EU Funding - ESTOOLS

Stem Cell Sciences plc
29 August 2006



For immediate release                                           29th August 2006


                      (Stem Cell Sciences plc., AIM: STEM)


                      STEM CELL SCIENCES TO PARTICIPATE IN
         €12 MILLION EU FUNDING OF HUMAN EMBRYONIC STEM CELL CONSORTIUM

Edinburgh, 28th August 2006: Stem Cell Sciences (SCS, AIM: STEM), today
announced that it will participate in the European Commission approved "ESTOOLS"
programme, a world leading €12 million stem cell research program involving both
academic and commercial researchers. Stem Cell Sciences is one of three
commercial partners taking part in this Framework Programme (FP) VI initiative
which is being led by the University of Sheffield.

"SCS is bringing its technologies and expertise to the project and plans to use
any discoveries to supply improved cell based drug screening and toxicology
options to the pharmaceutical and biotechnology industries. In the longer term,
all these technologies will mesh together to help us deliver new stem cell
therapies," said Dr Lilian Hook, Scientific Programme Manager - Europe.

"The momentum for embryonic stem cell research and development is growing and
this funding will greatly enhance our competitive advantage in delivering human
embryonic stem cell based products to the market in a field of endeavour that is
directly aligned with our commercial focus. We're delighted with the European
Union's decision to fund both this research program, and future wide ranging
research in the field under FP VII, at a time when research in the US is still
being limited by political factors" commented Dr Peter Mountford, CEO of Stem
Cell Sciences.

About ESTOOLS program
The overall goal of ESTOOLS is to develop the tools and biological understanding
required to control expansion, lineage commitment and terminal differentiation
of human embryonic stem cells ("hES") for bio-industrial and medical
applications. SCS will participate as a direct recipient of the ESTOOLS funding
support (approximately 5% of funds) and via certain rights to commercialise
intellectual property arising from the wider program.

About Human Embryonic Stem Cells ("hES")
hES cells offer unique opportunities for the investigation of cellular
development and disease processes in normal human cells and could constitute a
powerful new platform for drug discovery and toxicological screening. The
differentiation of hES cells may also provide a resource for future cell
replacement therapies. hES cell research is highly likely to yield benefits in
basic biology, bio-industry and medicine, but the complexity of the biology
demands cross-disciplinary collaborative initiatives to achieve a fuller
understanding of these cells and to realise their full potential.

Where ESTOOLS program fits in
ESTOOLS will focus on the self-renewal, specification, commitment and
differentiation of hES cells to the neural lineage. Neural differentiation is a
pathway that is well-studied in mouse ES cells and one that hES cells appear to
adopt fairly readily. There is a lack of our understanding in the early stages
of development of the human nervous system. This lineage thus provides a
pragmatic starting point for exploring the mechanisms by which ES cells choose
between self renewal and commitment & will greatly enhance our knowledge of
human brain development. Furthermore, establishing conditions for the
quantitative production of neurons and glia is an important goal in its own
right. This will provide vital new experimental avenues for the study of
cellular specification and disease modelling of the nervous system.

The key to revealing the molecular circuitry that governs the hES cell decision
process will be the combination of genomic technologies and genetic
interventions. Major priorities in ESTOOLS are the development over 4 years of a
complete repertoire of genome engineering techniques for hES cells, standardized
methodology for the propagation, expansion & differentiation of hES using
automated culture methodologies.

                                    - ends -


Disclaimer: This research was supported by EC FP6 funding (Contract
XXXX-CT-2006-018739). This publication reflects the author's views and not
necessarily those of the EC. The Community is not liable for any use that may be
made of the information contained herein


Contact Information

James White
Weber Shandwick Square Mile
[phone]
[e-mail]

Peter Mountford, CEO
Stem Cell Sciences plc
[phone]
[e-mail]


Notes to Editors:

Stem cells are undifferentiated (unspecialised) cells that can divide to make
copies of them selves or differentiate (change) to become specialised cells of a
specific tissue such as neural cells or blood cells.

Stem Cell Sciences plc (SCS, AIM: STEM) is a global biotechnology company
focused on the development and application of stem cell technologies in
biopharmaceutical research and cell-based therapies. The Company has established
a leading intellectual property (IP) and technology portfolio that enables the
commercial application of stem cells in pharmaceutical/biotechnology drug
discovery and development, providing the Company with an early-stage revenue
stream. In the longer term, the Company is developing regenerative, cell-based
therapies.

SCS operates as a group of independent operations with laboratories in Scotland,
Japan and Australia, each of which is affiliated with an academic centre of
excellence. These include the Institute of Stem Cell Research, Edinburgh, UK;
RIKEN Centre for Development Biology, Kobe, Japan and the Australian Stem Cell
Centre, Melbourne, Australia.

Stem Cell Sciences listed on the London AIM exchange on 18th July 2005 (AIM:
STEM).

ESTOOLS (full project title - Platforms for biomedical discovery with human ES
cells) is an integrated trans-European scientific consortium, aiming to make
major advances in fundamental understanding and biomedical application of hES
cells over the next 4 years. The project draws together a team of experienced,
high calibre researchers from across Europe. The consortium combines proven
expertise in mouse ES cell systems, human ES cell culture, microarray
technologies, epigenetics, genetic modification techniques, stem cell
biotechnology, neurodevelopment, neuronal cell biology, and bioethics.




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