U.S. Patent Office Issues CytoTherapeutics' Human Neural Stem Cell Patent; Used To Develop Treatments For Central Nervous System Disorders

LINCOLN, R.I. -- (BW HealthWire) -- Dec. 22, 1998 -- CytoTherapeutics, Inc. (Nasdaq:CTII) announced that the U.S. Patent and Trademark Office has granted patent No. 5,851,832, covering methods for expanding human neural stem cell cultures, for compositions of human neural stem cell cultures expanded by these methods, and for use of these cultures in human transplantation and remyelination. The human neural stem/progenitor cell cultures may be useful for repairing or replacing damaged central nervous system tissue, including the brain and the spinal cord. In March 1994, CytoTherapeutics announced that it had licensed a portfolio of patent applications from NeuroSpheres, Ltd. of Canada. CytoTherapeutics' neural stem patent estate currently consists of 7 issued U.S. patents and 13 pending U.S. patent applications related to stem/progenitor cells of the central and peripheral nervous systems.

"We believe the issuance of this patent, with its broad coverage of the in vitro expansion, composition and use in a broad spectrum of central nervous system conditions, further solidifies our preeminent position in the neural stem cell field," stated Richard M. Rose, M.D., President and Chief Executive Officer. "This proprietary technology enables us to expand neural stem/progenitor cells in the laboratory, which is a valuable tool for developing pharmaceutical products and is likely to facilitate the commercialization of our neural stem cell technology."

"CytoTherapeutics' expects to continue to build its leadership position in the field of stem cell therapy through discovering and licensing additional stem cell technology related to other major organ systems in the body, as well as through capitalizing on uses for these cells beyond the field of transplantation," continued Dr. Rose.

In preclinical studies, the Company's scientists and collaborators have already demonstrated the ability to:

characterize, proliferate and differentiate human neural stem/progenitor cell cultures in vitro;
engraft human neural stem/progenitor cells into the brains of rodents where the cells differentiate into the neuronal lineages characteristic of the site into which they are transplanted;
engraft human neural stem/progenitor cells into the spinal cords of myelin-deficient rodents in a model of multiple sclerosis where the cells differentiate into myelinating oligodendrocytes; and
genetically modify multipotent adult rodent hippocampal neural stem/progenitor cells to differentiate into neurons and glia.

In November, CytoTherapeutics announced that its scientists and collaborators presented four abstracts at the 28th Annual Meeting of the Society for Neuroscience in Los Angeles, California. The abstracts were based on the use of the Company's proprietary neural stem/progenitor cell cultures to proliferate in the laboratory, as well as to repair or replace central nervous system tissue following transplantation into the brains of rodents in a model for Huntington's disease.

On December 21, 1998, CytoTherapeutics announced that it had licensed proprietary technology from The Scripps Research Institute developed by Nora Sarvetnick, Ph.D. The Company expects to use this to identify and isolate the pancreatic stem/progenitor cell for use in developing a treatment for diabetes.

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CytoTherapeutics, Inc. is developing cell-based human therapeutics. The Company's encapsulated-cell technology is designed to treat a number of serious diseases and disorders by delivering therapeutic substances directly to the site in the body where they are needed. The Company's stem cell programs seek to repair or repopulate tissue that has been damaged or lost as a result of disease or injury. For additional information, visit the company's Internet web site at http://www.cyto.com.

Certain statements in this press release include forward-looking statements regarding, among other things, management, intellectual property rights, products, marketing, partnering, product development programs and clinical trial timing. CytoTherapeutics actual results may vary materially from those forward looking statements due to risks and uncertainties, such as delays in obtaining regulatory and other approvals or delays in product development, the need for additional intellectual property, the possible loss of existing intellectual property, the failure to achieve anticipated partnering agreements and other risks 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."

For a neural stem cell backgrounder and glossary of terms, contact Karlia O'Brien at (401) 288-1000, ext. 2105.


    CONTACT: CytoTherapeutics, Inc.
             John S. McBride
             Exec. Vice President, Chief Financial Officer
             (401) 288-1000 ext. 2126
             or
             CytoTherapeutics, Inc.
             Elizabeth A. Razee
             Director, Public and Investor Relations
             (401) 288-1000 ext. 2132