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News & Events > Press Releases > March 9, 2006

StemCells, Inc. Receives IRB Approval From Oregon Health & Science University To Begin Phase I Clinical Trial In Batten Disease

First Ever Clinical Trial Using Purified Human Neural Stem Cells

PALO ALTO, Calif., (March 9, 2006) –StemCells, Inc. (NASDAQ: STEM) today announced that it has received approval from the Institutional Review Board (IRB) of the Oregon Health & Science University (OHSU) to initiate a Phase I clinical trial of the Company’s proprietary human neural stem cell product—HuCNS-SC ™—to treat infantile and late-infantile neuronal ceroid lipofuscinosis (NCL), two forms of a group of disorders often referred to as Batten disease. Batten disease is a rare and fatal neurodegenerative genetic condition affecting infants and children.

StemCells, Inc. announced in October 2005 that it received clearance from the Food and Drug Administration (FDA) to initiate a Phase I trial, and this IRB approval means that patient enrollment may now begin at OHSU. StemCells, Inc. believes this will be the first trial using a purified composition of neural stem cells as a potential therapeutic agent in humans. The trial’s OHSU site will be led by clinical investigators Robert D. Steiner, M.D ., F.A.A.P., F.A.C.M.G., vice chairman of pediatric research and head of the Division of Metabolism at Doernbecher Children’s Hospital, and associate professor of Pediatrics and Molecular & Medical Genetics at OHSU School of Medicine, and Nathan Selden, M.D., Ph.D., F.A.C.S., F.A.A.P. , Campagna Associate Professor of Pediatric Neurological Surgery and head of the Division of Pediatric Neurological Surgery, Doernbecher and OHSU School of Medicine.

“IRB approval of this groundbreaking trial removes the only remaining regulatory requirement between us and the initiation of clinical testing in this very needy patient population. It is the culmination of many years of meticulous basic science followed by diligent preclinical research conducted by our scientists and collaborators around the world,” said Martin McGlynn, President and CEO of StemCells, Inc. “This approval also opens a very new and exciting chapter for the Company as we enter the clinic with our proprietary human neural stem cell. Drs. Steiner and Selden, specialists in pediatric neurosurgery and pediatric metabolic disorders, will be leading the trial at OHSU. We are particularly pleased that such respected clinicians will be providing their significant expertise to these patients.”

Dr. Robert Steiner specializes in inborn errors of metabolism and their impact on disease. He is currently engaged in clinical investigations for Smith Lemli Opitz syndrome, Mevalonate Kinase Deficiency, and phenylketonuria (PKU), disorders which, like Batten disease, are characterized by metabolic deficits and brain involvement. His co-investigator for the trial, Dr. Nathan Selden, has led the neurosurgery program at OHSU-affiliated Doernbecher Children’s Hospital since 2000.

“ NCL is a heartbreaking and devastating diagnosis for children and their families,” said Dr. Steiner. “ While the preclinical research in the laboratory and in animals is promising, it is important to note that this is a safety trial and, to our knowledge, purified neural stem cell transplantation has never been done before. It is our hope that stem cells will provide an important therapeutic advance for these children who have no other viable options.”

“Delivering the benefits of stem cell technology directly into the human brain will, in my opinion, be a major step forward in the efforts of scientists and clinicians around the country to find new treatments with the potential to help tens of thousands of patients with degenerative brain diseases,” said Dr. Selden. “I am proud that Doernbecher Children’s Hospital will be part of this effort.”

About Batten Disease (Neuronal Ceroid Lipofuscinosis)

Batten disease is named after the British pediatrician who first described the juvenile form of neuronal ceroid lipofuscinosis (NCL) in 1903. The name is now often used to encompass the three most common forms of NCL—infantile, late infantile and juvenile onset. All forms have the same basic cause—lack of a lysosomal enzyme—and have similar progression and outcome. The different forms of NCL have traditionally been classified by age of onset. Now with genetic and enzyme testing, the disease is more precisely classified in terms of specific gene mutations and enzyme deficiencies. Children with Batten disease suffer seizures, progressive loss of motor skills, sight and mental capacity, eventually becoming blind, bedridden and unable to communicate. Today, Batten disease is always fatal.

