Healthcare Industry News:  Cook 

Regenerative Medicine

 News Release - May 1, 2006

U.S. Patent Office Issues Office Actions Rejecting All Claims in Two PharmaStem Umbilical Cord Blood Patents

CAMBRIDGE, Mass., May 1 (HSMN NewsFeed) -- ViaCell, Inc. (Nasdaq: VIAC ) today announced that, following a re-examination, the United States Patent and Trademark Office (PTO) has issued office actions rejecting all of the claims of PharmaStem Therapeutics Inc.'s U.S. Patent Nos. 6,461,645 and 5,004,681. These patents relate to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells from umbilical cord blood and were asserted against ViaCell and several other defendants by PharmaStem in pending patent infringement cases. The PTO ruled that PharmaStem's patent claims are unpatentable over prior art.

"We are pleased with the PTO's decision," said Anne Marie Cook, General Counsel and Senior Vice President, Business and Corporate Development at ViaCell. "We believe this is a major step forward in vindicating our position in the patent litigation with PharmaStem."

In 2002, PharmaStem brought suit against ViaCell and several other defendants alleging infringement of U.S. Patent Nos. 5,192,553 and 5,004,681. In 2004, PharmaStem brought a second suit against ViaCell and the other defendants alleging infringement of U.S. Patent Nos. 6,461,645 and 6,569,427. The 5,192,553 and 6,569,427 patents also relate to certain aspects of the collection, cryopreservation and storage of hematopoietic stem cells from umbilical cord blood. Separately, the PTO ordered a re-examination of the four PharmaStem patents asserted against ViaCell based on prior art. In 2004, a District Court judge, in overturning a previous jury verdict in the first case, found that PharmaStem had failed to prove infringement. PharmaStem appealed the decision. On April 4, 2006, the U.S. Court of Appeals for the Federal Circuit heard oral argument in the appeal. The second case has been stayed pending decisions from the Federal Circuit on the appeal and the PTO on the patent re-examinations.

In 2003, the European Patent Office revoked all the PharmaStem patent claims on collecting, freezing and using blood from umbilical cord blood for transplantation and therapeutic treatments.

About ViaCell, Inc.

ViaCell is a biotechnology company focused on enabling the widespread use of human cells as medicine. The Company is developing a pipeline of proprietary stem cell product candidates intended to address cancer, cardiac disease, and diabetes. CB001, its lead cord blood derived stem cell therapy product candidate, is being developed for hematopoietic stem cell transplantation in patients affected by a variety of cancers. In addition to its therapeutic development programs, ViaCell's reproductive health business commercializes ViaCord®, a product that offers expecting families the option of preserving their baby's umbilical cord blood. The Company is working to leverage its commercial infrastructure and product development capabilities by developing ViaCyte(SM), its investigational product intended to broaden reproductive choices for women through the cryopreservation of human unfertilized eggs. ViaCell is headquartered in Cambridge, Massachusetts with a processing and storage facility in Kentucky and additional research and development operations in Singapore. Additional information about ViaCell is available online at http://www.viacellinc.com.

This press release contains forward-looking statements regarding the possible outcome of litigation. Such statements are based on management's current beliefs and expectations. There are a number of risks and uncertainties that could cause actual results to differ materially from management's current beliefs and expectations. A PTO Office Action is not a final decision. PharmaStem will have the right to respond to the Office Action and may either amend the patent claims to try to avoid prior art or may challenge the decision at the PTO or through appeal. There is no assurance that PharmaStem will not be successful in these efforts or that the PTO will reject claims in the remaining patents. There is also no assurance that the Court of Appeals will find in ViaCell's favor in the appeal of the pending litigation. The Court of Appeals could demand a retrial or decide to reinstate the jury verdict. For more information on the risks and uncertainties associated with this litigation or with the Company and its products and programs, see the factors set forth under the heading "Risk Factors That May Affect Results" in the Company's Annual Report on Form 10-K for the year ending December 31, 2005, which is on file with the Securities and Exchange Commission and which factors are incorporated herein by reference. ViaCell does not undertake any obligation to update forward-looking statements.

ViaCell® and ViaCord® are registered trademarks and ViaCyte(SM) is a service mark of ViaCell, Inc.



Source: ViaCell

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