Golden, Colorado-September 25th, 2019-Vitro Diagnostics, Inc. (OTCQB: VODG), dba Vitro Biopharma, announced its 3rd quarter ended September 24th 2019 financial results of operations.
Vitro Diagnostics Inc. (“Vitro Biopharma”) is pleased to announce a record 3rd quarter in Stem Cell Revenues. Vitro Biopharma recorded 3rd quarter revenues of $225,191 vs $141,783 an increase of 59% over the same comparative quarter last year. Current quarter stem cell revenues increased 60% from the prior comparative quarter, consisting of $175,533 for the 3rd quarter ended July 31st, 2019 vs $109,717 for the third quarter ended July 31st, 2018. In the nine months ended July 31st, 2019, revenues were 78% higher than the comparable period in 2018, $629,986 in 2019 versus $354,854 in 2018.
The company’s gross profit margins decreased from 76% in the comparative prior year’s quarter to 66% in the current quarter. Current COGS is charged with higher cryogenic shipping costs (affecting 5% of COGS) which the company is acting to reduce by stocking inventory at its partners clinic in the Cayman Islands. Subsequent to the quarter its partner in the Cayman Islands established a cryogenic dewar storage facility to support therapies on demand and substantially reducing shipping costs. In addition the current quarter better represents the growth of all the revenue streams represented by AlloRx, InfiniVive, NutraVivo (STEMulize) and Research and Development products. Nine months ended July 31st 2019 margins held up at 71% versus 74% in the prior comparative 9 month period ended July 31st 2018.
Overall operating expenses increased in the quarter by $93,769 to $194,682 from $100,913 in the prior year’s comparative quarter. The increase in expenses primarily reflects the increased costs of sales and marketing $27,919, Laboratory certifications (ISO 9001, ISO 13485, CLIA) accounting, regulatory, business development $30,048 and notes interest expenses $20,392. This represents the company’s investment in its executive team and outside consultants to support the company’s increased business development activities in the Cayman Islands, Bahamas and it’s US and international Cosmetic partnership with Infinivive MD™, operated by Jack Zamora, MD. For the 9 months ended July 31st 2019 the company grew revenues by 78% while only growing operating expenses by 16%. These investments also provide for further business development opportunities.
During the quarter the company achieved and pursed the following objectives:
- Continued expansion of its manufacturing capacity
The company moved forward increasing its manufacturing capacity at its current laboratory facility to support expanded operations and pre-positioning for the expanded manufacturing facilities due to go online in mid-fiscal 2020. During the quarter the company expanded its cell culture incubator capacity, cell analysis equipment and automated cryogenic equipment for expanded and automated production of its AlloRx Stem Cells™ and its stem cell serum product now branded as InfiniVive MD™. The manufacturing equipment added in the 3rd quarter costs were $115,868 and was financed with a 5-year finance facility.
The current expansion has increased our capacity to process 15 Billion AlloRx Stem Cells™ a month. This represents approximately $ 4 Million of capacity per year. Furthermore, the doubling of manufacturing facility at the beginning of the 2020 year will expand our capacity to approximately 100 Billion AlloRx Stem Cells™ a month or approximately $1.7 Million of revenue capacity per month. This would give Vitro Biopharma a revenue run rate capacity of $20M a year. This will become our new processing capacity which will be initially 10% utilized and provide for future exponential growth.
Our increased capacity is rigorously controlled by our Quality Management System, now certified to the ISO9001 Quality Standard and the ISO13485 Medical Device Standard as well. This provides cGMP-compliant manufacturing of the highest quality stem cells/medical devices for clinical trial testing to provide further evidence of safety and efficacy for treatment for a wide variety of indications. Highly regulated cGMP biologics manufacturing within an FDA-compliant facility provides numerous opportunities to the Company to drive strong revenue growth. We are presently focused on our partnerships in the Caribbean with DVC Stem in Grand Cayman Island, InfiniVive MD™ in the US and emerging opportunities in the Commonwealth of the Bahamas. Recent destruction of the Bahamas due to hurricane Dorian have deferred our revenue expectations into the latter part of 2020 versus the beginning of 2020. We are actively pursuing other partnership opportunities as well; including pursuing an FDA-based IND (“Investigational New Drug”) with an IRB for musculoskeletal conditions utilizing the business & manufacturing infrastructure that supported the Bahamas IRB approval. We are presently developing opportunities for diagnostic support of clinical trials of TBI and Alzheimer’s disease based on our CLIA certified clinical laboratory utilizing multiplexed biomarker profiling.
