WSA: Good day from Wall Street, this is Juan Costello with the Wall Street Analyst. Joining us today is Jim Musick the CEO, President & Chairman for Vitro Diagnostics and the company trades on the Bulletin Board ticker symbol VODG. Thanks for joining us today Jim.
James Musick: Thanks a lot Juan, good to talk with you again and give your investors a bit of an update on our situation out here.
WSA: Yeah well certainly so. Starting off can you talk about the recent revenue earnings status report?
James Musick: I would like to talk about that. I wanted to first talk about an event that impacted us. In my last interview with you I talked about our plans to merge with Neuromics, Inc. a life-science company located in Minneapolis. At the end of December we decided to defer that merger and focus instead on growing the revenue and earnings of Vitro Diagnostics to the point where it was profitable. This would result in positive earnings for the subsequent merger of the two companies. That plan has been operational since then and I am pleased to say that it’s working quite well and this interview is mainly focused on the results of the extensive partnering and collaboration between Vitro Biopharma and Neuromics.
So thus far, we are not quite at the end of our 2nd Quarter (April 30, 2014). At this point I project year-to-date revenues at 250%, or more, of what they were in the same period in 2013. There are two activities that generate revenues. We are an adult stem cell-based company manufacturing research products consisting of mainly stem cells and cell culture media for stem cell growth and differentiation. Our products have competitive advantages including out performance of our competitors in several different aspects.
For example, we have diverse offerings of growth and differentiation formulations of our stem cell media. Our media also results in recovery of significantly more cells than media provided by competitors and is significantly more stable. One of our cell lines was used in a research study on a new type of cell that could lead to improved diagnostics and possibly new therapies for pancreatic cancer which is a high-mortality form of cancer.
We have also added new products including cell lines and stem cell media products for culture of canine and equine stem cells. Revenue from our research products rose by 40% to 50% over the first 6 months of 2013.
We added revenues from contract research services that contributed about one-half of the total revenue thus far in 2014 through our collaboration with Neuromics, who arranged collaboration with a European clinical network that is involved in treating patients with various conditions. We now provide extensive test measurements of numerous biological molecules, including cytokines, growth factors and other biological signaling molecules to provide a profile of the disease condition. This information allows comparison with other patients and also a basis for evaluating the effects of various treatments on disease. This network of clinics consists of about 15 or 20 patients with various conditions including autoimmune diseases, autism and chronic fatigue syndrome that are managed by a well-known immunologist who has a network of professional experts that operate the clinics and manage the medical aspects of treatment of these patients.
The initial treatment is designed to control macro and micro blood levels of commonly measured agents. This stage of treatment also corrects problems related to toxic levels of metals, infectious agents, and low levels of trace elements, etc. The analysis performed at our facility adds more detailed molecular profiling to provide a complete picture of the patients. We utilize a laser scanner to obtain quantitative data from antibody arrays that allow us to measure up to 40 or 50 different molecules at the same time. And we can get a profile of these different molecular levels and thus a molecular signature of the disease. We use this information to establish baseline data. We are also testing various procedures known to activate stem cells within the body and then determining the effects of these procedures on the molecular biomarker profiles.
We anticipate continued growth of revenues throughout 2014. I project that we will be profitable at the end of 2014. In addition we anticipate the establishment of platforms to accelerate revenues & earnings growth substantially in 2015. Vitro has relatively limited number of common shares issued and outstanding, approximately 20 million that is very modest for comparable companies. With our ability to generate earnings and rapid earnings growth, we should be able to report strong earnings per share growth as we go forward which is one of the fundamental aspects of Vitro Biopharma. We have very actively attempted to maintain a favorable capital structure for the company.
WSA: Great. And so can you talk a little bit about the status of the regenerative medicine initiative both on the testing and clinical trial platforms?
James Musick: I would be glad to, Juan thanks very much for asking. So basically what we are referring to with our initiative in regenerative medicine is the use of stem cells and/or stem cell technology to treat injury, disease or aging. There are predominantly two methods of utilizing stem cells to achieve those goals: one is transplantation and this is the most common. It has been used for over 50 years, especially hematopoietic stem cell transplants from bone marrow which are used for treatment of various blood disorders. Transplants are now being expanded too to include other types of stem cells that Vitro is working on, MSCs and Neural Stem Cells, etc.
