Vitro Diagnostics (OTCBB:VODG) CEO Interview


Vitro Diagnostics
CEO: Dr. James Musick


ABOUT: Vitro Diagnostics dba Vitro Biopharma develops and commercialize adult stem cell technology for applications in stem cell research, drug development and therapeutic products for treatment of a vast variety of diseases and conditions. They offer a series of tools to promote the development of stem cell research and clinical applications focusing on Mesenchymal Stem Cells (MSCs).


WSA:  Good day from Wall Street.  This is Juan Costello with the Wall Street Analyst.  Joining us today is Dr. James Musick, the CEO for Vitro Diagnostics.  The company trades on the bulletin board, ticker symbol is VODG.  Thanks for joining us today, Dr. Musick.

Dr. James Musick:  Thank you, Juan.  I’m very pleased to speak with you again.

WSA:  Can you please give us a history and overview of the company for some of our listeners that are new to the story?

Dr. James Musick: Thanks very much, Juan I appreciate your continued interest in the company and I look forward to updating your readers about some exciting new developments in the company.  My name is Jim Musick.  I’m the President and CEO of Vitro Diagnostics.  We do business as Vitro Biopharma, since we are no longer a diagnostics company.  Our website is and there is a lot more detailed information about the company, its stem cell technology and products.  I can be reached by phone at 303-999-2130.   Our Safe Harbor Statement applies to the comments I’ll make today too.

A key development for us are the numerous opportunities for growth acceleration through our recently announced plans to merge with Neuromics Inc. Neuromics  is an impressive and growing privately held life-science firm that through combination with Vitro Biopharma will result in substantial increase in revenues and additional synergistic effects to further drive growth. Neuromics is complimentary and synergistic to Vitro Biopharma in many ways.  Neuromics offerings of about 2500 products compliment Vitro Biopharma’s adult stem cell-based products for research applications.  Completion of this merger will transform Vitro Biopharma to a much stronger position in its core research products together with an ability to further develop its adult stem cell technology for use in drug discovery and development together with other products that target select markets in regenerative medicine.  These are relatively new emerging markets that are quite exciting, but don’t require expensive and time consuming clinical trials for FDA approval.

I think another important factor for investors to consider is that we have a very favorable capital structure with relatively few issued and outstanding shares.  By comparative analysis I think we’re at an exciting point in time to see a substantial increase in our market capitalization through accelerated revenue growth.

The company was incorporated in 1986 and has been in operation for 27 years.  I’ve been with the company for 25 years.  Initially when I joined the company, we developed and manufactured specialty biological products including pituitary hormones and tumor markers for a niche market in diagnostics. There was very little competition and market analysis revealed an opportunity.  Manufacturing required large numbers of human pituitary glands that were difficult to obtain in commercial quantities at consistent quality level.  We became interested in cellular immortalization technology to provide the raw materials and this was the beginning of our involvement in stem cell technology.  We captured a significant share of the target market in the 1990’s and then we sold this operating division to Aspen Biopharma (APPY).   Since then, we have been focused on the development of product lines based on cell lines.

As our research progressed, we moved into adult stem cell technology and focused on a type of adult stem cell known as the mesenchymal stem cell or MSC, which is our main operational focus right now.  We have products on the market that include basic tools needed by most researchers in this area.  Adult stem cell technology utilizes cells that are present in adult tissues such as blood, bone marrow or even adipose tissue that’s recovered by liposuction.  We have also a blog on our website regarding recovery of stem cells from human urine, so there are a variety of different sources for adult stem cells. While use of human embryonic stem cells is controversial, as it turns out most of the work that’s being done clinically is occurring now with adult stem cells.  Published results showing safety and efficacy of adult stem cells in numerous clinical applications have given us several opportunities for commercialization.

WSA: Right.  So, yeah, you recently also expanded the product line that came before the merger announcement.  Can you talk a little bit about that?

Dr. James Musick: We recently added cancer-associated fibroblasts or CAFs to our catalog.  These are cells associated with malignant tumors and they support proliferation of the tumor cells and also metastasis of cancer, so these cells are becoming a new target for cancer research.  We now sell CAFs from endometrial and ovarian tumors have abilities to expand our CAF product line.  We also offer a primary fibroblast cell line that has been used in recent research in this area showing how CAFs block immune detection of pancreatic tumor cells. Hopefully, this research will lead to improved treatments of pancreatic cancer, a particularly aggressive cancer.

