CytoTherapeutics Reports Fourth Quarter and Year End 1999 Results

SUNNYVALE, Calif. -- (BW HealthWire) -- April 17, 2000 -- CytoTherapeutics (Nasdaq:CTII) announced today financial results for the fourth quarter and fiscal year ended December 31, 1999.

The Company reported a net loss of $5,225,000, or $0.28 per share, for the fourth quarter ended December 31, 1999, compared to a net loss of $2,193,000, or $0.12 per share, for the fourth quarter of 1998. For the fiscal year ended December 31, 1999, the Company reported a net loss of $15,709,000, or $0.84 per share, as compared to a net loss of $12,628,000, or $0.69 per share, for the 1998 fiscal year. Total revenue from collaborative agreements in 1999 was $5,022,000, compared with $8,803,000 in 1998. Cash, cash equivalents and short term investments were $4,760,000 at the end of 1999, compared with $17,386,000 at the end of 1998.

Changes from 1998 primarily reflect the end of a collaborative research agreement between CytoTherapeutics and AstraZeneca in the area of encapsulated cell technology ("ECT") as announced in June 1999, and the restructuring of operations to focus the Company's resources on the discovery, development and commercialization of its platform stem cell technologies to treat disease. As part of the restructuring, the Company has relocated its headquarters from Rhode Island to Sunnyvale, CA, and sold its former intellectual property assets relating to ECT.

The Company also reported that on April 13, 2000, it had completed arrangements to sell 1,500 shares of 6% cumulative convertible preferred stock plus a warrant for 75,000 shares of the Company's common stock to a member of its Board of Directors for $1,500,000, on terms more favorable than it was then able to obtain from outside investors. As a result of this transaction, the Company believes it has adequate resources to fund its operations into the first quarter of 2001.

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CytoTherapeutics is a biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of the central 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.

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 CytoTherapeutics, Inc., or of StemCells California, Inc., its wholly-owned subsidiary (collectively, "the Company"). 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 conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the fact that the Company's stem cell technology is at the pre-clinical stage and has not yet led to the development of any proposed product; the uncertainty whether the Company will achieve revenues from product sales or become profitable; and others that are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward Looking Statements."

    CONTACT:  CytoTherapeutics, Inc. 
              George Dunbar, 408/731-8670
              or
              IR PR Strategies, LLC
              Anette Breindl, 858/860-0266