StemCells Shares Surge Following News of Completion of First Patient Cohort for Spinal Cord Injury Trial

StemCells, Inc.(Nasdaq: STEM) today announced that the twelve-month data from the firstpatient cohort in the Company's Phase I/II clinical trial of its proprietaryHuCNS-SC® product candidate (purified human neural stem cells) for chronicspinal cord injury continued to demonstrate a favorable safety profile, andshowed that the considerable gains in sensory function observed in two of thethree patients at the six-month assessment have persisted. The third patientremains stable. A summary of the data was presented today by Martin McGlynn,President and CEO, at the 15^th Annual BIO CEO & Investor Conference. Bycompleting the twelve-month assessment, the first patient cohort has nowcompleted the trial, and has entered into a separate follow-up study forlong-term observation."The multi-segment gains observed in sensory function in two patients at sixmonths have endured at the 12-month assessment. In addition, between the six-and 12-month evaluations, one patient converted from a complete to anincomplete injury," said Armin Curt, M.D., Professor and Chairman of theSpinal Cord Injury Center at Balgrist University Hospital, University ofZurich and principal investigator of the clinical trial. "Importantly, thepersistence of these sensory gains at the 12-month evaluation was seen acrossmore than one clinical measure. While much more clinical research needs to bedone to demonstrate efficacy, the types of changes we are observing areunexpected and very encouraging given that these are patients in the chronicstage of complete spinal injury."  Mr. McGlynn added, "While we need to be cautious when interpreting data from asmall, uncontrolled trial, to our knowledge, this is the first time a patientwith a complete spinal cord injury has been converted to a patient with anincomplete injury following transplantation of neural stem cells. We areencouraged that the cells appear to convey clinical benefit in such severelyinjured patients. We are therefore hopeful that we will see similar or greaterbenefit in AIS B and C patients, who already have partial sensation and motorfunction below the level of injury which could be further augmented by celltransplantation."Patients in the study's first cohort all suffered a complete injury to thethoracic (chest-level) spinal cord. In a complete injury, there is noneurological function below the level of injury, and sensory function of allthree patients was stable before transplantation of the HuCNS-SC cells. Allthree patients were transplanted four to nine months after injury with a doseof 20 million cells at the site of injury. The surgery, immunosuppression andthe cell transplants have been well tolerated by all the patients. There wereno abnormal clinical, electrophysiological or radiological responses to thecells, and all the patients have remained neurologically stable through thefirst 12 months following transplantation. Positive changes in sensitivity totouch, heat and electrical stimuli were observed in well-defined andconsistent thoracic regions in two of the patients, while no changes wereobserved in the third patient.  Importantly, quantitative tests of specificsensory function, as well as electrophysiological measures of impulsetransmission across the site of injury, show an  association  with theclinical examination, providing further objective confirmation of the sensorygains.About the Spinal Cord Injury Clinical Trial           The Phase I/II clinical trial of StemCells, Inc.'s HuCNS-SC® purified humanadult neural stem cells is designed to assess both safety and preliminaryefficacy. Twelve patients with thoracic (chest-level) neurological injuries atthe T2-T11 level are planned for enrollment, and their injuries must haveoccurred within three to twelve months prior to transplantation of the cells.In addition to assessing safety, the trial will assess preliminary efficacybased on defined clinical endpoints, such as changes in sensation, motorfunction and bowel/bladder function. The Company has dosed the first threepatients, all of whom have injuries classified as AIS A, in which there is noneurological function below the injury level. The injuries are classifiedaccording to the American Spinal Injury Association Impairment Scale (AIS).The second and third cohorts will be patients classified as AIS B and AIS C,those with less severe injury, in which there is some preservation of sensoryor motor function. All patients will receive HuCNS-SC cells through direct transplantation intothe spinal cord and will be temporarily immunosuppressed. Patients will beevaluated regularly in the post-transplant period in order to monitor andassess the safety of the HuCNS-SC cells, the surgery and theimmunosuppression, as well as to measure any recovery of neurological functionbelow the injury site. The Company intends to follow the effects of thistherapy long-term, and each of the patients will be invited to enroll into aseparate four year observational study after completing the Phase I/II study. The trial is being conducted at Balgrist University Hospital, University ofZurich, a world leading medical center for spinal cord injury andrehabilitation, and is open for enrollment to patients in Europe, Canada andthe United States. Enrollment for the second cohort is currently underway, andthe first AIS B patient was enrolled and dosed late last year. If you believeyou may qualify and are interested in participating in the study, pleasecontact the study nurse either by phone at +41 44 386 39 01 or by email atstemcells.pz@balgrist.ch.Additional information about the Company's spinal cord injury program can befound on the StemCells, Inc. website athttp://www.stemcellsinc.com/Therapeutic-Programs/Clinical-Trials.htm and athttp://www.stemcellsinc.com/Therapeutic-Programs/Spinal-Cord-Injury.htm,including video interviews with Company executives and independentcollaborators.