International Stem Cell Corporation (OTCQB: ISCO) has its fingers in many pies. It develops and markets products in three different lines, and two of those businesses turn a profit. Its biomedical division is the most profitable. For the nine months ending September 30, 2015, the net operating profit on biomedics was $920,000 on sales of $2,925,000, a healthy return on sales (ROS) of 31%. ROS measures a company’s operational efficiency, and ISCO’s ROS shows it’s getting better at what it does. Its ROS for 2015 was a vast improvement on the comparable period in 2014, when ROS for the biomedics division was 23%. For the nine months to September 30, 2014, ISCO’s biomedics division had net income of $616,000 on revenues of $2,681,000. ISCO’s biomedics business tells a happy story all around. Sales in 2015 improved by 9% over 2014 sales while operating costs fell by 3%, and net operating profit for 2015 in biomedics rose an astonishing 49% over the comparable period in 2014.
The cheerful news extends to ISCO’s cosmetics division. Sales in cosmetics for 2015 were $2,648,000, five percent over 2014 sales of $2,519,000. Net operating profit, or ROS, on cosmetics almost tripled, going from 4% in 2014 to 11% in 2015. Once again, ISCO has managed to cut costs and increase revenues. Costs in 2015 for cosmetics fell by 2%. The cosmetics division generated a net income of $287,000, which represents a whopping 163% increase in net income over the similar period in 2014.
Together, these two profitable enterprises have increased ISCO’s 2015 bottom line by $482,000, a nice 66% increase over 2014. Using a very conservative price to sales ratio of 10 would value ISCO’s biomedics and cosmetics divisions together at about $56 million.
However, ISCO is not resting on its laurels. The company is plowing ahead with its innovative line of therapeutics based on a potent new stem cell technology that employs parthenogenesis. Parthenogenesis is a type of reproduction that takes place in the absence of fertilization. The company’s new stem cell technology holds the promise of advancing significantly the field of regenerative medicine by addressing the problem of immune-rejection. Stem cells are able to divide in a process of self-renewal in which one cell gives birth to two or more. They are also able to differentiate into cells of a different type so that a stem cell originating from one part of the body may differentiate into a type that is similar to the cells in another part of the body.
At the top of ISCO’s list is Parkinson’s disease. Parkinson’s is characterized by noticeable tremors of the hands. The Parkinson’s Disease Foundation estimates that approximately 60,000 Americans are diagnosed with Parkinson’s disease each year, a number that may not reflect the thousands of cases that go undetected. About one million Americans live with the disease, and an estimated seven to ten million people worldwide are living with Parkinson’s disease. ISCO’s UniStemCell for Parkinson’s has completed the Food & Drug Administration (FDA)’s Investigational New Drug (IND) phase, which means it will soon begin clinical trials. Clinical trials occur when the effects of new treatments on humans are studied.
International Stem Cell Corporation is a company with a bright future. It has two money-making divisions that continue to show increasing profitability. There’s little doubt that its foray into therapeutics will be equally successful.
For more information, visit www.internationalstemcell.com
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