CytoTherapeutics Reports First Quarter Results

PROVIDENCE, RI, APRIL 24, 1996 -- CytoTherapeutics, Inc. (NASDAQ: CTII) today reported a net loss for the quarter ended March 31, 1996 of $2,996,060, or $0.20 per share, compared to net earnings of $1,873,001, or $0.17 per share, for the first quarter of 1995. Revenues from collaborative arrangements for the first quarter of 1996 were $1,664,217, compared with $6,315,186 in the first quarter of 1995. The revenues for the quarter ended March 31, 1995 included a one-time $5,000,000 licensing payment from Astra AB, the Company's collaborator on its chronic pain program. At March 31, 1996, the Company had cash, cash equivalents and marketable securities totaling $39,551,000.

"During the first quarter of 1996, we received important confirmation of our clinical strategies in both our pain control and ALS programs," stated Seth A. Rudnick, M.D., Chairman and Chief Executive Officer.

"Based on favorable safety results from our initial Phase I trial of our pain control product, the FDA agreed to an extension of that trial in which we are now testing an implant designed to deliver higher amounts of natural pain-blocking substances into the central nervous system," continued Dr. Rudnick.

"In the case of our ALS program, Dr. Patrick Aebischer, a founding scientist and Board member of CytoTherapeutics, received a grant from the Swiss National Science Foundation to fund a second clinical trial of the Company's cell-containing implant for the treatment of ALS. The Company believes the commitment of the Swiss National Science Foundation to advancing this technology is an important endorsement.

"The second trial in ALS is designed to test modifications in implant design. Each product that we develop requires that we find the best combination of cell type, membrane and other technology elements to optimize the therapeutic efficacy of the implant while eliciting minimal effects on the patient's immune system. We will maintain our clinical progress by continuing to take a systematic, stepwise approach to clinical development of our products, and the Swiss grant will allow us to do this in our ALS program," he added.

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CytoTherapeutics, Inc. is a leader in the development of proprietary products and technology designed to deliver therapeutic substances to the central nervous system (CNS). The Company's CNS-focused technology is designed to provide controlled, site-specific and safe delivery of a variety of novel therapeutic substances across the blood-brain barrier, potentially overcoming a fundamental obstacle in the effective treatment of CNS diseases. The Company is currently developing products for the treatment of chronic pain, ALS, and Parkinson's disease, with additional research efforts directed to several other CNS disorders. For additional information, visit the Company's Internet web site at http://www.cyto.com.

Certain statements in this press release include forward looking comments regarding, among other things, product development programs and clinical trial strategies. The Company's actual results may vary materially from those forward looking statements due to risks and uncertainties to which the Company is subject and which are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward Looking Statements."