In the infantile and late infantile subtypes of NCL, the disorder is brought on by inherited mutations in the CLN1 gene, which codes for palmitoyl-protein thioesterase 1 (PPT1) or in the CLN2 gene, which codes for tripeptidyl peptidase I (TPP-I), respectively. The consequence of these gene mutations is either a defective or a missing enzyme that leads to accumulation of lipofuscin-like fluorescent inclusions in various cell types. It is thought that these non-degraded lysosomal substrates accumulate to the point where they interfere with normal cellular and tissue function and ultimately lead to the pathological manifestations of the disease. One way to treat the disease is to provide the brain with a replacement source of functional enzyme that can be taken up by the enzyme-deficient cells.

About HuCNS-SC™

StemCells’ human neural stem cells (HuCNS-SC) are a cell therapy product prepared under controlled conditions. Neural stem cells are isolated from the human fetal brain, purified, expanded and then stored and frozen in cell banks until they are transplanted as HuCNS-SC doses.

When HuCNS-SC are transplanted into the brain of a preclinical mouse model developed to mimic the human form of infantile NCL, they spread throughout the brain and produce the missing lysosomal enzyme. The enzyme level increases and continues to do so over time after the transplant. Thus, placement of HuCNS-SC in appropriate places in the brain provides the prospect of long-term delivery of the missing lysosomal enzyme. In laboratory studies, HuCNS-SC also produces the lysosomal enzyme missing in late infantile NCL, the other subtype being studied in the clinical trial. The production of both enzymes by HuCNS-SC provides a scientific rationale for enzyme replacement and cellular rescue in these two subtypes of Batten disease.

About the Clinical Trial

The proposed Phase I trial is designed to evaluate the safety and preliminary efficacy of HuCNS-SC as a treatment of infantile and late-infantile neuronal ceroid lipofuscinosis. The trial will not treat patients with a third form of the disease, juvenile NCL. In addition to measuring the safety of HuCNS-SC, the trial may provide initial data on the ability of HuCNS-SC to affect the progression of the disease. Potential patients will be tested for eligibility and then evaluated for baseline disease status prior to transplantation of HuCNS-SC. Children enrolled in the study will be evaluated with standardized measures of development, cognition, behavior and language for one year following HuCNS-SC transplantation. The Company is committed to following the effects of this therapy long-term, so trial patients will also be asked to commit to a four-year follow-up study.

Stephen L. Huhn, M.D., F.A.C.S., F.A.A.P., Chief of Pediatric Neurosurgery at Stanford Medical School, and Gregory M. Enns, MB, Ch.B., Assistant Professor and Director, Biochemical Genetics Program, Division of Medical Genetics, also of Stanford Medical School, played a major role in the pre-clinical research and design of the protocol for this clinical trial.

About StemCells, Inc.

StemCells, Inc. is a clinical 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 a publicly traded company solely focused on stem cell research and development and has approximately 40 U.S. and 100 non-U.S. patents, as well as more than 100 patent applications pending worldwide. Further information about the Company is available on its web site at: www.stemcellsinc.com.

About OHSU

Oregon Health & Science University is Oregon’s only health and research university. As part of its multifaceted public mission, OHSU strives for excellence in scholarship, research, clinical practice and community service. OHSU includes four schools, two hospitals, numerous primary and specialty care clinics, multiple research centers and institutes and dozens of community service programs. OHSU’s fundamental purpose is to improve the well-being of people in Oregon and beyond.

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 ability to conduct clinical trials as well as 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 whether results obtained in the animal model of infantile NCL and laboratory production of the enzyme implicated in late infantile NCL will be able to be translated into treatment for humans; uncertainty whether the clinical investigators will be able to identify suitable candidates for the Batten disease clinical trial; uncertainty as to whether the FDA will permit the Company to continue clinical testing in the Batten disease trial or in future clinical trials of proposed therapies for other diseases or conditions despite the novel and unproven nature of the Company’s technology; 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; uncertainty regarding the validity and enforceability of the Company’s patents; uncertainty as to whether HuCNS-SC and any products that may be generated in the future in the Company’s stem cell programs will prove safe and clinically effective and not cause tumors or other side effects; uncertainty as to whether the Company will achieve revenues from product sales or become profitable; 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.”

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    CONTACT: StemCells, Inc.
             Rodney Young
             Chief Financial Officer
             650-475-3100, Ext. 105
             or
             Schwartz Communications, Inc.
             781-684-0770 or 415-512-0770
             stemcells@schwartz-pr.com

    SOURCE: StemCells, Inc.
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