StemCells, Inc. Reports Fourth Quarter and Year End 2001 Results

PALO ALTO, Calif., March 6 /PRNewswire-FirstCall/ -- StemCells, Inc. (Nasdaq: STEM) announced today financial results for the fourth quarter and fiscal year ended December 31, 2001.

The Company reported a net loss of $3,524,000 or $0.15 per share, for the fourth quarter ended December 31, 2001, compared to a net loss of $6,260,000, or $0.30 per share, for the fourth quarter of 2000. For the fiscal year ended December 31, 2001, the Company reported a net loss of $3,446,000 or $0.15 per share applicable to common shareholders before deemed dividends, as compared to a net loss of $11,125,000 or $0.57 per share, for the 2000 fiscal year. The net loss after deemed dividends for fiscal year 2001 is $4,190,000 or $0.19 per share applicable to common shareholders, as compared to a net loss of $11,606,000 or $0.58 per share, for the 2000 fiscal year. Total revenue for 2001 was $805,000, compared with $74,000 in 2000. Revenue for 2001 was from grants and assignment of rights to technology, while revenue for 2000 was from collaborative agreements. Cash, and cash equivalents, were $13,697,000 at the end of 2001, compared with $6,069,000 at the end of 2000.

The decrease in net loss from 2000 to 2001 was attributed primarily to a realized gain on the sale of StemCells' remaining holdings in Modex Therapeutics, offset by an increase in operating expenses due to the expansion of the Company's research and development activities.

"StemCells continued to make progress in 2001 with its proprietary technologies for the identification, purification and expansion of adult stem cells derived from human organ tissue," said Martin McGlynn, the Company's president and CEO. "The first of the Company's proprietary organ-derived stem cells, the human neural stem cell, has been shown to not only survive transplantation, but to give rise to the robust production of mature neural cells in small animal models. In 2001, we established multiple master cell banks, containing highly purified and well-characterized human neural stem cells for use in our recently initiated pre-clinical testing program in animal models of central nervous system disease. We were also happy to report the award of two significant multi-year grants by the National Institutes of Health for our human liver stem cell discovery program."

StemCells Inc. is a biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of the central nervous system, liver and pancreas. The company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury.

Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company"). The Company's actual results may vary materially from those contemplated in the forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties regarding the Company's ability to obtain the capital resources needed to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the fact that the Company's stem cell technology is at the pre-clinical stage and has not yet led to the development of any proposed product; the uncertainty whether the Company will achieve revenues from product sales or become profitable; and other factors that are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward Looking Statements."