StemCells, Inc. announced that the fourth and final patient in its phase I clinical trial in Pelizaeus-Merzbacher Disease (PMD) has been transplanted with the company's HuCNS-SC cells (purified human neural stem cells). PMD is a fatal myelination disorder that afflicts male children. This clinical trial, which is being conducted in collaboration with UCSF Benioff Children's Hospital, is the first to evaluate neural stem cells as a potential treatment for a myelination disorder. Results of the trial will be reported in early 2012.

Stephen Huhn, vice president and head of the CNS Programme, said, "Completing enrolment in our second clinical trial of HuCNS-SC cells brings us one step closer to understanding how our cell might offer clinical benefit for patients with serious neurological conditions like PMD. We deeply appreciate the participation of the patients and their families in this important clinical research, and are grateful to the expert team of investigators at UCSF for helping us to advance the potential for neural stem cell therapy.

"Between the phase I Batten trial completed in 2009 and the PMD trial, we have dosed a total of 10 patients. Both of these trials involved the transplantation of HuCNS-SC cells directly into the brain at very high dose levels. The demonstrated feasibility of administering a significant cell dose to multiple regions of the brain in a single surgery may be relevant to the treatment of other neurodegenerative disorders."

The phase I trial is designed to assess the safety and preliminary efficacy of HuCNS-SC cells when transplanted in four patients with connatal PMD, the most severe form of the disease. Under the trial protocol, each patient will be evaluated regularly over a 12-month period following transplantation in order to monitor and evaluate the safety and tolerability of the HuCNS-SC cells, the surgery, and nine months of immunosuppression. In addition, magnetic resonance imaging (MRI) of the brain post-transplant may enable the measurement of new myelin formation. As the Company intends to follow the effects of this therapy long-term, a separate four-year observational study will be initiated upon completion of this trial.

Patients with PMD are born with a defective gene, which leads to insufficient myelin in the brain. Myelin is the substance that surrounds and insulates nerve cells' communications fibers (also known as axons). Without sufficient myelination, these fibers are unable to properly transmit nerve impulses, leading to a progressive loss of neurological function. Those with the most severe form of the disease, connatal PMD, lose the ability to walk and talk and eventually die, often before the age of 10. Currently, there are no effective treatments for PMD.

StemCells' lead product candidate, HuCNS-SC cells, is a highly purified composition of human neural stem cells that are expanded and stored as banks of cells. The company's preclinical research has shown that HuCNS-SC cells can be directly transplanted in the central nervous system (CNS) with no sign of tumor formation or adverse effects. Because the transplanted HuCNS-SC cells have been shown to engraft and survive long-term, this suggests the possibility of a durable clinical effect following a single transplantation. StemCells believes that HuCNS-SC cells may have broad therapeutic application for many diseases and disorders of the CNS, and to date has demonstrated human safety data from completed and ongoing studies of these cells in two fatal brain disorders in children.

Preclinical studies performed by StemCells and its collaborators provide a rationale for potential therapeutic use of HuCNS-SC cells in myelination disorders. The company has demonstrated that, when transplanted into an animal model of hypomyelination (shiverer mouse), HuCNS-SC cells engraft and differentiate into mature, specialized cells called oligodendrocytes, and form myelin sheaths around host nerve fibers.

StemCells, Inc. is engaged in the research, development, and commercialization of cell-based therapeutics and tools for use in stem cell-based research and drug discovery. In its therapeutic product development programmes, StemCells is targeting disorders of the central nervous system and the liver. StemCells' lead product candidate, HuCNS-SC cells (purified human neural stem cells), is currently in clinical development for spinal cord injury and two fatal neurodegenerative disorders in children, and in preclinical development for retinal disorders such as age-related macular degeneration.