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2 August 1999

Company Press Release

CytoTherapeutics' Study in Experimental Neurology Demonstrates
Proprietary Methods for Human Neural Stem/Progenitor Cell Lines
Unique Growth Factor-Combination Improves Ability to

Bank Human Cells for Transplantation

CytoTherapeutics, Inc. (NASDAQ:CTII - news) today reported that the
Company's researchers demonstrated, for the first time, that normal,
genetically unmodified human neural stem/progenitor cell lines expand
exponentially in response to a proprietary serum-free media formulation
containing a combination of growth factors. In addition, results from
the study demonstrated that, even after more than one year in tissue
culture, the human neural stem/progenitor cells expanded by these
methods retain the capacity to differentiate into the major components
of the central nervous system. In the study published in the August
issue of Experimental Neurology, results also indicated that expanding
CytoTherapeutics' proprietary human neural stem/progenitor cells in this
manner could provide an ideal source of multipotent cells for use in
transplantation to the human central nervous system. The U.S. Patent and
Trademark Office has allowed CytoTherapeutics' patent covering the
proprietary methods described in the study.

The human neural cells utilized by CytoTherapeutics' researchers are
normal, genetically unmodified cells, which do not contain
cancer-causing oncogenes or other forms of genetic manipulation. Thus,
human cells expanded by these methods may be more suitable for use in
human transplantation. The ultimate purpose of these techniques is to
establish a bank of normal human neural cells that integrate with the
endogenous cells of the human host to repair or replace damaged tissue
of the brain, the spinal cord and the retina.

``The ability to create a renewable source for human neural cells marks
an important step in the ability to develop neural stem cells toward a
commercial product,'' said Richard M. Rose, M.D., President and Chief
Executive Officer. ``Importantly, this proprietary technology enhances
our already significant patent estate covering the human neural stem
cell technology, which now includes 11 issued U.S. patents and 4 allowed
U.S. patents.''

CytoTherapeutics' human neural stem/progenitor cells utilized in the
study demonstrated the capacity to become, among other cell types,
dopamine-producing neurons. Dopamine-producing cells are the type of
neurons whose loss is typically associated with Parkinson's disease,
which affects more than 500,000 people in the United States alone. The
tremors, rigidity and slow movement experienced by patients with
Parkinson's disease results from low levels of dopamine in the striatum,
a portion of the brain, due to the death of dopamine-producing neurons.
The transplantation of neural stem/progenitor cells could, therefore,
provide a way to replace these cells, potentially returning patients to
productive lives.

CytoTherapeutics previously announced results from a study by its
researchers and collaborators published in the July 15th issue of The
Journal of Neuroscience. The results from that study showed that human
neural stem/progenitor cells, cultured by the methods described in the
current study, both migrate and differentiate into neurons following
transplantation at multiple sites of the brains of rodents, that the
transplanted cells differentiate normally, and develop long-distance
projections into the target regions of the brain.

CytoTherapeutics, Inc. is a biotechnology company focused on the
discovery, development and commercialization of stem cell-based
therapies. For additional information, visit the Company's Internet web
site at http://www.cyto.com

Contact:

     CytoTherapeutics, Inc.
     Richard M. Rose, M.D., (401) 288-1000
     or
     CytoTherapeutics, Inc.
     Elizabeth A. Razee, (401) 288-1000

Copyright © 1999 Business Wire.
--
Judith Richards, London, Ontario, Canada
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