San Diego, CA (September 17, 2008) – Novocell, Inc., a stem cell engineering company, today announced that the U.S. Patent and Trademark Office has issued two patents related to its stem cell encapsulation technology and granted Notice of Allowance for a patent relating to the Company’s technology for the isolation of clinical-grade human embryonic stem cell (hESC) lines. Novocell also enhanced its patent holdings with the receipt of three foreign patents for stem cell encapsulation. Additionally, the Company received Notice of Allowance for a patent relating to production of neural stem cells.

“As a leading innovator in stem cell engineering, we are pleased to strengthen our intellectual property position with these broad patents on cell encapsulation and human embryonic stem cell isolation that complement our comprehensive portfolio of hESC technologies,” said Alan J. Lewis, Ph.D., President and Chief Executive Officer of Novocell. “Our encapsulation-based delivery technology and methods for manufacturing hESCs and generating functional endoderm from hESCs offer the potential for a treatment that would avoid immunosuppression and provide an unlimited cell source, the two primary barriers currently facing the widespread application of cell replacement therapies.”

The issued patents U.S. No. 6,911,277 and U.S. No. 7,427,415 include claims surrounding the composition and method of use for a biocompatible polyethylene glycol (PEG) coating and other stem cell encapsulation methods designed to enable implanted cells to survive and function. Novocell’s technology eliminates the need for continuous immunosuppressant drugs and has been formulated to allow encapsulated pancreatic islet cells to release insulin in response to the recipient’s blood glucose concentration. Novocell has evaluated the safety and efficacy of implanting human pancreatic islets encapsulated with PEG into a subcutaneous site in patients with Type 1 diabetes.

The other allowed patent includes claims covering the isolation of hESC lines as well as standard culturing techniques using a range of human feeder cells. Clinical-grade hESC lines need to be isolated with the use of mouse feeder cells for the development of stem cell-based therapies. Currently, hESC’s used for research are exposed to mouse cells during isolation; however, this exposure limits their use in therapeutic products. Novocell’s research team was amongst the first in the world to demonstrate that hESCs could be isolated and cultured on human feeder cells, thereby eliminating this limitation for the development of stem cell-based therapies.

“The claims covered in these patents relate to our groundbreaking methods for encapsulating cells that can be implanted in the body and eliminate the need for immunosuppressive drugs, a process that has demonstrated preliminary evidence of efficacy and safety in patients with Type 1 diabetes,” said Allan Robins, Ph.D., Vice President and Chief Technical Officer of Novocell. “Our landmark patent related to stem cell isolation covers the most reliable way to isolate clinical-grade hESC lines that can be used for the development of stem-cell based therapies.”

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