NeuralStem Licenses Out Compounds For Diabetes Treatment ROCKVILLE, Md., Jan. 11 -- Neuralstem, Inc. (OTC Bulletin Board: NRLS - News), headquartered here, announced today the execution of an exclusive license agreement to Biomedical Research Models, Inc. for the development of Neuralstem compounds to treat certain cognitive and neurological impacts of diabetes. The agreement includes annual license fees until product commercialization; milestone payments upon the completion of agreed-upon clinical goals, which could total approximately $38 million for each licensed product that is approved by the FDA; as well as royalties on ensuing products. The license covers a library of Neuralstem patent-pending compounds, discovered using Neuralstem's patented human neural stem cells. The company said that the compounds, when orally administered, have been shown in adult mice to recruit and stimulate the body's own stem cells to form new neurons in the brain, and may be useful in healing and protecting injured brain areas. "What we have is a true platform technology," said Richard Garr, Neuralstem President and Chief Executive Officer. "Neuralstem's ability to grow regionally specific, physiologically relevant human nerve cells in large quantities, in vitro (in dishes) provides a unique tool for discovering drugs to treat neurological and psychiatric diseases. It gives the company a way to leverage our cells' unique properties in both our cell therapy and drug development programs. Our licensee, Biomedical Research Models, Inc., is focused on developing novel drug therapies for the treatment of diabetes, and will provide an excellent partner to move the results of our drug discovery program forward in this area." Neuralstem recently received a $500,000 grant from the NIH to study the possible effectiveness of its compounds to treat depression. "The creation of Neuralstem's unique drug discovery platform (patent-pending) was funded by an award from the U.S. Department of Defense several years ago," Garr added. "Neuralstem retains the rights to these compounds for all indications other than diabetes." About Neuralstem Neuralstem's patent-protected technology enables, for the first time, the ability to produce neural stem cells of the human brain and spinal cord in commercial quantities, and the ability to control the differentiation of these cells into mature, physiologically relevant human neurons and glia. The Company's technology was invented by founding scientist, Karl Johe, Ph.D. while at the National Institute of Neurological Disease and Stroke, at the National Institutes of Health. The Company expects that its first Investigational New Drug (IND) application will be for the treatment of Ischemic Spastic Paraplegia, a form of paraplegia that sometimes results from the surgery to repair aortic aneurysms and for which there is no effective treatment. The Company hopes to submit its initial IND application to the FDA and begin its first human trial during calendar year 2007. Major Central Nervous System diseases targeted by the Company with research programs currently underway include: Ischemic Spastic Paraplegia, Traumatic Spinal Cord Injury, ALS, and Parkinson's Disease. The company has also developed immortalized human neural stem cells for in-vitro use in drug development for the academic and pharmaceutical markets. The company's cells recently extended the life of rats with ALS (Lou Gehrig's disease) in a paper published in the journal TRANSPLANTATION, and were deemed viable for continued work in neurodegenerative spinal conditions. For further information, please visit http://www.neuralstem.com. About Biomedical Research Models Inc. Based in Worcester, MA, privately-held Biomedical Research Models Inc. was founded in 1996 and has recently been awarded a five-year contract with the National Institutes of Diabetes Digestive and Kidney Diseases (NIDDK) to assist NIDDK in development of potential new therapies for the prevention of type 1 diabetes. Only two such contracts have been granted. The creation of this National Research Center is part of the Congressionally-established Diabetes Research Working Group's Strategic Plan to Cure Diabetes in the 21st Century. This press release contains forward-looking statements. Neuralstem wishes to caution the readers of this press release that actual results may differ from those discussed in the forward-looking statements and may be adversely affected by, among other things, US FDA responses, and responses from other jurisdictions, to various regulatory submissions; SEC responses to various registration submissions; changes in corporate strategy; the need to raise additional capital; the success or failure of other private and public organizations and/or academic and corporate institutions engaged in stem cell research and development, and the market for stem cell research in general. For further information, please review the company's SB-2 filing with the Securities and Exchange Commission, and its 10-Q for the quarter ending September 30, 2006.