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Published Study Shows First Direct Link Between Human Neural Stem Cells and Restored Motor Function in Spinal Cord Injured Mice; StemCells Inc.'s Adult Human Neural Stem Cells Regenerate Protective Layer Around Nerves Following Spinal Cord Injury

Posted on: Monday, 19 September 2005, 18:00 CDT

StemCells, Inc. (Nasdaq: STEM) today announced results of a published study that demonstrates that the Company's proprietary human neural stem cells restore the lost motor function of mice with spinal cord injuries. This study is also the first to show the causal relationship between transplanted human neural stem cells and long-term recovery of motor function: The human neural cells were subsequently ablated in some of the mice, and their improved motor function was lost.

The study was conducted by Drs. Aileen Anderson, Brian Cummings and their colleagues from the Reeve Irvine Research Center at the University of California, Irvine. It will be published today online in the Early Edition of the Proceedings of the National Academy of Sciences of the United States of America (PNAS), and will appear in the September 27, 2005 print issue. The study was funded in part by a Small Business Innovative Research Grant from the National Institute of Health (NIH) to StemCells, Inc. Support was also provided by the Christopher Reeve Foundation through its International Research Consortium on Spinal Cord Injury.

As part of the study, human neural stem cells were transplanted into mice nine days after a spinal cord crush injury that results in hind limb paralysis. The mice were then observed and tested for sixteen weeks after the transplant. The transplanted mice showed significant improvement in their ability to walk compared to mice in two control groups, and the improvement persisted during the full term of the study. The treated mice had better weight-bearing ability and coordinated stepping using their hind limbs. Data gathered during the study shows that the transplanted human neural stem cells survived, produced new neural cells that integrated into the mouse spinal cord and reversed hind limb paralysis.

"While we are early in our quest to find a stem cell therapy for spinal cord injury, the design of this study raises the bar for evaluating experimental cell-based therapies in this extremely debilitating medical condition," said Martin McGlynn, President and Chief Executive Officer of StemCells. "The study clearly demonstrates that our proprietary human neural stem cells make functional new neural cells, and are responsible for the restoration of hind limb function in this animal model of spinal cord injury."

The human neural stem cells, when transplanted into the mouse spinal cord, become specialized new cells called oligodendrocytes that make myelin. Myelin forms a protective sheath that insulates nerve fibers that conduct electric signals for proper function. The newly formed human oligodendrocytes produced new myelin sheaths around damaged mouse axons. In addition, new human neurons were generated that formed synapses, a specialized junction linking one neuron to another.

Note to Journalists: The complete study is expected to be published online this week at www.pnas.org. For those wishing to see it prior to online publication, please e-mail stemcells@schwartz-pr.com.

About StemCells, Inc.

StemCells, Inc. is a development stage biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of the nervous system, liver and pancreas. The Company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury. StemCells is the first company to directly identify and isolate human neural stem cells from normal brain tissue. These stem cells are expandable into cell banks for therapeutic use, which demonstrates the feasibility of using normal, non-genetically modified cells as cell-based therapies. StemCells is the only publicly traded company solely focused on stem cell research and development and has more than 40 U.S. and 100 non-U.S. patents, as well as 100 patent applications pending worldwide. Further information about the Company is available on its web site at: www.stemcellsinc.com.

Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company") and its research and product development efforts. The forward-looking statements speak only as of the date of this news release. StemCells does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in the forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties regarding the Company's ability to obtain the capital resources needed to continue its current research and development operations and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the question whether results obtained in this animal model will be able to be translated into treatment for human conditions; uncertainty as to whether the FDA will remove the clinical hold on the Company's proposed initial clinical trial and permit the Company to proceed to clinical testing in that trial or in trials of proposed therapies for other diseases or conditions despite the novel and unproven nature of the Company's technology; the uncertainty regarding the validity and enforceability of issued patents; the uncertainty whether any products that may be generated in the future in the Company's stem cell programs will prove clinically effective and not cause tumors or other side effects; the uncertainty whether the Company will achieve revenues from product sales or become profitable; uncertainties regarding the Company's obligations in regard to its former encapsulated cell therapy facilities in Rhode Island; and other factors that are described in Exhibit 99 to the Company's Annual Report on Form 10-K titled "Cautionary Factors Relevant to Forward-Looking Statements."

Source: Business Wire

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