Portland, Ore.

Neurosurgeons and physicians at Doernbecher Children's Hospital, Oregon Health & Science University, Nov. 14, performed the first transplant of purified human fetal neural stem cells into the brain of a study participant with neuronal ceroid lipofuscinosis (NCL), also known as Batten disease. NCL is a rare and fatal neurodegenerative disorder that affects infants and children.

The transplant is the focus of a Phase 1 clinical trial to evaluate the safety and preliminary efficacy of HuCNS-SC(TM) - a proprietary human central nervous stem cell product developed by StemCells, Inc., Palo Alto, Calif. This one-year trial will involve up to six children with NCL.

"Doernbecher's specialists are privileged to care for this child and family and to push forward groundbreaking work in degenerative brain diseases," said co-principal investigator Nathan Selden, M.D., Ph.D., F.A.C.S., F.A.A.P., who performed the surgery. "Our team is pleased that our patient's recovery thus far has been as expected."

The research team will continue to concentrate their efforts on the health and well-being of the study participant and family and will, along with Stem Cells, Inc., provide periodic updates as appropriate until the trial is completed.

In the interest of confidentiality, the research team requests that all parties avoid interfering with the study participant and family during recovery from surgery.

The Phase I clinical trial is being led by Robert D. Steiner, M.D., F.A.A.P., F.A.C.M.G., Vice Chairman of Pediatric Research at Doernbecher Children's Hospital, and Professor of Pediatrics and Molecular & Medical Genetics in the OHSU School of Medicine; Nathan Selden, M.D., Ph.D., F.A.C.S., F.A.A.P., Campagna Associate Professor of Pediatric Neurological Surgery and Head of the Division of Pediatric Neurological Surgery, Doernbecher and OHSU School of Medicine; and Thomas K. Koch, M.D., F.A.A.P., F.A.A.N., Director of Pediatric Neurology and Professor of Pediatrics and Neurology at Doernbecher, OHSU School of Medicine.

For more information about StemCells, Inc., visit: www.stemcellsinc.com