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StemCells, Inc. Reports Third Quarter 2013 Financial Results And Provides Business Update

NEWARK, Calif., Nov. 5, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM), a leading stem cell company developing and commercializing novel cell-based therapeutics and tools for use in stem cell-based research and drug discovery, today reported financial results for the third quarter ended September 30, 2013 and provided a business update.

"In the third quarter, we made solid progress executing the clinical development plan for our proprietary HuCNS-SC® cells by actively recruiting more patients into our two enrolling studies and expanding regulatory authorization for our spinal cord injury study into the United States and Canada," said Martin McGlynn, President and CEO of StemCells, Inc. "We are on track to complete enrollment in our spinal cord injury trial in the first quarter of next year and complete enrollment in our dry age-related macular degeneration (AMD) trial by mid 2014. We have been laying the groundwork for the Phase II proof-of-concept trials to be initiated next year for both indications, including investing in our own state-of-the-art current Good Manufacturing Practice (cGMP) cell-processing facility in Sunnyvale, California. Lastly, we strengthened our balance sheet in early October by raising $18.6 million. The additional capital provides the resources and flexibility to execute our strategy."

Third Quarter and Recent Business Highlights

  • In July 2013, we formally launched our Alzheimer's disease program, which is being supported by the California Institute for Regenerative Medicine (CIRM). The goal of this project is to file, within four years, an Investigational New Drug (IND) application with the U.S. Food and Drug Administration to evaluate our HuCNS-SC cells as a potential therapeutic for Alzheimer's disease. CIRM has agreed to provide approximately $19.3 million in the form of a forgivable loan to help fund our preclinical development and IND-enabling activities, and in July we received an initial disbursement of $3.8 million from CIRM.  
  • In August 2013, we presented data which show that, two years after transplantation of our HuCNS-SC cells into patients with Pelizeaus-Merzbacher disease (PMD), the evidence of myelination, by magnetic resonance imaging (MRI), is more pronounced compared to one year post-transplantation, the gains in neurological function reported after one year were maintained, and there were no safety concerns.  The neurological and MRI changes suggest a departure from the natural history of the disease and may represent signals of a clinical effect.  
  • In September 2013, we published a comprehensive overview of the therapeutic potential and results from early clinical trials of our HuCNS-SC cells.  The paper was published in Stem Cell Research & Therapy, an international peer-reviewed journal considered to be the major forum for translational research into stem cell therapies.  
  • In September 2013, we dosed the first high-dose patient in our Phase I/II clinical trial in dry AMD.  The patient, the fifth overall in the 16-patient trial, was transplanted with one million of our HuCNS-SC cells.  The first four patients each received a dose of 200,000 cells.  An independent Data Safety Monitoring Committee conducted a review of the trial data related to the first four patients, and found no safety issues to preclude the trial from proceeding to the high dose.  
  • In September 2013, we published preclinical data confirming that our HuCNS-SC cells preserve photoreceptor cells and visual function in a widely used model of retinal degeneration. The data show not only that HuCNS-SC cells preserve the number of photoreceptors that would otherwise be lost, but also that the surviving photoreceptors appear healthy and normal, and maintain their synaptic connection to other important cells necessary for visual function.  The study was published in Investigative Ophthalmology and Visual Science (IVOS), the peer-reviewed journal of the Association for Research in Vision and Ophthalmology.  
  • In October 2013, the FDA authorized our IND application for clinical testing of our HuCNS-SC cells as a treatment for spinal cord injury.  As a first step under this IND, we are working to open U.S. sites for our Phase I/II clinical trial for chronic spinal cord injury, which is currently underway in Switzerland and Canada.  
  • In October 2013, we sold a total of 12,845,500 units in an underwritten public offering at a price of $1.45 per unit and received total proceeds, net of offering expenses, underwriting discounts and commissions, of approximately $17.3 million.  Each unit sold consisted of one share of common stock and a warrant to purchase one-half share of common stock.  The warrants have an exercise price of $1.80 per share, are exercisable immediately, and will expire five years from the date of issuance.  
  • In October 2013, we presented the results of a four-year observation study in patients with neuronal ceroid lipofuscinosis (NCL), also often referred to as Batten disease, who had been transplanted with our HuCNS-SC cells in a Phase I study.  Key results include long-term (up to five years post-transplantation) evidence of safety of the surgical transplantation of HuCNS-SC cells into multiple sites in the brain and at doses of up to one billion cells.  The study results represent the first, and thus far only, multi-year data set following transplantation of neural stem cells into human subjects, and supports the feasibility of our approach in multiple neurological disorders.  The data was presented by the co-principal investigator of the studies at the Congress of Neurological Surgeons Annual Meeting in San Francisco, California.  
  • In October 2013, we acquired a portfolio of issued U.S. and Canadian patents to which we had previously held an exclusive worldwide license.  The portfolio broadly claims the manufacture and proliferation of purified populations of human neural stem cells and their use as therapeutics and as tools for drug discovery.  The acquisition relieves us of all milestone and royalty obligations under the license agreements for products claimed by the patents, such as products derived from our HuCNS-SC cells.  As consideration for the portfolio, we will issue 139,548 shares of our common stock to Neurospheres Holdings Ltd., an intellectual property holding company affiliated with the University of Calgary.

Third Quarter Financial Results

Total revenue during the third quarter of 2013 was $325,000, compared to $264,000 in the third quarter of 2012. Revenue from product sales was approximately $272,000 in the quarter, an increase of 34% compared to the same period in 2012. The increase was due primarily to higher unit volumes.   

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