However, there is another approach to utilization of these cells for therapeutic benefit and that is to activate stem cells that exist within our bodies. It is not commonly recognized, but stem cells are present throughout our bone marrow and other organs and tissues in our body. Stem cells are fundamental to our survival. For example the hematopoietic stem cell system in bone marrow produces 200 billion blood cells per day and these are obviously critical in maintaining oxygen delivery to our tissues and physiological functions of our body. There are also two well known drugs that have been on the market for about 25 years that activate those systems one of these is called Epogen which activates red blood cells and is used to treat anemia that’s associated with chemotherapy. Neupogen is another drug that activates endogenous stem cells and stimulates white blood cell production that stimulates the immune system.
The current goal of our regenerative medicine initiative is to activate endogenous stem cells for therapeutic benefit by targeting MSCs and neural stem cells (NSCs), two different types of adult stem cells. MSCs are located in bone marrow, adipose tissue and various tissues throughout the body. Neural stem cells are located in the brain, but they are localized to just a few regions, they are not equally distributed throughout the brain. The dentate gyrus of the hippocampus is an area of stem cells in the brain and this structure is involved with memory. There is another NSC region in the lateral ventricles, which are deeper in the brain, as well as the olfactory epithelium.
So we are developing assays and products to activate those specific cells. These are mainly small molecules that activate pathways involved in differentiation, gene expression modulation or mobilization of the stem cells. Our approach to achieving this goal is through testing which I briefly described earlier, using the antibody arrays that allow us to get a biomolecular profile of diseases. These results allow us to determine at a quantitative level, the effect of a given treatment that activates endogenous stem cells to exert a therapeutic benefit. We are also measuring biomarkers for stem cells so that we can quantify and measure stem cell activation at a molecular level. We also have flow cytometry methods available for measuring stem cell activation and presence in the blood stream.
There are a lot of animal studies that show the effectiveness of this approach in cardiovascular disease, myocardial infarction heart attack, cognitive heart failure, stroke and various neurological conditions such as neural degenerative diseases like Alzheimer’s disease, Parkinson’s disease and spinal cord injury.
We plan clinical trials to gain proof of principle that activation of stem cells occurs in humans. Subsequent trials will be oriented at efficacy in various conditions such as traumatic brain injury.
WSA: So in terms of your drug discovery platform can you talk about, you touched about it earlier in the interview can you talk about some of the top ones as far as I guess you were starting to talk about bone healing.
James Musick: Right, we have expanded our bone growth/osteogenesis assay considerably to point where that’s now at a commercial state. We have also added stem cell activation assays which are similarly based. We use our stem cell products and media to produce the types of cells that are present in the human body. We then apply these cells to a platform for quantitative measurement in a live-cell situation with automated read-out of key cellular events needed in drug discovery. We use these assays for internal testing as needed to support various things that we have going such as our evolving clinical trials.
We are also using our cell-based assays to develop customized stem cell lines. For example, we are developing a stem cell line targeting skeletal muscular conditions in thoroughbred horses that are common in these highly trained and physical animals that are extremely active. Bone fractures, tendonitis, and ligament problems are common and stem cell transplants are being used to treat these conditions. We are using our drug discovery platform to convert MSCs to a specific lineage prior to using them for specific applications such as accelerated bone fracture healing.
WSA: Well that’s pretty timely with the Kentucky Derby coming up and it’s good to hear some of your recent news since our last interview which was in October 2013. So before we conclude Dr. Musick to briefly recap some of your updating and your key points, why do you believe investor should consider the company as a good investment opportunity today?
James Musick: Well I think that we have solid fundamentals, we are very conservative about expenditures and we have very limited number of shares issued and outstanding. We are thus well positioned to report strong earnings per share and consistent growth. We are involved in revolutionary new technology involving the application of stem cell technology to regenerative medicine. I think that there are many problems in healthcare including excessive costs and drugs that are marginally effectively, etc. Yet we have within our bodies a system of stem cells that are designed to heal us and by utilizing that system fully we can impact and improve healthcare and diminish the cost of healthcare throughout the world. This is definitely a needed situation as many struggle with the high cost and burdens of healthcare.
WSA: Certainly well, we certainly look forward to continue to attract the company’s growth and report on your upcoming process and I would like to thank you for taking the time to join us today Dr. Musick and update our investor audience on VODG. It’s always good to have you on.
James Musick: Well thanks very much Juan I really appreciate it and I appreciate your support and look forward to further interactions with you and update as we go along.