“Harnessing the Power of Cells”: Vitro Diagnostics

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Vitro Diagnostics, Inc
(OTC BB: VODG)
Dr. James Musick, CEO

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Corporate Profile:
Vitro Diagnostics, Inc, doing business as Vitro Biopharma, is committed to “Harnessing the Power of Cells ™” Vitro Diagnostics owns proprietary technology for cell immortalization and the generation and differentiation of adult stem cells. The Company’s stem cell technology includes cell lines, supporting products and methods for generation and differentiation of stem cells into products with application to treatment of numerous diseases such as heart disease, stroke, Parkinson’s and Alzheimer’s disease.

TRANSCRIPT:

WSR: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Reporter. Joining us today is Dr. James Musick, CEO of Vitro Diagnostics. The company trades on the Bulletin Board, and their ticker symbol is VODG. The company owns US patents for production of a fertility drug, immortalization of pituitary cells as well as a cell line that produces beta islets for use in the treatment of diabetes. Thanks for joining us today Dr. Musick Jim.

James Musick: Thank you, Juan. I appreciate the opportunity to interview with you and to get our story out there. I appreciate your interest in the company. Just as an introduction, basically Vitro is involved in adult stem cell technology and we have commercialized products in recent past that are used by all who are involved in stem cell work as tools. A primary advantage of the company is that we have revenues now, which is unusual for stem cell companies and we have strong prospects for turnaround to profitability and rapid earnings growth in the near future. We also have a fairly small number of issued and outstanding shares in the company, less than 20 million shares, which positions us in a strong position for earnings per share and growth opportunities as by M&A activities in the company.

WSR: I guess the company’s mission or your motto is “Harnessing the Power of Cells”. So, can you explain a little bit about that and talk about some of your other patents?

James Musick: We’ve actually been involved in what’s called cellular immortalization for the past 15 years. Our initial business involved production of pituitary hormones and tumor markers and those were derived from human tissues, and we thought alternative cellular sources of those materials in the mid-90s. So, we’ve been involved in this for a long time. It has evolved into a position within the stem cell technology field, which to some investors is a bit confusing because of the various issues that are involved with stem technology. One for example is that there are different types of stem cells. There is adult stem cells, and there is embryonic stem cells. Embryonic stem cells are somewhat contentious because of the involvement of use of embryos. We are involved in adult stem cell technology only and do not involve ourselves in embryonic stem cell technology. Stem cells are fundamental to life. They’re basic components, they’re present throughout the animal kingdom. I’m working on Hydra, and that particular organism also has stem cells. Stem cells are critical for life and we’re solely involved with adult stem cells. The interest in stem cell technology is largely related to the potential to deal with many, many medical problems that have been interactive or undertreated for many, many years, including degenerative diseases such as Alzheimer’s disease where certain cells of the brain die and result in memory loss and many of the complications of Alzheimer’s disease. Diabetes is another disease characterized by death of particular cells, Parkinson’s disease, many other conditions that are characterized by cellular degeneration can be treated with stem cell therapies. Also and less commonly known is that conditions such as cancer, which involve genetic abnormalities of cells can also be treated by stem cell technologies. There are some new drugs that are presently in clinical trials by companies such as Curis, Infinity Pharmaceuticals, Bristol-Myers Squibb that target specific pathways within what’s called cancer stem cells and are being used to treat various forms of cancer. So there is tremendous opportunity for advances to medicine through the new era of cellular medicine based upon stem cell technology. However, we’re at an early stage right now in terms of the clinical utility of stem cell technology for these various conditions. Vitro is focused on types of products that are used by all who are involved in stem cell research and the movement of these new technologies to clinical utilities. So, we provide tools for stem cell and drug development, and these tools are used by or they include cell lines, media; media is a substance, which is again the blood that is used by these cells for their growth and is needed by any laboratory who does work with those kinds of cells. And, we also have products related to another technology called iPS, induced pluripotent stem cells. Most investors get a little confused by this. I won’t go into a great deal of detail. But in general, iPS technology allows one to use adult stem cells to do the same thing that embryonic stem cells do, but without taking an embryo.

WSR: So, you don’t run into any of the political implications?

James Musick: The ethical religious issues regarding embryonic stem cells are totally obviated by use of iPS technology. Vitro has a patent position in iPS technology. We’re one of the few companies that have shown recently that iPS cells can be induced a lot more simply than was previously thought. And, this could lead to a very substantial acceleration in the clinical development of that technology.

WSR: Can you talk to us a little bit about your strategic alliance with HemoGenix to jointly manufacture HALO?

James Musick: We recently formed an alliance with a company called HemoGenix located in Colorado Springs. They’re a stem cell company that has been in business for the past 10 years, has products in the market, over 1,000 different products. They are involved in testing of stem cells for their quality, potency, and the effects of toxic agents upon those stem cells. They’ve basically been focused on what’s called the hematopoietic stem cell system. This is the stem cell system that’s responsible for elaboration of blood cells. Through this collaboration between Vitro and HemoGenix, we’re now expanding products that we’re jointly developing to include what’s called mesenchymal stem cells and iPS cells. This will allow the HALO platform to be extended to situations that are important in regenerative medicine. For example, we have a company out here in Colorado called Regenexx, which is nearby where we’re located. And, that company is taking mesenchymal stem cells that are derived from bone marrow of patients, extracting them from the bone marrow, purifying them from other cells and expanding those cells and then re-injecting those cells back into the patients or use it in treatment of joint conditions such as knee injuries, hip, shoulder. The technique has even been used for treatment of herniated disc without requiring any surgical procedure whatsoever. This procedure has been applied to 200 patients without major problems, any kind of tumor formation or adverse events and with numerous examples of success. However, the FDA is interested in regulating that process and the kinds of testing that we’re developing could be used as a critical test for determining the safety and efficacy of these stem cells prior to transplantation. This is an example of kind of a base from which our product could be used in numerous applications in regenerative medicine beyond treatment of conditions related to joint problems.