- NutraVivo™ (STEMulize™) development update:
We have recently reformulated our stem cell activation product, NutraVivo™, into a single capsule soft-gel format (STEMulize™) that is now undergoing testing prior to commercial release. The company also entered into a memorandum of understanding with New York-based partner Magnus Ventures to develop a Nutraceutical subsidiary for Vitro Biopharma that will focus on nutraceutical therapy of stem cell activation and cellular wellness. The company and its partner are looking to launch the on-line and social media platform for STEMulize™ in the first half of 2020. The product is currently recommended to our partners’ stem cell and cosmetic customers where it is being beta tested for enhancing and supporting cellular wellness in conjunction with the stem cell treatments. The company has scientific data supporting the natural product’s capabilities of anti-inflammation, stem cell activation and other cellular effects. The structure of the new company is not finalized but Magnus Ventures is looking to raise between $500,000 to $1,000,000 for the STEMulize™ subsidiary to support a direct to consumer on-line marketing launch. It is anticipated that Vitro Biopharma will retain over 60% majority control of the new nutraceutical subsidiary.
STEMulize™ contains natural substances that activate the body’s own stem cells to enhance recovery from injury such as TBI, stroke, MS, PD and other autoimmune and neurological diseases. The revised NutraVivo™ product will be offered as a private label product to InfiniVive ™ clinics and is being implemented as supplemental support to clinical treatments now ongoing in the Cayman Islands. Patients report positive benefits from NutraVivo™ therapy following stem cell transplants including increased overall energy and improved motor function in MS patients. We are currently testing the new formulation for its commercial release and implementing a name change to STEMulize™ to reflect its use as a nutraceutical stem cell activator.
- Expanded Revenue from InfiniVive MD™ Stem Cell Serum (relabeled from Limitless MD™)
The Company’s cosmetic stem cell serum private labelled as InfiniVive MD™ Stem Cell Serum is applied as a topical cosmetic beautification product that is used in conjunction with various skin resurfacing devices. InfiniVive MD™ continues to expand its base of authorized cosmetic partner clinics and revenues grew 98% in the quarter to approximately $105,000 vs $53,000 in the prior comparative quarter. The cosmetic surgery industry is cyclically slow in the summer months as a result the current quarter cosmetic revenues of $105,000 were lower from the previous second quarter revenues of $130,000. These developments have been in process for the last year and the Joint Development and Supply Agreement dated May 15th 2018 between Vitro Biopharma and Jack Zamora is now producing material results. The agreement requires a minimum level of performance of $1,000,000 annualized by the six-month ended period of June 30th 2020 in order to retain exclusivity in the cosmetic distribution channel.
InfiniVive MD™ Stem Cell Serum is revolutionizing cosmetic care. The results are delivering reduced down time and an improved beautification experience. The InfiniVive MD™ product offers many benefits including increased beautification, hydration and improved results compared to alternative cosmetic products. We work with a variety of regulatory consultants to assist us in the appropriate regulatory pathway. The company and its consultants considers InfiniVive MD™ as a cosmetic beautification product for topical use only.
Vitro Biopharma’s OEM cosmetic topical serum is being distributed by InfiniVive MD™ into cosmetic clinics that are providing the topical treatment as a beautification product used in conjunction with various skin resurfacing devices. To date the company’s product is being offered in 10 cosmetic clinics.
- Clinical Trial of Musculoskeletal Conditions in the Bahamas delayed into 2020.
Our clinical trial entitled “Vitro Biopharma Allogeneic MSC Therapy of Musculoskeletal Conditions” was approved by the National Stem Cell Ethics Committee of the Bahama’s on February 26, 2019. Subsequent to its 3rd quarter, the executive team of Vitro Biopharma visited Dr. Conville Brown and toured his facilities at the Medical Pavilion of the Bahamas. Subsequent to our trip and plans, hurricane Dorian wiped out the Islands of Abaca and Grand Bahamas but significantly spared Nassau where our partner clinic is located. However the government and hospital facilities are being taxed by devastation to property and the people. The company expects these developments to set back its revenue plans into the later half of 2020.
About the Medical Pavilion of the Bahamas: TMPB operates within a 40,000 square foot building as a partnered care specialty medical facility with 10 different centers in various areas including cardiology, cancer, clinical research and kidney disease. One of the centers is the Partners Stem Cell Centre, where the present trial will be conducted. The Partners Stem Cell Centre provides an environment to conduct stem cell research and clinical trials under the model of ”FDA rigor in a Non-FDA Jurisdiction” TMPB employs 20 medical specialists in various fields. See www.tmp-bahamas.com for additional information.
While our plans in the Bahamas have been set back there is currently no revenue contribution loss, only a delay in expanding our revenue diversification.
