International Stem Cell Corp (OTCMKTS:ISCO) Surges on News and Promotion
It’s been an eventful year for International Stem Cell Corp (OTCMKTS:ISCO) and its shareholders. Back in January, some exciting news as well as a big Quality Stocks promotional campaign (which is still active) pushed the ticker up the charts. In a matter of days ISCO managed to break through the $0.20 barrier and moved as high as $0.41 per share. Over the next few months it settled to more manageable levels of $0.23 – $0.25, but in July, after they announced that they have completed the sale of some warrants, the ticker dropped by no less than 40% and has been struggling to regain its former glory.
A few promotional campaigns have also been initiated over the last months and they didn’t really do the stock any favors. Which is a shame since the company is definitely showing some potential.
ISCO‘s principal business involves the development of treatments for Parkinson’s disease using stem cell technology. They have proven that the drug works on primates, they have gone through quite a lot of trials and are hoping to file some of the necessary documents with the FDA during the summer of 2014. In the meantime, however, they have two operating subsidiaries that are generating revenues through the sale of skincare products and human cells.
An interesting and appealing business plan, no doubt, but it hasn’t been all plain sailing.
There is indeed a steady stream of revenues, but even so, the sales just can’t outweigh the rather huge research and development expenses. The rest of the figures leave much to be desired as well. Here’s a summary of the results for the third quarter:
- cash: $1.79 million
- current assets: $4 million
- current liabilities: $6.38 million
- quarterly revenue: $1.67 million
- quarterly net loss: $3.8 million
Most of the people talk about how the revenues have increased by around 40% year-over-year and how the private placement from July has stabilized the company’s cash position, but they overlook the fact that the current liabilities have almost tripled compared to the same period of 2012 while the net loss has increased by about 80%.
Then there’s the promotional effort. ISCO themselves paid Quality Stocks nearly $380 thousand for 635 days of advertising and throughout the last few months, we have seen numerous pumpers get in on the promotional bandwagon.
The latest wave of touts started on Sunday when Damn Good Penny Picks and their affiliates sent out a few email alerts. According to the disclaimer, the promoters received $25 thousand for their efforts, but what is really peculiar is the timing of the whole campaign.
The latest email hit our inbox at 08:05 AM yesterday and just half an hour later, ISCO issued a rather important press release. According to the announcement, the company’s biologists have developed a new, faster, safer, and more efficient way of producing stem cells. This is bound to have an effect on the company and investors know it. The ticker managed to jump by around 11% while shifting more than 1.7 million shares.
Yet, while the new method of producing stem cells is definitely a positive development, it still can not guarantee that ISCO is going to end the next quarter with a positive bottom line. There’s no way of knowing if it will manage to accelerate the development of the Parkinson’s disease drug as well, which means that there are still some risks worth considering.
Another potential threat to the share price is, of course, the promotions. ISCO enjoys a relatively strong support from its shareholders and, unlike other penny stocks such as Makism 3D Corp (OTCBB:MDDD) and Tiger Oil and Energy, Inc. (OTCMKTS:TGRO), it is showing some signs of real progress which has managed to keep the ticker relatively stable so far. Even so, a paid pump can always catch you off-guard.
