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| CytoTherapeutics Restructures to Pursue Development of Its Proprietary Stem Cell Technology Platform |
| LINCOLN, R.I.--(BW HealthWire)--July 9, 1999--CytoTherapeutics,
Inc. (Nasdaq:CTII) announced plans for the restructuring of its
operations to focus its resources on the research and development of
its proprietary stem cell technology platform. CytoTherapeutics
expects to substantially reduce its research and manufacturing
facilities located in Lincoln, Rhode Island and concentrate on
development of its proprietary stem cell technology platform through
its wholly owned subsidiary, StemCells, Inc. CytoTherapeutics' patent
estate covering its stem cell technology consists of 10 issued US
patents and 28 US patent applications. CytoTherapeutics expects to reduce its Rhode Island workforce by
approximately 60 full-time employees who have been focused on the
development of its encapsulated cell technology program with
AstraZeneca Group plc, its collaborator for the encapsulated cell
implant for the treatment of chronic pain in cancer patients.
CytoTherapeutics' decision to reduce its Rhode Island workforce
follows the Company's announcement on June 24 that AstraZeneca did not
intend to further develop the encapsulated bovine cell product. In
addition to funding clinical trials, AstraZeneca also provided more
than $7 million annually to fund research for CytoTherapeutics'
encapsulated cell pain control implant program. CytoTherapeutics and
Astra formed the collaboration in 1995. In apparent anticipation of the Company's Rhode Island
downsizing, the Rhode Island Partnership for Science and Technology
("RIPSAT") has alleged that CytoTherapeutics is in default under a
funding agreement entered into with RIPSAT in 1989, and demanded
payment of approximately $2.6 million. The Company believes that the
Company is not in default under this agreement and expects to contest
any attempt by RIPSAT to realize on its demand. 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. Statements in this press release other than statements of
historical facts constitute forward-looking comments regarding, among
other things, future business operations and possible transactions. In
particular, there can be no assurance any third party will agree to
purchase or sublicense any technology from the Company. The Company's
actual results may vary materially from those forward looking
statements due to risks and uncertainties to which the Company is
subject and which are described in Exhibit 99 to the Company's Annual
Report on Form 10-K entitled "Cautionary Factors Relevant to
Forward-Looking Statements."
CONTACT: CytoTherapeutics, Inc.
Richard M. Rose, M.D.
President and Chief Executive Officer
(401) 288-1000
or
Elizabeth A. Razee
Vice President, Corporate Communications
(401) 288-1000
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