Stem Cell Therapeutics Corp.

Stem Cell Therapeutics Corp.

November 25, 2008 18:25 ET

Stem Cell Therapeutics Corp. Announces Third Quarter 2008 Financial Results and Provides Corporate Update

CALGARY, ALBERTA--(Marketwire - Nov. 25, 2008) - Stem Cell Therapeutics Corp. ("SCT") (TSX VENTURE:SSS) today announced its financial results for the period ended September 30, 2008.

Selected Highlights

SCT accomplished the following selected achievements during the third quarter of 2008 and up to November 25, 2008:

- On July 7, 2008, SCT announced the issuance of two keystone prolactin patents. The U.S. patent, numbered 7,393,830 and entitled "Prolactin induced increase in neural stem cell numbers" was issued July 1, 2008. The Australian patent, numbered 2002325711 and entitled "Prolactin induced increase in neural stem cell numbers and therapeutical use thereof" was issued January 10, 2008. These are the first patents to issue in this patent family. These patents cover the use of prolactin alone, as well as in combination with other therapeutics that augment recovery and therefore provide a broad base of protection. We have the exclusive right to the use of prolactin for treating neurodegenerative diseases and therefore have a strong foundation to develop many possible products using prolactin, either as a single therapeutic or in combination with other neurogenic agents.

- On September 4, 2008, SCT announced that it had received results from the Data Safety Monitoring Board (DSMB) that provides oversight for the Company's Phase IIb REGENESIS trial. The DSMB advised that it had completed a safety analysis and had recommended the trial continue as per the protocol. The REGENESIS Phase IIb clinical trial is designed to demonstrate that the NTx(TM)-265 therapy is both a safe and effective therapy capable of improving recovery after acute ischemic stroke. The mandate of the DSMB is to provide objective, independent monitoring of patient safety during the REGENESIS trial. This review was the second of several regularly scheduled reviews by the four-member DSMB that will occur over the duration of the trial.

- On September 15, 2008, SCT announced it has received a No Objection Letter (NOL) from Health Canada for the Company supported, investigator led Phase IIa single centre, open label study to characterize the safety of hCG and EPO in severe traumatic brain injury (TBI). Dr. David Zygun, MD, MSc, FRCPC, Assistant Professor in the Departments of Critical Care Medicine, Clinical Neurosciences and Community Health Sciences, University of Calgary, Foothills Medical Centre, Calgary Health Region, will be the Principal Investigator for this Phase IIa TBI study.

- On September 18, 2008 the Company announced that it had received a letter from Health Canada and a verbal request from the U.S. Food and Drug Association (FDA) calling for a temporary 'full clinical hold' on its currently enrolling REGENESIS Phase IIb stroke trial in Canada, and to not begin recruiting in the U.S., respectively. Additionally, Health Canada requested that recruitment not begin in the recently announced traumatic brain injury trial. The reason for these requests was that a trend in data found from a third party's stroke trial being conducted in Germany, which is unrelated to the Company's trial, reported safety results that required further analysis. SCT has been in discussions with Health Canada with the objective of having the hold removed so that the trial can resume, but there has no formal resolution to this matter at this time.

- On October 1, 2008, SCT was issued Australian Patent No. 2003250697, entitled "Oligodendrocyte Production from Multipotent Neural Stem Cells". This patent, issued on August 14, 2008, covers methods of producing oligodendrocytes from neural stem cells using granulocyte-macrophage colony stimulating factor (GM-CSF), interleukin 3 (IL-3), or interleukin 5 (IL-5), either in vivo or in cell culture, as well as oligodendrocyte compositions produced by such methods. This is the first patent to issue in this patent family. This technology adds to the depth of SCT's patent portfolio by expanding the repertoire of pharmaceutical agents that can be used to activate neural stem cells, in this case to produce oligodendrocytes. Neurodegenerative demyelinating diseases such as multiple sclerosis are associated with loss of myelin-producing oligodendrocytes. Further, GM-CSF fits into the Company's "repurposing" approach of using old drugs in new indications for expediting entry into the marketplace. Whether SCT develops this technology in-house or utilize it as an out-licensing opportunity, this patent adds to SCT's arsenal of commercialization opportunities.

- On October 3, 2008, SCT announced that it had elected to pay the final installment of the intellectual property acquisition of Stem Cell Therapeutics Inc. to Transition Therapeutics Inc. (TSX:TTH) (NASDAQ:TTHI) ("Transition") in common shares. The final payment of $1,650,000 was paid by SCT to Transition by issuing 23,272,633 shares, based on a 10-day average trading price of approximately C$0.07.

Capital Position

The Company's cash and cash equivalents as of September 30, 2008 is $7,311,748.

As of September 30, 2008 the working capital (current assets minus current liabilities) of the Company was $5,229,752 ($9,138,263 as of December 31, 2007). This calculation includes a deduction of $1,648,237 for the final payment under a share purchase obligation. As noted earlier as well as described in the September 30, 2008 "Management Discussion and Analysis" under "Acquisition of Stem Cell Therapeutics Inc.", this payment was made by the issuance of shares.

Outstanding securities as of September 30, 2008 totaled 103,529,864 common shares, 6,000,000 class B shares, 25,912,500 common share purchase warrants and 7,930,556 common share options. As of November 25, 2008, total outstanding common shares increased to 126,802,497; this revised figure includes the final payment under the share purchase obligation made to Transition Therapeutics Inc. as announced October 3, 2008.

Financial Review

The Company's loss for the nine month period ended September 30, 2008 increased by $961,051 to $4,326,737 ($0.04 per common share) from the loss of $3,365,686 ($0.05 per common share) reported for the nine month period ended September 30, 2007. The primary reason for the change in the reported loss figure is the increase in research and development costs. The September 30, 2008 "Management Discussion and Analysis" provides further details on these operating results.

About Stem Cell Therapeutics Corp.: Stem Cell Therapeutics Corp. is a Canadian public biotechnology company (TSX VENTURE:SSS) focused on the development and commercialization of drug-based therapies to treat central nervous system diseases. SCT is a leader in the development of therapies that utilize drugs to stimulate a patient's own resident stem cells. The Company's programs aim to repair neurological function lost due to disease or injury. SCT's extensive patent portfolio of owned and licensed intellectual property supports the potential expansion into future clinical programs in numerous neurological diseases such as traumatic brain injury, multiple sclerosis, Huntington's disease, Alzheimer's disease, ALS.

These securities have not been registered under the United States Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons unless an applicable exemption from U.S. registration requirements is available.

Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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