StemCell Therapy

Most commonly, these cell lines are created from unwanted embryos stored at IVF clinics. To distinguish the two methods, stem cell lines created through parthenogenesis are called hpSC; those created from fertilized eggs are called “embryonic” or hESC. Both have the potential to create any cell in the human body, but only hpSC lines do not involve the use or destruction of a fertilized human egg.

ISCO has formed several business units to advance its hpSC technology. The Lifeline Skin Care unit has created a stem cell based anti-aging cream. The Lifeline Cell Technologies division encompasses both the sale of growth media and human cells used in stem cell and other research. UniStemCell® was established to create a stem cell bank. And most recently, a business unit call Cytovis® was formed to further the company’s stem cell derived corneal and retinal tissue programs.

The Company launched its skin care products, consisting of a Day and a Night conditioning crème, in December through a joint marketing venture with noted Internet financial and economic advisor, John Mauldin. The initial launch involved only a limited number of targeted customers and was intended to analyze acceptance rates and refine the company’s customer service and delivery systems. The Company has stated that, although the data base needs to be expanded by an additional offering scheduled in January before meaningful statistics can be generated, early customer responses indicate that users of the crèmes are getting favorable results from the product, which confirms the Company’s own pre-market test results.

The market for skin care products is large; according to Mintel market research, total US sales in 2009 was $4.35 billion. By individual brand, the best selling anti-aging creams in 2008 range in market share from 3% for Olay Regenerist, to 1.3% for L’Oreal RevitaLift. Applied to the 2009 sales total, this translates to roughly $130 million and $57 million, respectively. These are likely upper bounds for sales of any new product.

Without the ability to run a large marketing campaign, ISCO is smart to offer its product first to its shareholders and followers. On the surface, its partnership with entrepreneur and newsletter writer John Mauldin seems a bit odd, it will be interesting to see how his marketing skills will be used to convert his 1.5 million readers into Lifeline Skin Care buyers.

ISCO sells reagents and human cells for research through its Lifeline Cell Technology unit. Stem cell research is a fast-growing field requiring specialized, high quality products. Lifeline Cell Technology has signed distribution agreements with such powerhouses as American Type Culture Collection (ATCC) and Millipore for its products, as well as regional distributorships in Europe, Japan and elsewhere. These products generate revenue for the company while providing a source of quality reagents for in-house research.

Other business units under the ISCO umbrella are still in the early stages of development. The unit that may best leverage the hpSC technology may be the UniStemCell cell bank.

One of the major promises in stem cell research is in the field of regenerative medicine. Embryonic and parthenogenetic stem cells can be turned into any human cell type; in theory, these cells can then be used to treat diseases such as diabetes, degenerative brain diseases, cardiac arrest, spinal cord injury, all by aiding in the re-growth of damaged tissue.

A major problem in the use of hESC in regenerative medicine is the ability to find proper matches for the recipient. As with any transplant, strategies must be used to prevent rejection of the donor tissue. By their nature, hESC cell lines express a highly variable set of antigens involved in graft rejection. These antigens are part of the major histocompatibility complex (MHC).

The high variability causes difficulty in finding matches between hESC lines and recipients. On the other hand, hpSC technology produces cell lines with a much more uniform set of MHC molecules. Through proper selection, a single hpSC cell line can provide fairly good histocompatibility match for a large segment of the US population. Additional cell lines can provide matches for additional subgroups so that, in time, a match may be possible for almost all potential transplant candidates.

Through the cell bank, ISCO is providing material for outside groups to conduct cutting edge research and develop therapies based on hpSC technology. The potential is great, but revenue in the form of royalties is far off and uncertain.

Further along in development is the company’s stem cell derived corneal and retinal tissue therapy program. ISCO has partnered with Absorption Systems in the US, Sankara Nethralaya in India, and Automation Partnership in the UK to develop the technology, now under the Cytovis® brand- CytoCor ®for corneal tissue and CytoRet® for retinal tissue.

The Cytovis® technology is in pre-clinical testing and has many potential therapeutic applications including: age-related macular degeneration, retinitis pigmentosa, and the repair of traumatic eye injuries.

The company is also actively testing its CytoCor® tissue for use as an alternative to live animals and animal eyes in drug and consumer products testing. ISCO estimates this to be a $500 million dollar market. Recent laboratory results have shown the CytoCor® corneal tissue to have optical properties. It was also observed to have drug absorption properties similar to real cornea.

The large number of business units is unusual for a company this size. A lack of focus is always a concern, but at the same time, it speaks to the considerable potential of the company’s stem cell technology.