StemCells Announces Strategic Realignment And Workforce Reduction Of About 25%

(RTTNews) - StemCells Inc. (STEM) announced the immediate suspension of its Phase II Radiant Study in GA-AMD, which entails curtailing further patient enrollment and service agreements related to the AMD program, and a workforce reduction of approximately 25%, which is planned to be completed by January 31, 2016.

The company estimates it will incur restructuring charges of approximately $400,000 in the first-quarter of 2016 in connection with one-time employee termination costs, including severance and other benefits.

The plan announced today, which is estimated to yield a cost reduction of approximately $20 million over the next two years, will allow the Company to expedite completion of its ongoing Phase II Pathway Study and commencement of a pivotal Phase III clinical trial in chronic spinal cord injury.

"The decision to prioritize our spinal cord injury program required some difficult choices, including the suspension of the Company's Phase II Radiant Study in geographic atrophy of age-related macular degeneration (GA-AMD) while we seek a partner to fund continued development in retinal disorders," said StemCells' CEO Martin McGlynn.

The company announced a strategic realignment to fully focus the Company's resources on its proprietary HuCNS-SC platform technology for the treatment of chronic spinal cord injury (SCI).

Evidence of efficacy from the Company's ongoing clinical trials in chronic SCI offers therapeutic promise to restore lost function previously considered unrecoverable. StemCells recently reported a pattern of improvements in both strength and motor function, six months post-transplant of its proprietary HuCNS-SC cells, in the first cohort of its Phase II Pathway™ Study in cervical spinal cord injury.

These interim findings are especially compelling given that all patients were treated between 10 to 23 months post-injury. Spontaneous motor recovery is not expected in SCI at this late stage after injury. Moreover, the emerging Phase II data are consistent with the evolution of positive outcomes seen in the Company's previous Phase I/II study in thoracic SCI, in which measurable sensory gains were reported in the majority of patients, and two of the seven patients enrolled with complete injuries (AIS A) converted to incomplete injuries (AIS B).