CARLSBAD, CA--(Marketwire -08/09/12)- International Stem Cell Corporation (ISCO) (www.internationalstemcell.com) ("ISCO" or "the Company"), a California-based biotechnology company focused on therapeutic and research products, today announced financial results for the three and six months ended June 30, 2012.

Three and Six Months Ended June 30, 2012

Revenue for the three months ended June 30, 2012 totaled $1.06 million compared to $1.11 million for the three months ended June 30, 2011. The decrease in revenue was due largely to lower sales generated from Lifeline Cell Technology (LCT). LCT and Lifeline Skin Care (LSC) each accounted for approximately 50% total revenue in the three months ended June 30, 2012 compared to 52% and 48%, respectively, in the corresponding periods the prior year. Revenue for the six months ended June 30, 2012 was $2.13 million compared to $2.63 million for the corresponding period in 2011. The decrease in revenue was due principally to fewer sales generated from LSC, partially offset by LCT's higher sales generated from larger distributors. For the six months ended June 30, 2012, LSC generated $1.07 million or 50% of total revenue, compared to $1.66 million or 63% of total revenue for the corresponding period in 2011. For the six months ended June 30, 2012, LCT generated $1.06 million or 50% of total revenue, compared to $0.97 million or 37% of total revenue for same period in 2011.

Research and development expenses (R&D) were $0.87 million for the three months ended June 30, 2012, representing a decrease of approximately 23% compared to the corresponding period in 2011. The decrease was due primarily to lower consulting expenses associated with various research projects, lower stock-based compensation expense, lower laboratory-related expenses, and lower personnel-related spending. The decrease was partially offset by higher stem cell line research and testing expenses. R&D expenses were $1.80 million for the six months ended June 30, 2012, compared to $2.13 million for the same period in 2011. The 15% decrease was due primarily to lower consulting expenses associated with various research projects, lower stock-based compensation expense, lower laboratory-related expenses, and reduced travel expenses, partially offset by higher stem cell line research and testing expenses and higher personnel-related spending associated with higher headcount and increased research activities.

The Company continues to invest in its sales and marketing initiatives. Marketing expenses for the three months ended June 30, 2012 were $0.55 million, an increase of 58% from the same period in 2011. The increase was primarily driven by investments in marketing and promotion, advertising, higher shipping and logistic expenses, additions of sales and customer service staff, higher consulting expense and higher commission paid to various strategic partners. The increase was partially offset by a reduction in commission paid to a consultant who promoted, marketed, and sold skin care products through various proprietary mailings and employee stock-based compensation. For the six months ended June 30, 2012, marketing expenses amounted to $1.04 million, reflecting an increase of $0.38 million or 57%, as compared to $0.66 million for the corresponding period in 2011. The substantial increase was primarily driven by increased investments in marketing support, promotion, and advertising, higher consulting expense, higher shipping and logistic expenses, higher personnel-related expenses resulting from higher headcount in the sales and marketing of the skin care products, and higher commission paid to various strategic partners. The increase was partially offset by a reduction in sales commission paid to a consultant who promoted, marketed, and sold skin care products through various proprietary mailings and lower employee stock-based compensation.

General and administrative expenses for the three months ended June 30, 2012 were $1.76 million, down 18% compared to the same period in 2011, as a result of ongoing operational efficiency initiatives. The decrease resulted largely from lower employee stock-based compensation, reduced employee-related spending resulting from lower headcount, lower professional accounting fees, and lower corporate support expenses. The decrease was partially offset by higher legal fees relating to our corporate activities, and higher consulting expense. General and administrative expenses for the six months ended June 30, 2012 were $3.79 million, reflecting a decrease of $0.58 million or 13%, compared to $4.37 million for the same period in 2011. The decrease was primarily attributable to lower employee stock-based compensation, the absence of stock-based compensation incurred for services provided by a consultant, reduced employee-related spending resulting from lower headcount, and lower corporate support expenses. The decrease was partially offset by an increase in legal fees relating to our corporate expenses, higher consulting expense, and higher professional accounting fees related to Sarbanes-Oxley compliance efforts.

Cash and cash equivalents totaled $4.29 million at June 30, 2012 compared to $1.34 million as of December 31, 2011, due primarily to two financing transactions totaling approximately $6.9 million completed in the first six months of 2012 partially offset by normal business operations.

"We have made solid progress across our entire organization in the first half of this year," stated Dr. Andrey Semechkin, ISCO's CEO and Co-Chairman, "and I'm pleased to see that the operational efficiencies we implemented in the second quarter are resulting in lower administrative expenses. Going forward we will continue to look for further opportunities to improve our organization effectiveness and reduce expenses. As you may have read in my shareholder letter, following a detailed analysis of our research priorities, we concentrated our resources on the most promising therapeutic programs and this has already resulted in exciting achievements and progressed our programs closer to clinical development."

Q2 2012 Highlights:

Conference Call and Webcast Details:

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International Stem Cell Corp Announces Second Quarter 2012 Financial Results