StemCells, Inc. Announces Closing of $35.8 Million Financing
Palo Alto, CA (April 7, 2006) – StemCells, Inc. (NASDAQ: STEM) announced today that it has closed the sale of 11,750,840 shares of its common stock to limited number of institutional investors at a price of $3.05 per share, for gross proceeds of $35.8 million. The shares were offered as a registered direct offering under the Company’s effective shelf registration statement previously filed with the Securities and Exchange Commission. StemCells, Inc. received total proceeds, net of offering expenses and placement agency fees, of approximately $33.2 million. The net proceeds of the financing will be used for general corporate purposes, including working capital, product development and capital expenditures, as well as for other strategic purposes .
“This is a strategically important financing for StemCells. We have an extensive agenda as we work to expand the clinical applications of our neural stem cell and advance our liver program into clinical development,” said Martin McGlynn, President and Chief Executive Officer of StemCells, Inc. “The net proceeds from this offering, together with our cash on hand, will allow us to commit fully to the execution of our business plan. Over the next several years, we look to complete our Phase I clinical trial for HuCNS-SC™ in Batten disease, to initiate clinical trials in additional neural indications, and to initiate a clinical trial with our candidate liver stem cell.”
Mr. McGlynn added, “We are very pleased with the sophisticated institutional investors who participated in this transaction as we believe they understand our vision and longer-term strategy to create shareholder value. We very much appreciate the vote of confidence they have shown in StemCells.”
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 potential 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. 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”), including statements regarding the use of proceeds from the offering, the Company’s commitment of funds to its business plan, and the Company looking forward to completion of its existing clinical trial and initiation of additional clinical trials. 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 uncertainty whether results obtained in the animal models of Infantile NCL, spinal cord injury, or other diseases and conditions will be able to be translated into treatment for humans and allow the Company to carry out its plans to advance preclinical programs into the clinic; uncertainty as to whether the FDA or other applicable regulators or review boards will permit the Company to continue clinical testing in Batten disease or to initiate 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 timing and duration of any clinical trials; uncertainties regarding the Company’s ability to obtain and maintain the required approvals of institutional review boards for its clinical trials; uncertainty regarding the Company’s ability to obtain the increased 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; any adverse developments in our initial clinical trial or the failure of that trial to meet expectations; 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; the Company’s likely increase in the use of cash in 2006 and future periods as compared to the Company’s historical use of cash; risks arising from the facts that our stock has been and is likely to continue to be highly volatile, from conditions and publicity regarding the industry in which we operate, as well as the specific areas our product candidates seek to address, conditions competition in our industry, from price and volume fluctuations in the stock market at large that are unrelated to our operating performance, and from comments by securities analysts or our failure to meet market expectations; and other factors that are described under the heading “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K.
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CONTACT: StemCells, Inc.
Rodney Young
Chief Financial Officer
650-475-3100, Ext. 105
irpr@stemcellsinc.com
or
Schwartz Communications, Inc.
781-684-0770
stemcells@schwartz-pr.com
SOURCE: StemCells, Inc.
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