Healthcare Industry News:  cord blood 

Regenerative Medicine Litigation

 News Release - May 30, 2006

ViaCell Announces New Office Actions Rejecting PharmaStem Patent Claims

CAMBRIDGE, Mass., May 30 (HSMN NewsFeed) -- ViaCell, Inc. (Nasdaq: VIAC ) today announced that, following a re-examination, the United States Patent and Trademark Office (PTO) issued two new office actions rejecting all of the claims of PharmaStem Therapeutics Inc.'s U.S. Patent No. 5,192,553 and U.S. Patent No. 6,569,427 as being unpatentable over prior art. Recently, the PTO issued initial office actions rejecting all the claims of PharmaStem Patent Nos. 5,004,681 and 6,461,645. All of these patents relate to certain aspects of the collection, cryopreservation, storage and use of hematopoietic stem cells from umbilical cord blood and have been asserted against ViaCell and several other defendants by PharmaStem in pending patent infringement cases.

"We are very pleased with these developments," said Anne Marie Cook, General Counsel and Senior Vice President, Business and Corporate Development of ViaCell. "We believe the PTO's actions support our position that the patents are invalid based on prior art."

Background on PharmaStem Litigation

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. Separately, the PTO ordered re-examinations of these four patents 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 and the U.S. Court of Appeals for the Federal Circuit heard oral argument in the appeal on April 4, 2006. 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

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. 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" in the Company's Quarterly Report on Form 10-Q for the quarter ending March 31, 2006, 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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