StemCells Inc announced that George Dunbar, its acting president and CEO, will be phasing out his service at the company. During the transition, Dunbar will continue in his position on a reduced time basis as the company accelerates its search for a permanent CEO.

``This a good time for us to select a president to lead us into the next phase of our development,'' said John J. Schwartz, chairman of the board. Since Dunbar joined StemCells, the Company has moved from Rhode Island to Sunnyvale, California and focused its business entirely on its platform stem cell technology.

The Company completed two financings this year, for a total of $6.5 million and is currently seeking additional space for expanded research and development efforts. In addition, StemCells owns approximately 126,000 shares of Modex Therapeutics, a Swiss biotechnology company, which completed its initial public offering in June. Modex trades on the Swiss New Exchange. Its last trade on September 21, 2000 was at 345 Swiss francs, or approximately $195 US, per share.

During the transition period, other members of the Company's current management team, including Drs. Ann Tsukamoto and Ronnda Bartel, Vice Presidents for Scientific Operations and Stem Cell Development, respectively, Iris Brest, General Counsel, and Dr. Schwartz, who devotes half time to StemCells, will assume additional responsibilities.

Dunbar, who has been Acting President and CEO of StemCells since February, will become CEO and a member of the Board of Directors of Epic Therapeutics, Inc., a privately held drug delivery technology company in Norwood, Massachusetts.