Vitro Diagnostics Announces Open Letter to Its Shareholders: Current Results and Future Prospects

GOLDEN, CO--(Marketwire - May 18, 2010) - Vitro Diagnostics, Inc. (OTCBB: VODG), dba Vitro Biopharma, announced the following open letter to its shareholders:

Dear Fellow Shareholders:

I am pleased to report substantial recent achievements that I believe have set the stage for the establishment of significant revenue and earnings growth in the near-term together with a solid pipeline for future growth.

• We launched a novel adult stem cell product line consisting of various tools needed by all of those involved with stem cell research, and
• Expanded our intellectual property to include an issued US patent for stem cell therapy of diabetes, pending patent applications for stem cell cancer therapy and state-of-the-art novel methods of stem cell generation using adult cells that perform the functions of embryonic stem cells, and
• Added a prominent investment banker to our board of directors, and
• Established a key strategic alliance with the leading provider of essential tools to measure stem cell quality and potency.

Through these developments and numerous studies showing significant benefits to the treatment of human & animal disease by stem cell therapy, I believe that our Company is preferentially positioned to emerge as a significant participant in the new field of regenerative medicine based upon modern stem cell technology.

Our strategy for growth is centered on a strong core stem cell technology base including key patent positions coupled with alliances with similar companies engaged in operations that are synergistic with the Company. This strategy is reflected in the recent establishment of an alliance partnership with HemoGenix, Inc. that enables significant value enhancement to both companies and may lead to an appropriate business combination that will leverage the strength of both companies in this emerging industry which is forecast to generate annual revenues of $4 billion in 2010 with an APR growth of 22% (Jain PharmaBiotech and in-house data.) HemoGenix has a 10-year operating history in providing basic products and services needed to measure stem cell quality, potency and the effects of toxic agents. This platform combined with Vitro’s product line and business plan focused on similar markets yields significant synergy that will both enhance and enlarge the collective footprint and capture of our target market. The alliance is immediately focused on extension of the HemoGenix platform stem cell analysis to mesenchymal cells through the merging of Vitro’s high performance stem cell media with HemoGenix high performance stem cell assay kits. I expect accelerated revenue expansion through the offering of these unique products that fulfill an unmet market need. Furthermore, Vitro now has an experienced partner who is quite successful in the marketing of basic stem cell tools to a similar market niche that Vitro is now targeting.

These new products are critically needed as the regenerative potential for adult stem cell therapy has been clearly demonstrated but FDA regulations remain to be established and are centrally dependent upon quality and potency tests that are being commercialized through the Vitro-HemoGenix alliance. We are in close communication with FDA officials regarding the use of our products as a standard of quality for regulatory approval of stem cell transplants. A key goal of the alliance is to provide the “Gold Standard” test for approval of stem cells in transplantation therapy of numerous diseases and injuries in both animals and humans.

HemoGenix revenues are now derived through contract services and sales of stem cell analysis kits both domestically and through an extensive international distribution network consisting of 19 distributors who sell HemoGenix products into 21 different countries. The products jointly developed by Vitro and HemoGenix are to be sold through this distribution network. An initial product line consisting of Vitro’s stem cell media combined with an existing HemoGenix assay kit was recently launched and numerous prospective customers expressed interest in purchasing these products. We also plan to jointly introduce these and additional new products at the “International Society for Stem Cell Research” annual meeting in San Francisco June 15-19, 2010. We plan additional cross selling efforts to our respective customer bases.

Our expanded management team complements the new opportunities for accelerated growth and development. Our Board of Directors now includes a prominent partner of a Denver-based investment bank focused on microcap firms including life science enterprises. Mr. Huebner brings 30 years experience in funding and capital structure development to Vitro’s management team. I expect that his added leadership will also support a strong focus on fundamental operations leading to accelerated revenue generation/profitability together with enhanced funding opportunities and access to investment banking services including M&A.

In closing, our management team has diligently vectored our resources into the establishment of revenues and near-term turn-around by minimizing expenses and developing highly competitive products that target niche markets in the rapidly expanding field of stem cell tools for cellular medicine. During the formative years of R&D, we turned down offers of equity financing that management determined were excessively dilutive when valued against our IP and near-term transition to commercial status. Management has thus maintained our outstanding shares at less than 20 million, allowing shareholders to benefit from earnings leverage not typical of other publicly traded stem cell companies. I believe we have set the stage for increased shareholder value based on imminent and rapidly expanding revenue and earnings from commercially available stem cell products while also contributing to conquering many debilitating diseases such as diabetes and cancer that represent enormous burdens to the global health care system.

Sincerely yours,
James R. Musick, Ph.D.
President, Chairman of the Board and CEO

Safe Harbor Statement

Certain statements contained herein and subsequent oral statements made by and on behalf of the Company 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 publicly update these forward-looking statements, whether as a result of new information, future events or otherwise.