StemCells' Human Neural Stem Cells Survive, Migrate and Differentiate in Pre- Clinical Stroke Study

PALO ALTO, Calif., July 28 /PRNewswire-FirstCall/ -- StemCells, Inc. (Nasdaq: STEM) -- Human neural stem cells proprietary to StemCells, Inc. have been used in a Stanford University study in a preclinical stroke model. In an article published yesterday in the early on-line edition of the Proceedings of the National Academy of Science (PNAS), authors from Stanford University described the results of the study, conducted by Drs. Kelly and Bliss under the direction of Gary Steinberg, M.D., Ph.D., Chairman Department of Neurosurgery; Co-Director, Stanford Stroke Center. Nobuko Uchida, Ph.D., StemCells Vice President, Stem Cell Biology, is also an author on the paper.

Study results showed that the transplanted cells are capable of surviving in the brain of immunosuppressed stroked rats. The human cells migrate as immature neurons preferentially towards the stroke lesion. The results confirmed the findings of a pilot study presented in November 2002, at the 32nd Annual Meeting of the Society for Neuroscience.

"We continue to be encouraged by the performance of our human cells in animal models," said Martin McGlynn, CEO StemCells Inc. "However, there are many questions still to be answered. While these results are a further testimony to the robustness of our human cells, we do not yet know whether we have a good animal model for stroke in humans. We must recognize that, in this experiment, the human cells were transplanted into a different species, in the presence of profound trauma, complicated by large doses of immunosuppressant drugs. These factors make it difficult to judge the extent to which similar, better or worse results would be obtained in a model that is more comparable to the human condition. Our own transplant experiments to date have been conducted in NOD-Scid mice, a special strain without an immune system. This eliminates one of the confounding variables, but unfortunately, there is no NOD-Scid stroke model available at this time. As previously announced, the first clinical evaluation of our human neural stem cells is targeted to begin in 2005, to evaluate the safety and efficacy of these cells in the treatment of Batten disease, an always fatal neurodegenerative lysosomal storage disease. The preclinical data supporting this decision was previously obtained in the Batten-NOD-Scid mouse model."

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About StemCells Inc
StemCells, Inc. uses proprietary technology to isolate, purify and expand stem or progenitor cells that are found in human tissue and which are at least committed to become the mature cells of the organ from which they were derived. StemCells' goal is to use these cells to repair or repopulate neural or other tissue that has been damaged or lost due to disease or injury. For more information about StemCells, Inc., please visit http://www.stemcellsinc.com.

Statements in this press release other than statements of historical facts constitute forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company"). 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 the risk that Company will not be successful in using the patented technologies to develop effective treatments for human diseases; 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 state and has not yet led to the development of any proposed product; the uncertainty whether the Company's preclinical work will be replicable in another animal model and whether comparable results will be obtainable in humans; 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; 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."

     Corporate Contact:
     StemCells, Inc.
     Martin McGlynn, President & CEO
     650-475-3100, ext 108

SOURCE  StemCells, Inc.
    -0-                             07/28/2004
    /CONTACT:  Martin McGlynn, President & CEO of StemCells, Inc.,
+1-650-475-3100, ext. 108/
    /Web site:  http://www.stemcellsinc.com /
    (STEM)

CO:  StemCells, Inc.
ST:  California
IN:  HEA MTC BIO
SU:  SVY

JO 
-- SFW068 --
4916 07/28/2004 12:35 EDT http://www.prnewswire.com

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