WSR: How well positioned do you think Vitro Diagnostics is to capitalize on some of these stem cell trends?

James Musick: I think we’re well positioned. We have products on the market right now. We don’t require FDA approval for marketing of our products. However, we are working with the FDA to assist in the overall establishment of a regulatory climate for this new technology. We have numerous opportunities within our target market. Our growth strategy involves collaboration with other companies such as HemoGenix. There are some other companies that we’re interested in and talking to. I think we’re well positioned to be a primary participant in the emerging field of cellular medicine, which is projected to grow at a very, very rapid rate. And while we’re also positioned well in the fundamental tools that all people require, researchers who are involved in this inclination. We also have a proprietary position in cancer and diabetes, in terms of stem cell therapies for those two conditions, which are huge global issues for healthcare in general.

WSR: What would you say makes Vitro unique from some of the other players in the sector?

James Musick: We have market. We have sales. We have an opportunity for rapid turnaround. We have a low number of issued and outstanding shares in the company. We have an extremely low burn rate so that profitability can be achieved fairly quickly. We’ve got a tremendous upside potential. We’re targeting a $4 billion market in non-therapeutic applications right now. And, we’re very much entrepreneurial. I have over 20 years experience. I’ve built a company and sold it. Ivan Rich is very entrepreneurial; he’s been Chairman and CEO of HemoGenix. Our Board of Directors complement us. We have a senior scientist from Amgen who is involved in the production of Epogen in the Longmont plant of Amgen. He is very, very familiar with all of the FDA regulatory issues involved in operation of a modern biopharmaceutical plant and company and will assist us tremendously in terms of regulatory issues. We also have a new board member who is an investment banker and very successful in raising funds and designing capital structure for small life science biotechnology companies like Vitro. I think all of these — Richard Huebner at Bathgate Capital. I think all of these things combine to position Vitro quite well for the future. And, I think we’re undervalued presently and represent an attractive target for investors.

WSR: You just answered my next question about some of the strength of your management team. So, perhaps you could tell us a little bit about some of the milestones and objectives that the team here is looking to accomplish over the course of the next 12 months?

James Musick: Probably the main milestone over the course of next 12 months is to turnaround the company and begin to report earnings. We have very specific targets with regard to revenues and how those revenues will be generated. We’re basically looking to establish our position in the tools business and rapidly accelerate the HALO platform assay tools to mesenchymal stem cells as well as iPS cells and to be working with regulatory people in the FDA to position our assay as a required component and a critical component and determining the safety and efficacy of new products that are being developed for routine use and release of cellular material for transplantation therapy.

WSR: When it comes to investors and the investment community Jim, do you believe that Vitro Diagnostics, that your story is completely understood and appreciated by the financial community?

James Musick: I think it’s, I’ve struggled with this, we’re dealing with high-technology areas. It’s very, very rapidly advancing and there’s a lot of very cutting edge work that’s being conducted in the field of stem cell technologies and I think investors get a little bit confused by that. We’re trying to get our story out. I think Vitro has been in, while we’ve been in R&D for sometime and so, we’re somewhat emerging and we’re trying to get our story more widely broadcast to the investment community. And, I think also there’s a lot of misconceptions about stem cell technology and we’re trying to obviate some of those misconceptions and clearly indicate that the beneficial effects that stem cell technology can have on medicine and solve some of the misconceptions that are existing out there.

WSR: So, once again joining us today is Dr. James Musick, CEO of Vitro Diagnostics. The company trades on the Bulletin Board. Their ticker symbol is VODG. It’s currently trading at $0.15 a share, market cap is $2.67 million, and I was speaking with Dr. Musick about the company’s continued mission to harness the power of stem cells as well as their strategic alliance with HemoGenix to distribute and manufacture the HALO assay platform. Before we conclude Dr. Musick, why do you believe that VODG, why should investors consider Vitro Diagnostics today?

James Musick: I think ultimately it’s an undervalued issue. Right now, we have revenues in short-term turnaround in front of us. We have an extremely low burn rate. We’re players in a defined $4 billion target market. Our growth strategy includes partnership formation, collaboration with other companies. There’s a lot of talent up there, and there’s a lot of small companies who are coming up with very, very innovative products and technology. We’re expanding our partnership platform right now through the alliance with HemoGenix. There are other companies that we’re talking to who are in the similar field, but also complement us. We feel like we have a very experienced management team that can handle this type of situation. I think it’s an exciting opportunity. The stem cell business has tremendous potential, but we do believe that it has to be properly controlled and properly regulated, and safety and efficacy is a critical issue before going forward with any type of clinical work. But, we’re very interested in working extremely closely with the FDA and other regulatory officials to ensure safety and efficacy.

WSR: We certainly do look forward to continuing to track the company’s growth as well as report on your upcoming progress. And, I like to thank you for taking the time to join us today Dr. Musick to talk about some of the stem cell trends as well as update us on Vitro Diagnostics.

James Musick: Thank you very much, Juan. I greatly appreciate the opportunity to speak with you and I encourage any investors who have any question about this to call me. I’m very readily accessible. I enjoy talking to investors. Please have a look at our website, it’s www.vitrobiopharma.com for additional information and contact information.

WSR: Great, thanks a lot Jim.

James Musick: Thank you Juan.

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