CytoTherapeutics' Study in Experimental Neurology Demonstrates Proprietary Methods for Human Neural Stem/Progenitor Cell Lines.

Unique Growth Factor-Combination Improves Ability to

Bank Human Cells for Transplantation

CytoTherapeutics, Inc. (NASDAQ:CTII) today reported that the Company's researchers demonstrated, for the first time, that normal, genetically unmodified human neural stem/progenitor cell lines expand exponentially in response to a proprietary serum-free media formulation containing a combination of growth factors. In addition, results from the study demonstrated that, even after more than one year in tissue culture, the human neural stem/progenitor cells expanded by these methods retain the capacity to differentiate into the major components of the central nervous system. In the study published in the August issue of Experimental Neurology, results also indicated that expanding CytoTherapeutics' proprietary human neural stem/progenitor cells in this manner could provide an ideal source of multipotent cells for use in transplantation to the human central nervous system. The U.S. Patent and Trademark Office has allowed CytoTherapeutics' patent covering the proprietary methods described in the study.

The human neural cells utilized by CytoTherapeutics' researchers are normal, genetically unmodified cells, which do not contain cancer-causing oncogenes or other forms of genetic manipulation. Thus, human cells expanded by these methods may be more suitable for use in human transplantation. The ultimate purpose of these techniques is to establish a bank of normal human neural cells that integrate with the endogenous cells of the human host to repair or replace damaged tissue of the brain, the spinal cord and the retina.

"The ability to create a renewable source for human neural cells marks an important step in the ability to develop neural stem cells toward a commercial product," said Richard M. Rose, M.D., President and Chief Executive Officer. "Importantly, this proprietary technology enhances our already significant patent estate covering the human neural stem cell technology, which now includes 11 issued U.S. patents and 4 allowed U.S. patents."

CytoTherapeutics' human neural stem/progenitor cells utilized in the study demonstrated the capacity to become, among other cell types, dopamine-producing neurons. Dopamine-producing cells are the type of neurons whose loss is typically associated with Parkinson's disease, which affects more than 500,000 people in the United States alone. The tremors, rigidity and slow movement experienced by patients with Parkinson's disease results from low levels of dopamine in the striatum, a portion of the brain, due to the death of dopamine-producing neurons. The transplantation of neural stem/progenitor cells could, therefore, provide a way to replace these cells, potentially returning patients to productive lives.

CytoTherapeutics previously announced results from a study by its researchers and collaborators published in the July 15th issue of The Journal of Neuroscience. The results from that study showed that human neural stem/progenitor cells, cultured by the methods described in the current study, both migrate and differentiate into neurons following transplantation at multiple sites of the brains of rodents, that the transplanted cells differentiate normally, and develop long-distance projections into the target regions of the brain.

CytoTherapeutics, Inc. is a biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies. For additional information, visit the Company's Internet web site at http://www.cyto.com.

Statements in this press release other than statements of historical facts constitute forward-looking comments regarding, among other things, future business operations. The Company's actual results may vary materially from those forward looking statements due to risks and uncertainties to which the Company is subject and which are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward-Looking Statements."