WSA: Certainly and so yeah, your company motto is harnessing the power of stem cells, how are you positioning the company with some of your patents to capitalize on some of the trends in your sector?

Dr. James Musick: We have various issued and pending patents and we’re expanding our intellectual property as we go forward. One of our goals is to patent particular stem cells lines, as we have done in the past.  This supports our FTO and competitive advantages of our products.  We are particularly interested in technology/cell lines that enable expanded differentiation capacity of adult stem cells.

WSA: And what would you say makes Vitro unique from some of the other players in the sector?

Dr. James Musick:   A key differentiator is diversified revenue sources.  Our current stem cell products target research and clinical development markets. Completion of our planned merger with Neuromics will strengthen this base considerably by adding numerous complimentary products and revenue from these products. We plan to expand our research products through strategic additions of new products.  We also have licensed patents for production of FSH, a fertility drug, and anticipate royalty revenue from this license as we go forward.  Furthermore, we are now developing new cell-based assays for use in drug discovery and hope to have these on the market in early 2014.

We are advancing the drug discovery and development process through novel use of stem cell technology.  Our uniqueness is that the cellular systems that we’re analyzing truly reflect what’s happening in the body because we use not only the drug target cells themselves and the media that the cells live in, but also proper extracellular matrices, the materials outside of the cells.  All components are provided in high throughput configuration including an automated live cell assay system together with advanced digital read-out capabilities.  We’ve recently purchased a new instrument that will allow us to generate the data needed to pursue this area.   Initially, we plan to offer cell based-assays for use in the development of new drugs for osteoporosis treatment and plan to expand this product line extensively as we go forward.

Osteoporosis is a wide-spread, chronic disease that affects about 50% of all postmenopausal women throughout the world.  Osteoporosis also affects significant numbers of older men and will expand as the population ages. Current drugs for osteoporosis include the bisphosphonates.  There are numerous side-effects of these drugs and many of these will be coming off-patent in the near future.  So we see several opportunities for us to provide products & services to support development of novel osteoporosis drugs that actually grow bone instead of block the reabsorption of bone, which is what most of the existing drugs do.

An additional market sector we are pursuing is select opportunities in regenerative medicine and I will talk about this later in the interview.  So with the established revenue from research products together with prospective revenues from patent licenses, products and services for drug discovery together with new products in regenerative medicine, our diversified revenue strategy is emerging.  We believe this approach provides distinction from our competitors and furthermore, none of the immediate targets require extensive, time-consuming and expensive regulatory approvals prior to market introduction.

WSA: Good.  And so perhaps you could walk us through your background and experience there and talk a little bit about the some of the team that you feel are important.

Dr. Jim Musick: I have a PhD degree from Northwestern University and an academic background at the University of Utah School of Medicine. My academic background was predominantly in neuroscience and biochemistry.  I have been with Vitro Biopharma for 25 years and my main strength has been developing new commercial products. In the time that I’ve been here, we have commercialized about a hundred different products.  I have been supported by numerous employees & colleagues and continue to rely heavily on collaborations and close business associates. One of our current collaborations that is very important to development of drug discovery products is an industry-university relationship.  Lane Gilchrist is a professor at CCNY just up the road from you in Manhattan.  He works in the material science department and Lane and I met at a convention here in Colorado in 2010 and have maintained a very close relationship since then.

Basically, Lane’s research is designing defined components of the stem cell niche, the exact environment in which stem cells reside within the body. A long-term goal is determining exactly how to reproduce that in an in-vitro situation outside of the body, which is exactly the kind of thing that is very important to us in our drug discovery program.  Lane is funded by a multi-year, NSF grant.  I’m a consultant on that grant, so I worked very closely with Lane and his laboratory team to build their capabilities in cell culture.  They’ve recently acquired a very sophisticated light imaging system called the confocal microscope through the NSF grant. We have other collaborations planned comparing results of the live cell imaging systems in both Vitro Biopharma’s and Lane’s laboratory at CCNY.

