StemCells, Inc. said it has given up the possible acquisition of Progenitor Cell Therapy, LLC, a New Jersey-based leading provider of cGMP-quality cell processing services as both the companies failed to reach agreement on mutually acceptable terms and conditions.

The company had announced on December 3, 2007 that it was exploring such an acquisition and that PCT had agreed to a period of exclusivity to allow for due diligence and negotiations. However, the parties were unable to reach, and have terminated discussions.

In consideration of the exclusivity period, StemCells agreed to make a secured loan of up to $3.8 million to PCT, of which $1.0 million was lent. This loan will be repaid and retired on its terms, the company said.

PCT will continue to provide various cell processing services to StemCells under an existing contract.

StemCells, Inc. is a clinical-stage biotechnology company focused on the discovery, development and commercialization of cell-based therapeutics to treat diseases of the central nervous system and liver.