- Expansion of revenues from the clinical trials in the Cayman Islands:
During the quarter Vitro Biopharma continued to expand its clinical trial business in the Cayman Islands with its partner www.DVCStem.com under the joint IRB covering inflammatory conditions. Treatments to date have covered MS (Multiple Sclerosis), OA(Osteoarthritis), PD (Parkinson’s disease) and other inflammatory conditions. DVC Stem specializes in clinical stem cell regenerative medicine utilizing Vitro Biopharma’s AlloRx Stem Cells™ under approval of the Ministry of Health of the Cayman Islands. Subsequent to the quarter, our executive team visited DVC Stem to train personal in stem cell deployment & cryogenics based on their new onsite cryogenic storage facility.
Our overall objectives are to support high quality offshore medical stem cell tourism with clinical trial partners worldwide.
- Patent & Intellectual Property Portfolio actions.
The Company has several patent applications (11) pending in the US and foreign jurisdictions. These patents cover our AlloRx Stem Cell™ line and various aspects of our NutraVivo™ stem cell activation products & processes as well as specific diagnostic tests of stem cell activity and therapeutic effectiveness. During the quarter, the Company has responded to office actions and continues to vigorously prosecute & expand its patent filings.
Dr. Jim Musick, CEO of Vitro Biopharma, said, “We are very pleased to report the results of operations through our 3rd fiscal quarter in 2019. We experienced strong revenue growth over the comparative prior year quarter. Our 3rd quarter is typically a cyclical low quarter as the Research products are not in demand during the summer period as well as it is a cyclically low quarter for the cosmetic revenue stream. The company expects with continued increases from all revenue categories that it will be cash flow positive in mid. 2020 and report its first net quarterly profit in the later 2020 timeframe.
We have added several regulatory certifications and outside oversight of our biomanufacturing operations. We are now ISO9001, ISO13485 and CLIA certified and cGMP compliant. Our regulatory certifications allow us to gain offshore IRB approvals, e.g., in the Commonwealth of the Bahamas and other countries since the ISO Standards are internationally recognized. Certification to these rigorous standards are often required to perform manufacturing operations supporting IRB-approved clinical trials, especially in foreign jurisdictions.
Our stem cell products are distinctly superior to stem cell transplants in the USA. The latter usually involve use of impure products lacking validation as stem cells and containing insufficient numbers of stem cells to achieve therapeutic benefits. These are produced without regulatory oversight and have been known to cause serious adverse effects. Hence the use of highly purified and well characterized stem cells (AlloRx Stem Cells™) is needed to provide safety and efficacy in regenerative medicine therapies. Results from our clinical studies show safe administration of AlloRx Stem Cells™ and evidence of efficacy in OA (“Osteoarthritis”), MS (“Multiple Sclerosis”) and PD (“Parkinson’s Disease”)
Our Research and Development team is developing a novel product for clinical applications, called AlloEx Exosomes™. Exosomes are secreted from stem cells and may mediate therapeutic benefits without the use of stem cells. The mechanism of stem cell effects on the body is complex, but exosomes offer an important line extension to AlloRx that represents further revenue diversification opportunities for Vitro Biopharma.
In summary, Vitro Biopharma is advancing as a key player in regenerative medicine with 10+ years experience in the development and commercialization of stem cell products for research, recognized by a Best in Practice Technology Innovation Leadership award for Stem Cell Tools and Technology and a growing track record of successful translation to therapies. We continue to leverage our proprietary technology platform to the establishment of international Stem Cell Centers of Excellence and regulatory approvals in the US and worldwide.”
James R. Musick, PhD.
President, CEO & Chairman of the Board
Statements herein regarding financial performance have not yet been reported to the SEC nor reviewed by the Company’s auditors. Certain statements contained herein and subsequent statements made by and on behalf of the Company, whether oral or written may contain “forward-looking statements”. Such forward looking statements are identified by words such as “intends,” “anticipates,” “believes,” “expects” and “hopes” and include, without limitation, statements regarding the Company’s plan of business operations, product research and development activities, potential contractual arrangements, receipt of working capital, anticipated revenues and related expenditures. Factors that could cause actual results to differ materially include, among others, acceptability of the Company’s products in the market place, general economic conditions, receipt of additional working capital, the overall state of the biotechnology industry and other factors set forth in the Company’s filings with the Securities and Exchange Commission. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking statements. Except as otherwise required by applicable securities statutes or regulations, the Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.
Dr. James Musick
Chief Executive Officer
(303) 999-2130 Ext. 1
Source: Vitro Diagnostics, Inc.