Healthcare Industry News:  Stem Cell Therapeutics Corp 

Regenerative Medicine Licensing

 News Release - August 29, 2006

StemCells, Inc. Grants License to Stem Cell Therapeutics

PALO ALTO, Calif.--(HSMN NewsFeed)--Aug. 29, 2006--StemCells, Inc. (NASDAQ: STEM ) announced today that it has entered into a license agreement with Stem Cell Therapeutics Corp. (TSX-V: SSS ), a Canadian biotechnology company engaged in treating certain central nervous system (CNS) disorders by stimulating endogenous neural stem cells. Under the agreement, Stem Cell Therapeutics (SCT) will pay StemCells up-front and license maintenance fees, as well as milestone and royalty payments. The agreement also provides StemCells with access to SCT's intellectual property portfolio for use in drug discovery, screening and testing, and therapeutic use of cellular compositions. StemCells will pay SCT a commercially reasonable royalty to be negotiated in good faith on products developed under the license.

"We are delighted to have Stem Cell Therapeutics as our newest licensee in the neural stem cell field," said Martin McGlynn, President and CEO of StemCells. "We regard them as a pioneer in the use of various molecules to induce a patient's own stem cells to proliferate in the brain, and wish them great success with their programs, some of which are already clinical stage. Our own primary approach to treating disorders of the CNS is through the direct transplantation into the brain of natural human neural stem cells; ReNeuron, a UK biotech company that is another of our licensees in the neural stem cell field, has a similar approach to ours, but in their case they use conditionally immortalized cells. Patients can only benefit from collaborations of this sort in the private sector, as they provide multiple shots on goal, where the goal is to bring stem cell based treatments to the clinic to treat a whole range of intractable conditions of the CNS."

"This is a mutually advantageous deal that we believe advances the adult neural stem cell field as a whole. The rights we have licensed from StemCells further solidify and strengthen our intellectual property position, and the agreement allows StemCells to use our intellectual property through approaches we are not currently pursuing in our own programs," said Joseph Tucker, Ph.D., President and CEO of Stem Cell Therapeutics. "Stem Cell Therapeutics is focused on a drug-based approach to treating disease, while StemCells is developing cell-based therapeutic approaches using adult stem cells. I believe that this agreement should help both companies achieve their ultimate goals of bringing effective stem cell therapies to the patients who need them."

About Stem Cell Therapeutics Corp.

Stem Cell Therapeutics Corp. (SCT) is a biotechnology company focused on the development and commercialization of drug-based therapies to treat central nervous system diseases. SCT is a leader in the development of therapies that utilize drugs to stimulate a patient's own resident stem cells. The company's programs aim to repair neurological function lost due to disease or injury. SCT's currently enrolling phase II clinical program for NTx(TM)-265 targets the treatment of stroke by repurposing approved and clinically well defined drugs. The company's extensive patent portfolio of owned and licensed intellectual property supports the potential expansion into future clinical programs in numerous neurological diseases. More information on Stem Cell Therapeutics Corp. can be found on its web site at

About StemCells, Inc.

StemCells, Inc. is a clinical-stage biotechnology company focused on the discovery, development and commercialization of cell-based therapeutics to treat diseases of the nervous system, liver and pancreas. The Company's programs seek to repair or repopulate neural, liver 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 cells are expandable into cell banks for therapeutic use, which offers the potential of using normal, non-genetically modified cells as cell-based therapies. StemCells has initiated a Phase I clinical trial of its proprietary human neural stem cells (HuCNS-SC(TM)) as a treatment for neuronal ceroid lipofuscinosis (NCL) and anticipates dosing the first patient in that trial later this year. NCL, which is often referred to as Batten disease, is a rare and fatal neurodegenerative disease that affects infants and young children. StemCells has approximately 40 U.S. and 100 non-U.S. patents. Further information about the Company is available on its web site at

Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, expectations regarding Stem Cell Therapeutics' technology, the Company's ability to develop products using Stem Cell Therapeutics' intellectual property, the likelihood of obtaining milestone or royalty payments from Stem Cell Therapeutics under the license agreement, the future business operations of StemCells, Inc. (the "Company") and its ability to conduct clinical trials as well as its research and product development efforts. 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; uncertainty as to whether the FDA or other applicable regulators or review boards will permit the Company to continue clinical testing in NCL or in 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 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; 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; and other factors that are described under the heading "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K.

Source: StemCells

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