Although
cash burn for International Stem Cell Corp. (OTCQB: ISCO) currently stands at over
$0.5 million per month, a number likely to increase with the progression of its
clinical trials for Parkinson’s disease (PD), risks have been mitigated thanks
to the company’s commercial operations. ISCO is an early stage biotechnical
company developing biomedical, therapeutic, and cosmeceutical applications for
its proprietary form of pluripotent stem cells known as human parthenogenetic
stem cells (hpSCs). Although ISCO is carrying out intensive research to develop
a stem cell therapy treatment for PD, the company reduces any financial risks
with the more commercially-oriented side of its operations.
ISCO’s
commercial operations are made up of Lifeline Skin Care (LSC) and Lifeline Cell
Technology (LCT). LCT develops, manufactures, and commercializes over 130 human
cell culture products. These cells are sold through International Stem Cell
Corp.’s website. On the other hand, LSC develops, manufactures, and markets
luxury skincare products through a variety of channels, including a branded
website, dermatologists, plastic surgeons, and spas, as well as through Amazon
(NASDAQ: AMZN) and DermStore. Since 2012, ISCO’s biomedical business has grown
by 19%, a rate nearly three times the industry’s rate. This branch of the
company grew by 15% between 2014 and 2015, and the operating margins rose to
31% from 21.7% in 2014 and 12.4% in 2013. LSC, however, is still a small player
in the global skincare market. That said, the skin care brand still saw revenue
grow at a CAGR of 17% in recent years and reported total revenue of $3.5
million in 2015.
Although
there are still sensitivities relating to therapeutics products developed by
ISCO, these are not insurmountable. In the International Stem Cell report by
Edison (http://nnw.fm/T8LoT), sensitivities were addressed accordingly.
Valuations done by Edison found that ISCO’s skin care business is estimated to
grow to sales of $4.8 million by 2025, while its biomedical business is
expected to reach $10.5 million in sales in the same amount of time. Although
both businesses still hold a number of risks due to the nature of their markets
and the fact that they are still relatively small and growing companies, these
risks have been highly mitigated to minimize loss and maximize long-term
profits.
For
more information, visit www.internationalstemcell.com
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
