StemCells Announces Third Quarter 2005 Financial Results

10/28/2005 7:30:00 AM EST

StemCells, Inc. (NASDAQ: STEM) today reported its financial results and reviewed its significant corporate events for the third quarter ended September 30, 2005.
The Company reported a net loss of $94,000, or $0.00 per share, for the third quarter ended September 30, 2005, compared to a net loss of $4,338,000, or $0.08 per share, for the third quarter ended September 30, 2004. The decrease in net loss from 2004 to 2005 was primarily attributable to the receipt of shares in ReNeuron as part of a license and settlement agreement. Upon receipt of these shares, the Company recorded approximately $3,748,000 as income, net of legal and other expenses. Cash and cash equivalents were $34,971,000 at September 30, 2005, compared with $23,141,000 at September 30, 2004.
Highlights for the quarter include:
-- The approval by the FDA of the Company's Investigational New Drug application (IND) to begin a clinical trial of its human neural stem cells (HuCNS-SC(TM)) for the treatment of Batten disease, a rare and fatal neurodegenerative genetic condition afflicting infants and children;
-- The publication in the Proceedings of the National Academy of Sciences of the United States of America ("PNAS") of the first study to show a direct link between HuCNS-SC and restoration of motor function in spinal cord injured mice;
-- The agreement with ReNeuron Limited, a UK biotech corporation, under which StemCells granted ReNeuron a license that allows ReNeuron to exploit their "c-mycER" conditionally immortalized adult human neural stem cell technology for therapy and other purposes. In return for the license, StemCells received a 7.5% fully-diluted equity interest in ReNeuron Group plc, the listed UK parent corporation of ReNeuron Limited, and a cross-license to the exclusive use of ReNeuron's technology for certain diseases and conditions;
-- The transfer of the listing of StemCells' shares to the Nasdaq National Market from the Nasdaq Capital Market;
-- The receipt by the Company of a manufacturing license for its California-based cell processing facility from the State of California Department of Health Services; and