San Diego, CA (May 6, 2009) – Novocell, Inc., a stem cell engineering company, today announced that it will receive two funding awards totaling $6.2 million from the California Institute for Regenerative Medicine (CIRM). The grants cover development of methods for delivery and monitoring safety of human embryonic stem cell (hESC)-derived pancreatic cells for diabetes cell therapy.

The two awards were given as part of the CIRM’s Tools & Technology and Early Translational Research Awards and will be used to overcome specific bottlenecks associated with Novocell’s innovative stem cell therapy for the treatment of diabetes. The deliverables generated from this work may also eventually be employed in the development of other hESC-derived products. For the translational award, Novocell was ranked in the top three among all applicants.

Novocell has developed and proven methods to efficiently generate pancreatic, insulin-producing cells from hESCs, demonstrating for the first time that hESCs could serve as a source of cellular therapy for diabetes. The CIRM grants will assist Novocell in developing methods fordetecting teratoma forming cells remaining in product preparations derived from hESCs, which will facilitate the development of hESC-derived therapeutics.

“We greatly appreciate this support from CIRM to continue the advancement of our diabetes stem cell therapy program. Developing methods to deliver cells and to reduce contamination of hESC-derived product preparations are major concerns impacting the development and application of stem cell therapies,” said Emmanuel Baetge, Ph.D., Senior Vice President and Chief Scientific Officer of Novocell.

About the California Institute for Regenerative Medicine

The California Institute for Regenerative Medicine was established in early 2005 following the passage of Proposition 71, the California Stem Cell Research and Cures Initiative. The statewide ballot measure, which provided $3 billion in funding for stem cell research at California universities and research institutions, was approved by California voters on November 2, 2004, and called for the establishment of a new state agency to make grants and provide loans for stem cell research, research facilities and other vital research opportunities.

About Novocell

Novocell, Inc. is a stem cell engineering company with research and development operations in San Diego, California and Athens, Georgia, dedicated to creating, delivering and commercializing cell and drug therapies for diabetes. 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