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StemCells, Inc. Granted Broad Patent for Pluripotent Rat Stem Cells and Genetically Engineered Rats

Wednesday, March 17, 2010

Palo Alto, CA -- StemCells, Inc. (Nasdaq: STEM) announced today that the United Kingdom (UK) Intellectual Property Office has granted patent number GB2451523 with broad claims covering true (germline competent) rat stem cells and genetically engineered rats derived from these cells. The patented technology is expected to have significant utility to academic and pharmaceutical industry researchers by enabling them to create novel rat models for the study of human diseases. Both mice and rats are used by scientists to model various human diseases. However, rat models are more frequently used by pharmaceutical companies because the physiological characteristics of rats make them better suited for assessing drug efficacy and toxicity.

The Company holds an exclusive license to commercialize this technology and is globally prosecuting the patent family that claims it. The patent family is based upon groundbreaking research led by prominent academic researchers at the University of Edinburgh.

"This is the first patent granted anywhere in the world that protects the derivation and use of pluripotent rat stem cells and the creation of genetically engineered rats," stated Ann Tsukamoto, Ph.D., Executive Vice President, Research and Development at StemCells, Inc. "This technology provides the missing link to create rat models for a wider range of human diseases previously not possible due to a lack of the true pluripotent stem cells needed for precise genetic engineering. We believe this technology, together with our recently launched GS1-R™ cell culture medium, will enable academic and industry researchers to create new, more sophisticated rat models that could prove invaluable in medical research and drug discovery. We look forward to exploring licensing and development opportunities with third parties wishing to commercialize rat models derived from pluripotent rat stem cells."

This patent adds to a broad base of technologies that StemCells is leveraging as part of its strategy to commercialize tools to enable stem cell-based research and drug discovery. The patent details composition of matter claims to pluripotent stem cells of the rat, including both embryonic stem cells and induced pluripotent stem (iPS) cells. The patent also covers genetically engineered rat models derived from such cells, including the generation of both "knock-out" and "knock-in" rats. Knock-out rats allow researchers to study the effect of gene deletion, which is useful for disease modeling. Knock-in rats allow researchers to study the effect of inserting non-native genes, such as human genes, in a precisely defined manner, which can be useful for predicting human responses to drug candidates earlier in the product development cycle.

About StemCells, Inc.

StemCells, Inc. is engaged in the research, development, and commercialization of stem cell therapeutics and enabling technologies for use in stem cell-based research and drug discovery. In its cellular medicine programs, StemCells is targeting diseases of the central nervous system and liver. StemCells' lead product candidate, HuCNS-SC® cells (purified human neural stem cells), is in clinical development for the treatment of two fatal neurodegenerative disorders that primarily affect young children. StemCells also markets specialty cell culture products under the SC Proven® brand, and is developing stem cell-based assay platforms for use in pharmaceutical research, drug discovery and development. The Company has exclusive rights to approximately 55 issued or allowed U.S. patents and over 200 granted or allowed non-U.S. patents. Further information about StemCells is available at

Apart from statements of historical fact, the text of this press release constitutes forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. These statements include, but are not limited to, statements regarding out-licensing prospects for the Company's technology; the prospects associated with commercializing tools to enable stem cell-based research and drug discovery; the potential for the Company's therapies to treat neurodegenerative diseases; the potential for its cell-based therapeutics to treat other diseases or disorders; and the future business operations of the Company. These forward-looking statements speak only as of the date of this news release. The Company 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 such forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties about whether our patents will provide adequate protection against competing technologies; uncertainties regarding the Company's ability to obtain the increased capital resources needed to continue its current operations and patent prosecution efforts; uncertainty regarding the validity and enforceability of the Company's existing patents, which may be questioned or contested through requests for reexamination and other legal proceedings; and other factors that are described under the heading "Risk Factors" disclosed in Part I, Item 1A in the Company's Annual Report on Form 10-K for the year ended December 31, 2009.

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