StemCells, Inc. Grants Research License to Children's Hospital of Orange County

StemCells, Inc. Grants Research License to Children's Hospital of Orange County

PALO ALTO, Calif. and ORANGE, Calif., June 3, 2010 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM) (the "Company") and the Children's Hospital of Orange County ("CHOC Children's") announced today that they have entered into an agreement that provides CHOC Children's with a royalty-free research license to certain of StemCells' patents. This license authorizes CHOC Children's to proliferate, maintain and use human neural stem cells for non-commercial purposes.

"We are very pleased to enter into this license agreement," said Brent Dethlefs, Director of the CHOC Children's Research Institute. "Ultimately, we are all working to find ways to advance the diagnosis and treatment of childhood disease. This research license allows CHOC Children's to continue these efforts in the neural stem cell field.

"Now that we have entered into this agreement, we at CHOC Children's would like to correct some misperceptions about our negotiations with StemCells," continued Mr. Dethlefs. "Any innuendo or suggestion that StemCells was trying to use its patent position to extract money from CHOC Children's is false. I can confirm that StemCells has never demanded from CHOC Children's any financial compensation for this academic research license. Moreover, I would like to state that throughout these complicated negotiations, StemCells was responsive and conducted itself in a professional and courteous manner. We had hoped to jointly announce this license last month, because the material terms of the agreement have been agreed-to for some time. But for a number of unanticipated reasons final execution took longer than expected. Notwithstanding this, during the course of these protracted negotiations, both parties developed a great deal of understanding and respect for each other's position. We are appreciative of StemCells' persistence and determination to enable such a satisfactory outcome."

"I am very pleased with this agreement, as I can now continue with my research on human neural stem cells," commented Dr. Philip Schwartz, Ph.D., Managing Director of CHOC Children's National Human Neural Stem Cell Resource. "The most important objective is to try to find new ways to diagnose and treat childhood neuro-developmental diseases, and that is what I am committed to doing. At the same time, I can affirm the commitment of StemCells and its founders to academic research and to the development of stem cell therapeutics. StemCells has spent many years advancing neural stem cells into the clinic as a potential treatment for two different deadly childhood diseases. Today's announcement reconfirms the common purpose and hope we share of improving human health by unlocking the power of stem cells."

Ken Stratton, General Counsel for StemCells, Inc., added, "This is a 'win-win' solution with CHOC Children's. We first approached CHOC Children's to make it aware of our intellectual property because we had concerns that CHOC Children's might wish to sell human neural stem cells through its 'National Human Neural Stem Cell Resource' website, which we considered no different than the commercial pursuits of our existing licensees, such as Cambrex/BioWhittaker. We have made considerable investments in our patent portfolio as a way to safeguard the Company's interests. Thankfully, through a lot of hard work by both parties, we have been able to agree with CHOC Children's upon a scope of activities and license terms which will allow Dr. Schwartz and CHOC Children's to pursue their research agenda and distribute cells to the academic community, while protecting the Company's assets against misuse. The license announced today covers almost two dozen patents from many inventors at several institutions, including researchers at StemCells."

"I would like to correct any impression or inference in the press that StemCells has been forcing CHOC Children's to take a license to any of Dr. Schwartz's own inventions," explained Jay Gabriel, General Counsel for CHOC Children's. "Any insinuations that StemCells somehow patented an invention of his are baseless."

StemCells owns or has exclusive rights to approximately 55 issued or allowed U.S. patents and approximately 200 granted or allowed non-U.S. patents. Many of the Company's patents include claims covering composition of matter and methods for the isolation, expansion, genetic manipulation, and use of neural stem and progenitor cells for both therapeutic use and non-therapeutic applications such as drug discovery and screening. The Company maintains an active licensing program for its technologies, and has several non-exclusive license agreements in place with leading pharmaceutical and research-based companies; as well as various on-going collaborations with stem cell researchers.

About StemCells, Inc.

StemCells, Inc. is engaged in the research, development, and commercialization of stem cell therapeutics and tools for use in stem cell-based research and drug discovery. In its cellular medicine programs, StemCells is developing therapeutic products targeting diseases of the central nervous system and liver. StemCells' lead product candidate, HuCNS-SC(R) 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(R) brand, and is developing stem cell-based assay platforms for use in pharmaceutical research, drug discovery and drug development. Further information about StemCells is available at

The StemCells, Inc. logo is available at

About CHOC Children's

CHOC Children's is exclusively committed to the health and well-being of children through clinical expertise, advocacy, outreach and research that brings advanced treatment to pediatric patients. Affiliated with the University of California, Irvine, CHOC's Children's regional healthcare network includes two state-of-the-art hospitals in Orange and Mission Viejo, several primary and specialty care clinics, a pediatric residency program, and four centers of excellence - CHOC Children's Heart, Cancer, Neuroscience, and Orthopedic Institutes.

CHOC Children's is one of only eight children's hospitals in the nation named a "2009 Leapfrog Top Hospital." CHOC Children's earned the Silver Level CAPE Award from the California Council of Excellence, the only children's hospital in California to ever earn this distinction, and was awarded Magnet designation, the highest honor bestowed to hospitals for nursing excellence. Recognized for extraordinary commitment to high-quality critical care standards, CHOC Children's is the first children's hospital in the United States to earn the Beacon Award for Critical Care Excellence.

Apart from statements of historical fact, the text of this press release constitutes forward-looking statements within the meaning of the U.S. securities laws, and is subject to the safe harbors created therein. These statements include, but are not limited to, statements regarding the clinical development of its HuCNS-SC cells; the Company's ability to commercialize drug discovery and drug development tools; the validity and enforceability of the Company's intellectual property; and the future business operations and licensing activities 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 those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2009 and in its subsequent reports on Form 10-Q and Form 8-K.

CONTACT:  StemCells, Inc.          Megan Meloni          (650) 475-3100, ext. 105

         CHOC Children's          Denise Almazan          (714) 532-8680



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