively, with liquidation preferences of $1,680 and $0 at December 31, 2016 and December 31, 2015, respectively.
Series I-2 Convertible Preferred stock, $0.001 par value, 4,310 and 0 shares authorized at December 31, 2016 and December 31, 2015, respectively, 4,310 and 0 issued and outstanding at December 31, 2016 and December 31, 2015, respectively, with liquidation preferences of $4,310 and $0 at December 31, 2016 and December 31, 2015, respectively.
Common stock, $0.001 par value, 120,000,000 and 720,000,000 shares authorized at December 31, 2016 and December 31, 2015, respectively, 3,950,979 and 2,808,598 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively 4 3
Additional paid-in capital 101,898 98,970
Accumulated deficit (98,463) (97,384)
Total stockholders' equity 3,444 1,594
Total liabilities and stockholders' equity $7,045 $7,138


International Stem Cell Corporation and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)
Years Ended
December 31,
2016 2015
Revenues
Product sales $7,165 $7,551
Total revenue 7,165 7,551
Expenses
Cost of sales 1,944 2,056
Research and development 2,856 2,707
Selling and marketing 2,527 2,637
General and administrative 4,689 4,715
Total expenses 12,016 12,115
Loss from operations (4,851) (4,564)
Other income (expense)
Change in fair value of warrant liability 14,607 1,980
Fair value of warrant liability in excess of proceeds (9,902)
Financing transaction costs (928)
Interest expense (6) (11)
Sublease income 1
Miscellaneous expense 1 (41)
Total other income (expense), net 3,772 1,929
Loss before income taxes (1,079) (2,635)
Provision for income taxes
Net loss $(1,079) $(2,635)
Net loss applicable to common stockholders $(1,079) $(2,635)
Net loss per common share-basic $(0.34) $(1.33)
Net loss per common share-diluted $(0.34) $(2.26)
Weighted average shares-basic 3,190 1,984
Weighted average shares-diluted 3,190 2,038

International Stem Cell Corporation Russell Kern, PhD Executive Vice President, CSO (760) 940-6383 ir@intlstemcell.com Mahnaz Ebrahimi, CPA Chief Financial Officer (760) 940-6383

Source:International Stem Cell Corporation