Healthcare Industry News:  neurodegenerative 

Regenerative Medicine Nurology

 News Release - May 29, 2008

StemCells Confirms Previously Reported Batten Trial Death Was Due to Natural Progression of Disease

PALO ALTO, Calif.--(HSMN NewsFeed)--StemCells, Inc. (Nasdaq:STEM ) today provided additional information about the patient in the Company’s Phase I clinical trial of HuCNS-SC® cells (purified human neural stem cells) whose death was previously reported in January 2008. Based on autopsy results and medical records, the principal investigators for the trial, the Company’s medical experts and an independent Data Safety Monitoring Committee have all confirmed their preliminary judgment that the death was due to the natural progression of the disease. The US Food and Drug Administration has been informed of the autopsy and the resultant conclusions.

The patient, a nine year old girl, was transplanted with HuCNS-SC cells in January 2007 as a participant in the Company’s trial of HuCNS-SC cells as a treatment for infantile and late infantile neuronal ceroid lipofuscinosis (NCL), a fatal neurodegenerative condition that affects infants and young children.

Two independent examinations of the patient’s brain, conducted by pathologists at Oregon Health & Science University (OHSU) and Stanford University Medical Center, did not show any abnormal reaction to either the transplantation procedure itself or to the HuCNS-SC cells that were transplanted into both sides of the brain. Specifically, there was no evidence of tumor formation or abnormal inflammation. The examinations did find atrophy of the brain, as well as diseased neurons containing the toxic cellular waste known as lipofuscin. Both of these pathologic features represent classic manifestations of the underlying disease.

“Because this first trial is designed primarily to assess the safety of transplanting HuCNS-SC cells, this data is very important,” said Stephen Huhn, M.D., F.A.C.S., F.A.A.P., Vice President and Head of the CNS Program. “We are indebted yet again to the patient’s family for consenting to an autopsy. Their decision has given us a fuller understanding of the outcome of neural stem cell transplantation into the brain of very fragile patients. We are very encouraged that the brain of this child tolerated both the surgery and cells without any apparent complication or toxicity.”

“We believe this data provides additional justification for future trials of our HuCNS-SC cells,” Dr. Huhn added, “And we will continue our efforts to find a treatment for NCL and other lysosomal storage diseases affecting the brain.” StemCells, Inc. is a sponsor of the 2008 Lysosomal Diseases and the Brain Conference, which is scheduled for May 29-31, 2008 in Sacramento, California.

About Neuronal Ceroid Lipofuscinosis (Batten Disease)

Neuronal ceroid lipofuscinosis is a fatal neurodegenerative disorder that afflicts infants and young children. The disorder, often referred to as Batten disease, is caused by genetic mutations, and children who inherit the defective gene are unable to produce enough of an enzyme that processes cellular waste substances that accumulate in a part of cells known as the lysosome. Without the enzyme, the cellular waste builds up, and eventually the cells cannot function and die. Children with NCL appear healthy when born, but as their brain cells die, they begin to suffer seizures and progressively lose motor skills, sight and mental capacity. Eventually, they become blind, bedridden and unable to communicate or function on their own. There currently is no cure for the disease. The infantile and late infantile forms of NCL are caused by different genetic mutations. As the names imply, the two forms begin to afflict patients at different stages of infancy, but both have similar disease progression and outcomes.

About HuCNS-SC Cells

StemCell’s lead product candidate, HuCNS-SC cells, is a purified composition of normal human neural stem cells that are expanded and stored as banks of cells. The Company’s preclinical research has shown that HuCNS-SC cells can be directly transplanted; they engraft, migrate, differentiate into neurons and glial cells; and they survive for as long as one year with no sign of tumor formation or adverse effects. These findings show that HuCNS-SC cells, when transplanted, act like normal stem cells, suggesting the possibility of a continual replenishment of normal human neural cells.

When HuCNS-SC cells are transplanted into a mouse model of infantile NCL, the cells engraft, produce the missing enzyme, and enable the mice to survive longer compared to mice which did not receive the cell transplant. Thus, placement of HuCNS-SC in the brain provides the prospect of long-term delivery of the missing lysosomal enzyme. In addition, the Company has shown in laboratory studies that HuCNS-SC cells also produce the enzyme missing in late infantile NCL, which provides the scientific rationale for enzyme replacement via transplantation of HuCNS-SC cells in these two subtypes of NCL.

About the Clinical Trial

The Company’s Phase I clinical trial is designed to evaluate the safety and preliminary efficacy of HuCNS-SC cells as a treatment of infantile and late infantile NCL. Based on its preclinical data, StemCells believes that transplantation of HuCNS-SC cells into the brain of an infantile or late infantile NCL patient may provide the prospect of long-term production and delivery of the missing enzyme, which would help clear the cellular waste and protect the patient’s brain cells. All six patients planned for this Phase I trial have been enrolled and transplanted with HuCNS-SC cells, and the Company expects the trial will be completed in early 2009.

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 and liver. 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 has pioneered the discovery and development of HuCNS-SC cells, its highly purified, expandable population of human neural stem cells. StemCells owns or has exclusive rights to more than 50 issued or allowed U.S. patents and more than 150 granted or allowed 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, the Company's conduct of and enrollment in the clinical trial of its HuCNS-SC product candidate as a treatment for infantile and late infantile NCL. These 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 as to whether HuCNS-SC cells will prove safe in the current or any future clinical trial; uncertainty as to whether the FDA or other applicable regulators or review boards will permit the Company to continue clinical testing in NCL despite the novel and unproven nature of the Company’s technology; uncertainty whether results obtained in the animal models and in vitro studies of NCL or other diseases and conditions will be able to be successfully translated into treatment for humans; uncertainties regarding the Company’s ability to obtain the increased capital resources needed to continue such clinical trial and its other current research and development operations and to conduct the further research, preclinical development and clinical trials necessary for regulatory approvals; and other factors that are described under the heading “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K. The clinical trial is not designed to establish efficacy and completion of the clinical trial by any patient in the clinical trial is not an indication of the efficacy of the Company's HuCNS-SC product; given the fragility of this patient population not all patients are expected to complete the clinical trial. Moreover, preliminary safety data may not be a reliable indication of future safety data.

Source: StemCells

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