CytoTherapeutics' Study in the Journal of Neuroscience Demonstrates Successful Transplantation of Human Neural Stem/Progenitor Cells in Preclinical Model.

LINCOLN, R.I.--(BW HealthWire)--July 15, 1999--

First Study to Demonstrate Ability of Transplanted Cells to Migrate to

Related Areas of the Brain and Capacity to Differentiate into

Appropriate Neuronal Cell Types After Migration

CytoTherapeutics, Inc. (Nasdaq:CTII) today reported that human neural stem/progenitor cells can survive, migrate and differentiate into mature neurons after transplantation in the adult rat brain. The Company's researchers and collaborators demonstrated, for the first time, that the human cells, once transplanted into rodent brains, successfully migrated from the site of implantation and integrated into the host tissue. These cells differentiated into the appropriate neuronal cell types in response to cues in the specific areas of the brain to which they migrated. The human neural cells utilized by CytoTherapeutics and its collaborators are normal, genetically unmodified cells that have been expanded in the laboratory utilizing proprietary techniques, including defined media and specific growth factors. The ultimate purpose of these techniques is to establish a bank of normal human neural cells for use in human transplantation.

Since the adult mammalian brain has limited capacity to generate new cells in response to damage, the transplantation of human neural stem/progenitor cells could offer a method of circumventing this limitation. Further, mature or differentiated brain cells do not retain the capacity to migrate and, thus, are unable to integrate into the cellular architecture of the host. Therefore, the use of these human neural stem/progenitor cells, which integrate with the host tissue and follow the endogenous migratory pathways, may enable the limited neurogenesis in the adult brain.

Neurodegenerative conditions, including Parkinson's disease, affect more than 10 million people in the United States alone and account for more than $150 billion annually in health care costs. The transplantation of neural stem/progenitor cells could potentially provide a way to repair tissue damaged by diseases and injuries that affect the central nervous system, thus potentially returning patients to productive lives and significantly reducing health care costs.

"The results from this important preclinical study demonstrate that the Company's neural stem/progenitor cells retain their ability to migrate to related areas of the brain that are affected by certain conditions and to respond to specific cues within those areas that cause them to become the appropriate cell type for the region," said Richard M. Rose, M.D., President and Chief Executive Officer. "The Journal of Neuroscience publication provides further encouraging evidence that CytoTherapeutics' proprietary neural stem/progenitor cell technology may ultimately be valuable in treating or reversing the affects of central nervous system diseases and injuries."

In the work resulting from a long-standing collaboration with CytoTherapeutics, Rosemary A. Fricker, Ph.D., of the Harvard Medical School Department of Neurology in Boston, Massachusetts, and Anders Bjorklund, M.D., of the Wallenberg Neuroscience Center at Lund University in Sweden, report in the current issue of The Journal of Neuroscience that their results are the first to demonstrate:

-- successful transplantation of human progenitor cells to neurogenic regions of the adult rat brain showing both migration and differentiation into neurons in the hippocampus (dentate gyrus) and the olfactory bulb; and

-- neuronal differentiation of transplanted cells in the normal striatum, and the development of long-distance projections into the target regions of the striatum, the globus pallidus and the substantia nigra.

"Though other researchers have shown the potential for neural progenitor cells to engraft into animal species identical to the cell source or to become the cells relevant to the specific site into which they were transplanted," explained Dr. Fricker, "we have, for the first time, demonstrated that human neural progenitor cells migrate to other sites in the brain which are functionally linked to the original transplant site, as well as retain the capacity to become the appropriate cell types of the site to which they have migrated. These characteristics are fundamentally important for the use of these human cells in a clinical setting for certain neurodegenerative diseases."

In the study, normal human neural stem/progenitor cells were expanded in long-term culture in the presence of certain neurotrophic factors. To enable detection of the transplanted cells, the cell cultures were labeled with a tracking marker bromodeoxyuridine (BrdU) which incorporates into actively dividing cells, prior to transplantation, a process which had no apparent effect on the growth or engraftment of the cells. The labeled cells were transplanted into one of four regions of the brains of adult Sprague Dawley rats: the subventricular zone (SVZa), the rostral migratory stream (RMS), the hippocampus or the normal intact striatum. At each of these sites, the transplanted cells exhibited the ability to differentiate into the appropriate neurons in response to specific signals at each of these sites in the brain. Confocal microscopic examination of specifically stained brain sections two and six weeks after transplantation show detection of both BrdU and human-specific histological staining.

In all animals, the transplanted cells were identified at each of the graft sites. Extensive migration of BrdU-labeled cells was observed in all animals where the transplanted cells were correctly placed in the SVZa, RMS or the hippocampus. Many cells transplanted into the striatum (head of the caudate-putamen) were observed to have migrated approximately 1-1.5 millimeters into the surrounding host striatum, without any preferential direction.

At each of these sites, the transplanted cells exhibited the ability to differentiate into the appropriate neurons in response to specific signals at each of these sites in the brain. No tumor formation was observed.

Following transplantation to the striatum, the cells migrated in an undirected manner up to approximately 1-1.5 millimeters from the original graft site, differentiated into neurons and projected processes to the target regions of the striatum, the globus pallidus and toward the substantia nigra.

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."