Thursday said there had been progress in talks with the Food and Drug Administration about using stem cells for research into the treatment of a rare, deadly brain disease affecting children.

The FDA has requested additional information on the company's proposed trial of its proprietary cell therapy product HuCNS-SC as a treatment for a progressive neurological disease in children known as Batten disease

Early last month, the FDA placed the Palo Alto, Calif.-based company's proposed clinical trial on hold. Three weeks later, the FDA asked StemCells for more information on the proposed trial and the company met with the FDA's Center for Biologics Evaluation and Research.

The proposed study would be the first-ever FDA-approved clinical trial to use a purified composition of human neural stem cells as the potential therapeutic agent.

Batten disease is characterized by vision failure, seizures, loss of motor skills and intellectual impairment caused by a fatty substance that accumulates in the brain. It is a rare hereditary disease that is passed on when both parents possess the defective gene.

Shares were down 8 cents, or 2.5%, to $3.18. Some 2.5 million shares had changed hands, vs. the average daily volume of almost 9 million.