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International Stem Cell Corporation Announces Operating Results for the Three and Six-Months ended June 30, 2017

CARLSBAD, Calif., Aug. 14, 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 operating results for the three and six months ended June 30, 2017.

“Over the period ended, we have substantially improved our business indicators, including a significant decrease in our cash burn,” said Andrey Semechkin, PhD, Co-Chairman and CEO of ISCO. “Additionally, we are successfully continuing with phase I Parkinson’s disease clinical trial. Based on our success in the current clinical trial, we are working towards commencing phase II of the traumatic brain injury, for which a more detailed update will be released shortly.”

Year-to-Date Financial Highlights

  • Consolidated revenue for the six months ended June 30, 2017 was $3.8 million, compared to the consolidated revenue of $3.5 million for the six months ended June 30, 2016.
  • Gross profit margin for the Company’s revenue-generating subsidiaries for the six months ended June 30, 2017 was $2.7 million, or 73%, compared to gross profit margin of $2.6 million, or 75%, for the six months ended June 30, 2016.
  • Combined operating income for the six months ended June 30, 2017 from our two wholly owned revenue generating subsidiaries was $975,000, an increase of 51% compared to $647,000 in the same period in 2016.
  • Consolidated loss from operations, including from phase I Parkinson’s disease clinical trial expenses, for the six months ended June 30, 2017 was $2.0 million, compared to consolidated loss from operations of $2.4 million for the same period in 2016
  • Average net cash used in operating activities, excluding capital expenditures and patent costs, was approximately $222,000 per month during the six months ended June 30, 2017, a decrease of 53%, compared to $472,000 per month for the same period in 2016.

Recent Clinical Trial Highlights

  • Completed first cohort in Parkinson’s disease clinical trial. The fourth operation went according to plan and no adverse events associated with ISC-hpNSC® have been reported in any of the patients.
  • The Data Safety Monitoring Board monitoring the Phase I Parkinson’s disease trial has authorized the clinical trial to move forward with accelerated enrollment and dose escalation to the second cohort.
  • The fifth patient (the first patient of the second cohort) in the clinical trial for Parkinson's Disease was successfully transplanted with ISC-hpNSC® cells. The operation was successfully performed without complications by the team of the RMH neurosurgeons.
  • Presented positive results of neural stem cell transplantation for Parkinson’s disease at the American Academy of Neurology and the American Society of Gene & Cell Therapy 2017 annual meetings.

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,
2017 2016
Assets (Unaudited)
Cash and cash equivalents $297 $110
Accounts receivable, net of allowance for doubtful accounts of $12 at June 30, 2017 and
December 31, 2016
605 574
Inventory, net 1,390 1,390
Prepaid expenses and other current assets 504 418
Total current assets 2,796 2,492
Property and equipment, net 358 396
Intangible assets, net 3,760 3,484
Non-current inventory 643 615
Deposits and other assets 57 58
Total assets $7,614 $7,045
Liabilities and Stockholders' Equity
Accounts payable $391 $841
Accrued liabilities 868 465
Related party payable 2,019
Advances 250 250
Fair value of warrant liability 2,493 2,045
Total current liabilities 6,021 3,601
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 $389 and $381 at June 30, 2017
and December 31, 2016, 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 I-1 Convertible Preferred stock, $0.001 par value, 2,000 shares authorized 1,610 and 1,680
issued and outstanding at June 30, 2017 and December 31, 2016, respectively, with liquidation
preferences of $1,610 and $1,680 at June 30, 2017 and December 31, 2016, respectively
Series I-2 Convertible Preferred stock, $0.001 par value, 4,310 shares authorized,
issued and outstanding with liquidation preferences of $4,310
Common stock, $0.001 par value, 120,000,000 shares authorized, 4,012,032 and 3,950,979 shares
issued and outstanding at June 30, 2017 and December 31, 2016, respectively
4 4
Additional paid-in capital 102,563 101,898
Accumulated deficit (100,979) (98,463)
Total stockholders' equity 1,593 3,444
Total liabilities and stockholders' equity $7,614 $7,045



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,
2017 2016 2017 2016
Revenues
Product sales$1,762 $1,916 $3,767 $3,532
Total revenue 1,762 1,916 3,767 3,532
Expenses
Cost of sales 471 506 1,024 883
Research and development 739 852 1,384 1,431
Selling and marketing 557 651 1,133 1,299
General and administrative 997 1,156 2,274 2,335
Total expenses 2,764 3,165 5,815 5,948
Loss from operating activities (1,002) (1,249) (2,048) (2,416)
Other income (expense)
Change in fair value of warrant liability 1,584 12,227 (448) 9,597
Fair value of warrant liability in excess of
proceeds
(9,902)
Financing transaction costs (59) (928)
Interest expense (14) (1) (20) (6)
Miscellaneous income 1 1
Total other income (expense), net 1,570 12,168 (468) (1,238)
Income (loss) before income taxes 568 10,919 (2,516) (3,654)
Provision for income taxes
Net income (loss)$568 $10,919 $(2,516) $(3,654)
Net income (loss) applicable to common
stockholders
$568 $10,919 $(2,516) $(3,654)
Net income (loss) per common share-basic$0.14 $3.76 $(0.63) $(1.28)
Net income (loss) per common share-diluted$(0.25) $0.26 $(0.63) $(1.28)
Weighted average shares-basic 3,996 2,903 3,974 2,856
Weighted average shares-diluted 4,017 5,742 3,974 2,856



Contacts: International Stem Cell Corporation Russell Kern, PhD Executive Vice President, CSO Phone: 760-940-6383 Email: ir@intlstemcell.com

Source:International Stem Cell Corporation