We have other collaborators that are very important to us too.  Dr. Jim Posillico is a long-term colleague of mine.  He is the licensee of our FSH technology & products.  He is also involved in some new activities that complement our regenerative medicine initiative.  He is licensing in technology that would provide very critical drug delivery and cell delivery methodologies for especially wound care products that we have in our pipeline as well as other delivery processes.  We collaborate with HemoGenix down in Colorado Springs, which is important in terms some of our cell-based assay development.  Celartia is another company that we collaborate with and there are others as well. We have limited resources ourselves, so collaborations are really very important for acceleration of our growth.  Our prior collaboration with Neuromics has evolved to the point where we’re planning to combine the companies.   A key component of this synergy comes from Pete Shuster’s expertise in sales and marketing.  We’re, again, mainly a technology/manufacturing company and through his expertise in sales and marketing we anticipate ability of penetrate some of these key markets in clinical stem cell products that I described earlier.

WSA: Great.  And what are some of the goals and milestones that you’re hoping to accomplish over the course of the next year?

Dr. James Musick:  Juan, I appreciate that and certainly one of the key goals for us is to complete our merger with Neuromics.  We don’t see major obstacles though, you know, since a key step is obtaining audited financial statements of Neuromics.  We’ve had a lot of water under the bridge so to speak and so we work together very well and the corporate cultures mesh nicely. Another key goal for us is to launch our initial products for drug discovery and development.  The development of these products is progressing well and I anticipate roll-out of these products/services in early 2014.  We plan on adding other cell-based assays than assays for drug discovery with regard to osteoarthritis, etc so I would anticipate considerable concurrent development of these assays as well.

Another current objective is applying stem cell technology to advance regenerative medicine.  I think we should be close to completion of the development of our initial products for use in accelerated wound healing.  In the longer term, we’re interested in being able to regenerate joints that are damaged through injury, disease, aging, etc.  I sincerely believe that the process of joint replacement with prosthetics will be replaced with regenerative medicine techniques that don’t involve that type of invasive surgery that can regenerate joints through cellular therapy.

WSA: And as far as investors and the financial community are concerned, do you believe that the company’s story and your message and upside are completely understood and appreciated by them and if not, what do you wish investors better understood about the company.

Dr. Jim Musick:  We’ve been under the radar for a while and we’re working at gaining more awareness by the investment community.  As we execute our business plan, we’re trying to improve our visibility.  I think that we have an exciting value proposition not only in terms of what we’re doing to grow our revenues and earnings.  Over the years, we’ve tried to maintain a favorable capital structure for the company.  So even post-merger we’re looking at approximately 25 million and maybe some additional shares issued depending on capitalization, but we have a relatively small number of issued and outstanding shares as I have mentioned before.  Some comparable public firms may have hundreds of millions of shares outstanding. This capital structure enables reasonable earnings per share fairy quickly and that’s a key differentiator of us that I want to emphasize to the investment community.

Our favorable capital structure also positions us well for other strategic combinations. There are a lot of interesting companies out there that have products and technologies that are synergistic to Vitro Biopharma and we’re interested in additional growth through strategic combinations.

WSA: Great and so once again joining us his Dr. James Musick the CEO for Vitro Diagnostics, also known as Vitro Biopharma.  The company trades on the bulletin board, ticker symbol VODG, currently trading at 6 cents a share, market cap north of 1.1 million and before we conclude here, James, to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?

Dr. James Musick: Well, I think we offer significant potential for return on investment because of our capital structure, diversified sources of revenues, substantial growth in our revenues by merger with Neuromics and upside for revenue grown through launch of new products without significant regulatory burden for market entry.  Drugs or biologics that require FDA approval prior to marketing usually require about 10 years of development and a billion dollars prior to commercialization.  Our products won’t require this level of FDA approval. Our drug discovery and development products basically are used in pre-clinical studies and don’t require FDA approval.  Some of our products in regenerative medicine may be considered medical devices such as wound care products. These products gain regulatory approval through a process of filling what’s called a 510K which is fairly straightforward process that we have done in the past.  So, I think those are the key points in terms of why this is an attractive investment and why it’s a good thing to have us in your stock portfolio.

WSA: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress.  And we would like to thank you for taking the time to join us today and update our investor audience on Vitro.  It’s always good to have you on Jim.

Dr. James Musick: Juan thanks very much and I appreciate all your continued interest in the company and look forward to providing further updates as we go forward.


Safe Harbor Statement

Certain statements contained herein and subsequent statements made by and on behalf of the Company, whether oral or written may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  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

Vitro Biopharma

(303) 999-2130 Ext. 3


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