Medistem Advances Type 1 Diabetes Stem Cell Technology Licensed From Yale

SAN DIEGO, CA--(Marketwire - Sep 12, 2012) - Medistem Inc. ( PINKSHEETS : MEDS ) announced today completion of the first phase of a joint project with the Shumakov Research Center of Transplantology and Artificial Organs of the Russian Federation and its Russian and CIS licensee ERCell.The collaboration is based on using Endometrial Regenerative Cell (ERC) technology licensed from Yale University to treat type 1 diabetes.

Dr. Viktor Sevastianov, Head and Professor of the Institute of Biomedical Research and Technology, within the Shumakov Center, demonstrated safety and feasibility of ERC injection in experimental animal models of diabetes.Additionally, the studies demonstrated that the cell delivery technology developed by Dr. Sevastianov's laboratory can be used to enhance growth of ERC.These experiments are part of the process for registration of "new pharmacological substances," which is the first step towards drug approval in Russia.

"Type 1 diabetes is a significant problem in the Russian Federation. Our laboratory has been working developing various delivery formulations for cell therapy, such as SpheroGel, which is registered in Russia," said Dr. Sevastianov. "Given that the ERC can be produced in large quantities, is a universal donor cell, and already is approved for clinical trials in both the USA and Russia, we are optimistic our collaboration will lead to a viable commercial product for the type 1 diabetes Russian population."

Medistem discovered ERCs in 2007, and they appear to possess "universal donor" properties, allowing the cells derived from one donor can treat multiple unrelated recipients.According to Medistem's current FDA cleared production scheme, one donor can generate 20,000 patient doses.Medistem licensed technology from Yale University for generating insulin producing cells from ERC.A publication describing the technology may be found at http://www.ncbi.nlm.nih.gov/pubmed/21878900.

"Our vision is to combine SpheroGel, which is a clinically-available cell delivery vehicle in Russia, together with Medistem's ERC and technology from Yale University to generate a commercially-viable product for clinical trials in type 1 diabetes patients,"said Thomas Ichim, CEO of Medistem.

Medistem has outlicensed the Russian and CIS rights to ERC and related products to ERCell LLC, a St. Petersburg-based biotechnology company.Under the agreement, Medistem owns all data generated and will receive milestone and royalty payments.

"By working with leading investigators in Russia and the USA, we seek to be the leaders in a new era of medicine in Russia,"said Tereza Ustimova, CEO of ERCell."

Cautionary Statement This press release does not constitute an offer to sell or a solicitation of an offer to buy any of our securities. This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking information. Factors which may cause actual results to differ from our forward-looking statements are discussed in our Form 10-K for the year ended December 31, 2007 as filed with the Securities and Exchange Commission.

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Medistem Advances Type 1 Diabetes Stem Cell Technology Licensed From Yale