San Diego, CA / February 20, 2008 - Novocell, Inc.,
        a stem cell engineering company, today announced data demonstrating for
        the first time that human embryonic stem (hES) cells can be turned into
        pancreatic cells capable of producing insulin in mice. The findings are
        reported in an article appearing on-line today, in advance of print publication,
        in the journal Nature Biotechnology. This research provides evidence
        supporting the potential future use of hES cells to replace insulin-producing
        pancreatic cells that are destroyed in people with Type 1 diabetes, requiring
        them to receive regular insulin treatment.
      The findings build on two previously reported studies by Novocell (Nature
        Biotechnology 2005 and 2006), whereby Novocell scientists demonstrated
        a process that successfully engineers hES cells into specific cells necessary
        for pancreas formation, and endocrine cells capable of producing insulin
        and other pancreatic hormones. 
      
        In this new work, Novocell has demonstrated that implantation of hES-derived
          pancreatic cells into mice results in the generation of glucose-responsive
          insulin producing cells. These cells exhibit properties characteristic
          of functional adult pancreatic insulin producing cells in the pancreas.
          Most importantly, these hES-derived cells provide protection in an
          animal model of diabetes characterized by loss of pancreatic insulin
          producing cells.
      
      "Our data provide the first compelling evidence that hES cells
        can serve as a renewable source of functional insulin producing cells
        for diabetes cell replacement therapies," said Emmanuel Baetge,
        Ph.D., Chief Scientific Officer of Novocell and senior author of the
        publication. "It also provides strong evidence that hES cell-derived
        endoderm cells are able to generate glucose-responsive insulin secreting
        cells that are functionally similar to adult human beta cells."
        Current cellular therapy for diabetes is performed by transplanting donor-derived
        human islets combined with chronic immunosuppression. While this has
        been demonstrated to be an effective therapy, the limited availability
        of donated pancreatic islets and the adverse side effects of long-term
        immunosuppression make this replacement therapy unsuitable for the general
        diabetes population. 
        Together with its stem cell engineering technology for insulin-producing
          cells, Novocell has also developed a delivery process by which such
          cells might be delivered to patients without the need for chronic immunosuppression.
          Novocell's encapsulation technology provides a protective, coating
          for cells, thus allowing them to be more readily accepted in the body
          without the chronic use of immunosuppressive drugs. This encapsulation
          technology has been successfully tested in human clinical trials using
          human islets isolated from donor organs. 
      
  "By developing proprietary processes to successfully generate insulin-producing
  cells from hES cells in vivo and protecting these cells from immune system
  rejection, we have created a potential treatment option that could lead to
  the first widespread application of cell replacement therapy for the treatment
  of diabetes," said Alan J. Lewis, Ph.D., President and Chief Executive
  Officer of Novocell. "We look forward to the continued advancement of
  these technologies that hold such promise for transforming the treatment of
  diabetes."
      
      About Diabetes
        Type 1, or insulin-dependent diabetes occurs when the pancreas ceases
          to produce insulin due to an autoimmune response that causes the selective
          destruction of insulin producing cells. People with Type 1 diabetes
          must take daily insulin and are candidates for pancreatic islet cell
          transplantation, which provides the potential to treat the disease.
          The disease is most common in children and young adults, accounting
          for approximately 10 percent of diabetes cases. The Juvenile Diabetes
          Research Foundation estimates that more than 1.1 million people suffer
          from Type 1 diabetes in the United States alone. Additionally, approximately
          30 percent of people with Type 2 diabetes require insulin therapy and
          could potentially benefit from islet cell transplantation 
      About Novocell
        Novocell, Inc. is a stem cell engineering company with research operations
          in San Diego, California and Athens, Georgia, dedicated to creating,
          delivering and commercializing cell and drug therapies for diabetes
          and other chronic diseases. Novocell has three primary technologies:
          stem cell engineering, cell encapsulation and drug discovery. The Company
          was founded in 1999 and merged with CyThera, Inc. and BresaGen, Inc.
          in 2004. For more information, please visit www.novocell.com